TXC — Interim / Quarterly Report 2024

Jun 11, 2024

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Making Every Connection Better Precise Clock for Seamless Synchronization & Ultimate Data Transmission Think of Frequency, Think of TXC

Market Leader with Sustainability

40 Years in Timing Industry, Founded in 1983 & Headquarters in Taiwan

Listed in Taiwan Stock Exchange, Since 2000 Ranked No. 1 in Worldwide Timing Market, QYR 2023, Jul

1 Ranked No. 1 in Worldwide MHz Crystal Market, QYR 2023, Jul & TXC Shipment 2008 ~ Present Preferred Supplier for Tier 1 in Network Infrastructure Market, Global Ranking No. 3 in Automotive Market, 54% YoY, 2022, QYR 2023, Jul 2012 ~ Present Timing Industry Leader in Product Miniaturization, Since 2013 Smallest and Innovative Devices Integration by Ceramic Packaging,

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Worldwide Timing Market Overview

Rank	Rank	Vendors	Revenue (Million_USD)	Revenue (Million_USD)	Revenue (Million_USD)	Market Share (%)	Market Share (%)
2021	2022	Company Name	2021	2022	YoY%	2021	2022
1 1 TXC			$519 $442		-14.8% 11.7% 11.1%
2 2 Epson			$425 $379		-10.7% 9.6% 9.5%
3	3	NDK	$366 $352		-3.9%	8.3%	8.8%
4 4 KCD(Kyocera)			$359 $311		-13.4%	8.1% 7.8%
7 5 Sitime			$218 $283		29.6%	4.9% 7.1%
5 6 KDS			$338	$268	-20.6%	7.6% 6.7%
6 7 Microchip			$222	$226	2.1%	5.0% 5.7%
8 8 TKD			$176	$128	-26.8%	4.0% 3.2%
11 9 Rakon			$121	$114	-5.9%	2.8% 2.9%
13 10 Hosonic			$113 $110		-2.2% 2.6% 2.8%
Other Companies			$1,565 $1,375		-12.1% 35.4% 34.5%
Total Revenue			$4,422 $3,988		-9.8% 100.00% 100.00%

Source: QYR Research Jul. 2023

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2

Revenue Growth By Years

Organic & Sustainable Business Expansion

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Revenue(Unit: USD$_M) Shipment(Unit : Qty_B)
USD(Million) Q'ty(Billion)
600 6
4.8
500 5
3.9
4.1
400 3.5 4
3.4
3.3
300 519 3
442 350
200 2
376
272 281
100 1
0 0
2018 2019 2020 2021 2022 2023
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Timing Devices is Essential Key to All Electronics

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Quartz offers the most Clear & Low Noise Clock to make every Connections Better

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Clock Reference/Generation
Crystal
CMOS Differential Programmable
Clock Synchronization/Attenuation
U
Oscillator
U
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North America

Manufacture Facilities

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1991
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 Automotive IATF 16949
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Taiwan, Ping Cheng (PCF)
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• MHz Crystal

• TSX

• XO

• TCXO

• VCXO

• OCXO

2013

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1999
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 Automotive IATF 16949
China, Ningbo (NGB)
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China, Chongqing (CKG)

• MHz Crystal

• kHz/MHz Crystal

• TSX

• TSX

• XO

• TCXO

• 4+1 manufacturing facilities

• 200+ automated production lines

• 430M+ monthly capacity(Timing Devices)

• • 3 R&D centers (PCF, NGB & CKG)

• • 400+ engineers

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2021
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 Automotive IATF 16949
China, Ningbo (TETC)
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• kHz/MHz Crystal

• XO

2024 Under Construction

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Indonesia, Surabaya (SUB)

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Revenue Growth By Segments

Diversified Market & Customer Matrix

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2023
Automotive
16%
14% 31%
38%
15% 17%
Consumer
2022
Electronics
& Others
31%
38%
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Telecom & Enterprise

Key Diversified Growth Drivers

5G Mobile Devices

Miniature Product , High Frequency Products

5G Telecom & Infrastructure

Precise & Ultra Low Phase Noise Oscillators

High Speed Datacom

Ultra High Frequency & Ultra Low Phase Jitter Oscillators

Vehicle Electrifications

Mass Adoption on Crystal & Oscillator for Autonomous Driving

Mobile Communication

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Our Focuses

Provide the Cleanest & Most Stable Clock source to ever hearts of Electronics y

Precise Stability & Ultra Low Phase Noise & Jitter

High Frequency, Ultra Stability & Miniature

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Telecom Datacom Connectivity Mobile Devices
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High Reliability & Quality

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Automotive
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Advanced Crystal & Oscillator Growth Target in AI Ecosystem Technology Derives from Humanity Features Requirement of HPC/High Speed Transmission/Meta-mobility

XTAL/XO Automotive 5G Infrastructure

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Photo Blank
Technology
onnecting
Ultra
Peo le
Miniature
p
Automotive
Grade
Generative AI
Advanced
Performance
Ultra High Frequency/Stability
Ultra Low Phase Noise/Jitter
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Mobile Communication
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AIoT Industry

