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CHROMA Interim / Quarterly Report 2013

Aug 8, 2013

52029_rns_2013-08-08_bca7ce93-76f7-439b-87ce-f8036b16d019.pdf

Interim / Quarterly Report

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Your Testing Quality is Our Commitment.

CHROMA ATE INC. 2013 2Q. 2013 Investor Conference

Paul Ying, CFO Leo Huang, Chairman & CEO

7[th] August, 2013

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1
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Disclaimer

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 forwardlooking 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

  • Corporate Profile

  • Quarterly Highlights

  • Financial Review

  • Operation Highlights

  • Q&A

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CORPORATE PROFILE

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Corporate Profile

  • Founded in 1984, a world leading own brand

turnkey test & automation solution provider,

specialized in electronics test and measurement

instruments and system. Products cover test and measurement instruments and system for various industries, and a turnkey solution of an integration of test and measurement with automation and manufacturing execution systems (MES).

  • Key success: Precision, Reliability, Innovation

  • 2012 Sales Revenues: NT$4,174 million

  • 2012 Net Income: NT$945 million

  • Total 1,235 employees, 36% in R&D (as June, 2013)

  • Named as top 10 “Mittelstand” of Taiwan, by

Industrial Development Bureau, MoEA.

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Sales Revenues R&D Expenses
R&D Expenses in % of Sales Revenues
5,640
Parent Only
5,338
15%
14%
4,174
4,158
13%
12%
3,444
11%
603 630 637
557
481
2008 2009 2010 2011 2012
In Million NTD
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Financial Performance

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Consolidated Testing Sales Parent Only Sales Net Profit Gross Margin
Operating Margin
Consolidated NM Sales Others Parent Only
1,812
Consolidated MAS
55%
14,886 54% 1,523 54%
14,148 51%
52%
12,228
11,747
10,914 1,105
945
863 29%
25%
24%
5,640 5,338 21%
4,174
4,158
3,444 19%
2008 2009 2010 2011 2012 2008 2009 2010 2011 2012
In Million NTD
In Million NTD
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Financial Performance

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ROE Dividend
Parent Only EPS Cash dividend
Stock dividend
26%
5.05
4.06
20%
3.80
18%
3.38
14%
12% 2.50
2.52
2.50
2.00 2.00 2.00
0.50
0.30 0.40
2008 2009 2010 2011 2012 2008 2009 2010 2011 2012
In NTD
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Chroma Global Network

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Global Employees : 1,639 � , Branch Offices x16, Distributors x58
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US :
Hong Kong : Neworld Irvine /
Foothill Ranch,
CA
Tempe, AZ
Europe : Netherlands / Finland Japan: Shin Yokohama
China : Shenzhen / Dongguan / Xiamen / Suzhou
Nanjing / Shanghai / Beijing / Chongqing
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Product Mix

A Turnkey Test and Automation Solution Provider

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Power
Electronics LCD Panel /
LCD Panel / Power
43.5% Video
Video Electronics
10.8%
6.7% 50.8%
Passive
Component
7.0%
Passive
Component
7.8%
IC 9.0%
Services Services
& Others & Others
7.4% * 6.3%
Customized LED 6.6% IC 16.7%
System Customized LED 3.1%
Solar 18.2%
1.6% System
Solar 2.8%
1.7%
Year 2011 Year 2012
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* Services & Others included general services and government projects.

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QUARTERLY HIGHLIGHTS

FINANCIAL REVIEW

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Year 2013.June Condensed Consolidated Balance Sheet

