8-K

UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

 Pursuant To Section 13 Or 15(d) Of The Securities Exchange Act Of 1934

Date of report (Date of earliest event reported) May 23, 2018

PHOTRONICS, INC.

(Exact name of registrant as specified in its charter)

Connecticut	0-15451	06-0854886
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

15 Secor Road Brookfield, CT	06804
(Address of principal executive offices)	(Zip Code)

Registrant's Telephone Number, including area code (203) 775-9000

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 7.01 Regulation FD Disclosure

The investor presentation included as Exhibit 99.1 to this report may be presented at meetings with investors, analysts, and others on May 23, 2018. A copy of the presentation will be posted on the Photronics, Inc. website.

A copy of the investor presentation is attached as Exhibit 99.1 to this Current Report on Form 8-K.

EBITDA is a non-GAAP financial measure that the Company defines pursuant to its credit agreement. The Company believes that EBITDA is generally accepted as providing useful information regarding the operational strength and performance of its business, including the ability of the Company to pay interest, service debt and fund capital expenditures. The Company’s method for calculating EBITDA may not be comparable to methods used by other companies but is the same method the Company uses for calculating EBITDA under its credit facility. The Company has included in the investor presentation certain reconciliation information for EBITDA to its most directly comparable financial measure of net income calculated and reported in accordance with GAAP.

The information in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed subject to the requirements of amended Item 10 of Regulation S-K, nor shall it be deemed incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing. The furnishing of this information hereby shall not be deemed an admission as to the materiality of any such information.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

99.1 Photronics’ Investor Presentation dated May 23, 2018.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	PHOTRONICS, INC.
	(Registrant)
	By:	/s/ Richelle E. Burr
		Name: Richelle E. Burr
		Title: Vice President, General Counsel and Secretary
Date: May 23, 2018

EX-99.1

Exhibit 99.1

 Photronics, Inc.Global Leader in the Merchant Photomask Industry  Analyst and Investor DayMay 23, 2018 

 Troy Dewar, Director, IR  Welcome  Peter Kirlin, CEO  Overview & Strategy  Chris Progler, CTO  Technology Development  High-End Growth Drivers    HK Park, GM, China & Taiwan FPD  High-End FPD  Frank Lee, GM, Asia IC  High-End IC Logic  Pete Broadbent, VP, US & Europe  High-End IC Memory  John Jordan, CFO  Financial Model & Outlook  Q&A    Lunch    Agenda  2 

 Safe Harbor Statement  3  This presentation and some of our comments may contain projections or other forward-looking statements regarding future events, our future financial performance, and/or the future performance of the industry. These statements are predictions, and contain risks and uncertainties. Actual events or results may differ materially from those presented. These statements include words like “anticipate”, “believe”, “estimate”, “expect”, “forecast”, “may”, “should”, “plan”, “project” or the negative thereto. We cannot guarantee the accuracy of any forecasts or estimates, and we are not obligated to update any forward-looking statements if our expectations change. If you would like more information on the risks involved in forward-looking statements, please see the documents we file from time to time with the Securities and Exchange Commission, specifically our most recent Form 10K and Form 10Q.Non-GAAP Financial MeasuresThis presentation and some of our comments may reference non-GAAP financial measures. These non-GAAP financial measures exclude certain income or expense items, and are consistent with another way management internally analyzes our results of operations. Non-GAAP information should be considered to be a supplement to, and not a substitute for, financial statements prepared in accordance with GAAP. Please see the “Reconciliation of GAAP to Non-GAAP Financial Information” in this presentation. 

 Peter Kirlin, CEOOverview & Strategy  4 

 Q2 Reprise / Repositioning the company Sustainable growth strategyConclusion   What You Will Hear Today  5 

 Revenue grew to $131M; up 21% Y/Y and 6% Q/QHigh-end IC biggest growth factor (+83% Y/Y)China revenue doubled Y/Y; up 18% Q/QGross and operating margins expanded on higher revenue and operating leverageNet income attributable to Photronics, Inc. shareholders of $10.7M ($0.15/share)Cash balance of $321M; capex increased to $33M as we invest in growthChina investments on trackConstruction to be completed later this yearProduction to begin first half of 2019  Q2 2018 Summary  6  Investing in long-term, profitable growth to increase shareholder value 

