Siltronic – a leading producer of silicon wafers

Fact Book Investor Relations October 2017

BUSINESS ENVIRONMENT

….operating in a continuous growing and improving environment…..…

Increasing demand for electronic devices and new applications drive semiconductor growth, which in turn fuels silicon demand.

Siltronic is a strong wafer supplier with leading-edge technology

Top 5 wafer producers serve more than 90% of market across all diameters

Sources: Companies' revenue reports 2016, converted to USD million

Value creation at Siltronic

International manufacturing network supports market leadership and business focus

Customer base well diversified across all major semiconductor Silicon wafer consumers

Source: Company Information, Siltronic

SILTRONIC - AN INDUSTRY TECHNOLOGY LEADER

……Technological leadership - a constant race for improvement…..

Flatness just one example – A number of key ingot & wafer properties needs to be continuously improved to meet customers' requirements

"More Moore" – Siltronic's technology roadmap will stay "One Generation Ahead"

Siltronic's Design Rule roadmap follows road to "More Moore"

Siltronic DR projects develop processes for upcoming wafer requirements one generation ahead

The transition to the next DR typically requires an improvement of critical wafer parameters by ~ 30 %!

Surface defects
Shape
Crystal homogeneity
Surface / bulk metals
Local / near-edge flatness Specifications down to 20nm!

How small is 20nm?

Image source: www.chiemsee-alpenland.de

Broad product portfolio

Siltronics offers a broad product portfolio to address all high volume wafer types and to meet different application requirements

Diameter	Process	Share of portfolio	Product	Applications
300 mm	CZ	~60%	Double side polished wafer Epitaxial wafer Argon annealed wafer SiliconTM Ultimate	Memory, Logic, Analog
125 – 200 mm + SD	CZ + FZ	~40%	Standard products: Polished wafer Epitaxial wafer Cut/lapped/etched wafer Special products: Lowly-doped and highly-doped wafer	Logic, Analog, Discretes, Microprocessors, Image sensors, Power and opto-electronics, IGBTs

Note: CZ: Czochralski crystal growing, FZ: Float zone technology

Siltronic is a leader in wafer technology and quality

Technology leadership complemented with the highest level of quality

First supplier to ship 300mm wafers
Development of 8 nm design rule started in 2013 (commercialization 2017);
Concurrently optimizing on 50+ wafer parameters of each design rule
400 engineers worldwide
Approximately 1,700 patents issued and pending (as of Dec. 31, 2016)
Single wafer traceability for 300mm
Standardized processes across sites enabling "copy exactly" at product level

Quality awards from several top semiconductor players

SILTRONIC PERFORMANCE

…well prepared to gain from future growth…..

Siltronic is focused on growing 300mm and attractive 200mm business

Development of total wafer demand per diameter, in million 300mm equivalents per month

Source: SEMI up to June 2017, Siltronic estimates

300mm wafer demand is expected above industry supply capacity, after almost a decade of oversupply

300mm effective capacity vs. demand, kpcs per month

Gap between supply and demand expected to increase further in 2018

Sources: SEMI, IHS, Siltronic

20 years back more than half of the semiconductor sales was for computing – todays markets are much more diversified

Silicon demand less volatile on broader application and markets

Sources: Computer History Museum, Catalog 107273410, WSTS 2017

Ever new applications for electronic devices and the infrastructure to support them continue to drive silicon demand

Electronic equipment contains multiple devices built on tailormade Si substrates

SSDs and industrial applications remain the main drivers for silicon demand. Turnaround in PC and tablet market also helps.

Computing

Servers, mobile PCs and PC upgrades drive demand for SSDs.
Mobile PC units will decline in 2017 but at the slowest rate in 10 years.

Mobile Phones

Smartphone shipments are expected to grow.
Technology migrations and content are key for silicon demand.

Industrial

Industrial automation, smart homes and medical electronics will increase silicon demand for industrial applications in 2017.

Automotive

Semiconductor content in new cars grows, driven by electrification, automated driving and connectivity.
Vehicle production also rises slowly.

Source: IHS Markit Technology (Semiconductor Silicon Demand Forecast Tool, Q1'17 Update)

END MARKETS

… are much more diverse nowadays.

All electronics are based on silicon

Data explosion: An inflation of connected devices and sensors lead to an unprecedented increase of generation of new data

Remember the good old Volkswagen Beetle… Modern passenger cars are stuffed with electronics

Carmakers are working intensively on autonomous driving which will need even more silicon for infrastructure and networks

Requirement for Connectivity

High-definition map downloads in real time
Sensor data uploads for machine learning
Over-the-air firmware and software updates

Benefit of 5G Network

Faster speed: Handle massive amounts of data generated by autonomous cars
Ultra latency: Max 10 GB per second (600 times faster than today's LTE*)
Vehicle-to-vehicle and vehicle-toinfrastructure connectivity: Maximize use of available data, control traffic
Intel® is offering Intel GO™ Automotive 5G platform for automakers' development

* Fastest average LTE speeds in the U.S. Source: Audi EMFT-YOLE Sensors for IoT in Munich (Jul 2017); Intel News Fact Sheet (Jan 2017)

Power devices are everywhere – silicon based devices convert electricity multiple times before consumption

Conversion of electric energy includes changing voltage, frequency and type of current (direct vs. alternating ). ―… ~−

Voltage ranges from hundreds of kilo Volts in power lines down to below 1 Volt in the logic chips within your smartphone.

