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TXC Interim / Quarterly Report 2019

Sep 2, 2019

52274_rns_2019-09-02_269266f1-c58b-4069-802c-d496a46682b9.pdf

Interim / Quarterly Report

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Investor Conference September, 2019

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TXC Confidential and Proprietary

Disclaimer

  • Except for statements in respect of historical matters, the statements in this release are forwardlooking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual performance, financial condition or results of operations of TXC to be materially different form what may be implied by such forwardlooking statements.

  • The financial forecasts and forward-looking statements in the release reflect the current belief of TXC as of the date of this release and TXC undertakes no obligation to update these forecasts and forward-looking statements for events or circumstances that occur subsequent to such date.

  • The statements in respect of historical matters may contain unaudited information, which may have certain deficiency or weakness so as not to fairly present financial condition or the results of operations of TXC.

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TXC Confidential and Proprietary

1

Financial Performance P&L, EPS, DPS, CAPEX

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TXC Confidential and Proprietary

2

Sales & Shipping Records

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TXC Confidential and Proprietary

Quarterly Performance

Unit: $NT in Million

2017 2018 2019’H1 NT$ 8,782M NT$ 8,156M NT$ 3,568M (yoy -8.9%) (yoy -7.1%) (yoy -4.4%)

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TXC Confidential and Proprietary

4

Quarterly Performance

Gross Margin (%)

2018 2019’H1 2017 NT$ 1,828M NT$ 795M NT$ 2,186M (yoy -16.4%) (yoy -4.1%) (yoy -14.4%)

Gross Profit (NT$ Million)

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TXC Confidential and Proprietary

5

Net Margin (%)

Net Profit

Quarterly Performance

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(NT$ Million)

2017 2018 2019’H1 NT$ 963M NT$ 644M NT$ 214M (yoy -5.3%) (yoy -33.1%) (yoy 7.3%)

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TXC Confidential and Proprietary

6

Income Statement

Unit：$NT in Million 2016 2017 2018 2019 Q1 2019 Q2 2019 H1
Net Revenue 9,637 8,782 8,156 1,623 1,945 3,568
Gross Profit 2,554 2,186 1,828 339 456 795
Operating Profit 1,114 802 533 58 133 191
Non-Operating Items 78 273 200 29 28 57
Income before Tax Profit 1,192 1,075 733 86 161 247
Net Incom
to Shareholders of the Parent Company		 1,016 963 644 78 137 214
Basic EPS (NT$) 3.28 3.11 2.08 0.25 0.44 0.69
Gross Margin(%) 26.5% 24.9% 22.4% 20.9% 23.4% 22.3%
Operating Margin(%) 11.6% 9.1% 6.5% 3.6% 6.8% 5.3%
OPEX(%) 14.9% 15.8% 15.9% 17.4% 16.6% 16.9%
Income before Tax Profit(%) 12.4% 12.2% 9.0% 5.3% 8.3% 6.9%
Net Profit Margin(%) 10.5% 11.0% 7.9% 4.8% 7.0% 6.0%

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TXC Confidential and Proprietary

7

Balance Sheet

Unit：$NT Million 2016 2017 2018 2019 Mar. 2019 Jun.
Cash & Marketable Securities 2,093 2,331 1,426 1,771 1,942
NR+AR 3,085 2,651 2,726 2,221 2,432
Inventories 1,520 1,504 1,817 1,853 1,843
Current Assets 8,818 7,983 7,117 6,956 7,370
PP&E 4,278 4,370 4,111 4,070 3,953
Total Assets 14,842 13,403 12,562 12,409 12,731
Current Liabilities 3,156 2,277 2,089 1,947 2,567
Non-curent Liabilities 1,913 1,961 1,722 1,478 1,722
Total Liabilities 5,069 4,238 3,811 3,425 4,289
Total Shareholders' Equity 9,773 9,165 8,751 8,984 8,442
A/R Turnover Days 114 119 120 139 132
Inventory Turnover Days 79 84 96 130 120
A/P Turnover Days 65 73 74 79 79
Current Ratio(%) 279.4% 350.6% 340.7% 357.4% 287.1%
Debt Ratio(%) 34.2% 31.6% 30.3% 27.6% 33.7%
Book Value Per Share($NT) 31.55 29.59 28.25 29.00 27.25

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TXC Confidential and Proprietary

