FocalTech — Investor Presentation 2020

Jun 1, 2020

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敦泰電子(3545) FocalTech 法人說明會

June 2020

The world leader in human machine interface solutions

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CONTENTS

01 Company Introduction 02 Growth Momentum-IDC 03 Growth Momentum-AMOLED 04 Growth Momentum-Fingerprint Sensor

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SECTION ~~01~~ Company Introduction

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FocalTech Company Overview

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Ticker: 3545.TW Employees: 750 Founded: 2005 Market Cap: NT$ 9 bn, US$ 303 Mn(2020/5/28) Listed: 2013 Revenues: NT$ 9.16 bn (2019)

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

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Global Presence South
Korea
San Jose
Beijing (USA)
Hefei
Xi’an
Shanghai
Wuhan
Chengdu
Taiwan
Shenzhen Xiamen
2 R&D / Operation
9 Sales/Technical Support Location
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CONFIDENTIAL

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

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Product Lines

Display Driver IC

Supports LTPS / α-Si panels used in smartphone, NB, tablet.

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Integrated Diver & Controller (IDC)

Highly integrated display & touch solution supports both α- Si and LTPS TFT-LCD panels

Touch Controller

Mutual- & Self- Capacitive Supports 1.5”~15” TFT LCD/AMOLED panels

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Fingerprint Sensor

Capacitive type, fast, reliable and secure. Optical sensing type , under screen sensing for AMOLED panels and biometric detection 3 in 1(FTDDI), touch, driver, fingerprint sensing integrated

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Automotive / Commercial Solution Touch and DDI solution for Automotive/Commercial App.

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AMOLED DDI

DDI solution for rigid and flexible AMOLED panels

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

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System Level Customers

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S y s t e m C u s t o m e r s

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I D H
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• © 2018 FocalTech Systems Co., Ltd. All rights reserved

CONFIDENTIAL

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Module Customers

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Touch Panel Customers

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、 LCD AMOLED Panel Customers

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CONFIDENTIAL

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

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2020 MP Models

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Redmi K30 Pro Redmi Note9 Pro Redmi Note9 Pro Max
FT3518 FT8756 FT8756
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G Power G Stylus G 8
FT8756 FT8756 FT8756
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Z6
FT8756
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A11
FT9362
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CONFIDENTIAL

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

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Q1 20’Income Statement /109年第1季損益表

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Unit in NT$ Million /單位: 新台幣佰萬元

	20' Q1	19' Q4	QoQ	19' Q1	YoY
Revenue/ 營業收入	2,910	2,807	3.7%	1,640	77.4%
Gross Profit/ 營業毛利	640	563	13.7%	344	86.0%
Gross Margin/ 營業毛利率	21.99%	20.04%	↑195bps	20.96%	↑103bps
OperatingExpense/ 營業費用	569	556	2.3%	569
OperatingIncome/ 營業淨利	71	6	1083.3%	(225)
Non Operating Income/ 營業外收入	32	43	-25.6%	30	6.7%
Profit before Tax/ 稅前淨利	103	49	110.2%	(195)
Profit after Tax/ 稅後淨利	59	51	15.7%	(194)
EPS(Basic)/ 每股盈餘(基本)	0.24	0.20		(0.67)

CONFIDENTIAL

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

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Q1 20’Balance Sheet / 109年第1季資產負債表

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Unit in NT$ Million /單位: 新台幣佰萬元

	20' Q1	19' Q4	QoQ	19' Q1	YoY
Cash & Market Securities/ 現金及流動金融資產	5,070	5,296	-4.3%	4,381	15.7%
Accounts Receivable/ 應收帳款	1,527	1,420	7.5%	678	125.2%
Inventory/ 存貨	2,347	1,570	49.5%	2,414	-2.8%
Other Current Assets/ 其他流動資產	262	362	-27.6%	155	69.0%
Non Current Asset/ 非流動資產	2,890	2,954	-2.2%	3,057	-5.5%
Total Assets/ 資產總計	12,096	11,602	4.3%	10,685	13.2%
Current Liabilities/ 流動負債	3,616	3,412	6.0%	2,559	41.3%
Non Current Liabilities/非流動負債	442	462	-4.3%	192	130.2%
Owner's Equity/ 股東權益	8,038	7,728	4.0%	7,935	1.3%
Total Liabilities and Owners' Equity/ 負債與權益	12,096	11,602	4.3%	10,685	13.2%
Net Worthper share/ 每股淨值	26.87	26.66		27.97
AR Days(Annual Basis)	46	40		46
CONFIDENTIAL ~~©2018 FocalTech Sstems Co Ltd All rihts reserved~~ InventoryDays(Annual Basis)	78	60		157

