Corporate Overview March 18, 2020 ACCURATE RELIABLE RESPONSIVE - PowerPoint PPT Presentation

Corporate Overview March 18, 2020 ACCURATE RELIABLE RESPONSIVE

Forward Looking Statement This Presentation contains “forward - looking statements” within the meaning of applicable Canadian securities legislation. These statements generally can be identified by use of forward-looking words such as “may”, “will”, “could”, “would”, “should”, “might”, “expect”, “estimate”, “anticipate”, “intend”, “consider”, “believe”, “plan”, “project”, “assume”, “strategy”, “goals”, “objectives”, “potential”, “possible”, “confident” or “continue” or the negative thereof or similar variations. Such forward -looking statements concern the business and anticipated financial performance of the Company and include, without limitation, the Company’s outlook on the long - term prospects of the market and the Company, the Company’s expec tations with respect to the overall order activity for the balance of the year, projections of the Company’s revenue, EBITDA, cash position, share buyback, growth in the etch market, timing of th e s emiconductor industry cycle, cost structure, and the Company’s ability to build on its financial and operational foundation in the future. These forward- looking statements are based on certain factors and assumptions, including, without limitation: the Company’s abil ity to develop, manufacture and sell new products that meet the needs of its customers and gain commercial acceptance; the Company’s ability to continue to sell its products in line with expected qu antity, price and delivery times; the Company’s ability to attract new business; continued and future demand for the Company’s products; continued sales to the Company’s major customers; the Company’ s operations not being adversely affected by supply, operating, cyber security, litigation or regulatory risks; the Company’s ability to react to the cyclical nature of the semiconductor in dustry; the Company’s ability to enhance revenue diversification and open new market opportunities; and , the Company’s expectations regarding market risk, including interest rate changes, tax changes and foreign currency fluctua tions. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation: additional measures and controls may not be implemented as expected or along the timelines anticipated; uncertainties relating to the market for the Company’s products and maintaining a stable level of orders; fluctuations in revenue as a result of volatility in the markets and product mix; risks relating to the Company’s present reliance on its major customers for the majority of its sales; risks relating to the Company’s reliance on the financial heal th of and timing of cycles in the semiconductor industry; risks relating to the development of competing technologies and the possibility of increased competition; the effect of slow growth in the United Stat es, the Company’s principal market, as well as other economies and other economic trends and conditions in the markets that the Company and its customers serve; risks associated with technical difficulties or delays in product introductions, improvements, implementation; uncertainties in product pricing or other initiatives of the Company and its competitors; uncertainties in factors that may result in a reduction in capital expenditures and/or delayed photoncontrol.com buying decisions affecting demand for the Company’s products; risks relating to currency fluctuations, particularly between t he Canadian and United States dollars; risks in pursuing additional development projects to support existing customers or pursue other business opportunities; and such other risks as are identifie d in the Company’s Annual Information Form and other disclosure documents filed on SEDAR at www.sedar.com. The foregoing assumptions, risks and uncertainties are not exhaustive of the items that may affect our forward-looking statements. Should underlying assumptions prove to be incorrect or one or more of these risks and uncertainties materialize, actual results may vary materially from those described in the forward-looking sta tements. The Company’s forward -looking statements are based on beliefs, expectations and opinions of management on the date the statements are made. For the reasons set forth above, readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements included herein if these beliefs, estimates and opinions or other circumstances should change, except as otherwise required by applicable law. 2

Photon Control Introduction A glob lobal cri critic ical l su subsystems su supplie lier of optical sensor solutions Deeply in De inte tegrated with our customers, with locations in Vancouver, Canada and San Jose, California and distributors in Asia A gro rowin ing installed base of over 150,000 fiber optic sensors for process monitoring applications Str Strong bala alance sh sheet to manage through the semiconductor cycle, whilst supporting photoncontrol.com corporate priorities to create long-term shareholder value Continued investments in in innovation an and new ew pro roduct dev evelopment to serve our customers and expand into adjacent markets 3

