WEC — Interim / Quarterly Report 2017

Apr 28, 2017

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1Q’ 17 Investor Conference

Apr 28, 2017

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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 forwardlooking 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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Financial Results

1Q17 Statement of Comprehensive Income - Consolidated

		1Q’17				4Q’16					QoQ Change
Unit: NT$ M		Amount		%		Amount		%			Amount		%
Net Sales		10,425		100		10,775		100			(350)		(3)
Gross Profit		2,989		29		3,041		28			(52)		(2)
Operating Income		925		9		937		9			(12)		(1)
Pretax Income		883		8		988		9			(105)		(11)
Net Income		723		7		871		8			(148)		(17)
EPS (NT$)		0.19				0.23
EBITDA		2,316		22		2,326		22			(10)		(0)

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1Q17 Balance Sheet - Consolidated

		Mar. 31		’17		Dec. 31		’16			QoQ Change
Unit: NT$ M		Amount		%		Amount		%			Amount		%
Current Assets		26,345		38		27,260		40			(915)		(3)
Net Fixed Assets		35,622		52		34,373		51			1,249		4
Total Assets		68,861		100		67,989		100			872		1
L/T Debt		6,642		10		6,638		10			4		0
Total Equity		47,267		69		45,221		67			2,046		5
Current Ratio		1.96				1.87
Debt / Equity Ratio		0.46				0.50

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1Q17 Statement of Cash Flows - Consolidated

		1Q’17		4Q’16			QoQ Change
Unit: NT$ M		Amount		Amount			Amount
Operating Cash Flow		2,045		3,103			(1,058)
Investing Cash Flow		(3,499)		(2,075)			(1,424)
Financing Cash Flow		(15)		(1,762)			1,747
Cash & Equivalents		6,124		7,684			(1,560)
Depreciation and Amortization		1,391		1,389			2
CAPEX		(3,497)		(2,352)			(1,145)

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1Q17 Statement of Comprehensive Income - Memory

		1Q’17				4Q’16					QoQ Change
Unit: NT$ M		Amount		%		Amount		%			Amount		%
Net Sales		8,248		100		8,585		100			(337)		(4)
Gross Profit		2,099		25		2,094		24			5		0
Operating Income		781		9		761		9			20		3
Pretax Income		814		10		936		11			(122)		(13)
Net Income		687		8		819		10			(132)		(16)
EPS (NT$)		0.19				0.23
EBITDA		2,107		26		2,083		24			24		1

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1Q17 Balance Sheet - Memory

Unit: NT$ M Current Assets Net Fixed Assets Total Assets L/T Debt Total Equity Current Ratio Debt / Equity Ratio

Mar. 31 ’17	Mar. 31 ’17	Dec. 31 ’16	Dec. 31 ’16	QoQ Change	QoQ Change	QoQ Change
Amount	%	Amount	%	Amount		%
20,472 31 21,270 33 34,832 53 33,608 52 65,333 100 64,399 100 6,642 10 6,638 10 45,932 70 43,921 68 1.75 1.67 042 047					(798) (4) 1,224 4 934 1 4 0 2,011 5
. .

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1Q17 Statement of Cash Flows-Memory

		1Q’17		4Q’16			QoQ Change
Unit: NT$ M		Amount		Amount			Amount
Operating Cash Flow		2,259		2,792			(533)
Investing Cash Flow		(3,399)		(1,895)			(1,504)
Financing Cash Flow		0		(1,766)			1,766
Cash & Equivalents		3,734		4,874			(1,140)
Depreciation and Amortization		1,326		1,322			4
CAPEX		(3,399)		(2,255)			(1,144)

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Revenue and GM Trend- Consolidated

Revenue (NT$B)

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Gross Margin
35%
12.0
32%
31%
10.0 30%
28% 28% 28% 28% 29% 30%
8.0
25%
6.0
4.0
10.5 10.7 10.8 10.4 20%
10.1
2.0 9.5 9.8
9.3
15%
0.0
2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17
Revenue Gross Profit GM%
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Revenue and GM Trend- Memory

