Macronix — Interim / Quarterly Report 2019

Feb 24, 2020

Macronix International Co., Ltd. Fourth Quarter 2019 Results February 18, 2020

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Safe Harbor Statement

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

2019Q4 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

2019Q4 2019Q3 2018Q4 Unaudited Audited Audited Revenue NT$ 9,581 million NT$ 11,906 million NT$ 8,981 million Gross margin 26% 30% 28% Operating margin 8% 15% 7%

Gross margin 26% Operating margin 8%

Copyright © Macronix International Co., Ltd.

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Financial Highlights

2019 2018 Unaudited Audited

Revenue

NT$ 34,995 million NT$ 36,953 million

Gross margin 28% 38% Operating margin 9% 18%

Copyright © Macronix International Co., Ltd.

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Agenda

Welcome

Welcome C.Y. Lu 2019Q4 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：NT$ Million Net Sales Gross Profit Gross Margin Operating Expenses Operating Income Operating Margin Net Non-Operating Income (Loss) Income Before Taxes Income Taxes Expense (benefit) Net Income Other Comprehensive Income Comprehensive Income Net Income(Loss) Attributable to : Shareholders of the Parent NoncontrollingInterests	2019/Q4 Unaudited 2019/Q3 Audited 2018/Q4 Audited	QoQ Change YoY Change (20%) 7% (30%) (1%) (4ppt*) (2ppt) (3%) (9%) (57%) 24% (7ppt) 1ppt - - (68%) (81%) - - (59%) (74%) - - (56%) (65%) (59%) (74%)
	9,581 11,906 8,981 2,506 3,576 2,535 26% 30% 28% (1,744) (1,797) (1,921) 762 1,778 614 8% 15% 7% (168) 79 2,504 594 1,857 3,118 (160) 4 250 754 1,853 2,867 50 (17) (596) 803 1,836 2,271 754 1,853 2,867 0 0 (0)
Basic EPS -- NT$	0.41 1.01 1.57	(59%) (74%)
EBITDA Weighted avg outstanding million shares	1,405 2,604 3,730 1,836 1,830 1,822

• ppt: percentage points

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Annual Consolidated Statements of Comprehensive Income

Unit: NT$ Million Net Sales Gross Profit Gross Margin Operating Expenses Operating Income Operating Margin Net Non-Operating Income (Loss) Income Before Taxes Income Taxes Expense (benefit) Net Income Other Comprehensive Income Comprehensive Income Net Income(Loss) Attributable to : Shareholders of the Parent NoncontrollingInterests	2019 Unaudited 2018 Audited	YoY Change (5%) (31%) (10ppt*) (12%) (52%) (9ppt) - (67%) - (66%) - (60%) (67%) -
	34,995 36,953 9,615 13,926 28% 38% (6,517) (7,417) 3,099 6,509 9% 18% (73) 2,755 3,026 9,264 13 272 3,013 8,993 241 (943) 3,254 8,050 3,012 8,993 1 (0)
Basic EPS -- NT$	1.64 4.94	(67%)
EBITDA Weighted average outstanding million shares	5,954 11,528 1,832 1,822

• ppt: percentage points

Copyright © Macronix International Co., Ltd.

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2019Q4 Financial Highlights

2019Q4 Sales = NT$ 9,581Million -20% QoQ +7% YoY

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Gross Profit
Sales
36,953 34,995 NT$ Million
NT$ Million 13,926 9,615
4,500
12,000
9,000
3,000
6,000
1,500
3,000
0 0
18Q1 Q2 Q3 Q4 19Q1 Q2 Q3 Q4 18Q1 Q2 Q3 Q4 19Q1 Q2 Q3 Q4
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Copyright © Macronix International Co., Ltd.

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2019Q4 Financial Highlights

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2019Q4 2018Q4
Gross Margin 26% 28%
Basic EPS -- NT$ 0.41 1.57
Basic EPS
Gross Margin
(retro-adjusted)
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% NT$ 4.94
2.0
50%
43%
42% [45%]
1.57 1.64
38%
35%
34%
1.28
28% 1.04
27% 27% [30%] 26% 1.05 1.01
25%
1.0
25%
0.41
0.08 [0.14 ]
0.0
0%
18Q1 Q2 Q3 Q4 19Q1 Q2 Q3 Q4
17Q1 Q2 Q3 Q4 18Q1 Q2 Q3 Q4 19Q1 Q2 Q3 Q4
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Copyright © Macronix International Co., Ltd.

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Quarterly Consolidated Condensed Balance Sheet / Cash Flow

Unit: NT$ Million	2019/12/31 Unaudited	2019/09/30 Audited
Cash	8,725	7,957
Inventory(Net)	12,810	15,126
Property, Plant and Equipment	29,366	28,353
Total Assets	60,657	63,662
Interest bearing debt - short term	4,817	5,418
Interest bearing debt - long term	9,774	9,491
Total Liabilities	28,164	32,040
Shareholders' Equity	32,493	31,623
Debt Ratio	46.4%	50.3%
Book Value -- NT$	17.68	17.20
Quarterly Highlight	2019/Q4	2019/Q3
Depreciation & Amortization	755	695
Capital Expenditures	(1,722)	(4,247)
Cash Flow from Operating	3,017	881

Copyright © Macronix International Co., Ltd.

