Applied Materials Confidential

More Than Moore (MTM)

Market Trends and Opportunities

John CummingsManaging Director

Marketing & Business Development

SEMICON Europa

October 26, 2016

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External Use2

AMAT stock

listing on

NASDAQ

$9.7 billionrevenue

Headquartered

in California’s

Silicon Valley

>14,000 employees

81 locations

18 countries

semiconductor and display equipment company

World’s #1

>10,200patents

$1.5 billionR&D spending

External Use

Applied’s Businesses

3

Energy and

Environmental

Solutions

DisplaySilicon Systems Global Services

External Use

Global Scale and Reach

4

81LOCATIONS

WORLDWIDE

18COUNTRIES

Principal Locations

Data as of fiscal year end, October 25, 2015

Taiwan

China

Italy

Singapore

Israel

California

Texas

Montana

Massachusetts India

Germany

External Use

LOCATED IN SINGAPORE: Dedicated advanced packaging center since April 2012

14K SQFT CLASS 10 CLEANROOM:

11 Applied platforms & over 40 supporting tools

Asia Product Development Center (APDC)

LOCATED IN SANTA CLARA, CA: HQ dedicated to product development transistors,

interconnects, memory applications.

39K SQFT CLASS 1 cleanroom with 120 tools

Maydan Technology Center

Applied Materials Global R&D Infrastructure

Xi’an Technology Center

LOCATED IN Xi’an China:

Dedicated 200mm demo and development facility

External Use6

Fab Services

• Supporting > 34,000

tools

• 3,000 field engineers

• Innovative, flexible &

technology-based

service solutions

Components

• Certified Applied parts

• Flexible spares

delivery programs

• High performance

parts options

• Advanced cleaning

and coatings

FabVantage™

• Benchmarking

• Tool output & cost

• Yield & predictability

• Fab productivity

Equipment

• < 200mm semi

• Subfab solutions

• Dedicated R&D for

emerging technology

• Technology and

productivity upgrades

Software

• Product quality

• Equipment control

• Factory productivity

• Supply chain

Applied Global Services: Optimizing Efficiency Through—COMPREHENSIVE SERVICES, CONSULTING, EQUIPMENT, AUTOMATION SOFTWARE

External Use

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Equipment Product Group:ENABLING EMERGING TECHNOLOGIES & HIGHER PERFORMANCE

Enabling New

TechnologiesExtending Tool Lifetimes

Enabling Green

Compliance

From technology inflections to productivity enhancements

External Use

Evolution of More-Than-Moore (MTM) in the Marketplace

MTM technology segments: MEMS, Power, Analog, Image Sensors, LP-MCU and Packaging technologies

MTM device segments: Consumer, Automotive, Industrial, Medical, …

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≤200mm represents >70% of all IC content in Automobiles, Mobile Devices and Wearables

External Use

Overall Semiconductor Market Outlook

© Gartner

$112

$182

$39

$32

2015

$365B

$127

$208

$53

$44

2019

$432B

Automotive8.2% CAGR

Communications4.7% CAGR

Consumer

Electronics

3.9% CAGR

Industrial9.7% CAGR

PWC Dec 2015

5.2% CAGR

Healthy growth expected for all key segments

>70% of chip content produced on ≤ 200mm wafer technology

External Use

-$10

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

-5% 0% 5% 10% 15%

Smart Phone PC Consumer Comm. Infras. Industrial Auto Server Tablets

200mm Capacity Growth

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Source: Gartner Forecast; Dec 2015

Se

mi re

v $

B

CAGR

+304K wspm 2015 to 201880% of chips on 3 fastest growing segments made on 200mm

External Use

Smartphone Teardown Analysis – 200mm Si

Global Smartphone Units

Sold (M)

74

30 (4%)

120

(17%)

232

(32%)

2015

1,433

625

(44%)

71 (5%)

107 (7%)

232

(16%)

325

(23%)

2012

720

289

(40%)

7 (1%) 42 (6%)

OCE - IDC Jan 2016

26%

15%

1%

9%

8%

41%

Power /

Power Management

MEMS

CIS

Analog

CMOS

Memory

200mm Si Area by deviceTotal 200mm Wafers Driven

by Smartphones (M)

5.1

2.4

0.6

0.6

0.9

0.2

1.9

1.0

2.7

1.9

2015

11.8

2012

5.9

0.30.1

Apple

Samsung

Lenovo

Huawei

Others

Xiaomi

Others

Lenovo

Xiaomi

Huawei

Apple

Samsung

0.6M

2.1M

• Smartphones 25% of total 200mm wafers (2015)

