IPG Photonics 2016 Investor Day

Transcription

World Leadership in High Power Fiber Lasers
IPG Photonics Corporation
The Fiber Laser Company™
(NASDAQ: IPGP)
2016 Investor Day
May 11, 2016
www.ipgphotonics.com
Welcome and Overview
Tim Mammen
Chief Financial Officer and Senior Vice President
Safe Harbor Statement
The statements in this presentation that relate to future plans, market forecasts,
events or performance are forward-looking statements. These statements involve
risks and uncertainties, including, risks associated with the strength or weakness of
the business conditions in industries and geographic markets that IPG serves,
particularly the effect of downturns in the markets IPG serves; uncertainties and
adverse changes in the general economic conditions of markets; IPG's ability to
penetrate new applications for fiber lasers and increase market share; the rate of
acceptance and penetration of IPG's products; inability to manage risks associated
with international customers and operations; foreign currency fluctuations; high levels
of fixed costs from IPG's vertical integration; the appropriateness of IPG's
manufacturing capacity for the level of demand; competitive factors, including
declining average selling prices; the effect of acquisitions and investments; inventory
write-downs; intellectual property infringement claims and litigation; interruption in
supply of key components; manufacturing risks; government regulations and trade
sanctions; and other risks identified in the Company's SEC filings. Readers are
encouraged to refer to the risk factors described in the Company's Annual Report on
Form 10-K and its periodic reports filed with the SEC, as applicable. Actual results,
events and performance may differ materially. Readers are cautioned not to rely on
the forward-looking statements, which speak only as of the date hereof. The Company
undertakes no obligation to release publicly the result of any revisions to these
forward-looking statements that may be made to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated events.
3
Agenda
Welcome and Overview ………………………………………………………….…….Tim Mammen
Current and Future Market Opportunities…………………………………………. Trevor Ness
Accessories………………………………………………………………… Felix Stukalin
Strategic Growth Projects…………………………………………………Yuri Erokhin
Medical……………………………………………………………………… Gregory Altshuler
Telecom………………………………………………………………………Mark Cannata
Manufacturing
Devices and Components……………………………………………….. Eugene Scherbakov
Diodes………………………………………………………………………..Alex Ovtchinnikov
Break
China……………………………………………………………………………………… Trevor Ness
Financial Review…………………..…………………………………………………… Tim Mammen
Summary and Growth Strategy............................................................................ Valentin Gapontsev
Q&A Session
Tours and Lunch
4
IPG Overview
 Global leader in industrial fiber lasers
 FY 2015 sales of $901 million; YOY growth of 17%
 $4.53 diluted EPS; up 20% YOY
 Q1 2016 sales of $207.2 million; YOY growth of 4%
 $0.99 diluted EPS; up 2% YOY excluding foreign
exchange transaction loss/gain
 Growing acceptance of fiber lasers replacing traditional lasers
 Products are sold to OEMs, systems integrators and end
users for use in many industries
 Global operations with over 3,700 employees
5
Investment Highlights
The technology leader and most profitable
company in the rapidly growing fiber laser market
 Expanding $4.8 billion opportunity for all lasers
 Approximate average annual growth rate of 6%
 Recognized leader in the rapidly growing fiber laser market
 Estimated 12% CAGR from 2015 to 2020
 Significant competitive advantages




First mover advantage
Performance, product range and reliability
Lowest cost (vertically integrated model)
Strong IP position
 Vertical integration and direct sales model drives industry-leading
margins (54.6% GM in FY 2015, 55.2% GM in Q1 2016)
 Broad geographies, end markets and applications
 Asia & Australia 51%, Europe 33%, North & South America 15%
6
Rapidly Taking Share in Large, Existing Laser Markets
2015 - Share of Total Laser Market
(000)
$8,000
$6,751
$7,000
Fiber, 31%
$6,000
$5,000
$4,800
$4,000
$3,000
$2,600
$2,000
$1,480
$1,000
2020 - Share of Total Laser Market
$All Lasers
Fiber Lasers
All Lasers
2015
Fiber Lasers
2020
Forecast
Materials Processing
Advanced Applications
Fiber, 39%
Medical
____________________
Source: Laser Focus World, Industrial Laser Solutions, Strategies Unlimited, Optech Consulting and IPGP estimates.
7
Materials Processing – Diverse End Uses and Customers
Automotive
General Manufacturing
Heavy Industry
Oil & Gas
Shipbuilding
Nuclear
Construction
Aerospace
Shipbuilding
Semi/
Electronics
Displays
Consumer
8
Recent & New Product Introductions
 Expand addressable market and enhance future growth opportunities by
addressing new application and customer specific requirements
CURRENT
 Marking &
Engraving
 Cutting
 Welding
 Fine
Processing
 Additive
Manufacturing
FUTURE
 Brazing
 Drilling
 Welding of Alloys and Specialty
Materials
 Cladding & Deposition
 Ablation
 Display & Imaging
 3D-Cinema
 Entertainment and Projection




Micro-processing
Medical Devices
Bio-Medical
Sensing & LIDAR
9
Future Opportunities in Micro-processing
Semi/PC
Board/Display, $153
CO2/EUV ,
$193
Solar/LED/
Other, $367
Other
Applications,
64%
Excimer/DUV ,
$719
Addressabl
e Market,
36%
Significant area of growth for ultra-fast pulsed lasers, and shorter
wavelength lasers at the green and ultra-violet wavelengths
10
Other Applications Provide Potential Additional Longer
Term Growth Opportunities
(US$ mm)
2015
2020
Displays & Light Shows
$192
$161
$628
$569
Sensors, LIDAR & Inspection
$67
$1,042
Mid-IR Spectroscopy
$236
$108
R&D
$455
Defense
$524
$372
$594
Medical
Fiber participation is relatively low in these other applications. Longer term opportunity will depend
on successful product development and market acceptance of fiber laser products.
____________________
Source: Strategies Unlimited, IPGP estimate of potentially addressable market.
11
IPG’s Defensible Laser Position
Vertical
Integrated
Business
Model
Strong IP
Portfolio
Manufacturing
Scale
12
Leveraged Sales Model Maximizes Market Reach
Direct Sales
End User
End User
End User
OEM
End User
End User
Direct Sales
End User
OEM
End User
Factory 1
Large Manuf.
Factory 2
Factory 3
Direct Sales
Integrator
End User
Representatives
End User
Three Distribution Channels
OEMs/Integrators
Direct Sales
13
Representatives
Current and Future Market Opportunities
Trevor Ness
Senior Vice President, World Wide Sales and Marketing
Diverse Product Lines and Market Opportunities