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Consolidated Condensed Balance Sheet / Cash Flow

Unit: NT$ Million	2019/12/31 Unaudited	2018/12/31 Audited
Cash	8,725	13,589
Inventory(Net)	12,810	17,949
Property, Plant and Equipment	29,366	19,309
Total Assets	60,657	59,049
Interest bearing debt - short term	4,817	3,335
Interest bearing debt - long term	9,774	5,885
Total Liabilities	28,164	27,688
Shareholders' Equity	32,493	31,360
Debt Ratio	46.4%	46.9%
Book Value -- NT$	17.68	17.06
Annually Highlight	2019	2018
Depreciation & Amortization	2,731	2,120
Capital Expenditures	(12,788)	(4,889)
Cash Flow from Operating	4,543	10,093

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Quarterly Sales Breakdown by Products (Parent Company)

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Unit: NT$ Million
12,000
44%
9,000
51%
52% QoQ YoY
6,000 Change Change
Flash -6% +6%
ROM -34% +2%
51%
FBG -24% +12%
3,000
43%
44% * FBG (foundry business group)
5% 5% 5%
0
2018Q4 2019Q3 2019Q4
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Annual Sales Breakdown by Products (Parent Company)

Unit: NT$ Million

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40,000
YoY
30,000
Change
62%
55%
Flash -17%
20,000
ROM +19%
FBG -9%
10,000
39%
31% * FBG (foundry business group)
7% 6%
0
2018 2019
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Copyright © Macronix International Co., Ltd.

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Agenda

Welcome

Welcome C.Y. Lu 2019Q4 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

 ROM business

• ≥ 64Gb products represented 73% of ROM business in 2019Q4

4,000

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3,564
Density shipment index: 2015Q1 =100
2,333
2,274
1,811
1,602
1,292
1,153
1,023
846
687 654
411 380
298
134 159
100 65 94 74
0
15Q1 Q2 Q3 Q4 16Q1 Q2 Q3 Q4 17Q1 Q2 Q3 Q4 18Q1 Q2 Q3 Q4 19Q1 Q2 Q3 Q4
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2,000

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Business update – Flash

Density shipment index: 2015Q1 =100

600

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506
443
386
377
351
346 342
309 305 305
289
300 271 266 272
257
186
158
141 141
100
0
15Q1 Q2 Q3 Q4 16Q1 Q2 Q3 Q4 17Q1 Q2 Q3 Q4 18Q1 Q2 Q3 Q4 19Q1 Q2 Q3 Q4
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Copyright © Macronix International Co., Ltd.

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Current status of Flash memory business

 Flash business

• ≤75nm products increased to 74% of NOR sales in 19Q4

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4,872
Accumulative design-win case count
4,068 [4,246 4,467 4,703 ]
3,728
3,170
2,676
1,624 [1,862 ][2,021 2,239 ]
1,375
1,139
756
349
0
16Q1 Q2 Q3 Q4 17Q1 Q2 Q3 Q4 18Q1 Q2 Q3 Q4 19Q1 Q2 Q3 Q4
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5,000
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2,500
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Copyright © Macronix International Co., Ltd. 17
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Business update – NOR sales breakdown (Parent Company)

NOR sales breakdown b densit y y

	12%		12%		13%		16%		19%		22%		23%		25%		30%		29%		30%		36%	(
	48%		50%		47%
							52%
									48%
											44%
													45%
															43%
																			40%
																	42%				40%
																							38%
	40%				40%
			38%
											34%
							32%		33%				32%		32%
																			31%		30%
																	28%
																							26%

Copyright © Macronix International Co., Ltd.

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Business update – NOR sales breakdown (Parent Company)

2019Q3 NOR sales breakdown 2019Q4 NOR sales breakdown

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Consumer, Comm, Consumer, Comm,
21% 31% 18% 34%
Computer,
23% Computer,
I.M.A., Auto , 14% 23% I.M.A., Auto , 14%
11%
11%
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• Comm: communication; including handsets

• Auto: automotive

• I: Industrial, M: Medical, A: Aerospace-defense

2019Q4 NOR sales comparison

Computer +1% QoQ +8% YoY

Consumer Communication Automotive I.M.A -14% QoQ +14% QoQ -3% QoQ -6% QoQ +7% YoY +21% YoY +20% YoY +2% YoY

Copyright © Macronix International Co., Ltd.

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Business update – NOR sales breakdown (Parent Company)

2018 NOR sales breakdown

2019 NOR sales breakdown

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Consumer, Comm, Consumer,
Comm, 33%
21% 30% 19%
Computer,
Computer,
23% Auto , 13% 22% Auto, 14%
I.M.A, 13%
I.M.A, 12%
Comm: communication; including handsets
Auto: automotive
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• I: Industrial, M: Medical, A: Aerospace-defense

2019 NOR sales comparison

Computer Consumer Communication Automotive I.M.A -6% YoY -14% YoY +5% YoY +4% YoY -14% YoY

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Agenda

Welcome

Welcome C.Y. Lu 2019Q4 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