Macronix — Interim / Quarterly Report 2014

Oct 30, 2014

Macronix International Co., Ltd. Third Quarter 2014 Results

October 30, 2014

==> picture [287 x 153] intentionally omitted <==

Disclaimer

The presentation and discussion contain certain forward-looking statements with respect to the results of operation, financial condition and current expectation. The forward-looking statements are subject to known and unknown uncertainties and risks that could cause actual results to differ materially from those expressed or implied by such statements.

Such risks and uncertainties include but are not limited to the impact of competitive products and pricing, timely design acceptance by our customers, timely introduction of new technologies, ability to ramp new products into volume, industry wide shifts in supply and demand for semiconductor products, industry overcapacity, availability of manufacturing capacity, financial stability in end markets, and other risks.

The forward-looking statements in this release reflect the current belief of Macronix as of the date of this release and Macronix undertakes no obligation to update these forward-looking statements for events or circumstances that occur subsequent to such date.

==> picture [667 x 37] intentionally omitted <==

----- Start of picture text -----

Copyright © Macronix International Co., Ltd. 1
----- End of picture text -----

Agenda

Welcome

Miin Wu

2014Q3 Financial Results Paul Yeh Business Update Miin Wu Remarks and Q&A Miin Wu

==> picture [667 x 37] intentionally omitted <==

----- Start of picture text -----

Copyright © Macronix International Co., Ltd. 2
----- End of picture text -----

Major Third Quarter Highlights

2014Q3 2014Q2 Actual Actual Revenue NT$ 6.7 B NT$ 5.0 B Gross margin % 17% 6% Operating margin % -16% -36%

• Revenue sequentially increased by 35% because of better demand in all product lines

• Gross margin sequentially increased by 11ppt because of higher utilization and the reversal of previous inventory write-down

• OP margin increased sequentially due to higher gross profit

• Due to unfavorable product mix and non-recurring legal expenses, single month bottom line did not achieve breakeven point

==> picture [667 x 37] intentionally omitted <==

----- Start of picture text -----

Copyright © Macronix International Co., Ltd. 3
----- End of picture text -----

Agenda

Welcome

Miin Wu

2014Q3 Financial Results Paul Yeh Business Update Miin Wu Remarks and Q&A Miin Wu

==> picture [667 x 37] intentionally omitted <==

----- Start of picture text -----

Copyright © Macronix International Co., Ltd. 4
----- End of picture text -----

Quarterly Consolidated Statements of Comprehensive Income

Uni	2014/Q3 2014/Q2 2013/Q3 Net Sales 6,691 4,973 6,708 Gross Profit 1,140 278 1,231 Gross Margin% 17% 6% 18% Operating Expenses (2,239) (2,076) (2,160) Operating Income (1,099) (1,798) (929) Net Non-Operating Income (Loss) (1) (2) 22 Income Before Taxes (1,100) (1,800) (907) Income Taxes (1) (2) (1) Net Income (1,101) (1,802) (908) Other Comprehensive Income 25 (25) (31) Comprehensive Income (1,076) (1,827) (939) Net Income(Loss) Attributable to : Shareholders of the Parent (1,097) (1,796) (897) NoncontrollingInterests (4) (6) (11) t: NTD Million (except EPS)	QoQ YoY Change Change 35% (0.3%) 310% (7%) 11ppt -1ppt 8% 4% (39%) 18% (60%) (39%) 21% (46%) 34% (39%) 21% (41%) 15% (39%) 22% (25%) (59%)
	EPS*(NT$) (0.31) (0.51) (0.26)	(40%) 20%
	Weighted Average Outstanding Million Shares 3,518 3,518 3,518

==> picture [667 x 37] intentionally omitted <==

----- Start of picture text -----

Copyright © Macronix International Co., Ltd. 5
----- End of picture text -----

2014Q3 Financial Highlights

2014 YTD Sales = NTD 16,454 M +1% YoY

2014 YTD GP = NTD 2,278M +79% YoY

==> picture [335 x 248] intentionally omitted <==

----- Start of picture text -----

Sales
NTD M
16,454M
10,000 16,344M
8,000
6,000
4,000
2,000
0
13Q1 Q2 Q3 Q4 14Q1 Q2 Q3
----- End of picture text -----

==> picture [342 x 250] intentionally omitted <==

----- Start of picture text -----

Gross Profit
NTD M
2,278M
1,271M
1,250
750
250
13Q1 Q2 Q3 Q4 14Q1 Q2 Q3
(250)
----- End of picture text -----

