Macronix — Interim / Quarterly Report 2017

Feb 26, 2018

Macronix International Co., Ltd. Fourth Quarter 2017 Results

January 31, 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

2017Q4 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

2017Q4 2017Q3 2017 2016 Actual Actual Actual Actual Revenue NT$10.6B NT$ 10.5B NT$ 34.2B NT$ 24.1B Gross margin % 43% 38% 37% 24% Operating margin % 25% 20% 17% -2%

Copyright © Macronix International Co., Ltd.

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Agenda

Welcome

Welcome C.Y. Lu 2017Q4 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)� 2017/Q4 2017/Q3 2016/Q4 Net Sales 10,557 10,467 6,766 Gross Profit 4,582 4,022 2,163 Gross Margin% 43% 38% 32% Operating Expenses (1,926) (1,923) (1,545) Operating Income 2,656 2,098 618 Operating Margin% 25% 20% 9% Net Non-Operating Income (Loss) (74) 30 1 Income Before Taxes 2,582 2,128 619 Income Taxes Expense (benefit) 7 5 (83) Net Income 2,576 2,123 702 Other Comprehensive Income 343 138 (22) Comprehensive Income 2,919 2,261 680 Net Income(Loss) Attributable to : Shareholders of the Parent 2,576 2,123 703 NoncontrollingInterests (0) (0) (1)	QoQ YoY Change Change 1% 56% 14% 112% 5ppt 11ppt 0% 25% 27% 330% 5ppt 16ppt - - 21% 317% 38% (108%) 21% 267% 149% - 29% 329% 21% 267%
Basic EPS*(NT$) 1.45 1.20 0.40	21% 263%
EBITDA 3,126 2,667 1,189 Weighted avg outstanding million shares 1,777 1,766 1,754

• EPS are retro-adjusted because of capital reduction

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Copyright © Macronix International Co., Ltd.

Annual Consolidated Statements of Comprehensive Income

Unit: NTD Million (except EPS) 2017 2016 Net Sales 34,197 24,125 Gross Profit 12,635 5,836 Gross Margin% 37% 24% Operating Expenses (6,882) (6,194) Operating Income 5,753 (358) Net Non-Operating Income (Loss) (217) (113) Income Before Taxes 5,536 (471) Income Taxes Expense (benefit) 19 (224) Net Income 5,517 (247) Other Comprehensive Income 607 (77) Comprehensive Income 6,124 (324) Net Income(Loss) Attributable to : Shareholders of the Parent 5,518 (243) NoncontrollingInterests (1) (4)	YoY Change 42% 116% 13ppt 11% - - - - - - - - -
Basic EPS* -- NT$ 3.12 (0.14)	-
EBITDA 7,724 1,875 Weighted average outstanding million shares 1,766 1,748

• EPS are retro-adjusted because of capital reduction

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Copyright © Macronix International Co., Ltd.

2017 Financial Highlights

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

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

Quarterly Consolidated Balance Sheet / Cash Position

Unit: NTD Million (except BV)	2017/12/31	2017/09/30
Cash	8,633	6,883
Inventory(Net)	9,872	9,389
Property, Plant and Equipment	16,259	15,490
Total Assets	44,194	41,361
Interest bearing debt - short term	3,179	8,233
Interest bearing debt - long term	4,860	963
Total Liabilities	19,538	19,656
Shareholders' Equity	24,656	21,705
Debt Ratio (%)	44.2%	47.5%
Book Value -- NT$	13.68	12.04
Quarterly Highlight	2017/Q4	2017/Q3
Depreciation & Amortization	493	488
Capital Expenditures	(879)	(657)
Cash Flow from Operating	3,969	1,970

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Copyright © Macronix International Co., Ltd.

Consolidated Balance Sheet / Cash Position

Unit: NTD Million (except BV)	2017/12/31	2016/12/31
Cash	8,633	6,368
Inventory(Net)	9,872	7,087
Property, Plant and Equipment	16,259	15,500
Total Assets	44,194	35,545
Interest bearing debt - short term	3,179	4,681
Interest bearing debt - long term	4,860	5,636
Total Liabilities	19,538	17,225
Shareholders' Equity	24,656	18,320
Debt Ratio (%)	44.2%	48.5%
Book Value -- NT$	13.68	10.31
Annually Highlight	2017	2016
Depreciation & Amortization	1,972	2,041
Capital Expenditures	(2,220)	(923)
Cash Flow from Operating	7,034	5,421

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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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14%
20%
9,000
QoQ YoY
Change Change
12%
48% 48%
6,000
NAND +48% +165%
NOR +0% +36%
55%
ROM -23% +63%
3,000
FBG +7% +10%
25%
32%
24% * FBG (foundry business group)
9% 6% 7%
0
2016Q4 2017Q3 2017Q4
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Annual Sales Breakdown by Products (Parent Company)

Unit: NTD Million

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40,000
15% YoY
30,000
Change
NAND +86%
11%
NOR +28%
20,000 53%
ROM +81%
58%
FBG -6%
10,000
FBG (foundry business group)
25%
20%
11% 7%
0
2016 2017
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Copyright © Macronix International Co., Ltd.

