KYEC — Investor Presentation 2021

Apr 1, 2021

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Benchmark of The Testing Industry

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King Yuan Electronic Co., Ltd. 京元電子股份有限公司

[TWSE: 2449]

March, 2021

• Wafer Test Service

• Assembly Service

• Burn-In Service

• IC Test Service

• Backend Support

• Turnkey Operation

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Safe Harbor Notice

• Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results of operations of the Company to be materially different from any future performance, financial condition or results of operations implied by such forward - looking statements. Further information regarding these risks, uncertainties and other factors is included in the Company most recent Annual Report on Taiwan Stock Exchange (Market Observation Post System).

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KYEC rou sna shot g p p

Overview

Manufacturing footprint in Taiwan & China

• Established In: May 1987

• Headquarters: Hsinchu, Taiwan

• TWSE Listed: 2449.TW

• Market Cap.[(1)] : NT$42,490.4 million

• Cash and Cash Equivalents[(1][)] : NT$8,008.5 million

• Employees[(1][)] : 9,390

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Headquarters Chu-Nan fab. Tung-Luo fab. KLT & ZKT Suzhou, China

Key milestones

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Began wafer sort
service for logic Complete Chu-
and memory Complete Complete Chu- Nan fab V
Chu-Nan fab I Nan fab III & IV
product
Began wafer
dicing service Began burn-in Complete Complete Complete Tong- Complete Tong-
services Hsinchu HQ Chu-Nan fab II Luo fab I Luo fab II
1987 1990 1993 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Establish US Inception of Establish S’pore Establish Japan
Inception of subsidiary KLT Suzhou subsidiary subsidiary
KYEC
Listed in Inception of ZKT DLT merger
TWSE Market Suzhou
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Note: (1) As of December 31, 2020

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KYEC is the benchmark of semi testin industr g y

KYEC is uniquely positioned, locally and globally, as a pure-play testing house and aiming to take advantages of the ever-growing outsourced semi testing business.

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4,000+ sets of installed test system, including both commercial and in-house developed testers, providing testing services for various end applications

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Optimal customer structure and balanced business exposure to maintain strong margin growth during the volatile semiconductor market environment

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In-house test system developing and manufacturing capability as a core competence differentiate KYEC from its OSAT peers

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Seasoned management team with broad and deep industry experiences

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Healthy financial structure and strong EBITDA profit to support CapEx

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Corporate strategies dedicated to enhance shareholder’s interests

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IC manufacturin rocess and KYEC available services g p

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Laser Repair
Front-End Manufacturing
IC Design/ Wafer
IDM Foundry Die Wafer
CP
Bank Grinding
IDM
Gold / Solder
WL
Bump WLBI
Cycling
Dicing
Backend
- Marking/ LS Cycling Burn-In
- Tape & Reel
Customer - Dry Pack
Assembly
FT
Drop Ship
Module Test
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Note: Blue colors are KYEC available services

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Diversified roduct mix for stable lon -term rowth p , g g

• In general, test services contributed about 76% of revenue in Q4’20 and 77% of revenue in 2020.

• Devices tested by KYEC have been widely used in various applications, including consumer, communication, automotive, data computing and industrial … etc.

 Revenue recorded in Others included sale of equipment and tooling, lease income, and miscellaneous items.

Revenue breakdown for Q4’2020 and 2020

By Manufacturing Process

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Final Test Burn-In
36.5% 1.6%
Q4’20
Assembly
22.8%
Others
Waf er Probe 1.6%
37.5%
Burn-In
2020 Final Test 3.6%
39.4%
Assembly
19.0%
Others
4.1%
Waf er Sort
33.9%
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By Application

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Consumer
Data
52.6% Processing Q4’20
11.7%
Industrial
2.9%
Others
Commun- 1.7%
ication Automotive
23.5% 7.6%
Data
Consumer 2020
Processing
48.8%
9.2%
Industrial
2.7%
Commun-
Others
ication
Automotive 1.6%
30.4% 7.3%
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KYEC services lobal to tier customers g p

 56% of global top 50 semi companies use KYEC’s test services

 Top 10 customers contributed 56.3% of revenue in Q4’20 and 61.9% of revenue in 2020.