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

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SECTION ~~02~~ Growth Momentum-IDC

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World First IDC Solutions

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Display Technology
LTPS TFT a-Si TFT
Resolution
Application
HD √ √
Smartphone FHD (ram or ramless) √ √
QHD √ NA
Tablet WXGA~WQXGA √ √
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CONFIDENTIAL © 2018 FocalTech Systems Co., Ltd. All rights reserved

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Booming Penetration of IDC

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IDC Shipment (M Units)

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

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Next Gen: Narrow Bezel without COF

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CONFIDENTIAL

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

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Next Generation IDC: Dual-Gate Mux 6 ,

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A-Si面板 規格(specification) 量產時間(mp time) COG下邊框窄度(wide of the bottom boarder by COG process) Single Gate 2017/Q4 5.3mm Dual Gate 2020/Q3 3.4mm LTPS面板 規格 量產時間 COG封裝COF封裝(specification) (mp time) 下邊框窄度(wide of the bottom 下邊框窄度(wide of the bottom boarder by COG process) boarder by COF process) Mux 1:3 2018/Q1 4.0mm 3.0mm (fine pitch COF) >30% Mux 1:6 2019/Q4 3.1mm 3.0mm (general COF) Cost down CONFIDENTIAL

>45%

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

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New Generation IDC Keeps Going on

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2015 H2 2017 H2 2020 H1
1 2 3
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• ●Realize the technology of ●Realize full screen integrating touch and smartphone with COG display driver ●Realize ultra narrow bezel Realize ultra narrow bezel

• Realize narrow bezel smartphone with COG

●Realize ultra narrow bezel Realize ultra narrow bezel ●Realize ultra narrow bezel smartphone with fine pitch smartphone with general COF COF

CONFIDENTIAL

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

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Incell Goes Up Trend in the Tablet Market

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90%
80%
70%
60%
50%
2019 Penetration
40%
2020 Penetration
30%
20%
10%
0%
Incell Outcell Oncell
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CONFIDENTIAL

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

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Covid-19 Drives China’s Tablet Shipment

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CONFIDENTIAL

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Tablet IDC Shipment Grows Quarterly

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7
6
5
4
3
2
1
0
2019Q1 2019Q2 2019Q3 2019Q4 2020Q1
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FocalTech’s Tablet IDC Shipment (M Units)

CONFIDENTIAL

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SECTION ~~03~~ Growth MomentumAMOLED

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AMOLED TP MP Record

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Emporio Armani

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MICHAEL KORS
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MISSION

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ASUS Zen Fone 4 Pro

Guess Connect Android Wear

Tambour

Montblanc Summit

Horizon

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Xiaomi Redmi Pro

CONFIDENTIAL

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AMOLED Panel Shipment Increases

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Source: DIGTIMES Research 2019

CONFIDENTIAL

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

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Recent Growth Momentum on AMOLED

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Product Target 2019 2020 AMOLED Touch Controller Design win to Korean 30% up market share for customer and turn mass Korean customer in China production smartphone market AMOLED Driver-Wearable Design win to all panel Mass production for brand suppliers customers AMOLED Driver-Smartphone Design win to Design win to brand maintenance market customers and turn mass customers and turn mass production production

CONFIDENTIAL

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SECTION ~~04~~ Growth MomentumFingerprint Sensor

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Under Display Fingerprint Booms from 2019

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source：IHS 2018

CONFIDENTIAL

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

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FocalTech Optical Fingerprint Advantages

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• Strong algorithm extended from capacitive FPS

• Capability of self-design in optical structure

• Rich IC design experiences

• Supply chain strength combined with other product lines

• Complete optical RD team up to 70 engineers

• Promotion with capacitive FPS and TDDI. One stop shopping

• Marketing and customer channel advantage

CONFIDENTIAL

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

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From Consumer Market to Medical Industry

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CONFIDENTIAL

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

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Ultrahigh ratio of high blood pressure in China

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CONFIDENTIAL

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

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China is the world's largest diabetes market

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

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THANKS 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.

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www.focaltech-electronics.com