ELAN — Investor Presentation 2022

Mar 9, 2022

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ELAN Smart-Input[TM] Solutions Dual Transformation through AI

2022/03/04

Taishin Taiwan Corporate Day March 2022

E L A N M i c r o e l e c t r o n i c s C o r p o r a t i o n

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ELAN World-Leading Smart Input Solution in NB Application

NB Market 235M in 2021 Consumer & Commercial Percentage 65% & 35%

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Multi-Finger Touchscreen IC Market Share: WW#1

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LTDI
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Fingerprint Market Share: WW#2 Target  Market Leader

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Multi-Finger Touchpad
Market Share: WW#1
Trackpad Lighting-Pad Haptic-Pad ID-Pad
Pointstick
Market Share: WW#1
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MOH (Encryption)
FP Keycap
MOC (Secure Bio)
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Pointing Stick Generations

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Double-Digit Revenue Growth for 5 Consecutive Years

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Revenue (NT$100M)
200
180
160
140
120
100
80
60
40
20
-
2017 2018 2019 2020 2021
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Year	2017	2018	2019	2020	2021
Revenue (NT$100M)	75	87	95	151	183
YoY	14%	15%	10%	59%	21%

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Source: ELAN

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The Content Value of Human-Machine Interfaces (HMI) Keeps Growing

Unit: M units

300	300
290
230 240 250 260 270 280
		2021(F)		2022(F)					2023(F)				2024(F)		2025(F)
					Canalys forecasts,				PC Analysis			IDC	Omdia
		Source				2021(F)		2022(F)				2023(F)	2024(F)	2025(F)	CAGR
	Canalys	forecasts,PC	Analysis (2021/02)				258.2		266.3			273.4	276.5	287.6	2.7%
	IDC (2021/12/13)						253			256		262	268	274	2.0%
	Omdia (2021/12/7)						258.4		267.4			272.7	275	280.3	2.1%

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Windows 11 Eco-System will Bring Similar Core Inputs as Mac OS

MOC FPR on Power-Button (Touch ID)

Haptic Touchpad

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Windows 11 Launch ! Win 8 Upgrade to Win 10 Take 3 Years ; Win 10 To Win 11 is 6 Years

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Windows 11 Touchpad UI for ELAN’s Smart-HapticPad[TM]

Windows 11 is 1[st] Windows OS with Haptic Software Built-in

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New Touchpad UI/Features: ELAN LRA Stack up ELAN Piezo Stack up
-
Global on/off toggle switch
- Haptic feedback intensity slider Protect film
Cover
Glass
Sponge
Adhesive Adhesive
Film sensor
Film sensor
PCBa
PCBa
Adhesive Piezo
Adhesive
Bracket P
Bracket
Touchpad feedback
Isolation pad 1
Get tactile signals when you use your touchpad
Isolation pad 2
LRA
Intensity
Bracket C C-cover
Conductive tape
Adjustable Haptic Feedback Intensity
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Windows 11 Fingerprint Security Requirements Fingerprint Module Must Support Match-on-Chip (MOC)

Commercial:required on devices launched from2022/1 Consumer:required on devices launched from2022/4	Commercial:required on devices launched from2022/1 Consumer:required on devices launched from2022/4
Year	Windows 11 L2 Security Requirement: Fingerprint Module must Support Match-on-Chip (MOC)
CY2022	L2 required for Commercial Modern Devices and Featured Devices Plus - L2 required on all Back-to-school 2022 consumer Featured Devices that meet thesupported hardware configuration - L2 required on all Holiday 2022 (SV2) consumer and Commercial Devices that meet thesupported hardware configuration**
CY2023	L2 required for all consumer and commercial devices

• *AMD Ryzen[TM] 5/ Intel Core i5 / Qualcomm Snapdragon 8CX and above, 8GB+ Ram, 664 GB + SSD

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ELAN Innovations Announced @ CES 2022

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CES 2022 New Flagships with ELAN Technologies Inside

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Lenovo Thinkpad Z13/Z16

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HP Elite Dragonfly Chromebook

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Dell XPS 13 Plus

• ELAN: Haptic Touchpad

• ELAN: Pointstick

• ELAN: Haptic Touchpad

• ELAN: Touchscreen IC with USI 1.0

• ELAN: Haptic Touchpad

• ELAN: Touch Function Row

• ELAN: Touchscreen IC on OLED

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CES 2022 New Flagships with ELAN Smart-Fingerprint[TM] Inside

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HP Probook 400

Lenovo Thinkpad Z13/Z16

Asus Zenbook 14X OLED

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All of Fingerprint Modules from ELAN are already M-O-C and fully compliant to Windows 11 Level 2 Security + Industry Leading Anti-Spoofing Capabilities built-in

