CHROMA — Call Transcript 2023

Sep 14, 2023

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2023.2Q Earnings Conference

Paul Ying, CFO Leo Huang, Chairman & CEO

31[st] July, 2023

1

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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2

Agenda

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•
Financial Review
•
Operation Highlights
•
Q&A
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3

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FINANCIAL REVIEW

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4

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Year 2023.2Q Condensed Consolidated Income Statement
Condensed Consolidated P&L 2023.2Q % 2023.1Q % QoQ % 2022.2Q % YoY %
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		2023.2Q %	2023.2Q %
(In Million NTD, except for EPS in NTD)			4,388 100% 1% 4,935 100% (11%) 4,049 92% 4% 4,644 94% (10%) 283 7% (41%) 188 4% (11%) 0 0% - 17 - n/a 56 1% (9%) 86 2% (41%) (1,722) (39%) (3%) (2,033) (41%) (18%) 2,666 61% 3% 2,902 59% (5%) (1,042) (24%) 6% (1,093) (22%) 1% (437) (10%) - (443) (9%) (2%) 1,187 27% 2% 1,366 28% (11%) 59 1% 144% 695 14% (79%) 1,246 28% 9% 2,061 42% (34%) (283) (6%) 7% (376) (8%) (19%) 963 22% 9% 1,685 34% (37%) (36) (1%) (69%) 161 3% n/a $ 927 21% 13% $ 1,846 37% (43%) 937 21% 9% 1,660 34% (39%) 26 1% 38% 25 - 44% $ 963 22% 9% $ 1,685 34% (37%) $ 2.23 9% $ 3.95 (39%) $ 2.19 11% $ 3.92 (38%)
Net Sales		4,416 100%
Consolidated Sales of Testing Equipment Business		4,198 95%
Consolidated Sales of MAS		167 4%
Consolidated Sales of New Material		0 0%
Others		51 1%
Cost of Goods Sold		(1,666) (38%)
Gross Profit		2,750 62%
Operating Expenses: General & Administration Research & Development		(1,103) (25%) (433) (10%)
Operating Income		1,214 27%
Non-Operating Income (Expenses), net		144 3%
Income (Loss) Before Tax Income Tax		1,358 30% (304) (6%)
Net Income		1,054 24%
Other Comprehensive Income (Losses)		(11) -
Comprehensive Income		$ 1,043 24%
Net Income (Losses) Attributable To: Shareholders of the Parent Noncontrolling Interests		1,018 23% 36 1%
		$ 1,054 24%
EPS (Basic)		$ 2.42
EPS (Diluted)		$ 2.42

2022/2Q included the gain from disposal of investment (ADLINK) of NTD 414 million plus revert the gain from disposal of property to ADLINK of NTD 90m.

5

Year 2023.1H Condensed Consolidated Income Statement Condensed Consolidated P&L (In Million NTD, except for EPS in NTD) 2023.1H % 2022.1H % YoY % Net Sales 8,804 100% 9,334 100% (6%) Consolidated Sales of Testing Equipment Business 8,247 94% 8,118 87% 2% Consolidated Sales of MAS 450 5% 409 4% 10% Consolidated Sales of New Material 0 0% 635 7% n/a Others 107 1% 172 2% (38%) Cost of Goods Sold (3,388) (38%) (4,247) (45%) (20%) Gross Profit 5,416 62% 5,087 55% 6% Operating Expenses: General & Administration (2,145) (24%) (2,039) (22%) 5% Research & Development (870) (10%) (844) (9%) 3% Operating Income 2,401 28% 2,204 24% 9% Non-Operating Income (Expenses), net 203 2% 862 9% (76%) Income (Loss) Before Tax 2,604 30% 3,066 33% (15%) Income Tax (587) (7%) (522) (6%) 12% Net Income 2,017 23% 2,544 27% (21%) Other Comprehensive Income (Losses) (48) (1%) 450 5% n/a Comprehensive Income $ 1,969 22% $ 2,994 32% (34%) Net Income (Losses) Attributable To: Shareholders of the Parent 1,955 22% 2,512 27% (22%) Noncontrolling Interests 62 1% 32 - 94% $ 2,017 23% $ 2,544 27% (21%) EPS (Basic) $ 4.65 $ 5.98 (22%) EPS (Diluted) $ 4.61 $ 5.94 (22%)