 Three large customer challengesMicron produced more memory masks in-houseSamsung Display shifts from LCD to AMOLED and brings highest-end masks in-houseMajor IC customer loses 28nm logic market shareWe’ve overcome challenges by winning business at other customersNew business from foundries that are primarily captiveNew IC and FPD business in China  Repositioning the Company  7 

 Global leader in merchant photomask industryDelivering growth by leveraging core competences: Operational Excellence, Low Cost Producer, Technology Leadership, Customer IntimacyInvesting aggressively to exploit secular growth opportunitiesChina industry expansion – Made in China 2025Technology inflection from LCD to AMOLEDExplosion of G10.5+ panel capacityTargeting $630M / $0.80 in revenue / EPS by 2020Strategic investments bring top-line growthOperating leverage creates margin expansionAdditional upside from potential M&A  A Compelling Investment Thesis  8 

 Largest merchant photomask manufacturerUnmatched global footprintInvesting to exploit market disruptions with reciprocal customer commitments Strong balance sheet to fund growth  Photronics at a Glance  9 

 Photomasks are Critical to Electronic Manufacturing  10  ComponentDesign  End User  Manufacturing Process  Photomask 

 Phases of Photronics Revenue Growth  11  Phase I: 1969 – 1986Technology StartupOrganic GrowthMostly USPre-IPO  Phase II: 1986 – 2002 M&A GrowthMerchant ConsolidationGlobal Expansion  Phase III: 2003 – 2017Enter High-End MarketForm Strategic PartnershipsInvest in High-End CapabilityEstablish FPD PresenceImprove Balance Sheet  Phase IV: 2018 and Beyond Leverage 1st Mover Advantage in ChinaExtend Technology LeadershipIncrease Market ShareStrategic Capital Allocation 

 Cost controlSupply chain optimization  Low Cost Producer  Flexible deliveryHigh yields  Operational Excellence  Trusted partnerWafer yield enhancement  Customer Intimacy  Process know-howAdvanced PoR  Technology Leader  Core Competencies Underpin Sustainable Growth  12 

 Exploiting/Creating Disruptions Drives Revenue Growth  13  G7.5 Display Substrate  High-End IC Memory  High-End IC Logic  G10.5+ Display SubstrateAMOLED Mobile“Made in China 2025”  The Right Technology … in the Right Place … at the Right Time  Micron JV  DNP JV  UMC Partner B Partner C 

 We already have growing business in China$39M YTD 2018 (15% of total revenue)Growing strong since 2015 (IC +31% CAGR; FPD +62% CAGR)13% of Q2 2018 LTM revenue (8% of IC; 33% of FPD)Manufacturing presence in China should accelerate growthCustomer contracts will help quickly ramp facilitiesInvestment incentives reduce risk and improve returnsIC JV enables us to compete more effectively  Successfully Developing China Business  14  +45% CAGR 

   IC  FPD  Location  Xiamen  Hefei  Investment Amount  $160M  $160M  Cleanroom Size  ~2,500 m2  ~4,500 m2  Ownership Structure  Majority-owned (50.01%) JV  Wholly-owned  Technology  High-end, mainstream, logic, memory  Up to G10.5+, AMOLED  Production Start First half of 2019 First half of 2019   Spring 2019  Incremental Revenue  $150M (total for both operations)    Investing in China Operations  15  PLAB well positioned for these investmentsGlobal merchant market and technology leaderStrong footprint in AsiaBalance sheet to support investment  Customer commitments totaling ~$300M over next three yearsEnables Hefei facility to operate profitablyEnables Xiamen facility to achieve breakeven 

 Repositioning the companyImproving high-end revenue  China investmentsFPD technology inflections  Strategic photomask partnershipsAdjacent market M&A  Driving Sustainable, Profitable Growth  16  Short term (6-12 months)  Medium term (12-36 months)  Long term (36+ months) 

