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Nanya Technology Q4’ 2019 Investor Conference Section I – Financial Results Dr. Pei-Ing Lee, President & Spokesman Dr. Lin-Chin Su, Executive Vice President 10 Jan. 2020

2020/01/10

Safe Harbor

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The information herein and the presentation made during the conference contain forward-looking statements and are provided for information purposes only. Neither Nanya Technology Corp. nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements or undertakes duty to update the statements. You are urged to review the information provided herein carefully, and please don’t distribute, reproduce or disclose the information in whole or in part without prior written permission of NANYA Technology Corp.

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01 02

03 04 05

Q4’19 Revenue & Results

2019 Revenue & Results CAPEX & Bit Shipment Market Outlook Business Review & Outlook

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01 Q4’19 REVENUE & RESULTS

Q4’19 Financial Results Summar y

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Amount in Million NT$, except for EPS & BVPS	Q4'19	Q3'19	QoQ	Q4'18	YoY
	Unaudited	Audited		Audited
Net Sales	13,116 *100%*	14,799 *100%*	-11.4%	16,958 *100%*	-22.7%
Gross Profit (Loss)Gross Margin(%)	3,377 *25.7%*	4,137 *28.0%*	-18.4%	8,972 *52.9%*	-62.4%
Operating Income (Loss) Operating Margin(%)	1,440 *11.0%*	2,252 *15.2%*	-36.1%	7,092 *41.8%*	-79.7%
EBITDA*EBITDA Margin (%)	5,170 *39.4%*	5,957 *40.3%*	-13.2%	10,21760.2%	-49.4%
Non-operating Income (Expense)	109 *0.8%*	432 *2.9%*		893 *5.3%*
Income Tax Benefit (Expense)	-271 *-2.1%*	-479 *-3.2%*		-32 *-0.2%*
Net Income (Loss)Net Margin (%)	1,278 *9.7%*	2,205 *14.9%*	-42.1%	7,953 *46.9%*	-83.9%
Earnings Per Share (NT$)	0.42**	0.72		2.57
Book Value Per Share (NT$)	49.78***	49.71		54.02
Shares Outstanding(million shares)	3,053	3,053		3,053

Note: * EBITDA = Operating income + Depreciation & Amortization Expenses

** EPS is based on weighted average outstanding shares of 3,053M

*** BVPS is calculated based on 3,053M outstanding shares after deduction of NT$ 7.11 cash dividend

Quarterly Revenue Results

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QoQ YoY Q4 ’19 vs. Q3’19 Q4’19 vs. Q4’18 Revenue -11.4% -22.7% Shipment Decreased mid single digits % Increased high fortys% ASP Decreased low single digits% Decreased high fortys% Exchange Rate -2.1% -1.0%

Q4’19 Revenue decreased by 11.4% QoQ

Q4’19 Bit shipment decreased mid single digits% QoQ

Q4’19 ASP decreased low single digits% QoQ

Q4’19 vs. Q3’19 Results Com arison p

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	Q4’19	Q3’19	QoQ (PPT Delta) Remarks*	QoQ (PPT Delta) Remarks*
Amount in Million NT$	Unaudited	Audited
Net Sales	13,116	14,799	-11.4%	 Bit shipment decreased by mid single digits% range QoQ  ASP decreased by low single digits% QoQ  NTD/USD appreciated 2.1%
Gross Profit (Loss) Gross Margin(%)	3,377 *25.7%*	4,137 *28.0%*	-2.3%	 Q4’19 Gross profit decreased NT$ 760M, mainly due to shipment & ASP decrease & FX impact
Operating Expense	1,937 *14.8%*	1,885 *12.7%*	+2.1%	 SG&A increased NT$ 22M, R&D expense increased NT$ 30M
Operating Income (Loss) Operating Margin(%)	1,440 *11.0%*	2,252 *15.2%*	-4.2%	 Q4’19 OP Income decreased NT$ 812M
Net Income (Loss) Net Margin (%)	1,278 *9.7%*	2,205 *14.9%*	-5.2%	 Net Income decreased NT$ 927M • Primarily from OP Income decrease of NT$ 812M • FX losses & others:NT$ 323M unfavorable • Income tax: NT$ 208M favorable

