WEC — Interim / Quarterly Report 2017

Jul 28, 2017

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Winbond Electronics Corporation

Safe Harbor Notice

• This presentation contains forward-looking statements concerning, among other things, our financial condition, future expansion plans and business strategies. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. These forward-looking statements are inherently subject to significant risks, uncertainties and assumptions about us and based on our current expectations and projections about future events.

• We undertake no obligation to 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.

• Except for the numbers and information included in the our financial statements, the information contained in this presentation has not been audited nor reviewed by any accountant or independent expert. We make no express or imply representations or warranties as to the fairness, accuracy, completeness, or correctness of such information or opinions. This document is provided as of the date herein and will not be updated to reflect any changes hereafter. We and our representatives do not accept any responsibility or liability for any damage caused by their negligence or any other reasons, nor do they accept responsibility or liability for any loss or damages arising from the use of this presentation or the information contained herein or anything related to this document.

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Financial Results

2Q17 Statement of Comprehensive Income - Consolidated

Unit: NT$ M Net Sales Gross Profit Operating Income Pretax Income Net Income EPS (NT$) EBITDA

2Q’17	2Q’17	1Q’17	1Q’17	QoQ Change	QoQ Change	QoQ Change
Amount	%	Amount	%	Amount		%
11,411 100 10,425 100 3,714 32 2,989 29 1,398 12 925 9 1,449 13 883 8 1,087 10 723 7 0.28 0.19 2,849 25 2,316 22					986 9 725 24 473 51 566 64 364 50 533 23

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2Q17 Balance Sheet - Consolidated

		Jun. 30		’17		Mar. 31		’17			QoQ Change
Unit: NT$ M		Amount		%		Amount		%			Amount		%
Current Assets		26,872		37		26,345		38			527		2
Net Fixed Assets		39,846		54		35,622		52			4,224		12
Total Assets		73,609		100		68,861		100			4,748		7
L/T Debt		7,984		11		6,642		10			1,342		20
Total Equity		46,210		63		47,267		69			(1,057)		(2)
Current Ratio		1.50				1.96
Debt / Equity Ratio		0.59				0.46

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2Q17 Statement of Cash Flows - Consolidated

		2Q’17		1Q’17			QoQ Change
Unit: NT$ M		Amount		Amount			Amount
Operating Cash Flow		2,333		2,045			288
Investing Cash Flow		(5,383)		(3,499)			(1,884)
Financing Cash Flow		2,812		(15)			2,827
Cash & Equivalents		5,903		6,124			(221)
Depreciation and Amortization		1,451		1,391			60
CAPEX		(5,400)		(3,497)			(1,903)

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2Q17 Statement of Comprehensive Income - Memory

		2Q’17				1Q’17					QoQ Change
Unit: NT$ M		Amount		%		Amount		%			Amount		%
Net Sales		8,943		100		8,248		100			695			8
Gross Profit		2,616		29		2,099		25			517			25
Operating Income		1,127		13		781		9			346			44
Pretax Income		1,298		15		814		10			484			59
Net Income		990		11		687		8			303			44
EPS (NT$)		0.28				0.19
EBITDA		2,512		28		2,107		26			405			19

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2Q17 Balance Sheet - Memory

		Jun. 30		’17		Mar. 31		’17			QoQ Change
Unit: NT$ M		Amount		%		Amount		%			Amount		%
Current Assets		21,047		30		20,472		31			575		3
Net Fixed Assets		39,000		56		34,832		53			4,168		12
Total Assets		69,947		100		65,333		100			4,614		7
L/T Debt		7,984		11		6,642		10			1,342		20
Total Equity		44,944		64		45,932		70			(988)		(2)
Current Ratio		1.32				1.75
Debt / Equity Ratio		0.56				0.42

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2Q17 Statement of Cash Flows-Memory

		2Q’17		1Q’17			QoQ Change
Unit: NT$ M		Amount		Amount			Amount
Operating Cash Flow		2,257		2,259			(2)
Investing Cash Flow		(5,320)		(3,399)			(1,921)
Financing Cash Flow		2,805		0			2,805
Cash & Equivalents		3,476		3,734			(258)
Depreciation and Amortization		1,385		1,326			59
CAPEX		(5,320)		(3,399)			(1,921)

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Revenue and GM Trend- Consolidated

Revenue (NT$B)

Gross Margin

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35%
12.0
32%
10.0 31%
30%
30%
8.0 29%
28% 28% 28%
28%
6.0
25%
4.0 11.4
10.7 10.8
10.5 10.4
10.1
9.8
2.0 9.5
20%
0.0
3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Revenue Gross Profit GM%
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Revenue and GM Trend- Memory

Revenue (NT$B)

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Gross Margin
10.0
29% 30%
28%
8.0
27%
25%
6.0 24% 24% 24% 24% 25%
4.0 8.9
8.5 8.6
8.2 8.2
8.0 8.2 20%
7.5
2.0
0.0 15%
3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Revenue Gross Profit GM%
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- Y2017 CAPEX Memory