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Our Core Competitiveness

Improvement and Enhancement of Technology

Quartz Blank Core Technology

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Tier 1 EMS
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IDH (Chipset) Branding Tier 1 Core Technology In-House Development Robust Product Design Mapping Portfolio Enhancement (Design-in) (Capacity Planning) Frequency • Dimension Control ~~H~~ IGH Stability • Temperature 0806 Shape Control • 1612 1210 1008 Photolithographic Uniformity LTRA LOW (Advanced) Phase Noise & Jitter • 3D/Surface Profile G-Sensitivity Excellent Performance eliability Aging, Shock (Advanced Oscillator Series) Mechanical (Conventional)

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0806
1612 1210 1008
Excellent Performance
(Advanced Oscillator Series)
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Increase Data Traffic is folding Business growth

Data Transmission Upgrade for Advanced Oscillators Deployment

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3 – 5 times in the Next 5 Years Mobile Network Traffic Growing

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Infrastructure
Industry-wide
Video
Smallest(5x3 mm)
+20% Gaming Streaming
ppt Level
OCXO
-40 to 105℃ OT
RU/DU/CU/Core/RAN HPC
Data Computing
-40 to 105℃OT Voice
Education
Streaming
+25% Standard PKG
S3-TCXO
7050/5032
AUTO
Server/Switch/IDC/Edge
Portfolio Optical/Smart NIC
Optimization Social Industry
Ultra Low PN & PJ +26%
CMOS/Diff XO
META
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Portfolio Optical/Smart NIC
Optimization
Ultra Low PN & PJ +26%
CMOS/Diff XO
100/200/400G/Next Gen
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Data Traffic (EB per Month): 2021: 84 , 2024: 255 , 2027: 368

+% CAGR of equipment or device sales revenues projection during 2022-2025

Source: Ericsson Mobility Report, June 2023

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Telecommunication & Enterprise

Extra High-Frequency, Ultra-Low Phase Noise & Jitter & Stability Performance

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Stratum 3E & 24hrs Holdover Phase Jitter@12k - 20MHz, 50 fs OCXO VCXO 5x3 mm, ±3ppb, 105°C Phase Noise@10Hz, -80dBc/Hz L Frequency up to 1.5G L T Precise T Diff XO Phase Jitter@12k - 20MHz, 50 fs ±20 ppm, 105°C R ±50 ppb, 105°C R TCXO A Frequency up to 1.5G A CMOS XO Phase Jitter@12k - 20MHz, 50fs Phase Noise@1MHz, <-170 dBc/Hz VCTCXO ±280 ppb, 105°C , -170dBc/Hz

Programmable XO

Phase Jitter@12k – 20MHz, 70 fs Frequency up to 1.5 - 2.1GHz (XO Series Selection for fast L/T)

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Mobile Connectivity & Devices Ecosystems

Miniature, Higher Frequency & Ultra Low Phase Noise

Live Navigation Satellite Always Connected GPS, Maps, Traffic Alerts 5G NR Smart Remote Control (Sub-6GHz & Industry, City, Home, Healthcare 5G AAU & Small Cell mmWave) Big Data Exchange Entertainment, Data Access CPE Router Devices Connectivity Wearable, AIoT, Automotive

AIoT Devices

~~H~~ IGHFrequency Accuracy & Stability

MHz Crystal TSX (TH+Xtal) XO (CMOS/Differential/PLL) Miniature, 1.0 x 0.8 (mm) Miniature, 1.6 x 1.2 (mm) PJ@12k – 20MHz, 0.05 – 0.3 ps 1612 1210 1008 8 – 320 MHz 19.2 – 76.8MHz Low EMI CMOS XO

TCXO (CMOS/Clipped) PN@100kHz, -166 dBc/Hz Stability, ±0.5 ppm

Next 0806

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Electrification & Smarter Vehicles

Define Key Growth Applications with Strong Forecast & Projections

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Automotive Grade, AEC-Q100, AEC-Q200 & Other Specified Compliances
Electric Vehicle
Autonomous Safety & Motion (100-180 PCS)
XO XTAL
+43% +16%
(G1 Grade) (Glass Type)
Gasoline Vehicle
(60-100 PCS)
Smart Cockpit Body Control
TCXO XTAL
+33% +36%
(2016 Size) (Seam Type)
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+% CAGR of TXC Sales Estimation during 2022-2026

**

21% 2024

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CAGR Electricc Vehicle Market Sales Forecast, 2024 to 2029

2029

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Heading Toward Next Level - Autonomous Driving Self-Drivin Boost Timin Demand with New Trend Technolo g g y gy

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Conventional Driving Experience
Moving Upon Ultimate Self-Driving Vehicles UX
2 [nd] Growth Engine
Comprehensive
1 [st] Growth Engine
Integrated
Standalone
L0 L1 L2 L3 L4 L5
No Automation Pilot Assistance Part Automation Conditional Automation High Automation Full Automation
Pilot + System Assisted Conditional System Automation Full Automation
 1 [st] Point of Growth : CAN to Gigabyte Ethernet , ADAS System Enhancement. (MHz Crystal + High Frequency Oscillators)
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 2[nd] Point of Growth : Full Vehicle to External Connectivity & Synchronization (Precise Timing Solutions for Synchronization)

