Published on November 3, 2008
November
3, 2008
EMCORE Corporation
AeA
Financial Conference
November
3-4, 2008 - San Diego, CA
Hong
Q. Hou, Chief Executive Officer
John
M. Markovich, Chief Financial Officer
Reuben
F. Richards, Jr., Executive Chairman
2
EMCORE
PROPRIETARY INFORMATION
Statements
in this presentation which are not historical facts, and the
assumptions underlying such statements, constitute "forward-looking
statements" and assumptions underlying "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934 including, but are not limited to, (a)
statements regarding future product introductions and performance metrics,
(b) statements regarding 2008 and other future financial performance, (c)
statements regarding future development and growth in the Company’s
markets, and (d) statements regarding projected benefits of the Intel
acquisition. and involve a number of risks and uncertainties, including
whether such product introductions will be successful and whether such
performance will be achieved, and whether such developments and growth will
occur. Readers should also review the risk factors set forth in EMCORE's
Annual Report on Form 10-K for the fiscal year ended September 30, 2007.
These forward-looking statements are made as of the date hereof, and
EMCORE does not assume any obligation to update these statements.
assumptions underlying such statements, constitute "forward-looking
statements" and assumptions underlying "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934 including, but are not limited to, (a)
statements regarding future product introductions and performance metrics,
(b) statements regarding 2008 and other future financial performance, (c)
statements regarding future development and growth in the Company’s
markets, and (d) statements regarding projected benefits of the Intel
acquisition. and involve a number of risks and uncertainties, including
whether such product introductions will be successful and whether such
performance will be achieved, and whether such developments and growth will
occur. Readers should also review the risk factors set forth in EMCORE's
Annual Report on Form 10-K for the fiscal year ended September 30, 2007.
These forward-looking statements are made as of the date hereof, and
EMCORE does not assume any obligation to update these statements.
“Safe
Harbor” Statement
3
EMCORE
PROPRIETARY INFORMATION
3
EMCORE’s
Business Units
Global
Communications and Power at the Speed of Light
Fiber
Optic Components &
Systems for Broadband, 10G
Ethernet, Datacom & Telecom
Systems for Broadband, 10G
Ethernet, Datacom & Telecom
DataCom
Component
Telecom
Component
10
GE TRx (LX4, CX4)
Parallel
Optical TRx
Fiber
Optics
Broadband
(EBB)
CATV
Tx/Rx
FTTx
Tx, PON TRx
RF
over fiber links
Fiber-optic
gyro
Video
Transport
Space
and Terrestrial
Solar
Power Based on
Multi-Junction
Solar Cells
Photovoltaics
Solar
Power (EPV)
Space
Solar Cells
Space
Solar Panels
CPV
Solar Cells
Emcore
Solar
Power
(ESP)
Solar
Power System
Based
on CPV Cells
4
EMCORE
PROPRIETARY INFORMATION
Photovoltaics
Division
5
EMCORE
PROPRIETARY INFORMATION
Silicon
Response Range Limit
Leading
III-V Solar Cell Technology
Replacing Silicon Based Applications
Replacing Silicon Based Applications
§ EMCORE’s
Technology Employs
Three Compound Semiconductor
Solar Cells in Series
Three Compound Semiconductor
Solar Cells in Series
§ Each
cell is tuned to absorb a
different color of light
different color of light
§ By
Converting More Sunlight into
Electricity, EMCORE’s Solar Cells
Operate at Higher Efficiency
Electricity, EMCORE’s Solar Cells
Operate at Higher Efficiency
§ III-V
Multi-Junction Technology
Improvements Promise Still Higher
Future Performance
Improvements Promise Still Higher
Future Performance
7
EMCORE
PROPRIETARY INFORMATION
Solar
Flux
Lens
Solar
Cell
Receiver
1x
1,000x
Utilizes
advanced solar cells to provide the most cost effective solution
Seven
5” Silicon Cells
One
1 cm2
Triple
Junction
CPV
Produces
As Much
Power As
Power As
Terrestrial
Application of Triple Junction
Solar Cell with Concentrator
Solar Cell with Concentrator
§ Lens
concentrates solar flux from 500 to 1,000
times normal irradiance
times normal irradiance
§ Area