June 2013
%
June 2012
%
Liabilities & Shareholders’ Equity
Current Liabilities
Short-term Borrowings
142
1%
430
4%
Note Payable – Third Party
141
1%
13
-
Note Payable – Related Party
7
-
-
-
Accounts Payable – Third Party
1,585
13%
2,031
17%
Accounts Payable – Related Party
10
-
8
-
Other Current Liabilities
2,024
17%
1,906
16%
Total Current Liabilities
3,909
32%
4,388
37%
Non-current Liabilities
Long-term Debt
126
1%
23
-
Other Non-current Liabilities
176
1%
163
1%
Total Liabilities
4,211
34%
4,574
38%
Shareholders'Equity Attributable to
Shareholders of the Parent
Capital Stock
3,768
31%
3,768
32%
Capital Surplus
939
8%
919
7%
Retained Earnings
2,855
23%
2,475
21%
Others
485
4%
239
2%
Treasury stock
(36)
-
(36)
-
Equity Attributable to Shareholders
of the Parent
8,011
66%
7,365
62%
Total Liabilities & SH Equity
$ 12,222
100%
$ 11,939
100%
(In Million NTD)
June 2013
%
June 2012
%
June 2013
%
June 2012
%
Assets
Current Assets
Cash & Cash Equivalents
1,603
13%
1,613
14%
Investments in Marketable Financial
Instruments
1,051
9%
447
4%
Note Receivable
11
-
75
-
Accounts Receivable – Third Party
2,797
23%
3,233
27%
Accounts Receivable – Related Party
7
-
4
-
Inventories
1,563
12%
1,922
16%
Other Current Assets
600
5%
295
3%
Liabilities & Shareholders’ Equity
Current Liabilities
Short-term Borrowings
142
1%
430
4%
Note Payable – Third Party
141
1%
13
-
Note Payable – Related Party
7
-
-
-
Accounts Payable – Third Party
1,585
13%
2,031
17%
Accounts Payable – Related Party
10
-
8
-
Other Current Liabilities
2,024
17%
1,906
16%
Total Current Liabilities
3,909
32%
4,388
37%
Total Current Assets
7,632
62%
7,589
64%
Non-current Liabilities
Long-term Debt
126
1%
23
-
Other Non-current Liabilities
176
1%
163
1%
Non-current Assets
Available-for-Sale Financial Assets -
noncurrent
411
3%
314
3%
Financial Assets Carried at Cost -
noncurrent
170
1%
161
1%
Investments Accounted by Equity
Method
430
4%
364
3%
Fixed Assets, Buildings & Equipment
2,792
23%
2,726
24%
Goodwill and Trademark
191
2%
138
1%
Other Noncurrent Assets
596
5%
647
6%
Total Liabilities
4,211
34%
4,574
38%
Shareholders'Equity Attributable to
Shareholders of the Parent
Capital Stock
3,768
31%
3,768
32%
Capital Surplus
939
8%
919
7%
Retained Earnings
2,855
23%
2,475
21%
Others
485
4%
239
2%
Treasury stock
(36)
-
(36)
-
Total Noncurrent Assets
4,590
38%
4,350
38%
Equity Attributable to Shareholders
of the Parent
8,011
66%
7,365
62%
Total Assets
$ 12,222
100%
$ 11,939
100%
Total Liabilities & SH Equity
$ 12,222
100%
$ 11,939
100%

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Year 2013.1H Condensed Consolidated Income Statement

Condensed Consolidated P&L
(In Million NTD, except for EPS in NTD)
Condensed Consolidated P&L
(In Million NTD, except for EPS in NTD)
1H’ 2013
%
1H’ 2013
%
12
1H’ 2012
%
YoY
%
5,786
100.0%
(13%)
(4,136)
(71.5%)
(25%)
1,650
28.5%
19%
(787)
(13.6%)
23%
(330)
(5.7%)
3%
533
9.2%
24%
10
0.2%
n/a
543
9.4%
40%
(140)
(2.4%)
(14%)
403
7.0%
59%
24
0.4%
488%
$ 427
7.4%
83%
408
7.1%
58%
(5)
(0.1)
-
$ 403
7.0%
59%
$ 1.09
59%
1H’ 2013
%
Net Sales 5,055
100.0%
Cost of Goods Sold (3,087)
(61.1%)
Gross Profit 1,968
38.9%
Operating Expenses:
General & Administration
Research & Development
(967)
(19.0%)
(341)
(6.8%)
Operating Income 660
13.1%
Non-Operating Income (Expenses), net 102
2.0%
Income (Loss) Before Tax
Income Tax
762
15.1%
(120)
(2.4%)
Net Income 641
12.7%
Other Comprehensive Income 141
2.8%
Comprehensive Income $ 782
15.5%
Net Income (Losses) Attributable To:
Shareholders of the Parent
Noncontrolling Interests
647
12.8%
(6)
(0.1%)
$ 641
12.7%
EPS (Basic) $ 1.73