*PPT: Percentage Points

Quarterly Financial Highlights

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Revenue (Million NT$) Net Income (Million NT$) Gross Margin(%) Operating Margin(%)

59%

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55%
53%
52% 51%
50%
47%
44% 44% 44%
42% 41%
40%
39%
20,000 40%
35%
33% 33%
32% 32%
31% 31%
28% 28%
27% 13,116
25%
23%
21% 25.7%
18%
17%
15%
11.0%
1,278
- 0%
Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19
Revenue, Net Income (Million NT$)
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Operating Expenses

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SG&A Expenses

Unaudited number

(Million NT$)

R&D Expenses

(Million NT$)

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* Unaudited number
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＊
NT$4,887 NT$4,926
＊
Q4 1,318 1,374
＊
Q3 1,336 1,345
＊
Q2 1,059
1,358
Q1 876 1,148
2018 2019
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2018 2019

Note: 2019 SG&A expenses decreased NT$ 323million mainly due to expense decrease.

Note: 2019 R&D expenses increased NT$ 39million, continued invested resources on the both new process technology and product development.

Cash Flows

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2019 Cash Flow

Cash Flows
	Q4'19	Q3'19
Unit: Million NT$	Unaudited & Consolidated	Audited & Consolidated
Beginning Balance	43,184	60,861
Cash from Operating Activities	5,013 -840 -3,210*	5,103
Capital expenditures		-1,106
Financial Activities		-21,673**
Ending Balance	44,147	43,184
Free Cash Flow(1)	4,173	3,996

(1) Free Cash Flow = Cash from operating activities – Capital expenditures

NT$ 2.05 billion(B) investment to acquire FATC shares, and NT$ 1.1B currency translation due to NTD appreciation

** Mainly from dividend payout of NT$ 21.7B

Unit: Million NT$

		-5,496
	17,623
	Cash from Operating Activities	Capital Expenditures	-25,364
			Dividend and
		L/T investment
57,384				44,147

2019/1/1 2019/12/31 Beginning Ending Balance Balance

2019 Free Cash Flow NT$12,127 Million

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02 2019 REVENUE & RESULTS

2019 Consolidated Income Statement

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	2019	2018	YoY
Amount: Million NT$	Unaudited	Audited
Net Sales	51,727 100.0%	84,722 100.0%	-38.9%
Cost of Goods Sold	35,233 68.1%	38,106 45.0%
Gross Margin	16,494 31.9%	46,616 55.0%	-64.6%
SG&A Expenses	2,051 4.0%	2,373 2.8%
R&D Expenses	4,926 9.5%	4,887 5.8%
Operating Income	9,517 18.4%	39,355 46.5%	-75.8%
Non-operating Income (Exp.)	1,707 3.3%	2,229 2.6%
Income before Tax	11,224 21.7%	41,584 49.1%	-73.0%
Income Tax Benefit (Expense)	-1,407 -2.7%	-2,223 -2.6%
Net Income	9,816 19.0%	39,361 46.5%	-75.1%
EPS(NT$)	3.22	12.80
Book Value Per Share	49.78	54.02

2019 vs. 2018 Results Comparison

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Amount in Million NT$	2019	2018	YoY (PPT Delta)*	Remarks
	Unaudited	Audited
Net Sales	51,727	84,722	-38.9%	 ASP decreased by high-fortys % YoY  Bit shipment increased by low-teens YoY  FX positive impact +2.6%
Gross Income (Loss) Gross Margin(%)	16,494 31.9%	46,616 55.0%	-23.1%	 Gross Income decreased mainly due to ASP decrease
Operating Income (Loss) Operating Margin(%)	9,517 18.4%	39,355 46.5%	-28.1%	 Operating Income decreased mainly due to ASP decrease
Net Income (Loss) Net Margin (%)	9,816 19.0%	39,362 46.5%	-27.5%	 Net Income decreased by NT$ 29,545M mainly due to: • Operating Income decreased NT$ 29,838M • FX loss unfavorable NT$ 1,366M (2019: NT$ -186M, 2018: NT$ 1,180M) • Other income favorable NT$ 272M (2019: NT$ 1,303M, 2018: NT$ 1,030M) • Income tax favorable 816M (2019: NT$ 1,407M, 2018: NT$ 2,223M)

