Filed by Applied Materials, Inc.
pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject Company: Applied Materials, Inc.; Tokyo Electron Limited
Commission File No.: 000-06920
Date: September 24, 2013
Safe Harbor Statement This presentation will include forward-looking statements, which are all statements other than those of historical fact, including those related to the proposed combination of Applied and Tokyo Electron and the expected benefits of the combination. All forward-looking 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. Information concerning these risks and uncertainties are contained in today’s press release, Applied’s current reports on Form 8-K and the party’s other filings with the Securities and Exchange Commission. Neither Applied nor Tokyo Electron undertakes any obligation to update the information presented. 2 |
Creating a New Global Innovator |
All stock transaction with new company valued at approximately $29B 4 Applied Materials and Tokyo Electron combining in a merger of equals Creates value for customers and shareholders and great opportunities for our employees Today’s Announcement Creates a new global innovator in Precision Materials Engineering and Patterning |
FOUNDED: November, 1967 November, 1963 HEADQUARTERS: Santa Clara, California, USA Tokyo, Japan EMPLOYEES: ~15,000 worldwide ~12,000 worldwide PATENTS: ~10,500 issued ~16,000 issued LTM REVENUE 1 : $7.2 Billion $5.4 Billion 2 TECHNOLOGY EXCELLENCE: CVD, PVD, Epi, Implant, CMP, Anneal, Conductor Etch, Defect Review, Display CVD, Display PVD Track, Furnace, Wet Clean, Dielectric Etch, ALD, Wafer Prober, Display Etch, Display Track INSTALLED BASE: 33,000 tools 54,000 tools 5 1. LTM = Last Twelve Months through June 2013 for TEL and July 2013 for Applied 2. TEL revenue of $5.4B assumes average yearly exchange rate of 0.86 JPY / USD |
6 Creating value for Customers, Employees and Shareholders Combined portfolio of strong products and ability to invest in highly differentiated products Opportunities to enhance services and field support Creating value for Customers, Employees and Shareholders CUSTOMERS EMPLOYEES INVESTORS Expanded career opportunities to work at a truly global company with vision, resources and talent to provide enabling technology to customers and shape industries for decade to come Mutual commitment to significantly improve profitability Company structure enhances ability to increase cash returns to investors |
7 Our market environment Forming our new company Addressing our customers’ needs A company built on people and talent Beginning our new journey |
8 Our market environment Forming our new company Addressing our customers’ needs A company built on people and talent Beginning our new journey |
96 YEARS Combined Experience of Enabling the Most Exciting Industries on Earth 9 1 Source: SIA, IC Knowledge LLC 2 Source: Display Search, Nikkei BP, Applied Materials 20,000,000x reduction in COST PER TRANSISTOR in 30 years 1 20x reduction in COST PER AREA in 15 years 2 SEMICONDUCTOR DISPLAY |
Our Market Environment Today 10 Top 5 customers are >60% of WFE spending More inflections in the next 5 years than last 15 New applications and markets requires cost effective solutions Faster pace of innovation everywhere in value chain Cycles of Learning Cost Pressures Market Concentration Technology Complexity |
Transistor Interconnect Memory Patterning Packaging Display DRIVING MAJOR INFLECTIONS Functions and features Battery life Interface experience Form factors At the right cost WAR FOR MOBILITY ENABLED BY OUR TECHNOLOGY Precision Materials Engineering and Patterning innovation Device Performance and Yield solutions 11 |
GENERATIONAL INCREASES IN NEW MATERIALS 3D memory transition shifts spending to Materials Deposition and Removal 3Xnm 1Xnm 1Ynm 3D NAND Materials Complexity is increasing in Logic THERMAL & IMPLANT CVD ETCH LITHO Source: Customer Presentations 12 130nm 90nm 65nm 45nm 32nm 22nm 3X1X1Y 3D 3X1X1Y 3D 3X1X1Y 3D 3X1X1Y 3D |
13 Our market environment Forming our new company Addressing our customers’ needs A company built on people and talent Beginning our new journey |
14 Terry Higashi Gary Dickerson Live from Tokyo |
15 Combination accelerates our momentum for profitable growth Complementary strengths provide significant opportunities to understand and solve customers’ high-value problems better, faster and at lower cost Linking core competencies enables customers’ new device architectures through materials innovation and cost-effective scaling |
A New Global Innovator in Precision Materials Engineering and Patterning Precision films Precision materials removal Materials modification Interface engineering Scaling engineering High-k films Selective Epitaxy Reflow PVD Semi-batch ALD Integrated ALD Millisecond anneal Porous low-k films Multi-patterning Conformal doping Co-implants Film Treatments Staircase etch Hard mask films Metal CMP OPPORTUNITIES TO COMBINE COMPLEMENTARY COMPETENCIES FOR CUSTOMERS Deposition, etch and clean • No queue time • No vacuum break 16 HARC etch Flowable CVD |
Broad Portfolio to Address Customers’ Challenges 17 KEY: TEL, APPLIED High Speed, Low Leakage TRANSISTORS Low Resistance and Reliable INTERCONNECT 3D NAND Memory LOW-COST SCALING Enabled by Patterning Anneal CMP Conductor Etch CVD Epi Furnace Implant PVD Track Wet Clean CMP CVD Dielectric Etch PVD Wet Clean Spin -on Dielectric ALD CMP Conductor Etch Dielectric Etch CVD Furnace Selective Material Removal Wet Clean ALD Brightfield Inspection CVD Defect Review Dielectric Etch Track Wet Clean Field Support, Spare Parts and Device Performance and Yield Services |
