TXC - Interim / Quarterly Report 2020

==> picture [275 x 98] intentionally omitted <==

Investor Conference Aug, 2020

==> picture [59 x 21] intentionally omitted <==

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.

==> picture [59 x 21] intentionally omitted <==

TXC Confidential and Proprietary

TXC over 36 years in Timing Industry

Founded in 1983, Headquarters in Taiwan
2000
Listed in Taiwan Stock Exchange,
CS&A 2019
Ranked No. 3 in Worldwide Timing Market,
CS&A 2012 ~ 2019
Ranked No. 1 in Worldwide MHz Crystal Market,
2008 ~ 2019
Preferred Supplier for Tier 1 in Network and Telecom Markets,
2012 ~ 2019
Steady Growth in Automotive Market, 11% CAGR,
2013
Smallest and Innovative Sensors Integration by Ceramic Packaging,
Market Leader in Product Miniaturization, 2012 ~ 2020

Mission

To achieve a Win-Win-Win partnership in the Supplier-TXC-Customer relationships

==> picture [237 x 39] intentionally omitted <==

TXC Confidential and Proprietary

Worldwide Timing Market Shares Strong Market Penetration

2018 Rank	2019 Rank	Company Name	Revenue	(USD :M)	Percent Change	Market Share (%)	Market Share (%)
			2018	2019		2018	2019
1	1	Seiko Epson	$365	$355	-2.7%	11.7%	11.7%
2	2	NDK	$358	$336	-6.0%	11.5%	11.1%
4	3	TXC	$272	$281	3.3%	8.7%	9.2%
3	4	KCD	$285	$257	-10.0%	9.1%	8.4%
5	5	KDS	$191	$192	0.2%	6.1%	6.3%
6	6	Microchip(Vectron)	$176	$171	-3.0%	5.7%	5.6%
7	7	Murata	$94	$89	-6.0%	3.0%	2.9%
9	8	Harmony	$92	$88	-4.6%	2.9%	2.9%
8	9	Hosonic	$94	$86	-8.3%	3.0%	2.8%
11	10	SiTime	$85	$84	-1.1%	2.7%	2.8%
		Others	$1,110	$1,103	-0.6%	35.6%	36.3%
		Total Revenue	$3,122	$3,041	-2.6%	100%	100%

==> picture [59 x 21] intentionally omitted <==

Source: CS&A July 2020

TXC Confidential and Proprietary

Manufacturing Facilities Economy of Scale Productions

==> picture [236 x 146] intentionally omitted <==

----- Start of picture text -----

1991
 Automotive IATF 16949
Taiwan, Ping Cheng (PCF)
----- End of picture text -----

MHz Crystal

==> picture [242 x 150] intentionally omitted <==

----- Start of picture text -----

1999
 Automotive IATF 16949
China, Ningbo (NGB)
----- End of picture text -----

kHz/MHz Crystal

==> picture [33 x 11] intentionally omitted <==

----- Start of picture text -----

2013
----- End of picture text -----

==> picture [241 x 137] intentionally omitted <==

----- Start of picture text -----

China, Chongqing (CKG)
----- End of picture text -----

MHz Crystal
TSX
TSX
OSC
OSC
TCXO
VCXO
OCXO
Sensors
3 manufacturing facilities
200+ automated production lines
350M+ monthly capacity(Timing Devices)
3,250 employees (PCF-1,060、NGB-1,330、CKG-860)
2 R&D centers (PCF, NGB)

==> picture [59 x 21] intentionally omitted <==

500+ engineers

TXC Confidential and Proprietary

Sales & Labs

Localized Service, Responsive and Dedicate

==> picture [826 x 360] intentionally omitted <==

----- Start of picture text -----

    


 Technical & lab supports
----- End of picture text -----

==> picture [59 x 21] intentionally omitted <==

TXC Confidential and Proprietary

Product Portfolios

Timing and Sensors

==> picture [791 x 370] intentionally omitted <==

----- Start of picture text -----

Timing (Crystals and Oscillators) Sensors
Metal Can Glass Seal Crystal Oscillators SAW Oscillators
Proximity and Light Sensor
(XO) (SO)
Seam Seal Tuning Fork Voltage Controlled Temperature
Oscillators Compensated
(VCXO) Oscillators
(TCXO/S3TCXO)
μBolometer
Coming in 2020 2H
Temperature Sensor Crystal Oven Controlled Active Low EMI
(TSX) Oscillators Oscillators
(OCXO) (EMI XO)
----- End of picture text -----

