INX — Investor Presentation 2022

Mar 21, 2022

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2022 First Half Institutional Investor Conference

March 2, 2022

Disclaimer

Innolux Corporation’s statements of its current expectations and estimates are forward-looking statements subject to significant known and unknown risks and uncertainties and actual results may differ materially from those contained or implied in the forward-looking statements. These forward-looking statements are not guarantees of future performance and therefore one should not place undue reliance on them. Except as required by law, we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

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Agenda

1 . Market Over view

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• 2 . Tech n o lo gy an d P ro d u c t Ro ad map

• 3 . B u s in es s Strategies an d Go als

• 4 . F in an c ial Res u lts

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In view of geopolitics, inflation and shortening supply chain, regional markets will show different trends

• In 2022, demands for commercial products still remain stable, but inflation will weaken the purchasing power for consumer products in the U.S. and Euro markets.

 In view of the cross impacts under geopolitics, countries’ monetary policies for inflation control, and the shortening supply chains, the sales distribution for various products would show different trends in 2022. In 22’, the U.S. and Euro markets would be suppressed under the pressure of inflation and interest rate hikes; whereas the Asian markets remain stable

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TV Shipment Estimates by Major Regions
mn unit
50
40
30
20
10
0
N'A Eur CN AP
20' 21'(F) 22'(F)
Source: Omdia, Innolux
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IT (NB + Monitor) Shipment Estimates by Major
mn unit
Regions
140
120
100
80
60
40
20
0
N'A Eur CN AP
20' 21'(F) 22'(F)
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Source: Omdia, Innolux

Intrinsic quality and opportunity of Metaverse

• Three stages of the industry - 3G/4G/5G: the communication industry is constantly upgrading its user environment.

• Innolux’s three phases - Product/Technology/Standard in response to the Metaverse.

Communication upgrade 3G/4G/5G - driving value chain effect Innolux’s three phases - Product/Technology/Standard

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27 QHD 300hz IGZO MiniLED
NVIDIA G-SYNC ULTIMATE
PolarBlack NB 3D Floaitng touch
CR3500:1 POS
Floating Image
Smart Speaker
UHD 144Hz iVRR3.0
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Source: Innolux
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Source: IDC
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InnoLED: aiming at the post-epidemic entertainment market

• The research institution predicts Mini LED backlight module shipments will exceed 40 million units in 2024 (2021-24 CAGR of 41.18%), while the CAGR of traditional LCD will be -3.12%.

• Home entertainment has becoming the new lifestyle in the post-epidemic era. InnoLED combines the advantages of IGZO panels with the rendering effects of Mini LED backlight display. Consumers can not only experience high refreshment rate when playing games, but also enjoy cinema-like resolution on TV at home.

Shipment Estimates of Mini LED Backlight Modules

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(mn unit) 45
40
35
30
25
20
15
10
5
0
2021 2022 2023 2024
Tablet 7.9 8.7 8.6 8.5
Note-PC 4.5 9.9 9.9 10.1
Monitor 0.1 0.2 0.4 0.6
TV 2.0 8.6 16.2 21.6
Mini LED
14.5 27.4 35.1 40.8
Total
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InnoLED Backlight Products

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Monitor
Notebook
TV
Consumer Electronic
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Source: Omdia

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Source: INX

Megazone leads the market with high-end medical panels

• Megazone technology provides customers in the diagnostic, surgical, and ultrasonic fields with high-end, color contrast and saturationenhanced medical panels.

• Innolux has been cooperating with medical education units such as National Cheng Kung University and continuing to develop next generation products according to the doctors’ feedbacks.

Megazone enhances the competitive scale

of medical panels

The penetration rate of Megazone in ultrasonic applications will increase year by year

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2021 2022
Contrast Ratio
200,000 > 1,000,000
( Dual Cell )
Contrast Ratio
2,000 2,500
(Single Cell)
Color Saturation 104% NTSC 110% NTSC
Anti-Glare Cover Glass <1%
Source: INX
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K units Medical Ultrasound Market
200
175
150
125
100
75
50
2022 2023 2024 2025
Regular OLED Megazone
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Source: Omdia, INX
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Cross fields integration with software and hardware as a total solution provider

• Innolux and Taipei Metro work together to implement the "Innolux Cloud Advertising Platform" on Taipei Metro trains, integrating LCD screens and electronic paper, and managing the display information of different screens in the cabin through inputs from cloud to achieve real-time dynamic marketing, reducing the replacement cost and carbon footprint required by traditional advertising,

• Innolux and Taipei Metro set up the Metro Lab at Ximen Station to provide customers the immersive experience and achieve creative marketing through 5G and AIoT commercial displays (PID).

Innolux joins hands with system integrators to create the smart marketing ecosystem

- Innolux Cloud Advertising Platform; Metro Lab Immersive Experience

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INX
Smart
System Transportation
Integrator
Mass
Transportation
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Source: Taipei Metro, prepared by INX

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2021 Financial Results

 In 2021, the company hit record highs in gross margin, operating margin, and net margin ever since the three in one merger in 2010.

 In the future, Innolux will maintain a stable operating capital expenditure and invest in technology upgrades, the ecosystem formation, and new ventures while planning a stable dividend policy to which profit fluctuations might affect less.

(NT$ million)		2021 350,077 100.0% 258,577 73.9% 91,500 26.1% 28,787 8.2% 62,713 17.9% (302) -0.1% 62,411 17.8% 57,545 16.4% 57,534 16.4% 5.53 99,014 28.3% 36,301 28,139	2020	YoY % 29.7% 5.1% 283.9% 30.7% 3361.4% - 2340.7% 3409.2% 3416.5% 164.9%
Net Sales Cost of Goods Sold Gross Profit Operating Expenses Operating Profit (Loss) Net Non-operating Income (Exp.) Profit (Loss) before Tax Net Profit (Loss) Net Profit (Loss) Attributable to Owners of Company Basic EPS (NT$)(1)(2)			269,911 100.0% 246,078 91.2% 23,833 8.8% 22,021 8.2% 1,812 0.7% 745 0.3% 2,557 0.9% 1,640 0.6% 1,636 0.6% 0.17
EBITDA(3)			37,380 13.8%
Depreciation & Amortization Capital Expenditure			35,568 20,673

Notes:

1. Basic EPS = Net Income-Parent / Weighted Average of Outstanding Common Shares

2. Capital Stock (common): NT$105.6billion as of December 31, 2021

3. EBITDA = Operating Income + Depreciation & Amortization

4. All figures are prepared by Innolux Corporation in accordance with the International Financial Reporting Standards as endorsed in TIFRS.

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