                                         Tau Labs, Inc.1986  Gould/AMIMask Shop1987  Master Images Inc.1987  Motorola AustinMask Shop1987  NCR Mask Shop1988  National SemiMask Shop1990  Rexotech, Inc.1990  Perkin-Elmer1990  Philips NijmegenMask Shop1990  Hyundai  InfineonAMD/AMTC  IBM Europe  Hewlett – Packard  DuPont          NanoMask Inc.1988  SGS-ThomsonMask Shop1989  TektronixMask Shop1991  Philips HamburgMask Shop1993  AT&T Mask Shop1995  Photronics                  Micro Mask1969  Hoya  Oki Mask Shop    Sony  Sharp  Mitsubishi  Global Foundries/JV(AMTC)  Toppan            1969// 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018   Derived from Semiconductor Equipment and Materials International (SEMI)  Toshiba  DNP  Fabserve(NEC)              Hitachi  Fujitsu  Photronic LabsIncorporated1969  Motorola PhoenixMask Shop1997  HoyaMicro Mask Inc.1994  GEC PlesseyMask Shop1990  MicrophaseLab’s, Inc.1991  CSEM Litomask Inc.1993  Masken Zentrumfur Mikrostruk Turferung1997  Cirrus Logic1999  Conextant2001  MP Mask/JV withMicron2006 - 2016  PKL2001  PSMC2000  Align-Rite2001  Drexler’sMicrofab1989  Micro FabSystems1988  Martin MarrietaMask Shop1991  Analog DevicesMask Shop1991  RaytheonMask Shop1993  ToppanPrintronics1993  Global Consolidation of Photomask Industry 2018  17  PDMC JV2014  DNP PhotomaskTech Taiwan        PDMCX JV2018       

 Photomask industrySignificant market shareAdvanced technologyValuable manufacturing assetsAdjacent marketsRevenue diversificationSynergies to business modelFinancial benchmarksMeets ROIC hurdlesAccretive to earnings and cash flow  M&A Criteria  18 

 World Class Management TeamSignificant Industry Experience  19   Name  Title  Years withPhotronics  Yearsin Industry  Experience   Peter Kirlin, Ph.D.  CEO  10  33     Chris Progler, Ph.D.  VP, CTO, and Strategic Planning  18  30     HK Park  GM, China and Taiwan, FPD  13  23     Frank Lee, Ph.D.  GM, Asia IC  12  38     Peter Broadbent  VP, US & Europe  5  5     John Jordan  SVP, CFO  1  5   

 Global leader in merchant photomask industryDelivering high-end growth by leveraging core competences: Operational Excellence, Low Cost Producer, Technology Leadership, Customer IntimacyInvesting aggressively to exploit secular growth opportunitiesChina industry expansion – Made in China 2025Technology inflection from LCD to AMOLEDExplosion of G10.5+ panel capacityTargeting $630M / $0.80 in revenue / EPS by 2020Strategic investments bring top-line growthOperating leverage creates margin expansionAdditional upside from potential M&A  A Compelling Investment Thesis  20 

 Chris Progler, CTOTechnology Development  21 

 China’s IC and display aspirations and investmentsDiversification in mid to high-end IC applications – the 4th Industrial RevolutionNew lithography intensive display form factors and enhancementsIncreased focus on process of record and integrated solutionsComplexity, cost and scale drive consolidation and partnershipsNew innovations in manufacturing   Trends Guiding our Technology Portfolio  22 

 IC: (Data, IoT, AI)Introduce EUV productionInnovate to extend previous nodesFPD: (AMOLED, G10.5+, VR)Accelerate IC type mask techLarger substrate, finer dimensionAP: (Fan Out, Panel)Introduce FPD type mask techSubstrate and resolution roadmap  Photronics Patterning Leadership  23  Tech Adoption in Lithographic Applications   Adoption (%)  100%50%0%  Pattern Correction Phases → 

 Type  2017  2018  2019  2020  Logic  10nm  7nm  5nm (EUV)    DRAM  1x  1y  1z + new architectures    3D-NAND  Gen 2  Gen 3  Gen 4 + new architectures    LVIP to Mass Production   Optical Mask Scaling on Existing Equipment  EUV Device Masks  Entered 14nm logic, 20nm DRAM, 3D-NAND production (2014)First with advanced EBM 9000 writing tool (2016)First qualified for 1x DRAM (2016) and 1y DRAM (2017)First to deliver yielding 7nm class logic EUV masks (2017)  Single Expose Metal  24  IC: Investing in Technology Opportunities 