IR Lasers
UV Laser
Ultrafast
Visible Fiber Lasers
Systems
Accessories (Felix Stukalin)
Strategic Growth Projects (Dr. Yuri Erokhin)
Medical Applications (Dr. Greg Altshuler)
Telecom (Mark Cannata)
15
IR Lasers
IPG Laser Wavelengths, Mode of Operation and Power
Wavelength
400 nm
Ultra-violet
UV ~0.36 mm
1.5 mm
700 nm
Visible
Near-Infra-red
Blue, green, yellow , orange and red 0.45-0.73 mm
Mode of Operation
• CW: the laser is ON all the time
> 5 mm
Mid-Infra-red
Diode
Ytterbium Erbium Thulium, Cr:Zn/Se/S Fe:ZnSe/S
~0.98 mm ~1.07 mm ~1.5 mm Holmium 1.8-3.4 mm
3.4 -5.2 mm
~2 mm
Any wavelength, any
pulse duration, any
average power:
ANY APPLICATION
• Quasi-CW: the laser is modulated in ms to ms range
• Pulsed: the laser is switched on for 10-9 s
• Ultrafast: the laser is switched on for 10-12 t0 10-15 s
Laser Power
IPG manufactures lasers with average
power ranging from a few Watts to
hundreds of kW (virtually unlimited)
17
IR Lasers Overview
 Overview:
IR fiber lasers are the laser of choice in
materials processing applications
 Strategy:
IPG fiber lasers have the broadest product
range, the highest performance and
reliability, the lowest cost of ownership and
offer unmatched integration capabilities
 Margin Profile:
Vertical integration and direct sales model
drives industry-leading margins
 Growth Targets:
Fiber lasers forecast to outpace laser market
growth, with CAGR of 15% though 2019
Source: Optech Consulting and IPGP estimates.
18
Materials Processing Laser Market
Opportunity for Continued Fiber Laser
Market Share Gain is Significant
(US$ mm)
IPG’s Core Existing Applications
New Applications
$1,867
$1,453
$1,323
$644
$569
$278
2015
2020
High Power
$718
$662
2015
$431
$333
$385
$352
$219
2020
2015
Marking
$520
$144
2020
Fine Processing
2015
$183
2020
Micro Processing
(Excludes lithography)
All Lasers
Fiber Lasers
____________________
Source: Laser Focus World, Industrial Laser Solutions, Strategies Unlimited, Optech Consulting and IPGP estimates.
19
Fiber Laser Penetration of High Power Applications
$1,400
80%
70%
$1,200
Welding
Opportunity potentially
much more
significant
$364
60%
$1,000
50%
$800
$600
40%
$591
30%
$967
$180
$400
$200
20%
$219
$462
10%
$356
$182
$-
0%
2015
(US$ mm)
2020
2015
Cutting
Fiber Lasers
Welding & Other High Power
All Other Lasers
Cutting Applications
Flat Sheet
Cutting
3%
Fiber Market Share
Welding Applications
7%
16%
Power Train
Tube Welding
Tube Cutting
3D Cutting
2020
Car Body Scanner
Welding
Car Body Seam Welding
/ Brazing
Other
81%
20
27%
40%
9%
17%
IR Laser Applications
Cutting
Cladding
Brazing
Welding
Additive Manufacturing Marking
21
Drilling
Surface Treatment
High Power Cutting
Market estimated at 7,500 systems per year.
Underlying growth rate est. at 5-7% per annum
- World leader with commanding market
position with room to grow
- Total market size expanding; ease of use,
lower cost, higher power trends
- Fiber penetration estimated at 35% in Y15
with potential to grow to 80% by Y2020
Source: Strategies Unlimited & IPGP estimate
22
Cutting Applications
Flat Sheet
Cutting
3%
16%
Tube Cutting
3D Cutting
81%
High Power Cutting
• Approximately 30 major OEMs
Y15 High Power Laser Cutting
55.6%
35.2%
• Fiber forecast to grow to 80%
market share by 2020, remainder
CO2 & Disk
9.2%
Fiber
Source: IPGP estimate
Disk/OtherFiber
• Total market size of kW scale
machines approximately 7,500
units, forecast to grow at CAGR
of 5-7% through 2020; over
10,000 machines
CO2
• Estimate 60-70% IPG share of
industry sales achievable by 2020
• Some fiber opportunity not
available to IPG due to OEM
own laser/competition
23
High Power Welding
Remote Welding
Spot Welding
Seam Welding
Laser Seam Stepper
24
Braizing (aesthetic,
roofs, trunks)
Fine Welding
Introduction – Laser Welding Market
Welding Market USD - Laser Sources
600,000,000
CAGR
7%
500,000,000
400,000,000
300,000,000
200,000,000
100,000,000
0
2015
Global HP Laser Welding Market - Analysis
by units (excl. Surface Treatment)
2019
3,000
2,500
2,000
1,500
1,000
500
Source: Optech Consulting, Sep. 2015;
Strategies Unlimited Mar. 2016; IPG estimates
0
2015
25
2019
Transitions in Welding – Medium and Long Term
FUTURE
CURRENT
Limited Materials
Niche Welding
Applications
Diverse Materials
Diverse Industries
Automotive
Aerospace
Construction
Heavy
Equipment
Railways
Shipbuilding
Transportation
& Storage
High Strength
Steel
Aluminum
Titanium
Alloys
Thick
Materials
Diverse Products
Aircraft
Autos
Bridges
Buildings
Pipelines
Rails
Railcars
Ships
Storage Tanks
Trucks
In many instances strength of the laser weld > welded material
Decreasing cost of laser welding, new laser welding technologies, know-how,
software & algorithms
26
High Power CW Welding
• TAM – Expecting to grow to 2,200 units by Y19
(conservative estimate)
• Estimated CAGR of 6-7%, expected to outpace market
growth for 2016 ~10-15%
• Welding covers a wide industry cross section that
encompasses aerospace, construction, consumer
appliances, furniture, heavy industry and automotive
2015
• Opportunities include CO2 displacement, new braising
technologies, new remote welding solutions,
penetration of new industries and flagship customers
IPG has strong traction within
automotive segment.
Over 850 HP lasers installed in
welding applications with
automotive end users globally.
Source: Strategies Unlimited, Optech Consulting and IPGP estimates.
27
38.5%
Auto
61.5%
Welding other
New High Power Scanning (Remote Welding)
• 2D currently undergoing testing, prototypes to
apps labs and test customers this quarter
•
3D alpha testing expected in Q3’16,
prototypes in Q3’16
•
New IPGWeld software and the scan
controller seamlessly interfaces to IPG lasers
and scanning systems
•
With the addition of the application software,
IPG is able to offer a complete remote
welding solution to Integrators and OEMs
•
Target to capture 50% of industry sales,
incremental $45-$50M
Market size scanning ~380 lasers in
Y15, our sales <30%. Expect to grow as
we roll out an integrated total product
that we can support, at a competitive
price point.
28
New Product Introductions: High Power Scan head
Market Opportunity*
[Product Image]
(US$ mm)
$140
$90
High Power Scan head
2015
Description:
Scan head for high speed welding in 2D and 3D for
use with kW class lasers
Applications/Markets:
Automotive; body in white, seat welding, battery
welding
Advantages:
Ease of use, lightweight, competitively priced, 2D &
3D IPG is able to provide complete solution laser +
beam delivery + chiller + software
29
2019 (E)
Launch:
Q2 2016
Market Opportunity*:
$140M estimated by Y19
Strategy:
Customer testing from Q2 in multiple
geographies
*Source: Optech/IPG
New Product Introductions: Trifocal Brazing
Market Opportunity*
(US$ mm)
$65
$34.5
2015
2019 (E)
Trifocal Brazing
Description: IPG's new YLS-5000-BR trifocal laser
brazing allows cleaning of the base metal parts improving
filler material flow, resulting in reproducible brazed joint
with increased strength and better appearance
Applications/Markets: Brazing of Electrogalvanized
Material, Automotive manufacturing
Advantages: Unique three beam approach, cleaning
and braising. Highly reproducible brazed joint with
increased strength and better appearance
30
Launch: Launched Q2 Y15, several large
automotive manufacturer wins, multiple
global engagements
Market size estimated at 140 units, growing
to 380+ by Y20
Strategy: Rapid deployment globally to
become technology of choice for brazing
Source: Optech Consulting, Sep. 2015;
Strategies Unlimited Mar. 2016; IPG estimates
Unique Quasi-CW Fiber Lasers
Fine welding, brittle material cutting, high power drilling
•
•
•
•
QCW has grown strongly in past 3 years to $56M in Y15
Market opportunity to displace YAG remains with 5000+
per annum still produced in China. Expect 20-30% of
market to transition to QCW
Unique technology with high peak power, has typically
displaced old YAG lasers which are large, inefficient and
unreliable
Target to grow to $100M by Y20
•
Medical Devices
•
Micro welding
•
Computer
Components
•
Deep Engraving
•
Drilling (aerospace)
•
Cutting
•
Spot Welding
•
Batteries
•
Seam Welding
31
Pulsed Lasers
1-100 W, 1-200 ns, up to 1 mJ
Main market application marking &
engraving across most/all industries,
ablation, cleaning, micro-processing
•
•
•
•
Increased competition in low power
pulsed market; erosion of ASP’s
IPG working in higher power
applications, sales up 20% in Q1
with good pricing/margin
New integrated marking platform
(laser + scan head + software)
gaining traction
Opportunities in higher power
applications growing; coatings
removal, cutting applications
•
•
Low Divergence
High Beam Quality
New 100 W to 5 kW, 100-600 ns, 10100 mJ
•
•
Strategy – Defend volume market,
expand applications and trend to
high power
32
High Throughput
High Pulse Energy
UV Fiber Lasers
New Product Introductions: UV Fiber Lasers
Market Opportunity*
(US$ mm)
$140
$110
Low Power UV Laser
2015
Description:
Laser marking module with 2-axis scanner
integrated with IPG UV laser
2019 (E)
Launch:
Ready for introduction
>$110 million
UV marking for white plastics and cabling;
electronics, aerospace
Advantages:
IPG’s Complete UV Marking Module Provides
Ease-of-Integration, High Performance and
Reliability to Integrators and OEMs at a
competitive cost point
34
*Source: IPG Estimates
Ultrafast Fiber Lasers
Ultrafast Lasers
Ultrafast lasers have short pulses of pico (10-12 s) to femtosecond (10-15 s) duration,
pulse duration so short that little of no thermal damage occurs when laser interacts
with materials.




