AOT — Investor Presentation 2017

Oct 26, 2017

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榮創能源科技股份有限公司 Advanced Optoelectronic Technology Inc.

Investor’s Conference ： (Code 3437TT)

2017/10/27

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Safe Harbor Notice

This presentation may contain various forward-looking statements of Advanced O p toelectronic Technolo gy Inc. ( “AOT” ) and include AOT’s operations, future results and prospects. These statements may involve substantial known and unknown risks and uncertainties, and actual result and performance may differ materially from those contained in any forward-looking statements due to some factors beyond AOT ’ s control . In addition, AOT expressly disclaims any obligation or undertaking to release ublicl an u dates or revisions to an forward- p y y p y looking statements, whether as a result of new information, future events, or otherwise.

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Outline

• Corporate Introduce

• • Operation Results

• Market Outlook

• • Product Roadmap

• • Business Strategy

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1.Corporate Introduce

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Basic Information

• Set-up:1999/10

• Cha rman oi f the oarB d ： J Hsi F ungang

• ：

• General Manager Jung-Hsi Fang

• Major Stockholder ： Foxconn

• Capital ： NT$1 49 billions.

• ：

• Employee 1,500 people

• Site ： Hsinchu Industrial Park & Jhunan Science Park

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Major Products

TV /MNTBLU Application

Automotive

	Type	Type	Type	YAG/RGn	YAG/RGn	KSF		• 3014M
	FU-D			3030M, 2121M,		3030M
	DU-E			3014M, 4010M, 4014M, 7020M, 7020P		4010M, 4014M, 7020M
	Flip-D			3030S, 3030SK				Lighting Module
	Flip-E			2010F, 7032S,
	CSP			1313A5, 1515A1
		Application • CSP1313A1 • 2016C						Application • 3014M • 30008 filament • 3528
			NB/Tablet BLU Application					• 3030M UV •3535UV
		Thick		YAG/silicate	KSF
		0.3t		3803,1803	1803
		0.4t		3804,3004	3004
				38063006
		0.6t		, 4206	3006

Major Customers

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Patents

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EKP/EIP
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EUROPE
CHINA N. AMERICA
S.KOREA JAPAN
India
AOT
AFRICA
S. AMERICA
Australia
Until 2017/09/30, 1,326 patents were approved globally.
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2. Operation Results

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Financial Results

	Financial Results	Financial Results	Financial Results	Financial Results	Financial Results	Financial Results	Financial Results	Financial Results
	$ UNIT:NT K Year 2011 2012 2013 2014 2015 2016
	Year	2011	2012	2013	2014	2015	2016
	Revenue	3,968,509	5,209,998	6,558,767	7,114,256	6,170,439	6,171,727
	G ross Margin	573,739	900,982	1,262,723	1,188,111	1,045,571	763,910
	Gross	14 46%	17 29%	19 25%	16 70%	16 94%	12 38%
	Margin %	.	.	.	.	.	.
	Operation Income	263,765	509,767	735,624	529,823	387,651	102,912
	Net Income before Tax	275,321	489,432	752,889	565,407	411,857	97,911
	Net Income
	after Tax	253,050	451,192	687,384	422,013	342,783	58,947
	EPS(NT$)	1.95	3.47	5.29	3.07	2.38	0.41

Quarterly Revenue & GM%

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NT$ Million
2,000
25%
20%
1,500
18.1%
14.7% 15%
13 4%.
1,000
12.2%
10.3%
10.8%
10%
9.0%
500
5%
0 0%
Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17
Revenue GM%
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Product Portfolio

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100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17
Oth ers Li g hti ng TV NB&M on it or M o bil e
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3. Market Outlook

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Prospect of TV Market

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Global panel demand will promote the growth of LED

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Overall Panel
LCD TV
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Prospects of LED Industry

• The global demand of LED package is still growing. The demand from back light application will still have 3-5% CAGR from now to year 2020, thanks to the capac ty oi f G10 5 k. eep ng ncreas ng.i i i

• • The new BT2020 standard with 4k/8K TV will bring in a new wave to upgrade TV sets globally. LED will be one of the keys to meet the standard.

• The demand of ultra-high brightness LED is stimulated by the growth of flash LED, which is used in cell phone to replace camera.

• There will be a high growth rate for LED used in automotive. High growth, high price, and high value-added will make automotive market a new arena for LED industry to conquer. Especially the external light will be the main focus.

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4. Product Roadmap

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Slim/Light
OLED
LCD + BLU Flexible
Cost+Technology Mini-LED
QD+EL WGC KSF+New G
micro-LED R+G QD
QLED
Micro-LED
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Side-Emitting Type-Package

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7020S

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3020S Q DR + Q DG b eze l 、 NBR + NBG LCM Blue LEDs 1803S BEF Light quide QD sheet or NBRG sheet reflector back B-Led plate 3103S plate W-Led 68003S QD-LED or KSF-LED

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Micro/Mini-LED Relative Product
Technology Analysis
Resolution
10-35dpi 35dpi
300-1200dpi
1 . Handset BLU
1. Slim/Thin (0-5mm OD) BLUE + Module
2. WGC >OLED +QD CF
3. Flexible ( FPC )
2. TV BLU
1 . S lim Thin / (0-15mmOD)
2. WGC >OLED RGB
Inorganic
LED
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Handset Product Compatible with OLED

OLED Handset: (2-3W) 1. Thickness 1 6. -2mm< 2. WGC: NTSC>105

3. Flexible

4. No Fringe 5. Cost:<10 USD

TFT Type :