==> picture [59 x 21] intentionally omitted <==

TXC Confidential and Proprietary

Product Applications

==> picture [889 x 379] intentionally omitted <==

----- Start of picture text -----

NB/ Tablet
Mobile Phone
Ture wireless Stereo
Wireless Head Phone
Crystals
Wearable
Automotive
Oscillators
Back-drift Radar Crystals
Sensors
Tire Pressure Sensor
Smart Home/Speaker
GPS
Game Console
----- End of picture text -----

==> picture [59 x 21] intentionally omitted <==

Sales & Shipping Records Steady and Organic Volume Growth

==> picture [690 x 310] intentionally omitted <==

----- Start of picture text -----

Unit: USD M Unit: Billion PCS
REVENUE SHIPPING QUANTITY
US$350 6.0
US$323
US$310
US$302
US$294
US$300 US$281
US$272 5.0
US$250
4.0
3.4
3.3 3.3
US$200 3.1
2.8
2.6 3.0
US$150
2.0
US$100
1.0
US$50
US$0 -
2014 2015 2016 2017 2018 2019
----- End of picture text -----

Unit: Billion PCS

==> picture [59 x 21] intentionally omitted <==

TXC Confidential and Proprietary

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

==> picture [911 x 355] intentionally omitted <==

----- Start of picture text -----

IoT OTHERS
Crystal, TCXO
11% 7%
AUTOMOTIVE
5%
AUTOMOTIVE
OTHERS 5%
9% IoT
10%
2020
MOBILE
MOBILE
NETWORKING COMMUNICATION
COMMUNICATION
31% 2019 (F) 30%
27%
NETWORKING
31% Crystal, TSX , TCXO
Stratum 3 TCXO
HF VCXO
OCXO, Crystal
MOBILE
MOBILE
COMPUTING
COMPUTING
16%
18%
----- End of picture text -----

==> picture [59 x 21] intentionally omitted <==

TXC Confidential and Proprietary

Financial Performance P&L, EPS, DPS, CAPEX

==> picture [59 x 21] intentionally omitted <==

TXC Confidential and Proprietary

Quarterly Performance

Sales Revenues

Sales Revenues (NT$ Million)

	nues on)	2,151 2,524 20.Q1 20.Q2 2020’H1 NT$ 4,675M (yoy +31.0%)
	2017 NT$ 8,782M (yoy -8.9%) 2018 NT$ 8,156M (yoy -7.1%) 2019 NT$ 8,431M (yoy +3.4%)	2020’H1 NT$ 4,675M (yoy +31.0%)
0 500 1,000 1,500 2,000 2,500 3,000 3,500	2,133 2,114 2,267 2,269 1,869 1,862 2,267 2,158 1,623 1,945 2,428 2,434	2,151 2,524
	17.Q1 17.Q2 17.Q3 17.Q4 18.Q1 18.Q2 18.Q3 18.Q4 19.Q1 19.Q2 19.Q3 19.Q4	20.Q1 20.Q2

==> picture [59 x 21] intentionally omitted <==

TXC Confidential and Proprietary

Quarterly Performance

==> picture [904 x 457] intentionally omitted <==

----- Start of picture text -----

Gross Margin
29.9%
Gross Margin 29.8%
(%) 28.3%
25.2%
24.3% 24.6%
23.6% 23.6% 22.6% 23.4%
22.5%
22.2% 22.3%
20.9%
17.Q1 17.Q2 17.Q3 17.Q4 18.Q1 18.Q2 18.Q3 18.Q4 19.Q1 19.Q2 19.Q3 19.Q4 20.Q1 20.Q2
2017 2018 2019 2020’H1
NT$ 2,186M NT$ 1,828M NT$ 2,007M NT$ 1,396M
Gross Profit (yoy -14.4%) (yoy -16.4%) (yoy +9.8%) (yoy +75.5%)
(NT$ Million) 800 755
641
603 597 615
600 535 534
513 513
486
456
415 415
400 339
200
0
17.Q1 17.Q2 17.Q3 17.Q4 18.Q1 18.Q2 18.Q3 18.Q4 19.Q1 19.Q2 19.Q3 19.Q4 20.Q1 20.Q2
----- End of picture text -----

==> picture [59 x 21] intentionally omitted <==

TXC Confidential and Proprietary

Net Margin (%)

Net Profit

(NT$ Million)

