TXC — Investor Presentation 2017

Mar 15, 2017

==> picture [721 x 50] intentionally omitted <==

www.txccorp.com

Think of Frequency Think of

==> picture [303 x 109] intentionally omitted <==

Investor Presentation Mar. 16, 2017

Think of Frequency Think of TXC

==> picture [721 x 50] intentionally omitted <==

==> picture [602 x 141] intentionally omitted <==

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

1991 1999 2013
 Automotive ISO/TS16949  Automotive ISO/TS16949
Taiwan, Ping Cheng (PCF) China, Ningbo (NGB) China, Chongqing (CKG)
----- End of picture text -----

==> picture [313 x 139] intentionally omitted <==

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

•
3
manufacturing facilities
•
200+
automated production lines
•
310M+
monthly capacity
•
2 R&D centers (PCF, NGB)
•
400+
engineers
----- End of picture text -----

2

Think of Frequency Think of TXC

==> picture [721 x 50] intentionally omitted <==

==> picture [649 x 354] intentionally omitted <==

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

Crystals Oscillators & Modules Sensors
 Metal Can  Glass Seal  Crystal Oscillators SAW Oscillators Optical Sensors
(XO) (SO) (Ambient Light+Proximity)
 Seam Seal  Tuning Fork Voltage Controlled Oscillators  CompensatedTemperature Strategic
(VCXO) Oscillators Innovation
(TCXO/S3TCXO)
 Temperature Sensor Crystal Oven Controlled Real Time Clock
(TSX) Oscillators (RTC)
(OCXO)
 Automotive Applications
----- End of picture text -----

3

Think of Frequency Think of TXC

==> picture [131 x 51] intentionally omitted <==

==> picture [628 x 456] intentionally omitted <==

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

Notebook
Mobile Phone Bluetooth Earphone
Personal Stereo Crystals
Hard Drive
Automotive
Oscillators
Back-drift Radar Crystals
Monitor
Sensors
Tire Pressure Sensor
Digital Camera
Game Console
GPS
----- End of picture text -----

==> picture [186 x 13] intentionally omitted <==

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

Think of Frequency Think of TXC
----- End of picture text -----

4

==> picture [721 x 50] intentionally omitted <==

Worldwide Crystal and Oscillator Forecast (Source: CS&A)

kHz Crystal	19.6%	20.9%	21.4% 21.7% 21.8%
MHz Crystal	36.3%	36.5%	36.8% 36.9% 37.1%
XO	12.9%	13.0%	13.0% 13.1% 13.1%
TCXO	18.3%	17.2%	16.4% 15.8% 15.3%
VCXO	7.4%	7.1%	7.1% 7.1% 7.1%
OCXO	5.5%	5.4%	5.4% 5.4% 5.5%

Think of Frequency Think of TXC

5

==> picture [721 x 50] intentionally omitted <==

Worldwide Crystal and Oscillator Forecast (Source: CS&A)

kHz
Crystal	6,089	6,394	6,617 6,816	6,952
MHz
Crystal	8,897	8,986	9,211 9,395	9,583
XO	765	776	792 807	824
TCXO	889	867	849 832	816
VCXO	88	87	88 90	92
OCXO	3.12	3.08	3.13 3.19	3.26

Think of Frequency Think of TXC

6

==> picture [721 x 50] intentionally omitted <==

Company		Rank		Revenue (M,	Revenue (M,	USD)	Market Share
	2013	2014	2015	2013	2014	2015	2015
Epson	1	1	1	500.10	449.00	427.00	13.8%
NDK	2	2	2	432.52	417.86	338.36	10.9%
TXC	3	3	3	326.00	323.00	301.50	9.7%
KCD	4	4	4	297.65	295.00	300.51	9.7%
KDS	5	5	5	259.65	214.08	201.24	6.5%
Vectron	6	6	6	169.80	176.60	163.35	5.3%
SIWARD	7	7	7	95.50	99.50	94.53	3.0%
Hosonic	9	8	8	93.50	95.10	91.40	2.9%
RIVER	10	13	9	66.06	59.45	77.28	2.5%
Murata	12	11	10	59.32	60.00	69.00	2.2%
Others						1,039.2	33.5%
Total						3,101.8	100%

(Source: CS&A)

