Siltronic AG — Investor Presentation 2017

Jan 18, 2017

Siltronic – a leading producer of silicon wafers

Kepler Cheuvreux German Corporate Conference January 18, 2017

The whole electronic value chain is based on semiconductor silicon wafers

Electronics value chain 2015

Source: Electronics (IC Insights), semiconductors (WSTS), silicon wafers (SEMI SMG), electronic applications (WACKER estimate)

Siltronic is a strong wafer supplier in leading-edge technology

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

Sources: Companies' revenue reports 2015, converted to USD mn

International manufacturing network supports market leadership and business focus

Customer base well diversified across all major semiconductor silicon wafer consumers

Siltronic is a supplier to all top 20 silicon wafer consumers

Note: Top 20 consumers defined according to their fab capacities in the Fab Data Base from Gartner Source: Company Information; Gartner Fab Data Base; Companies' web pages

Continuous improvement of key ingot and wafer properties to meet customers' requirements

After a decade of low utilization market finally back to positive momentum

Profit drivers

Capacity utilization 300mm	Capacity expansion	Depreciation
 ~60% capacity utilization in 2008  Slowly increased over the years  Fully loaded in Q3 2016	 ~1.5% p.a. expansion due to OEE (Overall Equipment Effectiveness)  Investment in additional capacity only at substantially higher prices	 Declining in 2014, 2015 and 2018 due to lower Capex levels
ASP	FX	Hedging

Silicon area grows proportional to semiconductor units, but revenue has been disconnected in the past years.

Semiconductor vs. silicon revenue

(in USD bn per quarter)

Source: WSTS/SIA, SEMI up to Q3 2016

Semiconductor units vs. silicon area

(in bn units / bn cm² per quarter)

The average size of semiconductors is very stable over time. Silicon ASP declined more than semiconductor since 2008.

Silicon area per semiconductor

(in cm² per unit)

Semiconductor vs. silicon ASP (100% = Q1 1996)

Source: WSTS, SEMI

Semiconductor unit sales have been growing continuously, keeping up the main driving force for silicon demand.

Semiconductor revenue

(only silicon based, Jan-Oct in USD bn)

Source: WSTS up to October 2016

Semiconductor ASP is impacted by

• trend from high end to mid-tier phones
• memory price declines in 2015/2016

Semiconductor units grow due to

• high demand for SSDs
• growing semiconductor content

Focus on growing 300 mm and attractive 200 mm business

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

Source: SEMI up to Sep 2016, Siltronic estimates

IHS Markit forecasts silicon wafer demand growth of 5.1% in 2017

Source: IHS Markit (Semiconductor Silicon Demand Forecast Tool Q4 2016 Update)

Bit growth is expected to exceed bit density growth in the foreseeable future. This will result in growing wafer demand.

bit density growth: ~33% (technological progress) bit demand growth: ~40% (enabled by lower cost) wafer demand growth: ~7%

2016-2019 NAND market growth

• New NAND technology helps increase bit density and reduce costs.
• This opens up new applications, and spurs demand growth.
• As a result, bit demand grows faster, and more silicon is consumed.

300mm NAND silicon market, k/m

Source: IHS Markit Q3 2016

Summary: Industry outlook for 2017 is solid due to healthy GDP growth, new 300 mm fabs / expansions and low inventories.

• GDP growth around 3% is driving healthy growth in electronics end markets.
• Semiconductor unit demand is steadily growing.
• ASP pressure in early 2016 especially for memory hampered overall revenue trend.
• Memory market started to recover in mid-2016. Prices are increasing, driven by solid SSD growth and higher memory content in mid-range smartphones.
• Semiconductor device inventories are considered healthy across the industry.
• 2016 was a strong year for semiconductor equipment sales, driven by 300mm device fab expansions of our customers and the transition to 3D NAND.
• Economic fundamentals are a solid base for healthy 2017 semiconductor growth.
• Ongoing 300mm new fab and expansion projects of our customers add to silicon wafer demand.
• Unlike typical seasonality, there are no signs of high wafer inventory in late 2016.
• 2017 is expected to become a good year for the whole industry.

Source: IMF, IC Insights, IHS Markit

Based on technology leadership Siltronic is well positioned to improve returns

Contact and Additional Information

Issuer and Contact		Additional Information
Siltronic AG Hanns-Seidel-Platz 4 D-81737 München		ISIN: WKN: Deutsche Börse:	DE000WAF3001 WAF300 WAF
Investor Relations: Petra Mueller Tel. +49 89 8564-3133		Listing:	Frankfurt Stock Exchange Prime Standard
Financial Calendar
Annual Report 2016	March 14, 2017
Q1 2017 Results	April 27, 2017
Q2 2017 Results	July 28, 2017
Q3 2017 Results	October 26, 2017

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 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, as well as the words "may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, or continue", "potential, future, or further", and similar expressions identify forward-looking 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 and the prospects for growth anticipated by Siltronic AG's 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 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 undue reliance on forward-looking statements, which speak only as of the date of this presentation.