of solar cell is then reduced by a factor of
500 to 1,000 compared to a full coverage
500 to 1,000 compared to a full coverage
§ Conversion
efficiency improves under
concentrated illumination
concentrated illumination
§ 38% cell efficiency
in production
§ 40% cell efficiency
recently achieved
§ Comparison of Solar
Module Technologies § § Crystalline Si:
Conversion efficiency of 12-15% at module level § Pros: ¨ Predominant
technology ¨ Most
versatile for all applications § Cons: ¨ Si shortage
(at least until late 2008) ¨ Relatively
high price: ~$3.5-3.8/W § Thin Film: Conversion
efficiency of 5-10% at module level § Pros: ¨ Most cost
effective ~$2/W ¨ Easy to
scale up in production §Cons: ¨ Low
efficiency of surface area/land use ¨
Environmental concerns with some materials (Cadmium Telluride) §Concentrator
Photovoltaics (CPV): efficiency of 25-30% at module level §Pros: ¨ More cost
effective: ~$3.6/W now and <$2/W in 3 years ¨ Most
efficient land use – more power generated per area ¨ Less
equipment and material requirement for production scale up §Cons: ¨ Suitable for
commercial, agricultural, and power utility applications ¨ More
efficient for direct illumination than diffused
light
Terrestrial Concentrator
Solar Cells – History
& Roadmap EMCORE Solar Cell
Technology – Performance at 500x 45% 40% 42.5% 37.5% 35% 32.5% 30%
2005 2006 2007 2008 P 2010 P 33.0% 36.0% 39.0% 43.0% 45.0%
2nd Generation (IMM2) Inverted Meta-Morphic IMM 3rd
Generation Concentrator Triple Junction (CTJ3) 2nd
Generation Concentrator Triple Junction (CTJ2) Concentrator Triple
Junction (CTJ) Year
Developed
10
EMCORE
PROPRIETARY INFORMATION
CPV
Market and Emcore Strategy
Market
§ “Sweet
spots” for CPV products are geographic areas with high level of Direct
Normal
Irradiance (DNI), such as Spain, Italy, Australia, UAE, and US Southwestern states.
Irradiance (DNI), such as Spain, Italy, Australia, UAE, and US Southwestern states.
§ Over
20 pilot installations worldwide, of which 2-3 projects are over
1MW.
§ A
increasing number of developers, owner/operators, banks, and investors
are
beginning to view CPV as the most competitive solution in certain markets.
beginning to view CPV as the most competitive solution in certain markets.
§ Although
the uncertainties on Investment Tax Credit (ITC) in the US and new Feed
In
Tariffs (FIT) in Spain several months ago resulted in a slowdown in new solar
technology adoption, recently approved extensions of these policies should result in
an acceleration of CPV adoption and installation in these markets.
Tariffs (FIT) in Spain several months ago resulted in a slowdown in new solar
technology adoption, recently approved extensions of these policies should result in
an acceleration of CPV adoption and installation in these markets.
§ Due
to the emerging nature of CPV, investors are validating the power
production
economics through pilot installations in a variety of geographic markets.
economics through pilot installations in a variety of geographic markets.
Strategy
§ Utilize
the current product (Gen-II) to develop market acceptance,
§ Team
up with strategic partners for international market penetration,
§ Accelerate
the development and production of the next-Gen (Gen-III) low-cost
system
for large-volume deployment. Gen-III’s hardware cost target is $1.75/Watt and is
scheduled for commercial launch in the second half of 2009.
for large-volume deployment. Gen-III’s hardware cost target is $1.75/Watt and is
scheduled for commercial launch in the second half of 2009.
11
EMCORE
PROPRIETARY INFORMATION
Terrestrial
CPV Components
§ Achieved >40%
efficient (under 1000x) solar cells from triple-junction design.
§ Shipping
minimum average 38% efficient CPV cells.
§ Three
Albuquerque receiver lines fully operational with China close to
launch.
§ Demonstrated
record performance from the IMM design, project CPV efficiency
of 42-45%, targeted to be in production in 2009.
of 42-45%, targeted to be in production in 2009.
§ Providing
standard and custom form factors to over 20 CPV customers.
§ June
backlog for CPV components totaled $52.5M from a diverse customer
base, of which $33M is scheduled to ship in FY09.
base, of which $33M is scheduled to ship in FY09.
