FocalTech — Investor Presentation 2015

Dec 18, 2015

December, 2015

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About FocalTech 關於敦泰
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January 2[[nd]] , 2015 3545

Date of Merger 合併基準日 January 2[[nd]] , 2015 (FocalTech+Orise) TSE ticker[股票代號] 3545 NT$ 2,930million Capital 股本 (as of 15’/11/30) Market Cap. 市值 (as of 15’/11/30) NT$ 10,183 million Employee # 員工數 (as of 15’/11/30) ~800 ppl

~800 ppl

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Product Lines 產品線
Touch Controller IC
LCD Driver IC驅動IC
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Includes: Both self and mutual SOC, Source driver (SD) capacitive controllers support Gate driver (GD), 1.5”~15” panels Timing controller (TCON) Feature driver (SD+TCON)…

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FocalTech
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Supports both α-Si and LTPS TFT LCD panels

Capacitive area type. Fast, highly reliable and secure

Delivers functions based on the force input

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Applications and Customers 應用與客戶
Selected Applications Selected Customers
Tablet
Smartphones
E- Readers
Wearable Device
Automotive
Laptop
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A leading wearable device company provides versatile cameras, widely adopted in Mountain biking, Skiing, Water skiing, Skydiving……

Capture everything everywhere .

Hero+ LCD: camera has an LCD touch screen on the back

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LCM Size: 1.75”

IC Solution: FT3306 (on cell) Waterproof: Excellent Touch points: Multi

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Asus Zenfone launched in Asia, India, US, Europe and all emerging markets.

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LCM Size: 5~5.5” IC Solution: FT5446 + OTM128X Resolution: HD (1280x720) Waterproof: Excellent Touch points: Multi

Top smartphone

makers in the world

Red rice is one of the most popular model in Xiaomi

Huawei’s Ascend model won the “European Consumer Smartphone” award

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LCM Size: 5” Pixel eyes panel IC Solution: OTM1902 Resolution: FHD（1920×1080）

LCM Size: 4.7~5.5” IC Solution: FT5316 Waterproof: Excellent Touch points: Multi

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GFF, Hybird and Super In Cell Comparison
觸控模組技術比較
GFF外掛 Hybrid混合式 Super Incell
內嵌式
Cover Glass
Cover Glass
Cover
TX Sensor & Glass
Polarizer
PET Film Polarizer
OCA RX Sensor Color Filter
Glass
RX Sensor
& PET Film
Color Filter
OCA
Glass
Polarizer
VCOM &
Color Filter
Glass VCOM & Tx Touch Sensor
Sensor
TFT
Glass
IDC IC
TFT
TFT
Glass
Glass
Polarizer
FPC
Polarizer
B
Driver IC
Touch IC
Tx & Driver IC
FPCB Rx Touch IC
FPCB
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 About Super In-cell:

• Adopt self capacitive sensing technology自電容技術

• Support multi-finger sensing多指觸控

• Simpler panel structure and easy for MP結構簡單亦於生產

• Lower cost than out-cell or other in-cell成本低於其他觸控方案

• Support high resolution display beyond FHD支援高解析度

• Support larger display size up to 10~13”應用尺寸可達10-13”

• Support both LTPS & a-si TFT LCD支援非晶矽與多晶矽面板技 術

• Make display slimmer, lighter & brighter提供輕、薄、亮顯示器

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 About IDC:

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TP Controller
LCD Driver
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IDC
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• A SOC integrates LCD driver & touch controller驅動與觸控整合之單晶片

• Simplify in-cell touch display module structure簡化內嵌式觸控螢幕模組結購

• Reduce the external components減少外部 零件

• Lower power consumption低耗電

• Minimize compatibility issues between 2 components增加驅動與觸控功能相容性

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Performance 性能優化

Cost & Reliability 成本與可靠性

Thinner & Lighter 輕、薄

20% Thinner

Better Optical Performance 光學效果提高

10% Brighter

Simpler Structure: Easier to Make& More Reliable 結購簡單：容易生產 & 更可靠

More Integration, Shorter Supply Chain 縮短供應鏈 Competitive System Cost 成本競爭力提高

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• Strong patent portfolio in Super In-Cell with IDC專利布局

• Cooperate with multiple LCD makers in TW, JP, CN & KR多元客戶

• Support HD, FHD ,WQHD, 4K支援高解析度

• First IDC inside smartphone, K2, was launched in Sep首款產品K2於9 月發表

• LTPS FHD solution will be in production soon 即將量產LTPS FHD產品

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• Q3 revenue, down 9% QoQ, is primarily due to第三季營收季下滑9%:

• Reduction of low-end product as part of our effort to improve the margin減少低階產品

• Short term Imbalance of supply and demand of high-end products in Q3高階產品短期供需不平衡