(US$ Millions)

2019	Company	2018	2019	change		2019	Company	2018	2019	change
1	Intel*	66,290	67,754	2.2%		26	Marvell TechnologyGroup*	2,800	2,655	(5.2%)
2	SamsungElectronics	73,708	52,191	(29.2%)		27	Toshiba*	5,614	2,435	(56.6%)
3	SK hynix	36,240	22,297	(38.5%)		28	Robert Bosch*	2,494	2,430	(2.6%)
4	Micron Technology	29,742	20,254	(31.9%)		29	Qorvo	2,334	2,358	1.0%
5	Broadcom*	16,261	15,322	(5.8%)		30	Maxim Integrated*	2,497	2,183	(12.6%)
6	Qualcomm*	15,375	13,613	(11.5%)		31	Cypress Semiconductor*	2,439	2,145	(12.1%)
7	Texas Instruments	14,592	13,364	(8.4%)		32	Novatek*	1,815	2,081	14.7%
8	STMicroelectronics*	9,579	9,451	(1.3%)		33	Realtek Semiconductor*	1,516	1,962	29.4%
9	NXP*	9,022	8,758	(2.9%)		34	Nichia	1,842	1,794	(2.6%)
10	Apple	7,646	8,569	12.1%		35	Nanya Technology	2,808	1,667	(40.6%)
11	Sony	6,465	8,536	32.0%		36	Osram	1,970	1,635	(17.0%)
12	Infineon Technologies*	8,748	8,471	(3.2%)		37	Nexperia	1,496	1,466	(2.0%)
13	MediaTek*	7,890	7,959	0.9%		38	DialogSemiconductor*	1,442	1,408	(2.4%)
14	Kioxia	8,533	7,827	(8.3%)		39	Mitsubishi	1,310	1,352	3.2%
15	HiSilicon Technologies*	6,035	7,738	28.2%		40	MLS	1,198	1,318	10.0%
16	Nvidia*	8,073	7,331	(9.2%)		41	Vishay	1,551	1,289	(16.9%)
17	Renesas Electronics*	6,710	6,716	0.1%		42	Sanken	1,333	1,265	(5.1%)
18	AMD	6,295	6,591	4.7%		43	Cirrus Logic*	1,248	1,242	(0.5%)
19	Western Digital	9,078	6,252	(31.1%)		44	Winbond Electronics*	1,352	1,237	(8.5%)
20	AnalogDevices*	6,207	5,831	(6.1%)		45	Denso	1123	1,193	6.2%
21	ON Semiconductor*	5,642	5,327	(5.6%)		46	Synaptics*	1,437	1,165	(18.9%)
22	MicrochipTechnology*	5,154	5,161	0.1%		47	Macronix International*	1143	1,061	(7.2%)
23	Xilinx*	2,904	3,235	11.4%		48	UniSoC Technologies	1,286	1,036	(19.4%)
24	Skyworks Solutions*	3,277	2,822	(13.9%)		49	Diodes	1033	1,021	(1.2%)
25	Rohm*	3,025	2,768	(8.5%)		50	Socionext	996	1008	1.2%

Note: company’s names in blue * are KYEC’s customers

Source: Gartner 2019 7

KYEC retains flexible and cost effective test solutions

• Current semi testing service provider is demanding on flexibility, cost effective and various platform/capacity for servicing the small-volume business trend.

• KYEC is standing to take advantage of this market trend for its flexible in test platform choices, capacity and in-house capability.

• KYEC currently installed 4,000+ test systems on its shop floor.

	Memory	Logic / Mixed-Signal	CIS/CCD	LCD Driver	RF / Wireless	SOC
Advantest	T5571P / T5581H / T5585 / T5588 T5371 / T5372 / T5377S T5382A / T5771 T5335 / T5365 / T5334 / T5335P	T6672 / T6673 T6575 / T6577 T6683		T6331 T6371 T6372 T6373	T2000-RF	T2000
Agilent (Verigy)	V1200 / V2000 V3000 / V4400	HP93K / HP94K / HP83K	HP93KIP / 94KIP		HP93KPSRF	HP93KPS / PS1600
LTX- Credence	Kalos / XW Kalos II / HEX Pkalos / Pkalos II	Duo / Quartet SCX12 / ITS9KEXA / CV ITS3KEXA / ASL1K / ASL3K-MS Sapphire / D10			ASL3K-RF Fusion-CX Fusion-MX	Sapphire / D10 Fusion-MX DiamondX
Teradyne	M1 / M2	Catalyst / J750 J750EX / iFlex Ultra Flex	IP750 IP750EMP		Flex-RF Catalyst-RF Ultra Flex-RF	J750EX / J750 / J750HD / ETS-364 iFlex / Ultra Flex Catalyst / M1 / M2
Yokogawa				TS6700 ST6730
KYEC	M-series tester	E-series tester	I-series tester	D-series tester	E-series tester	E-series tester

