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NTC Interim / Quarterly Report 2020

Jul 10, 2020

52061_rns_2020-07-10_1fdb0f5b-b233-4ab6-ac1f-e2826d45a8ad.pdf

Interim / Quarterly Report

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Nanya Technology Q2 2020 Investor Conference

Dr. Pei-Ing Lee, President & Spokesman 10 July 2020

2020/07/10 ︱© 2020 Nanya Technology Corporation. All Rights Reserved.

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Safe Harbor

The information herein and the presentation made during the conference contain forward-looking statements and are provided for information Neither nor other purposes only. Nanya Technology Corp. any person assumes responsibility for the accuracy and completeness of the forwardstatements or undertakes to the statements. You are looking duty update 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.

2020/07/10 ︱© 2020 Nanya Technology Corporation. All Rights Reserved.

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Q2’20 Revenue & Results

CAPEX & Bit Shipment Response to COVID-19 Market Outlook Business Review & Outlook

2020/07/10 ︱© 2020 Nanya Technology Corporation. All Rights Reserved.

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2020/07/10 ︱© 2020 Nanya Technology Corporation. All Rights Reserved.

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Q2’20 Financial Results Summary

Amount in Million NT$,
except for EPS & BVPS		 Q2’20
Unaudited
Q1’20
Audited
QoQ
Q2’19
Audited
YoY		 Q2’20
Unaudited
Q1’20
Audited
QoQ
Q2’19
Audited
YoY
Net Sales 16,489
100%		 14,419
100%
14.4%
12,441
100%
32.5%
Gross Profit (Loss)Gross Margin(%) 5,042
30.6%		 3,436
23.8%
46.7%
4,348
34.9%
16.0%
Operating Income (Loss)
Operating Margin(%)		 3,229
19.6%		 1,832
12.7%
76.2%
2,805
22.5%
15.1%
EBITDA*EBITDA Margin (%) 6,784
41.1%		 5,437
37.7%
24.8%
6,427
51.7%
5.6%
Non-operating Income (Expense) 198
1.2%		 492
3.4%
600
4.8%
Income Tax Benefit (Expense) -216
-1.3%		 -395
-2.7%
-657
-5.3%
Net Income (Loss)Net Margin (%) 3,211
19.5%		 1,928
13.4%
66.5%
2,748
22.1%
16.9%
Earnings Per Share (NT$) 1.05** 0.63
0.90
Book Value Per Share (NT$) 49.62*** 50.40
49.01
Shares Outstanding(million shares) 3,061 3,054
3,040

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

*** BVPS is calculated based on 3,072M outstanding shares after deduction of NT$ 1.5 cash dividend

  • ** EPS is based on weighted average outstanding shares of 3,061M

2020/07/10 ︱© 2020 Nanya Technology Corporation. All Rights Reserved.

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Quarterly Revenue Results

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QoQ
Q2’20 vs. Q1’20
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YoY
Q2’20 vs. Q2’19
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Revenue

+14.4%

+32.5%

Increased mid-to-high single Shipment Increased approx. fifties% digits% Increased mid-to-high single ASP Decreased high single digits% digits% -0.5% -3.4%

Exchange Rate

  • Q2’20 Revenue increased by 14.4% QoQ

  • Q2’20 Bit shipment increased mid-to-high single digits% QoQ

  • Q2’20 ASP increased mid-to-high single digits QoQ

2020/07/10 ︱© 2020 Nanya Technology Corporation. All Rights Reserved.

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Q2’20 vs. Q1’20 Results Comparison

Q2’20 vs. Q1’20 Results Comparison Q2’20 vs. Q1’20 Results Comparison Q2’20 vs. Q1’20 Results Comparison
Q2’20
Unaudited
Q1’20
Audited
QoQ
(PPT* Delta)
Remarks
Amount in Million NT$
Net Sales 16,489 14,419
+14.4%

Bit shipment increased by mid-to-high
single digits QoQ

ASP shipment increased by mid-to-high
single digits QoQ

FX negative impact 0.5%
Gross Profit (Loss)
Gross Margin(%)		 5,042
30.6%		 3,436
23.8%
+6.8%