Balance Sheet Highlights & Financial Ratio

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Consolidated (In Million NTD)		2023. June	2022. Dec	+ / - %
Balance Sheet Highlights
Cash & Short Term Investments		5,356	6,685	-	20%
Inventory		5,252	4,753		10%
Short Term Debt		953	2,024	-	53%
Long Term Debt		508	1,165	-	56%
Shareholders Equity		20,487	21,873		- 6%
Total Assets		33,371	33,828		- 1%
Inventory Turnover (Day)		266	148
AR Turnover (Day)		82	72
AP Turnover (Day)		137	101
Net Debt to Equity (%)		Net Cash	Net Cash
ROE (%)		19%	25%
ROA (%)		12%	16%
Cash Position	2023.1H	2022.1H	YoY
EBITDA	2,978	3,421	(13%)
Cash Flow from Operation	1,105	1,951	(43%)
Free Cash Flow	457	2,069	n/a

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All ROE + ROA has been annualized.

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

7

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OPERATION

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HIGHLIGHT

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8

2023.2Q & 1H Annual Product Mix and Consolidated Sales Breakdown

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		(Unit: Million NTD)	2023.2Q % QoQ YoY 2023.1H % YoY	2023.2Q % QoQ YoY 2023.1H % YoY
		Test Instruments & Automatic Testing System (ATS)	2,318 70% - 44% 4,640 73% 46%	7,052 52%
		Semiconductor / Photonics Test Solutions	631 19% 63% (57%) 1,026 16% (56%)	4,523 34%
		Turnkey Solutions	145 4% 101% (48%) 217 4% (52%)	578 4%
		Service & Others	248 7% 10% (33%) 475 7% (24%)	1,308 10%
		Total of Parent Company Sales	3,342 100% 11% (10%) 6,358 100% (3%)	13,461 100%
		+ Sales from Overseas Operations & Related Subsidiaries	856 (17%) (7%) 1,889 23%	6,808
		Chroma Consolidated Testing Equipment Bi	4,198 95% 4% (10%) 8,247 94% 2%	20,269 92%
		usness MAS Other Subsidiaries	167 4% (41%) (11%) 450 5% 10% 51 1% (9%) (41%) 107 1% (38%)
		Consolidated Sales (Continued Business Units)	4,416 100% 1% (10%) 8,804 100% 1%
			0 - n/a n/a 0 - n/a 4,416 100% 1% (11%) 8,804 100% (6%)

Year 2023 Guidance

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In the first half of year 2023, Chroma total consolidated sales revenues reached 8.8 billion NTD, presented a decline of 6% YoY. The consolidated testing equipment business reached 8.2 billion NTD, presented a growth of 2%. The major contribution was coming from Testing Instruments & ATS, particularly the demand from EV and ESS.

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Year 2023.2H Business Outlook:

• ✓ Increasing demand of SLT testers contributed from AI - related and HPC applications.

✓ The growth of Test Instruments & ATS for power testing solutions in 2H will be slowing down compared to 1H due to China EV market consolidation. Nevertheless, EV battery cell projects will start delivery in 2H as scheduled.

• ✓ China Semiconductor remained slow. However, the Semiconductor / Photonics sector in 2H will be

outperformed compared to 1H.

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Awards

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Best CEO, 2[nd] Place (Rest of Asia Overall) Best CFO, 1[st] Place (Rest of Asia Overall) Best CFO, 3[rd] Place (Small & MidCap) Technology Hardware Best IR Professional, 3[rd] Place (Rest of Asia Overall) Best IR Professional, 3[rd] Place (Small & MidCap) Technology Hardware IR Team, 3[rd] Place (Small & MidCap) Technology Hardware

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Green Revenue

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Testing Solutions

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High Power High Precision
✓ Semiconductor/IC
✓ EV/EVSE ✓ Photonics
✓ AOI
✓ Power Electronics ✓ Battery
Passive Component
✓
& Electrical Safety
✓ Photovoltaic
✓ FPD/Video & Color
✓ LED ✓ Thermoelectric
✓ Automation
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High Precision Test Solutions

