CHROMA — Call Transcript 2021

Sep 13, 2021

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CHROMA ATE INC. 2021.2Q Earnings Conference Call

Paul Ying, CFO Leo Huang, Chairman & CEO

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29[th] July, 2021

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Disclaimer

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This presentation contains some forward-looking statements that are subject to substantial risks and uncertainties. Typically, these statements contain words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “plan”, “forecast”, “project”, “predict”, “potential”, “continue”, “may”, “should”, “will”, and “would” or similar words. You should consider these forward-looking statements carefully because such statements are only our expectations or projections about future events, and actual results may differ materially from those expressed or implied by such statements. The forward-looking statements in this presentation include, but are not limited to, growth rates for various markets estimated by third party sources, future products and technology development, widespread market acceptance of the hosted delivery model, future revenue growth and profitability. You should be cautioned that the forward-looking statements are no guarantee of our future performance. The forward-looking statements contained in this presentation are made only as of the date of this presentation and we undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances, except as required by law.

This presentation and the information contained herein are the property of Chroma Ate Inc.

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Agenda

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• Financial Review

• • Operation Highlights

• • Q&A

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FINANCIAL REVIEW

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Year 2021.1H Condensed Consolidated Income Statement

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Condensed Consolidated P&L 2021.1H % 2020.1H % YoY %
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	2021.1H %	2021.1H %
(In Million NTD, except for EPS in NTD)
Net Sales	8,718 100%	7,200 100% 21%
Consolidated Sales of Testing Equipment Business	6,705 77%	5,580 78% 20%
Consolidated Sales of MAS	364 4%	306 4% 19%
Consolidated Sales of New Material	1,457 17%	1,171 16% 24%
Others	192 2%	143 2% 34%
Cost of Goods Sold	(4,546) (52%)	(3,591) (50%) 27%
Gross Profit	4,172 48%	3,609 50% 16%
Operating Expenses: General & Administration Research & Development	(1,947) (22%) (746) (9%)	(1,646) (23%) 18% (644) (9%) 16%
Operating Income	1,479 17%	1,319 18% 12%
Non-Operating Income (Expenses), net	1,898 22%	65 1% 2820%
Income (Loss) Before Tax Income Tax	3,377 39% (609) (7%)	1,384 19% 144% (303) (4%) 100%
Net Income	2,768 32%	1,081 15% 156%
Other Comprehensive Income (Losses)	207 2%	(69) (1%) n/a
Comprehensive Income	$ 2,975 34%	$ 1,012 14% 194%
Net Income (Losses) Attributable To: Shareholders of the Parent Noncontrolling Interests	2,729 31% 39 1%	1,054 15% 159% 27 - 44%
	$ 2,768 32%	$ 1,081 15% 156%
EPS (Basic)	$ 6.50	$ 2.53 157%
EPS (Diluted)	$ 6.47	$ 2.51 158%

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Balance Sheet Highlights & Financial Ratio

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Consolidated (In Million NTD)		2021. June	2020. Dec	+ / - %
Balance Sheet Highlights
Cash & Short Term Investments		5,373	4,442		21%
Inventory		3,308	3,028		9%
Short Term Debt		1,333	3,187	-	58%
Long Term Debt		1,598	2,405	-	34%
Shareholders Equity		17,510	16,389		7%
Total Assets		28,815	28,129		2%
Inventory Turnover (Day)		125	130
AR Turnover (Day)		98	120
AP Turnover (Day)		108	122
Net Debt to Equity (%)		Net Cash	7%
ROE (%)		14%	15%
ROA (%)		8%	7%
Cash Position	2021.1H	2020.1H	YoY
EBITDA	3,661	1,631	125%
Cash Flow from Operation	1,405	756	86%
Free Cash Flow	3,220	322	900%

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All ROE + ROA has been annualized (excluded capital gain).