• Handset BLU <0.8W (14pcsLED (Side-View 3004/3006/1803) ) 1. Thickness<0.6mm 2. WGC NTSC>105 1. KSF+ β Silone, 95-100 2. KSF+ γ Alone, 95-105 3. No-Cd 系列 QD 95-100 -

• 4. CdSe 系列 QD 105 120

• 3. No Fringe

4. Flexible

5. Cost 3-10 USD

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TV LED Product Compatible with OLED

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1. New Type BLU Module Requests:

1. BLU Thickness<10,15 mm • Direct :3030M/3030S+ Lens (15-30mm)

• Side: 7032S/4020/4010+Light Guide Reflector(<20mm)

2. WGC NTSC>105

  **1. KSF+** β **Silone (V) 2. KSF+ γ Alone (V) 3. No-Cd Type QD 4. CdSe Type QD 5. R+G+B LED**

3. Dimming: 區塊發光直下式 ( (V)) 4. No Fringe 5. Flexible

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• 1. Multi dies Light Plate • mini-LED (>100um以上)

• • POP+DBEF+QD Film

• 1. PCB/FPC/PI/Glass

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Derivative products & Roadmap

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QD Sheet, Film New +QD
Luminance
Plate Module QD Inject
High color gamut
CSP
S-Type
Local-Dimmable
- Local-Dimmable
TV/Monitor Star Backlight
-
BLU+QD /Phosphor F Star-Backlight
-CSP
Local Dimming -Package
&
-
L oca l Di mma bl e
Slim Star-Backlight
-
BBLU+QD CF
Handset Local-Dimmable
-
Star Backlight
-
BLU+QD /Phosphor F
2017/Q4 2018/Q1 2018/Q3 2018/Q4
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QDRG or NBRG sheet	QDRG or NBRG sheet				Light shaping Diffuser QDR+QDG or NBG+NBR sheet	Light shaping Diffuser QDR+QDG or NBG+NBR sheet	Light shaping Diffuser QDR+QDG or NBG+NBR sheet	Light shaping Diffuser QDR+QDG or NBG+NBR sheet	Light shaping Diffuser QDR+QDG or NBG+NBR sheet
					KSF CSP or B chip or QD-LED
					Materials Remark Pitch Y(um) P-N cap
	Application	Item			Materials			Remark
		Size	LED Q'ty	Pitch X(um)		Pitch Y(um)	P-N cap
	Handset	5.5	8,160	1,000		1,000	200
	Handset	6	3,200	1,750		1,750	150
	TV	65	17,280	16,100		10,000	150
	TV	70	138 240 ,	16 300 ,		10 000 ,	150

Automobile LED Application

LED H eadlamp LED Si gna ul b lb P21W/T20 H7/9005/9006…… under develo ment ( p ) � Direction light � Back light T10/C5W

H7/9005/9006……

� Reading light � Brand name light R5W/R10W C5W ( un d er eve d l opmen t) � Customized � Blake/stop light headlamp light � Brand name light source � Direction light

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Automobile LED Application in 2017‐2018

		Product	Pkg	Target customer	Market	MP
		P21 L/B W/T20	1313	Europe/ USA	AM	2018/Q1 2018/Q4
				Chi
		H4 L/B	1313	na Southern Ease Asia	AM	2018/Q1
				China
		R10/T10 L/B	9V	Southern Ease Asia	AM	2018/Q2

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5.Business Strategy

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AOT analysis

• Strength

• • C te with Inno ux anl d Sh oopera arp as ma or j

• customers.

• Operate in highly effective supply chain management

1.Partnership with suppliers to rapidly response to demand change 2.Modularized design to minimize the risk of idle of s ow mov ngl i • Comprehensive, global service structure to maintain long term customer partnership Opportunities • Mirco LED is highly possible to be the main stream technology.

• High-efficiency KSF phosphor offer the alternative to LCD to compete with OLED

• Consolidate supply chain to get the cost .

• advantages

• • Cooperate the global name brand companies

• and technology leaders to gain the competiveness.

Weakness

• U tream chi li k i ps p supp ers eep merg ng and consolidating. Less room for price bargain.

• Very famous on back light market. Less market awareness on other market segment.

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Threats

• China competitors gradually get stronger, also gain the resources from government.

• • Competitors in China have advantages on local service and resources.

• AMOLED will share part of the LCD/LED

• market.

• • Rapid demand change caused by short product life cycle, makes the supply chain management and cost management more difficult.

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Market Development Strategy	Market Development Strategy	Market Development Strategy	Market Development Strategy
	Penetrate world-class TV brand name companies and Mini LED and Micro LED technologies are
	Penetrate world-class TV brand name companies and	Mini LED and Micro LED technologies are
N E	l i pane compan es. Upgrade technologies for high-end application on	i li d idl d commerc a ze rap y, an can be deployed to the market much earlier.
Cu W	backlight and automotive.
s tomer	Secure, future increase, the market share in China TV and panel industry.	Keep promoting high color gamma technology to offer better CP ratio to compete
O L D		with OLED. Focus on mobile devices and
		TV to create new growth .
	Product 28

Market Outlook─Prospect & Strategy

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Competitive
barrier through
technology and
SCM
Enhance
market share
of B/L & Expand from
Mobile LED supply
chain to LCD
based on
supply chain
Micro LED
tech .
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Thanks! Q & A

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