Tapping the Opportunity in the Global HighTech Markets

Tapping the Opportunity in the Global High-Tech Markets Dan Vilenski Former Chairman, Applied Materials Israel 12/19/2021 1

The Vilenski Business card BIRD Israel - U. S. Binational Industrial Research and Development Foundation 1969 12/19/2021 1986 1997 2004 2

Jaffa Oranges vs. Software & Life Sciences 12/19/2021 3

Israeli High-Tech Environment n Socialism is moving out, entrepreneurial spirit, similar to the “good old days” in Silicon Valley is taking it’s place No change n Young entrepreneurs with “chutzpah” and innovative ideas motivated by some of the latest successes of many Hi-Tech Israeli - start-ups No change n New generation of successful managers, trained in the USA are moving back to Israel The trend is accelerated due to better job alternatives in Israel 12/19/2021 4

Israeli High-Tech Environment (cont. ) n Lack of experienced scientists and engineers Large number of experienced professionals are available n Manufacturing rising to international standards ISO 9000, TQM etc. No change n Free trade agreements with the European Community and the USA No change with some risk of boycott from Europe n Business and cultural links with international markets No change 12/19/2021 5

Israeli High-Tech Environment (cont. ) n Military technology developed without economic consideration ready and available for commercialization No change n Large number of qualified University graduates No change n Regional instability without a solution in sight -Tech: Was I s Being Changed No change n Poor cooperation between the Academy and the Industry Budget cuts have forced the universities to seek outside funds 12/19/2021 6

Israeli High-Tech Environment (cont. ) High Valuations of Israeli companies, start ups as well as mature companies The current business environment offers attractive valuations for quality companies n Israel will be the center of the “New Middle East” The question is when? n 12/19/2021 7

Foreign Subsidiaries in Israel (partial list) n n n n Intel Microsoft IBM Sun Micro systems CA EDS BMC Cisco 3 Com HP Texas Instruments National S. C Alcatel Philips Ericsson Nokia 12/19/2021 n n n n Marvel ST Microelectronics Infineon Analog Devices Vishay AVX (Kyocera) General Electric Philips Medical Medtronics Boston Scientific Motorola Lucent Technologies Avaya Nortel Siemens n n n n ADC Qualcomm Applied Materials KLA - Tencor Kulicke & Soffa Bio-Rad BAE Systems Ind. Astronautics Sigma Invitrogen J&J Merck Deutsche Telekom British Telecom Daimler Chrysler 8

Foreign Investments in Israel 2006 $4, 000 M $1, 500 M $800 M $300 M $150 M $107 M 12/19/2021 9

A Success Story Applied Materials Team work between Israeli and US teams enabled: § Identified correct market needs - products § Successful integration of newly acquired companies’ § Successful management of transition into a new company culture § Successful integration of financial and information systems 12/19/2021 10

A Success Story Applied Materials Product People Infrastructure People 12/19/2021 11

Success Story Applied Materials ORBOT Wants to enter the metrology & inspection markets The largest supplier of products and services to the Inspection Tools Metrology Tools OPAL global semiconductor industry 12/19/2021 12

Success Story Applied Materials ISRAEL The largest supplier of products and services to the global semiconductor industry 12/19/2021 13

The Challenges Detecting 30 nm defects on a wafer is like… 300 mm Wafer The state of Israel Soccer field 30 nm defects Golf ball White blood cell 12/19/2021 14

Applied Materials PDC Portfolio Wafer Inspection Com. PLUS 3 T UVision 12/19/2021 Mask Review Elite G 3 HP G 3 FIB SEMVision Family Metrology Inspection Verity. SEM 2 RETicle. SEM Aera 15

Strategic Partnership based on the ¢ ¢ ¢ Complement Product Line New Technology Potential Increase of Market Share Bio-Rad o US company o 1. 3 $ Billion sales 12/19/2021 1+1>2 Academia “Golden Egg” Shorter Time to Market ¢ Risk Reduction ¢ Financial Resources ¢ Prote. Optics o Israeli start-up o Originated at the Technion 16

The Product “Golden Nugget” 12/19/2021 17

The Future: Sustainable Development n Renewable Energy ¡ ¡ ¡ n n Alternative energy Storage of energy Saving of conventional energy Water Environment Biotechnology Nanotechnology 12/19/2021 18

www. nanoisrael. org 12/19/2021 19

www. nanoisrael. org 12/19/2021 20

Summary Main points for the unique business climate opportunity n Manpower - availability of quality professionals n Creativity - plenty of word-class innovations from individuals and universities n Valuation – companies with good intellectual property and/or product are having difficulties raising money and are therefore willing to raise funds at lower valuation rates n Financial – governmental financial support for capital and R&D investments are available to “compensate” for the risks 12/19/2021 21

Conclusions § There are risks in starting an operation in Israel § The geographic distance is not convenient § The regional instability is a problem BUT The opportunities are great, it is worthwhile to try 12/19/2021 22