Macronix — Interim / Quarterly Report 2015

Jan 28, 2016

Macronix International Co., Ltd. Fourth Quarter 2015 Results Jan 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.

Agenda

Welcome

2015Q4 Financial Results Business Update Remarks and Q&A

Copyright © Macronix International Co., Ltd.

C.Y. Lu Paul Yeh C.Y. Lu C.Y. Lu

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Financial Highlights

	2015Q4	2015Q3	2015	2014
	Actual	Actual	Actual	Actual
Revenue	NT$5.60B	NT$ 5.65B	NT$ 20.9B	NT$ 22.4B
Gross margin %	8%	14%	12%	13%
Operating margin %	-27%	-19%	-24%	-28%

• Revenue sequentially decreased by 1% mainly because of seasonal lower demand in NOR and mitigated by increased shipment of ROM and NAND

 Revenue decreased by 7% mainly because of very weak demand of ROM products; meanwhile NOR and NAND are showing optimistic growth

• Gross margin and OP margin sequentially decreased by, respectively, 6ppt and 8ppt due to lower utilization rate resulted from inventory adjustment

• Gross margin decreased by 1ppt due to inventory control

• OP margin improved by 4ppt because of well-controlled operating expense

Copyright © Macronix International Co., Ltd.

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Inventory level with projected trend

9,136 0 2,000 4,000 6,000 8,000 10,000 12,000 13Q4 NTD M	9,136 0 2,000 4,000 6,000 8,000 10,000 12,000 13Q4 NTD M	Inventory (net)
	9,136	9,334 9,652
	13Q4	14Q4 15Q4 16Q4

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Agenda

Welcome

Welcome C.Y. Lu 2015Q4 Financial Results Paul Yeh Business Update C.Y. Lu Remarks and Q&A C.Y. Lu

Copyright © Macronix International Co., Ltd.

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Quarterly Consolidated Statements of Comprehensive Income

Unit: NTD Million (except EPS) 2015/Q4 2015/Q3 2014/Q4 Net Sales 5,599 5,647 5,960 Gross Profit 467 786 526 Gross Margin% 8% 14% 9% Operating Expenses (2,002) (1,836) (2,679) Operating Income (1,535) (1,050) (2,153) Operating Margin% (27%) (19%) (36%) Net Non-Operating Income (Loss) (129) 104 (130) Income Before Taxes (1,664) (946) (2,283) Income Taxes (2) (5) (9) Net Income (1,666) (951) (2,293) Other Comprehensive Income (210) (119) 144 Comprehensive Income (1,876) (1,070) (2,148) Net Income(Loss) Attributable to : Shareholders of the Parent (1,663) (949) (2,290) NoncontrollingInterests (3) (2) (2)	QoQ YoY Change Change (1%) (6%) (41%) (11%) (6ppt) (1ppt) 9% (25%) 46% (29%) (8ppt) 9ppt 76% (27%) 75% (27%) 77% (246%) 75% (13%) 75% (27%)
EPS -- NT$ (0.47) (0.27) (0.65)	74% (28%)
EBITDA (120) 594 (328) Weighted Avg Outstanding Million Shares 3,522 3,519 3,518

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Annual Consolidated Statements of Comprehensive Income

2015 2014 Net Sales 20,928 22,414 Gross Profit 2,512 2,894 Gross Margin% 12% 13% Operating Expenses (7,516) (9,210) Operating Income (5,004) (6,316) Net Non-Operating Income (Loss) 823 (146) Income Before Taxes (4,181) (6,462) Income Taxes (15) (13) Net Income (4,196) (6,475) Other Comprehensive Income (324) 409 Comprehensive Income (4,520) (6,066) Net Income(Loss) Attributable to : Shareholders of the Parent (4,188) (6,454) NoncontrollingInterests (8) (21)	Change (7%) (13%) (1ppt) (18%) (21%) (35%) (35%) (179%) (25%) (35%) (61%)
EPS* -- NT$ (1.19) (1.83)	(35%)
EBITDA 2,021 1,384 Weighted Average Outstanding Million Shares 3,522 3,518

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Copyright © Macronix International Co., Ltd.

