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.
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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
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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
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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
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8. Solar Electric is Fundamentally Familiar
Silicon Wafers Thin Film on Glass
Higher efficiency, area constrained Lower efficiency, cost constrained
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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
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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
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13. The Applied Materials Difference
World Class
Capabilities
R&D + Reputation
Financial +
Resources Experience
Providing Leadership in Accelerating Solar Learning Curve
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14. VIDEO:
"Learn about Solar Technology"
hosted by Charles Gay
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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
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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
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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
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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
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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
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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
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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
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24. Applied’s Capabilities
Large Area Platforms Automation
ATON™ AKT50K PECVD
MULTIWEB™
Process Technology
Service & Support
Integration
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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
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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
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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
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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
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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
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30. Largest Microcrystalline Solar Panel Structure
Demonstrated 4 Times Larger Than Standard Solar Module (4.4m2)
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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
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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
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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
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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
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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
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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
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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
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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
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