Quarterly Highlights

Sales Revenues Gross Margin Operating Margin

  • Sales Revenue: $ 1,001 million,

up 22% QoQ, down 11% YoY

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56% 1,266 57%
55%
54%
52%
56%
1,122
1,001
911
875
821
24%
22%
19% 19% 18% 19%
1Q’12 2Q’12 3Q’12 4Q’12 1Q’13 2Q’13
In Million NTD
% of Sales Revenues
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  • Gross Margin: 54%

  • Operating Margin: 19%

  • Net Income: NT$ 429 million,

up 97% QoQ, up 51% YoY

  • 2Q 2013 Highlights:

− The major sales driver is contributed from Power Electronics Testing sectors, up 31% QoQ, while IC testing sector consistent with the expectation.

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2Q’ 2013 Income Statement (QoQ / YoY Comparison)

Condensed P&L– Parent Only
(In Million NTD, except for EPS in NTD)
2Q’ 2013
%
1Q’ 2013
%
QoQ
%
2Q’ 2012
%
YoY
%
1,122
100.0%
(11%)
(499)
(44.4%)
(8%)
623
55.6%
(13%)
(194)
(17.4%)
2%
(164)
(14.6%)
(5%)
265
23.6%
(28%)
93
8.3%
183%
358
31.9%
27%
(73)
(6.5%)
(66%)
$ 285
25.4%
51%
(9)
(0.8%)
n/a
$ 276
24.6%
84%
$ 0.76
51%
Net Sales 1,001
100.0%
821
100.0%
22%
Cost of Goods Sold (457)
(45.6%)
(363)
(44.2%)
26%
Gross Profit 544
54.4%
458
55.8%
19%
Operating Expenses:
General & Administration
Research & Development
(198)
(19.8%)
(156)
(15.6%)
(170)
(20.7%)
16%
(142)
(17.3%)
10%
Operating Income 190
19.0%
146
17.8%
30%
Non-Operating Income
(Expenses), net
264
26.4%
94
11.4%
181%
Income (Loss) Before Tax 454
45.4%
240
29.2%
89%
Income Tax (25)
(2.5%)
(22)
(2.7%)
14%
Net Income $ 429
42.9%
$ 218
26.5%
97%
Other Comprehensive Income 78
7.8%
62
7.6%
26%
Comprehensive Income $ 507
50.7%
$ 280
34.1%
81%
EPS (Basic) $ 1.15 $ 0.58
97%

Non-operating Income included the gain from equity investments total of 219m (QoQ � 265%), including 100% owned subsidiaries - New Material: 10m (QoQ � 17%), MAS: 206m (QoQ � 415%).

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1H’ 2013 Income Statement (QoQ / YoY Comparison)

1H’ 2013 Income S 1H’ 2013 Income S tatement(QoQ / tatement(QoQ / YoY Comparison)
Condensed P&L– Parent Only
(In Million NTD, except for EPS in NTD)
1H’ 2013
%
1H’ 2012
%
YoY
%
1,997
100.0%
(9%)
(895)
(44.8%)
(8%)
1,102
55.2%
(9%)
(364)
(18.3%)
1%
(308)
(15.4%)
(3%)
430
21.5%
(22%)
70
3.5%
411%
500
25.0%
39%
(92)
(4.6%)
(49%)
$ 408
20.4%
59%
24
1.2%
n/a
$ 432
21.6%
82%
$ 1.09
59%
1H’ 2013
%
Net Sales 1,822
100.0%
Cost of Goods Sold (820)
(45.0%)
Gross Profit 1,002
55.0%
Operating Expenses:
General & Administration
Research & Development
(368)
(20.2%)
(298)
(16.4%)
Operating Income 336
18.4%
Non-Operating Income (Expenses), net 358
19.7%
Income (Loss) Before Tax 694
38.1%
Income Tax (47)
(2.6%)
Net Income $ 647
35.5%
Other Comprehensive Income 140
7.7%
Comprehensive Income $ 787
43.2%
EPS (Basic) $ 1.73

