Macronix — Interim / Quarterly Report 2016

Jul 28, 2016

Macronix International Co., Ltd. Second Quarter 2016 Results July 28, 2016

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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.

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Copyright © Macronix International Co., Ltd. 1
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Agenda

Welcome C.Y. Lu 2016Q2 Financial Results Paul Yeh Business Update C.Y. Lu Remarks and Q&A C.Y. Lu

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Financial Highlights

	2016Q2	2016Q1
	Actual	Actual
Revenue	NT$5.2 B	NT$ 5.1B
Gross margin %	14%	15%
Operating margin %	-16%	-16%

• Revenue, Gross margin rate and OP margin rate are flat sequentially

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Inventory trend

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NTD M
12,000
2013 2014 2015 2016
9,334
10,000
9,652 8,231
9,136
8,000 7,275
Inventory (net)
6,000
4,000
2,000
0
13Q4 14Q4 15Q4 16Q1 16Q2
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Copyright © Macronix International Co., Ltd.
4
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Agenda

Welcome C.Y. Lu 2016Q2 Financial Results Paul Yeh Business Update C.Y. Lu Remarks and Q&A C.Y. Lu

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Quarterly Consolidated Statements of Comprehensive Income

Unit: NTD Million (except EPS) 2016/Q2 2016/Q1 2015/Q2 Net Sales 5,181 5,086 4,975 Gross Profit 707 791 608 Gross Margin% 14% 15% 12% Operating Expenses (1,553) (1,596) (1,779) Operating Income (846) (805) (1,171) Operating Margin% (16%) (16%) (24%) Net Non-Operating Income (Loss) 11 (85) (46) Income Before Taxes (835) (890) (1,217) Income Taxes 144 (1) (5) Net Income (691) (891) (1,222) Other Comprehensive Income (134) (108) (203) Comprehensive Income (825) (999) (1,425) Net Income(Loss) Attributable to : Shareholders of the Parent (689) (890) (1,221) NoncontrollingInterests (2) (1) (1)	QoQ YoY Change Change 2% 4% (11%) 16% -1ppt 2ppt (3%) (13%) 5% (28%) 0ppt 8ppt (6%) (31%) (22%) (43%) 24% (34%) (17%) (42%) (22%) (44%)
EPS*(NT$) (0.19) (0.25) (0.35)	(24%) (46%)
EBITDA (237) (296) 344 Weighted Avg Outstanding Million Shares 3,546 3,536 3,518

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2016Q2 Financial Highlights

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2016 YTD Sales = NTD 10,267M 2016 YTD GP = NTD 1,498M
+6% YoY +19% YoY
Sales Gross Profit
NTD M NTD M
1,500
10,000
9,681M 10,267M 1,259M 1,498M
8,000
1,000
6,000
4,000
500
2,000
0 0
15Q1 Q2 Q3 Q4 16Q1 Q2 15Q1 Q2 Q3 Q4 16Q1 Q2
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2016Q2 Financial Highlights

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2016Q2 2015Q2
Gross Margin (%) 14% 12%
EPS -- NT$ (0.19) (0.35)
Gross Margin (%) EPS
GM% NTD
20%
1.00
0.75
15%
14% 14%
13% 12% 0.50 (0.45) (0.45)
0.25
10%
8%
0.00
15Q1 Q2 Q3 Q4 16Q1 Q2
(0.25)
(0.10) (0.27)
(0.19)
(0.50) (0.35) (0.25)
(0.47)
(0.75)
0%
(1.00)
15Q1 Q2 Q3 Q4 16Q1 Q2
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Quarterly Consolidated Balance Sheet / Cash Position

Unit: NTD Million

Unit: NTD Million
	2016/06/30	2016/03/31
Cash	5,409	5,341
Inventory(Net)	7,275	8,231
Property, Plant and Equipment	16,198	16,272
Total Assets	34,868	35,632
Interest bearing debt - short term	6,274	5,476
Interest bearing debt - long term	6,972	8,027
Total Liabilities	18,146	18,126
Shareholders' Equity	16,722	17,506
Debt Ratio (%)	52.0%	50.9%
Book Value -- NT$	4.63	4.84
Quarterly Highlight	2016/Q2	2016/Q1
Depreciation & Amortization	513	512
Capital Expenditures	(393)	(170)
Cash Flow from Operating	731	488

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Quarterly Sales Breakdown by Products (Parent Company)

Unit: NTD Million

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10%
9% 10%
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QoQ YoY Change Change NAND +17% +35% NOR +6% +5% ROM -15% +8% FBG -2% -9% * FBG (foundry business group)