==> picture [59 x 21] intentionally omitted <==

==> picture [784 x 509] intentionally omitted <==

----- Start of picture text -----

Quarterly Performance
Net Margin
15.1%
14.6%
11.9%
10.8%
10.7%
10.0%
9.4% 9.7% 9.1%
8.0%
7.0%
6.2%
4.8%
4.5%
17.Q1 17.Q2 17.Q3 17.Q4 18.Q1 18.Q2 18.Q3 18.Q4 19.Q1 19.Q2 19.Q3 19.Q4 20.Q1 20.Q2
2017 2018 2019 2020’H1
NT$ 963M NT$ 644M NT$ 672M NT$ 626M
(yoy -5.3%) (yoy -33.1%) (yoy +4.3%) (yoy +192.1%)
400
369
321
300
257
246 242
227 234 221
203
200 169
137
116
84 78
100
0
17.Q1 17.Q2 17.Q3 17.Q4 18.Q1 18.Q2 18.Q3 18.Q4 19.Q1 19.Q2 19.Q3 19.Q4 20.Q1 20.Q2
TXC Confidential and Proprietary 13
----- End of picture text -----

Income Statement

Unit：NT$ in Million	2016	2017	2018	2019	2020 Q1	2020 Q2
Net Revenue	9,637	8,782	8,156	8,431	2,151	2,524
Gross Profit	2,554	2,186	1,828	2,007	641	755
Operating Profit	1,114	802	533	632	276	357
Non-Operating Items	78	273	200	132	22	56
Income before Tax	1,192	1,075	733	765	298	412
Net Income to Shareholders of the Parent Company	1,016	963	644	672	257	369
Basic EPS (NT$)	3.28	3.11	2.08	2.17	0.83	1.19

Gross Margin(%)	26.5%	24.9%	22.4%	23.8%	29.8%	29.9%
OPEX(%)	14.9%	15.8%	15.9%	16.3%	16.9%	15.8%
Operating Margin(%)	11.6%	9.1%	6.5%	7.5%	12.8%	14.1%
Income before Tax Margin(%)	12.4%	12.2%	9.0%	9.1%	13.9%	16.3%
Net Profit Margin(%)	10.5%	11.0%	7.9%	8.0%	11.9%	14.6%

==> picture [59 x 21] intentionally omitted <==

TXC Confidential and Proprietary

Balance Sheet

Unit：NT$ Million	2016	2017	2018	2019	2020 Q1	2020 Q2
Cash & Marketable Securitie	2,093	2,331	1,305	1,986	2,059	1,981
NR+AR	3,085	2,651	2,726	2,889	2,704	2,868
Inventories	1,520	1,504	1,817	2,039	2,400	2,580
Current Assets	8,818	7,983	7,117	7,945	8,229	8,672
PP&E	4,278	4,370	4,111	4,054	4,070	4,315
Total Assets	14,842	13,403	12,562	13,369	13,817	14,556
Current Liabilities	3,156	2,277	2,089	2,797	2,753	4,318
Non-current Liabilities	1,913	1,961	1,722	1,875	2,104	1,819
Total Liabilities	5,069	4,238	3,811	4,671	4,857	6,137
Total Shareholders' Equity	9,773	9,165	8,751	8,698	8,960	8,419

A/R Turnover Days	114	119	120	122	119	101
Inventory Turnover Days	79	84	96	110	134	128
A/P Turnover Days	65	73	74	85	98	82
Current Ratio(%)	279.4%	350.6%	340.7%	284.1%	298.9%	200.8%
Debt Ratio(%)	34.2%	31.6%	30.3%	34.9%	35.2%	42.2%
Book Value Per Share(NT$)	31.55	29.59	28.25	28.08	28.93	27.18

==> picture [59 x 21] intentionally omitted <==

TXC Confidential and Proprietary

EPS and DPS

==> picture [72 x 16] intentionally omitted <==

----- Start of picture text -----

Unit: $NT
----- End of picture text -----

High Dividends payout

YEAR 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 2.5 Earnings Per Share Cash Dividends Per Share
		.2 2.2 2.2 2.5 2.5						2.5





	2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016							2017 2017	2018 2019 2018 2019
Earnings Per Share	3.48		3.79	3.02	3.21	3.03	3.28	3.11	2.08	2.17
Cash Dividends Per Share	2.2		2.2	2.2	2.5	2.5	2.8	2.5	2.0	2.5
Stock Price(Apr.)	43.6		46.0	43.6	39.9	41.1	44.5	39.0	36.0	44.0
Payout Ratio(%)	63.2		58.0	72.8	77.9	82.5	85.4	80.4	96.2	115.2
Yields(%)	5.1		4.8	5.1	6.3	6.1	6.3	6.4	5.6	5.7

