dr. subodh kulkarni, ceo jeff bertelsen, cfo, coo · • semi sensors: wafer shaped and reticle...

© 2020 CyberOptics, All Rights Reserved

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Dr. Subodh Kulkarni, CEO Jeff Bertelsen, CFO, COO

Investor Presentation August 2020




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Forward-Looking Statements

Statements regarding the Company’s anticipated performance are forward-looking and therefore involve risks and uncertainties, including but not limited to: a possible world-wide recession or depression resulting from the economic consequences of the COVID-19 pandemic; the negative effect on our revenue and operating results of the COVID-19 crises on our customers and suppliers and the global supply chain; market conditions in the global SMT and semiconductor capital equipment industries; trade relations between the United States and China and other countries; the timing of orders and shipments of our products, particularly our 3D MRS-enabled SQ3000 Multi-Function systems and MX systems for memory module inspection; increasing price competition and price pressure on our product sales, particularly our SMT systems; the level of orders from our OEM customers; the availability of parts required to meet customer orders; unanticipated product development challenges; the effect of world events on our sales, the majority of which are from foreign customers; rapid changes in technology in the electronics and semiconductor markets; product introductions and pricing by our competitors; the success of our 3D technology initiatives; the market acceptance of our SQ3000 Multi-Function inspection and measurement systems and products for semiconductor advanced packaging inspection and metrology; costly and time consuming litigation with third parties related to intellectual property infringement; the negative impact on our customers and suppliers due to past and future terrorist threats and attacks and any acts of war; and other factors set forth in the Company’s filings with the Securities and Exchange Commission.




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Agenda

• Vision/Strategy

• CyberOptics Overview

• MRS Technology/Market Opportunity

• WaferSense Technology/Market Opportunity

• Financials/Summary




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CyberOptics Vision & Strategy

Vision

• To be the technology leader in high precision 3D sensors and system products for inspection and metrology

Strategy

• Leverage proprietary high precision 3D Multi-Reflection Suppression™ (MRS™) based optical sensors for inspection and metrology in key vertical markets: Surface Mount Technology (SMT) and Semiconductor

• Capitalize on significant growth opportunities for inspection and metrology in emerging markets: Semiconductor wafer level/ advanced packaging and Micro LED

• Accelerate growth of high margin WaferSense® sensors with new applications

Advanced Multi-Reflection Suppression™ (MRS™) 3D optical sensors

WaferSense® and ReticleSense® Sensors




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Agenda

• Vision/Strategy








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CyberOptics History

1984 1990s 2000-2010 2011-2015 Present

Founded by Univ. of Minn. professor

Steve Case and his graduate students

Focus on laser based 2D optical sensors for SMT

OEMs

Launched in-line solder paste

inspection and 2D automated optical inspection for SMT

customers

Strategic focus on disruptive 3D MRS

technology development.

Launched multiple new WaferSense

applications

Focused on innovative products and growth from 2

key platforms: MRS & WaferSense




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A Global Leader in High-Precision 3D Sensor Technology

Optical Pioneers

30+ Year History Optical Technology Expertise Strong Patent Portfolio Award-Winning

Technology-Driven Continued R&D Investment Disruptive Advancements Algorithm Expertise

US Headquarters Global Distribution World-Class Customer Base

Significant Customer ROI

Improving Yields, Throughput and Operational Efficiencies

MRS Technology

Technology Leadership Global Footprint

Inspection and metrology for the Surface Mount Technology (SMT) and Semiconductor markets




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Our Customers Count on CyberOptics

Yields Time

Throughput

Quality

Productivity Expense

Processes

Operational Efficiencies

Speed Accuracy Ease-of-

Use

CyberOptics Technology has a leading combination of

attributes that enable

Providing Our Customers Improvements In

That Saves Our Customers




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CyberOptics Overview – (Nasdaq: CYBE)

• Key verticals in SMT and Semiconductor

• 180 WW employees in USA, Singapore, China, UK, Taiwan

• CYBE financial metrics – Significant growth potential with year/year volatility – 2020 6 Mo. Revenue: $32.4M up 8% yr./yr. – Strong near-term growth potential in market for Micro

LED inspection and metrology

• Q3 20 Revenue Guidance of $19.5 - $21.5 million – Record backlog at end of Q2 20 - $24.8M – Q3 19 revenue was $12.4 million

• Strong long-term growth expected for MRS/WaferSense – Closely monitoring impacts from COVID-19

• Strong balance sheet ($29.1M in cash and no debt)

Sales ($ million)

2020 6 Mo. Revenue - $32.4M - by Product Line

$0

$30

$60

$90

2015 2016 2017 2018 2019

Inspection/Metrology

Systems 50%

3D/2D Sensors

27%

Semi Sensors

23%




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CyberOptics Overview

• Multi-reflection suppression (MRS) is a unique proprietary 3D optical sensing technology enabling significant differentiation

– 2019 MRS Revenue: $23.9M, up 13% yr./yr.

