cohu investor presentation
TRANSCRIPT
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November 16, 2011November 16, 2011
88thth Annual CitiAnnual Citi
Small/Mid Cap ConferenceSmall/Mid Cap Conference
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....Forward Looking Statements and Regulation FDForward Looking Statements and Regulation FD
Certain matters discussed in this presentation, includingCertain matters discussed in this presentation, including
statements concerning expectations of Cohustatements concerning expectations of Cohus future operatings future operating
performance, are forwardperformance, are forward--looking statements that are subject tolooking statements that are subject to
risks and uncertainties that could cause actual results to differisks and uncertainties that could cause actual results to differrmaterially from those projected or forecasted. Such risks andmaterially from those projected or forecasted. Such risks and
uncertainties include, but are not limited to; inventory, goodwiuncertainties include, but are not limited to; inventory, goodwill,ll,
and other intangible asset writeand other intangible asset write--downs, our ability to convert newdowns, our ability to convert new
products under development into production on a timely basis,products under development into production on a timely basis,support product development and meet customer delivery andsupport product development and meet customer delivery and
acceptance requirements for next generation equipment; andacceptance requirements for next generation equipment; and
customer orders may be cancelled or delayed. These and othercustomer orders may be cancelled or delayed. These and other
risks are discussed more fully in Cohurisks are discussed more fully in Cohus filings with the Securitiess filings with the Securitiesand Exchange Commission, including the most recently filed Formand Exchange Commission, including the most recently filed Form
1010--K and Form 10K and Form 10--Q. Cohu assumes no obligation to update theQ. Cohu assumes no obligation to update the
information in this presentation.information in this presentation.
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Cohu Investment SummaryCohu Investment Summary
Enabling technologies and industryEnabling technologies and industry--leading products toleading products to
drive market share growthdrive market share growth Operating leverage provides opportunity for significantOperating leverage provides opportunity for significant
growth in profits during upcyclesgrowth in profits during upcycles
Strong, debtStrong, debt--free balance sheet to enable future growthfree balance sheet to enable future growthopportunitiesopportunities
Track record of sound acquisitionsTrack record of sound acquisitions e.g. 2008 Rascoe.g. 2008 Rascopurchase expanded TAM, with no product overlap andpurchase expanded TAM, with no product overlap andstrong crossstrong cross--selling synergiesselling synergies
Cash dividend since 1977Cash dividend since 1977 -- currently $0.06/sharecurrently $0.06/share
Market leader in semiconductor test handling equipmentMarket leader in semiconductor test handling equipment
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Cohu, Inc. Operating UnitsCohu, Inc. Operating Units
Note: 2010 Results
10%10%
85%85%
5%5%
!""#
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CohuCohus largest businesss largest business
IC test handlers and thermal subIC test handlers and thermal sub--systemssystems
Semiconductor capital equipmentSemiconductor capital equipment
Dynamic, cyclical industry, with rapid and steep changes in demaDynamic, cyclical industry, with rapid and steep changes in dema
ndnd
December 2008 acquisition of Rasco GmbH increased TAM 70%,December 2008 acquisition of Rasco GmbH increased TAM 70%,expanded product portfolio and broadened customer baseexpanded product portfolio and broadened customer base
Semiconductor Test Handling EquipmentSemiconductor Test Handling Equipment
* Source: VLSI Research, Inc. and Company estimates
#2 in Gravity#2 in Gravity--FeedFeed
Test HandlersTest Handlers
A Cohu Company
*
#1 in Logic Pick&Place#1 in Logic Pick&Place
Test HandlersTest Handlers*
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SemiconductorSemiconductor Manufacturing ProcessManufacturing Process
WaferFab
The Front-End
ShipInspectionMarkTestAssembly
Cohu handlers, thermal subsystems and equipment areCohu handlers, thermal subsystems and equipment arean essential part of the IC manufacturing processan essential part of the IC manufacturing process -- usedused
with ATE to costwith ATE to cost--effectively test ICs for quality andeffectively test ICs for quality and
functionalityfunctionality
Final Manufacturing Processes
The Back-End
DeltaDelta EDGEEDGE