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High Precision Test Solution – Semiconductor ATE

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3650-S2
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MPVI HVVI HDDPS2
768pin
12 slots
15kVA
Floating
40A pulse  750V  24V LB electronics
2ch 4ch 64ch Mechanical
VI VI VI-like
2016 2020 2022 2023
LPC128 HCDPS HDVI
3680
Chroma ASIC 32A
1Gbps 4ch 2048 pin SoC Test
512MW 1Gbps Pattern Rate
128ch 512A High Current
HDAVO -40-70V 2048 Parallel Sites Testing
32ch
VI
HR/HS mode
AWG/DIG
8ch
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768pin
12 slots
15kVA
Floating
LB electronics
Mechanical
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Analog/Power ICs

High Precision Test Solution - IC Test & Handler Solution

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Precision

Temperature-forcing Systems

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✓ 40℃~ 150℃ ​@Tc ✓ -40℃~ 150℃ ​@Tc ✓ -70℃~ 150℃ ​@Tc
✓ Up to 1.2 kW power ✓ Up to 1.8 kW power ✓ Up to 800W power
dissipation dissipation dissipation
2021 2022 2023
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Single Site Test Handler

Automatic System Function Tester

FT & SLT Hybrid Test System

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• ✓ 3x3~120x120mm

• ✓ -70~+150℃ @Tc, 1.2kw dissipation

• ✓ 500 kgf contact

• ✓ TSD (Tj) available

Model 3110 Gen2

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• ✓ 3x3~70x70mm

• ✓ -40~+150℃ @Tc, 1.2kw/site dissipation

• ✓ 150 kgf/site contact

• ✓ TSD (Tj) available ✓ OTA integration Model 3260

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• ✓ 5x5~120x120mm

• ✓ 4~24 sites

• ✓ RT. ~ +150℃ @Tc,

1.5 kw/site dissipation

• ✓ 500 kgf/site contact

• ✓ TSD (Tj) available

• ✓ Warpage detection ✓ OHT integration

Model 3200

Advanced Packaging of HPC, Automotive, IOT, AI , Cloud, Network and Datacenter Chips

High Precision Test Solution – Semiconductor Advanced Manufacturing Process

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3D Metrology Measurement System

2D+3D Metrology

• •XY / Z Resolution: 30nm / 0.05nm

• •Sensor: Optical module & WLI module

• •Light Source: Multiple Light Sources

2D+3D Metrology

• •XY / Z Resolution: 30nm / 0.05nm

• •Sensor: BLiS

• •Light Source: Multiple Light Sources

• •Applications:

RDL: ≧ 2 μm, AR3 TSV: ≧ 5 μm, AR15 OVL ≦ 0.2 μm

BLiS technology

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Model 7980

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2021 2022
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2023
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BLiS: Broadband Light integrated System Muti-Sensors with different functions are integrated.

Advanced Packaging: InFO, CoWoS, 3D IC

Semiconductor Test Solution – Advanced Manufacturing Process

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3D Metrology Measurement System 7980

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• ✓ Nondestructive and rapid surface profile measurement and analysis.

✓ Advanced Packaging Applications:

• TSV

• RDL

• Overlay (OVL)

• Surface 3D profile

• ✓ SEMI S2 certified.

• ✓ Semi-auto or Fully-auto

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TSV OVL
Surface 3D Profile
RDL
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High Precision Test Solution – Automatic Optical Inspection Solution

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In-Process Wafer Chip Inspection System
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✓ Large die size
• die size up to 20mm
✓ High throughput
• WPH: 27 wafers/hour
✓ Shared auto wafer loader
• 1 loader support maximum 2 inspectors
Model 7940 ✓ AI classification
Parallel computing
Defect size 2μm Model 7945
WPH: 15 wafers/hour
2020 2022 2023
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LED/ PD/ VCSEL/ Discrete power device Wide Band Gap SEMI/ Quartz Element

High Precision Test Solution – Electrical Safety Test Solutions

DUT: Photo-coupler

• Built-in AC hipot test & PD detection functions

• PD detection range: 1pC~2000pC

• AC voltage output: 0.1kVac~10kVac

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19501-K Partial Discharge Tester

