Investors Presentation Cautionary Statement Regarding Forward - PowerPoint PPT Presentation

February 2020 Investors Presentation

Cautionary Statement Regarding Forward Looking Statements his presentation includes statements that constitute forward-looking government programs we participate in; risks related to taxation; changes in statements within the meaning of safe harbor provisions of the Private customer demand for our products; risks related to currency fluctuations; risks Securities Litigation Reform Act of 1995 relating to future events or our related to technology security threats and changes in privacy laws; risks future performance, such as statements regarding, but are not limited to, related to acquisitions we may pursue and risks related to our operations in anticipated growth opportunities and projections about our business and its Israel. We cannot guarantee future results, levels of activity, performance or future revenues, expenses and profitability. Forward-looking statements achievements. The matters discussed in this presentation also involve risks involve known and unknown risks, uncertainties and other factors that may and uncertainties summarized under the heading “Risk Factors” in Nova’s cause our actual results, levels of activity, performance or achievements to be most recent Annual Report on Form 20-F for the year ended December 31, materially different from any future results, levels of activity, performance or 2018 filed with the Securities and Exchange Commission on February 28, achievements expressed or implied in those forward- looking statements. You 2019. These factors are updated from time to time through the filing of should not place undue reliance on forward-looking statements since they reports and registration statements with the Securities and Exchange involve known and unknown risks, uncertainties and other factors which are in Commission. Any forward-looking statements contained in this presentation some cases beyond our control. Factors that may affect our results, are made as of the presentation date and Nova Measuring Instruments Ltd. is performance, circumstances or achievements include, but are not limited to under no obligation to revise or update these forward-looking statements. the following: our dependency on three product lines; our dependency on a This following presentation includes financial measures that are not calculated small number of large customers and small number of suppliers; the highly in accordance with generally accepted accounting principles (GAAP). The cyclical and competitive nature of the markets we target and we operate in; presentation of this non-GAAP financial information is not intended to be our inability to reduce spending during a slowdown in the semiconductor considered in isolation or as a substitute for the financial information prepared industry; our ability to respond effectively on a timely basis to rapid and presented in accordance with GAAP. Nova's earning release, including a technological changes;; our dependency on PEMs; risks related to exclusivity presentation of the most directly comparable financial measures calculated obligations and non-limited liability that may be included in our commercial and presented in accordance with GAAP and a reconciliation of each GAAP to agreements and arrangements; our ability to retain our competitive position non-GAAP financial measure discussed in the presentation is available at the despite the ongoing consolidation in our industry; risks related to our Investors section of the company’s website. dependence on our manufacturing facilities; risks related to changes in our Certain of the information contained herein concerning economic trends and order backlog; risks related to efforts to complete and integrate current and/or performance is based upon or derived from information provided by third future acquisitions; risks related to the worldwide financial instabilities; risks party consultants and other industry sources. We have not independently related to our intellectual property; new product offerings from our verified and cannot assure the accuracy of any data obtained by or from these competitors; unanticipated manufacturing or supply problems; risks related to sources. 2

KEY DUAL-LISTED TECHNOLOGIES PROFITABLE GROWTH Optical & X-Ray NASDAQ / TASE Revenue Growth Facts 5Y CAGR – 13% EMPLOYEES METROLOGY Leading Dimensions & Materials 650 Operating Income Growth Metrology 5Y CAGR – 19% Innovator for Advanced Process Insight GLOBAL PRESENCE R&D SITES Cash Reserves ~$190M World wide offices USA & Israel *Non-GAAP Financials ** CAGR 2014-201 9 3

$225 Success Tied to $164 $112 Revenue In Million $ 2013 2016 2019 Diversified Portfolio Customers’ partnership $77 $60 X-ray & Optical Development to Manufacturing $45 Dimensions & Materials Joint development programs Operating expenses In Million $ 2013 2016 2019 $46 Disruptive technologies Solid financial model $30 Coupling SW & HW Operational efficiency $14 Emerging Metrology Growth by investment Operating income In Million $ 2013 2016 2019 4 Non-GAAP Financials •

Innovative 300mm 10um 5nm 0.5Å Wafer Pad Pitch Precision Optical / X-Ray Semiconductor Dimensions / Materials Segments Parameters 5

