TXC — Investor Presentation 2014

Jun 4, 2014

www.txccorp.com

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Think of Frequency Think of Investment Conference June, 2014

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Think of Frequency, Think of TXC

1

Personalized and Locally-Based Support

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Europe China Taiwan Japan America
• • • • •
Germany Ningbo Ping Cheng Yokohama San Jose
• • • •
Chongqing Peitou Osaka Los Angeles
•
Shenzhen
•
Shanghai
•
Suzhou
•
Beijing
•
Wuhan
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• 14 150+ Professionals at service Sales and Marketing offices,

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Think of Frequency, Think of TXC

2

Manufacturing Facilities

Taiwan, Ping Cheng (PCF)

China, Ningbo (NGB)

China, Chongqing (CKG)

• 3 manufacturing facilities

• 200+ automated production lines

• • 260M+ monthly capacity

• • 2 R&D centers (PCF, NGB)

• • 400+ engineers

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3

Product Portfolios

Total solution, innovation and integration as sustainable competitive advantage

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Crystals Oscillators & Modules Sensors
Metal Can Glass Seal Crystal Oscillators SAW Oscillators Light Sensors
(XO) (SO) (3-in-1)
Seam Seal Tuning MEMS Oscillators Temperature
Fork (MO) Compensated
(TCXO/VC-TCXO)
Coming Soon
Motion Sensors
Temperature Sensor Voltage Oven Real Time Bio Sensors
Crystal Controlled Controlled Clock
(TSX) (VCXO) (OCXO) (RTC)
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Diverse product for long-term

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• 10,000+ product variations

Think of Frequency, Think of TXC

4

Revenue Performance

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CAGR: 8%
USD: Million
500
450
USD377
400
USD327 USD326
350
USD300
300
USD240
250
200
150
100
50
0
2009 2010 2011 2012 2013
Net
10% 12% 13% 11% 10%
Profit
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Think of Frequency, Think of TXC

5

Worldwide Ranking No. 3 in 2013

Rank	Company Name	Area	2011	2012	2013	(11-12) Change %	(12-13) Change %	2011 Market Share	2012 Market Share	2013 Market Share
1	Epson Toyocom	Japan	592	610	500	3.0%	-18.0%	16.7%	17.5%	15.3%
2	NDK	Japan	557	540	433	-3.1%	-19.8%	15.7%	15.5%	13.3%
3	TXC	Taiwan	327	377	326	15.3%	-13.5%	9.2%	10.8%	10.0%
4	KED	Japan	265	292	298	10.2%	2.1%	7.5%	8.4%	9.1%
5	KDS	Japan	389	309	260	-20.6%	-15.9%	11.0%	8.9%	8.0%
6	Ventron	USA	196	166	170	-15.3%	2.4%	5.5%	4.8%	5.2%
7	SiWard	Taiwan	90	97	96	7.8%	-1.0%	2.5%	2.8%	2.9%
8	Rakon	New Zealand	111	106	95	-4.5%	-10.4%	3.1%	3.0%	2.9%
9	Hosonic	Taiwan	101	92	94	-8.9%	2.2%	2.9%	2.6%	2.9%
10	River	Japan	52	73	66	-5.8%	-9.6%	1.5%	1.4%	2.0%
11	CTS	USA	53	55	61	3.8%	10.9%	1.5%	1.6%	1.9%
12	Murata(TEW)	Japan	59	57	59	-5.1%	3.5%	1.7%	1.6%	1.8%
13	Taitien	Taiwan	79	59	57	-25.3%	-3.4%	2.2%	1.7%	1.7%
14	Micro Crystal	Switzerland	63	58	55	-7.9%	-5.2%	1.8%	1.7%	1.7%
15	Pericom	USA	52	54	52	3.8%	-3.7%	1.5%	1.5%	1.6%
-	Others	-	553	570	642	-	-	15.6%	16.3%	19.7%
		Total Revenue	3,539	3,489	3,264	-1.4%	-6.4%

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Source: CS&A 2014.04

Think of Frequency, Think of TXC

6

Worldwide FCP T.A.M. Splits

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VCXO
OCXO
0.52%
0.02%
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OCXO
VCXO 5.17%
7.14%
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Source: CS&A 2014.04

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7

TXC keep penetrating and developing in high end products

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13.2% 14.5% 12.9%
MHz Crystal/kHz Crystal
3.4% 8.0% 7.6%
TCXO
9.0% 7.3% 7.0%
XO/MO
2.4% 3.5% 7.1%
VCXO
Source: CS&A 2014.04
Think of Frequency, Think of TXC
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8

TXC’s Revenue Splits by Product Category

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Sapphire
Others Automotive
3% 6%
6% Infrastructure
11%
3% 3%
9% 7%
Networking 32%
29% 31%
27% Mobile
Communication
18%
15%
Mobile
Computing
Think of Frequency, Think of TXC
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9