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In-house test s stems widel use in mass roduction y y p

 In general, in-house test system provide a custom-tailored solution flexible in test configuration and programming for device used in various applications.

 In addition, KYEC designs and manufactures test tooling and probe card in-house.

Application of in-house tester

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CIS Tester
Integration Image
Process & Optical
Logic Tester
MEMS G-sensor Tester
Integration of Motion & thermal
socket
SOC solution
MEMS Microphone Tester Integration of Analog
module & RF module
Integration of
Acoustic chamber
& kit design
High Power Solution
Integration of Hi-voltage
LCD Driver Solution module & Hi-current module
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KYEC develo ed ovens for burn-in test services p

• In-house burn-in ovens provide flexibility, custom tailored test services.

• Our burn-in oven is able to offer testing under wide range of power/watts for products after one single test setup.

• Our high-power burn-in oven employs the air-cooling technologies instead of the water-cooling used in the market available ovens, providing advantages of cost saving and easy maintenance.

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Network
GPU
< 1 watt / -40 ° C communication 50 watts 300 watts 1000 watts 2000 watts
10 watts
KYE601 KYE700-32 HP600-12 HP600-20 KYE600/HP600 KYE600/HP600
Oven Oven Oven Oven Oven Oven
1996 1998 2000 2002 2006 2008 2010 2012 2014 2016 2018 2020
KYE600 KYE680 HP600-6 HP600-16 HP600-20Z KYE600/HP600
Oven Oven Oven Oven Oven Oven
Memory Logic 20 watts Automotive GPU 1500 watts
(DRAM / SRAM) (Chipset) 120 watts 500 watts
< 1 watt < 1 watt
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KYEC rovides turnke WLCSP services as well p y

KYEC’s WLCSP process flow

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Wafer incoming
inspection
Wafer Test
Wafer grinding
Laser mark
Die saw
(Laser grooving)
AOI
T & R
Waffle pack
Ship
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 In addition to wafer testing, KYEC provides wafer grinding, die sawing/laser grooving, AOI and packing services for Wafer Level Chip Scale Package (WLCSP) as well.

• WLCSP is primarily for applications as: e- compass, accelerometer, gyroscope, pressure, humidity, microphone, power management and memory products.

• WLCSP revenue in KYEC has increased significantly over last couple years. We expects this trend to continue in the future.

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KYEC group management team with deep industry experience

C.K. LEE - Chairman & CEO

• Over 30 Years of semiconductor industry experience

• Chairman of KLT (Suzhou) and ZKT (Suzhou)

• Former Manager of Manufacturing, United Microelectronics Corporation

• Bachelor of Department of Shipping &Transportation Management, National Taiwan Ocean University.

• Logan CHAO- CFO Dr. A.H. LIU - General Manager Gauss CHANG - Executive VP

• Over 20 Years of semiconductor industry  Over 20 Years of semiconductor industry  Over 30 Years of semiconductor industry experience experience experience

• Former Audit manager of KPMG  Former Vice President of EverLight  Former Manager of foundry business,  Bachelor of Department of Accounting, Electronics Winbond Electronics Corp. Chinese Culture University. EMBA of  Former General Manager of Intematix  MBA. from Saginaw Valley State University, National Tsing Hua University. Company. Michigan, USA.  Ph.D. from Graduate School of Mechanical Engineering, North Carolina State University, USA.