Pico and femto pulses enable
microprocessing and medical applications
Key process areas are micro cutting,
scribing, 3D micro-milling, micro hole
drilling and blind hole machining, laser liftoff, selective material removal and ultrafine
marking
Typical industries include production of
consumer and appliances, semiconductor
industry, medical device manufacturing and
medical procedures
Leverage IPG fiber laser technology into
the $130+M ultrafast laser market segment
by developing compelling new lasers
differentiated by performance, form factor
and total cost of ownership
36
New Product Introductions: Picosecond Fiber Lasers
Market Opportunity*
(US$ mm)
$300
$190
Industrial Picosecond
IR Laser
2015
2019 (E)
Launch:
Description:
Ready for introduction
Air-cooled, rack-mountable chassis featuring
remote head produces 50 µJ pulses at high
repetition rate totaling >50 Watts average power $190 million annual industrial
picosecond laser market opportunity
Sapphire scribing (LED)/cutting (watch glass),
Strategy:
high strength glass cutting (smartphone/tablet), IPG will accelerate ultrafast market
thin film ablation (display/electronics)
growth by providing robust, easy to
integrate economical fiber lasers
Advantages:
*Source: Strategies Unlimited
Compact, affordable, reliable picosecond laser
37
New Product Introductions: Femtosecond Fiber Lasers
Market Opportunity*
>$1B
$620
Industrial Femtosecond
IR Laser
2015
Description:
Air-cooled, rack-mountable chassis featuring
remote head produces 500 femtosecond pulses
at high repetition rates totaling >10 Watts
average power
2019 (E)
Launch:
Initial units available
>$600 million annual industrial
femtosecond laser market opportunity
Strategy:
IPG’s robust, affordable fiber lasers will
enable femtosecond laser processing to
enter the mainstream
Medical (Laser Eye Surgery), Scientific,
Ultra-precise micromachining
Advantages:
Compact, affordable, reliable femtosecond laser
38
*Source: Strategies Unlimited
Visible Fiber Lasers
Green Fiber Lasers Overview
 Overview:
IPG provides visible fiber lasers in many wavelengths, including red, yellow,
orange, green. These sources can be utilised in many application areas such as
materials processing, medical and entertainment. For example green wavelength
has distinct advantages for fine processing of highly reflective metals like Copper,
gold and platinum
 Strategy:
Penetrate emerging micro applications and enable new applications through the
introduction of visible fiber lasers with unprecedented performance levels
 Competition:
IPG Green Fiber lasers provide unprecedented levels of average power with
reasonable pulse energy in a rack-mountable industrial footprint with an elegantly
compact remote laser head
40
New Product: High-Power High Rep Rate Green Fiber Laser
Market Opportunity*
$10-20
(US$ mm)
<$1
High-Power Quasi-CW
Green Fiber Laser
2015
Description:
Rack-mountable 500 Watt single mode laser
providing 1.5 nano second pulses at high 150 MHz
repetition rate through a compact remote head
Emerging applications in reflective metal welding and
drilling, wafer and glass panel annealing
Advantages:
Unprecedented level of single-mode green power
Launch:
Expected Q3 2016
Market Opportunity:
Kilowatt-class HRR green laser creates a new
market segment
Strategy:
IPG is partnered with leading OEMs in the
PCB, Aerospace and Semi Equip industries to
pioneer new applications
*Source: IPG Internal Data
41
2019 (E)
New Product: Nanosecond Green Fiber Laser
Market Opportunity*
(US$ mm)
$451
$263
High Pulse Energy Green
Nanosecond Fiber Laser
2015
Description:
Rack-mountable 100 Watt nanosecond laser
providing up to 500 milliJoule pulse energy
through a compact remote head
Solar Cell thin film ablation and wafer dicing,
precision via drilling for microelectronics PCBs
Advantages:
Unique combination of throughput and precision
stemming from high pulse energy and short 1.5
nanosecond pulse width
42
2019 (E)
$250M annual micro materials laser
market in Semi, PCB and Solar
Strategy:
IPG partners with leading micro materials
processing companies to pioneer new high
pulse energy green applications
*Source: Strategies Unlimited, 2016 Worldwide Laser Report
Laser Systems
Adding Value Through Integration
Resonators
Lasers
Amplifiers
Chillers
and Power
Supplies
Couplers, Switches &
Delivery Fibers
Process Heads
$5-40K
$10$20K
$4-$10K
$3K
$15-$20K
$4-$10K
$50K to $1.0
million
$8-$100K
COMPLETE SYSTEMS $200k to $5 million +
INTEGRATED LASER, ACCESSORIES
AND CONTROLLER TO DRIVE
LASER, OPTICAL PROCESSING AND
ROBOT
44
Laser Systems – Developing New Applications and
Opportunities

Overview:
IPG manufactures complete integrated systems for welding, cladding, cutting, drilling. The
systems are typically customised solutions i.e. 50kW laser welding cell with IPG laser,
welding head, control software for US customer welding rockets. We integrate the industry’s
best lasers with IPG high precision motion systems, optics, beam switches, processing
heads and software.

Strategy:
Penetrate new applications for lasers and expand product portfolio through the development
and introduction of specialized laser-based systems to meet the specific needs of
manufacturing end users whose requirements are not met by standard systems or in certain
geographic areas where fiber laser systems are not currently available