Source: Basics of power electronics, Point The Gap

The more power, the more silicon is needed in the inverter: from fractions of a wafer in an e-bike to ~20 wafers in a train.

Industrial semiconductor segment comprises a wide range of applications

diagnostics and control
imaging equipment
laboratory test
patient monitoring

Power & Energy Other Industrial

equipment for energy production and distribution
industrial power supplies
energy meters
built in climate control
lighting
safety & security equipment
aircraft systems
radar, sonar, avionics
missile guidance
military grade computers

Medical Building & Home Manufacturing

manufacturing equipment
robotics
process control equipment
measurement instruments
motor controls
power tools
ATMs
ships, golf cars, electric bikes and trains

Source: appliedmaterials.com

STAKEHOLDERS' BENEFITS

…shareholders to benefit from improved financials…..

Financials improved strongly over the last years

Adjusted1 financial figures (EUR mn)	2012	2013	2014	2015	2016
Sales	1030.0	875.5	853.4	931.3	933.4
EBIT	(75.5)	(87.3)	(31.6)	2.7	27.0
EBIT margin in %	(7.3)	(10.0)	(3.7)	0.3	2.9
EBITDA	122.5	112.6	117.7	124.0	146.0
EBITDA margin in %	11.9	12.9	13.8	13.3	15.6
CapEx	144.3	39.7	40.7	75.0	88.8
Free cash flow	(134.4)	64.7	86.3	37.4	19.0

¹figures 2012-2014 adjusted for consolidation effects resulting from acquisition of SSW and restructuring

Successful cost reduction programs continue

Cost savings, in EUR millionn¹

¹ Based on prior year cost basis to current year volumes and adjustments to certain current year costs to reflect prior year contractual and economic parameters (e.g. prior year unit labor cost).

A disciplined approach to capital budgeting – priority is to support and secure our business

Capital budgeting priorities

Outstanding Cost Reduction and Efficiency Improvement Track Record

¹ Delivered wafer / paid hours (2009 = 100)

Siltronic share price more than tripled since IPO

Shareholder structure

Investment Highlights – Siltronic Strengths

4 Strong track record in efficiency improvement and cost reduction

5 Strategic supply of high-quality polysilicon at competitive cost

6 Experienced management team and highly skilled workforce

STRATEGY

……no change in our proven strategy while enjoying improving returns…..

Siltronic strategy - capitalize on market opportunities while focusing on 300mm & technological leadership by growing with the market

Improve returns, stay ahead in technology and grow with the market

Strategic Focus

Benefit from market growth

Ensure technology & quality leadership

Improve financial performance & cash flow

Execute

cost reduction roadmaps & debottlenecking concepts

We continuously increase the value for our stakeholders by providing best-in-class wafers at competitive costs.

Contact and Additional Information

Q2 2018 Results July 25, 2018

Q3 2018 Results October 25, 2018

Issuer and Contact Siltronic AG Hanns-Seidel-Platz 4 D-81737 München Investor Relations: Petra Mueller email: [email protected] Tel. +49 89 8564-3133 Additional Information ISIN: DE000WAF3001 WKN: WAF300 Deutsche Börse: WAF Listing: Frankfurt Stock Exchange Prime Standard Financial Calendar Full Year 2017 Results March 5, 2018 Annual General Meeting April 19, 2018 Q1 2018 Results April 25, 2018

Disclaimer

The information contained in this presentation is for background purposes only and is subject to amendment, revision and updating. Certain statements contained in this presentation may be statements of future expectations, future financial performance and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties. In addition to statements which are forward-looking by reason of context, including without limitation, statements referring to risk limitations, operational profitability, financial strength, performance targets, profitable growth opportunities and risk adequate pricing, words such as "may", "will", "should", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "continue", "projects" or "seeks", "potential", "future", or "further" and similar expressions may identify forwardlooking statements. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions which could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These include, among other factors, changing business or other market conditions, currency and interest fluctuations, introduction of competitive products, poor acceptance of new products and services, change of the corporate strategy and the prospects for growth anticipated by the management. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. Statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Siltronic AG does not undertake and does not intent to undertake any obligation to update or revise any statements contained in this presentation, whether as a result of new information, future events or otherwise. In particular, you should not place any reliance on forwardlooking statements which speak only as of the date of this presentation.

SILTRONIC AG | Hanns-Seidel-Platz 4

81737 München Germany