Free Cash Flow = Net Cash Provided by Operating Activities + (Net Cash used by Investing Activities)

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Quarterly Highlights

2021.2Q Key Points

• Sales Revenue: $ 2,449 million,

down 8% QoQ, up 6% YoY

• Gross Margin: 54%

• Operating Margin: 25%

• Net Income: NT$ 481 million,

down 79% QoQ, down 18% YoY

• 2021.2Q Highlights:

• The major growth sector in second quarter

is contributed from Test Instruments & ATS, which presented a growth of 18% QoQ and 9% YoY respectively.

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Sales Revenues Gross Margin Operating Margin

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2,666
2,449
2,421
2,313 2,394
2,053
55% 55% 53% 54%
52%
51%
27% 26%
25% 25% 25%
22%
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2021.1Q

2021.2Q

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2020.1Q 2020.2Q 2020.3Q 2020.4Q

Year 2021.2Q Condensed Income Statement

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Condensed P&L – Parent Only 2021.2Q % 2021.1Q % QoQ 2020.2Q % YoY
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	2021.2Q %	2021.2Q %
(In Million NTD, except for EPS in NTD)		% %
Net Sales	2,449 100%	2,666 100% (8%) 2,313 100% 6%
Cost of Goods Sold	(1,119) (46%)	(1,266) (47%) (12%) (1,112) (48%) 1%
Gross Profit	1,330 54%	1,400 53% (5%) 1,201 52% 11%
Operating Expenses: General & Administration Research & Development	(376) (15%) (344) (14%)	(370) (14%) 2% (330) (14%) 14% (333) (13%) 3% (302) (13%) 14%
Operating Income	610 25%	697 26% (12%) 569 25% 7%
Non-Operating Income (Expenses), net	(3) -	1,933 73% n/a 145 6% n/a
Income (Loss) Before Tax	607 25%	2,630 99% (77%) 714 31% (15%)
Income Tax	(126) (5%)	(382) (14%) (67%) (130) (6%) (3%)
Net Income	$ 481 20%	$ 2,248 85% (79%) $ 584 25% (18%)
Other Comprehensive Income	75 3%	137 5% (45%) (1) - n/a
Comprehensive Income	$ 556 23%	$ 2,385 90% (77%) $ 583 25% (5%)
EPS (Basic)	$ 1.14	$ 5.36 (79%) $ 1.40 (19%)
EPS (Diluted)	$ 1.14	$ 5.33 (79%) $ 1.39 (18%)

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100% owned subsidiaries’ income - New Material: 14m (QoQ ↑ 133%, YoY ↑ 250%); MAS: (214m).

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Year 2021.1H Condensed Income Statement

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2021.1H % 2020.1H % YoY
Condensed P&L – Parent Only
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	2021.1H %	2021.1H %
(In Million NTD, except for EPS in NTD)		%
Net Sales	5,115 100%	4,365 100% 17%
Cost of Goods Sold	(2,385) (47%)	(2,041) (47%) 17%
Gross Profit	2,730 53%	2,324 53% 17%
Operating Expenses: Selling and General & Administration Research & Development	(746) (14%) (677) (13%)	(672) (15%) 11% (580) (13%) 17%
Operating Income	1,307 26%	1,072 25% 22%
Non-Operating Income (Expenses), net	1,930 37%	208 4% 828%
Income (Loss) Before Tax	3,237 63%	1,280 29% 153%
Income Tax	(508) (10%)	(226) (5%) 125%
Net Income	$ 2,729 53%	$ 1,054 24% 159%
Other Comprehensive Income	213 4%	(62) (1%) n/a
Comprehensive Income	$ 2,942 57%	$ 992 23% 197%
EPS (Basic)	$ 6.50	$ 2.53 157%
EPS (Diluted)	$ 6.47	$ 2.51 158%

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Non-operating Income included 100% owned subsidiaries’ income - New Material: 20m (YoY ↑ 33%), MAS: (191m).