Growth Targets:
Target to develop systems business of $200M + by 2020
45
Laser Systems Overview
New system platforms offering specific laser and beam delivery tailored to specific
applications
Small format 2D
cutting
Micromachining
Tube and Profile Welding
Multi-axis pipe
welding system
Small format multi-axis
welding, cutting & drilling
Multi-axis welding,
cutting & drilling
Laser Seam Stepper
46
Orbital Pipe Welding
Robotic Laser Processing System
High Power Automated Welding System
 Laser Equipment:
– YLS-50000-CT 50 KW Welding Laser
– IPG FLC D50 Welding Head
– LC170 Chiller
 Motion System
–
–
–
–
6-Axes Robot, 10 ft reach
10 ft linear track
Rotary worktable 22 ton 8 ft dia
Tip/Tilt 2-axes positioner
Application: Welding Aerospace Components
Example. Seam welding 1 inch thick copper
47
New Product Introductions: Laser Systems
5-Axis Pipe Welding System
Description:
Multi-axis high power fiber laser pipe welding
system
Launch:
First system delivered in Q1 2016
Pipelines, construction
Market Opportunity:
Large application area with zero
penetration by lasers today
Advantages:
High productivity vs incumbent technology
48
Macro and Micro Laser Systems Market
Macro and Micro Laser Systems
2015 - Approximately $9.6 Billion*
10%
11%
38%
Cutting
Welding & Brazing
Other High Power
10%
Micro-processing Excluding DUV & EUV
Fine Cutting, Welding & Drilling
Marking
19%
9%
Other Low Power
2%
*Source: Strategies Unlimited, Optech Consulting and IPG Photonics estimates
49
Accessories
Felix Stukalin
Senior Vice President, U.S. Operations
Typical Laser System Architecture
Lasers & Chillers
Couplers, Switches &
Delivery Fibers
Cutting Heads
CUTTING
Laser System
MARKING
WELDING
Welding Heads
Pulsed Laser
Controller +
Software
51
Scan Heads
Integrated Modules
Strategic Rational
 Significant greenfield revenue opportunity
 Facilitates higher power laser sales through integrated subsystem
solution
 Enables new laser material processing applications through optimized
beam delivery and process control
 Captures more value from laser processing by integrating lasers, with
beam delivery, controllers, software and process monitoring
52
IPG Strategy
 Product Development of Laser Process Heads
– Develop product platforms for highest volume applications
– Leverage expertise into more specialized and new applications
 IPG Differentiators
– Achieve highest quality through technological superiority
• In-house high power optics and coating capability
• Extensive testing with high power laser
• Advanced application expertise
– Offer superior performance though integration with laser source
– Provide lower cost through vertical integration
53
Major IPG Opportunity for Integrated Heads
 Value
–
–
–
–
–
Cutting and welding heads are sold at 10% of laser price
Advanced process heads are sold at 30% to 50% of laser price
Marking heads are sold at 30% of laser price
Sensors and advanced features are sold at significant premium
IPG can offer better value to IPG customers
 Performance
– Power of IPG fiber lasers advanced faster than process heads
– Existing offering have power limitations above 20 - 30 kW for welding and
above 6 kW for cutting
– IPG in-house optics technology and sealed designs solve power limitations
 Sales and Service
–
–
–
–
One-stop shop from IPG for the laser, processing head and application
Enhanced opportunity for advanced applications development
Service and warranties are aligned with integrated solution
Service and support benefits from IPG’s worldwide infrastructure
54
Total Available Market* – Accessories Sold with IPG Lasers
 Total available in 2015 ~$150M, projected 2020 ~$280M to $300M
 Targeting >60% market penetration by 2020 ~$180M
– IPG currently provides 100% in Switches and Process Fibers
– IPG current share is less then 10% in Process Heads and Scanners
TAM
2015
2020E
TOTAL
$150M
$280M-$300M
Welding heads
$35M
$80M
Cutting heads
$50M
$80M
Scanning heads
$30M
$60M
Beam Switches
$22M
$45M
Process Fibers
$13M
$25M
*Market size estimate by IPG
55
Recent Products Introduced in 2015
•
•
•
•
Highest power handling in the
Industry – 12kW
Ultra-stable capacitive height
sensing
Hermetically sealed design
Motorized Focus and Pierce
Sensing options
WOBBLE & SEAM
TRACKING MODULE
WELDING
CUTTING
IPG CUTTING HEAD
•
•
•
•
•
•
•
•
•
Remote Scanning
Applications
Plug & Play with QCW or
CW lasers
Up to 2kW laser power
handling
Calibrated Scan Field
50kW WELDING HEAD
WELDING
SCANNING
MID-POWER
SCANNING SYSTEM
Wobble and Seam Tracking
combined in one product
Unique Product
Provides improved weld quality
and better visual finish
Variety of Wobble shapes at a
frequency of 300Hz
Power Handling of up to 12kW
•
•
•
Optimized for welding applications
of up to 50kW
Provides unmatched results in
penetration depth
35mm+ of penetration
depth in SST at 50kW
56
New Products for 2016 Introduction
•
•
•
D30 WOBBLE & SEAM
TRACKING MODULE
WELDING
CUTTING
IPG HP CUTTING
HEAD
Highest power handling in the
Industry – 15kW
Ultra-stable capacitive height
sensing
•
•
•
•
REMOTE WELDING
MARKING
UV INTEGRATED
MARKER
Integrated Module
Optimized for Marking
applications
Completely sealed
design
Includes Controller and
Software
57
•
•
•
IPG Wobbler design is now
available in a compact and
lightweight architecture
Wobble frequencies of up to
1000Hz
Power Handling of up to 6kW
2D/3D REMOTE
WELDING
•
•
•
•
•
Highest power handling in
the Industry – 15kW
Through the lens vision
Plug and Play with IPG
Lasers
Available with IPG Controller
and IPGWeld software
Next Level of Integration - Specialized Beam Delivery
Systems Expand Market Opportunities
Welding with Seam
Tracking Sub-system
•
Welding unit with seam
tracking capability addresses
pipe and seam welding market
Seam Stepper
•
Integrated robotic welding unit
addresses large resistance
spot welding market
58
Cladding Heads and 3D
Cutting Heads
•
Specialized cladding and 3D
cutting heads for emerging
material processing applications
Strategic Growth Projects
Dr. Yuri Erokhin
VP, Strategic Marketing
Laser Luminaire: Large Greenfield Opportunity
 Industry Trend
– Major cinema players upgrading image quality and overall moviegoer
experience, opportunities in other entertainment and signage markets
– Transitioning projectors from Xenon Bulb to laser luminaires
 Opportunity
– ~$200M annualized IPG revenue potential beginning to ramp in 2017
 IPG Solution
– Key Differentiators versus laser diode based illumination alternatives:
• Improved image quality: higher brightness & contrast, lower speckle
• Increased optical efficiency of next gen projector designs
• Reduced overall Cost-of-Ownership
– Leverages IPG existing fiber laser technologies
– Successful product introduction at CinemaCon-2016  Significant interest
from leading projector makers and high-end theater operators
5/11/2016
60
Cinema Market Opportunity: Up to $2.4B Over 8-10 Years
Very Large
Screens 2D
and 3D
Large Screens
Primarily 2D, some
3D capable
Fiber Lasers or
diodes
3D Ultra
Premium
Laser Strength Segments
Projected Top-Down Laser Luminaire
Market Adoption
Medium Screens, Mostly 2D
Segment
Screen
Count
TAM over
8-10 years
Ultra-Premium
IMAX, Dolby, etc.
Mostly 3D
2,000
$200M$400M
Very Large
Screens
2D and 3D
5,000
$250M$450M
Large Screens
10,000
$300M$600M
Medium Screens
38,000
$425M$950M
55,000*
screens
$1.2B to
$2.4B**
* Remaining 85.000 (+/-) screens WW are small size
**Revenue opportunity is exclusive of service
61
Laser Opportunities in Signage and Entertainment Markets
 Laser Projection is rapidly gaining
traction in signage and
entertainment
2015 Freightliner unveiling autonomous truck - Hoover Dam
promo event. 60 projectors with 1.17M lumen
– High impact advertising
campaigns
– Theme parks and museums
– Architectural projection mapping
– Concerts, other performances
 Laser projectors enable lower
costs, easier field installation and
superior image quality
Creating Technology – design; Barco Entertainment – projection system
$50M annualized RGB Fiber Laser
Illumination Source opportunity
http://www.barco.com Projection mapping: A map to spectacle
62
Flat Panel Display Anneal Market Opportunity
 FPD market segments are undergoing
disruptive structural shifts:
– Accelerated growth of high resolution
smartphone displays
– iPhone adopts OLED displays in 2018
– High-Res OLED tablets
 Laser Annealed Low Temperature
Poly-Si (LTPS) is key enabler of these
products
Source: Samsung Display
 $500M market today, dominated by
Excimer Lasers
Unique Flat Panel market opportunity
for IPG UV fiber lasers
63
Source: DisplaySearch, 2014
UV Fiber Laser Flat Panel Market Opportunity
 Excimer Laser Anneal (ELA) is an
incumbent LTPS process
 ELA process (excimer) suffers from
high cost, both initial capital
requirements and high ongoing
equipment maintenance
 96% of LCDs (by area) still fabricated
on a-Si will transition to high mobility
backplane  fiber laser opportunity
DisplaySearch, Jan., 20th, 2014
By 2018 Samsung Projects Proliferation of LTPS
into High End Tablets
 3-5x lower operating cost vs. ELA
expands OLED to next generation
smartphone, tablet and laptop displays
 >$300M IPG opportunity
 IPG patent pending processes under
evaluation with three major WW Flat
Panel Manufacturers
*Source: Samsung
64
Laser Ablation for Paint Stripping and Surface Cleaning
Environmental Benefits:
Solid waste (lb.) generated
Per 1 lb. on paint stripped
Plus 165 lbs of Liquid Waste
10

