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Solar_Launch Applied Materials 2006


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Solar_Launch Applied Materials 2006

  1. 1. Applied Materials Going Solar! New York 5 September 2006 External Use
  2. 2. Safe Harbor Statement This presentation contains forward-looking statements, including those relating to Applied’s business strategy, growth opportunities, served available market, strategy to reduce solar production costs, operational efficiencies, financial performance, product capabilities and technology leadership; customers’ plans; and the solar technology roadmap and industry outlook. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including without limitation: (a) broadening of demand in the solar industry, which is subject to many factors, including global economic conditions, the cost-effectiveness and performance of photovoltaic (PV) products compared to conventional and other alternative energy sources, technological innovations, availability and cost of raw materials such as silicon, evolving industry standards, changing customer and end-user requirements, government subsidies and economic incentives for alternative energy development, and geopolitical uncertainties; (b) customers’ capacity requirements and timing, rate and amount of capital spending for new technology; (c) Applied’s ability to: accurately predict the characteristics of, and capitalize on opportunities in, the emerging PV market; successfully adapt its existing products and develop and commercialize new products that enable increased solar cell efficiency and performance at a lower cost; recruit, incent and retain key employees; obtain and protect intellectual property rights in key technologies; develop, deliver and support a broad range of products; integrate acquired businesses; maintain effective cost controls and timely align the company’s cost structure with business conditions, and effectively manage its resources and production capability; and other risks described in Applied Materials’ SEC filings. All forward-looking statements are based on management’s estimates, projections and assumptions as of September 5, 2006 and Applied undertakes no obligation to update any such statements. 2 External Use
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  4. 4. Applied Materials’ Strategy Extend Leadership in Core Business Differentiated systems and services Extend position in memory business Grow in New Markets Use core nanomanufacturing and global strengths Expand into related high growth opportunities Deliver World-Class Performance Enhance operational and financial efficiencies Drive performance initiatives to optimize financial results 4 External Use
  5. 5. Applied’s Available Opportunity ’08 SAM ‘06 - ’08 New Markets $41.5B 1.5X Flat Panel Display $4B Silicon System & Service $2.5B 2.0X $35B 1.3X New Core: +$15B 2005 – $20B 2004 2005 2006E 2007F 2008F Opportunity Expected to Double from ‘05 to ‘08 with CAGR ~25% Source: Gartner DataQuest, Applied Materials Note: New Markets includes Applied Films 5 External Use
  6. 6. Extend Core Business Differentiated Products for Nanomanufacturing Technology™ Performance Enhancements Drive Moore’s Law Fab Productivity Enhancements Amplify customers’ productivity Flat Panel Display Driving down costs, enabling adoption New Markets Solar and other emerging markets Deliver World-Class Performance 6 External Use
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  8. 8. Solar Electric is Fundamentally Familiar Silicon Wafers Thin Film on Glass Higher efficiency, area constrained Lower efficiency, cost constrained 8 External Use