Q2’20 Gross profit increased NT$ 1,606M,
mainly due to shipment and ASP increase,
and cost improvement
Operating Expense 1,813
11.0%		 1,604
11.1%
-0.1%

SG&A increased NT$ 41M, R&D expense
increased NT$ 168M
Operating Income (Loss)
Operating Margin(%)		 3,229
19.6%		 1,832
12.7%
+6.9%

Q2’20 OP Income increased NT$ 1,397M
︱© 2020 Nanya Tech
2020/07/10
Net Income (Loss)
Net Margin (%)		 nologyCorporation. All Ri
3,211
19.5%		 ghts Reserved.
PPT: Percentage Points
1,928
13.4%*
+6.1%

Net Income increased NT$ 1,283M
•
Primarily from OP Income increase
of NT$ 1,397M
•
FX loss : NT$ 280M unfavorable
(Q2’20: -202M; Q1’20: +78M)
•
Income tax: NT$ 180M favorable
(Q2’20: 216M; Q1’20: 395M)

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Quarterly Financial Highlights

2020/07/10 ︱© 2020 Nanya Technology Corporation. All Rights Reserved.

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Operating Expenses

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SG&A Expenses R&D Expenses
(Million NT$) * Unaudited number (Million NT$) * Unaudited number
1,374 Q4
562 1,345 Q3
Q4
＊
540 Q3
＊ 1,059 Q2 1,239
574
483 Q2
465 Q1 533 1,148 Q1 1,071
2019 2020 2019 2020
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Note: Q2’20 R&D expenses increased NT$ 168million

2020/07/10 ︱© 2020 Nanya Technology Corporation. All Rights Reserved.

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50,971

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Cash Flows

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Unit: Million NT$ Beginning Balance 47,532 44,149 Cash from Operating 4,706 4,080 Activities Capital Expenditures -1,020 -838 Financing & Effect of Exchange Rate -247 141 Changes Ending Balance 50,971 47,532 Free Cash Flow[(1)] 3,686 3,242*

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

  • +NT$ 513 million from exercise of ESOP;

2020 1H Cash Flow

Unit: Million NT$

-1,858 8,786 Capital Expenditures -106 Cash from Financing Operating & Effect of Activities Exchange Rate Changes 44,149

Jan. 1, 2020 Jun. 30, 2020 Beginning Ending Balance Balance

  • -NT$ 788million from exchange differences on translation of foreign F/S

2020/07/10 ︱© 2020 Nanya Technology Corporation. All Rights Reserved.

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2020/07/10 ︱© 2020 Nanya Technology Corporation. All Rights Reserved.

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CAPEX & Bit Shipment

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NT$ Billion
20.4
15.76
5.5
2018 2019 2020(E)
CAPEX
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Mid-thirties%
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Approx.
twenties%
Low-
teens%
2018 2019 2020(E)
Bit Shipment (YoY)
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Capital Expenditure (CAPEX)

  • Q2’20 CAPEX NT$ 1,020 million

 2020 CAPEX plan revised up to NT$ 15.76 billion(B) from NT$ 9.2B, mainly for 10nm-class piloting line establishment

Bit Shipment

  • Q2’20 Bit shipment increased by mid-to-high single digits% QoQ

  • Q3’20 QoQ bit shipment expected to be flat

  • 2020 YoY bit shipment growth in twenties %

2020/07/10 ︱© 2020 Nanya Technology Corporation. All Rights Reserved.

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2020/07/10 ︱© 2020 Nanya Technology Corporation. All Rights Reserved.

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Response to COVID-19

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COVID-19
Status
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  • Taiwan: COVID-19 pandemic situation calms down and restraints gradually unlocked

 International: COVID-19 outbreaks in the United States, Brazil and India have been severe

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Supply
Chain Mgmt.
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  • Production line and subcontractors are all located in Taiwan, not affected by COVID-19

  • Raw materials currently not affected

  • Shipment and transport of the supply chain are normal

  • Increase inventory of materials and chemicals

  • Minor equipment delivery delay, no impact on overall operation

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Customer
Support
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  • Support and services to our customers with goal to assist our customers for stable production

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Next
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  • Continue monitor the future development of COVID-19 and take appropriate measure to assure the overall normal operation

2020/07/10 ︱© 2020 Nanya Technology Corporation. All Rights Reserved.