Ablates paint from the surface

Vacuum removes 99.9% of residue

Does not require chemicals which produce toxic
sludge or plastic beads

Manual paint stripping requires:
5
0
Media Blast*
Solvent*
Paint Stripping Method
Laser
Ablation**

F-16 4 people

16 to 18 people for a C-130

Dept. of Defense current paint stripping costs >
$800 million per year (2015 Air Force LCMC)

Many applications outside of aerospace:


Cleaning of molds, casts, tanks, pipes &
other surfaces
New generation of Nano-Second Pulsed laser
with average power up to 4 kilowatt

Pulsed product limits thermal damage to
cleaned surface
Sources:
*Potential alternative report for the portable handheld laser small area
supplemental coating removal system, prepared for USAF by SAIC, Feb. 2001
** Penn State Applied Research laboratory, Automated Rotor Blade Stripping
System (ARBSS) study for the USN, 2005
65
Medical
Dr. Greg Altshuler
President, IPG Medical
Large Medical Laser and Systems Market
4-8 Times Larger Opportunity for Laser Medical Systems
($ in Millions)
$9,000
$7,759
$8,000
$7,000
$6,000
Laser medical systems*,
$MM
Laser sources for medical
systems**, $MM
$5,000
$4,110
$4,000
$3,000
$2,000
$1,000
$1,042
$628
$0
2015
2020
*Includes Ophthalmic, Surgical, Cosmetic, Dental and Veterinary applications
Source: BCC Research
**Source: Strategies Unlimited
67
Medical Laser Sources by Type
Laser Medical Systems use legacy technologies such as flash lamp pumped
and gas lasers with slow transition to new diode and fiber laser platforms
2020
2015
Diode laser
17%
Diode
Pumped
SSL
16%
Fiber laser
5%
Eximer laser
4%
Diode laser
20%
Diode
Pumped SSL
12%
Lamp Pumped
SSL
37%
CO2
21%
Fiber laser
9%
Eximer laser
4%
Lamp Pumped
SSL
35%
CO2
20%
IPGM believes it can target 20% to 30% growth
Source: Strategies Unlimited
68
Fundamental Advantages of Fiber Lasers for Photo-medicine
 All spectrum of wavelengths for safer and more effective selective
photothermolysis and tissue surgery
 Pulse width from CW to picosecond and femtosecond
 High-quality laser beam enables tight focusing of energy for precise
and safe surgery and delivery of laser energy to tissue through
ultra-thin quartz fiber
 Low cost compare with old laser technology
 Small system size, air cooling
 High reliability, no water and lamp replacement - low ownership cost
 Opportunity for dramatic improvement of existing laser medical
applications and development new medical technologies
69
69
IPG Medical Overview and Strategy
 Overview:
– IPG Medical provides turn-key solutions for development and manufacturing
of lasers and laser-based medical systems
– ISO 13485 certified and FDA registered manufacturer (2016)
– Research and development in Marlboro (USA) and Fryasino (Russia)
– Production of components and final product in Fryasino (Russia) and final
product for US market in Marlboro (USA)
 Strategy:
– IPG’s unique fiber lasers new game-changing products which are more
efficient, safe and cost-effective and enable new medical procedures
– Penetrate new medical applications, such as urology (BPH and Lithotripsy),
aesthetic (hair removal, vascular and pigment, skin texture and tightening,
body contouring, tattoo), dental (surgery and tissue regeneration),
ophthalmology, through the development and introduction of new products
– Approach the market in partnership with leading medical device companies
in particular fields or direct distribution in selective field and territory
 Growth Targets:
– We target medical opportunities from $70M - $150M in 2020
70
Dental Laser Partnership
 IPG:
– Conducts joint research, design and development of the new product
platform for professional dental use
– Manufactures laser console and application modules on exclusive basis
 Biolase:
– Commercializes the final medical products with Biolase accessories in the
professional dental field under Biolase brand
– Exclusive, performance-based distribution rights
 Expected revenue beginning in 2016
71
Urology Opportunity
 New IPG products based on QCW Tm fiber laser: laser for Lithotripsy and
Benign Prostatic Hyperplasia & Lithotripsy would replace flash-lamp pumped
Ho:YAG laser platforms with more than 10,000 installed base
 2 times faster speed of human stone dusting with significantly lower retropusion
than current “gold standard” Ho laser has been demonstrated in vitro study
(Super Pulse Tm Laser for Lithotripsy, ASLMS Annual Meeting 2016)
 First product would be launched in 2016 in Russia pending regulatory approval
 US and worldwide market would be approached in partnership with leading
urology partner with product launch in 2018
IPG Consumable Surgical Fiber with proprietary connector
72
Dentistry Opportunity
 Gum regeneration for periodontology and implantology
 New solution with IPG proprietary patent pending fractional dental
laser technology
ALD 2015, G. Altshuler et al.: Laser
Patterned technology: a new natural method
of tissue regeneration
Laser patterns on gum
tissue treatment
Before Tx
3 w after Tx
Replacement of tissue
grafting
73
Telecom Products
Mark Cannata
Director, Sales and Marketing, Telecommunications Products
Differentiated Products for Growing Market
 Product Line Today
– Optical amplifiers and Raman lasers
– Optical transmission and DWDM systems
 Markets/Customers
– Fiber-based Fiber to the Home (FTTH) and Cable TV (CATV)
• Arris, Calix, Portugal Telecom
– Ultra-long haul
• ABB, Saudi Electricity Company, Rostelecom
 IPG Differentiators
– Highest power amplifiers, any wavelength/any power Raman
– Proprietary signal processing system technology for ultra-long haul telemetry
and DWDM applications
– Eliminates mid-span optical regeneration in long-haul links
– Provides industry’s highest density amplification with the lowest electrical
power utilization
 Amplifier Market Size
– $520M (2016) growing to $630M (2020)1; 15% CATV amplifiers / 85%
transport amplifiers1
1 Ovum,
Total OC Forecast Spreadsheet: 2014–20, August 2015
75
Optical Amplifiers for Broadband and CATV
IPG EDFAs for FTTH Networks
RF Overlay for CATV delivery
64-port with integrated WDMs
32-port Front Access
~10W amplification
OEM EDFAs for CATV Networks
Fiber Deep architectures
e.g. RFOG, Node Segmentation
Node EDFA
Head-end CATV EDFA
76
Optical Transmission - Line Cards, Modules, DWDM Systems
Addressable Optical Networks Market:
$12.8B in 2016 to $15.4B in 2020
All Growth in 100G+ Line Cards and Pluggable Modules
IPG DWDM and Optical Transport
Menara Optical System Modules
Repeater-less 40x100G DWDM – 400+ Km
10G OTN XFP
System in a Module
100G CFP/CFP2/QSFP
Data Center / metro / Regional
And DWDM Connectivity
77
10G SFP+
Vendor Agnostic Plug-and-Play
IPG to Enter Large and Growing Optical Pluggable
Systems Market with Menara Acquisition
 Product Line Tomorrow (with Menara)
–
–
Patented “System in a pluggable module” integrating all line card functions;
“transponder-less transport”
Short Reach to Ultra-Long Reach, 1G to 100G+ DWDM for all network segments
 Markets and Customers
–
–
Major network operators, CATV MSOs, Data, Wireless
Optical network equipment manufacturers
 Large and Growing Optical Line Card Market Opportunity
–
100G+ market growing from $5.4B in 2016 to $8B by 2020
 IPG + Menara Differentiators
–
–
–
–
–
Vertically integrated transponder technology- optics, ASICs, manufacturing
ASIC with patented mixed-mode coherent & multilevel 100G+ signal processing
Plug-and-play functionality with all vendor transmission and switching equipment
Optimized DWDM solutions with transponder blade elimination
Software Defined Network control
 Synergies
–
–
–
Vertical integration of IPG’s optical transmission solutions
Add new addressable markets for IPG’s telecom portfolio
Leverage IPG’s resources to accelerate time to market, lower cost, expand Menara’s
current markets
78
100% of Optical Networks 5yr Growth in 100G Line Cards
2016
$12,830M
$2.5B Growth
In 100G+ Transmission Line Cards
2020
$15,350M
Terminals,
L2/OTN
switching,
$2,002
Terminals,
L2/OTN
switching,
$1,973
100G, >100G
MXP/TXP,
ROADMs,
Amplifiers,
$1,967
$5,360
ROADMs,
Amplifiers,
$2,531
100G, >100G
MXP/TXP,
$7,900
10G, 40G TXP,
$2,915
10G, 40G TXP,
$3,536
$25.0
Optimistic
Pessimistic
Revenue ($bn)
$20.0
Most likely
$15.0
$10.0
$5.0
$0.0
2012
2013
2014
2015
2016
2017
2018
Ovum, Optical Networks Forecast Spreadsheet: 2015–20, December 2015
79
2019
2020
Growing Telecom Opportunity
Telecom Acquisition Adds Scale to Business and
Expands 3-to-5 Year Growth Opportunity
to between $100 million and $150 million
160,000.00
140,000.00
120,000.00
100,000.00
80,000.00
60,000.00
40,000.00
20,000.00
Current Business
With Menara
80
3-5 Year Opportunity
Manufacturing: Devices and Components
Dr. Eugene Scherbakov
Managing Director, IPG Laser GmbH and SVP, Europe
Proven Vertical Manufacturing Drives Leading Results
 Vertically integrated volume manufacturing provides cost and
technology advantages
 Leverages scientific and manufacturing expertise in different locations to
develop new technologies and implement low cost high volume
manufacturing
 Capitalizes on labor intensive component and finished product
manufacturing in lowest cost geographic locations
 Benefits from proximity to large end markets and customers
 Manufactures in strategic locations where there is strong IP protection
 Manufactures close to customers, providing excellent service
82
Vertical Integration Drives Significant Benefits
83
Major Global Production Facilities
Production Facility and
World Headquarters
Oxford, MA
IPG Laser Facility
Burbach, Germany
Total: 57,000 sq.m.
Clean Rooms: 10,000 sq.m.
Employees: 1,400
Total: 38,600 sq.m.
Employees: 1,113
84
NTO Facility
Fryazino, Russia
Total: 50,000 sq.m.
Employees: 1,100
Vertical Integration & Production Location
US, Germany & Russia
US
Laser diode
Packaging
Fab Operations
Semiconductor Wafer Growth
Up to 120-watts
Diode Processing, Chip Mounting
& Burn-In
Germany & Russia
Optical Preform
US & Russia
Optical Delivery
Systems: Welding
& Cutting Heads,
Scanners, process
fibers
Silica based glass
MCVD method
Dope with rare
earth ions
Germany & Russia
Deep in technology
Deep in experience
Fiber Draw
Draw towers
Final Assembly
Components
Coupling
Final burn in
Shipment
Bragg Gratings
Modules
Up to 2000 Watts
Isolators, Couplers
Fiber Block
85
Core Technologies Manufactured at IPG’s Facilities
Core Technologies
U.S.
Diode Fab/Front End