Think of Frequency Think of TXC

7

==> picture [721 x 50] intentionally omitted <==

Unit: NT$ Million

==> picture [614 x 277] intentionally omitted <==

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

2016:
2014: 2015:
9,637
9,526 9,266
(+4.00%)
(+0.23%) (-2.73%)
----- End of picture text -----

	~~14Q1~~	~~14Q2~~	~~14Q3~~	~~14Q4~~	~~15Q1~~	~~15Q2~~	~~15Q3~~	~~15Q4~~	~~16Q1~~	~~16Q2~~	~~16Q3~~	~~16Q4~~
Revenue(QoQ)	~~.~~ ‐9.8%	~~.~~ 8.9%	~~.~~ 6.8%	~~.~~ ‐1.4%	~~.~~ ‐14.0%	~~.~~ 3.9%	~~.~~ 8.9%	~~.~~ 3.2%	~~.~~ ‐15.5%	8.3%	13.8%	1.7%
Revenue(YoY)	‐6.9%	1.2%	3.0%	3.5%	‐1.4%	‐5.9%	‐4.0%	0.5%	‐1.2%	2.9%	7.6%	6.0%

Think of Frequency Think of TXC

8

==> picture [721 x 50] intentionally omitted <==

Unit: NT$ Million

Gross Profit Gross Profit Rate	~~14Q1~~ 23 14	23	.5% 24.	6% 24.	2% 25.5% 25.0%	2% 25.5% 25.0%	2% 25.5% 25.0%	22.1% 24.0% 25.3% 28.9%	22.1% 24.0% 25.3% 28.9%	22.1% 24.0% 25.3% 28.9%	24.7%	2016: 2,554 (+14.27%) ~~16Q3~~ ~~16Q4~~ 20.2% 3.1% 16.9% 11.1% 26.1% 26.5% 16Q3 16Q4	2016: 2,554 (+14.27%) ~~16Q3~~ ~~16Q4~~ 20.2% 3.1% 16.9% 11.1% 26.1% 26.5% 16Q3 16Q4
			~~14Q2~~ .Q1 14.	~~14Q3~~ Q2 14.	2014: 2,331 (+6.24%) ~~14Q4~~ ~~15Q1~~ ~~15Q2~~ Q3 14.Q4 15.Q1 15.Q			2015: 2,235 (-4.12%) ~~15Q3~~ ~~15Q4~~ ~~16Q1~~ 2 15.Q3 15.Q4 16.Q1			~~16Q2~~ 16Q2
Gross Profit(QoQ)	~~.~~ ‐7.3%		~~.~~ 13.8%	~~.~~ 5.2%	~~.~~ 4.1%	~~.~~ ‐15.9%	~~.~~ ‐7.9%	~~.~~ 18.3%	~~.~~ 8.4%	~~.~~ ‐3.2%	‐7.4%	20.2%	3.1%
Gross Profit(YoY)	‐2.5%		2.3%	9.3%	15.5%	4.7%	‐15.2%	‐4.6%	‐0.6%	14.4%	15.1%	16.9%	11.1%

Think of Frequency Think of TXC

9

==> picture [721 x 50] intentionally omitted <==

Unit: NT$ Million

==> picture [721 x 460] intentionally omitted <==

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

11.8% 11.7%
Net
10.6% 10.7%
Profit 10.3% 10.2% 10.3%
10.6%
Rate 10.2% 10.4%
9.3%
8.0%
14.Q1 14.Q2 14.Q3 14.Q4 15.Q1 15.Q2 15.Q3 15.Q4 16.Q1 16Q3 16Q3 16Q4
Net 2014: 2015: 2016:
995 938 1,015
Profit
(+6.42%) (-5.73%) (+8.21%)
14.Q1 14.Q2 14.Q3 14.Q4 15.Q1 15.Q2 15.Q3 15.Q4 16.Q1 16Q2 16Q3 16Q4
Net Profit (QoQ) ‐8.3% 9.0% 10.7% ‐1.9% ‐16.0% ‐19.9% 61.6% ‐11.2% ‐11.0% ‐6.2% 26.4% 15.3%
Net Profit (YoY) 6.2% 10.0% 1.5% 8.7% ‐0.5% ‐26.9% 6.7% ‐3.4% 2.3% 19.8% ‐6.3% 21.7%
Think of Frequency Think of TXC 10
----- End of picture text -----