8

EPS and DPS

Unit: $NT

0
0.5
1
1.5
2
2.5
3
3.5
4		 2.2
2.2
2.2
2.5
2.5
2.8
2.5
2.0
Earnings Per Share
Cash Dividends Per Share		 2.2
2.2
2.2
2.5
2.5
2.8
2.5
2.0
Earnings Per Share
Cash Dividends Per Share		 2.2
2.2
2.2
2.5
2.5
2.8
2.5
2.0
Earnings Per Share
Cash Dividends Per Share		 2.2
2.2
2.2
2.5
2.5
2.8
2.5
2.0
Earnings Per Share
Cash Dividends Per Share		 2.2
2.2
2.2
2.5
2.5
2.8
2.5
2.0
Earnings Per Share
Cash Dividends Per Share		 2.2
2.2
2.2
2.5
2.5
2.8
2.5
2.0
Earnings Per Share
Cash Dividends Per Share		 2.2
2.2
2.2
2.5
2.5
2.8
2.5
2.0
Earnings Per Share
Cash Dividends Per Share		 2.2
2.2
2.2
2.5
2.5
2.8
2.5
2.0
Earnings Per Share
Cash Dividends Per Share		 2.2
2.2
2.2
2.5
2.5
2.8
2.5
2.0
Earnings Per Share
Cash Dividends Per Share		 2.2
2.2
2.2
2.5
2.5
2.8
2.5
2.0
Earnings Per Share
Cash Dividends Per Share		 2.2
2.2
2.2
2.5
2.5
2.8
2.5
2.0
Earnings Per Share
Cash Dividends Per Share		 2.2
2.2
2.2
2.5
2.5
2.8
2.5
2.0
Earnings Per Share
Cash Dividends Per Share		 2.2
2.2
2.2
2.5
2.5
2.8
2.5
2.0
Earnings Per Share
Cash Dividends Per Share		 2.2
2.2
2.2
2.5
2.5
2.8
2.5
2.0
Earnings Per Share
Cash Dividends Per Share		 2.2
2.2
2.2
2.5
2.5
2.8
2.5
2.0
Earnings Per Share
Cash Dividends Per Share
2.2
2.2
2.2
2.5
2.5
2.8
2.5
2.0
Earnings Per Share
Cash Dividends Per Share
YEAR
2011
2012
2013
2014
2015
2016
2017

2011
2012
2013
2014
2015
2016
2017		 2018
2018
Earnings Per Share 3.48 3.79 3.02 3.21 3.03 3.28 3.11 2.08
Cash Dividends Per Share 2.2 2.2 2.2 2.5 2.5 2.8 2.5 2.0
Stock Price(Apr. end) 43.6 46.0 43.6 39.9 41.1 44.5 39.0 36.0
Payout Ratio(%) 63.2 58.0 72.8 77.9 82.5 85.4 80.4 96.2
Yields(%) 5.1 4.8 5.1 6.3 6.1 6.3 6.4 5.6

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TXC Confidential and Proprietary

9

2019 Capital Expenditure Expand the Economy of Scale Capacity expansion for new products, and to satisfy market demands

Unit: $NT M

Amount: $340M

  • MEMS

  • Oscillators

Amount: $150M

  • SMD Crystal

  • • Facility

Amount: $230M

  • SMD Crystal

  • ACAP Crystal

Total Amount: $720M

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TXC Confidential and Proprietary

10

Market Outlook TAM, Ranking, Sales segment breakdown

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TXC Confidential and Proprietary

11

’ Worldwide X tal & Oscillator Market

Revenue

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WW Revenue(Millions of USD) YoY
3,500 4.05% 5.00%
3,000 1.35% 0.00% 2.04%
0.00%
2,500
2,000
-5.00%
2.9B
1,500
-10.12%
1,000
-10.00%
500
0 -15.00%
2016 2017 2018 2019(e) 2020(f)
Shipment
WW Shipments(Millions of pcs) YoY
20,000 8.00%
5.88%
6.00%
15,000
4.00%
2.15%
1.24% 0.59% 2.00%
10,000
16.9B 0.00%
-2.00%
5,000 -4.51%
-4.00%
- -6.00%
2016 2017 2018 2019(e) 2020(f)
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Source: 2019/5 CS&A