• The operating loss in Q3 is a direct result of smaller biz scale營業虧損主因營運規模縮小

• Q3 net profit of NT$186M, an increase of 2.3X QoQ, is mainly from non-operating income 淨利因業外收入貢獻而季成長 2.3 倍

• The smartphone demand in Q4 is expected to be equal or better than Q3 第四季智慧型手 機需求預估持平或略好

• Q4 will be better than Q3第四季較第三季好

• 2nd half is better than the first half of 2015下半年較上半年好

• FocalTech newly announced 3-D touch (2D touch plus force touch) is in product design phase with multiple customers 新發表 3D 觸控 (2D+ 壓力 ) 方案已導入數個客戶產品

• First production is expected in 1H of 2016首批生產預計落在2016上半年

• New generation of fingerprint sensor product will be introduced in Q4新世代指紋變式產品 於第四季發表

• We are behind our competitors in the market but we try to catch up將急起直追

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Company Revenue 營收 (Pro Forma Basis)
NT$ MM
5,000
4,388 Revenue
4,500
4,000 3,807
3,356
3,500
3,202
2,900
2,853
3,000
2,429
2,500
2,000
1,500
1,000
500
0
14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2 15'Q3
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Financial Results 財務狀況 (Pro Forma Basis)
NT$ MM
Gross Profit
Net Profit
971
1,000
903
742
654
552
600
504
448 432
362 376
242
200
200
82
63
13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2 15'Q3
-200 -56
-153
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Shipments 出貨量
M units
800
700
600
500
493
400 737
636
300
200
372
100
0
2012 2013 2014 15' 1~3Q
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Preliminary, Amt: in NT$ M

	3 months ended on	2015/9/30	2015/9/30	2015/6/30	2015/6/30	2014/9/30 Pro Forma	2014/9/30 Pro Forma	QoQ	YoY
	Net Revenue	2,899.7	100.0	3,202.5	100.0	3,355.4	100.0	-9%	-14%
	Cost of Rev.	2,396.1	82.6	2,650.8	82.8	2,701.2	80.5	-10%	-11%
	Gross Profit	503.5	17.4	551.6	17.2	654.3	19.5	-9%	-23%
	Op. Exp.	552.7	19.1	523.0	16.3	597.4	17.8	6%	-7%
	Income from Op.	(49.2)	- 1.7	28.6	0.9	56.9	1.7	-	-
	Non-Op. Income & Exp.	235.0	8.1	27.4	0.9	28.0	0.8	759%	739%
	IBIT	185.9	6.4	56.0	1.7	84.9	2.5	232%	119%
	Income Tax Income (Exp.)	13.8	0.5	7.0	0.2	(2.9)	- 0.1	96%	-
	Net Income	199.7	6.9	63.0	2.0	82.0	2.4	217%	143%
	EPS	0.49		0.15		0.20		227%	150%

Note1: 2015 EPS- -based on weighted average outstanding common shares.

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Preliminary, Amt: in NT$ M

	3 months ended on	2015/9/30	2015/9/30	2014/9/30 Pro Forma	2014/9/30 Pro Forma	YoY
	Net Revenue	8,531.3	100.0	11,550.2	100.0	- 26.1
	Cost of Rev.	7,100.1	83.2	9,021.7	78.1	- 21.3
	Gross Profit	1,431.2	16.8	2,528.4	21.9	- 43.4
	Op. Exp.	1,597.6	18.7	1,542.3	13.4	3.6
	Income from Op.	(166.3)	- 1.9	986.2	8.5	-
	Non-Op. Income & Exp.	357.8	4.2	51.8	0.4	590.1
	IBIT	191.5	2.2	1,038.0	9.0	- 81.6
	Income Tax Income (Exp.)	15.7	0.2	(76.0)	- 0.7	-
	Net Income	207.1	2.4	962.0	8.3	- 78.5
	EPS	0.51		-		-

Note1: 2015 EPS- -based on weighted average outstanding common shares.

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Preliminary, Amt: in NT$ M

	As of	2015/9/30	2015/6/30	2014/9/30Pro Forma	QoQ	YoY
	Total Assets	16,150	16,126	14,392	0%	12%
	Cash Equivalent	8,226	7,623	7,339	8%	12%
	AR	1,670	2,083	2,424	-20%	-31%
	Inv.	2,257	2,470	3,475	-9%	-35%
	Total Lia.	4,615	3,928	4,674	18%	-1%
	Short-term Loans	230	62	943	273%	-76%
	AP	876	1,373	1,626	-36%	-46%
	Convertible Bonds	953	949	934	0%	2%
	Shareholder Eqt.	11,535	12,199	NA	-5%
	Net CF In (Out)	1,297	763	210	70%	518%
	CF fm Operation	492	283	1,273	74%	-61%
	ROE-annualized	NA	NA	NA
	AR Days	61	69	56
	Inv. Days	108	112	107

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Thank you !
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www.focaltech-systems.com