 25  Type  2017  2018  2019  2020  TV  UHD(4K)QD LCD  UHD(8K)QD OLED      Mobile(OLED)  QHD(6xx ppi)  UHD1(8xx ppi)  UHD2(12xx ppi)    Mask Size  8.5G  10.5G      LVIP to Mass Production   Entered FPD phase shift mask technology for AMOLED (2013)Delivered Quad HD masks for OLED (2014)Qualified slit type (2010) and half-tone type (2016) efficiency solutionsFirst to market P-800 (2018) and P-80 (2015) writing systemsPlan first to G10.5 in China  Phase Shift Mask  Contact Hole Resolution  P80  P800  FPD: Widening Tech Lead            HT layer            Slit bar        Multi-Dose Mask 

 26  Type  2018  2019  2020  WLP/Panel Fan Out  Mask resolution and registrationApplication specific lithography extensions9” and 14” to panel size      Heterogeneous Integration        Sampling custom mask solutions for AP litho challengesPreparing resolution enhancement infrastructure (mask, software, design)Evolve capability and lead as lithography importance grows  Depth of Focus Solutions  40%20%Baseline  Co-designing new AP mask technologyto increase substrate warp tolerance    AP: Establishing New Products and PoR 

 Partnering with Our Customers for Success  27  ThePLABPoR  * Process of record  7 high-end PoR* relationships across IC and FPDCritical for ROI on capability investmentsCustom design tools to strengthen connectionsDelivering measurable end product yield enhancementsStriving for virtual captive modelCustomized, flexible, interlocked, fast  IBM Nov 2017  Strong Portfolio of Joint Development Projects → 

 Mask 1  Mask 2  Successful mask for high yield on complex device has many factorsProcess Capability – right specs, pattern quality, no critical defectMask to Substrate (wafer, panel) Know-How – simulate, characterize, improveReproducibility – matching, transfer, ramp and volume experienceProtection – IP, systems, mask lifetime management  Why PoR Partners Trust a Photronics Built Mask          Probe Yield Result Using 2 Full Spec Masks  Ours  Theirs      28 

 Mask 1  Mask 2  Powerful know-how for inter-mask matchingSite to site transfers for expanding productionCaptive process signatures for backupWithin site ramp, reproducibility and yieldHybrid inter-site process supportRecent success stories25nm DRAM, 3D-NAND, 14nm logic: US to Taiwan22nm to 7nm logic: captive mask and module matchingFPD enhancement module: Korea to Taiwan  Technology Matching and Moving: A Competitive Strength  nanoFab to PDMC OPC Reproducibility  FPD: Korea => Taiwan, ChinaIC: US => Taiwan, Taiwan => China    29 

 Technology as a Tool to Support Business Growth  30  High-End34%  Mainstream66%  High-End66%  Mainstream34%  Growth Investment Cycle 

 Tech and innovation keys to ROIC, even as Moore’s Law slowsProven leadership roadmap across all key lithographic applicationsIC extensions, FPD rising complexity, AP stage settingPartnerships and PoR bring differentiated technology to productsResults, trust, know-how and consistencyDelivering integrated solutions and measurable user yield impactTechnology portability as a competitive advantageMatching in and transferring technologyVerified and cost effective multi-site solutions  Technology Summary  31 

 HK Park, GM, China and Taiwan, FPDHigh-End FPD  32 

 Aligning with market driversMobile transition to AMOLEDLarger TV screensHigher resolutionExtending technology leadershipLeading portfolio of advanced mask writersLeveraging IC know-how for FPD process developmentGrowing presence in China33% of revenue Q2 2018 LTMShould accelerate with Hefei production  FPD Recent Performance  33 

 Align global footprint with dominant geographic panel technologiesMost advanced AMOLED technology in KoreaLarge format (G10.5+) LCD TV in ChinaEstablished mainstream producers in TaiwanSuccessfully establish China operating presenceHefei manufacturing facilityG10.5+ masks for large screen TVIntegrate into global network to optimize customer serviceExtend technology leadershipHigher resolution AMOLED displaysTechnology transfer from IC to FPDGrow to be global, merchant market share leader  Strategic Priorities  34 

 Mobile devices moving from LCD to AMOLEDSuperior visual characteristicsLower power consumptionEnables flexible formatPreferred for VR/AR devicesIncreases mask complexityMore mask layers per setTighter specs on each layerQualifying P-800 in Korea1st to qualify this advanced mask writerProduces highest resolution AMOLED masksCompetitive advantage vs. all merchants and captives  Leveraging Technology Leadership for Mobile Display AMOLED Adoption  35  Source: Internal Estimates  AMOLED remains preferred technology for mobile applications 