Balance Sheet Highlights & Financial Ratio

Parent Only(In Million NTD)
Balance Sheet Highlights
Cash & Short Term Investment
Inventory
Short Term Debt
Long Term Debt
Shareholders Equity
Total Assets
Inventory Turnover (Day)
AR Turnover (Day)
AP Turnover (Day)
Net Debt to Equity (%)
ROE (%)
ROA (%)
Cash Position
EBITDA
Cash Flow from Operation
Free Cash Flow
June. 2013
651
1,190
-
-
7,851
Dec. 2012
547
1,073
380
-
7,797
+ / - %
19%
11%
n/a
-
1%
8%
1H’ 2013
YoY
770
31%
539
38%
441
n/a
9,994 9,257
250
152
118
-
234
141
89
-
17% 12%
13% 10%
2Q’ 2013
491
292
1Q’ 2013
279
246
QoQ
76%
19%
346 95 264%

All ROE + ROA has been annualized.

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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Sales Breakdown By Testing Solution

(Unit: Million NTD)
Power Electronics
Testing
Component Testing
LCD Panel / Video
Testing
IC Testing
LED Testing
Solar Power Testing
Customized System
Service & Others
Total
(Unit: Million NTD)
Power Electronics
Testing
Component Testing
LCD Panel / Video
Testing
IC Testing
LED Testing
Solar Power Testing
Customized System
Service & Others
Total
2Q’2013
%
476
47.5%
137
13.7%
73
7.3%
222
22.2%
12
1.2%
19
1.9%
16
1.6%
46
4.6%
2Q’2013
%
476
47.5%
137
13.7%
73
7.3%
222
22.2%
12
1.2%
19
1.9%
16
1.6%
46
4.6%
1Q’2013
%
QoQ
391
47.6%
22%
76
9.3%
80%
55
6.7%
33%
214
26.1%
4%
18
2.2%
(33%)
5
0.6%
n/a
13
1.5%
23%
49
6.0%
(6%)
2Q’2012
%
YoY
502
44.8%
(5%)
88
7.8%
56%
162
14.5%
(55%)
272
24.2%
(18%)
27
2.4%
(56%)
7
0.6%
n/a
19
1.7%
(16%)
45
4.0%
-
1,122
100.0%
(11%)
2Q’2013
%
476
47.5%
137
13.7%
73
7.3%
222
22.2%
12
1.2%
19
1.9%
16
1.6%
46
4.6%
1,001
100.0%
821
100.0%
22%

Sales Breakdown By Industries

Innovation, Integration Capability, Market Penetration

In million NTD / % of Sales

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$ 3,444 $ 5,640 $ 5,338 $ 4,174 $ 1,822
100%
17% 31% 35% 24% 15%
80%
60%
40%
20% 40% 44% 45% 47% 48%
0%
2009 2010 2011 2012 2013.1H
( Power (Power & Component ( Panel (Video & LCM IC Clean Other Sectors
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* Clean Technology included solar, LED, battery cell formation and EV OEM business.

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Guidance

The year 2013.2Q sales revenues were mainly contributed from power electronics tester businesses, increased by 31% QoQ and 4% YoY respectively. IC tester business is consistent with the expectation. The reshuffle of Power industry from IT to energy storage, solar inverter and EV related industries create a potential growth in the future. Expected IC tester business continues to be the major driver for coming quarters due to development of new IC package and applications. Aggressively promoting the turnkey solutions for emerging market opportunity, mainly from high potential growth industries. Sales contributed from US, Europe and Japan markets have reached to 24% in 2013.1H from 21% in 2012. Annual target of 30% through increase recognition from global top-tier customers with high customer satisfaction.

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Innovations in Test & Automation Solutions

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Innovation in FPD, Video & Color Test Solution

  • Support 4Kx2K ultra high resolution TV

  • Comply with HDMI 1.4b standard

  • 3D / HDCP / EDID / CEC test functions

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(Model: 22294-A)
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  • LCM signal and power source test system

  • Suitable for Full HD; up to 4Kx2K resolutionSupport LVDS 2/4/8 ch data output

  • DC Power Source

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(Model: 2917) (Model: A291710)
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Innovation in Power Electronics Test Solution

  • Inverter/battery inverter/EV charger for smart grid application

  • Bi-directional AC source (4-quadrant)

  • High power 60kVA (1 & 3-phase output)

  • Parallelable up to 300KVA

(Model: 61800)

  • Solar array/ Wind power simulator

  • Power: 15kW~150kW

  • Constant power profile with 3 times capability

  • Test for inverter and DC-DC optimizer

(Model: 62150H-600S)