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Hans HAN- Vice President Andy LIANG - Vice President K.K. LEE - Senior VP Steven CHANG - Senior VP
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	Over 30 Years of semiconductor		Over 20 Years of semiconductor		Over 30 Years of semiconductor		Over 20 Years of semiconductor
	industry experience		industry experience		industry experience		industry experience
	Former deputy assistant vice		Former manager of equipment		Former vice director of material		Former Manager of quality
	president of Walton Advanced		engineering, UTAC/Taiwan		procurement and management,		assurance, Macronix
	Engineering Inc.		Bachelor of Department of		United Microelectronics		International Co., LTD.
	Bachelor of Department of		Electronic Engineering, Minghsin		Corporation		Bachelor of Department of
	Electrical Engineering, National		University of Science and		Bachelor of Department of		Electrical Engineering, Chung
	Taiwan University of Science and		Technology. MBA from Minghsin		Industrial Engineering and		Yuan Christian University. M.Sc.
	Technology. M.Sc. from		University of Science and		Enterprise Information, Tunghai		from Graduate School of
	Department of Electronic and		Technology.		University.		Electrical Engineering, National
	Computer Engineering, National						Central University.
	Taiwan University of Science and
	Technology.

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Financial highlights

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Financial Sna shot p

(NT$ Millions)	2019	Q3’20	Q4’20	2020
Net Revenue	$25,539.4	$7,362.6	$6,937.1	$28,959.3
Gross Margin (%)	27.5%	27.0%	22.8%	27.5%
Expenses
SG&A	$1,935.7	$533.9	$534.3	$2,100.8
R&D	$1,035.2	$317.4	$340.2	$1,202.5
EBITDA	$11,104.5	$3,306.8	$2,820.7	$13,058.7
EPS – diluted (NT$)	$2.47	$0.78	$0.56	$2.94
EPS – basic (NT$)	$2.49	$0.79	$0.57	$2.97

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8,000 60%
7,000
50%
6,000
40%
5,000
4,000 30%
3,000
20%
2,000
10%
1,000
0 0%
Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20
(NT$ Millions) Revenue 4,869 4,843 5,173 4,803 4,581 5,040 5,521 5,674 5,260 6,091 7,041 7,147 7,001 7,659 7,363 6,937
Gross margin 30.4% 31.4% 29.7% 26.0% 23.1% 28.1% 29.7% 22.0% 21.3% 24.9% 31.0% 30.8% 29.0% 30.7% 27.0% 22.8%
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Healthy business trends and capacity investment

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Revenue EBITDA
(NT$ Millions)
(NT$ Millions)
35,000
25,539.4 28,959.3 14,000 13,058.7
30,000
11,104.5
12,000
25,000 20,815.4 9,446.1
10,000
20,000
8,000
15,000
6,000
10,000 7,147.1 6,937.1 4,000 3,243.8 2,820.7
5,000
2,000
0
0
2018 2019 2020 Q4 '19 Q4 '20 2018 2019 2020 Q4 '19 Q4 '20
Utilization Rate EBITDA Margin
100%
100%
80%
80%
60.2% 62.4% 63.4% 60.4%
57.1%
60%
60% 45.4% 43.5% 45.1% 45.4%
40.7%
40% 40%
20% 20%
0% 0%
2018 2019 2020 Q4'19 Q4'20 2018 2019 2020 Q4 '19 Q4 '20
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Optimal financial leverage enhances shareholder interest

Cash Flow from Operations

CapEx

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(NT$ Millions )
14,000 12,402.7 ( NT$ Millions)
12,000 10,833.5 14,000
11,621.6
12,000 10,935.0
10,000 8,427.8
10,000 8,680.8
8,000
8,000
6,000
3,478.4 3,923.3 6,000
4,000 3,073.9
4,000 2,368.6
2,000
2,000
0
0
2018 2019 2020 Q4'19 Q4'20 2018 2019 2020 Q4'19 Q4'20
Debt | Cash
Net Debt/Equity 49.6% 60.7% 61.8% 64.4% 57.2%
(NT$ Millions)
30,000 25,928.6 24,788.2
22,099.7 22,427.4 22,227.2
17,047.0
20,000
6,166.0 6,700.3 6,225.3 8,166.6 8,008.5
10,000 4,786.6
0
2018/12/31 2019/12/31 2020/3/31 2020/6/30 2020/9/30 2020/12/31
Debt Cash
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Com an website p y

http://www.kyec.com.tw

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