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Balance Sheet Highlights & Financial Ratio

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	Parent Only (In Million NTD) Balance Sheet Highlights 2021. June 2020. Dec + / - % Cash & Short Term Investment 1,622 902 80% Inventory 2,690 2,331 15% Short Term Debt 600 2,420 - 75% Long Term Debt 1,350 2,230 - 39% Shareholders Equity 17,134 16,063 7%
	Total Assets 25,176 24,406 3%
	Inventory Turnover (Day) 189 184 AR Turnover (Day) 88 106 AP Turnover (Day) 93 96 Net Debt to Equity (%) 2% 23%
	ROE (%) 14% 15%
	ROA (%) 10% 10%
	Cash Position 2021. 1H 2020. 1H YoY EBITDA 3,407 1,409 142% Cash Flow from Operation 1,100 663 66%
	Free Cash Flow 3,136 102 2975%

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All ROE + ROA has been annualized (excluded capital gain).

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Free Cash Flow = Net Cash Provided by Operating Activities + (Net Cash used by Investing Activities)

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OPERATION HIGHLIGHT

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2021.2Q & 1H Product Mix and Consolidated Sales Breakdown

(Unit: Million NTD) Test Instruments & Automatic Testing System (ATS) Semiconductor / Photonics Test Solutions Turnkey Solutions Service & Others Total of Parent Company Sales + Sales from Overseas Operations & Related Subsidiaries Chroma Consolidated Testing Equipment Business MAS New Material Other Subsidiaries Consolidated Sales	(Unit: Million NTD) Test Instruments & Automatic Testing System (ATS) Semiconductor / Photonics Test Solutions Turnkey Solutions Service & Others Total of Parent Company Sales + Sales from Overseas Operations & Related Subsidiaries Chroma Consolidated Testing Equipment Business MAS New Material Other Subsidiaries Consolidated Sales	(Unit: Million NTD) Test Instruments & Automatic Testing System (ATS) Semiconductor / Photonics Test Solutions Turnkey Solutions Service & Others Total of Parent Company Sales + Sales from Overseas Operations & Related Subsidiaries Chroma Consolidated Testing Equipment Business MAS New Material Other Subsidiaries Consolidated Sales	2021.2Q % QoQ YoY 2021.1H % YoY	2020 %
	Test Instruments & Automatic Testing System (ATS) Semiconductor / Photonics Test Solutions Turnkey Solutions Service & Others Total of Parent Company Sales + Sales from Overseas Operations & Related Subsidiaries Chroma Consolidated Testing Equipment Business	Test Instruments & Automatic Testing System (ATS)	1,349 55% 18% 9% 2,491 49% 3%	4,849 53%
		Semiconductor / Photonics Test Solutions	803 33% (23%) (3%) 1,845 36% 23%	3,025 33%
		Turnkey Solutions	33 1% (84%) (45%) 245 5% 113%	456 5%
		Service & Others	264 11% (2%) 41% 534 10% 60%	850 9%
		Total of Parent Company Sales	2,449 100% (8%) 6% 5,115 100% 17%	9,180 100%
		+ Sales from Overseas Operations & Related Subsidiaries	910 34% 28% 1,590 31%	2,865
			3,359 76% - 11% 6,705 77% 20%	12,045 78%
			221 5% 55% 71% 364 4% 19% 765 17% 11% 25% 1,457 17% 24% 100 2% 9% 54% 192 2% 34%	618 4% 2,551 16% 318 2%
			4,445 100% 4% 16% 8,718 100% 21%	15,532 100%

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Year 2021 Guidance

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For the first half in 2021, Chroma total consolidated sales revenues reached 8.7 billion NTD, presented a growth of 21% YoY. The Parent Company sales reached 5.1 billion, presented a growth of 17% YoY, mainly contributed from Semiconductor / Photonics testing solutions which increased by 23% compared to year 2020.

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2021 Business Outlook:

• Semiconductors / Photonics testing solution remains strong in second half, continued drive by increasing demand of automotive IC, development of 5G-related and high performance chip (HPC) applications. Key drivers are:

• CIS / VCSEL / ToF testing solutions

• Wireless RF and MCU testing solutions

• High Reliability Testing Solutions : Burn-in Test, SLT Test with thermal control dedicated for EV applications.

• The Test Instruments & ATS for power testing solutions continues benefit from green energy, included EV related components, battery cell / module / pack and smart-grid and 5G / Server related power testing.

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• Developing of augmented reality / virtual reality glasses will be driving the demand for testing solutions from second half.

