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Advanced Display Trends and China Growth

YT KuoVice PresidentAKT Display Business GroupApplied Materials, Inc.

FPD International ChinaSept 10, 2013

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Safe Harbor StatementThis presentation contains forward-looking statements, including those relating to Applied’s display businesses and growth opportunities, and the 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 but not limited to: demand for display products, which is subject to many factors, including global economic and market conditions, technological innovations and evolving industry standards; customers’ ability to acquire sufficient capital, obtain regulatory approvals and/or build infrastructure; Applied’s ability to (i) develop, deliver and support a broad range of products, expand its markets and develop new markets, (ii) manage its resources and production capability, (iii) predict the characteristics of, and capitalize on opportunities in, new markets and technologies, (iv) obtain and protect intellectual property rights in key technologies, (v) align its cost structure with business conditions, and (vi) attract and retain key employees; and other risks described in Applied’s SEC filings. All forward-looking statements are based on management’s estimates, projections and assumptions as of Feb 21, 2013 and Applied undertakes no obligation to update any such statements.

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Electronics Evolution Calls for Display Innovation

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• Display is becoming the #1 differentiating factor of consumer electronics

Samsung 85” 4K2K TV

LG 5” flexible mobile OLEDE-ink flexible e-paper

• The differences in semiconductor content in gadgets are fast diminishing

• Display form factor innovation becomes new driver in addition to visual effects

LG curved OLED TV

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0

20

40

60

80

100

120

140

160

180

200

1995 2000 2005 2010 2015F 2020F

TFT

Dis

play

Rev

enue

($B

)

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New Display Era on the Horizon

Laptop PC

1st Wave

Monitor

2nd Wave

Large Screen TV

3rd Wave

LCD EraCRT replacement

Smart Phones &TabletsNotebooks

4K2K TV; OLED TVFlexible Display

5th~6th Wave4th Wave

Source : DisplaySearch, Applied Materials

Advanced Display EraMobile revolution

New TV technologies

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Display Technology Transitions

SIZE

SIZE

SIZE

Requires Lower power consumption, Higher transistor density,

RESOLUTION

FORM FACTOR

TODAY

TV

PHONE

TV

PHONE

40”

3.5”

HD

>326ppi

55”

4.5”

4K

>600ppi

70”

5”

8K

DISPLAYTRANSISTOR

FLEX OLED

LCDOR

OLED

a-Si

LTPS

OR

MOx>700ppi

Power consumption Transistor density Electron mobility

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OLEDHigh-Res LCDStandard LCD

Backlight

Liquid Crystal or OLED Liquid Crystal Liquid Crystal

Color Filter

LTPS or MOxTFT

LTPS TFT

RGB OLED

TFE

Transistor Plane

(Back Plane)

a-Si TFT

Front PlaneColor Filter

iPhone5326ppi

iPhone3163ppi

Mobile Device440ppi

Optimizing Resolution, Power & Form Factor

LEDLED

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► Particles > 10x Density Reduction

PRECISION MATERIALS ENGINEERING OPPORTUNITY

► Uniformity 3X improvement

Yield Challenges with Large Size Display

Killer Defect Repairable Defect

32”

HD

93%Yield

HD

55”

83%Yield

4K TV

55”

33%Yield

4K TV

90”

0%Yield

300mm Wafer

LARGE AREA PRECISION MATERIALS

ENGINEERING

GEN 8.5GLASS

2.5m

2.2m

5.5m2=59ft2

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CVD Uniformity Requirements with Advanced Displays

In-Cell Touch Steady transistor capacitance to minimize noiseFilm uniformity improves transistor stability

High-ResolutionSmaller pixels require smaller capacitance (Cs) and TFTsFilm uniformity greater effect on TFT capacitance

OLED TFTCurrent driven requires tighter capacitance toleranceFilm uniformity ensures TFT driver performance

200ppi 400ppi

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Applied Materials Enables the Most Exciting Industries on Earth

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DISPLAYSEMICONDUCTOR SOLAR

20,000,000xreduction in COST PER TRANSISTOR in 30 years1

20xreduction in COST PER AREA in 15 years2

3xreduction in COST PER WATT in 4 years

1 Source: SIA, IC Knowledge LLC2 Source: Display Search, Nikkei BP, Applied Materials

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CORE LCD EQUIPMENT

Applied Materials Display ProductsNEW EQUIPMENT SEGMENTS

CVD Array

Array Test

PVD Array

PVDColor Filter

CVD PiVot NAR CF

TV Monitor Notebook Mobile

+LTPS + Metal oxide

+ Touch

New TV Tablet Smart Phone

CVD MOPiVot MO

ADAPTING

LTPS

Metal Oxide

OLED

Hi Res

TouchKPX CVD

PivotEBTT

+ TFE

CVD TFE

+ Advanced

Test

EBT-HR

Full range of solutions to device performance & yield issues

1

1

1

1

1 1

1Market Share

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China Becomes The Most Attractive Market

#1 Technology Adoption

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#1 Display Market

#1 Display Manufacture

R&D Activity Ramping

#1 Display investment

1 Source: DisplaySearch, Strategy Analytics2 Source: AVC, as of Q1’2013

• 22% of WW TV • 22% of WW Smartphone

• 43% TV are smart TVs• 40% TV are 3D TVs

• 70% LCD TV modules

• 50% display investment

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China Has Established FPD Value ChainD

ispl

ay

Bra

nds

Equi

pme

nt

mak

ers Supporting China Display industry with

advanced manufacturing equipment

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l M

aker

sR

etai

l C

hann

el

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Applied Materials and AKT in China

29 years of experience in China

RD&E and/or operations centersSales and/or Service Offices

BeijingTianjin

ShanghaiKunshan

Suzhou

Xi’an

WuxiWuhan

DalianLangfang

Nanchang

AKT officesExisting Display customer fabs

Applied Materials China

Display/AKT

Shenzhen

Chengdu

HefeiWuhu

Nanjing

AMC Founded in 1984

Opened service center in Beijing as the first foreign WFE company to enter China market8 sales/service, R&D/manufacturing, and training centers800 RTF employees

AKT Locations(Since 2004)

Beijing, Shanghai, Chengdu, Hefei, Shenzhen100 RTF employees for Sales/Service, sharing AMC infrastructure

• Gen 5• Gen 8.5

• Gen 6• Touch panel

• Gen 6

• Gen 4.5• Gen 4.5 • Gen 4.5

• Gen 2.5• Gen 5• Gen 8.5• Touch panel• Touch panel

• Gen 5.5• Touch panel

Xiamen

• Gen 5• Gen 5 • Gen 4.5

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Summary

Industry has entered Advanced Display Era, with proliferation of hi-resolution, OLED, and touch

Applied Materials is helping enable new displays with equipment and processes that improve yield of new technologies

Together, we are applying technology and experience for the success of the China TFT-LCD industry

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