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  10. 10. Solar Learning Curve Dynamics 100 Historical Projected 1980 $21.83/W Module Cost ($/W)* 1985 $11.20/W 1990 $6.07/W 1995 10 $4.90/W 2000 $3.89/W 2005 $2.70/W INDUSTRY ACCELERATION 1 1 10 100 1,000 10,000 1E5 Cumulative Volume (MW) Goal: Increase Rate of Learning * 2002 Dollars Source: Navigant Consulting 10 External Use
  11. 11. World Electricity Production Forecast (2000 – 2040) 100,000 Equivalent Production Total Electricity Solar GWp2 10,000 Potential of Existing ~5,000 US Rooftops (GWp) US 10% Total 1,000 China ~500 TWh1/Year India 1% Total h) Est. CAGR% ’00 - ’40 ~50 100 n (TW Total Electricity Production 2.5% du ctio (increase of 25,400TWh) ty Pro Solar Energy Production 21% tri ci 10 lec (increase of 6,000TWh) ~5 la rE So California 1 Million Roofs Current solar capacity 1 2000 2010F 2020F 2030F 2040F 1TWh = Terrawatt-hour = 1 Billion Kilowatt-hours = Consumption in labeled country / state 2GWp = Gigawatt-peak, assuming average hours or sunshine Source: Solar Generation and IEA-PVPS 11 External Use
  12. 12. PV Solar Supply Growth Solar PV Projections - Market Analysts 12,000 Historical Navigant, March 2006 - Low Est. CAGR 25 - 45% 10,000 CLSA (Solar Silicon Conf), 2006 PV Shipments (MWp) 8,000 Top ten solar producers to add Driving 480MW in 2006E Faster Growth 6,000 – 85% of all new capacity added Productivity – 25% of total resulting capacity worldwide Cost Infrastructure 4,000 2,000 0 2002 2003 2004 2005 2006E 2007F 2008F 2009F 2010F Source: Compilation analysts reports, Applied Materials, Photon International 12 External Use
  13. 13. The Applied Materials Difference World Class Capabilities R&D + Reputation Financial + Resources Experience Providing Leadership in Accelerating Solar Learning Curve 13 External Use
  14. 14. VIDEO: "Learn about Solar Technology" hosted by Charles Gay 14 External Use
  15. 15. Technology Conditions – Why Solar Now? SCALE OF MANUFACTURING PRODUCT COST REDUCTION – Cost per m2 Glass/display – Size – Process – Watts per m2 Materials science Yield & control IC know-how & leverage THIN FILM OPPORTUNITY – Polysilicon supply constraint 15 External Use
  16. 16. Scale to Enable Learning Curve 100 Historical Projected 1980 $21.83/W Module Cost ($/W)* 1985 $11.20/W 1990 10 $6.07/W 1995 $4.90/W 2000 $3.89/W 2005 $2.70/W 1 1 10 100 1,000 10,000 1E5 Cumulative Volume (MW) Production line size 0.5 5 50 100 (Megawatts per Year): (1980) (2000) (2005) (2010) Lines Per Factory 2 3 4 10 * 2002 Dollars Source: Navigant Consulting 16 External Use
  17. 17. Technology Conditions – Why Solar Now? SCALE OF MANUFACTURING PRODUCT COST REDUCTION – Cost per m2 Glass/display – Size Cost / m2 – Process $ Production / Watt = – Watts per m2 Watt / m2 Materials science Yield & control IC know-how & leverage THIN FILM OPPORTUNITY – Polysilicon supply constraint 17 External Use
  18. 18. Experience Reducing Unit Production Costs Experience from LCD Manufacturing 10 Substrate Area Cost/Area 8 5.2m2 Cost / Area (relative) 4.4m2 Cost / m2 6 2.8m2 Watt / m2 4 1.4m2 2 0.7m2 0 Gen 4 Gen 5 Gen 6 Gen 7 Gen 8 Gen 8: 60nm Uniformity Over 4x1018nm2 Area at 50 Substrates per Hour 18 External Use
  19. 19. Experience Enhancing Product Performance and Process Consistency c-Si Applied Materials Production Quantity technology Cost / m2 Watt / m2 Conventional approach Cell Efficiency Tighter distribution and higher mean efficiency 19 External Use
  20. 20. Experience Enhancing Product Performance and Process Consistency Thin Film a-Si:H/μc-Si:H Cell Spectral Response Number of Sunlight Photons (m-2s-1micron-1) E+19 5 Relative External Quantum Efficiency, % Glass Substrate a-Si:H junction μc-Si:H junction Transparent Conductor 100 Cost / m2 4 80 Amorphous Silicon 3 Watt / m2 60 2 40 Microcrystalline Silicon 1 20 AM 1.5 global spectrum 0 0 Back Contact 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 Wavelength, microns Tandem Junction Increases voltage, collects more light, enhances stability 20 External Use