2020

2025

2030

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2024 CAPEX

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A+ Enhancements

• Core Technology

• Advanced Process

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Sustainability

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 Environment
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Smart Factory
 Green & Renew Energy
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 Social Responsibility
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 Governance
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Unit: NT$ Million

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1,619
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• Photo Die Capacity &NASA 465M*

• Project (135M)

• TCXO Equipment & RD Project (109M)

   - HF Miniature Product (130M)
  
   - TCXO, XO Capacity  System Upgrade (17M) Expansion (145M)
  
   - System Upgrade (36M)
  

• Building & Facilities (223M)

• EDA ETL, System Upgrade (72M)

• 26KK Capacity Expansion (609M)

• 317M*  Diff XO Project (10M)  Office Building & Canteen (40M)

  • IT Equipment (74M)

*: 2023defferedcapex

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Statements of Comprehensive Income

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Unit: NT$ Million Q1'24 Q4'23 QoQ Q1'23 YOY
Net Revenue 2,754 3,040 -9.4% 2,298 19.8%
Gross Profit 1,000 1,148 -12.9% 793 26.0%
Operating Expenses 534 529 0.8% 448 19.2%
Operating Profit 466 618 -24.7% 345 34.8%
Non-Operating Items 181 -124 246.9% 6 3119.0%
Income before Tax 647 495 30.8% 351 84.3%
Net Income 537 408 31.7% 287 87.3%
Basic EPS (NT$) 1.73 1.31 32.1% 0.93 86.0%
Gross Margin(%) 36.30% 37.75% 34.52%
OPEX(%) 19.39% 17.42% 19.49%
Operating Margin(%) 16.91% 20.33% 15.03%
Income before Tax Margin(%) 23.50% 16.27% 15.28%
Net Profit Margin(%) 19.51% 13.42% 12.48%
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17

Balance Sheet

Unit: NT$ Million	Mar. '24	Mar. '24	Dec. '23	Dec. '23	Mar. '23	Mar. '23
Item	Amount	%	Amount	%	Amount	%
Cash & Cash equivalents NR+AR Inventories Current Assets PP&E Total Assets	4,231 3,006 2,662 11,519 5,798 19,797	21.4% 15.2% 13.4% 58.2% 29.3% 100.0%	4,204 3,255 2,470 10,812 5,770 18,822	22.3% 17.3% 13.1% 57.4% 30.7% 100.0%	4,456 2,744 2,711 10,830 6,181 19,262	23.1% 14.2% 14.1% 56.2% 32.1% 100.0%
Current Liabilities Non-current Liabilities Total Liabilities	4,274 2,798 7,073	21.6% 14.1% 35.7%	4,768 2,180 6,949	25.3% 11.6% 36.9%	3,474 2,957 6,431	18.0% 15.4% 33.4%
Total Shareholders' Equity	12,725	64.3%	11,874	63.1%	12,830	66.6%
A/R Turnover Days Inventory Turnover Days Inventory Turnover Days (exclu.) Current Ratio(%) Debt Ratio(%) Book Value Per Share(NT$) ROA(%) ROE(%)	17.5% 41.08 11.4% 270% 35.7% 134 121 104		14.1% 38.33 9.1% 227% 36.9% 135 122 115		9.1% 41.42 6.1% 312% 33.4% 164 149 125

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18

EPS & DPS

High Dividends Payout, with Sustainable Business Growth

EPS(NTD) Cash Dividend(NTD) 80%+ Average Payout Ratio

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10.06
Cash Dividend(NTD)
9.06
80%+
Average Payout Ratio
7.5
5.53
7.0
4.61
3.02 3.21 3.03 3.28 3.11 4.5
2.08 2.17 3.8
2.5 2.8
2.5 2.5 2.5
2.2
2.0
Unit: NT$ 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Share Price 43.6 39.9 41.1 44.5 39.0 36.0 44.0 99.8 98.0 89.4 105.5
Payout Ratio(%) 72.8 77.9 82.5 85.4 80.4 96.2 115.2 82.4 74.6 77.3 81.4
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2024© TXC Corporation All Right Reserved

Healthy Growth with Value based Sustainability

Dedicate on Continuous Enhancement of Environment, Society, and Governance

公司治理  Top 6%~20% Listed Corporates of the 10[th] Corporate Governance Evaluation  Taiwan Best-in-Class 100

ESG Risk Rating 17.7 Low Risk pts

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• The Excellent Enterprise Award in Taoyuan City IDB the 4[th] Gender Mainstreaming Benchmark Manufacturer BSI Sustainability Leader Award

• "Conform to 1.5°C temperature control target" label from CommonWealth

• Magazine

• ISO 14064 Greenhouse Gas Emissions Verification

Roadmap

 ISO 50001 Energy Management System Verification

• ISO 14067 product carbon footprint Verification

• 2030 RE30% ， 2050 RE100% & Net Zero Carbon

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20

Thank You

Think of Frequency, Think of TXC