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2020/07/10 ︱© 2020 Nanya Technology Corporation. All Rights Reserved.

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Q3’20 Market Outlook

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Outlook
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  • Short term: Solid remote work, online learning and e-commerce demand; healthy enterprise datacenters outlook; PC, SSDs and networking momentum continue into Q3, smartphones and consumer electronics to recover from Q3 onward. However, COVID-19, macro economy and trade disputes may slow down short term demand growth

  • Long term: healthy demand trend from A.I., 5G, cloud / edge computing, autonomous car and IoT, etc.

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Supply
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  • Conservative CAPEX in 1H’20 resulted in limited bit supply growth in 2H’20

  • 2021 bit supply growth depends on DRAM suppliers CAPEX plan in 2H’20

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Demand
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  • Mobile Market: COVID-19, entity list ban from U.S. Commerce Department negatively impacted smartphone shipment in 1H’20. Demand to improve as major smartphone suppliers launch new models in 2H’20

  • Server Market: 1H’20 demand strong due to remote work, online learning and e-commerce. In 2H’20, enterprise type datacenter remains solid, yet, advertisement-oriented datacenters expected to be soft

  • PC Market: Notebook shipment to be flat yoy. Shipment in Q3’20 at similar level in Q3’19. Chromebooks demand to increase in Q3’20

  • Consumer Market: networking, SSDs and IoT demand continue into Q3’20, DTV & STB expected to recover in Q3 onward. However, COVID-19 pandemic and global economy uncertainties may impact automotive demand

︱© 2020 Nanya Technology Corporation. All Rights Reserved.

2020/07/10

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2020/07/10 ︱© 2020 Nanya Technology Corporation. All Rights Reserved.

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Nanya Business Review & Outlook

  • Q2’20 performance & supply chain were not affected by the COVID-19 pandemic

  • Mixed market outlook in 2H’20

  • Cash dividends of NT$ 4.6B (approx. NT$ 1.5 per common share) scheduled to

  • be distributed on July 24, 2020

  • 1st generation 10nm-class node on track to pilot in 2H’20; 2nd generation 10nm-

  • class node development on schedule

2020/07/10 ︱© 2020 Nanya Technology Corporation. All Rights Reserved.

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Thanks & uestions Q

2020/07/10 ︱© 2020 Nanya Technology Corporation. All Rights Reserved.

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Q2’20 Consolidated Income Statement

Q2’20 Consolidated Income Statement Q2’20 Consolidated Income Statement Q2’20 Consolidated Income Statement
Q2’20
Unaudited
Q1’20
Audited
QoQ
Q2’19
Audited
YoY
Amount: Million NT$
Net Sales 16,489
100.0%		 14,419
100.0%
14.4%
12,441
100.0%
32.5%
Cost of Goods Sold 11,447
69.4%		 10,983
76.2%
8,093
65.1%
Gross Margin 5,042
30.6%		 3,436
23.8%
46.7%
4,348
34.9%
16.0%
SG&A Expenses 574
3.5%		 533
3.7%
483
3.9%
R&D Expenses 1,239
7.5%		 1,071
7.4%
1,059
8.5%
Operating Income 3,229
19.6%		 1,832
12.7%
76.2%
2,805
22.5%
15.1%
Non-operating Income (Exp.) 198
1.2%		 492
3.4%
600
4.8%
Income before Tax 3,427
20.8%		 2,324
16.1%
47.5%
3,405
27.4%
0.7%
Income Tax Benefit (Expense) -216
-1.3%		 -395
-2.7%
-657
-5.3%
Net Income 3,211
19.5%		 1,928
13.4%
2,748
22.1%
EPS(NT$) 1.05 0.63
0.90
Book Value Per Share 49.62 50.40
49.01

2020/07/10 ︱© 2020 Nanya Technology Corporation. All Rights Reserved.

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