Macronix — Interim / Quarterly Report 2018

Jun 15, 2018

Macronix International Co., Ltd. First Quarter 2018 Results April 26, 2018

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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

2018Q1 Financial Results Business Update Remarks and Q&A

Copyright © Macronix International Co., Ltd.

Miin Wu Paul Yeh Miin Wu Miin Wu

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Financial Highlights

2018Q1 2017Q4 2017Q1 Actual Actual Actual Revenue NT$9.1B NT$ 10.6B NT$ 6.6B Gross margin % 42% 43% 27% Operating margin % 22% 25% 6%

Copyright © Macronix International Co., Ltd.

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Agenda

Welcome

Welcome Miin Wu 2018Q1 Financial Results Paul Yeh Business Update Miin Wu Remarks and Q&A Miin Wu

Copyright © Macronix International Co., Ltd.

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Quarterly Consolidated Statements of Comprehensive Income

Unit: NTD Million (except EPS)� 2018/Q1 2017/Q4 2017/Q1 Net Sales 9,061 10,557 6,610 Gross Profit 3,814 4,582 1,815 Gross Margin% 42% 43% 27% Operating Expenses (1,819) (1,926) (1,401) Operating Income 1,995 2,656 414 Operating Margin% 22% 25% 6% Net Non-Operating Income (Loss) (100) (74) (210) Income Before Taxes 1,896 2,582 204 Income Taxes Expense (benefit) 14 7 1 Net Income 1,882 2,576 203 Other Comprehensive Income (154) 343 19 Comprehensive Income 1,728 2,919 222 Net Income(Loss) Attributable to : Shareholders of the Parent 1,882 2,576 203 NoncontrollingInterests (0) (0) (0)	QoQ YoY Change Change (14%) 37% (17%) 110% (1ppt) 15ppt (6%) 30% (25%) 382% (3ppt) 16ppt - - (27%) 829% - - (27%) 829% - - (41%) 680% (27%) 829%
Basic EPS*(NT$) 1.06 1.45 0.12	(27%) 783%
EBITDA 2,431 3,126 761 Weighted avg outstanding million shares 1,780 1,777 1,756

• EPS are retro-adjusted because of capital reduction

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Copyright © Macronix International Co., Ltd.

2018Q1 Financial Highlights

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Gross Margin (%)
43% 42%
45%
38%
32% 34%
31%
27%
30%
15%
14%
15%
0%
16Q1 Q2 Q3 Q4 17Q1 Q2 Q3 Q4 18Q1
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Annualized Return on Equity Performance

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29%
30%
26%
20%
20%
9%
10%
4%
0%
17Q1 Q2 Q3 Q4 18Q1
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Copyright © Macronix International Co., Ltd.

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Quarterly Consolidated Balance Sheet / Cash Position

Unit: NTD Million (except BV)	2018/03/31	2017/12/31	2017/03/31
Cash	10,251	8,633	6,062
Inventory(Net)	11,228	9,872	7,384
Property, Plant and Equipment	17,056	16,259	15,574
Total Assets	48,300	44,194	35,851
Interest bearing debt - short term	2,947	3,179	4,119
Interest bearing debt - long term	5,980	4,860	6,058
Total Liabilities	21,498	19,538	17,243
Shareholders' Equity	26,802	24,656	18,608
Debt Ratio (%)	44.5%	44.2%	48.1%
Book Value -- NT$	14.87	13.68	10.31
Quarterly Highlight	2018/Q1	2017/Q4	2017/Q1
Depreciation & Amortization	496	493	499
Capital Expenditures	(1,496)	(879)	(563)
Cash Flow from Operating	2,129	3,969	487

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Copyright © Macronix International Co., Ltd.

Quarterly Sales Breakdown by Products (Parent Company)

Unit: NTD Million

12,000

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20%
9,000
26%
QoQ YoY
Change Change
11%
48%
6,000
NAND +10% +236%
44%
NOR -21% +5%
58%
ROM -21% +33%
3,000
FBG -1% +32%
25%
23% 22% * FBG (foundry business group)
8% 7% 8%
0
2017Q1 2017Q4 2018Q1
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Copyright © Macronix International Co., Ltd.

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Agenda

Welcome

Welcome Miin Wu 2018Q1 Financial Results Paul Yeh Business Update Miin Wu Remarks and Q&A Miin Wu

Copyright © Macronix International Co., Ltd.