2015Q4 Financial Highlights

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2015Q4 Sales = NTD 5,599M 2015 Q4 GP = NTD 467M
-6% YoY -11% YoY
2015 Sales = NTD 20,928M 2015 GP = NTD 2,512M
-7% YoY -13% YoY
Sales Gross Profit
NTD M NTD M
1,500
10,000 2,894M 2,512M
22,414M 20,928M
8,000
1,000
6,000
4,000
500
2,000
0 0
14Q1 Q2 Q3 Q4 15Q1 Q2 Q3 Q4 14Q1 Q2 Q3 Q4 15Q1 Q2 Q3 Q4
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2015 Financial Highlights

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2015 2014
Gross Margin (%) 12% 13%
EPS -- NT$ (1.19) (1.83)
Gross Margin (%) EPS
GM% NTD
25%
1.00
18% 17%
14% 0.75
13%
15% 12%
9%
6% 8% 0.50 (1.83) (1.19)
5% 0.25
0.00
-5% 1 4Q1 Q2 Q3 Q4 15Q1 Q2 Q3 Q4 14Q1 Q2 Q3 Q4 15Q1 Q2 Q3 Q4
(0.25)
(0.10)
(0.31)
(0.36) (0.27)
(0.50)
-15% (0.35)
(0.51) (0.47)
(0.75) (0.65)
-25% (1.00)
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Quarterly Consolidated Balance Sheet / Cash Position

Unit: NTD Million

Unit: NTD Million
	2015/12/31	2015/09/30
Cash	5,593	3,819
Inventory(Net)	9,334	10,410
Property, Plant and Equipment	16,596	17,887
Total Assets	37,628	38,807
Interest bearing debt - short term	6,224	3,992
Interest bearing debt - long term	7,862	9,851
Total Liabilities	19,199	18,589
Shareholders' Equity	18,429	20,218
Debt Ratio (%)	51.0%	47.9%
Book Value -- NT$	5.12	5.61
Quarterly Highlight	2015/Q4	2015/Q3
Depreciation & Amortization	1,461	1,460
Capital Expenditures	(81)	(366)
Cash Flow from Operating	1,724	355

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Copyright © Macronix International Co., Ltd.

Annual Consolidated Balance Sheet / Cash Position

Unit: NTD Million

Unit: NTD Million
	2015/12/31	2014/12/31
Cash	5,593	7,636
Inventory(Net)	9,334	9,652
Property, Plant and Equipment	16,596	21,128
Total Assets	37,628	44,843
Interest bearing debt - short term	6,224	14,277
Interest bearing debt - long term	7,862	2,074
Total Liabilities	19,199	22,237
Equity	18,429	22,606
Debt Ratio	51.0%	49.2%
Book Value -- NT$	5.12	6.38
Annual Highlight	2015	2014
Depreciation & Amortization	5,901	7,565
Capital Expenditures	(1,461)	(1,660)
Cash Flow from Operating	1,703	293

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Quarterly Sales Breakdown by Products (Parent Company)

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Unit: NTD Million
8,000
6,000
4%
7% 9% QoQ YoY
Change Change
4,000 53% NAND +19% +92%
65% 62% NOR -6% +11%
ROM +14% -46%
2,000 FBG -1% -1%
33%
FBG (foundry business group)
17% 19%
10% 11% 10%
0
2014Q4 2015Q3 2015Q4
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Annual Sales Breakdown by Products (Parent Company)

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Unit: NTD Million
30,000
25,000
YoY
3% Change
20,000 9%
NAND +105%
NOR +2%
15,000 59%
62% ROM -45%
10,000 FBG -3%
26% * FBG (foundry business group)
5,000
19%
12% 10%
0
2014 2015
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Quarterly Quantity Breakdown by Products (Parent Company)

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Unit : Million
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600
500 3%
5%
QoQ YoY
3%
400 Change Change
NAND +55% +95%
300
NOR -5% +14%
95% 92% ROM +14% -28%
93%
200
FBG +3% +3%
Equivalent 8” WF base for FBG
100
(foundry business group)
4% 2% 3%
0
2014Q4 2015Q3 2015Q4
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Annual Quantity Breakdown by Products (Parent Company)

Unit : Million

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2,000
YoY
4%
2% Change
1,600 NAND +82%
NOR +3%
1,200 ROM -37%
FBG -4%
94%
800 95% * Equivalent 8” WF base for FBG
(foundry business group)
400
3% 2%
0
2014 2015
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Copyright © Macronix International Co., Ltd.

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Agenda

Welcome

Welcome C.Y. Lu 2015Q4 Financial Results Paul Yeh Business Update C.Y. Lu Remarks and Q&A C.Y. Lu

Copyright © Macronix International Co., Ltd.