• Power 26% of total Si area

• Chinese Smartphone makers growing fastest

252M TechInsights, Applied Materials EPG Marketing

Calculated by Units and Si Area

External Use

BMW i3 Teardown Analysis – 200/300mm Si

11% 89%

300mm200mmpower

MEMS

memory

CMOS

CIS

Analog

484

29%

4%4%

42%

0.4

22%

Total Die Count 545

Total Si Area (mm2) 4537

200mm Die Count 484

200mm Si Area (mm2) 3189

20% 80%

300mm200mm power

MEMS

memory

CMOS

CIS

Analog

3,189

22%

3%7%

54%

3%

11%

15%

52% 61%

90% 92% 85%

48%39%

8%10%

Lighting*

68

Interior/

Infotainment

1,964

Drivetrain/

Control

711

Driver

Support

(ADAS)

603

Battery /

Inverter

1,191

22% 18%

97% 94%78% 82% 83%

17%

Drivetrain/

Control

69

Driver

Support

(ADAS)

47

6%

Battery /

Inverter

230

3%

187

Interior/

Infotainment

12

Lighting*

Analysis Based on Silicon Area Analysis Based on Number of Dies

20

0m

mv

s 3

00m

m

20

0m

m v

s 3

00

mm

20

0m

m d

evic

e s

eg

me

nt

20

0m

m D

evic

e s

eg

me

nt

20

0m

m C

ar

Mo

du

le

200mm dominating semiconductor market for Automotive

External Use

MEMS

• Supporting time to market

and cost challenges by

developing new 200mm

capabilities on our production

proven platforms

Power

• Improving processes like

aluminium PVD, epitaxial

silicon deposition, and deep

reactive ion etch

• Addressing emerging trends

such as thin wafer handling to

<150µm and thermal

management

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Packaging

• Supporting today's state-of-

the-art IDM and foundry

capabilities

• Meeting the needs of reduced

form-factor electronics and

ever-shrinking die footprint

Analog

• Chamber and system

upgrades that enable installed

base tools to meet tighter

performance requirements

• Upgrades include remote

clean for CVD chambers and

pumping improvements for

metal etch

Enabling the Mobility EvolutionCOMPREHENSIVE PORTFOLIO OF ≤ 200MM APPLIED MATERIALS EQUIPMENT & UPGRADES

External Use

Enabling MTM Technologies on 200mm Smartphone / Tablet, Automotive and Wearables will drive 200mm device unit growth and new

technology requirement for the next 5+ years

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Automotive

(Body, Engine, Infotainment, ADAS)

Wearables

(Fitness, Garments)Smartphones & Tablets

End Use Application(s)

Segments with >70%

200mm Content

Key inflections in high growth application segments drive requirements for new

materials, packaging and CMOS integration

Adv. CMOS Compatible Films

(PECVD SiGe for MEMS)Ultra Uniform AlN Films

(MEMS RF Filters)

Adv. Epi Technologies

(Power Switching)

Adv. Etch Solutions

(Packaging, Power)Adv. Metal Deposition

(Power Technologies)

Endura Centura / Producer

CVDCentura Epi Centura DPS DTM Endura

External Use

Transition to 300mm Technologies

Will occur in MTM on an opportunistic basis. Key drivers:

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Available capacity on depreciated 300mm line

Volume / ASP pressure

Opportunity for disruption (ASP/ Technology)

Technology existing or easily ported to 300mm

Examples from the MEMS segment may include:

Gyro – ASIC / WLCSP AlN Based Devices Disruptive Technologies

External Use

Manufacturing Capability

Ability to build new 200mm tools

Upgrades to latest technology and safety standards

► Proactive obsolescence solutions

200mm and 300mm refurbishment capability

► 92,000 sq ft. with 17 test bays

► Capacity of >70 tools/quarter

Dedicated team

► Average experience >15 years

Continuously driving manufacturing efficiency

► Enabling high quality, cost competitive solutions

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External Use

Conclusions

More Than Moore technologies is a large and growing market

MTM customers require technology development – new films, new structures, improved productivity

Applied Materials is committed to the success of our customers

Applied continues to invest in enabling technology (materials engineering, productivity, fab life)

Comprehensive manufacturing capability, upgrades; Technology-based service and support

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