     65”    65”    65”    65”    65”    65”    65”    65”  95%  G10.5+  Improved Glass Efficiency for Ultra-Large Screen TV  36  2940 mm x 3370 mm  2200 mm x 2500 mm  1950 mm x 2250 mm  1500 mm x 1850 mm      75”    75”    75”    75”    75”    75”  94%      65”    65”    65”  64%      75”    75”  73%      65”    65”  88% 

 China represents fastest growing display region64 fabs in production, under construction or being plannedLargest display producer (Korea 2nd)Photomask opportunities in China are attractiveWide range of display technology, including AMOLED & G10.5+No merchant photomask producer with high-end experienceNo G10.5+ photomask producer  “Made in China 2025” Driving Growth in FPD Market  37  +17% CAGR  Source: Internal Estimates  G10.5+ CAGR +62% 

 34 Existing China Display Fabs  38  Image from https://commons.wikimedia.org/wiki/File:China-equirect.png  LCD (25)AMOLED (9)G10.5+ (N/A)  Photronics LocationsFPD KoreaFPD Taiwan                                                                          We are qualified at all existing fabs. 

 30 New China Display Fabs in Production by 2022  39  Image from https://commons.wikimedia.org/wiki/File:China-equirect.png        LCD (7)AMOLED (15)G10.5+ (8)                                                              Photronics LocationsFPD KoreaFPD HefeiFPD Taiwan                                                                     

 New Hefei Facility  40  Construction complete by end of fiscal year 2018.Tool move in during fiscal Q119. 

 New Hefei Facility  FAB  Office Building  Front Door  FacilityBuilding  41 

 Become G10.5+ market share leaderExtend AMOLED technology leadershipEstablish China market share leadershipIntegrated global manufacturing facilities with outstanding customer service  How We Win  42 

 Key Success FactorsHefei rampG10.5+ launchWill be our largest FPD facilityAMOLED mobile display technology inflectionDiversify customer concentrationFPD revenue expected to double over next 3 years  FPD Outlook  43  2017-2020 CAGR: 29% 

 Repositioned the businessChina investment on trackInvesting to exploit industry trendsBusiness expected to double over next 3 years  FPD Summary  44 

 Frank Lee, GM, Asia ICHigh-End IC Logic  45 

 Repositioning the businessStrong demand from Asia logic foundriesKorea IC revenue up 24% YTDRevenue to Taiwan foundries up 58% YTDExpanding penetration at captive manufacturersIncreasingly seen as trusted technology partnerHigh-end capacity and capabilityClose proximity to customer  High-End IC Logic Recent Performance  46 

 Two JV’s serving AsiaTaiwan JV, PDMC, formed in 2014China JV, PDMCX, formed in 2018Combines technology, know-how and customer relationships of two leading merchant mask producersReduces risk of Xiamen investmentFacility should ramp more quickly due to complimentary sales organizationsAllows us to compete more effectivelyPhotronics owns 50.01% of both JVsPhotronics management teamConsolidate financial results  Successful Partnership with DNP  47 

 Large group of customers, suppliers, partners, and local officials in attendanceJV seen as technology partner for advanced IC manufacturingChina producers eager to have local source of high-end photomasks  Shanghai Technology Forum  48 

 Leverage JV’s in Taiwan and China to win market shareMaintain and extend market leadership in TaiwanBuild China market share into leadership positionDraw on combined technology, experience, and customer relationshipsIncrease business globally with large foundries and IDMsPrevent formation of additional captive manufacturing in ChinaSuccessfully ramp China manufacturing facility  Strategic Priorities  49 

 China represents fastest growing semiconductor regionGrowing domestic producersInvestments by multi-nationalsMore investment needed to meet national targets2022 forecast is 17%China government target is 40% by 2020, 70% by 2025Photomask opportunities in China are attractiveWide range of nodes in logic and memoryNo strong domestic merchant mask producer  “Made in China 2025” Driving Growth in IC Market  50 

 23 New China 12” IC Fabs  51  Image from https://commons.wikimedia.org/wiki/File:China-equirect.png                                                Photronics LocationsIC KoreaIC XiamenIC TaiwanIC Boise (not shown)      Logic (17)Memory (6)  Innotron (M)  Nexchip (L)  YMTC (M)  Samsung (M)  AOS (L)  Unigroup (L)  GF (L)  SMIC (L)  Intel (M)  SMIC (L)  Cansemi (L)  JHICC (M)  USC (L)  Silan (L)  Sien IC (L)  HidM (L)  AMS (L)  TSMC (L)  HH Group (L)  Unigroup (M)  SMIC (L)  SMIC (L)  HLIC (L) 

 New Xiamen IC Facility   52  Construction complete by end of fiscal year 2018.Tool move in during fiscal Q119. 