Laser Diode Packaging

Active and Passive Fibers
Laser Crystals

Fiber & Bulk Gratings

Russia





Fiber Couplers & Combiners
Fiber Blocks & Modules
Germany







Bulk and Micro Optics.

Thin Film Coatings


Laser Assembly



Laser Systems Assembly



Optical Heads & Scanners


86
IPG's Commercial Products
IPG offers more than 510 different fiber lasers for micro and
macro applications!
2013 - First 100kW HPL
10
20
100
200
400
600
1000
2000
4000
5000
Output Power [W]
87
2015 - First 6kW ECO laser
WPE>50%
8000
10000
15000
20000
50000
NTO Sales 2013-2015 at Internal Transfer Prices
($ in millions)
200.0
$173
180.0
160.0
$129
140.0
120.0
$109
100.0
80.0
60.0
40.0
20.0
0.0
2013
HP Lasers
Telecom
2014
LP Lasers
Medicine
2015
Systems
Components
88
Laser Heads
Components Production: Fibers
Active Fibers
NTO IRE-Polus
IPG Laser GmbH
Total length, km
1,400
1,331
1,200
985
1,000
497
879
795
800
644
66
600
418
402
400
200
386
578
200
56
192
823
793
834
2013
2014
2015
67
728
384
180
0
2008
2009
2010
2011
2012
Passive Fibers
NTO IRE-Polus
IPG Laser GmbH
14,000
12,018
Total length, km
12,000
9,523
10,000
8,000
6,100
6,213
6,120
6,000
4,000
3,095
2,000
1,541
1,554
0
2008
3,564
985
575
2009
7,800
6,729
3,600
3,388
3,713
2,712
2,500
3,129
3,403
2011
2012
2013
2014
2,134
1,430
2010
89
4,218
2015
Components Production: Fiber Blocks
Fiber Blocks: Production in Germany and Russia
100,000
93,833
NTO IRE-Polus
90,000
IPG Laser GmbH
Quantity, pcs
80,000
70,000
65,631
60,000
54,488
42,735
40,000
30,000
52,600
32,756
41,032
34,838
32,278
22,569
24,480
20,000
15,756
9,486
4,133
5,353
8,276
10,457
12,839
13,456
13,031
14,263
6,813
2008
2009
2010
2011
2012
2013
2014
2015
10,000
0
79,570
47,677
50,000
Year
90
Pulsed Lasers Production
Pulsed Lasers. Production in US, Germany and Russia.
20,000
18,604
IPG Photonics
18,000
IPG Laser GmbH
16,000
NTO IRE-Polus
15,681
Quantity of Lasers, pcs
14,051
14,829
14,000
11,579
12,000
10,468
10,000
9,246
8,000
2,637
6,000
5,334
6,181
7,697
7,434
7,940
4,011
5,916
-
4,000
5,785
2,000
3,159
-
6,011
6,616
5,640
6,578
2,951
-
2008
2009
2010
817
1,020
1,214
1,125
2011
2012
2013
2014
91
2015
High Power Lasers (P > 1KW)
High Power Lasers. Production in US, Germany and Russia.
4,500
IPG Photonics
3,883
IPG Laser GmbH
4,000
NTO IRE-Polus
3,500
3,021
3,000
2,500
2,241
2,000
2,015
1,518
1,500
1,266
1,398
1,000
590
500
-
259
276
164
191
2008
2009
413
2010
2,758
947
842
352
461
2011
2012
92
724
886
1,051
2013
2014
2015
Low- & Mid-power Lasers (P < 1KW)
Low- & Mid-power Lasers. Production in US, Germany and Russia.
10,000
IPG Photonics
9,000
IPG Laser GmbH
8,000
NTO IRE-Polus
8,734
1,677
7,000
6,000
5,148
3,616
5,000
634
3,652
4,000
3,000
2,000
1,000
2,317
694
1,083
2,940
2,759
1,957
1,647
1,259
2,686
1,454
1,635
1,583
3,441
827
1,043
1,230
1,518
1,755
939
2009
2010
2011
2012
2013
2014
-
2008
93
2015
Scale in High Power Laser Sales
IPG has shipped more than 19,000 lasers with output power of
more than 500-watts since 2007
7,000
6,000
5,000
4,000
>500W
3,000
>1KW
2,000
1,000
2007
2008
2009
2010
2011
94
2012
2013
2014
2015
Rapid Penetration of the Laser Market Across All Products
Approximately 160,000 IPG lasers in the field since 2007
35,000
30,000
25,000
20,000
Total Units Sold
15,000
10,000
5,000
2007
2008
2009
2010
2011
2012
95
2013
2014
2015
Automotive – IPGL
 IPG is already an important player in automotive welding field; ~$108M
revenue in 2015 (primarily for welding, some cutting)
 Potential upside in automotive welding is substantial
–
–
–
–
–
Many OEMs are just starting to use fiber lasers
Huge potential substitution for spot/ arc/ other joining technologies
Move to lightweight materials creates opportunities for fiber lasers
Strong growth potential in electric vehicle batteries
Many new products; trifocal braising, high power scan head, three beam
LSS aid application and market growth
 However- this is a difficult and time consuming market to penetrate
– Requires extensive design in work with auto OEMs
– Long preproduction time frames
– Competition with other joining techniques
96
Automotive – Outlook for HP Lasers
 Auto HP units for joining forecast to
grow from 718 in 2015 to 1,200 in 2019
 IPG targeting to grow sales in joining
from ~50% to 65% through superior
technology, technical differentiation,
applications wins, regional excellence
and strong commercial position
 Opportunity is $200M+ by 2019 (mid
and HP welding, cutting and ablation)
 Existing market forecast could have
strong upside from electric vehicles
Growth in HP Lasers for
Automotive Joining
1200
1000
800
600
400
200
0
2015
2019
Total
97
IPG
Manufacturing: Diodes
Dr. Alexander Octchinnikov
SVP, Components
IPG Diode Manufacturing: Significant Competitive Barrier
 Most technically advanced, highest volume and lowest cost in the industry
 Key Benefits:
– Cost control: Advantage of internal manufacturing
– Quality control: Key subcomponents manufactured internally
– Technology/IP control: Significant process know how, trade secrets & strong
patent protection
– Unprecedented flexibility: Rapid product development and introduction into
volume production
 Scale and Scope:
– Full vertical integration: Not a single manufacturing step or key subcomponent
is outsourced
– High-volume manufacturing: IPG is largest manufacturer of high power pump
laser diodes
– Highly automated robotic manufacturing: Most automation processes and
equipment are designed and manufactured in-house
99
Ongoing Strategic Initiatives and Cost Improvements
 Enhancing vertical integration
 Capitalizing on next-generation pumps
– Increases output power per chip and reliability
– Lowers manufacturing cost volume of packaged diodes
 Improving utilization of existing global facilities
Result: Driving down cost and maintaining significant competitive
advantage
100
Diode Manufacturing Steps and Facilities World Wide
Total Worldwide Facilities:
~135,000 sq. ft. production floor area and ~750 employees
Front-End
Wafer Fab Operation
Chip-On-Submount Assembly
U.S.
Germany
Russia
Wafer Growth (MBE)

─
─
Wafer Processing

─
─
Facet Passivation and Coating

─
─

─
─
U.S.
Germany
Russia
Submount Manufacturing
COS Assembly
Back-End
Test and Burn-In
Screening out low-reliability lots
and individual devices



Packaging
Manufacturing of various types of
pumps



101
FRONT-END: Wafer Fab Operation – Oxford, MA
 Requires most technical expertise
and capabilities
– Highly qualified technical staff,
proprietary designs, equipment and
technology ensure industry best diode
performance and reliability
 Capital Intensive
 Ensures redundant high-volume
manufacturing operation
– Over-capacity in MBE and Wafer
Processing equipment
– Strategic stock of MBE-grown qualified
wafers
102
FRONT-END: Chip-On-Submount Assembly – Oxford, MA
 Scale of Operation
IPG assembles over 0.5 million Chip-On-Submount
each month
 Vertical Integration
IPG manufactures submounts internally
 Automation
Manufacturing is based on automated equipment
(some built in-house), and proprietary processes
 Paperless Manufacturing
Production processes are fully DB-traceable:
translates to higher yields and little direct labor
These advantages result in high yield, little direct labor and subcomponent cost;
thus IPG manufacturing is cheaper than off-shore contract manufacturing
103
BACK-END: Test & Burn-In Operation in
US, Germany and Russia
 Purpose
Key operation to screen out “weak devices”
to ensure long-term reliability of pumps
 Scale
IPG has industry’s largest TEST/BI facility:
over 100,000 COS devices are tested
simultaneously
 Competition Barrier to Entry
All TEST/BI equipment has been designed
and manufactured internally for a fraction of
an open market price
 Long-term Benefit
Every COS used in IPG Fiber Lasers
undergoes rigorous screening by burn-in:
elevated temperature and elevated current
TEST/BI operation ensures high reliability of DIODE pumps:
 Contributes to low cost of ownership of Fiber Lasers, and
 Minimizes IPG need for field service
104
BACK-END: Packaging Operation in
Packaging is the most labor-intensive part of pump
manufacturing and the most “value-added” operation
Facts about IPG Packaging operation:



PLD130
Pioneered commercialization of single emitter pumping
over 20 years ago
Produces industry’s most efficient pumps
All automated equipment and processes used in PKG
operation:
–
–
PLD70

PLD40
PLD40
PLD70
PLD130
PLD80
PLD90
Most commonly used pumps
3 COS
40 W CW
6 COS
60 W CW
12 COS
120 W CW
Designed and manufactured internally for a fraction of open
market analogues’ cost, and
More productive than commercially available analogues
Cost of subcomponents:
IPG is the only company in the industry that
manufactures all micro-optics and packages mechanical
subcomponents internally
–
More than 90% of BOM are internally manufactured parts
and components
New pumps: introduced through 2016
6 COS: new design
> 70 W CW: Q2
6 COS: next design; new package > 80 W CW: H2
105
BACK-END: Packaging Manufacturing Cost in
Labor Productivity Improvement
in PKG Operation
2.35
2.50
2.00
2.00
1.56
Labor Productivity
IPG continues to increase PACKAGING
labor productivity through wider robots
utilization and automation
Internal development and manufacturing
of automation equipment
1.28
1.50
1.00
1.00
0.50
0.00
2011
2012
2013
2014
2015
Manufacturing Cost of IPG PACKAGING operation is lower than
overseas contract manufacturing
106
Summary: Diode Production a Significant Advantage
High volume production levels of pump diodes, proprietary processes
and use of unique chip and package designs allows IPG to increase
yields, lower component costs and assure high quality
Diode Production and Cost Trends
120%
100%
Tested Chips Produced
5,000,000
80%
4,000,000
60%
3,000,000
40%
20%
2,000,000
0%
1,000,000
-20%
-
-40%
2009
2010
Tested Chip Production
____________________
Source: IPGP estimates.
2011
2012
2013
Cost/watt % decrease (base yr 2009)
107
2014
2015
Annual cost decrease %
% Change in Packaged Diode Cost
6,000,000
China
Trevor Ness
Senior Vice President, World Wide Sales and Marketing
Broad Established Presence in Growth Market
•
•
•
•
10 year presence
~150 employees servicing customers in 17 locations.
Broad Geographic Coverage – close to customers
Best service and support in the industry drives sales
Beijing
Shenyang

