VPEC — Investor Presentation 2018

Nov 29, 2018

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Company Profile World-class leading edge with MOCVD

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Safe Harbor Notice

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Core Technology

MOCVD( 有機金屬氣相沉積法 )

• Metal Organic Chemical Vapor Deposition

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MOCVD( 有機金屬氣相沉積法 )

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Semiconductor(by Material)

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||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|Element|
|Si|Ge|
|,|
|Semiconductor|IV-IV|
|SiC,|SiGe|
|III-V|
|GaAs,|InP, GaN, GaP, GaSb...|
|Com|ound|
|p|
|II-VI|
|ZnSe,|ZnS, CdS, etc.|
|Period|Column II|III|IV|V|VI|
|Be|鈹|B|硼|C|碳|N|氮|O|氧|
|2|
|Beryllium|Boron|Carbon|Nitrogen|Oxygen|二元化合物|Binary : GaAs, InP, GaP,GaN, etc.|
|Mg|鎂|Al|鋁|Si|矽|P|磷|S|硫|
|3|Magnesium|Aluminum|Silicon|Phosphorus|Sulfur|三元化合物|Ternary : InGaAs, InGaP, AlGaAs, etc.|
|4|Zn|鋅|Ga|鎵|Ge|鍺|As|砷|Se|硒|四元化合物|Quaternary : AlGaInP, InGaAsP, etc.|
|Zinc|Gallium|Germanium|Arsenic|Selenium|
|Cd|鎘|In|銦|Sn|錫|Sb|銻|Te|碲|五元化合物|Pentanary : AlGaInAsN, etc.|
|5|
|Cadmium|Indium|Tin|Antimony|Tellurium|
|Hg|汞|Tl|鉈|Pb|鉛|
|6|
|Mercury|Thallium|Lead|
|5|

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Chemical Reaction During Epitaxy

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化學反應式：

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主要原物料:

MO Source + Hydride + Carrier Gas： H2

A s H 3[: rs ne] A i PH3 : Phosphine SiH 4 : Silane Si H 2 6 : Disiline H2Se : Hydrogen Selenide CBr 4 : Carbon Tetrabromide

TEAl : Tri-ethyl-Aluminum ( C2H5 )3Al TMGa : Tri-Methyl-Gallium ( CH3 )3 Ga SiH TMIn : Tri-Methyl-Indium ( CH3 )3In Si H 2 DETe : Di-ethyl-Tellurium ( C2H5 )2Te DEZn : Di-ethyl-Zinc ( C2H5 )2Zn CBr CP2Mg : Bis (cyclo-penta-dienyl ) Magnesium 環戊二烯鎂

CH Al CH Al 3 3 TMAl Tri - Methyl - Aluminum ( CH3 )3 三 甲基 鋁 CH 3

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Advantages of Compoundsemiconductor

1. High Electron Mobility高電子移動速率(5.7x higher than CM0S)

2. High Frequency Response高頻率響應

3. Wide Band Width 寬幅之頻寬 4 . High Linearity高線性度

4. High Power高功率

5. Alternative Choice of Material材料選擇多元性 7. 抗輻射 適用於無線通訊、光纖通訊、光顯示(LED)& 太陽能產 業

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GaAs in Wireless Communication Su l Chain pp y

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IDM :Skyworks, Qorvo, Avago, Anadigics

Sumitomo, Freiberg, AXT 4~6 ”GaAs Substrate

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GaAs Epi- Wafer 磊晶片

Microelectronics IC Process

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Wireless Communication Substrate

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MOCVD Reactor

Foundry: WIN, AWSC, GCS IC Package & Testing

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Global GaAs wafer market

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Global GaAs wafer market

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Source:Yole

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Global GaAs market

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GaAs with More and More Application

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VPEC’s products

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Microelectronics Photonics
•
HBT
•
LD
•
PHEMY
•
VCSEL
•
BiHEMT
•
PD
•
GaN on Sic
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RF

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Source:Avago

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IoT(802.11ac/802.11ax/802.11ad)

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802.11ax will greatly increase network capacity by supporting up to eight simultaneous data streams, each delivering up to 1.2 Gbps, to connect many more devices at greater speeds. 802.11ax portfolio includes 2.4GHz and 5GHz front-end modules (FEMs) and BAW filters. According to ABI Research, 802.11ax devices will account for 57% of Wi-Fi chipsets by 2021

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Small Cell

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According to an estimate from Small Cell Forum, small cell shipments are expected to more than double from a base of 3.8 million units in 2016 to 7.8 million units by 2020 , creating a $6 billion market segment.