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Positioned for Continued GrowthPositioned for Continued Growth
Semiconductor Test Handler MarketSemiconductor Test Handler Market
Source: VLSI Research, Inc. and Company estimates
Key market drivers: IC unit volume, increasing IC content,Key market drivers: IC unit volume, increasing IC content,expanding applications, new IC package typesexpanding applications, new IC package types
Our products address 62% of the marketOur products address 62% of the market
Rasco acquisition added gravityRasco acquisition added gravity--feed and strip handlersfeed and strip handlers GravityGravity--feed is wellfeed is well--suited for handling small IC packagessuited for handling small IC packages
critical to miniaturization of CE productscritical to miniaturization of CE products
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Market Share LeadershipMarket Share Leadership
IC Test HandlersIC Test Handlers
Logic Pick & PlaceLogic Pick & Place HandlersHandlers
Gravity Feed HandlersGravity Feed Handlers
Source: 2010 VLSI Research, Inc. and Company estimates
#1 Position#1 Position
#1 Position#1 Position
#2 Position#2 Position
#1 or #2 position in every test#1 or #2 position in every testhandler market served by Cohuhandler market served by Cohu
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Leading Technologies to Drive Market Share GainsLeading Technologies to Drive Market Share Gains
PRODUCTIVITYPRODUCTIVITY
X32 (X4 Chuck) 125C Thermal Testing
120.0
121.0
122.0
123.0
124.0
125.0
126.0
127.0
128.0
129.0
130.0
00.00 04.32 08.64 12.96 17.28 21.60 25.92 30.24 34.56 38.88Time(s)
Temperature(C)
SiteB1
SiteA1
SiteD1
SiteC1
SiteB2
SiteA2
SiteD2
SiteC2
SiteB3
SiteA3
SiteD3
SiteC3
SiteB4
SiteA4
SiteD4
SiteC4
SiteA5
SiteB5
SiteC5
SiteD5
SiteA6
SiteB6
SiteC6
SiteD6
SiteA7
SiteB7
SiteC7
SiteD7
SiteA8
SiteB8
SiteC8
SiteD8
- Tmin. =123.4C
- Tmax. = 127.9C- Temp. Range= 4.5C- SitesA5andA6 were notfunctioning,no temperaturereading.80
90
100
110
120
130
140
0 2 4 6 8 10 12 14 16 18 20
Time (sec)
Temp(C)
Temp Rise
6.0C
4.3C
3.9C
3.4C
2.6C
Thermal response at 125W
FLEXIBILITYFLEXIBILITY
IndustryIndustry--leading Parallelism & Throughputleading Parallelism & Throughput
Lowers costLowers cost--ofof--testtest
Vision AlignmentVision Alignment
Enables accurate testing of small formEnables accurate testing of small form
factor IC packagesfactor IC packages a fast growing marketa fast growing market
Thermal ManagementThermal Management
Proprietary thermal technology increasesProprietary thermal technology increasestest accuracy and yieldstest accuracy and yields
ChamberChamber--less Triless Tri--TemperatureTemperature
Allows onAllows on--line maintenance at temperature,line maintenance at temperature,reducing downtimereducing downtime
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Proprietary Thermal TechnologyProprietary Thermal Technology
Solves a Growing Problem in IC TestSolves a Growing Problem in IC Test Delta Design is the industry leader in highDelta Design is the industry leader in high--power/DUT thermalpower/DUT thermal
managementmanagement
Enabling capability that optimizes speed grading, increasinglyEnabling capability that optimizes speed grading, increasingly
important for GPUs as well as MPUsimportant for GPUs as well as MPUs Latest technology incorporated in nextLatest technology incorporated in next--gen Pyramid thermal handlergen Pyramid thermal handler
2.79
2.82
2.85
2.88
2.91
2.94
2.97
3.00
3.03
3.06
3.09
78
80
82
84
86
88
90
92
94
96
98
100
102
104
106
108
110
112
114
118
120
122
Fmax Uncertainty for MPUsFreq. vs. Temp
2% / 10oC Typical
2oC Tj errorFmax Uncertainty
10oC Tj errorFmax Uncertainty
Max.
Freq.-GHz
Tj Setpoint deg. C
Speed = $Speed = $
Core i3Core i3 3.1 Ghz3.1 Ghz $129$129
Core i3Core i3 3.3 Ghz3.3 Ghz $159$159 (+23%)(+23%)
Source: Computeredge.com
(November 2, 2011)
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$%&'
()
*+
,
,
&
InInProductionProduction
InInProductionProduction
InitialInitialCustomerCustomerEvaluationEvaluation
-Thermal Pick & Place HandlersThermal Pick & Place Handlers
-High Speed Pick & Place HandlersHigh Speed Pick & Place Handlers
-GravityGravity--Feed & Strip HandlersFeed & Strip Handlers
IndustryIndustry--leading systems in each product lineleading systems in each product line
Broad Product PortfolioBroad Product Portfolio
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%
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Wide Customer BaseWide Customer Base
Realizing crossRealizing cross--selling opportunities, resulting in market share gainsselling opportunities, resulting in market share gains
RascoRascoDelta DesignDelta Design
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Largest global sales and service network in the industry...Largest global sales and service network in the industry...