Headquarter
Central warehouse
Qingdao
ZhengZhou
Jinan
Nanjing
Suzhou
Chongqing
Wuhan

Hangzhou
Chengdu
Shanghai
Ningbo
NingDe
Sheet Metal cutting
application lab
Guangzhou
Shenzhen


Branch office/application lab/service station
Remote service station
Micro Process Application Lab
109
Automotive application
lab
TAM in China
M$
Total addressable market for IPG is $916M , IPG has 36% sales position –
big enough space for growth.
320
288
300
280
260
240
220
200
180
160
140
203
147
142
120
100
80
60
104
40
32
20
Marking/
Engraving/
Cleaning
Resource:
Input from major IPG
Chinese OEMs
Micro
processing
Cutting
(metal/
non-metal)
Micro
welding
110
HP welding Beam Delivery
/ adhesive
System
manufacture
Diverse and Growing End Markets Drive Laser Sales
Chinese industry is intent on adopting advanced technologies to enhance
manufacturing capability
Cutting:
•
•
•
•
•
Fiber laser has significant and growing share vs other sources
Hundreds of OEMs
OEMs expect underlying annual growth of 10%
Significant installed base of 12K+ expected to be replaced by fiber laser during next 2-3 years
IPG is well positioned with strongest product portfolio, superior quality, highest reliability and largest
service coverage
Welding:
•
•
•
•
Automotive: seat welding, body in white, electric vehicles (productivity and weight reduction trends)
Heavy industry: locomotive, oil and gas, pipe lines
Emerging applications replacing traditional non-laser welding: white goods, elevator manufacturers,
cabinet/furniture
New applications to drive production efficiency
– Remote welding, scanner welding and trifocal braising
Cutting and Welding Optical Heads:
•
•
Optical head; IPG is growing its penetration into a large opportunity, selling optical heads into
cutting, welding and scanning applications
$32M annual addressable market in China)
111
Diverse and Growing End Markets Drive Laser Sales
Fine and Micro Processing:
 International and Chinese local electronic brands are accelerating adaption
of laser process: quality and efficiency improvements
 QCW lasers are entering new applications (micro-welding replacing YAG)
and new customers
 UV and Pico second laser are quickly adopted on a large scale: marking
and precise cutting of brittle materials
Marking and Engraving:
•
High power pulse fiber laser (>=100w)
– Cleaning/cutting, engraving, mold making
– Display applications
Emerging Applications:
•
Additive manufacturing
•
Cleaning and ablation
112
Future Strategies
 Manufacturing
– Low cost manufacturing in Russia
– Highest volume vertically integrated producer
 Cost and product solution
– Broadest product range
– High-end and low-end offerings
– Vertical integration drives lowest cost
 Service and support
– Unrivaled service capabilities drives sales
113
Financial Review
Tim Mammen
Chief Financial Officer and Senior Vice President
Financial Highlights
 2014 – 2015 Revenue growth ~17%
 17% CAGR from 2011 to 2015
 Highly diversified revenue stream and business model
 Customers, powers, geographies, applications
 Vertically integrated model driving gross margin
 High return on R&D and SG&A drives strong operating margins
 Strategically focused and efficient R&D that creates value
 Track record of profitability and financial discipline
 Strong return on invested capital (excluding cash)
 43% in 2015
115
Sales and Gross Margin Growth
Gross Margin(1)
(%)
Sales ($ mm)
$1,000
70.0%
$901.3
$900
$800
54.2%
$769.8 54.1%
54.6%
54.2%
60.0%
50.0%
$648.0
$700
$600
52.5%
55.2%
$562.5
40.0%
$500
30.0%
$400
$300
$199.0
$207.2
20.0%
$200
10.0%
$100
$0
0.0%
2012
2013
2014
2015
Q1 2015
Revenue ($mm)
____________________
(1) Gross margin includes stock-based compensation of $2.2mm, $3.2mm, $4.2mm, $5.3mm, $1.2mm and $1.4mm for
2012, 2013, 2014, 2015, Q1 2015 and Q1 2016, respectively.
116
Q1 2016
Gross Margin
Operating Leverage Improvement
Operating Margin(1)
(%)
Sales & Operating
Income(1) ($mm)
$1,000
80.0%
$901.3
$900
70.0%
$769.8
$800
60.0%
$648.0
$700
$600
50.0%
$562.5
(2)
41.2%
$500
$400
40.0%
37.1%
(2)
(2)
38.0%
$342.0
36.9%
33.7%
33.8%
30.0%
$283.8
$300
$208.9
$218.1
$199.0
$207.2
20.0%
$200
$82.0
$100
$70.0
$0
10.0%
0.0%
2012
2013
2014
2015
Revenue ($mm)
Q1 2015
Operating Income ($mm)
____________________
(1) Operating income includes stock-based compensation of $8.6mm, $11.7mm, $15.2mm, $19.0mm, $4.1mm and $5.0mm for
2012, 2013, 2014, 2015, Q1 2015 and Q1 2016, respectively.
(2) Operating margin includes FX gains/(losses) of $2.6mm, $8.8mm and ($5.0mm) for 2015, Q1 2015 and Q1 2016, respectively.
117
Q1 2016
Operating Margin
Strong Cash and Liquidity Position
($ in thousands)
As of December 31, 2015
As of March 31, 2016
Cash and cash equivalents
$582,532
$613,692
Short-term investments
$106,584
$126,273
$1,453,429
$1,550,100
--
--
$19,667
$19,167
$1,259,528
$1,345,856
Total assets
Revolving line-of-credit facilities
Long-term debt, including current portion
Stockholders' equity
 Long-term CapEx target <10% of revenue
 Investments in product and manufacturing technology development,
capacity expansion and sales and service infrastructure
118
A Diverse Mix with Year-over-Year Growth
IPG Sales by Product Lines
($US mm)
$550
$499.6
$500
$450
$426.1
$400
$344.1
$350
$300
$250
$200
$150
$135.3
$131.6
$124.8
$118.2
$99.5
$100
$81.0
$53.8
$50
$28.6
$22.6
$34.9
$13.3 $13.2 $13.8 $3.0
$56.5
$21.5
$8.6
$0
Pulsed
High-Power
Medium-Power
2013
2014
119
2015
Low-Power
YTD 2016
QCW
The technology leader and most profitable
company in the rapidly growing fiber laser market
 Expanding $4.8 billion opportunity for all lasers
 Approximate average annual growth rate of 6%
 Recognized leader in the rapidly growing fiber laser market
 Estimated 12% CAGR from 2015 to 2020
 Significant competitive advantages




First mover advantage
Performance, product range and reliability
Lowest cost (vertically integrated model)
Strong IP position
 Vertical integration and direct sales model drives industry-leading
margins (54.6% GM in FY 2015, 55.2% GM in Q1 2016)
 Broad geographies, end markets and applications
 Asia & Australia 51%, Europe 33%, North & South America 15%
120
Summary and Growth Strategy
Dr. Valentin Gapontsev
Chief Executive Officer and Chairman of the Board
Q&A

IPG Photonics 2016 Investor Day

Transcription

Similar documents

Organic matter cutting applications

Laser Engraving - Source International

laser pointer pen sale

972-258-6400 | TYLOCK.COM

SPEcificAtionS

Here - Ultrazone

Click here to view our Smoothbeam Lasers

HOW IT`S MADE - doctor smile

TGS_ADTS_CENTURION_v2:Layout 1.qxd

Facial Rejuvenation, Lasers or Surgery