Unique Complementary Software Dimensional Materials Services Physical & Standalone Install Base Integrated & Mathematical Models Standalone Materials Features and Fleet Management Metrology Upgrades Optical CD Hybrid Ecosystem Film Thickness 6

FLEET MANAGEMENT Hybrid Metrology CMP Lithography Interlacing HW & SW Inline solutions Deposition ETCH Monitor Train & Retrain Open Eco System Physical Models Complementary Models NOVA MARS NOVA Fit 7

Digital Semi Market Wafer Capacity 2017 60B GB 40% Human 2000 2010 2020 2025 Internet Mobile Internet Connected World Data Economy Connectivity Mobility Productivity Veracity 8

Multi Catalysts for Semiconductors Demand Smart Smart AI Cryptonomy Smart Autonomous AR / VR Cities Sensors Industry Vehicle 1 PB 4 TB 25% 30% 50% 30% 70% Per Car Per day CAGR CAGR CAGR CAGR CAGR Per Day 9

Smart Smart Sensors Industry Data Connected Management Sensors Smart Automotive City Semi GROWING Growth Demand AR / VR AI for Data Network Mobile Infrastructure Management Devices Cloud 5G & Computing Power Beyond Cryptonomy Smartphones Capacity Continuous demand for improvement Wearables Robots Performance Density Scaling Cost 10

1,000 10,000 HIGH PERFORMANCE Requirement Variety 100 100 Density DATA STORAGE (Gigabyte) Scaling MOBILITY POWER (Watt) storage (capacity) 1 1 Energy efficiency Access speed IoT SENSORS 0,01 0,01 Powerful processing (speed) 0,000 0,0001 0,0001 0,01 1 100 10,000 DATA RATE (Giga operations/sec) 11

Growth Beyond Demand Metrology Intensity METROLOGY INTENSITY Planar FinFet Nano-Wires Scaled Devices 3D Profiles Multiple Parameters Thinner Films Planar NAND VNAND Gen-1 VNAND Gen-x DRAM Gen-1 DRAM Gen-X DRAM Gen-Y Complexity 12

Enables Scaling METROLOGY INTENSITY 48 Elements Thickness Composition Stress Strain 26 Elements Doping Chemical State Reduce Leakage Increase 13 Elements Performance Increase Efficiency 13

Enabled by Materials 3D NAND Applications 96L TLC Today Channel Films HAR etch control Measurement Steps Future NVM MRAM Xpoint 128L QLC RRAM Nanolaminate Future channel films FeRAM New Hard Mask materials V32 V48 V64 V96 Growth From Phase to Phase New Applications With Every Phase 14 BEYOND TRADITIONAL DIMENSIONAL SCALING

Enabled by Materials Logic Applications FinFETs Today Multi-Vt Measurement Steps Drive Current Leakage Future Designs Gate All Around 3D Transistors Nanowires CFETS Future More processing steps More materials Growth With Every Node Higher Sampling of Critical Layers 15 BEYOND TRADITIONAL DIMENSIONAL SCALING

Enabled by Materials DRAM Applications 1X DRAM BWL Leakage Capacitor Today Dielectric ALD layers Measurement Steps Future Designs OXRAM CBRAM STT 1Y DRAM Future Higher aspect ratios New metallization 2018 2019 2020 2021 2022 Stable Amount of Measurement Steps Yield Demands Increases Sampling Rates 16 BEYOND TRADITIONAL DIMENSIONAL SCALING

Dimensional Services Materials M&A Metrology Metrology Inorganic Share Process Control > $50M Gains $300M TAM Expansion 300 $200M Disruptive Organic Innovation $300M Reaching revenues $100M of $300M organically M&A Target 2012 2017 17

Why do we CONTINUE GROWING? Diversification Customers Mix Nodes Segments Technology Geography Increasing Market Share while Expanding TAM 18

Diversification - Segment Mix Target Model Segments Balance Memory Growth Foundry leadership 2014 2019 Non-GAAP Financials • Memory versus foundry / Logic 19

Diversification - Regional Mix Taiwan USA Target Model 35% 25% China 20% Balanced Territory Taiwan exposure 45% 3 Large Territories 2014 2019 Expansion in Korea Korea Taiwan Strong position in Diversified Exposure 10% China Territory Mix Korea 25% Other Other 20% 20% 20