  21. 21. Experience Enhancing Product Performance and Process Consistency Thin Film Glass Substrate Transparent Conductor Cost / m2 Amorphous Silicon Watt / m2 Microcrystalline Silicon Back Contact Enhanced light Innovative trapping increases technology improves cell efficiency product performance 21 External Use
  22. 22. Technology Conditions – Why Solar Now? SCALE OF MANUFACTURING PRODUCT COST REDUCTION – Cost per m2 Glass/display Polysilicon Supply and Demand – Size – Process – Watts per m2 Materials science Yield & control IC know-how & leverage THIN FILM OPPORTUNITY – Polysilicon supply constraint Source: Tor Hartmann, Solar Grade Silicon, 2005 22 External Use
  23. 23. Delivering Compelling Photovoltaic Technology and Service Solutions 23 External Use
  24. 24. Applied’s Capabilities Large Area Platforms Automation ATON™ AKT50K PECVD MULTIWEB™ Process Technology Service & Support Integration 24 External Use
  25. 25. Crystalline Silicon: ATON SiN PVD Passivation Wet Clean Ion Doping Back Wafer & ARC & Texture & Diffusion Reflector Layer (SiN) Bin & Sort; Contact Metrology & Transfer to Module Metals Inspection Module Mfg SiN: biggest ‘pain’ point for ATON c-Si manufacturers Flexible platform easily adaptable for production volumes from 25-100MW • Insert picture of AKT PECVD Increase yield: uniform appearance and high efficiency 25 External Use
  26. 26. Crystalline Silicon: New ATON Applications Passivation Wet Clean Ion Doping Back Wafer & ARC & Texture & Diffusion Reflector Layer (SiN) Bin & Sort; Contact Metrology & Transfer to Module Metals Inspection Module Mfg Expand sequential applications ATON including – Back reflector – Contact metal • Insert picture of AKT PECVD Enables large scale automation of a significant part of manufacturing line 26 External Use
  27. 27. Thin Film Silicon: New Aristo™ PVD New Aristo Glass Substrate TCO • Insert picture of AKT PECVD Amorphous Silicon Back Contact Deposition of transparent conductors (TCO) 100+ Aristos shipped for TCO, leading LCD color filter market High throughput in-line tool Ultra-low particle contamination 27 External Use
  28. 28. Thin Film Silicon: AKT-PECVD System AKT50K PECVD Glass Substrate TCO Amorphous Silicon Back Contact Large area PECVD 500+ systems shipped for thin film silicon, leading LCD display market High throughput cluster tool Exceptional film uniformity over large areas 28 External Use
  29. 29. Thin Film Silicon: ATON PVD System ATON Glass Substrate TCO Amorphous Silicon Back Contact Deposition of back reflectors, metal contacts and transparent conductors Recently introduced for solar, derived from heritage of 150+ glass coaters High throughput in-line tool for either glass or silicon substrates Flexible process architecture, scalable to 100MW 29 External Use
  30. 30. Largest Microcrystalline Solar Panel Structure Demonstrated 4 Times Larger Than Standard Solar Module (4.4m2) 30 External Use
  31. 31. Roadmap Other Real Time Feedback, 85% → 98% yield Fab MIS, Metrology CIS 10% → 14% efficient Contacts, Absorber CIS Contacts c-Si SiN, Back Reflector, Contacts, Surface Prep, 14% → 23% efficient c-Si SiN, Back Reflector, Integrated Wiring, Adv Contacts Junctions, Automation TF-Si TF-Si 6% → 11% efficient TCO, PECVD, Contacts TCO, PECVD, Automation, High Efficiency Contacts, Automation Now 2010F Note: Items listed in white will be new technologies and capabilities added by 2010 31 External Use
  32. 32. Applied Materials: An Enabling Force Fastest solar power companies Applied Materials (US) M.Setek (Japan) BP (UK) Motech (Taiwan) Carmanah (Canada) Q-Cells (Germany) Conergy (Germany) REC (Norway) Ersol (Germany) Sanyo (Japan) Evergreen Solar (US) Sharp (Japan) First Solar (US) SolarWorld (Germany) GT Solar (US) SunPower (US) Hemlock (US) Suntech (China) Kyocera (Japan) Tokyuama (Japan) Source: Photon International, July 2006 32 48 External Use