Think of Frequency, Think of TXC

12

Worldwide Crystal & Oscillator Market Ranking

2017
Rank		 2018
Rank		 Company
Name		 Revenue(M) Revenue(M) Revenue(M) Market Share(%) Market Share(%)
2017 2018 Percent
Change		 2017 2018
1 1 Seiko Epson $382 $365 -4.5% 11.7% 12.4%
2 2 NDK $354 $358 1.1% 10.8% 12.2%
3 3 KCD $344 $285 -17.1% 10.5% 9.7%
4 4 TXC $294 $272 -7.5% 9.0% 9.3%
5 5 KDS $205 $191 -6.8% 6.3% 6.5%
7 6 SIWARD $104 $95 -8.7% 3.2% 3.2%
9 7 Hosonic $98 $94 -4.4% 3.0% 3.2%
10 8 Harmony $98 $90 -8.2% 3.0% 3.1%
n/a 9 Diode - Pericom / Saronix n/a $90 n/a n/a 3.1%
8 10 MegaChips (SiTime) $103 $85 -17.4% 3.7% 2.9%
Other Companies
$1,289
$1,015		 -21.3% 38.8% 34.5%
Sorce 2019/5 CS&A
Total Revenue
$3,271
$2,940

Source: 2019/5 CS&A

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TXC Confidential and Proprietary

13

TXC’s Revenue by Market Segments Actual and Forecast (F)

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IoT OTHERS
Crystal, XO,
TCXO 9% 7% AUTOMOTIVE
Crystal, XO
5%
AUTOMOTIVE
OTHERS 5%
9% IoT
8%
2019
MOBILE
MOBILE
NETWORKING COMMUNICATION
COMMUNICATION
34% 2018 (F) 24%
24%
NETWORKING
37% Sensors, TSX ,
TCXO
Stratum 3 TCXO
HF VCXO
OCXO
MOBILE
MOBILE
COMPUTING
COMPUTING
18%
20%
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TXC Confidential and Proprietary

14

TXC’s Sales by Products

Actual and Forecast (F)

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OTHERS
7%
XO
5G
Others 13%
10%
XO GNSS, TSX
12% 3G/4G/5G 10%
2019
TSX
GNSS/GPS
7% 2018 Small Cell TCXO (F)
Networking 4%
TCXO
CRYSTAL
4%
CRYSTAL 61%
PS,
SENSOR SENSOR
64% ALS+PS
3% 5%
Color+PS
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TXC Confidential and Proprietary

15

Growth Potential

  • The development of new product lines

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TXC Confidential and Proprietary

16

5G NR Standards Development 3 Main Types of Usage Scenario – eMBB, mMTC & uRRLC

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TXC Confidential and Proprietary

17

5G use cases develop the driving power

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WiFi - 6
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Network Infrastructure XTAL & OSC Usage: Base Station(BBU/RRU) 1-2pcs Small Cell Optical Module

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5G Smartphone
XTAL & OSC Usage:
5-10pcs
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XTAL & OSC Usage: 10-100pcs

NB-IoT AP Router LoRa HUB IoT M2M Automotive XTAL & OSC Usage: 2-6pcs

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TXC Confidential and Proprietary

18

5G Related Frequency Components Requirements

  • 手機

  • CPE

  • IOT/AIOT

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  • Infrastructure

  • Data Center

  • AP/Router

  • Modem

TXC Confidential and Proprietary

19

Telecom and Networking Solutions

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1 Ultra Stability SMD SC-Cut OCXO (9.7x7.5mm)+/-10ppb

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Ultra Stability S3 TCXO (7.0x5.0mm, 5.0x3.2mm); 2 +/-100ppb 3 High Frequency, XO/VCXO (7.0x5.0mm); Up to 2.1GHz, ultra low jitter 0.15pS 4 Ultra Low Phase Noise VCXO (3.2x2.5mm); Close-in phase noise -80dBc/Hz 5 High Frequency Crystal (MESA 3.2x2.5mm); 200MHz

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WiFi Continue to dominate 5G World

AP Router ◆

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Gateway-Carrier ◆
STB/OTT ◆
Gaming ◆
Smart TV ◆
Smart Phone ◆
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3.2x2.5mm/2.5x2.0mm/2.0x1.6mm Ceramic Package

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  • Small

  • High Frequency

  • High Temperature

◆ NB-IoT

◆ M2M ◆ Smart Speaker

◆ Wearable ◆ Automotive ◆ AI/Robotics

Source: WiFi Forum

TXC Confidential and Proprietary

21

IoT Rising demand between now and future

Intelligent

Connected

Things

Worldwide Worldwide Crystals and Sensors Oscillators CAGR 11.3% CAGR 1.4% (2016 to 2021) (2016 to 2020) Forecasted Forecasted U$241B U$3.5B by 2021 (AMR) by 2020 (CS&A)