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CES 2022 Highlights – ELAN Foldable Touch with MPP2.0 ELAN Successfully Introduced the Foldable Technology into NB Market

2022 CES Innovation Asus Zenbook 17 Fold OLED

17.3” OLED panel with MPP 2.0

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10mm
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Increased loading and noise with thinner thickness

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ELAN Smart-Fingerprint[TM] Solution Highlights

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ELAN Fingerprint Growth Trend

Increasing Security Awareness Drives Fingerprint Penetration Rate in NB

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Unit in Millions

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50%
100
38%
37%
28%
25%
50 20%
0 0%
2018 2019 2020 2021 2022(F)
Global FP Shipment ELAN Shipment Penetration Rate
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Source: TrendForce, TRI, NB Players, ELAN

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Fingerprint Form Factor and ASP Trend

ASP $2.X ~ >$10

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Glass
Glue
FP Sensor 515RC
RFPC
Glue Underfill
Holder
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Smart-ID [TM ] Pad
Touchpad
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Coating
Plastic
Adhesive
FP IC
Soldering
Underfill
FPC
Adhesive
SUS
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ELAN Smart-Touchpad[TM] Solution Highlights

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ELAN Touchpad Growth Trend Commercial Device Market Share Grows

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Unit in Millions
300
240
180
120
60
0
2018 2019 2020 2021 2022(F)
Global Shipment ELAN Shipment
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Source: TrendForce, TRI, NB Players, ELAN

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Touchpad Form Factor and ASP Trend

ASP

$2.X ~ >$30

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Protect film

Glass

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Adhesive Film sensor PCBa Adhesive Bracket P

Isolation pad 1 Isolation pad 2 S ~~mart-I~~ D[TM ] Pad LRA Bracket C ~~Touchp~~ ad

Conductive tape

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ELAN Smart-Touchscreen[TM] Solution Highlights

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Windows 11: Leverage User Experience from Phone/Tablet to NB Win 11 introduces 3F/4F Gestures on Touchscreen

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Personalization Widget Dark Mode

Frictionless Android APP Build-in Teams

Productivity Snap Layout/Docking Multiple Desktop

Intuitive Gesture Controls Pen Updates

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ELAN Touchscreen Growth Trend Increasing Penetration Rate

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Unit in Millions
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50%
50
28% 28%
25%
21%
17%
25
0 0%
2018 2019 2020 2021 2022(F)
Global TS Shipment (w/o Apple) ELAN Shipment Penetration Rate
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KOBO ELIPSA
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Source: TrendForce, TRI, NB Players, ELAN

3,000

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NT$ M

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-
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Touchscreen Growth Trend Pen-supporting Drives Higher Content Value

Touch Revenue & Pricing

Pen across Multiple Device

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US$
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3.00 Protocol
MPP1.51/2.0/2.5/2.6
AES1.0/2.0
USI1.0 /1.0+Tilt/2.0
0.00 WGP
2021 2022(F)
Touch IC ASP
Stack Up
Out-Cell/On-Cell
In-Cell
Display
LCD/R.OLED/F.OLED
/EPD
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2018 2019 2020 2021 2022(F)
Touch revenue Touch w/ pen ASP Touch IC ASP
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Source: ELAN

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NB Touch Migration: Out-cell → On-cell →In-cell

ASP On-cell In-cell

Out-cell

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ELAN Sees Multiplied In-Cell IC Demands

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The First LTDI Solution to Support Microsoft MPP2.5 & Wacom WGP
Out-Cell In-Cell
Display Display Touch
Touch Sensor Overlay
Touchscreen IC ELAN TDIC x X
SDIC
(daughter board) Content
value TCON Touchscreen IC
TCON
3~6X
more
eDP from System USB to System
eDP from System USB to System
Out-cell Panel IC Demand – 1 pcs In-Cell Panel IC Demand – 8 pcs
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• Touchscreen IC x1

• Touchscreen IC x1

• (Source + Touch IC ) x 6

• • Level Shifter x1

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ELAN LTDI In-Cell Solution Approved by Microsoft

Windows HLK certificate (Touch)

Windows PHCK certificate (Pen)

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ELAN LTDI In-Cell Solution Approved by WGP Wacom Level 1

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Pointstick Growth Trend Increased ASP with New Features

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Unit in Millions
20
10
0
2018 2019 2020 2021 2022(F)
Global Shipment ELAN Shipment
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Source: TrendForce, TRI, NB Players, ELAN

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ELAN’s Content Value in NB Continues to Grow

ASP Contribution per NB

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US$ ASP Contribution per NB
10
-
2018 2019 2020 2021 2022(F)
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ASP Drivers:
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Fingerprint Touchpad
• •
KeyCap solution Haptic pad
• •
Higher security Lighting pad
•
level (MOC, Full-deck pad
•
anti-spoof) Pen supporting
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Touchscreen Pointstick
• •
Pen-supporting New features,
TSC solution incl. lighting,
•
In-cell LTDI etc.
•
SLOC solution
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Growth Potentials of Current Products in 2022