==> picture [59 x 21] intentionally omitted <==

TXC Confidential and Proprietary

2020 Capital Expenditure Expand the Economy of Scale Capacity expansion for new products, and to satisfy market demands

Amount: NT$360M

MEMS
Miniature SMD Crystal
Amount: NT$370M  Facility  Miniature SMD Crystal

Amount: NT$430M  Miniature SMD Crystal  SMD Oscillator

Total Amount: NT$1,160M

==> picture [59 x 21] intentionally omitted <==

TXC Confidential and Proprietary

Growth Potential

The development of new product lines

==> picture [59 x 21] intentionally omitted <==

TXC Confidential and Proprietary

From 4G to 5G

==> picture [633 x 185] intentionally omitted <==

QORVO, 2017

==> picture [501 x 223] intentionally omitted <==

----- Start of picture text -----

(1M units / km [2] ) (Latency <1ms)
(~10Gbps)
----- End of picture text -----

5G Use Cases – Drivers

eMBB (增强移動寬帶)
Enhanced Mobile Broadband
mMTC (大規模裝置互聯)
Massive Machine Type. Communications
uRLLC (超可靠低延遲)
Ultra-Reliable and Low Latency Communications

Ericsson, 2017 TPE 5G Summit

==> picture [59 x 21] intentionally omitted <==

TXC Confidential and Proprietary

5G Complete Infrastructure & Device Ecosystem Development

Comprehensive Ecosystem

Network Infrastructure

Internet Data Center

==> picture [844 x 193] intentionally omitted <==

----- Start of picture text -----

AIoT Device
Mobile Phone AAU 5GC
(Core Network)
CU
25/50/100G 100/200/400G 200/400G Cloud
Multiple Automotive
Usage NR
Equipment
Small Cell DU
Optical Module Server/Storage/Security
CPE
Mobile Computing
----- End of picture text -----

==> picture [59 x 21] intentionally omitted <==

TXC Confidential and Proprietary

TXC 5G Applications Product Trends

Device Interconnection

Infrastructure

Intelligence Platform

Mobile Phone

(5G NR, GPS, Wi-Fi 6/6E, BT, NFC, etc.) Mobile Computing

(NB, Tablet, Mobile Device, Server, etc.)

CPE

(5G NR, Wi-Fi 6, NB-IoT, LoRA, etc.)

Macro Base Station (AAU, DU/CU, Transport & Core) Small Cell

(Micro, Pico, Femto, etc.) Optical Module

(100/200/400G PAM4 & Coherent Solution)

Smart Device

(Home, City, Industry, Logistic, Medical, etc.) Edge Computing

(Server, CPU/GPU, MCU, etc.) Automotive

(V2X & ADAS)

Support Roles in Timing Solution

5G NR • LTE • GPS • LoRA
NB-IoT • Wi-Fi • BT • NFC
Clock Synchronizer (SyncE & IEEE1588) • DSP
Clock Generator • Jitter Attenuator • Ethernet

Crystal & Oscillator Specification Development Trend

Miniature • Low Hysteresis
High Frequency Accuracy & Stability
High Temperature Operating
Miniature • Ultra High Frequency Accuracy & Stability
Reliability • Ultra Low Phase Noise
Anti-Air Flow • Ultra Low Jitter
G-Sensitivity • High Temperature Operating

Crystal & Oscillator Type Demand

XTAL/HF XTAL • XTAL/HF XTAL • TSX • XO/Differential XO/VCXO • XO • TCXO/S3TCXO • TCXO/S3TCXO • OCXO

==> picture [59 x 21] intentionally omitted <==

TXC Confidential and Proprietary

TXC Total Solutions for 5G Application

Solution

Size Ke Parameters 5G Main A lication y pp AAU 5G New Core Stability, ±10 ppb CU NR Infrastructure DU Stability, ±0.28 ppm Small Cell (AAU, DU/CU, Core, Optical) Phase Noise@100kHz, -166dBc/Hz Optical Module

OCXO 9775/1409 Stability, ±10 ppb S3TCXO 5032/7050 Stability, ±0.28 ppm TCXO 1612 – 2520 Phase Noise@100kHz, -166dBc/Hz VCXO 2520 – 7050 Phase Jitter@12k - 20MHz, 0.05 ps Diff XO 2520 – 7050 Phase Jitter@12k - 20MHz, 0.05 ps PLL XO 2520 – 7050 Frequency, 10MHz - 2.1GHz XO 1612 – 2520 Phase Jiter@12k - 20MHz, 0.3 ps TSX 1210 – 2520 Frequency, 19.2 – 76.8MHz Crystal 1008 – 5032 Frequency, 8 – 320MHz