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TECHNOLOGY

Semiconductor / Photonics Test Solutions

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Fast & Flexible Operation
• Multi-sites: 6~24 Sites (SLT / FT Combo Module)
IC Test Handler • Temperature: Ultra Cold Temp. -70˚C ~150˚C
• IC DUT: Normal IC and bare die
• New stack integration for dual lots and multiple binning
2D / 3D / 2D+3D Metrology
Advanced
• XY / Z Resolution: 30nm / 0.05nm
Packaging
• Sensor: Optical & WLI dual modules with auto switch
Inspection
• Light Source: Multiple Light Sources
1H, ‘21 2H, ‘21
MARKET HPC (CPU/MCU/GPU), Ics, MEMS, PMIC, FPGA, Sensors Advanced Packaging Industry
FT & SLT Hybrid Test System 2D/3D Critical Dimension Metrology
3200 7980
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SOLUTION
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Semiconductor / Photonics Test Solutions

TECHNOLOGY

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High Voltage Burn-in
• Design for Photo Diode, Avalanche Photo Diode
Photonics Testing • High voltage SMU: Up to 80V DC
• High temperature burn-in: Up to 180℃
• Precise probing: pad ~ 80um
1H, ‘21 2H, ‘21
MARKET 3D Sensing, LiDAR, Automotive, Optical Fiber Communication
Photodiode Burn-in & Reliability
Test System 58606
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SOLUTION
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TECHNOLOGY

Test Instruments & ATS Solution

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Display Optical Test AR Display Image Quality Test
• Chromaticity 、 Luminance • Automated loading and unloading
Optical Testing • High accuracy ≤ ± 0.002 • High-precision mechanism
•
• 0.001 cd/m2 low luminance Measurement: Luminance, Chromaticity,
Uniformity, Contrast, Artifacts, Distortion, & MTF
• WB, pGamma, Auto Flicker
Passive Metal Film Resistor Test Application
Component Testing • Laser trimming insulation test (HV test)
• Quality test (Impulse/Inrush test)
1H, ‘21 2H, ‘21
MARKET Display Metal Film Resistor (MELF resistor, chip/SMD resistor) AR Glasses
Color Analyzer Battery Cell Surge Tester AR Image Quality Test System
71241 19311 76XX Series
SOLUTION
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TECHNOLOGY

Test Instruments & ATS Solution

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Programmable DC Source Bidirectional DC Supply, Regenerative
Power Electronics
• High Power Density: 1.7kW x 3ch in 1U • Bidirectional: Source & Load
Testing
• Voltage rating: Up to 600V • Power: 0~1200/1800V, 0-40A, 18kW
• Power rating: 1.7kW/3.4kW/5kW • Load Changed +90%~ -90%, <4ms
Charging Emulation
EV Testing • CHAdeMO E-Scooter standard
• Simulating multiple charging conditions
1H, ‘21 2H, ‘21
MARKET ICT and EV Power Electronics, Green Energy, Battery Storage E-Scooters/2-Wheelers
Programmable DC Power Supply
62017E-600P-3 Bidirectional DC Power Supply
62180D-1200/1800
CHAdeMO E-Scooter Emulation System
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SOLUTION

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8000

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TECHNOLOGY

Test Instruments & ATS Solution

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Li-ion Battery Test Application Li-ion Battery Test Application
• Voltage/Current: 1.5V-6V / 0-12A • Energy Regenerative
• High accuracy for cycle test: 0.02% @ F.S. • Fast current response up to 1mS
• Multi-current range: 4 ranges • Channel parallel output up to 1200A
Battery Testing
Battery Pack Power HIL Test
• Integrated with battery cycler
• Up to 500kW
1H, ‘21 2H, ‘21
MARKET Battery Cell/Module/Pack for EV, Energy Storage System, Green Energy, Power Tools
Battery Cell Charge & Discharge Tester Battery Charge & Discharge Tester Battery Pack Power HIL Testbed
17216 series 17212M-6-100S 8610
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SOLUTION

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18

www.chromaate.com

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Keep going beyond

Thank You !

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Copyright © 2018 Chroma ATE Inc. All rights reserved.

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