Continuous Increase in Penetration Rate & Market Share; New Features Bring ASP Increase

1. Fingerprint Reader:

• Higher penetration rate in NB

• Growing market share for ELAN

• Win 11 Security-Bio Level 2 increases adoption rate of MOC (match on chip)

• Advanced keycap fingerprint solution drives the ASP increase

2. Touchpad:

• Commercial NB market share growth

• NB aspect ratio change to 16:10 from 16:9, enlarging Touchpad with higher ASP

• Win 11 boosts adoption rate of Smart-HapticPad[TM] and increases ASP

3. Touchscreen:

• Win 11 raises adoption rate of Smart-Touchscreen[TM]

• MPP 2.6 & USI 2.0 – the latest pen protocol will Increase ASP

4. Pointstick:

• New features bring higher ASP

• ELAN’s forward-looking statements are subject to significant risks and uncertainties that could cause actual results to differ materially from the forward-looking statements made in this presentation.

• Except as required by law, we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

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ELAN’s Product Portfolio for Multiple Applications

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NB
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• ●Touchpad module

• ●Touchscreen with pen controller

• ●Fingerprint module

• ●Pointstick module

• ◆LTDI (In-cell)

Automotive

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●ADAS AI vision processing/ recognition
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• ◆Touchscreen controller IC

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Touchpad module
Fingerprint solution
MiniLED backlight control IC
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• ◆Mini-LED backlight control

Consumer

• ●MCU

• ◆Mini-LED backlight control IC

Mobile

• ◆Foldable AMOLED touchscreen with pen

Smart Card/ Security Access

• ◆Fingerprint solution

• Fingerprint module

• ●TDDI

Non-NB revenue contribution is ~10% in 2021 ELAN targets non-NB revenue contribution to be 15~20% in 2022

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Market Trend of Foldable AMOLED Smartphone

2020: 4.2M 2021: 11.1M 2022: 20.8M 2023: 32.3M 2024: 42.0M 2025: 50.9M

CAGR 46.3% 2021~2025

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Foldable AMOLED Smartphone with Pen

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Fold Next

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Magic X

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Mate X2/X3
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P50 Pocket

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Xiaomi Shows Dual-Foldable Smartphone

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17.3” OLED Panel with MPP 2.0

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Dual-Foldable Handwriting Demo

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Security Awareness Drives Explosive Growth in the Biometric Credit Card Market

CAGR 2021~2026 146%

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Unit: M units
2,916 2,946 2,975 3,005 3,005
3,000
20%
2,000
11.0%
10%
7.0%
1,000
5.0%
331
1.5%
210
149
0.2% 44
5
0 0%
2021(F) 2022(F) 2023(F) 2024(F) 2025(F)
Card Forecasts Biometric Card Penetration Rate
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Source: UBS estimates, SPA (Smart Payment Association)

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ELAN Biometric Smart Card Solution (Battery-less)

2[nd] Generation Fingerprint Sensor

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Union Pay Alsok
Security Card
Magnets US Card
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Magnets US Card
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3[rd] Generation Fingerprint Sensor (Under PVC)

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ELAN Smart Human Interface for Metaverse

Hand Gesture

HTC VIVE Focus 3

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Sales Breakdown by Product Line (Consolidated)

Sales: NT$M 15,100 18,328 2,206 3,539 4,708 4,647 4,156 5,036 4,974 4,162

• Touch: Touchscreen Controller, Touchpad, Biometrics

• Non-Touch: MCU, Pointing Stick, Affiliated Co. Products

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4Q21 Income Statement

YoY Comparison (Consolidated)

mparison (Consolidated) Income Statement	mparison (Consolidated) Income Statement
		NT$M
	4Q21	%	4Q20	%	YoY(%)
Sales	4,162	100.0	4,647	100.0	(10.4)
Grossprofit	2,056	49.4	2,184	47.0	(5.9)
Sales expense	143	3.4	170	3.7
G&A expense	142	3.5	138	2.9
R&D expense	638	15.3	515	11.1
OPEX	923	22.2	823	17.7	12.2
Operating profit	1,133	27.2	1,361	29.3	(16.8)
Non-operatingincome & exp.	257	6.2	37	0.8
Profit before tax	1,390	33.4	1,398	30.1	(0.6)
Netprofit	1,305	31.4	1,189	25.6	9.8
Belong
Parent company	1,321		1,194
Non-ControllingInterests	(16)		(5)
* EPS(NT$)	4.64		4.10		13.2

• 304 million shares issued; 284.6 million shares outstanding as of the end of Dec., 2021.