– 2020 6 Mo. MRS Revenue: $14.9M, up 45% yr./yr.

– 2019 SQ3000 3D AOI sales: $17.5M up 36% yr./yr.

– 2020 6 Mo. SQ3000 3D AOI sales: $8.0M up 12% yr./yr.

– Long-term trajectory: Significant growth

• Semi Sensors: Wafer shaped and reticle shaped wireless sensors used in the semiconductor fabrication process

– 2020 6 Mo. Revenue: $7.5M, up 4% yr./yr.

– Long-term trajectory: Significant growth

• Traditional/2D – Long-term trajectory: Flat/Down

2020 6 Mo. Revenue - $32.4 million

In Millions

$9.4

$14.9

$7.5 $0.6

Traditional 2D MRS Products

Semi Sensors 2D MX Products




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Global Locations/Support

Corporate Headquarters, Global R&D, Sensor

Manufacturing

Minneapolis, Minnesota

Americas

Sales & Support

Minneapolis, MN

EU Sales & Support

Harrogate,

North Yorkshire,

UK

Systems R&D, Manufacturing,

Sales & Support

Singapore

China

Sales & Support

Kunshan, China

Worldwide Network of Channel Partners for SMT/Semiconductor Products 59 independent sales representatives and distributors covering all global geographies

Taiwan

Sales & Support

Taichung City

Taiwan




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Agenda

• Vision/Strategy








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MRS Products/Representative Customers

World Class Customer Base

MRS Products – Sensors and Systems




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Proprietary MRS 3D Optical Sensing Technology Gaining Traction

• Faster and more accurate than competitive conventional 3D optical sensing technologies by suppressing multiple reflections, an inherent issue in any optical sensing

– 2-3x higher speed and/or 2-3x higher resolution/accuracy – Superior image quality

• 12 patents issued and 22 patents pending; more in progress – Enables higher margins

• Getting significant customer traction in SMT and Semi verticals – Gaining market share – Competition in SMT: Koh Young, Mirtec, Viscom, etc. – Competition in Semi: Internal sensor technologies at back-end and wafer

level/advanced packaging companies – ONTO, CAMT, etc.

• 2020 6 Mo. Revenue of $14.9M, up 45% yr./yr. – 2020 6 Mo. SQ3000 3D AOI sales: $8.0M up 12% yr./yr. – 2020 6 Mo. MRS sensor sales: $6.0M up 113% yr./yr. – 1st sale of 3D MX3000 memory module inspection system – First mover advantage in Micro LED inspection and metrology

• Long-term trajectory: Significant growth

MRS Sales ($ million)

Cumulative # of MRS Customers

$14.3

$21.1 $23.9

$10.3

$14.9

$0

$7

$14

$21

$28

2017 2018 2019 6 Mo. 19 6 Mo. 20

31

58

99

142 163

0

40

80

120

160

200

2016 2017 2018 2019 6 Mo. 20




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3D AOI Market CAGR ~ 22% to 2025

US

Mill

ion

$

Global 3D AOI Market CAGR 22% to 2025

Source: MarketsandMarkets Report

$332 $467

$601

$896

$1,259

0

300

600

900

1,200

1,500

2019 2020 2021 2023 2025




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Expanding Proprietary MRS Technology Across Systems and Applications Inspection and Metrology

IC Packaging Inspection SMT Inspection

Wafer-Level and Advanced Packaging

Inspection and Metrology

MRS-Enabled SQ3000 Multi-Function System for SMT, Semi and other Challenging Applications

MicroLED, MiniLED, Printer Cartridge, Other

MRS Sensors for Semiconductor

AOI

Inspection & Metrology

SPI CMM Various Applications Back-End Semi Mid-End Semi Final Vision Inspection

MRS-Enabled MX3000 for Memory

Memory Final Vision Inspection

SMT Inspection




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Expanding Applications for MRS Technology Inspection and Metrology

Automated Optical Inspection (AOI) Solder Paste Inspection (SPI) Coordinate Measurements (CMM)

Automotive Packaging IC Package

Memory Mini/MicroLED BGA Ball




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Expanding Applications for MRS Technology Memory Final Vision Inspection (FVI)

MRS-Enabled 3D MX3000 for FVI 2D MX600 for FVI

1st PO received for 3D MRS™-enabled MX3000™ memory module inspection system




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Expanding Applications for MRS Technology Inspection and Metrology

Flip Chip (c4)

Micro Bumps

Copper Pillars




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Integrating NanoResolution MRS Sensors into New WX3000 System For Wafer-Level and Advanced Packaging Metrology and Inspection