Combined Expertise in Etch E-chucks Chamber matching Chemistry Source Technology Chamber design Heaters Integrated metrology Best Known Methods Chemical delivery Selective Material Removal New $1B Opportunity Dielectric Etch (Tokyo Electron) >$1.5B Market Conductor Etch (Applied Materials) >$2.2B Market 1: Source - Dataquest 2012, 2 Source - Applied Analyst Meeting 2013 1 2 18 |
19 Our Vision for SEMICONDUCTOR Randhir Thakur |
Semiconductor Complementary Competencies Combination better positioned to innovate for large, sophisticated customers Higher velocity of innovation Broadest product portfolio in both single-wafer and batch systems Integrated process innovation for customers Combined expertise in patterning, transistor, interconnects, advanced memory, packaging Strength across logic, foundry, memory Deep relationships with supply chain and materials companies Higher levels of RD&E to address device complexity and Inflections Platform synergies enable more investment in innovative products Chemistries, coatings, materials and open innovation Scale and sophistication in advanced product development Better service and support for customers Global capabilities, reach and responsiveness Higher employee satisfaction Learning from each other Career opportunities from growth, from winning products Culture of collaboration and teamwork 20 |
21 Our Vision for DISPLAY Ali Salehpour |
Display Complementary Merger 22 No Overlap Between Products AKT: CVD, PVD & Array Test TEL: Etch, Litho Coater/Developer Synergy to Solve Customer HVPs Transistor Level R&D Interface Engineering Better Support for Customers Global Reach Responsiveness Supply Line Synergies Volume Common Parts Higher Employee Satisfaction Tech Collaboration Winning Solutions Career Opportunities |
> 300ppi Resolution New Opportunity for Precision Materials Engineering More Process Steps, New Materials, Tighter Dimensions 23 a-Si Transistors LTPS MOx |
24 Our market environment Forming our new company Addressing our customers’ needs A company built on people and talent Beginning our new journey |
New Company Structure Headquarters and Listings Dual headquarters in Santa Clara and Tokyo Dual listing on NASDAQ and Tokyo Stock Exchange Combine into a new company incorporated in the Netherlands with new name to be announced Shared Leadership Team Chairman: Tetsuro Higashi Vice Chairmen: Mike Splinter and Tetsuo Tsuneishi CEO: Gary Dickerson CFO: Bob Halliday Shared Governance Single Board structure with eleven directors Five Applied Materials nominated directors Five Tokyo Electron nominated directors One additional independent director to be mutually agreed 25 |
26 Our market environment Forming our new company Addressing our customers’ needs A company built on people and talent Beginning our new journey |
Expanded Opportunities for our employees around the world Be a part of a company that will shape industries Expanded career and development opportunities Be a part of the broadest technical community in the industry Learn from each other by combining best practices and technologies 27 |
28 US 25% REVENUE BY REGION EMPLOYEES BY REGION ASIA 65% 26,000 total EUROPE 10% US 33% JAPAN 34% REST OF ASIA 20% EUROPE 13% Our Global Footprint will Mirror our Customer’s Footprint |
29 Our market environment Forming our new company Addressing our customers’ needs A company built on people and talent Beginning our new journey |
Extensive Integration Experience 30 Tried and tested integration practices Dual headquarters and CEO to relocate to Tokyo Integrated Board of Directors Combine best practices to achieve ‘faster, better and at lower cost’ Process Shared Values Global perspectives and cultures Strong heritage of customer service and technical innovation Strong commitment to driving improved profitability Commitment to recruit, develop and retain industry’s best and brightest employees |
Inside Applied Your Manager CEO & Leadership Videos and Webcasts HR Business Partners Email Employee Questions New Website newglobalinnovator.com Where You Can Go for More Information 31 Direct media inquiries to Kevin Winston in Corporate Communications and Public Affairs Kevin_Winston@amat.com or + 1-408-235-4498 |
We will all be part of something historic and very special in shaping the industry for decades to come 32 We are creating a new global innovator with expanded capabilities in precision materials engineering and patterning Our Journey starts today…. This will enable us to solve our customers biggest challenges faster, better and at a lower cost |
33 employee_questions@amat.com |
Forward-Looking Statements