==> picture [667 x 37] intentionally omitted <==

----- Start of picture text -----

Copyright © Macronix International Co., Ltd. 6
----- End of picture text -----

2014Q3 Financial Highlights

==> picture [616 x 417] intentionally omitted <==

----- Start of picture text -----

2014Q3 2013Q3
Gross Margin (%) 17% 18%
EPS (NTD) (0.31) (0.26)
Gross Margin (%) EPS
EPS numbers are retro-adjusted
NTD
1.00
18%
17%
18% 0.75
12%
0.50 (1.37) (1.19)
6% 0.25
4%
0.00
Q2 Q3 Q4 14Q1 Q2 Q3 13Q1 Q2 Q3 Q4 14Q1 Q2 Q3
(0.25)
(0.26)
(0.31)
(0.36)
(0.50) (0.42)
(0.59) [(0.52)] (0.51)
(0.75)
(1.00)
(1.79)
----- End of picture text -----*

==> picture [329 x 219] intentionally omitted <==

----- Start of picture text -----

GM%
25%
18%
17%
18%
12%
15%
5% 6%
4%
-4%
-5% 13Q1 Q2 Q3 Q4 14Q1 Q2 Q3
-15%
-25%
----- End of picture text -----

==> picture [667 x 37] intentionally omitted <==

----- Start of picture text -----

Copyright © Macronix International Co., Ltd. 7
----- End of picture text -----

Quarterly Consolidated Balance Sheet / Cash Position

Cash Inventory(Net) Property, Plant and Equipment Total Assets Interest bearing debt - short term Interest bearing debt - long term Total Liabilities Shareholders' Equity Debt Ratio (%) Book Value (NT$) Quarterly Highlight Depreciation & Amortization Capital Expenditures Cash Flow from Operating EBITDA Unit: NTD Million	2014/09/30 2014/06/30
	7,257 7,443 9,554 9,656 22,420 23,607 47,596 47,924 7,409 6,028 10,097 10,944 22,789 22,055 24,807 25,869 47.9% 46.0% 7.05 7.35 2014/Q3 2014/Q2
	1,892 1,902 (607) (449) (139) (471) 798 172

==> picture [667 x 37] intentionally omitted <==

----- Start of picture text -----

Copyright © Macronix International Co., Ltd. 8
----- End of picture text -----

Quarterly Sales Breakdown by Products (Parent Company)

==> picture [659 x 383] intentionally omitted <==

----- Start of picture text -----

Unit: NTD Million
8,000
6,000
QoQ YoY
Change Change
57%
54%
Flash +8% +6%
4,000
ROM +181% -16%
71%
FBG +9% +36%
2,000
32%
38% * FBG (foundry business group)
15%
8% 14% 11%
0
2013Q3 2014Q2 2014Q3
----- End of picture text -----

==> picture [667 x 37] intentionally omitted <==

----- Start of picture text -----

Copyright © Macronix International Co., Ltd. 9
----- End of picture text -----

Quarterly Quantity Breakdown by Products (Parent Company)

Unit : Million

==> picture [690 x 338] intentionally omitted <==

----- Start of picture text -----

600
500
QoQ YoY
400 Change Change
Flash +17% +17%
300
94% 98% 96%
ROM +89% -27%
FBG +7% +40%
200
Equivalent 8” WF base for FBG
100
(foundry business group)
6% 2% 4%
0
2013Q3 2014Q2 2014Q3
----- End of picture text -----*

==> picture [667 x 37] intentionally omitted <==

----- Start of picture text -----

Copyright © Macronix International Co., Ltd. 10
----- End of picture text -----

8 ” Equivalent Wafer- Out Trend

==> picture [700 x 345] intentionally omitted <==

----- Start of picture text -----

Wafer Out
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
09Q1 Q2 Q3 Q4 10Q1 Q2 Q3 Q4 11Q1 Q2 Q3 Q4 12Q1 Q2 Q3 Q4 13Q1 Q2 Q3 Q4 14Q1 Q2 Q3
----- End of picture text -----

==> picture [667 x 37] intentionally omitted <==

----- Start of picture text -----

Copyright © Macronix International Co., Ltd. 11
----- End of picture text -----

Agenda

Welcome Miin Wu 2014Q3 Financial Results Paul Yeh Business Update Miin Wu Remarks and Q&A Miin Wu

==> picture [667 x 37] intentionally omitted <==

----- Start of picture text -----

Copyright © Macronix International Co., Ltd. 12
----- End of picture text -----

Business update - ROM equivalent density shipment

==> picture [714 x 462] intentionally omitted <==

----- Start of picture text -----

Density shipment index:
1,400 2009Q1 =100
1,250
1,200
976
1,000 914
802
800
600 528 511
502
393
365
342
400 306 350
320
193
200 161 156 111 139
100 106 120
84 83
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2009 2010 2011 2012 2013 2014
Copyright © Macronix International Co., Ltd. 13
----- End of picture text -----

Current status of memory business

� ROM business

• ≤45nm products represented 80% of ROM business in 14Q3

• 32nm 16/32Gb products will be qualified in Nov. and shipped in Dec.