• 304 million shares issued; 291.4 million shares outstanding as of the end of Dec., 2020.

• Consolidated Statement of Financial Position (Unaudited).

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4Q21 Income Statement QoQ Comparison (Consolidated)

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NT$M
4Q21 % 3Q21 % QoQ(%)
Sales 4,162 100.0 4,974 100.0 (16.3)
Gross profit 2,056 49.4 2,539 51.0 (19.0)
Sales expense 143 3.4 145 2.9
G&A expense 142 3.5 138 2.8
R&D expense 638 15.3 584 11.7
OPEX 923 22.2 867 17.4 6.5
Operating profit 1,133 27.2 1,672 33.6 (32.2)
Non-o eratin income & ex . 257 6.2 9 0.2
p g p
Profit before tax 1,390 33.4 1,681 33.8 (17.3)
Net profit 1,305 31.4 1,338 26.9 (2.5)
Belon
g
Parent company 1,321 1,362
Non-Controlling Interests (16) (24)
EPS (NT$) 4.64 4.70 (1.3)
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• 304 million shares issued; 284.6 million shares outstanding as of the end of Dec., 2021.

• 304 million shares issued; 285 million shares outstanding as of the end of Sep., 2021.

• Consolidated Statement of Financial Position (Unaudited).

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2021 vs. 2020 Income Statement YoY Comparison (Consolidated)

	NT$M	NT$M	NT$M	NT$M	NT$M
	2021	%	2020	%	YoY(%)
Sales	18,328	100.0	15,100	100.0	21.4
Grossprofit	9,116	49.7	7,054	46.7	29.2
Sales expense	606	3.3	542	3.7
G&A expense	530	2.9	437	2.8
R&D expense	2,315	12.6	1,858	12.3
OPEX	3,451	18.8	2,837	18.8	21.6
Operating profit	5,665	30.9	4,217	27.9	34.3
Non-operatingincome & exp.	396	2.2	(323)	(2.1)
Profit before tax	6,061	33.1	3,894	25.8	55.6
Netprofit	5,028	27.4	3,193	21.1	57.5
Belong
Parent company	5,103		3,246
Non-ControllingInterests	(75)		(53)
* EPS(NT$)	17.64		11.14		58.3

• 304 million shares issued; 284.6 million shares outstanding as of the end of Dec., 2021.

• 304 million shares issued; 291.4 million shares outstanding as of the end of Dec., 2020.

• Consolidated Statement of Financial Position (Unaudited).

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1Q22 Guidance

Based on Current Assumptions of Future Prospects, ELAN Expects:

• Consolidate Revenue to be Approximately between NT$ 4.0Billion and NT$ 4.2Billion

• Gross Margin to be about 46.5% to 48.5%

• Operating Margin to be about 24.8% to 27.8%

• ELAN’s forward-looking statements are subject to significant risks and uncertainties that could cause actual results to differ materially from the forward-looking statements made in this presentation.

• Except as required by law, we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

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Upward ROE & Dividend

ROE Trend

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60.0% ROE Trend
50.4%
50.0%
38.5%
40.0% 34.9%
30.0%
22.3%
20.0% 15.1%
10.0%
0.0%
2017 2018 2019 2020 2021
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Dividend Trend

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NT$ Dividend Trend
16.00
13.50
12.00
9.00
8.00 6.50
5.00
4.00 2.58
-
2017 2018 2019 2020 2021
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Performance Highlight ELAN Continuously Outgrows Market

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NT$ M, Shipment in M unit
Profitability Trend
49.7%
20,000
46.5% 46.7% 50.0%
45.6%
44.6%
40.0%
15,000
30.9%
27.9%
30.0%
10,000 21.9%
20.0%
18.0%
20.0%
5,000
10.0%
235
207
165 164 161
- 0.0%
2017 2018 2019 2020 2021
Sales GM OPM Global NB shipments
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• 2018~2021 Revenue CAGR：20%

• Global NB shipments in 2022 are expected to be 237M units.

	2018	2019	2020	2021	2022F
ELAN Rev YoY	15%	10%	59%	21%	> Semi growth
Global NB Shipment YoY	-1%	-2%	29%	14%	Flat

Note: Financial data are on consolidated basis.

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ELAN’s Outlook in 2022

• ELAN expects that its operating performance in 2022 will outperform the

• growth of entire global semiconductor industry.

• ~10% increase in wafer capacity will benefit ELAN’s business momentum.

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Sustainability Matters

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Building Energy Saving and Carbon Reduction

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Important suppliers with “Supplier Important suppliers with the ISO
Social Responsibility and Business 9001 & ISO 14001 certificates
Ethics Consent”
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http://www.emc.com.tw/emc/en/csr

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T h a n k Yo u

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ELAN Microelectronics Corporation

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