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Agenda

Welcome

Welcome C.Y. Lu 2017Q4 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

 ROM business

• ≥ 64Gb products represented 68% of ROM business in 2017Q4

• Decreased Q4 ROM business due to seasonal weak demand

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Density shipment index: 2013Q1 =100 2,015
1,625
1,064
517
478
374
365 352
285
267
200
168
149
100 115 102 126 82 118 93
0
13Q1 Q2 Q3 Q4 14Q1 Q2 Q3 Q4 15Q1 Q2 Q3 Q4 16Q1 Q2 Q3 Q4 17Q1 Q2 Q3 Q4
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2,100 Density shipment index: 2013Q1 =100

1,400

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700
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Copyright © Macronix International Co., Ltd.

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Business update – NOR equivalent density shipment

Density shipment index: 2013Q1 =100

250

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202
190 195
182
180 179
171 169
161
151 151 150
134 135 134
128
125
119
125 113
100
0
13Q1 Q2 Q3 Q4 14Q1 Q2 Q3 Q4 15Q1 Q2 Q3 Q4 16Q1 Q2 Q3 Q4 17Q1 Q2 Q3 Q4
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Current status of NOR memory business

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Accumulative design-win case count
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 NOR flash business

• ≤75nm products increased to 60% of NOR sales in 17Q4

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900 LD (512K~16M)
MD (32M~128M)
HD ( ≧ 256M)
600
300
0
16Q1 Q2 Q3 Q4 17Q1 Q2 Q3 Q4
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• With the best-in-class product quality and performance, Macronix is focusing on high quality and/or high density segments

• 2018 growth drivers include applications of Data center, Telecommunications, Automotive, etc.

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≤ 55 nm
NOR (by tech & sales) ≤ 75 nm
NTD % ≧ 0.10μm
100% 1% 1% 1% 2% 2% 3% 5% 1% 3%
80% 39%
42% 46% 49% [46%] [43%] 48% 51% 46% 49%
55%
60%
40%
61%
58% 53% 50% [53%] [55%] 50% 46% 53% 48%
20% 40%
0%
16Q1 Q2 Q3 Q4 17Q1 Q2 Q3 Q4 2015 2016 2017
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Speedy growth in automotive segment

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Revenue
2500
1500
500
2011 2012 2013 2014 2015 2016 2017
-500
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Copyright © Macronix International Co., Ltd.

Business update – NOR flash breakdown

2017Q4 NOR Revenue breakdown

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Consumer,
27%
Comm, 31%
Computer,
22%
Auto , 10%
I.M.A., 10%
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*** Comm:** including handsets

• I (Industrial), M (Medical), A (Aerospace-defense)

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Computer Consumer Communication Automotive
Rev +3% QoQ -11% QoQ +1% QoQ +4% QoQ
(M)
+47% YoY +9% YoY +47% YoY +22% YoY
1,500
2,000 1,000
2,000
1,000
1,000 500
1,000
500
0 0 0
0
17Q3 17Q4 17Q3 17Q4 17Q3 17Q4 17Q3 17Q4
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Copyright © Macronix International Co., Ltd.

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Business update – NOR flash breakdown

2017 NOR Revenue breakdown

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Consumer,
29%
Comm, 31%
Computer,
22%
Auto, 10%
I.M.A, 8%
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*** Comm:** including handsets

• I (Industrial), M (Medical), A (Aerospace-defense)

Consumer

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Computer Consumer Communication Automotive
Rev
(M) +46% YoY +8% YoY +48% YoY +2% YoY
4,000 6,000 6,000 4,000
2,000 3,000 3,000 2,000
0 0 0 0
2016 2017 2016 2017 2016 2017 2016 2017
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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 case count of 36nm
500
• Because of more wafer-out and recovered 431
pricing, NAND business sequentially increased 362 [398 ]
320
48% in Q4
280
• Demand is still strong and will be the key growth 250 227
driver in 2018
123
49
0
16Q1 Q2 Q3 Q4 17Q1 Q2 Q3 Q4
SLC NAND Flash equivalent density shipment
Total density (Tb) 350,000 2017Q4 NAND
Density shipment index: 36 nm
2016Q1 =100 Revenue breakdown
75 nm
Index
500
437
120,000 175,000
311 100,000 Consumer, Comm, 60%
279 276
225 241 80,000 32%
250 199
60,000
100 40,000 Others, 8%
20,000
0 0 0
16Q1 Q2 Q3 Q4 17Q1 Q2 Q3 Q4 2015 2016 2017
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Copyright © Macronix International Co., Ltd.

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2018 capex plan

 Prudent investment in production

• Capex budget of NTD3.89B in 2018 for advanced technology and productivity improvement

• High fab utilization and expect to be full in 2018

Copyright © Macronix International Co., Ltd.

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Agenda

Welcome

2017Q4 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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For more information regarding Macronix http://www.macronix.com

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