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03 CAPEX & BIT SHIPMENT

CAPEX & Bit Shipment

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NT$ Billion
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29.4
20.4
5.5
2017 2018 2019
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CAPEX

Mid-thirties %

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Low-teens% Approx.
teens%
2018 2019 2020(E)
Bit Shipment (YoY)
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Capital 2019 CAPEX NT$ 5.5Billion (B) 
Expenditure (CAPEX) 2020 CAPEX plan will be announced after BoD approval
Q4’19 Bit shipment decreased by mid single digits %
2019 YoY bit shipment grew by low-teens%

Bit Shipment

Q1’20 QoQ bit shipment expected to be low single digits increase
2020 YoY bit shipment growth guided for approx. teens%
Continue allocating 5~10% capacity to technology & product development

2020/01/10

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04 MARKET OUTLOOK

Market Outlook (Year 2020)

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Macro : Optimistic market outlook throughout 2020, inventory normalized, and supply and demand gradually stabilized
Outlook
Sectors Outlook : Server demand recovery, mobile DRAM content growth, healthy outlook on PC shipment and consumer demand
Supply  Conservative 2019 Capex, discipline bit supply growth in 2020
Mobile Market: 2020 smartphone unit shipment grow slightly, 5G phone with 8GB DRAM sales increase; 12GB units increase in high-end models of Android phones
Server Market: Solid server demand growth. Demand increase with 5G base station deployment, 64GB high-density module, and edge computation
Demand  PC Market: Strong enterprise and gaming PC demand. Dual monitors PC, 5G laptops, creators (enhanced independent graphics capabilities) sustain DRAM demand. Microsoft Windows transition and Intel new processors helping new demand
Consumer Market: DRAM demand in consumer segments including TV, set-top box, SSD, gaming, smart speaker, routers and smart watch…etc. to grow steadily

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05 BUSINESS REVIEW & OUTLOOK

Nanya Business Review & Outlook

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Complete DDR4, LPDDR4/X, LPDDR3 product portfolio, and begin volume
shipment in server market
Acquired additional 13% FATC shares, total holding 32%
Optimistic market outlook throughout 2020
2020 bit shipment will increase teens%, grow in-line with market demand growth
Successful DRAM proprietary core cell development based on 10nm class
process technology

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Section II – Technical Briefing

2020/01/10

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DRAM `01` R&D Strategy

NTC 03 Patent Portfolio

Advanced 02 DRAM Cell Features

DRAM 04 Technology Roadmap

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NTC DRAM R&D Strategy

To enable 30% productivity gain per technology node

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30%
30%
20nm 1Anm 1Bnm
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2020/01/10

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Advanced DRAM Cell Features

Active Area minimum pitch 6F[2] cell design

AA-min Cell Design

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unit
Bit Lines
cell
(BL)
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Active Area (AA)

Key Features

 Self-aligned epitaxial Si growth to enlarge cell contact area

 Cell landing pads to enable hexagonal close-packed (HCP) capacitors

 Bit-line air gaps to improve signal margin

Word Lines (WL)

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NTC Patent Portfolio

NTC has accumulated more than 4000 patents. This established strong patent portfolio is beneficial to NTC technology development.