Intelligence Platform

(Smart Device, Edge Computing, Automotive)

Mobile/Multi Access Edge Computing

Device Interconnection NR (Mobile Phone, Mobile, Computing, CPE) CPE

==> picture [59 x 21] intentionally omitted <==

TXC Confidential and Proprietary

TXC Automotive Application Focus & Solutions

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

==> picture [269 x 75] intentionally omitted <==

----- Start of picture text -----

Multimedia V2X
----- End of picture text -----

==> picture [269 x 113] intentionally omitted <==

----- Start of picture text -----

Safety Electronic System
Crystal/XO: 8-14 units
BMS/OBC/Inverter EPS
----- End of picture text -----

==> picture [313 x 129] intentionally omitted <==

==> picture [275 x 114] intentionally omitted <==

----- Start of picture text -----

Tire Pressure Monitoring System
Crystal: 5 units (4T & 1R)
TPMS
----- End of picture text -----

Security Electronic System Crystal/XO: 7-12 units Cluster Smart Key

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

==> picture [268 x 78] intentionally omitted <==

----- Start of picture text -----

77/79G
ADAS Camera Radar
----- End of picture text -----

Crystal (AEC-Q200 Compliant)

[Oscillator (AEC-Q100 Compliant) ]

Glass (G0)

Seam (G1)

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)

TSX (G2)

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

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

==> picture [59 x 21] intentionally omitted <==

TXC Confidential and Proprietary

TXC Competitive Advantages

==> picture [305 x 397] intentionally omitted <==

==> picture [61 x 60] intentionally omitted <==

No. 1 Largest Suppler in MHz Crystal for 7 Consecutive Years and Leading Edge Technology in Crystal Miniaturization.

Out of Top 5 Ranking Suppliers TXC is the only Profitable and Financially Healthy with Organic Growth without acquisitions.

TXC Manufactures MHz Crystal in all three manufacturing facilities to offset potential impacts caused by natural disasters.

Quick response and fulfillment to customer requirements

No. 1

Largest Supplier in MHz Crystals

TXC is Currently the No. 1 Largest Suppliers in the World for MHz Crystal alone.

No. 1

Largest Supplier Outside Japan

TXC is Currently No. 1 Largest Supplier in Frequency Control Products outside of Japan and introduced healthy competition into the Frequency market.

==> picture [59 x 21] intentionally omitted <==

TXC Confidential and Proprietary

Thank You

No.4, Kung Yeh 6[th] Rd., Ping Cheng Industrial District Ping Cheng District 32459, Tao Yuan City, Taiwan

TEL: +886-3-4698121 FAX: +886-3-4696954 www.txccorp.com

==> picture [59 x 21] intentionally omitted <==

TXC Confidential and Proprietary

AI assistant

TXC — Interim / Quarterly Report 2020

52274_rns_2020-08-17_2a77dca6-4f77-4afd-9be9-cc46ea19dd40.pdf

Disclaimer

TXC over 36 years in Timing Industry

Mission

Worldwide Timing Market Shares Strong Market Penetration

Manufacturing Facilities Economy of Scale Productions

Sales & Labs

Localized Service, Responsive and Dedicate

Product Portfolios

Timing and Sensors

Product Applications

Sales & Shipping Records Steady and Organic Volume Growth

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

Quarterly Performance

Quarterly Performance

Net Profit

Income Statement

Balance Sheet

EPS and DPS

2020 Capital Expenditure Expand the Economy of Scale Capacity expansion for new products, and to satisfy market demands

Amount: NT$360M

Total Amount: NT$1,160M

Growth Potential

From 4G to 5G

5G Use Cases – Drivers

5G Complete Infrastructure & Device Ecosystem Development

Comprehensive Ecosystem

Network Infrastructure

Internet Data Center

TXC 5G Applications Product Trends

Device Interconnection

Infrastructure

Intelligence Platform

Mobile Phone

CPE

Macro Base Station (AAU, DU/CU, Transport & Core) Small Cell

Smart Device

Support Roles in Timing Solution

Crystal & Oscillator Specification Development Trend

Crystal & Oscillator Type Demand

TXC Total Solutions for 5G Application

TXC Automotive Application Focus & Solutions

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

TXC Competitive Advantages

Thank You

More from TXC

TXC Interim / Quarterly Report 2020