==> picture [721 x 50] intentionally omitted <==

==> picture [682 x 468] intentionally omitted <==

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

Automotive
Automotive
Sapphire 4% Sapphire 4%
Others
5% 5%
Others IOT 7% IOT
7% 5% 5%
Mobile
Comm.
Mobile
26%
Comm.
Networking
24%
Networking 36%
Automotive
36% Sapphire
5% Mobile
Mobile 4%
Others
Computing
Computing IOT
6% 17%
19% 5%
Mobile
Networking
Comm.
35%
32%
Mobile
Computing
13%
11
----- End of picture text -----

==> picture [186 x 13] intentionally omitted <==

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

Think of Frequency Think of TXC
----- End of picture text -----

==> picture [721 x 50] intentionally omitted <==

0 1 2 3 4	0 1 2 3 4	0 1 2 3 4	0 1 2 3 4	0 1 2 3 4	0 1 2 3 4	0 1 2 3 4	0 1 2 3 4
Earning Per Share		3.48	3.79	3.02	3.21	3.03	3.27
Cash Dividend Per Share		2.2	2.2	2.2	2.5	2.5	-
Stock Price (4/E)		43.55	46.00	43.55	39.90	41.10	-
Payout Ratio(%)		63.22	58.05	72.84	77.88	82.51	-
Yields(%)		5.05	4.78	5.05	6.27	6.08	-

12

Think of Frequency Think of TXC

==> picture [721 x 50] intentionally omitted <==

==> picture [657 x 441] intentionally omitted <==

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

NGB (Unit: $NT)
Amount: 530M
PCF
TCXO/ Sensors /
Amount: 350M
New Products
SMD X’TAL 8KK
ACAP X’TAL
2015
CKG
NGB
Total Amount:
CKG
600 million
Amount: 80M
SMD X’TAL: 10KK
ACAP X’TAL
Factory + Facility
----- End of picture text -----

Think of Frequency Think of TXC

13

==> picture [721 x 50] intentionally omitted <==

==> picture [624 x 47] intentionally omitted <==

High Accuracy

Miniature

==> picture [231 x 310] intentionally omitted <==

==> picture [462 x 138] intentionally omitted <==

==> picture [519 x 137] intentionally omitted <==

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

Source: TXC
----- End of picture text -----

Think of Frequency Think of TXC

1 4

==> picture [721 x 50] intentionally omitted <==

Consumer Electronics、Telecom & Networking and automotive are relatively fast-growing industries

==> picture [697 x 122] intentionally omitted <==

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

(Source: MARKETANDMARKETS)
----- End of picture text -----

Think of Frequency Think of TXC

15

==> picture [721 x 50] intentionally omitted <==

==> picture [425 x 148] intentionally omitted <==

==> picture [425 x 148] intentionally omitted <==

==> picture [171 x 93] intentionally omitted <==

==> picture [173 x 73] intentionally omitted <==

==> picture [61 x 10] intentionally omitted <==

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

Source: IDC
----- End of picture text -----

Think of Frequency Think of TXC

16

==> picture [721 x 50] intentionally omitted <==

150 200 250 300 350 400	183.79	183.79	183.79	26% 232.01	26% 232.01	26% 232.01	18% 274.59	18% 274.59	18% 322.69	18% 322.69	18% 322.69	13% 10% 15% 20% 25% 30% 365.03	其他健身監測器 運動手錶 胸部扣帶 智慧服飾 智慧腕帶 藍牙耳機 穿戴式攝影機
100													頭戴式顯示器(HMD)
0 50												0% 5%	智慧型手錶 YoY
(Unit: KK)	2014			2015			2016		2017			2018 (Source：DIGITIMES)
2017	Shipment may reach to									3.2B units, sales of
smartwatch and rings growing fast
										Think		of Frequency Think of TXC		17