  33. 33. Applied Materials: An Enabling Force Fastest solarcost per watt is what it’s all about. Having done this before in IC and “Reducing production power companies LCD, we’re excited to see what Applied Materials can do in solar. Q-Cells and the Industry can benefit strongly from a player of the caliber and with the capabilities of Applied Materials. We are excited to be working with them” – Anton Milner Applied Materials (US)Chief Executive Officer - Q-Cells M.Setek (Japan) “Looking at the growth opportunity ahead of us (UK) going to have to scale to meaningful BP we’re Motech (Taiwan) plant sizes and fast” Carmanah (Canada) P.M. Pai – Q-Cells (Germany) Chief Operating Officer - SunPower Conergy (Germany) REC (Norway) “Like many in the industry we’ve beenErsol (Germany) able to get to this point by creating our own machines Sanyo (Japan) to do the job. But this is not our core expertise … we’re looking forward to what Applied Materials can bring to the table” Evergreen Solar (US) Dr. Chris Sharp (Japan) – Eberspacher First Solar (US) VP Engineering - NanoSolar SolarWorld (Germany) “Applied Materials has been a great partner Solar over the years. They have made(US) GT for us (US) SunPower the Suntech (China) investment to support us wherever we Hemlock – new products, new generation fabs, need to be (US) and on-going service and support” Kyocera (Japan) – ChengTokyuama (Japan) Yih Lin Senior Vice President, Member of Executive Board - AUO Source: Photon International, July 2006 32 External Use
  34. 34. Solar Product Business Group Footprint Installed Systems Technology and Global Development Centers First Thin Film Si Sale - Q-Cells Major Producing Countries Applications US Japan Cell technologies: c-Si, TF-Si, CiS Germany Korea Processes: TCO, SiN, contact metals, Belgium India semiconductor precursors, a-Si/µc-Si Taiwan Three of Top 10 Producers Already Customers 33 External Use
  35. 35. Applied Materials’ Solar Market Opportunity 34 External Use
  36. 36. Current Solar Industry Landscape Solar Cell Production (MWp) Sharp Q-Cells Kyocera Sanyo Mitsubishi Electric Deutsche Cell Schott Solar BP Solar 2006 Planned Capacity Suntech 2005 Actual Production Motech 0 100 200 300 400 500 600 Source: Photon International Thin Film Si Equipment Suppliers C-Si Equipment Suppliers Applied Materials, Leybold Optics, Applied Materials, Baccini, OTB, Ulvac, Unaxis, Von Ardenne Centrotherm, GT Equipment, Manz Automation, Roth & Rau, Schmid, Spire 35 External Use
  37. 37. Multiple Technologies Driving Industry Growth c-Si Annual New Capacity (MW) TF Annual New Capacity (MW) 2,000 500 1,860 430 Est. CAGR = 23% 400 1,500 1,450 Est. CAGR = 64% 340 1,200 300 1,000 920 240 800 200 150 500 100 60 0 0 '06E '07F '08F '09F '10F '06E '07F '08F '09F '10F Source: c-Si: Applied Materials analysis based on Solar Buzz, Maycock, customer forecasts TF: Applied Materials analysis based on Navigant 2006, customer forecasts 36 External Use
  38. 38. Significant and Growing Solar Market c-Si + Thin Film PV Equipment Spending (wafer, cell & module manufacturing equipment) 4 Total Available Market Served Available Market 3 28% R= CAG Est. $ BN 2 % = 150 GR . CA Est 1 0 '06E '07F '08F '09F '10F Forecast to Aggressively Increase Each Year Note: Based on forecast of 8.5 GW production output in FY10; there are significant service opportunities that are incremental to this TAM Source: Applied Materials analysis based on Navigant 2006, CLSA (Solar Silicon Conference) 2006, Solar Buzz 2006, Manufacturer forecasts 37 External Use
  39. 39. An Industry in Transition Exponential Market Growth Will Be Enabled By Production Cost Reduction Rapid Scale in Manufacturing Robust Equipment Solutions Global Capability Applied Materials is Uniquely Positioned to Enable the Solar Industry to Make these Transitions 38 External Use
  40. 40. 39 External Use