 New Xiamen IC Facility   53  FAB  Supporting Building  Office Building  FacilityBuilding 

 Technology leadership in both logic & memoryDevelop high-end capacity and capabilityObtain PoR for new nodes (28nm, 14nm)Customer relationships that lead to business partnershipsProximity to large customers (fast delivery, comprehensive customer support)Act as virtual captive, providing joint development programs and technology supportCross-site collaboration and integrationGrow market shareWin majority of merchant opportunitiesGrow by serving captive customers  How We Win  54 

 Key Success Factors“Made in China 2025” expansionNode migration (14nm, 10nm, 7nm)Captive business penetrationLeverage JV & partnership to compete more effectivelyWin majority market share of growing foundry demand Cross-site collaboration to serve global customers  High-End IC Logic Outlook  55  2017-2020 CAGR: 7% 

 Repositioned the business to grow high-end market shareChina investment on trackGrowing business globally with logic foundries and IDMsJV’s in China and Taiwan allow us to compete more effectivelyIncreasingly seen as business and technology partner  High-End IC Logic Summary  56 

 Pete Broadbent, VP US & EuropeHigh-End IC Memory  57 

 Repositioning the customer baseExtremely strong memory demand – revenue to top memory customers up 78% YTD vs. 2017High market share with specialty and emerging memory foundriesBenefitting from Micron technology foundationTrusted technology partnerHigh-end capacity and capabilityTechnology, global engineering support  High-End IC Memory Recent Performance  58 

 We have replaced nearly all of the revenue lost from Micron insourcingStrong diversity of high-end customersCost structure improved during downturn – more profitable at same revenue levelRobust qualification pipeline – PoR development with key memory customers  Repositioning Boise  59  Customer Transition    % of Boise Revenue 

 Maintain and grow market leadership in Asia memory (DRAM & 3D-NAND)Provide virtual captive technology, capability and customer serviceIncrease high-end business with foundries (China, U.S.)Integrate global high-end manufacturing locations to better serve customers  Strategic Priorities  60 

 Strong memory growth trendDiversity of technology, applicationsCurrently dominated by large, captive producersMerchant opportunity with emerging memory producers, foundriesMost emerging memory production in Asia (Taiwan and China)  Memory Market Dynamics  61  China New Fabs - $70B+ Investments        Company  $B  Memory  Site  Tsinghua Unigroup  30  DRAM  Nanjing  Yangtze Memory Technologies (YMTC)  24  3D-NAND  Wuhan  Innotron  8  DRAM  Hefei  Fujian Jin Hua IC (JHICC)  8  DRAM  Fujian  China Existing Fabs       Company  Memory  Site  Intel  3D-NAND  Dalian  Samsung  3D-NAND  Xi-An  SK Hynix  DRAM  Wu-Xi  JHICC/UMC  DRAM  Xiamen  Nexchip  DRAM  Hefei  YMTC  DRAM  Wuhan 

 23 New China 12” IC Fabs  62  Image from https://commons.wikimedia.org/wiki/File:China-equirect.png                                                Photronics LocationsIC KoreaIC XiamenIC TaiwanIC Boise (not shown)      Logic (17)Memory (6)  Innotron (M)  Nexchip (L)  YMTC (M)  Samsung (M)  AOS (L)  Unigroup (L)  GF (L)  SMIC (L)  Intel (M)  SMIC (L)  Cansemi (L)  JHICC (M)  USC (L)  Silan (L)  Sien IC (L)  HidM (L)  AMS (L)  TSMC (L)  HH Group (L)  Unigroup (M)  SMIC (L)  SMIC (L)  HLIC (L) 

 Technology leadership in both logic & memoryDevelop high-end capacity and capabilityEstablish PoR for new nodes (DRAM, 3D-NAND)Joint development for next generation nodesCustomer relationships that lead to business partnershipsAct as virtual captive providerCross-site collaboration and integrationGrow market shareWin majority of merchant opportunitiesGrow merchant market by serving captive customers  How We Win  63 