Market focus

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IT and Network
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Public Safety
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Public facilities
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Industrial Monitor
System
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Medical Application
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Consumer & Digital
Home
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Transportation
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Smart Building/Home
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Think of Frequency, Think of TXC

10

Solutions for Base Station and Smallcell Infrastructure

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Ultra Stability ±3ppb
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High stability ±100ppb
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Ultra Low Jitter 50fs
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Migrating to LTE… SDH/SONET

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Ultra Low Jitter 50fs
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Stability ±10ppm
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High Stability ±5ppm
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Think of Frequency, Think of TXC

11

Solutions for Networking and Data Center

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High speed processing…
Gigabit Ethernet/Fiber Channel
Super Computer Center Data Center
Design Center Department
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Ultra Low Jitter 50fs
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Ultra Low Jitter 50fs
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High Stability ±10ppm
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High Stability ±5ppm
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Think of Frequency, Think of TXC
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Solutions for Wireless and Smart Home

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Smartphone, M2M connecting…
LTE
WiFi
BT/BLE
Zigbee
GNSS
Sensor
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Smallest and Thinnest
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Smallest and Thinnest
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Low Jitter  1ps
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ALS+PS+IR LED (Ceramic)
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High Stability ±5ppm
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High stability ±0.5ppm
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Think of Frequency, Think of TXC

13

Solutions for Smart Medical

Healthcare monitoring... BT/BLE, WiFi, GNSS Sensor

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Smallest and Thinnest
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Smallest and Thinnest
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Low Jitter  1ps
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ALS+PS+IR LED (Ceramic)
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High Stability ±5ppm
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High stability ±0.5ppm
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Think of Frequency, Think of TXC

14

Solutions for Automotive

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Smart connected car….
Infotainment,
(Telematics, GPS,
AV)
Safety Electronics
System (Airbag,
ABS, TPMS)
ADAS
(Advanced Driver
Assisted System)
Crystal units(AEC Q200)
Metal Can: G2 XO (AEC Q100) TCXO (AEC Q100)
Glass: G0 Seam: G1 Seam: G2
Seam: G1
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Notes:

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

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15

Solutions for Wireless and Smart Wearable

Wearable technology... BT/BLE, WiFi, GNSS Sensor

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Smallest and Thinnest
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Smallest and Thinnest
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Low Jitter  1ps
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ALS+PS+IR LED (Ceramic)
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High Stability ±5ppm
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High stability ±0.5ppm
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Think of Frequency, Think of TXC

16

Wearable Market

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Info‐
tainment
4%
Healthca
re
35%
Sports
and
Fitness
61%
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WEARABLE MARKET comprises all technical end devices in the form of clothing and accessories. The central function is the recording and processing of data related to its user.

The market forecast of Wearable devices in 2014 will reach 100M+ > Sport fitness 30M+

Healthcare 20M+

• Infotainment 10M+

*MARKET VOLUME (in USD 2.5B)

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Info-
tainment
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Sports and Fitness

Healthcare

• Devices for the measurement of movement, nutrition and vital functions

• Example: Nike+ FuelBand

• , Garmin and Jawbone

• Devices for the extension of smart phone & cloud brand functions

• Technical solutions

• measuring, storing and sending smart phone & cloud brand data for diagnosing and treating functions patients > Example: Google Glasses and > Example: Fitbit Flex Sony Smartwatch 2

• Example: Fitbit Flex

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Fitbit Flex Google Glasses

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17

Wearable Focus

2014

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* Sport fitness 30M+
Healthcare 20M+
> TAM NT$ 9.5M * Infotainment 10M+
> Brands
Apple
Infotainment
SONY
22%
Google Healthcare > TAM NT$17.2M
40%
> Brands
Fibit
Sports and Fitness SIRIIV
> TAM NT$16.3M 38%
Sensoria (Smart Sock )
> Brands Misfit(Shine)
Garmin Bodymedia
Nike
Jawbone (Unit:pcs)
Think of Frequency, Think of TXC
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Wearable Potential Customer

• Qualcomm (USA) Broadcom (USA) CSR (Norway)

• SONY Quintic (China) Samsung NXP (Holland) LG ST Micro (Geneva) Apple

• Google Glasses Garmin

• Qualcomm Toq Google TI (Norway) watch

• Nike+ FuelBaned Microsoft Nodic Jawbone UP

• Tom Tom MOTO (Norway) Fitbit Flex

• SONY wristband

• Time schedule 2014 Q1 2014Q2 2014 Q3 2014 Q4 Potential Application

• • BLE Crystal Unit • ‧ Integrated combo chipset • WiFi Wireless • CrystalOscillator ‧ Improved transmission capacity and • GPS Communication • TCXO the effective distance

