INX — Investor Presentation 2024

Aug 5, 2024

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2024 Second Half Institutional Investor Conference

August 5, 2024

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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 forwardlooking 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

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1. Market Overview

2. Corporate Strategies

3. Financial Results

4. Q&A

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Near term- Market stays healthy in a structural way

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• Healthy-to-low inventory level in favor to customer new project launch

• • Average size growth for various products

• More diverse application adopting LCD display

• Price fluctuates with market demand and cost of material/component

• Healthy-to-low inventory level secures sensible price trend

• Cost management becomes the key

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Price
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Price
Made-to-order
discipline
Market
Demand Capacity
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Uncertainties:

1. Supply chain turbulence (ex. shortage, logistic disruption)

2. Geo-political issues

3. Production disruption (ex. Earthquake)

4. No new TV capacity in the next two years

5. • Growth of size help digest capacity

6. • Tight supply-demand strengthened by fade-out of original factory

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Near term- Market highlights

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TV IT Growth driver: Growth driver:

• Size growth--Global LCD TV panel shipment average size growth 1.4” YoY (51.8” in Y2024(F))

• Average size growth for NB and monitor

• Replacement and system EOL  AI PC Update:

Update:

1. Expected PC replacement brought by EOL of Win 10 and new opportunities of AI PC.

2. MiniLED / MicroLED as alternatives for enhanced visual experience, LCD as entry level option.

3. Tight supply-demand trend maintained.

Automotive

Growth driver:

• Growth in average shipment size

• EV promotion policy

Update:

1. The growth of average size and EV promotion policy support the market amid the slow down in vehicle shipment.

2. MiniLED / MicroLED as alternatives for enhanced visual experience, LCD as entry level option.

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Source: INX Mkt. Omdia

Long term- Product mix, technology and SCM become the match point

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Production for full capacity  X-Ray Detector  FOPLP Core capabilities product Premium product Produce for seasonality Produce for capacity

Production for value creation

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Premium
product
Core capabilities
product
Produce for
Produce for cost
seasonality
competitiveness
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Innolux position

 Display provider of various technology and specification for end products  IC glass substrate handling

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Source: INX Mkt. Omdia

Innolux diversification map

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Linear

Diversification

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•
Traditional way of business
TWIST
substrate
Commodity display FOPLP:
•
1. Chip-first Etching
•
-
2. RDL first
or w/o via
3. TGV …
TFT • Laser
TFT
LCM
CORE
Business
unit
Customer
Commodity
Automotive
Non-commodity
TFT->LCM
TFT->LCM
Fundamental +System EXTEND
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Capability to handle IC glass
substrate
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• Etching

• • Pattern on glass w/ or w/o via

• • Laser

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Innolux position in semiconductor (IC) value chain

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• Low contact resistance, high breakdown voltage, high reliability performance

• IC package in Automotive for short/mid term goal

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Chip design
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Chip
manufacturing
Chip
packaging
Chip
testing
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Ex. 77GHz Radar transceiver Chip-First for High Frequency

Innolux FOPLP

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6.X times area output
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Ex. 650V DC/DC convertor Chip-First for High Power

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• Chip-First for High Power

• InnoLux RDL fan-out substrate provide cost competitive solution for AI and HPC chip-let application with fine pitch pattern.

• Strip (95x240mm) or sub-panel (297x240) format delivery.

TGV

• TGV (Through-glass-via) process on glass substrate

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• Target high speed for generative AI/ HPC application

• Substrate format delivery

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IC packaging performance

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Panel vs. wafer

Silicon wafer based substrate

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Wire bond at lead frame or substrate

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Panel based glass substrate

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Copper direct interconnect with EMC 6 sides encapsulation

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• Better area utilization

• Better productivity and material usage efficiency

Panel glass vs. silicon

• Better cost competitiveness in glass with stronger bargaining power (INX as panel maker)

• Larger size possibility

• Heterogeneous package

Wire bond vs. copper direct interconnect

• Shorter trace means lower resistance and lower signal interference

• Interconnection provide package miniaturization

EMC 6 sides encapsulation

• MSL-1 (highest level of moisture proof)

• Better heat dissipation

• High electrical current 100A and high voltage of 650V.

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Operation performance by domain

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 Revenue across business domains marked an increase in value QoQ

• Gross margin could vary greatly across different product types

Revenue share by domain

Gross margin by domain

0% 20% 40% 60% 80% 100%	81% 77% 67% 67% 66% 69% 69% 65% 67% 70% 9% 11% 12% 10% 11% 9% 9% 7% 8% 8% 10% 12% 21% 23% 24% 22% 22% 28% 25% 22%
	1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Commodity (TV, IT, Tablet, MP) Non-commodity (commercial products) Non-display (X-ray, automotive)

Product Type	Revenue (NT$ million)	Average GM
	2Q24 QoQ (%) % share	1H24
Non-display	12,734 1% 22%	11-15%
Non-commodity	4,601 12% 8%	21-25%
Commodity	39,526 17% 70%	6-10%

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Statements of comprehensive income highlights

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(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 2024 56,861 100.0% 51,150 90.0% 5,711 10.0% 5,347 9.4% 364 0.6% 1,118 2.0% 1,482 2.6% 1,184 2.1% 1,131 2.0% 0.12 8,213 14.4% 7,849 3,782	1Q 2024 50,492 100.0% 48,351 95.8% 2,141 4.2% 5,312 10.5% (3,171) -6.3% (543) -1.1% (3,714) -7.4% (4,095) -8.1% (4,104) -8.1% (0.45) 4,647 9.2% 7,818 4,542	QoQ % 12.6% 5.8% 166.7% 0.6% - - - - - 76.7%	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

Notes:

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

2. Capital Stock (common): NT$90.8billion as of June 30, 2024

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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The information contained in this file is the exclusive intellectual property or confidential document of Innolux Corporation ("INX"), and shall not be distributed, reproduced, or disclosed in whole or in part without prior written permission of INX. INX shall not be liable for any information and unauthorized misuse, abuse, modification of this file.

www.Innolux.com

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