WEC — Call Transcript 2021

Feb 19, 2021

~~2H20 Investor Conferen~~ ce

Feb. 19[th] , 2021

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Safe Harbor Notice

• We have made forward-looking statements in this presentation. Our forward-looking statements contain information regarding, among other things, our financial condition, future expansion plans and business strategies. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that these expectations and projections are reasonable, such forward-looking statements are inherently subject to risks, uncertainties and assumptions about us.

• We undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this conference might not occur and our actual results could differ materially from those anticipated in these forward-looking statements.

• The information contained herein shall also not constitute an offer to sell or a solicitation of an offer to buy the company’s securities nor shall there be any sale of such securities in any state or country in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or country.

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Agenda

01 Financial Results

Jessica Huang - CFO

02 Business Recap & Outlook

Pei-Ming Chen - President

03 Q & A

Pei-Ming Chen & Jessica Huang

3

Financial Results

4

- Consolidated Statement of Comprehensive Income

Unit: NT$ M Net Sales Gross Profit Gross Margin Operating Income Net Non-Operating Income (Loss) Income Tax Benefit (Expense) Net Income (Loss) Earnings Per Share EBITDA
	4Q20	3Q20	QoQ	2020	2019	YoY
	20,348 16,034		4,314	60,683 48,771		11,912
	6,192 4,323		1,869	17,040 12,914		4,126
	30% 27%			28% 26%
	607 113		494	1,627 1,255		372
	(102) 377 (120) (113)		(479) (7)	185 497 (293) (275)		(312) (18)
	385 377 0.09 0.08		8 0.01	1,519 1,477 0.33 0.32		42 0.01
	3,135 2,472		663	11,090 10,033		1,057

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Revenue and GM Trend - Consolidated

(NT$ B)

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13.4
12.5 12.8
12.0 11.5
10.9
32%
30%
29%
26% 27% 27%
24%
22%
1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20
Gross Profit Revenue
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Balance Sheet - Consolidated

Unit: NT$ M Cash Inventory(Net) Property, Plant and Equipment Total Assets L/T Liability Total Liabilities Shareholders' Equity Debt / Equity Ratio Current Ratio	Dec. 31, '20 % Jun. 30, '20 % Dec. 31, '19 % 11,744 9% 12,559 12% 11,468 11% 14,141 11% 10,583 10% 10,332 10% 61,453 49% 55,340 54% 56,977 54% 126,043 100%103,541 100%104,805 100% 20,534 16% 20,868 21% 19,662 19% 55,450 44%41,448 40%40,948 39% 70,593 56%62,093 60%63,857 61% 0.79 0.67 0.64 1.87 2.29 2.14

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Statement of Cash Flow - Consolidated

Unit: NT$ M Operating Cash Flow Depreciation & Amortization Investing Cash Flow CAPEX Financing Cash Flow Net change Cash & Equivalents
	4Q20	3Q20	QoQ	2020	2019	YoY
	4,536 2,268		2,268	11,118 10,576		542
	2,528 2,359		169	9,463 8,778		685
	(1,349) (9,967)		8,618	(14,844) (14,636)		(208)
	(2,024) (3,224)		1,200	(8,356) (13,431)		5,075
	(588) 4,387		(4,975)	4,152 3,033		1,119
	2,509 (3,323) 11,744 9,236		5,832 2,508	276 (1,092) 11,744 11,468		1,368 276

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- Statement of Comprehensive Income Memory

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Unit: NT$ M 4Q20 3Q20 QoQ 2020 2019 YoY
Net Sales 10,408 10,354 54 39,650 37,885 1,765
Gross Profit 2,514 2,142 372 8,807 8,239 568
Gross Margin 24% 21% 22% 22%
Operating Income 576 132 444 1,091 379 712
Net Non-Operating Income (Loss) (133) 208 (341) 259 980 (721)
Income Tax Benefit (Expense) (93) (9) (84) (46) (103) 57
Net Income (Loss) 350 331 19 1,304 1,256 48
Earnings Per Share 0.09 0.08 0.01 0.33 0.32 0.01
EBITDA 2,748 2,282 466 9,736 8,738 998
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Revenue and GM Trend - Memory

(NT$ B)

29% 24% 24% 21% 22% 19% 21% 16% 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 Gross Profit Revenue