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64% 66%
66%
10% 12% 11%
15% 14% 13%
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Quarterly Quantity Breakdown by Products (Parent Company)

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Unit : Million
600
8%
500
4%
5%
QoQ YoY
400
Change Change
NAND +38% +56%
300
NOR +12% +7%
94% 91%
94%
ROM -14% -15%
200
FBG +5% -5%
100
Equivalent 8” WF base for FBG
(foundry business group)
2% 1% 1%
0
2015Q2 2016Q1 2016Q2
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Agenda

Welcome C.Y. Lu 2016Q2 Financial Results Paul Yeh Business Update C.Y. Lu Remarks and Q&A C.Y. Lu

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Business update - ROM equivalent density shipment

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Density shipment index: 2012Q1 =100
343
350
331
300
267
251
250
200 187
158
145
150 138 140
108 118 111
100 94 96
100 84 88
77
50
0
12Q1 Q2 Q3 Q4 13Q1 Q2 Q3 Q4 14Q1 Q2 Q3 Q4 15Q1 Q2 Q3 Q4 16Q1 Q2
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Current status of ROM memory business

� ROM business

• ≤45nm products represented 79% of ROM business in 2016Q2

• ROM will be the main growth driver due to seasonal sales in Q3

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NTD % ROM (by tech & sales)
100%
80%
66%
60% 80% 76% 77% 74% 79% 76% 87%
76%
≤ 45 nm
≥ 65 nm
40%
20%
34%
20% 24% 23% 26% 21% 24% 24%
13%
0%
15Q1 Q2 Q3 Q4 16Q1 Q2 2014 2015 2016(E)
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Business update – NOR equivalent density shipment

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Density shipment index: 2012Q1 =100
250 243 240
228
214 214 213
200 190 192 190
181
177
169
160
154
150 141 142
130
100
100
50
0
12Q1 Q2 Q3 Q4 13Q1 Q2 Q3 Q4 14Q1 Q2 Q3 Q4 15Q1 Q2 Q3 Q4 16Q1 Q2
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Current status of NOR memory business

� NOR flash business

• ≤75nm products represented 47% of NOR business in 2016Q2

• Steady upward trend of market share gain and looking for No. 1 position

• Rev contribution from auto segment is fast growing and meets our expectation

• B/B (book-to-bill) ratio is uprising

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≤ 55 nm
≤ 75 nm
NTD % NOR (by tech & sales) ≧ 0.10 µ m
100% 1% 2%
32%
80% 33% 39% 42% 42% 42% 39%
46%
49%
60%
40%
67% 68%
61% 58% 58% 58% 53% 61%
49%
20%
0%
15Q1 Q2 Q3 Q4 16Q1 Q2 2014 2015 2016(E)
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Macronix’s B/B ratio trend
1.50
1.33
1.00 1.08
0.99
0.50
0.00
2016/04 2016/05 2016/06
Speedy growth in automotive segment
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Revenue
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2016H1
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Business update – NOR flash breakdown

2016Q2 NOR Revenue breakdown

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Consumer,
34%
Comm, 26%
Computer,
Auto , 14%
18%
I.M.A, 8%
Comm: including handsets
I (Industrial), M (Medical), A (Aerospace-defense)
Computer Consumer Communication Automotive
Rev.
+13% QoQ +12% QoQ -3% QoQ -6% QoQ
(NTD M)
-5% YoY +1% YoY +3% YoY +29% YoY
1,500
1,000
1,000 1,000
1,000
500
500 500
500
0 0 0 0
2016Q1 2016Q2 2016Q1 2016Q2 2016Q1 2016Q2 2016Q1 2016Q2
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Business update – SLC NAND breakdown & outlook

� SLC NAND flash business

• Rev keeps on reaching new high level and will continue a robust growth

• The first 36 nm NAND in global market passed AEC-Q100 qualification, specific for auto application, Macronix’s products are proven with the industry’s best-in-class quality and performance

SLC NAND Flash equivalent density shipment

2016Q2 NAND

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Total density (Tb)
200,000 Revenue breakdown
Density shipment index:
2014Q1 =100
36 nm
Index
Comm,
400 75 nm 40,000 Consumer,
53%
41%
399
300 263 100,000
213
200 175 157 20,000 Others, 6%
100
100
0 0 0
15Q1 Q2 Q3 Q4 16Q1 Q2 2014 2015 2016(E)
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Copyright © Macronix International Co., Ltd. 18
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Agenda

Welcome C.Y. Lu 2016Q2 Financial Results Paul Yeh Business Update C.Y. Lu Remarks and Q&A C.Y. Lu

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Copyright © Macronix International Co., Ltd. 19
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For more information regarding Macronix http://www.macronix.com

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