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Revenue (NT$B)
Gross Margin
10.0
30%
29%
28%
8.0
27%
25%
24%
6.0 24% 24% 25%
24%
4.0
8.5 8.6
8.2 8.2 8.2
8.0 20%
7.5
2.0 7.3
0.0 15%
2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17
Revenue Gross Profit GM%
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- Y2017 CAPEX Memory

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Purpose %
(NT$ B)
17.4
New capacity &
18.0 53%
process migration
16.0
13.0 Fab C facility 25%
14.0
12.0 New technology 17%
10.0 Others 5%
8.0 Total 100%
4.8
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 04/28/2017

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Winbond Business Update & Outlook

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1Q17 Memory Business Recap

QoQ YoY Revenue -4% +1% Gross Profit +0% -4%

• Revenue slightly decreased due to unfavorable exchange rate and capacity limitation

• Exchange rate impacted gross margin

• Business performance was stabilized by price increase, better product mix and cost down.

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1Q17 Revenue Breakdown by Application

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Car & Industrial
Communication
18%
32%
Consumer
26% Computer
24%
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Note: Revenue excluded foundry and others

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Car & Industrial Consumer
- -
QoQ 10% QoQ 9%
-
YoY +19% YoY 1%
NT$M NT$M
1,465
2,500 2,000
1,234
2,090 2,065
2,000 1,500
1,500 1,000
1,000 500
2016Q1 2017Q1 2016Q1 2017Q1
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Computer - QoQ 6% - YoY 0% 1,968 1,960

Communication QoQ +7% - YoY 6%

NT$M

NT$M

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3,000
2,722
2,563
2,500
2,000
1,500
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1,500 1,234
1,000
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500
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2016Q1 2017Q1
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1Q17 Revenue Breakdown by Product

Revenue (NT$B)

8.6 8.5 9.0 8.2 8.0 8.2 8.2 7.5 8.0 7.3 7.0 36% 36% 37% 38% QoQ YoY 37% 41% 36% 6.0 36% Flash +4% +14% 5.0 Specialty -11% -14% 4.0 51% 51% 50% 50% 47% 44% Mobile -1% +22% 3.0 52% 54% 2.0 1.0 12% 10% 12% 13% 14% 14% 15% 15% 0.0 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

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1Q17 Specialty DRAM Business

QoQ YoY Revenue -11% -14%

• Revenue decreased due to reduced capacity (relocated to Flash)

• Reduced demand in TV and STB due to model change in customers

• Improved gross margin with better product mix

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1Q17 Mobile DRAM Business

QoQ YoY Revenue -1% +22%

• Significant YoY revenue growth driven by business in Handheld and Display

• Relative flat revenue QoQ due to seasonality

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1Q17 Flash Memory Business

QoQ YoY Revenue +4% +14%

• Demand increased in multiple applications, especially in display and handheld devices

• Content per box in various devices continued increasing

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Memory Market Outlook

 DRAM

• Content increase and upcoming hot season drive strong demand in high density DRAM, consuming significant portion of DRAM capacity.

• Supply-demand situation in medium and low density DRAM is relatively stable with slight price increase

 NOR Flash

• Limited supply from all NOR Flash suppliers

• Demand for NOR Flash in diversified applications continues to increase along with content increase

• Supply shortage drives price hike

• Need to cautiously monitor new capacity to be added in Taiwan and China in 2018

Winbond Business Outlook

• Optimizing customer/product mix in value-add applications for “ stable business and profit growth ”

• Continue to increase wafer capacity and upgrade technologies in the coming years to support business growth

• Focus on DRAM and code-Storage Flash products with special product performance and features ( more than “Moore” ) to establish “ unique competitiveness ”

• 3x nm DRAM will be into mass production from Q3

• Technology development of 2x nm DRAM is on track.

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Questions & Answers

Company website • Winbond: www.winbond.com