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Balance Sheet - Memory

Unit: NT$ M Cash Inventory(Net) Property, Plant and Equipment Total Assets L/T Liability Total Liabilities Shareholders' Equity Debt / Equity Ratio Current Ratio	Dec. 31, '20 % Jun. 30, '20 % Dec. 31, '19 % 4,818 5% 4,824 5% 5,425 6% 7,920 8% 8,705 9% 8,750 9% 54,399 54% 54,083 57% 55,691 57% 100,053 100%94,564 100%98,249 100% 17,826 18% 18,362 19% 19,162 19% 34,604 35%35,285 37%37,228 38% 65,449 65%59,279 63%61,021 62% 0.53 0.60 0.61 1.96 1.86 1.80

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Statement of Cash Flow - Memory

Unit: NT$ M Operating Cash Flow Depreciation & Amortization Investing Cash Flow CAPEX Financing Cash Flow Net change Cash & Equivalents
	4Q20	3Q20	QoQ	2020	2019	YoY
	4,187 1,645		2,542	9,971 10,131		(160)
	2,172 2,150		22	8,645 8,359		286
	(2,799) (2,723)		(76)	(8,654) (15,619)		6,965
	(1,860) (3,033)		1,173	(7,885) (13,159)		5,274
	(787) 471		(1,258)	(1,924) 1,528		(3,452)
	601 (607) 4,818 4,217		1,208 601	(607) (3,960) 4,818 5,425		3,353 (607)

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Y2020 Memory CAPEX

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(NT$ B)
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16.7
15.2
13.2
12.7
7.9
2017 2018 2019 2020 2021 (E)
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2021 (E)

Cash Basis, as of Jan. 31th, 2021

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Business Recap

& Outlook

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4Q20 Revenue Breakdown by Product

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(NT$ B)
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12
11% 9% 9%
10
10% 10%
13% 10%
14%
8 36% 34% 34%
34%
35% 35%
37%
39%
6 10% 8%
8% 9%
9% 9%
7%
7%
4
45% 46% 46% 47% 47% 49%
43%
40%
2
0
1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20
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NOR NAND Specialty Mobile

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Revenue Breakdown by Application

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2019
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2020
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Note: Rev excluded foundry and others

Car & Industrial Consumer - YoY - 3% YoY 2% NT$M NT$M 10,000 14,000 8,000 12,000 10,000 6,000 8,000 4,000 6,000 4,000 2,000 2,000 0 0 2019 2020 2019 2020

Communication YoY + 16%

Computer - YoY 1%

NT$M

NT$M

12,000 14,000 10,000 12,000 10,000 8,000 8,000 6,000 6,000 4,000 4,000 2,000 2,000 0 0 2019 2020 2019 2020

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2020 DRAM Business

• Revenue decreased by mid-single digits % YoY

• Bit shipment increased by high-teens % YoY

• 25nm DRAM revenue steadily increased

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4%
6% 17%
25% 8% 11% 20%
24%
27% 23%
28% 22%
64%
62%
58% 55% 54% 51%
7% 8% 7% 6% 6% 7%
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3Q19 4Q19 1Q20 2Q20 3Q20 4Q20
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65nm 46nm 38nm 25nm

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2020 Flash Business

• Both revenue and shipment hit record highs

• ASP remained flat YoY

• Winbond remained No.1 NOR Flash supplier worldwide

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15%
17%
16% 16%
16% 16%
59% 61% 65%
62% 64% 64%
25% 22% 20% 20% 22% 20%
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3Q19 4Q19 1Q20 2Q20 3Q20 4Q20
90nm 58nm 46nm
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2020 Key Achievement

• Expanded Fab capacity from 54K to 57K wafers per month

• The production yield of 25nm DRAM has reached a mature level

• Launched the W77Q (32 Mbit) TrustME® Secure Serial Flash memory

• Low Power DRAM and HyperRAM have been successfully adopted in various AI edge computing applications

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Market and Business Outlook (1)

 Specialty DRAM

• Limited Supply: Major suppliers continued to convert DRAM capacity to CIS

• Growing Demand: WiFi6, AIoT, ADAS, Wearable, and Game console

 Code Storage Flash

• Tight Supply: The situation may continue through 2H’21 for both NOR and SLC NAND

• Growing Demand: TWS, Wearable, Networking, PC, and TV

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Market and Business Outlook (2)

 Overall Market

• Along with the economic recovery, 5G/ AI/ IoT demand is expected to rise

• Memory industry is entering into a new up-cycle

• Global politics and COVID-19 are expected to add uncertainties for the memory market

 Winbond Business

• Supply increase: Continue to transfer products to new process nodes

• Innovative solutions: HyperRAM and TrustME® Secure Serial Flash

• Kaohsiung fab: Equipment move-in in 1H’22

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Q & A

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Thank you

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