Source:Skyworks

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iPhone XS

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Source:iFixit

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iPhone XR

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Source:iFixit

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iPhone XR

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Source:iFixit

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iPhone X(Intel)

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iPhone X(Qualcom)

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Source:iFixit

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Samsung Galaxy S9

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Source:iFixit

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Samsung Galaxy Note9

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Source:iFixit

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Huawei Mate20 Pro

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Source:iFixit

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Apple Watch

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Source:iFixit

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5G is coming

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Customers’ Design Win

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5G Smart Phone Shipments

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Source: Business Wire

Ericsson Mobility Report forecasts over 1 billion subscriptions by the end of 2023, accounting for 20% of mobile data traffic worldwide.

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What’s new

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RF Outlook

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5G Brings New RF Challenges for Handsets

RF complexity

�Bandwidth � Linearity

� Power management

GaAs Provides The Key Ingredient For 5G Phones

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Source:Compound Semiconductor Volume 23 lssue 8

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GaN on SiC

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High tempeture ~~High frenqurency~~ Excellenct Heat Dissipation

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PIN Diode

收光晶粒之上游材料 , 可用於 PIN & APD, 具元件驗證能力 技術能力已達 25G

6.59% of revenue in 2013 18.88% of revenue in 2017Q1 12.49% of revenue in 2014 15.94% of revenue in 2017Q2 14.95% of revenue in 2015 6.9% of revenue in 2017Q3 17.93% of revenue in 2016 12.78% of revenue in 2017Q4 13.72 % of revenue in 2017 24.87% of revenue in 2018Q1 17.78% of revenue in 2018Q2 18.61% of revenue in 2018Q3

Image sensor’s application: The concept of “Machine Vision”

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Seeing in Low Light ConditionsNight Vision

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Penetrate Atmosphere Obscurants

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Seeing through Smoke and Fire

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Product Inspection

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FP LD & DFB LD

• 1270 nm/1310 nm/1550 nm

• FP LD 2016/11 small volume shipment

• DFB LD 2018 Q2 small volume shipment

• Upgraded products in reliability test p rocess

• Product Advantage:

• Far field angle design Increase power & yield rate Reduce lens cost

• Improve product mix & margin

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VCSEL inside iPhoneX

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the Dot projector which projects 30,000 infrared dots onto your face to map its structure.

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The Flood illuminator is used in low-light and dark environments to illuminate your face using infrared light to enable the IR camera.

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VCSEL inside iPhoneX

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VCSEL inside iPhoneX

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How does a 3D laser sensor work?

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VCSEL Application

High Power 940nm 3D Sensing/ 808nm hair removal and other aesthetics applications/ LiDAR for Autonomous Driving/ Surveillance

High Speed 850nm Datacom

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VCSEL

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VCSEL

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Epi Wafer Market Consolidation

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2010
2013
Source:Strategy Analytics
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2017
Source:Yole 48
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2014-2018Q1-Q3 Financial Result

	2018 Q1-Q3	%	2017	%	2016	%	2015	%	2014	%
Revenue	1,573,520	100.00%	2,137,109	100.00%	2,182,825	100.00%	2,391,899	100.00%	2,073,370	100.00%
Gross margin	591,907	37.62%	743,467	34.79%	809,059	37.06%	896,369	37.48%	720,975	34.77%
Operating Profit	367 269 ,	23 34% .	515 093 ,	24 10% .	588 072 ,	26 94% .	670 700 ,	28 04% .	524 487 ,	25 30% .
Financial Income	22,855	1.45%	-35,375	-1.66%	-29,431	-1.35%	20,258	0.85%	40,133	1.94%
Tax	71,387	4.54%	-85,366	-3.99%	-91,534	-4.19%	-98,301	-4.11%	-96,209	-4.64%
Net income	318,737	20.26%	394,352	18.45%	467,107	21.40%	592,657	24.78%	468,411	22.59%
EPS	1.72		2.15		2.12		2.4		1.9

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2019 Outlook

• New Momentum

• IOT Application(802.11ac or 802.11ax)

• New Products in Photonics

• Healthy Portfolio

• By products(improve product mix & margin)

• By customers

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