WT — Call Transcript 2022

Aug 5, 2022

2022 Second Quarter Investor Conference August 5, 2022

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Safe Harbor Statement

 WT’s forward-looking statements, which may include statements regarding its results of operations, financial condition or business prospects, are subject to significant risks and uncertainties and are based on WT’s current expectations.  Actual results may differ materially from those expressed or implied in these forward-looking statements for a variety of reasons, including, among other things: the cyclical nature of our industry; our dependence on introducing new products on a timely basis; our dependence on growth in the demand for our products; our ability to compete effectively; our dependence on key personnel; general economic and political conditions; possible disruptions in commercial activities caused by natural and human-induced disasters, including terrorist activity and armed conflict; and fluctuations in foreign currency exchange rates.

 In addition, any financial information contained here within is presented in conformity with International Financial Reporting Standards (IFRSs).

 Except as required by law, our release of financial forecasts and forward-looking statements at any particular time does not create any duty of disclosure, and we expressly disclaim any obligation to publicly update or revise any forecasts or forward-looking statements, whether as a result of new information, future events or otherwise.

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2

Agenda

1. Overview

2. Financial Update

3. Business Outlook

4. Questions and Answers

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3

•

1. Overview

A leading Asian semiconductor distributor (74% of global market) • Founded in 1993

US$16B 8000+ NR 34% YoY Customers

80+ Product Lines

Headquartered in TWN

• Listed in 2000

(ticker: 3036 TT)

Top 500 Asia High Growth (FT)

Top 5% Governance (TWSE)

• Taiwan High Salary 100 Index (TWSE)

2600+ #46 / #5 29B+ Employees Offices / Delivered Chips around Asia Warehouses annually

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4

2. Financial Update

2Q22 Statement of Comprehensive Income

Unit: NT$M

K	2Q22		1Q22		2Q21	YY
ey accounts	Amount		Amount	QoQ	Amount	o
Net Operating revenues Gross profit	130,121 5,017		127,943 4,867	2% 3%	102,096 4,203	27% 19%
Gross margin	3.86%		3.80%		4.12%
Operating expenses Operating profit	(1,798) 3,219		(1,852) 3,015	-3% 7%	(1,517) 2,686	19% 20%
Operating margin	2.47%		2.36%		2.63%
Financing costs Others Earning before tax Income tax expense Profit attributable to owners of the parent	(362) 130 2,987 (792) 2,206		(237) 22 2,800 (608) 2,218	53% 491% 7% 30% -1%	(158) 39 2,567 (569) 2,001	129% 233% 16% 39% 10%
EPS (in dollars)	2.25		2.77		2.54
Weighted average shares (M shares)	861		800		788
Pro forma EPS (in dollars)	2.19		2.75		2.60
Outstanding shares as of period end (M shares)	884		806		769

Note ： 2Q22 EPS is calculated by profit attributable to owners of the parent minus NT$270mn dividends of preferred stock.

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5

2. Financial Update

1H22 Statement of Comprehensive Income

Unit: NT$M

K	1H22		2H21	HH	1H21	YY
ey accounts	Amount		Amount	o	Amount	o
Net Operating revenues Gross profit Gross margin Operating expenses Operating profit Operating margin Financing costs Others Earning before tax Income tax expense Profit attributable to owners of the parent EPS (in dollars)	258,064 9,884 3.83% (3,649) 6,235 2.42% (599) 152 5,788 (1,400) 4,424 5.00		248,154 9,318 3.75% (3,462) 5,856 2.36% (408) 267 5,715 (1,354) 4,412 5.58	4% 6% 5% 6% 47% -43% 1% 3% 0%	199,742 7,668 3.84% (2,967) 4,701 2.35% (307) 71 4,465 (971) 3,511 4.45	29% 29% 23% 33% 95% 114% 30% 44% 26%
Weighted average shares (M shares) Pro forma EPS (in dollars) Outstanding shares as of period end (M shares)	831 4.70 884		791 5.50 803		788 4.57 769

Note ： 1H22 EPS is calculated by profit attributable to owners of the parent minus NT$270mn dividends of preferred stock.

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6

2. Financial Update

Balance Sheet

Unit: NT$M

Key accounts	2Q22			1Q22	%	2Q21
	Amount	%		Amount		Amount	%
Cash and cash equivalents Accounts receivable Inventory Other current assets Non-current assets	6,136 84,388 85,001 2,628 17,061	3 43 44 1 9		5,165 77,042 71,837 2,980 24,879	3 42 39 2 14	5,062 61,920 53,985 2,134 19,201	4 44 38 1 13
Total Assets	195,214	100		181,903	100	142,302	100
Short-term loans	38,359	20		33,020	18	36,281	25
Accounts payable Other current liabilities Long-term loans	75,725 10,041 15,132	39 5 8		74,433 5,400 9,710	41 3 5	53,214 3,690 200	37 3 0
Other liabilities	1,396	1		1,310	1	1,526	1
Total Liabilities Total Equity	140,653 54,561	72 28		123,873 58,030	68 32	94,911 47,391	67 33
Indices	2Q22			1Q22		2Q21
Current ratio Liabilities/Assets ratio Liabilities/Equity ratio Gearing ratio	144% 72% 258% 0.87			139% 68% 213% 0.65		132% 67% 200% 0.66