24/7 Global Customer Support24/7 Global Customer Support
POWAY, CADelta Headquarters
Long Island,NY
MALAYSIA- Kuala Lumpur- Penang- Malacca- Kulim
Burlington, VT
TAIWAN
- Taipei- Kaohsiung- Hsinchu
SOUTH KOREA
- Seoul
JAPAN
CHINA
- Tianjin- Shanghai- Suzhou- Chengdu
THAILAND- Bangkok
Hillsboro, ORBoise, ID
Austin, TX
COSTA RICA
Houston, TX
Chandler, AZ
UNITEDKINGDOM
MALTA
Tyngsborough,MA
Dallas, TX
SINGAPOREDelta-Rasco
Asia Headquarters
KOLBERMOOR, DE
Rasco Headquarters
San Jose, CA
INDONESIA
Depth and Breadth is a Competitive AdvantageDepth and Breadth is a Competitive Advantage
Tooling Design/Mfg
PHILIPPINES- Manila- Baguio- Cavite
- Laguna
- Tokyo
- Batam
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Financial UpdateFinancial Update
Poway, California Headquarters
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Semi/Semi Equipment UpdateSemi/Semi Equipment Update
Source: SEMI 2011
Most semiconductor equipment companies have guided toMost semiconductor equipment companies have guided tolower operating results in Q4lower operating results in Q4
Global macroGlobal macro--economic weakness and uncertainty iseconomic weakness and uncertainty is
slowing worldwide demand for semiconductorsslowing worldwide demand for semiconductors Equipment utilization rates in our customersEquipment utilization rates in our customers test facilitiestest facilities
are currently in the 70%are currently in the 70% -- 75% range75% range
$20
$70
$120
$170
$220
$270
$320
$370
$420
$470
Millions Orders
AugAug
2006 2007 2008 2009 2010 2011
0.45
0.55
0.65
0.750.85
0.95
1.05
1.15
1.25
1.35
1.45
1.55
2006 2007 2008 2009 2010 2011
Aug
Aug
Book to Bill
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Q3Q311 Results / Q411 Results / Q411 Guidance11 Guidance
Q3 HighlightsQ3 Highlights
Sales $71.8Sales $71.8
Orders $61.4MOrders $61.4M
NonNon--GAAP EPS $0.21GAAP EPS $0.21
Backlog of $74.5MBacklog of $74.5M
$0.06 cash dividend$0.06 cash dividend
Q4 GuidanceQ4 Guidance
Sales ~ $65MSales ~ $65M
Gross Margin ~ 32% (nonGross Margin ~ 32% (non--GAAP)GAAP)
Operating Expense ~ $19M (nonOperating Expense ~ $19M (non--GAAP)GAAP)
Cost reduction actions in response to softeningCost reduction actions in response to softeningbusiness conditionsbusiness conditions
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#1 in IC Test Handler Industry#1 in IC Test Handler Industry
Rasco acquisition expanded TAM and has been highlyRasco acquisition expanded TAM and has been highlysuccessfulsuccessful
Well positioned for market share growth from:Well positioned for market share growth from:
New, industryNew, industry--leading pick & place handlersleading pick & place handlers
Ramp of Pyramid, nextRamp of Pyramid, next--gen thermal handlergen thermal handler
NextNext--Gen gravityGen gravity--feed handlerfeed handler -- initial customer evaluationinitial customer evaluationexpected to begin in Q4expected to begin in Q41111
Significant cross selling opportunitiesSignificant cross selling opportunities
Strong balance sheet with no bank debtStrong balance sheet with no bank debt
Dividend provides return even during downcyclesDividend provides return even during downcycles(currently yielding >2%)(currently yielding >2%)
SummarySummary
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November 16, 2011November 16, 2011
Thank you!Thank you!
88thth Annual CitiAnnual Citi
Small/Mid Cap ConferenceSmall/Mid Cap Conference