INX — Investor Presentation 2023

Aug 2, 2023

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2023 Second Half Institutional Investor Conference

August 2, 2023

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 Overview

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2. Corporate Strategies

3. Financial Results

4. ESG Update

5. Conclusions/Q&A

2

Dual revival drivers: market sentiment and su l -demand balance pp y

Market sentiment

• TV shipment to be encouraged by three major sports events (Paris Olympic, Euro 2024, Copa America 2024) ;

• Expected PC replacement brought by EOL of Win 10 and new opportunities of XR devices

Supply-Demand Balance

• Supply-demand balance supported by low to healthy inventory and loading control.

Supply-Demand Balance

Display area shipment growth rate

2021

2022

2024

Year/Year Growth Rates(%)	-2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0%
		2023	2024
	Demand YoY%	2.0%	8.0%
	Capacity YoY%	-1.0%	1.6%

source: INX estimate, Omdia

Euro 2024 (14 June~14 July) COPA America 2024 (14 June~13 July)

Olympic Winter Games Beijing 2022 (4 ~20 Feb)

Tokyo Olympics (23 Jul~8 Aug) Euro 2020 (11 Jun~11 Jul) COPA America (13 Jun~10 Jul)

Paris Olympic 2024 (26 July~11 August)

2022 FIFA World Cup Qatar (20 Nov~18 Dec)

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30%
25% 28%
26%
20%
15% 18%
10% 15%
5% 8% 12%8% 11% [13%] 9% [12%] 12% 11% 10% 8%
0% 2% 3% 4% 3% [6% ][6%] 5% [6% 6%] -4% 2%
-5%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
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Source: INX, Omdia

3

TV- balanced supply prepares for economy recovery

• 2H2021 started the panel oversupply. 2022 panel makers adjusted UTR. TV supply-demand approaches balance in 2023 with continuous

• loading control.

• 2022 global demand declined owing to Russia-Ukraine war, inflation, and energy crisis.

• 2023 as panel price was relatively low and inventory was nearly cleared, TV brands started restocking and strengthened promotion. The

• average size of TV increased 1.4”.

TV global shipment area

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51.6
Average Size (inch) 50.2
Area ( M m²) / YoY 49.4
48.2
47.0
8.5%
6.5%
5.0%
-0.5%
-1.7%
136 144 144 141 148
2019 2020 2021 2022 2023(F)
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Source: INX, Omdia, NPD, AVC

4

NB- about to rebound

• In the first half of 2023, lower demand and higher inventory levels continued to impact brand shipments and panel procurement.

• In 2024-2025, the ongoing easing of cyclical downturn and inflation improved market sentiment. The replacement cycle of commercial

• notebook (3-4 years) and EOL of Win 10 is expected to fuel the rebound in 2024-2025.

• Due to the expanding market of light gamers, gaming notebooks are expected to maintain high growth from 2023 to 2026.

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Notebook display demand forecast Mobile PC for XR+AI
devices and electric
Replacement
Elimination of demand vehicles
350 Pent-up demand support for Windows
during COVID-19 10 in 4Q25
+α demand
300
250
AI hardware & software
200
150
292 260 267 271 273
Quantum
100 180 169 180 185 190 229 216 221 247 IoT Computing
204
50 6
0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Smart Cities Data Science
EOL of Win XP EOL of Win 7 EOL of Win 10 5
Source: INX, Omdia Robotics
Million units
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More than Panel

• Restructure business units into Display and Non-Display domains.

• Display domain will focus on panel module and continue to enhance the cost, yield, gross margin and market share. Non-display domain will include the two spin-offs, Innocare and CarUX, and emerging new application market. This new domain will be differentiated as a complete solution provider

Display (Component approach)

 Commodity : improve cost and yield  Non-commodity : maintain high-margin and steady share

• Non-Display (Solution approach)

• X-ray and automotive as system integration solution providers

• Roll out inherent strength to other non-display business

Effective from Sep 1, 2023

6

More than Panel

• Since 1Q22, the revenue share of non-display domain has grown steadily, which was primarily contributed by automotive product.

• CarUX will continue to seek strategic partners to provide complete solutions including cockpit entertainment, automated driving systems and charging pile display to customers.

Revenue share by domain

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Talent
100%
10% 12%
21% 23% 24% 22%
9%
11%
80%
12% 10% 11% 9%
60%
More than
40% 81%
77% 67% 67% 66% 69% Location Panel Know-How
20%
0%
1Q22 2Q22 3Q22 4Q22 1Q23 2Q23
Commodity (TV, IT, Tablet, MP) Non-commodity (commercial products) Non-display (X-ray, automotive)
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7

Cash Utilization

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CAPEX for equipment
upgrade and transformation
Automotive system
Other capital accommodation
integration development
New technology rollout
ESG Sustainability
(Micro LED / PLP)
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8

Statements of Comprehensive Income

Selected Items from Statements of Comprehensive Income

(NT$ million) 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) EBITDA(3) Depreciation & Amortization Capital Expenditure	2Q 2023 55,087 100.0% 54,735 99.4% 353 0.6% 5,692 10.3% (5,339) -9.7% 206 0.4% (5,133) -9.3% (5,720) -10.4% (5,738) -10.4% (0.60) 2,355 4.3% 7,694 5,656	1Q 2023		QoQ % 2Q 2022 20.8% 57,902 100.0% 12.2% 57,214 98.8% - 688 1.2% 5.4% 6,425 11.1% 38.0% (5,737) -9.9% -87.8% 1,356 2.3% 26.0% (4,381) -7.6% 26.3% (4,712) -8.1% 26.1% (4,741) -8.2% (0.45) - 2,568 4.4% 8,305 5,954
		45,595 100.0% 48,803 107.0% (3,208) -7.0% 5,403 11.8% (8,610) -18.9% 1,671 3.7% (6,939) -15.2% (7,758) -17.0% (7,769) -17.0% (0.82)
		(873) -1.9%
		7,737 5,684

Notes:

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

2. Capital Stock (common): NT$95.6billion as of June 30, 2023

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.

9

ESG Update

2Q23 update

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Science-based Target approved by SBTi

• 15% reduction in Scope 1+Scope 2 emissions by 2026 (vs. 2020)

• 6.2% reduction in Scope 3 emissions by 2026 (vs.2021)

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Biodiversity and Zero Deforestation Policy announced

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