FocalTech — Interim / Quarterly Report 2018

Oct 30, 2018

==> picture [149 x 35] intentionally omitted <==

敦泰電子(3545)法人說明會

FocalTech Investor Conference

2018/10/30

The world leader in human machine interface solutions

免責聲明DISCLAIMER

==> picture [102 x 25] intentionally omitted <==

• 本簡報之內容可能包括本公司基於從各項來源所取得的資訊， 對於營運、財務狀況與企業發展情形的前瞻性預估。

• 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.

• 因為包括但 不 限於市場需求、 價格波動、 競爭態勢、 供應鏈 變動、全球經濟局勢、 匯率波動及其他本公司無控制力之風險 等各 種因素，實際的營運、財務狀況與企業發展情形，可能會 與本公司於預測中明示或默示敘述有差異。

• 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 FocalTech’s controls.

• 本簡報之內容若有對未來之前瞻性預估，僅反映本公司於發佈當時之看法。本公司並無義務於日後情況變更時，更新前瞻預估。

• The forward-looking statements in this presentation, if any, only reflect the current view of FocalTech as of the date of its release. FocalTech undertakes no obligation to update those forward-looking statements for events or circumstances that occur subsequently.

CONFIDENTIAL

© 2018 FocalTech Systems Co., Ltd. All rights reserved

2

Q3 18’Income Statement /107年第3季損益表

==> picture [102 x 25] intentionally omitted <==

Unit in NT$ Million /單位: 新台幣佰萬元

	18' Q3	18' Q2	QoQ	17' Q3	YoY
Revenue/ 營業收入	2,530	2,733	-7.4%	3,265	-22.5%
Gross Profit/ 營業毛利	618	589	4.9%	673	-8.2%
Gross Margin/ 營業毛利率	24.4%	21.6%	↑287bps	20.6%	↑384bps
OperatingExpense/ 營業費用	586	552	6.2%	543	7.9%
OperatingIncome/ 營業淨利	32	37	-14.0%	129	-75.2%
Non Operating Income/ 營業外收入	38	67	-42.4%	22	72.7%
Profit before Tax/ 稅前淨利	71	104	-32.2%	151	-53.0%
Profit after Tax/ 稅後淨利	76	80	-4.6%	134	-43.3%
EPS(Basic)/ 每股盈餘(基本)	0.30	0.31		0.49

CONFIDENTIAL

© 2018 FocalTech Systems Co., Ltd. All rights reserved

3

Q3 18’Balance Sheet / 107年第3季資產負債表

==> picture [102 x 25] intentionally omitted <==

Unit in NT$ Million /單位: 新台幣佰萬元

	2018.9.30	2018.6.30	QoQ	2017.9.30	YoY
Cash & Market Securities/ 現金及其他金融資產	5,223	5,336	-2.1%	4,806	8.7%
Accounts Receivable/ 應收帳款	1,177	1,780	-33.9%	1,496	-21.3%
Inventory/ 存貨	2,385	2,152	10.8%	3,345	-28.7%
Other Current Assets/ 其他流動資產	215	223	-3.6%	222	-3.2%
Non Current Asset/ 非流動資產	5,331	5,333	0.0%	5,438	-2.0%
Total Assets/ 資產總計	14,331	14,824	-3.3%	15,307	-6.4%
Current Liabilities/ 流動負債	3,277	3,474	-5.7%	3,849	-14.9%
Non Current Liabilities/非流動負債	325	497	-34.6%	416	-21.9%
Owner's Equity/ 股東權益	10,729	10,853	-1.1%	11,042	-2.8%
Total Liabilities and Owners' Equity/ 負債與權益	14,331	14,824	-3.3%	15,307	-6.4%
Net Worthper share/ 每股淨值	35.8	36.2		36.98
AR Days(Annual Basis)	53	56		48
InventoryDays(Annual Basis)	107	87		127

CONFIDENTIAL

© 2018 FocalTech Systems Co., Ltd. All rights reserved

4

2018 Q3 Results Summary /107年第3季總結

==> picture [102 x 25] intentionally omitted <==

• 雖然敦泰受到晶圓代工產能限制，無法享受IDC市場的高速成長，但充分利用原本的庫存，成功地保持 第3季IDC的出貨量與第2季相當，另外傳統的觸控晶片及DDIC晶片方面，整體表現比預期強勁，使得 第3季營收僅季減7.4%。

 The production volume of IDC in Q3 was constrained by limited wafer supply. However, with the supply from spare inventory, the IDC shipment in Q3 remained at a level similar to Q2. Furthermore, the touch controller IC and DDIC business had a stronger than expected quarter. This resulted in only a 7.4% decrease in Q3 revenue.