   Stable demand – less cyclicalGood margins and cash flowLow consumer of capitalVery competitive – more like a commodity marketAuto and IoT driving analog growth  Mainstream – Steady IC Contributor  64 

 Key Success Factors“Made in China 2025” expansionNode migration (DRAM, 3D-NAND)Strong market driversMaintain leading market share with specialty foundry producersCross-site collaboration to serve global customersMainstream stability, growth of auto, IoT  High-End IC Memory Outlook  65  2017-2020 CAGR: 7% 

 Repositioned the businessBoise performance back to JV levelsGrowing business with Asia specialty memory foundriesExtending technology leadership, developing partnerships  High-End IC Memory Summary  66 

 John Jordan, CFOFinancial Model & Outlook  67 

 My observations coming from outsideLean, no-frills well-organized businessTransparent across boundariesDevoid of unnecessary redundanciesAll key players are respected industry experts with years in the industryInsistence on operational excellence and maintaining a death grip on costPassionate respect for customers and relationshipsA passion to win and a passion to improve the value equation for shareholdersFinance observations:Excellent controls environmentAppropriate competence levels in all positionsTone at the top to do the right thingOpportunity to automate and improve processes to achieve best practiceDesire to support the drive to improve ROIC  Early Observations  68 

   Performance Improved During 2nd Quarter  69  *Net income attributable to Photronics, Inc. shareholders  +6%Q/Q  +21%Y/Y  +270 bpsQ/Q  +650 bpsY/Y  +210 bpsQ/Q  +660 bpsY/Y  +60%Q/Q  +10XY/Y  +80%Q/Q  +6XY/Y  +67%Q/Q  +5XY/Y 

   Performance Improved During 1st Half  70  +17% Y/Y  +400 bps Y/Y  +420 bps Y/Y  +4X Y/Y  +4X Y/Y  +4X Y/Y  *Net income attributable to Photronics, Inc. shareholders 

 Key Success Factors“Made in China 2025” – new facilitiesFPD technology inflectionsRepositioning the companyNode migration (logic & memory)Growing business with captive producersIC JV’s in China and TaiwanStable mainstream businessCross-site collaboration to serve global customers  Positive Growth Outlook  71  2017-2020 CAGR: 12% 

 Disciplined focus on investments to improve ROICMaintain strong balance sheet through China investment periodFinancial stability through economic downturnFlexibility to invest in other growth opportunities (organic or M&A)Continue to drive cost out to improve customer value proposition and improve shareholder return  Strategic Priorities to Improve Shareholder Value  72 

 Strong operating cash flow generatorPowerful operating leverage: target 50%Positive free cash flow every fiscal year since 2009Solid balance sheet  Solid Financial Fundamentals  73 

 Free Cash Flow Much Stronger Post China Investments  74  *Free cash flow equals operating cash flow less capex 

 Reducing Risk of China Investment  75 

 Fund organic growthGeographic expansion into ChinaTechnical investments to maintain leadership positionExplore strategic M&APhotomask industry – IC & FPDAdjacencies to increase revenue diversificationDebt repaymentConverts mature in 2019Incurring local debt in China  Clear Capital Deployment Priorities  76  *Net cash defined as cash and cash equivalents less long-term borrowings (including current portion) 

 Clear path to profitable growthPrudent stewardship of balance sheetFinancial model to grow income faster than revenueFinancial targetsRevenue $630M & EPS $0.80 by 2020Operating margin > 15%Minimum $100M net cashImprove ROIC – no projects accepted below hurdle rate  Financial Summary  77 

 Global leader in merchant photomask industryDelivering high-end growth by leveraging core competences: Operational Excellence, Low Cost Producer, Technology Leadership, Customer IntimacyInvesting aggressively to exploit secular growth opportunitiesChina industry expansion – Made in China 2025Technology inflection from LCD to AMOLEDExplosion of G10.5+ panel capacityTargeting $630M / $0.80 in revenue / EPS by 2020Strategic investments bring top-line growthOperating leverage creates margin expansionAdditional upside from potential M&A  A Compelling Investment Thesis  78 

 Questions?  79 

 Thank you for your interest!  For Additional Information:R. Troy Dewar, CFADirector, Investor Relations203.740.5610tdewar@photronics.com