• • NFC System • T/F ‧ Reduced power consumption • MCU Performance ‧ Improved operational efficiency

• • CPU ‧ Smart system management

• • Motion • 3-axis accelerometer Detection • ‧ Improved detected precision 3-axis gyroscope

• • Ambient Sensor • 3-axis magnetometer ‧ Size miniaturization Detection MEMS Sensor • IR image sensor ‧ Multi-axis data sensing

• • Bio Info. • Micro-Microphone

• Detection • Oscillator Think of Frequency, Think of TXC 19

Capital Expenditures of 2014

(Unit: $NT)

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CKG
NGB
PCF
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Amounts:120 million SMD X’TAL (Q3)*10 KK

Amounts:180 million SMD TSX (Q2)3 KK (Q3)2KK

Amounts:300 million SMD TSX / VCXO/ OCXO/ Sensors / RTC Sapphire BW & PSS

Total Amounts: 600 million

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Think of Frequency, Think of TXC

20

Dividend Policy

0 1 2 3 4 5 6	(Unit: $NT) 4.13 4.88 3.56 2.75 4.06 3.48 3.79 3.02 1.94 1.98 2 2 2.5 2.2 2.2 2.2 0.97 0.99 0.5 0.2 0.2 0 0 2006 2007 2008 2009 2010 2011 2012 2013	(Unit: $NT) 4.13 4.88 3.56 2.75 4.06 3.48 3.79 3.02 1.94 1.98 2 2 2.5 2.2 2.2 2.2 0.97 0.99 0.5 0.2 0.2 0 0 2006 2007 2008 2009 2010 2011 2012 2013	(Unit: $NT) 4.13 4.88 3.56 2.75 4.06 3.48 3.79 3.02 1.94 1.98 2 2 2.5 2.2 2.2 2.2 0.97 0.99 0.5 0.2 0.2 0 0 2006 2007 2008 2009 2010 2011 2012 2013	(Unit: $NT) 4.13 4.88 3.56 2.75 4.06 3.48 3.79 3.02 1.94 1.98 2 2 2.5 2.2 2.2 2.2 0.97 0.99 0.5 0.2 0.2 0 0 2006 2007 2008 2009 2010 2011 2012 2013	(Unit: $NT) 4.13 4.88 3.56 2.75 4.06 3.48 3.79 3.02 1.94 1.98 2 2 2.5 2.2 2.2 2.2 0.97 0.99 0.5 0.2 0.2 0 0 2006 2007 2008 2009 2010 2011 2012 2013	(Unit: $NT) 4.13 4.88 3.56 2.75 4.06 3.48 3.79 3.02 1.94 1.98 2 2 2.5 2.2 2.2 2.2 0.97 0.99 0.5 0.2 0.2 0 0 2006 2007 2008 2009 2010 2011 2012 2013	(Unit: $NT) 4.13 4.88 3.56 2.75 4.06 3.48 3.79 3.02 1.94 1.98 2 2 2.5 2.2 2.2 2.2 0.97 0.99 0.5 0.2 0.2 0 0 2006 2007 2008 2009 2010 2011 2012 2013	(Unit: $NT) 4.13 4.88 3.56 2.75 4.06 3.48 3.79 3.02 1.94 1.98 2 2 2.5 2.2 2.2 2.2 0.97 0.99 0.5 0.2 0.2 0 0 2006 2007 2008 2009 2010 2011 2012 2013	(Unit: $NT) 4.13 4.88 3.56 2.75 4.06 3.48 3.79 3.02 1.94 1.98 2 2 2.5 2.2 2.2 2.2 0.97 0.99 0.5 0.2 0.2 0 0 2006 2007 2008 2009 2010 2011 2012 2013
		2006	2007	2008	2009	2010	2011	2012	2013
Earning Per Share		4.13	4.88	3.56	2.75	4.06	3.48	3.79	3.02
Cash Dividend Per Share		1.94	1.98	2	2	2.5	2.2	2.2	2.2
Stock Dividend Per Share		0.97	0.99	0.5	0.2	0.2	0	0	0
Share Prices		60.6	54.6	32	52.1	55.9	43.55	44.85	40.7
Yield (%)		3.20%	3.63%	6.25%	3.84%	4.47%	5.05%	4.91%	5.41%

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21

Summary

Revenue will grow gradually and stably. Price Pressure 01 become stable. Gross margin is maintained and supposed to be 02 better than 2013. New automotive, networking, wearable device related 03 products will bring new business. 4G /LTE application is the major driving force for high-end products along with raising Cloud 04 . Computing New products are on market smoothly and will bring 05 growth momentum.

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22

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Thank you

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23