EMC — Investor Presentation 2021

Mar 15, 2021

Elite Material Co., Ltd.

Global leader of eco-friendly laminates

Presentation March, 2021

Disclaimer

This presentation may contain “forward-looking statements” which may include projections on future results of operations, financial condition, and business prospects based on our own information and other sources.

The actual results of operations, financial condition, and business prospects may differ from those explicitly or implicitly indicated in those forward-looking statements for a variety of reasons, including but not limited to market demand, price fluctuations, competition, supply chain issues, global economic conditions, exchange rate fluctuation and other risks and factors beyond EMC’s controls. The forward-looking statements in this presentation, if any, only reflect the current view of EMC as of the date of its release. EMC undertakes no obligation to update those forward-looking statements for events or circumstances that occur subsequently.

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Content

▪ Industry outlook ▪ Financial performance ▪ Appendix

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PCB design of networking infrastructure is migrating

• Trend 1: Halogen-free. HF laminates are preferred or required. New platforms of PCIe 4 include, but are not limited to, Intel’s Whitely, request only halogen-free laminates.

• Trend 2: HDI. AI semiconductors, GPUs and CPUs, and heterogeneous integration of semiconductors increase pin counts substantially.

Fine line/pitch HDI architecture design by PCB constructors becomes common.

• Trend 3: The manufacturing technique of HDI becomes the must handicraft art of high-end networking board.

• Decades of experiences and knowledge EMC accumulated in HF and HDI now a competitive advantage unrivalled by peers.

Multi-GPUs make a super high speed computing AI Server

Source: nVidia

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Trend of 5G infrastructure development: HDI, High Speed, High Frequency

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HDI
High Speed
High Frequency AAU
AiP MIMO [RRU]
Phone-5G BBU
mmWave
Phone-4G
ADAS
Phone-3G
77GHz
AI Server
Switch-800G
26.56 GHz
NB- USB4.0 Server- PCIe5 Switch-400G Infotainment
16GHz
14GHz
E-Mobility
NB- USB3.0
Switch-100G ECU
Server- PCIe4
12.89GHz
8GHz
Server- PCIe3 Switch-40G
4GHz 5GHz
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Global server shipment is increasing for next 5 years

Unit：k set

Source：DIGITIMES Research，2020/9

The 100/400G switch is becoming the main stream

~ 2017 2023 switch split

Source: IDC, Morgan Stanley Research

The CAGR of 5G Smartphone is 37.9%

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Unit: Million
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Source: DIGITIMES Research, 2020/9

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HDI is a must trend of wide varieties of automotive electronics applications

HDI (High-Density Interconnection) PCB adoption in automotive electronics is set to rise in the next 10 years in step with higher penetration of ADAS (advanced driver assistance systems), infotainment systems and telematic systems.

9

Sales Revenue

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NTD ： Billion
30.0
25.0
2003 ： 2.3Bn � 2020 ： 27.2Bn
(2003 ~ 2020) 17 years GAGR=15.5%
20.0
15.0
10.0
5.0
0.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Revenue
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Operation Performance

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12.0
11.33
EPS: NTD
10.14
10.0
8.7 8.74
8.0
7.6
6.0
5.48
4.9
4.0
4.30 3.73
2.87 2.7
2.0 2.80
1.52
1.36 1.78
0.53
0.49
0.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
(1.04)
(2.0)
EPS
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History of Cash dividend and Payout ratio

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4Q20 P&L summary

Unit: NT$ million

Unit: NT$ million
Revenue Gross profit Operating profit Income before tax Tax expenses Net income EPS (NT$) - basic Gross margin (%) Operating margin (%) Net margin (%)	4Q20 7,517 1,876 1,203 1,287 (310) 977 2.93 25.0% 16.0% 13.0%	3Q20 7,474 2,058 1,423 1,438 (314) 1,124 3.40 27.5% 19.0% 15.0%	QoQ 0.6% -8.8% -15.5% -10.5% -1.1% -13.1% -13.8%	4Q19 6,780 1,722 1,161 1,182 (45) 1,137 3.55 25.4% 17.1% 16.8%	YoY
					10.9% 9.0% 3.6% 8.9% 588.7% -14.1% -17.5%

*Note : Excluding one-off NT$ 223mn tax credit in Q419, EPS was NT$ 2.85, YOY up 2.8%.

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4Q20 Abstracted Balance Sheet

	Unit:NT$ million Cash & Equivalent A/R+N/R Inv PPE Total Assets	4Q20 Amount % 5,732 20.6% 9,934 35.7% 3,702 13.3% 6,531 23.4% 27,857 100.0%	3Q20 4Q19 Amount % Amount % 5,328 20.2% 6,351 24.7% 9,571 36.2% 9,192 35.8% 3,914 14.8% 2,905 11.3% 6,016 22.8% 5,858 22.8% 26,406 100.0% 25,704 100.0% 1,209 4.6% 1,100 4.3% 6,114 23.2% 5,672 22.1% 545 2.1% 643 2.5% 15,533 58.8% 13,537 52.7% 26,406 100.0% 25,704 100.0%
	Short term Debt A/P Long term Debt	1,162 4.2% 5,847 21.0% 564 2.0%
	Shareholder's Equity	16,756 60.1%
	Total Debt and Equity	27,857 100.0%

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APPENDIX

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Company profile- Global Footprint

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Japan
Kunshan,
UK
China
Korea
Germany
Huangshi,
CA OH China
Taiwan,
France
HQ
Zhongshan,
China
▪ EMC Group Outline
TAIEX listing code: 2383
Established: 1992
Manpower: 3,200+
Capacity: 3.55 KK sheets/ month (CCL)
10.7 KK m/ month (PP)
800 K SF/ month (Mass Lam)
40K panels/ month (MCCCL)
Paid-in capital: USD 96 million
Revenue in 2020: USD 920 million
Production facility
Qualification: ISO-9001, ISO-14001, IATF-16949,
Distributor
ISO-45001, QC080000, AS9100C
and Sony Green Partner Representative office
UL file number: E150504
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Manufacturing Locations and Monthly Capacity

EMC (HS) Huangshi CCL: 600k sheets PP: 2.4kk meters Manpower: 500+ +300K SHT/ Month by June, 2022

EMC (KS) Kunshan CCL: 1.35kk sheets PP: 3.3kk meters Manpower: 1,000+ +300K SHT/M in Q3,2022 EMC (TW) Taoyuan CCL: 500k sheets PP: 1.8kk meters Manpower: 600+

EMC (TW) Hsinchu CCL: 150k sheets PP: 1.1kk meters Mass Lam: 800k ft2 Metal Core: 40k pnls Manpower: 300+ EMC (ZS) Zhongshan CCL: 950k sheets PP: 2.1kk meters Manpower: 800+