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Purpose %
(NT$ B) 17.0
New capacity &
18.0 57%
process migration
16.0
13.0
14.0 Fab C facility 20%
12.0 New technology 15%
10.0
Others 8%
8.0
4.8
Total 100%
6.0 3.9
3.0
2.1
4.0
2.0
0.0
2012 2013 2014 2015 2016 2017
(E)
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CAPEX(Cash Basis) as of 07/28/2017

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Winbond Business Update & Outlook

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2Q17 Memory Business Recap

QoQ YoY Revenue +8% +9% Gross Profit +25% +35%

• Increasing demand in NTWK and industrial application contributed to revenue growth

• Gross margin improved significantly both QoQ and YoY due to better product mix and price increase

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2Q17 Revenue Breakdown by Application

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Car & Industrial
Communication
19%
30%
Consumer
26% Computer
24%
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Car & Industrial Consumer Computer QoQ +14% QoQ +10% QoQ +9% YoY +31% YoY +18% YoY +5%

Communication QoQ +3% - YoY 6%

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NT$M
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NT$M
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NT$M
3,000
2,500
2,000
1,500
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NT$M
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2,000 2,500 2,500 3,000
1,500 2,000
2,000 2,500
1,000 1,500
1,500 2,000
500 1,000
0 1,000 500 1,500
2016Q2 2017Q2 2016Q2 2017Q2 2016Q2 2017Q2
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2Q17 Revenue Breakdown by Product

Revenue (NT$B)

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8.9
8.5 8.6
9.0
8.2 8.2 8.2
8.0
7.5
8.0
7.0 36% 36% 37% 38% 45% QoQ YoY
37% 41%
36%
6.0 Flash +17% +36%
5.0
Specialty +5% -10%
4.0
51% 51% 50% 50% 47% 44% 42% Mobile -5% +3%
3.0 54%
2.0
1.0
10% 12% 13% 14% 14% 15% 15% 13%
0.0
3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
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2Q17 Specialty DRAM Business

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QoQ YoY
Revenue +5% -10%
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• Revenue growth was constrained by limited capacity

• Revenue declined YoY due to reduced capacity in DRAM

• Gross margin slightly increased

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2Q17 Mobile DRAM Business

QoQ YoY Revenue -5% +3%

• Demand slightly dropped QoQ due to model change in customer side

• Demand for low density Mobile DRAM increased

• Expanding business in Display application

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2Q17 Flash Memory Business

QoQ YoY Revenue +17% +36%

• Strong demand along with better product mix and price increase

• Growing demand for NOR Flash in diversified applications

• Increase in content per box drives the demand of mid-to-high density NOR Flash

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Memory Market Outlook

 DRAM

 Demand-Supply balance remains healthy  Increasing content per box in smart phones and servers  Slow technology migration & limited capacity expansion  Low-to-mid density DRAM market remain lukewarm along with mild increase in ASP.

 NOR Flash

• Supply shortage will continue in 2H’17

 New applications and content per box drive the growth

• Need to cautiously monitor new capacity in China in 2018

• Impact subject to its quality

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Winbond Business Outlook

• All wafer capacity is fully utilized due to strong demand from diversified applications and customers.

• Wafer capacity will be expanded from 44K to 48K WPM in Q4’17 (26K DRAM + 22K Flash).

• DRAM revenue in 2H’17 will be constrained by limited capacity, while 3x nm products will be into mass production in Q3.

• Increasing business in new applications and new products

• Growing business in SLC NAND, especially in Serial NAND

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Winbond DRAM Bit Growth (2012~2018)

1Gb-Equ. Bit Growth (Mill. Pcs) YoY (%)

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Winbond NOR Flash Bit Growth (2012~2018)

1Gb-Equ. Bit Growth (Mill. Pcs) YoY (%)

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Expanding Product Portfolio in Code Storage Flash

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Code Storage Flash
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NOR
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SpiStack
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for flexible code/data storage Ultra low Vcc for low power consumption Reduced pin count in SLC NAND Passed AEC-Q100 certification

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Winbond Business Growth in SLC NAND

Serial NAND ONFI NAND

Worldwide Serial Flash Market Share

Winbond is Top 2 (34% Share)

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Peer A Winbond Peer B Peer C
40%
35% 33% 33% 33% 35%
34%
33%
30% 29% 29% 30% 32% 32% 34%
25%
20%
15%
14%
14%
13% 13%
12% 12% 12%
10% 10%
8%
7%
6%
5% 5%
0%
2012 2013 2014 2015 2016 Q1-17
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Source from iHS 2017/July

Worldwide NOR Flash Market Share

Winbond is Top 3 (20% Share)

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Peer A Peer B Winbond Peer C
30%
25% 25% 26% 26%
24%
23% 24%
22%
22% 21% 22%
21%
20% 20%
19% 18% 20%
17%
18%
15% 15% 17%
16%
13%
12%
10%
10%
5%
0%
2012 2013 2014 2015 2016 Q1-17
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Source from iHS 2017/July