30 Billion Connected Devices by 2020 (Statista)

Growing usage of all sorts of sensors and AI

Increasing usage, decreasing in price

Massive number of devices are being embedded with sensors and connectivity

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TXC Confidential and Proprietary

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New Products Development

Crystal

  • Miniaturization

  • High Freq

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Light Sensor
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  • Under Display Color Sensor

  • High Drive Level

  • Wide OTR

Oscillator

  • High Freq

  • Ultra Stability

  • Ultra Low Noise

  • Wide OTR

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IR Thermal Sensor
(Thermopile)
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Diversification & Strategic alliance

  • Ceramic Package Solutions, Assembly & Contract Manufacturing

EMI Oscillator Module

  • EMI IC Integration

IR Thermal Image Sensor (uBolometer)

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TXC Confidential and Proprietary

23

Miniature & Low Profile Crystal & Oscillator

Miniature and low profile 1.0x0.8x0.3mm Crystals for Compact size module applications

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GNSS/GPS WiFi, BT/BLE, ZigBee
Source: ublox, OriginGPS Module Module
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Module
Applications
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Miniature and low profile 1.6x1.2mmx0.6mm Oscillators

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TXC Confidential and Proprietary

24

Light Sensors

Single Aperture Combo Light Sensor (ALS/RGB+PS) 2.5x2.0mm

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Slim Bezel

Combo Light Sensor (ALS/RGB+PS) 3.4x1.2mm

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Miniature Proximity Sensor 2.0x1.6mm

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TXC Automotive Application Focus & Solutions

Infotainment & Telematics System Crystal/XO: 5-10 units

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Multimedia V2X
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Safety Electronic System
Crystal/XO: 8-14 units
BMS/OBC/Inverter EPS
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Tire Pressure Monitoring System
Crystal: 5 units (4T & 1R)
TPMS
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Security Electronic System Crystal/XO: 7-12 units Cluster Smart Key

Advanced Driver Assistance System Crystal/XO: 10-16 units

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77/79G
ADAS Camera Radar
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Crystal (AEC-Q200 Compliant)

Glass (G0)

Seam (G1)

TSX (G2)

AX(8.0x4.5mm, 2pad) AB(5.0x3.2mm, 4pad) AA(5.0x3.2mm, 2pad) AM(3.2x2.5mm, 4pad) AV(3.2x2.5mm, 2/4 pad) AZ(2.5x2.0mm, 4pad) AR(2.0x1.6mm, 2pad) AY(2.0x1.6mm, 4 pad) AJ(1.6x1.2mm, 4 pad)

AE(2.5x2.0mm, 4pad) AF(2.0x1.6mm, 4pad) AG(1.6x1.2mm, 4pad)

[Oscillator (AEC-Q100 ] Compliant) XO (G1)

TCXO (G2)

AU(3.2x2.5mm, CMOS) AQ(3.2x2.5mm, CS) AW(2.5x2.0mm, AL(2.5x2.0mm, CS) CMOS) AK(2.0x1.6mm, CS) AN(2.0x1.6mm, CMOS) A5(1.6x1.2mm, CMOS)

G0: -40 to 150 ºC G1: -40 to 125 ºC G2: -40 to 105 ºC G3: -40 to 85 ºC

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TXC Confidential and Proprietary

26

Automotive Imaging Solutions

Automotive

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Active Low EMI OSC Module
Automotive G1
2.5x2.0mm
2.0x1.6mm
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Source: Yole, Tesla, Sony
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TXC Confidential and Proprietary

27

Summary

  • Market competition is always at intense

  • Product specifications getting rigorous

  • Exchange rate fluctuations in the dollar, Yen, CNY

  • Risk and impact of US protectionism - Slowing down global productivity and trends – would likely to hit Asia, and China in particular

  • Speed up the development of new revenuegenerating product lines for Automotive, 5G, IoT, Sensor

  • Accelerate business strategy on product diversification and strategic alliance

  • Continue to review vendors to lower the cost of goods sold and localized

  • Continue to drive lean management in all aspects to maintain healthy business and increase competitiveness

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TXC Confidential and Proprietary

28

Q & A Investor Conference

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TXC Confidential and Proprietary

29

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