12
EMCORE
PROPRIETARY INFORMATION
2004
December
2006
November
2007
Gen
I: 10kW
Gen
II: 25kW
Four
cell prototype
May 2008
Commercial
Deployment
§ 25kW
Array Performance in Albuquerque, NM
0
5
10
15
20
25
30
7:30
9:30
11:30
13:30
15:30
17:30
Time
of Day
CPV
System Milestones
§ Performance
§ Performance
at or above the
design target. Overall system
efficiency ~28%
design target. Overall system
efficiency ~28%
§ System
Certification
§ CE
and UL certified
§ IEC
certification expected by
November 2008
November 2008
13
EMCORE
PROPRIETARY INFORMATION
Terrestrial
CPV Systems
§ Spain
§ Extremadura
(0.85MW in 2008)
§
Completed construction and connected to the power grid in September
2008
§ ISFOC
(0.3MW in 2008)
§
Shipped all modules, construction and connection to complete by
December
§ SolarIG
(0.1MW in 2008)
§ 100-kW
pilot modules shipped and installation scheduled to complete by end of
November
§ United
States
§ SunPeak
Solar
§
Jointly bidding on a number of US utility projects, short listed on a SoCal
utility project (115
MW). Award is expected to be announced by the end of CY2008.
MW). Award is expected to be announced by the end of CY2008.
§ A
Strategic Partner
§
Jointly bidding on a utility project in Southwest (50-80MW), short list will be
announced by
the end of November.
the end of November.
§ A
number of projects under development with various financial
partners
§ Other
Countries
§ Many
projects in Korea, Canada, China, India, Italy, and UAE are under
development.
development.
Cells Receivers
Modules
Arrays
System
Turn-Key Installer
Owner / Operator Strategic Partnership
Opportunities EMCORE Partners § Perfect synergy on CPV
value chain § EMCORE to develop CPV
products § High-performance
and low cost § EMCORE/Partner to
manufacture CPV systems w/ leverage from the Partner § Greater
purchasing power § International
operations § Jointly develop markets
through pilot installations in multiple countries § Long Term supply
agreement on CPV systems
15
EMCORE
PROPRIETARY INFORMATION
Video
Services and “Triple Play” Bandwidth are Driving the Market
|
Telcos
|
Services
|
MSOs
|
|
1Mb/s
(DSL) going to 50 Mb/s (FiOS)
|
High-speed
Internet
|
2Mb/s
going to 50Mb/s (DOCSIS3.0)
|
|
25
channels going to 200
|
HD-TV
Channels
|
25
channels going to 200 channels
|
|
FIOS
and U-Verse
|
Major
CAPEX
|
DOCSIS3.0
and Switched Video
|
Source:
Verizon
Broadband
Market Drivers
16
EMCORE
PROPRIETARY INFORMATION
1550nm
Transmitters,
Video Receivers,
PON Transceivers,
EDFA’s
Video Receivers,
PON Transceivers,
EDFA’s
RF
Satellite Links
Tx/Rx/Delay Lines,
FOG’s, THz, Lithium
Niobate Devices
Tx/Rx/Delay Lines,
FOG’s, THz, Lithium
Niobate Devices
Analog
Video,
HDTV/DTV Video, Mobile
Video and
IP Transport
HDTV/DTV Video, Mobile
Video and
IP Transport
CATV
Transmitters &
Receivers, Subassembly
Boards, Lasers,
Photodiodes
Receivers, Subassembly
Boards, Lasers,
Photodiodes
SPECIALTY
VIDEO
FTTx
CATV
Broadband
Products
17
EMCORE
PROPRIETARY INFORMATION
Broadband
Business
§ We
are a leading provider of Broadband Components and Systems
§ Consolidated
technology, IP, product portfolio & CATV customer base
§ Positioned
as “Arms Merchant” to MSO and Telecom for broadband
buildout to offer “triple play” services
buildout to offer “triple play” services
§ Major
supplier to equipment OEMs serving multi-service operators (MSO’s)
• ~80% share of the
non-captive market in the US
§ Emerging
supplier of FTTP components
• One of the two
qualified B-PON transceiver suppliers to Verizon, and gaining
market share
market share
• Approved vendor to 3
major G-PON transceiver customers
• Competitive cost
through China manufacturing and vertical integration
§ Market
Drivers of CATV Business
§ Upgrade
HFC network to 1 GHz to offer more value-added premium services
§ Build
new networks to businesses to offer commercial services