WX3000 Metrology and Inspection System NanoResolution MRS-Enabled


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• Yield challenges with Advanced Packaging are necessitating inspection/metrology

• New 3 micron pixel 3D NanoResolution MRS™ sensor (X/Y resolution of 3 micron, Z resolution of 50 nanometer)

• New WX3000 system (incorporating 3D NanoResolution MRS™ sensor) enables participation in advanced packaging/wafer level inspection and metrology in a much bigger way - $400 - $500 million market growing at 20-25% CAGR

• Superior 100% 2D and 3D inspection performance for features as small as 25-micron/2-3X faster than conventional technologies

Semiconductor Wafer Level and Advanced Packaging Inspection and Metrology

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Source: Yole Développement

Changing Landscape is Enabling Significant Opportunities

Nano Sensor Market Opportunity – Est. ~ 20% CAGR ($ in millions)

$60 $75

$90 $110

$0

$25

$50

$75

$100

$125

$150

2020 2021 2022 2023

Source: CYBE internal estimates

• The advanced packaging market was ~$27.6B in 2018. It is expected to grow at ~8% CAGR (2018-2014) to reach ~$43.6B in 2024.

• The highest revenue CAGRs are expected from 2.5D/3D TSV IC, ED, and Fan-Out at 26%, 49% and 26% respectively.

Advanced Packaging Market Forecast




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Expanding Applications for MRS Technology

Potential In Front-End Semiconductor




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Agenda

• Vision/Strategy








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WaferSense Sensors/Representative Customers

World Class Customers

WaferSense® & ReticleSense® Semi Sensors

Seven applications: level, vibration, humidity, particle, teaching, gapping and resistance.




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Proprietary WaferSense Sensor Technology

• Real time sensing using MEMS devices that can fit in Wafer or Reticle form factors

– Launched sensor for resistance application (ARS™) and extension of airborne particle sensor technology for in-line sensing (IPS™)

– More applications in development

• Patented

– 15 patents issued and 9 pending; more in progress

– Enables higher margins

• Adopted by most major players in Semi (fabs and equipment suppliers)

• 2020 6 Mo. Revenue of $7.5M, up 4% yr./yr.

– 2019 Revenue: $14.0M, up 3% yr./yr.

– 2019 reflects sluggish Semi market conditions

• Long-term trajectory: Significant growth

WaferSense Sales ($ millions)

$11.1 $13.6 $14.0

$7.3 $7.5

$0$2$4$6$8

$10$12$14$16$18$20

2017 2018 2019 6 Mo. 19 6 Mo. 20

New Products

ARS IPS

Proprietary WaferSense Sensor Technology




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WaferSense Total Available Market

170

0

20

40

60

80

100

120

140

160

180

Fabs

~$1B TAM

CyberOptics Internal Estimates

Semiconductor Fabs • About 170 active fabs today with 5-10% CAGR

• On average, each fab has about 500 ‘tools’, and

each ‘tool’ can use 6 WS/RS with price of about ~$20k/unit, however, there are mitigating factors: shared WS/RS by engineers, older fabs may not need yield/productivity improvement tools, etc.

– Assuming we can get only ~ 10% of the

available slots, TAM is still 50k units or ~$1B – Adding applications increases TAM

• Flat Panel Display market is additional opportunity




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Agenda

• Vision/Strategy








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Financial Summary

$30.0 $32.4

$1.1

$2.2

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$0

$10

$20

$30

$40

2019 6 Mo. 2020 6 Mo.

Revenue Op. Profit

3Q 20: Revenue Forecast of $19.5 - $21.5 million vs. Q3 19 Revenue of $12.4 million

Ended Q2 2020 with record backlog of $24.8M // Monitoring COVID-19 situation closely

2020 6 Mo. Revenue up 8%

$15.0 $16.0

$0.6

$1.5

$0.0

$0.5

$1.0

$1.5

$2.0

$0

$5

$10

$15

$20

Q2 19 Q2 20

Revenue Op. Profit

Q2 20 Revenue up 6%




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CyberOptics Investment Opportunity Summary

• CyberOptics has re-invented itself with new exciting proprietary sensor technology and products – MRS is proprietary 3D optical sensing technology enabling significantly faster speed/accuracy

– WaferSense is proprietary sensing technology enabling real time sensing for Semi applications

• MRS potential is significant because of high growth in 3D inspection and metrology for SMT and Semiconductor capital equipment markets

– High growth potential for 3D inspection and metrology for emerging advanced packaging market

– High growth potential for 3D inspection and metrology for semiconductor wafer level applications

– First mover advantage and high growth potential in 3D inspection and metrology for Micro LED

• Strong long-term revenue growth expected for MRS/WaferSense


Thank You!

Nasdaq: CYBE August 2020

dr. subodh kulkarni, ceo jeff bertelsen, cfo, coo · • semi sensors: wafer shaped and reticle...

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