This communication contains forward-looking statements, including but not limited to those regarding the proposed business combination between Applied Materials, Inc. (“Applied Materials”), and Tokyo Electron Limited (“Tokyo Electron”) (the “Business Combination”) and the transactions related thereto. These statements may discuss the anticipated manner, terms and conditions upon which the Business Combination will be consummated, the persons to be appointed officers and directors of a to-be-formed holding company (“HoldCo”), trends and the future performance of their businesses, the synergies of Applied Materials and Tokyo Electron, and similar things. Forward-looking statements may contain words such as “expect,” “believe,” “may,” “can,” “should,” “will,” “forecast,” “anticipate” or similar expressions, and include the assumptions that underlie such statements. 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: the ability of the parties to consummate the Business Combination in a timely manner or at all; satisfaction of the conditions precedent to consummation of the Business Combination, including the ability to secure regulatory approvals in a timely manner or at all, and approval by Applied Materials’ and Tokyo Electron’s stockholders; the possibility of litigation (including related to the transaction itself); Applied Materials’ and Tokyo Electron’s ability to successfully integrate their operations, product lines, technology and employees and realize synergies, growth and tax assets from the Business Combination; unknown, underestimated or undisclosed commitments or liabilities; the potential impact of the announcement or consummation of the proposed transactions on the parties’ relationships with third parties; the level of demand for the combined companies’ products, which is subject to many factors, including uncertain global economic and industry conditions, demand for electronic products and semiconductors, and customers’ new technology and capacity requirements; Applied Materials’ and Tokyo Electron’s ability to (i) develop, deliver and support a broad range of products, expand their markets and develop new markets, (ii) timely align their cost structures with business conditions, and (iii) attract, motivate and retain key employees; and other risks described in the Applied Materials’ filings with the Securities & Exchange Commission (the “SEC”). Tokyo Electron’s filings with the Financial Services Agency of Japan and the S-4 registration statement to be filed by HoldCo. All forward-looking statements are based on management’s estimates, projections and assumptions as of the date hereof. Except as required under applicable law, none of Applied Materials, Tokyo Electron or HoldCo undertakes any obligation to update any forward-looking statements.
No Offer or Solicitation
This announcement is for informational purposes only and is neither an offer to purchase, nor a solicitation of an offer to sell, subscribe for or buy any securities or the solicitation of any vote in any jurisdiction pursuant to the proposed transactions or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and applicable regulations in the Netherlands and Japan.
Additional Information and Where to Find It
Applied Materials and Tokyo Electron intend to cause HoldCo to file with the SEC a registration statement on Form S-4 (the “Registration Statement”), which will include a prospectus with respect to HoldCo’s ordinary shares to be issued in the Business Combination and a proxy statement of Applied Materials in connection with the Business Combination between Applied Materials and Tokyo Electron. The definitive Registration Statement will contain important information about the proposed Business Combination and related matters. SECURITY HOLDERS ARE URGED AND ADVISED TO READ THE REGISTRATION STATEMENT CAREFULLY WHEN IT BECOMES AVAILABLE. The Registration Statement and other relevant materials (when they become available) and any other documents filed by Applied Materials, HoldCo or Tokyo Electron with the SEC may be obtained free of charge at the SEC’s web site at www.sec.gov. In addition, security holders will be able to obtain free copies of the Registration Statement from Applied Materials or Tokyo Electron by contacting either (1) Investor Relations by mail at Applied Materials, 3050 Bowers
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Avenue M/S 1261, P.O. Box 58039, Santa Clara, CA 95054-3299, Attn: Investor Relations Department, by telephone at 408-748-5227, or by going to Applied Materials’ Investor Relations page on its corporate web site at www.appliedmaterials.com or (2) Tokyo Electron’s Public Relations Group, by mail at Tokyo Electron, Akasaka Biz Tower, 3-1 Akasaka 5-chome, Minato-ku, Tokyo 107-6325, by telephone at 512-424-1757, or by email at telpr@tel.com, or by going to Tokyo Electron’s Investor Relations page on its corporate web site at www.tel.com.
Participants in the Solicitation
Applied Materials, Tokyo Electron, HoldCo and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from Applied Materials’ stockholders in connection with the proposed Business Combination. Information about Applied Materials’ directors and executive officers is set forth in Applied Materials’ Proxy Statement on Schedule 14A for its 2013 Annual Meeting of Stockholders, which was filed with the SEC on January 22, 2013, and its Annual Report on Form 10-K for the fiscal year ended October 28, 2012, which was filed with the SEC on December 5, 2012. These documents are available free of charge at the SEC’s web site at www.sec.gov, and from Applied Materials by contacting Investor Relations by mail at Applied Materials, 3050 Bowers Avenue M/S 1261, P.O. Box 58039, Santa Clara, CA 95054-3299, Attn: Investor Relations Department, or by going to Applied Materials’ Investor Relations page on its corporate web site at www.appliedmaterials.com. Additional information regarding the interests of participants in the solicitation of proxies in connection with the proposed Business Combination will be included in the Registration Statement that Applied Materials and Tokyo Electron intend to cause HoldCo to file with the SEC.
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