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Business update - ROM equivalent density shipment

 ROM business

• ≥ 64Gb products represented 57% of ROM business in 2018Q1

• Better than seasonal demand in Q1

2,000

Density shipment index: 2014Q1 =100

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1,756
1,417
1,121
927
451
416
318 307 326
174
147
100 89 110 72 103 81
0
14Q1 Q2 Q3 Q4 15Q1 Q2 Q3 Q4 16Q1 Q2 Q3 Q4 17Q1 Q2 Q3 Q4 18Q1
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1,000

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Business update – NOR equivalent density shipment

Density shipment index: 2014Q1 =100

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250
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170
160 164
153 151 150
144
142
135
127 127 126
125 113 114 119
112
100
0
14Q1 Q2 Q3 Q4 15Q1 Q2 Q3 Q4 16Q1 Q2 Q3 Q4 17Q1 Q2 Q3 Q4 18Q1
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Copyright © Macronix International Co., Ltd.

Business update – ASP trend of NOR product line

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ASP per unit
10.00
5.00
0.00
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16Q1 Q2 Q3 Q4 17Q1 Q2 Q3 Q4 18Q1
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Copyright © Macronix International Co., Ltd.

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Current status of NOR memory business

 NOR flash business

• ≤75nm products increased to 57% of NOR sales in 18Q1

• Profit-driven growth strategy to focus on HD segment and high quality business

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≤ 55 nm
NOR (by tech & sales) ≤ 75 nm
NTD % ≧ 0.10μm
100% 2% 2% 3% 5% 6% 1% 3%
13%
80%
46%
43% 49%
48% 51%
55% 51%
50%
60%
40%
55% 53%
50% 48%
46%
20% 40% 43% 37%
0%
17Q1 Q2 Q3 Q4 18Q1 2016 2017 2018(E)
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Accumulative design-win case count

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1,200 LD (512K~16M)
MD (32M~128M)
HD ( ≧ 256M)
600
0
16Q1 Q2 Q3 Q4 17Q1 Q2 Q3 Q4 18Q1
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Speedy growth in automotive segment
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Revenue
2500
1500
500
2011 2012 2013 2014 2015 2016 2017
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2011 2012 2013 2014 2015 2016 2017 18Q1
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Business update – NOR flash breakdown

2018Q1 NOR Revenue breakdown

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Consumer, Comm,
24% 30%
Computer,
20% Auto , 13%
I.M.A.,
13%
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* Comm: including handsets
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• I (Industrial), M (Medical), A (Aerospace-defense)

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Computer Consumer Communication Automotive
Rev -29% QoQ -29% QoQ -27% QoQ +6% QoQ
(M)
-8% YoY -12% YoY +3% YoY +15% YoY
1,500
2,000 1,000
2,000
1,000
1,000 500
1,000
500
0 0 0
0
17Q4 18Q1 17Q4 18Q1 17Q4 18Q1 17Q4 18Q1
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Copyright © Macronix International Co., Ltd.

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Macronix new NOR product series

 1.2V NOR Flash

• Capable of >80% power saving with features of ultra-low Vcc, ultra-low power consumption & ultra-low deep power down current

• Deep power down current is only nA level compared to peers’ μA

• Perfect suitable for low power applications: Health monitoring, Bluetooth connection, IoT, Mobile Internet devices, etc.

 8-bit I/O NOR flash: the fastest in the NOR Flash industry

• Perform up to an operational frequency of 250MHz with 500MB/s read throughput, the ultra-high performance and fastest in the NOR Flash industry

• Can meet the growing demand for "instant-on" performance and real-time system responsiveness in automotive, industrial and consumer applications

Copyright © Macronix International Co., Ltd.

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Business update – SLC NAND breakdown & outlook

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Accumulative design-win
 SLC NAND flash business 600 case count of 36nm
515
•
Recovered pricing and slightly decreased
shipment in Q1
• 280 [320 362 398 431 ]
SLC NAND is one of the key growth drivers
300 227
in 2018
123
49
0
16Q1 Q2 Q3 Q4 17Q1 Q2 Q3 Q4 18Q1
Total density (Tb)
1,000 SLC NAND Flash equivalent density shipment 929
Density shipment index:
2015Q1 =100 695
662
592 587
514
479
500 423
263
213
175
157
100
0
15Q1 Q2 Q3 Q4 16Q1 Q2 Q3 Q4 17Q1 Q2 Q3 Q4 18Q1
Copyright © Macronix International Co., Ltd. 17
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Agenda

Welcome

Welcome Miin Wu 2018Q1 Financial Results Paul Yeh Business Update Miin Wu Remarks and Q&A Miin Wu

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