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Power Electronics Testing in Smart Grid Application

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Wind Power PV Energy Storage Smart Home EV
Application
DUT
Smart Grid
Wind Power PV Bi-direction Smart Meter Charging Station/
Inverter Inverter Inverter OBC
AC Source Charging Station/
EVSE ATS
Testing + 61504
Solution
Regenerative Simulator AC Source DC Load AC & DC Load OBC/DC-DC
Grid Simulator 62150H-600S 61512 63210 63804 Converter ATS
61800
24
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Power Electronics Testing in Energy Storage Application

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Commercial Facilities Office
Wind Power PV Homes EV
/Factories Building
Low Power Battery ATS
17020
Energy Storage System
Outdoor PV Inverter Industrial Office Home EV Battery
High Power Battery ATS
Energy Storage w/ Battery Storage Battery Storage Battery Storage Battery Pack 17030
Power Control
AC Source
System
61512
DC Source
62150H
High Power Low Power
Regenerative PCS PCS
Grid Simulator AC & DC Load DC Load
63804 63210
61800
25
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Power Electronics Testing in Automotive/EV Application

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Battery Pack ATS Regenerative Battery Pack Test System Charging Station/
EVSE ATS
HCU/DC-DC Converter ATS Charger Electrical Safety Tester OBC/DC-DC
Converter ATS
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Innovation in Passive Component & Electrical Safety Test Solution

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New Patent
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  • Semi-Four-Terminals Impulse Winding Test

  • High through-put: Up to 1,000 pcs / min

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  • Test inductance range : 0.1uH~100uH

  • Test voltage range : 10V~1000V, sampling resolution 0.25V

(Model: 19301) (Model: 1871 for production)

  • Test Items :

  • Winding phase

  • Inductance, Q/ACR

  • Winding resistance

  • High output speed: Up to 1,000 pcs / min

  • DUT auto positioning for packing

  • CPK and quality control software

(Model: 1870)

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Innovation in Passive Component & Electrical Safety Test Solution

Patent

  • First combining impulse tester and hipot analyzer

  • Multichannel scanning: Up to 40 channels with patented 4-wire port.

  • Test Range: 5kVac/6kVdc; 6kV impulse voltage

(Model: 19036)

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Innovation in Semiconductor/IC Test Solution

  • 50/100 MHz clock rate

  • 1280 I/O pins

  • Up to 1024 sites parallel testing

  • 128M Memory

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(Model: 3380)
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  • Tri Temp ATC capability: -55 ~ 150 ℃ ; Resolution: 0.1 ℃

  • System integration with ATE, CIS handler, capture grabbing and light source

  • Idea for high-end consumer/commercial and automotive products

(Model: 3110)

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Innovation in Semiconductor/IC Test Solution

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  • Best solution for Bluetooth, GSM, WCDMA and LTE

  • RF shielding capacity 2.4~5.8 GHz

  • High throughput, multi-DUTs capability up to 8 sites

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(Model: 3240-Q)
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Innovation in LED/Lighting Test Solution

  • Applicable for vertical chip and flip chip

  • Simultaneous top and back side inspectionProgrammable magnification change

(Model: 7936)

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New Patent
� High speed and low labor cost
� Test LED lamps in steady states
� All in one measurement function
LEDinsde “Aurora Award 2013”
(Model: 5102)
「極光獎2013」
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Innovation in PV Test Solution

  • Applied Wafers: mono/poly/quasi crystalline wafers, both 5” and 6”

  • Inspection Items: 2D geometry, front-side surface, back-side surface, sawmarks

  • UPH: 3000~3600

(Model: 7200)

  • 33um/pixel resolution

  • Defect and color inspection in the same time

  • Real-time illumination monitor

  • SPC and defect position analysis software

(model: 7210)

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Innovation in Turnkey Solution

Automation Integration

Solutions

  • LED Lighting Automatic Assembly & Testing

  • Photovoltaic Automatic Testing & Sorting

Test & Measurement MES Technology

  • Flat Panel Display Burn-in & Testing

  • Battery Cell Formation

  • IC Automatic Testing & Sorting

  • Auto Winding & Testing

Assembly & Test Automation

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www.chromaate.com

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The World for You & for Me… Thank You!

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