NTC Accumulated Patent Count

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Count NTC Accumulated Patent Count
4500 4198
4000 3739 459 Increased
3500 3237 502
3000 2766 471
2500 478
2000
3739
3237 Accumulated
1500
2766
2288
1000
500
0
20161 20172 20183 20194 Year
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2020/01/10

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DRAM Technology Roadmap

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1A 1B 1C Active Area minimum pitch

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Thanks & uestions Q

2020/01/10

Q4’19 Consolidated Income Statement

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	Q4'19	Q3'19	QoQ	Q4’18	YoY
Amount: Million NT$	Unaudited	Audited		Audited
Net Sales	13,116 100.0%	14,799 100.0%	-11.4%	16,958 100.0%	-22.7%
Cost of Goods Sold	9,739 74.3%	10,662 72.0%		7,986 47.1%
Gross Margin	3,377 25.7%	4,137 28.0%	-18.4%	8,972 52.9%	-62.4%
SG&A Expenses	562 4.3%	540 3.6%		562 3.3%
R&D Expenses	1,374 10.5%	1,345 9.1%		1,318 7.8%
Operating Income	1,440 11.0%	2,252 15.2%	-36.1%	7,092 41.8%	-79.7%
Non-operating Income (Exp.)	109 0.8%	432 2.9%		893 5.3%
Income before Tax	1,549 11.8%	2,684 18.1%	-42.3%	7,985 47.1%	-80.6%
Income Tax Benefit (Expense)	-271 -2.1%	-479 -3.2%		-32 -0.2%
Net Income	1,278 9.7%	2,205 14.9%	-42.1%	7,953 46.9%	-83.9%
EPS(NT$)	0.42	0.72		2.57
Book Value Per Share	49.78	49.71		54.02

AI assistant

NTC Earnings Release 2019

52061_rns_2020-01-10_2ec093d8-e884-4e6f-accd-fbeb52ca92fa.pdf

Safe Harbor

Q4’19 Revenue & Results

Q4’19 Financial Results Summar y

Quarterly Revenue Results

Q4’19 Revenue decreased by 11.4% QoQ

Q4’19 vs. Q3’19 Results Com arison p

Quarterly Financial Highlights

Operating Expenses

SG&A Expenses

R&D Expenses

Cash Flows

2019 Cash Flow

2019 Consolidated Income Statement

2019 vs. 2018 Results Comparison

CAPEX & Bit Shipment

CAPEX

Mid-thirties %

Market Outlook (Year 2020)

Nanya Business Review & Outlook

Section II – Technical Briefing

DRAM `01` R&D Strategy

NTC DRAM R&D Strategy

Advanced DRAM Cell Features

Active Area minimum pitch 6F[2] cell design

AA-min Cell Design

Key Features

Word Lines (WL)

NTC Patent Portfolio

NTC Accumulated Patent Count

DRAM Technology Roadmap

Thanks & uestions Q

Q4’19 Consolidated Income Statement

AI assistant

NTC — Earnings Release 2019

52061_rns_2020-01-10_2ec093d8-e884-4e6f-accd-fbeb52ca92fa.pdf

Safe Harbor

Q4’19 Revenue & Results

Q4’19 Financial Results Summar y

Quarterly Revenue Results

Q4’19 Revenue decreased by 11.4% QoQ

Q4’19 vs. Q3’19 Results Com arison p

Quarterly Financial Highlights

Operating Expenses

SG&A Expenses

R&D Expenses

Cash Flows

2019 Cash Flow

2019 Consolidated Income Statement

2019 vs. 2018 Results Comparison

CAPEX & Bit Shipment

CAPEX

Mid-thirties %

Market Outlook (Year 2020)

Nanya Business Review & Outlook

Section II – Technical Briefing

DRAM 01 R&D Strategy

NTC DRAM R&D Strategy

Advanced DRAM Cell Features

Active Area minimum pitch 6F[2] cell design

AA-min Cell Design

Key Features

Word Lines (WL)

NTC Patent Portfolio

NTC Accumulated Patent Count

DRAM Technology Roadmap

Thanks & uestions Q

Q4’19 Consolidated Income Statement

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NTC Earnings Release 2019

DRAM `01` R&D Strategy