• Average density per unit: 6.7Gb, 6.0Gb and 11.4Gb for 14Q1, Q2 and Q3, respectively

==> picture [584 x 310] intentionally omitted <==

----- Start of picture text -----

NTD % ROM (by tech & sales)
100%
14%
24%
33% 35%
80%
57% 60% 61%
60% 80% 75%
84%
76%
45 nm
67%
40%
59% 57%
65 nm
75 nm
38%
20% 36% 34%
10% 23% ≧0.10μm
18%
5%
0% 7% 3% 4%5% 5% 3% 3%2% 2%2% 2%3% 1% 1% 6% 3% 1% 1%
13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 2012 2013 2014E
14
----- End of picture text -----

Business update – NOR Flash equivalent density shipment

==> picture [647 x 419] intentionally omitted <==

----- Start of picture text -----

750 Density shipment index:
2009Q1 =100
640
569
542
505
530
480
500
460
422 425
382 390
360
317
299
298
272 270 256
250
250 227
192
173
100
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2009 2010 2011 2012 2013 2014
----- End of picture text -----

==> picture [667 x 37] intentionally omitted <==

----- Start of picture text -----

Copyright © Macronix International Co., Ltd. 15
----- End of picture text -----

Current status of memory business

� NOR flash business

• 75nm products represented 33% of NOR business in 14Q3

• 55nm parallel / serial 512Mb NOR CS were sent for qualification in 14Q3.

==> picture [11 x 10] intentionally omitted <==

==> picture [11 x 10] intentionally omitted <==

High density Mid density (32Mb~128Mb) Low density

==> picture [10 x 9] intentionally omitted <==

==> picture [10 x 9] intentionally omitted <==

==> picture [670 x 257] intentionally omitted <==

----- Start of picture text -----

Low density
NTD % 100% NOR (by tech & sales) NTD % NOR (by density & sales)
7% 100%
7%
15% 19% 23% 26% 28% 30% 33% 21% 32% 12% 15%
80%
80%
55%
60% 60% 54% 53%
93%
85%
40% 81% 77% 74% 72% 70% 79% 40%
67% 68%
75 nm 20% 20% 38%
≧ 0.10µm 34% 32%
0% 0%
13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 2012 2013 2014E 2012 2013 2014E
----- End of picture text -----

==> picture [667 x 37] intentionally omitted <==

----- Start of picture text -----

Copyright © Macronix International Co., Ltd. 16
----- End of picture text -----

Business update – NOR Flash breakdown & outlook

2014Q3 NOR

Revenue breakdown

==> picture [307 x 126] intentionally omitted <==

----- Start of picture text -----

Consumer,
34% Comm,
21%
Computer,
21% Handset,
Auto, 9% 10%
Industrial,
5%
----- End of picture text -----

2014Q3 NOR QTY breakdown

==> picture [712 x 214] intentionally omitted <==

----- Start of picture text -----

QTY.
(M ea) Computer Consumer Communication Handset Auto
+22% QoQ +19% QoQ +21% QoQ +1% QoQ +10% QoQ
200 +18% YoY +21% YoY +24% YoY -11% YoY -7% YoY
150
150 150 150 150
100
100 100 100 100
50 50 50 50 50
0 2014Q2 2014Q3 0 2014Q2 2014Q3 0 2014Q2 2014Q3 0 2014Q2 2014Q3 0 2014Q2 2014Q3
Copyright © Macronix International Co., Ltd. 17
----- End of picture text -----

Business update – SLC NAND breakdown & outlook

� SLC NAND flash business

• 36nm 2Gb NAND CS were sent for qualification in 14Q3 (for STB, networking applications)

• 36nm 4Gb NAND ES were sent for qualification in Oct. (for networking application)

• 36nm 1.8V 1Gb NAND ES were sent for qualification in 14Q3 (for wireless application)

2014Q3 NAND

SLC NAND Flash equivalent density shipment

==> picture [670 x 194] intentionally omitted <==

----- Start of picture text -----

30,000
Revenue breakdown Density shipment index: 2013Q1 =100
25,617
25,000
Consumer, 20,000
17,186
52% Comm,
40% 15,000
10,000
Others, 8%
4,321
5,000
1,483 2,030
100 316
0
2013Q1 Q2 Q3 Q4 2014Q1 Q2 Q3
----- End of picture text -----

==> picture [667 x 37] intentionally omitted <==

----- Start of picture text -----

Copyright © Macronix International Co., Ltd. 18
----- End of picture text -----

Agenda

Welcome

Miin Wu

2014Q3 Financial Results Paul Yeh Business Update Miin Wu Remarks and Q&A Miin Wu

==> picture [667 x 37] intentionally omitted <==

----- Start of picture text -----

Copyright © Macronix International Co., Ltd. 19
----- End of picture text -----

For more information regarding Macronix http://www.macronix.com

==> picture [353 x 188] intentionally omitted <==

For all inquiries, suggestions and comments ir@mxic.com.tw