==> picture [721 x 50] intentionally omitted <==

==> picture [717 x 392] intentionally omitted <==

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

Worldwide Mobile Phone Market by Device Type，2014-2020 Chinese smartphone makers
1,800 35%
broke into the top five of the
31% 1,570 [1,621 1,657 1,678 ]
1,600 1,440 1,501 30%
global smartphone rankings
1,400 1,297 25% in 2016
1,200
1,000 20%
800 11% 15%
600
10%
400 4% 5%
3%
200 2% 1% 5%
0 0%
2014 2015 2016(e) 2017(f) 2018(f) 2019(f) 2020(f)
(Source：DIGITIMES)
2016(e) 2017(f) YoY
350 17.90%18.60% 17.10% 25.00%
20.00%
300
11.90%10.60% 10.50% 15.00%
250 6.60%
4.40% 10.00%
2.20%
200 5.00%
150 0.00%
-5.00%
100
-16.50% -10.00%
50
-15.00%
- -20.00%
(Unit: KK) (Source：TrendForce)
----- End of picture text -----

Think of Frequency Think of TXC

18

==> picture [721 x 50] intentionally omitted <==

PA246 Slim Bezel MI Mix

PA22X Invisible Window Samsung Note7

==> picture [230 x 239] intentionally omitted <==

PA22R RGB

==> picture [270 x 198] intentionally omitted <==

PAXXX RGB+ToF

==> picture [198 x 244] intentionally omitted <==

==> picture [198 x 100] intentionally omitted <==

19

Think of Frequency Think of TXC

==> picture [721 x 50] intentionally omitted <==

==> picture [461 x 174] intentionally omitted <==

==> picture [461 x 174] intentionally omitted <==

Think of Frequency Think of TXC 20

==> picture [721 x 50] intentionally omitted <==

10x to 100x faster 10x faster, max speed 10.53Gbps Source: Inter Digital

21

Think of Frequency Think of TXC

==> picture [721 x 50] intentionally omitted <==

-New application brings need of automotive electronic products

==> picture [477 x 311] intentionally omitted <==

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

120 6% 6%
5% 5%
111
100 107 5%
104
100
95 4%
80 87 90 4% 4%
84
81
77
4% 3%
4%
60 3% 3%
40 2%
20 1%
0 0%
Unit: KK) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
全球汽車銷售量預估，2011-2020
Think of Frequency Think of TXC
----- End of picture text -----

==> picture [170 x 228] intentionally omitted <==

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

+28%
----- End of picture text -----

==> picture [203 x 229] intentionally omitted <==

22

==> picture [721 x 50] intentionally omitted <==

==> picture [614 x 130] intentionally omitted <==

==> picture [614 x 130] intentionally omitted <==

==> picture [614 x 130] intentionally omitted <==

23

Think of Frequency Think of TXC

==> picture [721 x 50] intentionally omitted <==

Crystals

==> picture [721 x 467] intentionally omitted <==

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

•
1210 Crystal (bevel) 1210 Crystal (Bi-Mesa) Small, high
performance crystals
1612 High Q/High DLD Crystal
for cellphones
•
1210 32.768kHz Tuning Folk (4 pads) Wide temperature
Crystal
Products 1612 TSX with high DLD range crystal and
TSX for automotive
6035 SMD SC-Cut Crystal applications
Automotive TSX up to 105°C Automotive crystals up to 150°C
Oscillators
•
Low phase noise XO,
9775 OCXO ±5~20ppb
S3-TCXO, and OCXO
Low Phase Noise S3 TCXO with extended temperature for telecomm
applications
Oscillator Low Profile/High thermal shock resistant TCXO •
Thin/robust TCXO for
Products Low Jitter PLL XO up to
high-end cellphones
2.1GHz(7050)
•
Wide temperature
Low Phase Noise VCXO (7050/5032)
range XO and TCXO
Automotive XO up to
for automotive
125°C
applications
PM2.5 Sensing
PM2.5 Sensing Devices
Modules
Sensors
Sensor 3-in-1 RGB/Proximity Sensors Small PS
•
Products Optical sensors for
3-in-1 Sensors for cellphone
no-hole top plates
applications
•
PM2.5 modules
2017 Q1 Q2 Q3 Q4
24
Think of Frequency Think of TXC
----- End of picture text -----

==> picture [721 x 50] intentionally omitted <==

Think of Frequency, Think of

==> picture [172 x 74] intentionally omitted <==

==> picture [267 x 307] intentionally omitted <==

25

Think of Frequency Think of TXC