Board of Directors Nei eil McD cDonnell Chuck Car argi gile Nig igel Hun unton Mic ichele Kl Klein Ronan McG Ron cGrath (Director & Board (Director and Chair of (CEO, President & (Director & Chair of M&A (Director & Chair of Audit Chair) Compensation, Corporate Director) Committee) Committee) Governance & Nominating photoncontrol.com Committee) 4

Photon Control is a Critical Supplier in Semi Our fib fiber-optic sen ensors enable improved process monitoring, uniformity, and repeatability in harsh environments, which pro rovid ides va valu lue throughout the semiconductor supply chain. Wafer Photon Semiconductor Electronics Fabrication Device Equipment (WFE) Manufacturers Control Manufacturers Manufacturers Improved process Increased process Higher Greater accessibility of performance and monitoring, yield and technology lower cost devices uniformity and productivity (5G, data centers, IoT) photoncontrol.com repeatability Deep Integration in the Semiconductor Supply Chain 5

Photon Control is a Global Company Canada (Headquarters) • Richmond, BC South Korea • Manufacturing, Engineering and Sales • Distribution • ISO 9001: 2015 certified • QSP Co. Ltd. Japan • Distribution • Japan Laser Corporation China photoncontrol.com • Distribution USA • Crowntech Photonics • San Jose, CA • Engineering and Sales 6

Manufacturing Facility (Richmond, BC) 13,000 ft 2 Manufacturing Facility 1,850 ft 2 ISO Class 6 Cleanroom (<1000 ppm) • • Clean labs for critical test and assembly • Central production and assembly area • Controlled access and inventory control photoncontrol.com 7

Financial Summary Revenue Q4 2019 2019 $14.6 $13.9 $8.9M $32 32.7 .7M Revenue 53% 54% Gross Margin 24% 21 21% $10.1 EBITDA Margin $8.9 $8.7 $8.2 $8.0 $7.1 As of December 31, 2019 Cash $33.4M Order Backlog $20.8M Q1 2020 Guidance Q1 Q2 Q3 Q4 Q1 Q2 photoncontrol.com Q3 Q4 2018 2019 Revenue $14.0M - $15.0M (in $ millions) EBITDA Margin >30% of Revenue Management Delivering Operational Efficiencies (In Canadian dollars, unless otherwise noted) 8

Markets & Technology Drivers

Photon Control’s Served Market Segments Photon Control supplies to the la larg rgest WFE manufacturers Total WFE Market: $58B Plasma Etch Equipment Market: $12.2B Lam Re Research ch 46% 46% Others 6% Litho & Track 23% Deposit itio ion 22% 22% Tok okyo El Elect ctron Ap Applied Mat Materials 30% 30% 19% 19% Automation 5% Plas Pl asma Etc tch 20% 20% Inspection & Metrology 11% Deposition Equipment Market: $13.2B Other 4% photoncontrol.com Ap Applied Mat Materials 38% 38% Thermal & Doping Other clean & 5% removal 10% Lam Re Research ch 21% 21% Other 16% ASM 5% Tok okyo El Elect ctron 13% 13% Global WFE Market by Process ($USD) Kokusai Electric 7% Source: Gartner, Market Share: Semiconductor Wafer Fab Equipment, Worldwide, 2018 (In United States dollars) 10

Semiconductor Manufacturing Process Steps Our sensors are used in Etch tch and De Deposit ition process steps photoncontrol.com Significant Opportunity for Growth in Deposition 11

Device Scaling Trends & the Role of Sensors Grea reater co complexit ity and in incr creased number of Etch and Deposition process steps as devices scale and increase in complexity Increased number of Etch and Deposition Logic steps 5nm 3nm 7nm More Greater process complexity Sensors photoncontrol.com Tighter control of 3D NAND critical process parameters 64L 96L 128L 12