2020

DUT: IGBT

• Built-in hipot test & PD detection functions

• • PD detection range 1 pC~6000pC

• Voltage output : 0.1KVac ~ 5KVac

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19501 Partial Discharge Tester

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2023
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IGBT/MOSFET Power IC, Gate Driver Transformer, HV Relay, Photo-coupler, Digital Isolators

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High Power Test Solutions

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High Power Test Solution – Power Electronics Test Solution

Bidirectional DC Source

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Bidirectional: Source & Load with energy regen High Power Density: 6-18kW/3UH, Eff:92% Model 62000D Series 100V-1800V, 540A

2019 2021

2022

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Regenerative Grid Simulator

High power AC source with energy regen Optional regen AC Load Parallel up to 300kVA Model 61800 Series 30kVA-60kVA, 400VLN

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Regenerative AC Load

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Programmable AC Load with energy regen High Power Density: 15kW/3UH, Eff:90% Model 63800R Series 9kW-15kW, 350VLN

2023

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Regenerative Grid Simulator
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High power AC source with energy regen Optional regen AC Load Parallel up to 1MVA Model 61800-100HV 105kVA, 500VLN-800VLN

Server PSU, BBU Testing & EV Power Electronics, Green Energy (PV, ESS, PCS, Battery/Fuel Cell), Battery Storage

High Power Test Solution – Electric Propulsion Test System

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BMS Power HIL Testbed Model 8630 for EV and ESS

E-Propulsion Test System Model 1210 for E-Scooter, EV and E-Bus

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• •
250kW/500Nm/15,000rpm 1200V/500A and 5V/5A
• •
370kW/426Nm/25,000rpm 1200V/600A and 5V/5A
2020 2021 2022 2023 2024
Battery Pack Power HIL Testbed OBC and DC-DC Converter Power HIL
Model 8610 for EV and ESS Testbed Model 8620 for EV and ESS
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• •

• 300kW 1000V 750A 11kW/400V/40A

• • 360kW 1000V 900A 3.3kW/12V/300A

• • • 500kW 1000V 1200A 22kW/800V/75A

• • 600kW 1000V 1500A 6.6kW/12V/550A

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e-Propulsion/ Battery Pack/BMS/OBC/DD

High Power Test Solution – Battery Module/Pack Test System

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Test Solution for
E-Scooter Battery pack
E-vehicle Battery Module
• Regenerative Battery Pack
Test Solution Model 17020E
• 10kW60V • 10kW200V
• 10kW100V
New Generation Developing
2020 2021 2022 2023 2024
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Test Solution for Test Solution for E-vehicle, ESS Battery Pack E-vehicle, ESS Battery Pack

• Regenerative Battery Pack Test Solution Model 17040

• Regenerative Battery Pack Test Solution Model 17040E

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• 300kW 1000V 750A

• 200kW 1700V 400A

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• 360kW 1000V 900A

• 200kW 850V 800A

• 500kW 1000V 1200A

• 600kW 1000V 1500A

Test Solution for ESS, E-boat Battery Pack,

• Regenerative Battery Pack Test Solution Model 17040E

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• Up to 1.6MW/1700V/6400A

Battery Module/ Pack

High Power & High Precision Test Solutions – Battery Cell

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Large Cell Test Solution

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Linear type high power CDC Prog. Charge/Discharge Tester Model 17208M-6-60 6V, 60A

2019 2020 2021

High Power xEV Cell Test Solution

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High power CDC with energy regen Battery Reliability Test System Model 17010H 6V, 300A, 600A (peak current) 2022

DVA Cell Test Solution

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Ultra-high precision CDC Prog. Charge/Discharge Tester Model 17208M-5-12C 5V, 12A

2023

Small Cell Test Solution

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xEV Cell Solution

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Auxiliary Measurement Solution

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Linear type CDC

Prog. Charge/Discharge Tester Model 17216 series 6V, 6A/12A

Energy regen CDC Prog. Charge/Discharge Tester Model 17212M-6-100S 6V, 100A

Multi-Channel Voltage/Temperature Data Logger Model A172013 / A172014

Battery Cell

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Thank You

26 Copyright © 2023 Chroma ATE Inc. All rights reserved.