• 第3季雖然營收衰退，但受益於產品組合的改善、生產成本下降及產品漲價效益，毛利率跳升2.87個百 分點，達24.4%，一舉創下敦泰與旭曜合併後單季新高紀錄。

• Even with declined revenue in Q3, the gross margin rose 287 bps, reaching 24.4%, which was a record high after merger of FocalTech and Orise. This was achieved by the combination of better product portfolio, lower production cost and price hike on selected products.

CONFIDENTIAL © 2018 FocalTech Systems Co., Ltd. All rights reserved

5

2018 Q3 Results Summary /107年第3季總結

==> picture [102 x 25] intentionally omitted <==

• 受惠於毛利率提升，第3季變營業利益為新台幣3,227萬元，稅後淨利為7,6215萬元，每股盈 餘0.3元，與第2季表現幾乎持平。

• Benefiting from the improvement in gross margin, the operating profit is NTD 32.27 million, which yields a net profit after tax of NTD 76.21 million. This gives NTD 0.30 earnings per share for Q3.

• 為捍衛敦泰同仁多年研發成果、公司利益及股東權益，於第3季正式對聯詠公司提起專利侵權 訴訟。也對聯詠公司涉嫌侵權而所造成敦泰市占率流失等的經濟損失，針對聯詠的兩項代表性 (FHD及HD)產品，向智慧財產法院聲請定暫時狀態處分。

• In order to protect and safeguard the interest of company as well as years of hardworking R&D results by all colleagues, FocalTech officially filed a patent infringement lawsuit against Novatek in Q3. At the same time, FocalTech also filed preliminary injunction pleas on two products (FHD and HD) produced by Novatek, which both are suspected of infringement of FocalTech's patents.

CONFIDENTIAL © 2018 FocalTech Systems Co., Ltd. All rights reserved

6

Future Outlook /未來展望(1)

==> picture [102 x 25] intentionally omitted <==

• 從第4季開始，因著手機內嵌式面板市場需求持續熱絡，使得敦泰IDC產品庫存接近耗盡，供不應求； 所幸新的貨源將於第4季下半逐步貢獻，故預期IDC出貨將有機會接近第3季水準，故儘管第4季是智 慧型手機市場傳統淡季，敦泰仍可望有優於產業平均水準的營運表現。

 The demand of in-cell smartphone panel is expected to remain strong in Q4, which may deplete FocalTech current IDC inventory. However, more sources of foundry wafers have begun to flow in the production line. These additional supplies will reach market in the bottom half of Q4. The total IDC shipment in Q4 will be at similar level as Q3. Therefore, despite Q4 is typically a slow quarter, we expect a performance which is better than industry average.

• 預期第4季的平均售價及毛利率將雙雙維持穩定，而從2019第1季度起IDC的短缺情況將會明顯紓解。

• It is expected that both ASP and gross margin will be maintained in Q4. We also expect to see a noticeable relief in the IDC wafer shortage at FocalTech starting Q1 of 2019.

CONFIDENTIAL © 2018 FocalTech Systems Co., Ltd. All rights reserved

7

Future Outlook /未來展望 (2)

==> picture [102 x 25] intentionally omitted <==

• 在AMOLED相關產品方面，支持AMOLED手機面板的觸控晶片出貨量持續增加，至於顯示驅動晶片也 將於明年第1季開始量產。

• Shipment of touch controller IC for the AMOLED panels continue to expand. As to the display drivers for AMOLED panels, the first product is being verified by customers , and would turn mass production in early 2019.

• 在車用相關的產品方面, 敦泰支持外掛式的觸控產品已成功通過AEC-Q100車載認証，另外支持內嵌式 LCD面板的晶片也在客戶端進行測試認證中，預料敦泰在IDC產品的開發將持續領先，率先量產全球首 顆專門為車載市場使用，整合觸控與驅動功能的IDC產品。

 FocalTech has been in preparation to expand the business into automotive market for years. The first touch controller successfully passed AEC-Q100 certification, and has been verified by multiple customers. FocalTech has also successfully developed the world's first IDC designated for automotive market. This IDC is now being verified by customers.

CONFIDENTIAL © 2018 FocalTech Systems Co., Ltd. All rights reserved

8

==> picture [113 x 27] intentionally omitted <==

==> picture [357 x 146] intentionally omitted <==

----- Start of picture text -----

THANKS
----- End of picture text -----

Copyright © 2018 FocalTech Systems Co., Ltd. All Rights Reserved. The information in this document may contain predictive statements including, without limitation, statements regarding the future financial and operating results, future product portfolio, new technology, etc. There are a number of factors that could cause actual results and developments to differ materially from those contained in the predictive statements. Therefore, such information is provided for reference purpose only and constitutes neither an offer nor an acceptance. FocalTech makes no warranties, express, implied or otherwise, regarding the accuracy or completeness of those information. FocalTech may change the information at any time without keeping recipients updated of any information contained in this document.

==> picture [58 x 58] intentionally omitted <==

www.focaltech-electronics.com