MKS Instruments Inc at Bank of America Global Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Vivek Arya - Bank of America Securities - Analyst : Thank you so much. So maybe, John, for those who are unfamiliar, maybe walk us through the broad MKS story. M&A had been part of the strategy for you. But just how do you look at the company holistically across the three segments of semiconductors, right, electronics and packaging and specialty industrial market?

Question: Vivek Arya - Bank of America Securities - Analyst : All right. So John, as you look at the second half, you called for some half-on-half growth, what are the leading indicators of that? And how much of that is market growth? How much of that is unique to your product cycles?

Question: Vivek Arya - Bank of America Securities - Analyst : Historically, what's been your correlation to just wafer fab equipment trends? Because this year, for example, we are seeing WFE in the low

Question: Vivek Arya - Bank of America Securities - Analyst : Got it. We had Applied Materials I presented earlier today. It started two days ago, so they outlined a very strong growth in their data all around business, right. So I think Applied has said almost $2.5 billion this year. Lam said over $1 billion. How does the move towards this new (inaudible) structure benefit MKS, right? And how would you contrast it, John, given your experience in the industry versus the move we saw from (inaudible) to FinFET.

Question: Vivek Arya - Bank of America Securities - Analyst : Okay. On the NAND side, have you seen any signs of recovery? Like would you be early to see that? Or would you start to see that in Phase 2 that you first need to see better utilization of what these companies already have?

Question: Vivek Arya - Bank of America Securities - Analyst : I see. As we look into next year, so not on a forecast, obviously, it's early. How would you stack rank where you see the best growth opportunities?

Question: Vivek Arya - Bank of America Securities - Analyst : When we talk with the number of the end customers who are developing GPU ASIC and we asked, where are the biggest supply constraints, they always point to advanced packaging. So what is your exposure to the need for advanced packaging? And how correlated is that business to just the growth in overall AI and cloud deployments? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 06, 2024 / 6:20PM, MKSI.OQ - MKS Instruments Inc at Bank of America Global Technology Conference

Question: Vivek Arya - Bank of America Securities - Analyst : How big your exposure is this within your E&P segment and did you see it growing?

Question: Vivek Arya - Bank of America Securities - Analyst : Got it. Does it make a difference, John, if somebody is using a chiplet approach versus multiple radical sites chips used together? Does that make a difference on the packaging side? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 06, 2024 / 6:20PM, MKSI.OQ - MKS Instruments Inc at Bank of America Global Technology Conference

Question: Vivek Arya - Bank of America Securities - Analyst : All right. One other thing that I noticed is this opportunity within E&P for laser drilling or low earth orbit applications. That seems to be like a very interesting and unique aspect of -- not something they hear normally I think in a semiconductor.

Question: Vivek Arya - Bank of America Securities - Analyst : And then maybe help us unpack the specialty industrial business? What is in that segment, what are the growth drivers?

Question: Vivek Arya - Bank of America Securities - Analyst : All right. On Atotech, you hit your cost synergy targets already, how much more is left? Are there more operating synergies that are left? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 06, 2024 / 6:20PM, MKSI.OQ - MKS Instruments Inc at Bank of America Global Technology Conference

Question: Vivek Arya - Bank of America Securities - Analyst : And then, John, maybe moving on to the financial model. I think you've given a '27 revenue target of $5.6 billion, so that's a mid-teens or so sales CAGR from '23 levels. Maybe give us a view of how much progress you're making there? Is that a conservative target? Is that an easy target?

Question: Vivek Arya - Bank of America Securities - Analyst : Majorities exceeded.

Question: Vivek Arya - Bank of America Securities - Analyst : Is there more leverage to the gross margins in that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 06, 2024 / 6:20PM, MKSI.OQ - MKS Instruments Inc at Bank of America Global Technology Conference

Question: Vivek Arya - Bank of America Securities - Analyst : Is it a services component to your business also that is perhaps a little more predictable undertones?

Question: Vivek Arya - Bank of America Securities - Analyst : On the capital structure side, you refinance your term loan, you have in repaying right debt. How should we think about delevering the balance sheet there?

Question: Vivek Arya - Bank of America Securities - Analyst : Long term, John, if you look at, let's say, the next three to five years, is there an ideal mix that you would like to see within the company? And are there M&A opportunities you think that will help you drive towards that ideal and how does one come up with the idea mix?

Question: Vivek Arya - Bank of America Securities - Analyst : Must have some favorite.

Question: Vivek Arya - Bank of America Securities - Analyst : On that positive note, thank you, John. Thank you for taking time.