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Business update - ROM equivalent density shipment

Density shipment index: 2010Q1 =100

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1,600
1,200
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1,490
1,439
1,164
1,200
1,090
957
815
800
687
610
629 598
469
514
435 408
417
382 365
400 336
230
166
186 132
100 99
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2010 2011 2012 2013 2014 2015
Copyright © Macronix International Co., Ltd. 17
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Current status of ROM memory business

 ROM business

• ≤45nm products represented 77% of ROM business in 2015Q4

• Annual ROM sales declined by NTD2.6B which is the main reason of declined company annual revenue

• Key customer is planning new generation platform

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NTD % ROM (by tech & sales)
100%
35%
80%
60% 61%
66%
60% 80% 84% 80% 76% 77% 76% 76%
≤ 45 nm
40%
65% ≥ 65 nm
20% 40% 39%
34%
20% 20% 24% 23% 24% 24%
16%
0%
14Q1 Q2 Q3 Q4 15Q1 Q2 Q3 Q4 2013 2014 2015
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Business update – NOR equivalent density shipment

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Density shipment index: 2010Q1 =100
300
270
254
250 238 238
211 214 211
197 201
200 178 188
171 158
157
145
142
150
133
111 117 111
100
95
100 84
71
50
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2010 2011 2012 2013 2014 2015
Copyright © Macronix International Co., Ltd. 19
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Current status of NOR memory business

 NOR flash business

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density ≥256M
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• ≤75nm products represented 42% of NOR business in 15Q4

• Global ranking No. 2 with 22% market share in 15Q3

• Design-wins will support our future growth

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≤ 75 nm
100% NTD % NOR (by tech & sales) ≧ 0.10μm 260 High Density NOR 244
240 Rev equivalent index: CAGR = 22%
21%
80% 28% 30% 33% 34% 33% 39% 42% 42% 32% 39% 220200 2013Q1 =100 194 211 189 203 208
180 170 171 170
156
160
60%
140
123
120
100
40% 79% 100
72% 70% 67% 66% 67% 61% 58% 58% 68% 61% 80
60
20% 40
20
0
0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
14Q1 Q2 Q3 Q4 15Q1 Q2 Q3 Q4 2013 2014 2015
2013 2014 2015
Copyright © Macronix International Co., Ltd. 20
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Business update – NOR flash breakdown

2015Q4 NOR Revenue breakdown

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Consumer, Comm,
32% 26%
Computer, Handset,
18% 5%
Auto &
Indu., 19%
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2015Q4 NOR Revenue breakdown

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Computer Consumer Communication Handset Auto&Indu
Rev.
+0% QoQ 0% QoQ -9% QoQ +24% QoQ +5% QoQ +7% QoQ
(NTD M)
+9% YoY +12% YoY +40% YoY -14% YoY +37% YoY
1,000 1,500 1,000 1,000 1,000
1,000
500 500 500 500
500
0 2015Q3 2015Q4 0 2015Q3 2015Q4 0 2015Q3 2015Q4 0 2015Q3 2015Q4 0 2015Q3 2015Q4
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Rev. +0% QoQ 0% QoQ -9% QoQ (NTD M) +9% YoY +12% YoY

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Business update – SLC NAND breakdown & outlook

 SLC NAND flash business

2015Q4 NAND

• NAND rev increased by 107% YoY in 2015 with ~7% market share; Targeting higher growth in 2016

Revenue breakdown

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Comm,
Consumer, 54%
38%
Others, 8%
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SLC NAND Flash equivalent density shipment

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Total density (Tb)
3,000 150,000
Index
36 nm
Density shipment index:
75 nm
1,500 2014Q1 =100 1,316 40,000
2,000 100,000
1,000 877
787
593 573 20,000
501 1,000 50,000
500 398
100
0 0 0 0
14Q1 Q2 Q3 Q4 15Q1 Q2 Q3 Q4 2013 2014 2015
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Growth momentum of 2016

• I/A/I (Industrial / automotive / infrastructure) will be our key growth drivers

• With best quality delivered, Macronix is winning customers’ trust globally

• Seeing growth momentum with Arrow specializing in automotive and industrial segments

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Copyright © Macronix International Co., Ltd.

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Agenda

Welcome

Welcome C.Y. Lu 2015Q4 Financial Results Paul Yeh Business Update C.Y. Lu Remarks and Q&A C.Y. Lu

Copyright © Macronix International Co., Ltd.

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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