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2. Financial Update

Unit: NT$M

Revenue vs GPM

OP vs OPM

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Revenue GPM OP OPM
140,000 4.12% 4.5% 3,500 3.0%
3.87% 3.86% 2.63% 2.47%
120,000 3.55% 3.65% 3.80% 4.0% 3,000 2.45% 2.28% 2.36% 2.5%
2.06%
100,000 3.01% 3.5% 2,500
2.78% 2.0%
3.0% 1.53%
80,000 2,000 1.44%
2.5% 1.5%
60,000 119,105 129,049 127,943 130,121 1,500 2,916 2,940 3,015 3,219
91,862 109,090 97,646 102,096 2.0% 2,686 1.0%
40,000 1.5% 1,000 2,015
20,000 1.0% 500 1,407 1,568 0.5%
- 0.5% - 0.0%
3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22
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OPEX vs. OPEX ratio
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OPEX OPEX(%)
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2,000 1.7%
1,800 1.47% 1.48% 1.49% 1.42% 1.44%
1.37% 1.39% 1.5%
1,600 1.34%
1,400
1.3%
1,200
1,000 1.1%
800 1,353 1,463 1,450 1,517 1,696 1,766 1,852 1,798 0.9%
600
400
0.7%
200
- 0.5%
3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22
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EPS (NTD)

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3.0 2.85
2.77
2.66
2.54
2.5
2.25
1.92
2.0
1.57
1.46
1.5
1.0
0.5
3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22
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2. Financial Update

Operating Cash Cycle

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AR INV AP Operating cash cycle
70
59
60
53
52
51
50 50
50 46
40
40
30
56 51 54 48 49 53 48 50 53 49 52 54 51 53 57 57 55
46 45 45 46 45
43
20
37
10
0
3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22
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2. Financial Update

ROWC vs. NWC/Sales

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NWC/Sales ROWC
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0.20
0.18 17.1% 17.1%
16.3% 16.2%
0.16
14.0%
13.7%
0.14
12.5%
12.2%
0.12
0.10
0.08
0.06
0.04
0.02
0.00
3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22
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2. Financial Update

ROE vs. Equity

Unit: NT$M

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Equity attributable to owners of the parent ROE
70,000 20%
19.0%
16.9% 18%
60,000
16.3% 15.9% 15.7%
16%
50,000 13.0% 14%
12.3%
11.7%
12%
40,000
10%
30,000
53,768 57,960 54,500 8%
49,685
46,078 47,235 47,246
6%
20,000 38,643
4%
10,000
2%
- 0%
3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22
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3. Business Outlook

We currently expect 3Q22 :

 At a forecast exchange rate of 29.9 NT Dollars to 1 US Dollar

• Revenue mid-point guidance: 4.5% QoQ increase and 14.2% YoY growth

			Unit: NT$M
I	3Q22		2Q22
tem	Forecast		Amount
Revenue Gross Profit Gross Margin Operating Expenses Operating Profit Operating Margin Profit Before Tax Profit attributable to owners of the parent	132,000 ~ 140,000 4,422 ~ 4,970 3.35% ~ 3.55% 1,912 ~ 2,029 2,510 ~ 2,941 1.90% ~ 2.10% 2,151 ~ 2,582 1,763 ~ 2,103		130,121 5,017 3.86% 1,797 3,219 2.47% 2,987 2,206
EPS (NT$)	2.01 ~ 2.39		2.25
Weighted average shares (M shares)	879		861

Note ： 2Q22 EPS is calculated by profit attributable to owners of the parent minus NT$270mn dividends of preferred stock.

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3. Business Outlook

Global Semiconductor Market Forecast by Electronic Equipment Category

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(US$ Billion)
723
90
595
91
54
65 60
44 79
66
252
220
147 152
2021 2025
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Semiconductor Market

2021-25F semiconductor segment revenue CAGR vs. 3 months ago

• Automotive: +13.8% vs. +14.0%

• Industrial: +8.9% vs. +9.7%

• Communication: +8.1% vs. +8.0%

 Consumer: +4.4% vs. +4.7%

 Computing: +3.5% vs. +3.6%

Automotive Industrial Communications Consumer Computing Mobile Phones

• Mobile Phone: +0.9% vs. +3.0%

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Source ： Gartner, 2022/06

3. Business Outlook

2Q22 Revenue Breakdown by Application

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1Q22 (Left) vs. 2Q22 (Right )
QoQ -14%
100% 40
6.4% 6.9% 7.8% 35 QoQ +29% QoQ -7%
30
10.4% 9.3% 41% Star
9.9%
25
Application
80% 20 QoQ +3%
QoQ +8%
15
16.6% 18.4% QoQ +14%
23.4% 10
5
0
60% 14.3% 12.0%
12.2%
34% Quality
23.7% Business
40% 24.9%
21.7%
2Q21 (Left) vs. 2Q22 (Right )
35 YoY +79% YoY +16%
YoY +11%
20% 30
27.4% 29.7% 25% Cash 25
25.0%
Cow
20
YoY +8%
YoY +22%
15
YoY +55%
0%
10
2Q21 1Q22 2Q22
5
Automotive Industry & Instrument (I&I)
0
Communication Consumer
Computing Mobile Phone
Revenue (NT$B)
Revenue (NT$B)
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14

Q & A

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WT Microelectronics Website : www.wtmec.com The BEST Distribution Partner

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Thank You!

WT Microelectronics Website : www.wtmec.com The BEST Distribution Partner

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