§ Strong
overseas market demand in Eastern Europe, Russia, India, China, etc
§ Penetrated
into the high growth video transport and IPTV markets
18
EMCORE
PROPRIETARY INFORMATION
● 2.5 &
5Gb/s per ch parallel
Optic Tx / Rx in SNAP-12
● 4-lane parallel TxRx OMC
● TxRx-based optical cable
Optic Tx / Rx in SNAP-12
● 4-lane parallel TxRx OMC
● TxRx-based optical cable
● 10
Gb/s VCSELs & PDs
● 10Gb/s DFB & PDs
● GPON TO Cans
● 1-10 Gb/s TOSA/ROSA
● 10Gb/s DFB & PDs
● GPON TO Cans
● 1-10 Gb/s TOSA/ROSA
● Full
C&L-Band Tunable
Lasers, ITLAs, & trspdrs
● 300-pin Transponders,
● 80-km XFP
Lasers, ITLAs, & trspdrs
● 300-pin Transponders,
● 80-km XFP
Components
LAN
/ SAN
Parallel
Optics
Telecom
Transport
Telecom
/ Datacom Products
●
Xenpak/X2 LX4,
CX4, LR,
SR, ER TxRxs
● 1/2/4 Gb/s SFF/SFP TxRx
● SFP+ and XFP TxRxs
SR, ER TxRxs
● 1/2/4 Gb/s SFF/SFP TxRx
● SFP+ and XFP TxRxs
19
EMCORE
PROPRIETARY INFORMATION
Enhanced
Fiber Optics Positioning
§
RHK viewed Intel as one of the most diverse supplier of Optical
modules
§
Acquisition of Intel’s OPD moves EMCORE into a leading industry
position
“EMCORE
has proven it
can grow its business
through selective
product offerings in
optical components. Its
acquisition of much of
Intel's OPD is another
example. Clearly
EMCORE was interested
in entering the full-band
tunable transponder
market. It acquired good
technology from Intel
that can bring in revenue
today” - - Ovum RHK
can grow its business
through selective
product offerings in
optical components. Its
acquisition of much of
Intel's OPD is another
example. Clearly
EMCORE was interested
in entering the full-band
tunable transponder
market. It acquired good
technology from Intel
that can bring in revenue
today” - - Ovum RHK
Emcore
20
EMCORE
PROPRIETARY INFORMATION
Intel’s
Asset Acquisition
§ Strengthens
EMCORE’s competitive position in Telecom, LAN, SAN, and
high-performance computing
high-performance computing
§ Strong
synergy with EMCORE’s infrastructure and products
§ Combined with
internal laser and photodetector capability, EMCORE will be one
of the few vertically integrated telecom fiber optics module suppliers.
of the few vertically integrated telecom fiber optics module suppliers.
§ Ability to amortize
existing fab and contract manufacturer infrastructure costs to
improve gross margin.
improve gross margin.
§ Status
of integration
§ Transition services
completed in August,
§ Both the Telecom and
Enterprise businesses are fully integrated,
§ Customers are happy
with the smooth transition and more dedicated service from
EMCORE,
EMCORE,
§ Consolidation
synergy and financial benefits are being recognized.
21
EMCORE
PROPRIETARY INFORMATION
Recent
Developments
§ Strategic
Partner
§ An agreement (MOU)
was signed in August with an international conglomerate to
jointly develop solar power projects in the US and internationally.
jointly develop solar power projects in the US and internationally.
§ A
Joint Bid with the Partner on a 50-80MW Project
§ Submitted in
October, short list for this project with a Southwestern utility
company in the US will be announced by the end of November.
company in the US will be announced by the end of November.
§ A
$25M Line of Credit with Bank of America Was Established
§ Closed in September,
this credit facility will assist with the need of working capital
for solar business.
for solar business.
§ A
$27M Industry Revenue Bond (IRB) Was Granted by City of Albuquerque
§ Signed in October,
this IRB will be utilized to offset the tax liability for new
investment in our solar business in Albuquerque.
investment in our solar business in Albuquerque.
November
3, 2008
EMCORE Corporation
AeA
Financial Conference
November
3-4, 2008 - San Diego, CA
Hong
Q. Hou, Chief Executive Officer
John
M. Markovich, Chief Financial Officer
Reuben
F. Richards, Jr., Executive Chairman