WT — Interim / Quarterly Report 2021

Sep 14, 2021

Investor Conference

August 6, 2021

Agenda

1. Overview

2. Financial Update

3. Business Outlook

4. Questions and Answers

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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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1. Overview

• A leading Asian semiconductor distributor, founded in 1993 and listed in 2000 (ticker: 3036 TT), providing supply chain management such as capital flow, information flow, inventory, and technical support

• Sophisticated frameworks in Asia (total 45 offices in China, Taiwan, Korea, and S.E.Asia & India; total 5 warehouses in Taiwan, HK, Shenzhen China, Korea, and Singapore) to cover over 8,000 customers

• Over 2,300 headcounts (over 650 sales, 250 PMs, and 450 FAEs)

• Digital Transformation to enhance operation efficiency and reduce expense by intelligent operation management system

• Published Sustainability Reports since 2018 (More details in WT Sustainability Website)

• 2016-2020 revenues CAGR of 25% and 2020 revenues closed to US$12bn

• Maintaining sustainable growth by expanding value-added service and market share

• Establishment of a leading and trustworthy brand in distribution industry by core value - Integrity, Discipline and Teamwork with Respect for the Individual

1. Overview

ESG Highlights

 Environmental Sustainability

• Greenhouse Gas (GHG) Emissions data certificated by thirty independent party during 2018-2020

• Commit the goal for reducing 1% GHG emissions per year

• Introduced Extended Warehouse Management (EWM) in 2014 and reduced 3,153 thousand paper sheets during 2015-2020

 Social Significance

• Value employees’ health, safety, salary, and benefit. WT enters Taiwan High Salary 100 Index.

• Ability of WFH during COVID-19 pandemic and prevention material donation for the community

• WT Education Foundation established in 2014 and cumulative donations & activities expense more than NT$47 millions during 2015-2020

 Corporate Governance

• Awarded the top 5% in governance ranking by TWSE for the year of 2020

• Established risk management committee to enforce WT’s risk management mechanisms

• The gender, experience, and expertise diversity. 43% female and 43% independent director among the board members

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1. Overview

World Semi Revenue Forecast: Strong Growth Continues to Break 600B Milestone in 2022

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Billions of Dollars and Revenue Growth
CAGR (2021-25): 7.4%
700
6.6%
650 CAGR (2016-20): 6.8% 9.9% 3.3% $667
-3.5%
600 22.4% $627 $626
$605
550 $571
500 12.9%
10.4%
450 21.9% $476 -11.3% $466
400 $422 $422
3.3%
350
$346
300
250
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Source ： Gartner, 2021/7
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1. Overview

Worldwide Non-Memory Semi Revenue Forecast: Strong Growth Continues to Break 400B Milestone in 2021

Billions of Dollars and Revenue Growth

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CAGR (2021-25): 6.7%
3.5%
4.5%
$472
450 3.2%
4.5% $456
CAGR (2016-20): 6.0% 18.5% $423 $437
400
$405
350 9.3%
7.5% -0.2% $342
10.0%
300 $313 $313
3.5%
$291
250 $265
200
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Source ： Gartner, 2021/7
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1. Overview

Asia (ex-Japan) Semi Distribution Market Continues Outgrowing Global Semi & Semi Distribution Market

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Asia/Pacific Distribution Market Revenue and Share of Global Semi Distribution Market
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120 CAGR (2016-20): 9.6%
72.9%
110
68.9% $112
69.7%
100 $105
67.5% $101
90 $94
80
64.7%
70 $75
60
50
2016 2017 2018 2019 2020
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Source ： Gartner, 2021/3
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1. Overview

NR (Net Revenue)

CAGR(2016-20): 25%

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NT$B
400
353
350 335
300
273
250
189
200
144
150
108 [114 ]
88
100 80
71
64
47
50 30 34 39 41
21
5 9 10 14
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
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1. Overview

WT Continues Expanding Market Share in Target Competitive Market

WT’s Market Share of Top 10 Distributors, Asia/Pacific

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20%
20.7%
19.8%
15% 17.0%
13.6%
10% 11.3%
5%
0%
2016 2017 2018 2019 2020
WT’s Market Share of Top 4 Distributors, Asia/Pacific
30%
28.6%
25% 27.1%
24.1%
20%
19.1%
15%
15.3%
10%
5%
0%
2016 2017 2018 2019 2020
Source ： Gartner, 2021/3
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2. Financial Update

Statement of Comprehensive Income

Unit: NT$M

K t	2Q21	1Q21	QQ	2Q20	YY
ey accouns	Amount %	Amount %	o	Amount %	o
Net Operating revenues Gross profit Operating expenses Operating income Financing costs Others Earning before tax Income tax expense Profit after tax	102,096 100.00% 4,203 4.12% (1,517) -1.49% 2,686 2.63% (158) -0.16% 39 0.05% 2,567 2.51% (569) -0.56% 2,001 1.96%	97,646 100.00% 3,465 3.55% (1,450) -1.48% 2,015 2.06% (149) -0.15% 32 0.03% 1,898 1.94% (402) -0.41% 1,510 1.55%	5% 21% 5% 33% 6% 22% 35% 42% 33%	74,724 100.00% 2,503 3.35% (1,317) -1.76% 1,186 1.59% (249) -0.33% 48 0.06% 985 1.32% (196) -0.26% 789 1.06%	37% 68% 15% 126% -37% -19% 161% 190% 154%
EPS (in dollars)	2.54	1.92		1.07
Weighted average shares (M shares)	788	788		737
Pro forma EPS (in dollars) Outstanding shares as of period end (M shares)	2.53 792	1.91 791		1.01 784

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2. Financial Update

Statement of Comprehensive Income

Unit: NT$M

Key accounts	Amount % 1H21	Amount % 2H20	HoH	Amount % 1H20	YoY
Net Operating revenues Gross profit Operating expenses Operating income Financing costs Others Earning before tax Income tax expense Profit after tax	199,742 100.00% 7,668 3.84% (2,967) -1.48% 4,701 2.35% (307) -0.15% 71 0.04% 4,465 2.25% (971) -0.49% 3,511 1.76%	200,952 100.00% 5,791 2.88% (2,816) -1.40% 2,975 1.48% (339) -0.16% 392 0.20% 3,028 1.51% (638) -0.32% 2,390 1.19%	-1% 32% 5% 58% -9% -82% 47% 52% 47%	152,200 100.00% 4,983 3.27% (2,642) -1.75% 2,341 1.54% (652) -0.43% 82 0.05% 1,771 1.16% (366) -0.25% 1,405 0.92%	31% 54% 12% 101% -53% -13% 152% 165% 150%
EPS (in dollars)	4.45	3.03		2.11
Weighted average shares (M shares)	788	788		665
Pro forma EPS (in dollars)	4.43	3.03		1.79
Outstanding shares as of period end (M shares)	792	788		784

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2. Financial Update

Balance Sheet

Unit: NT$M

Key accounts	2Q21		Amount % 1Q21	2Q20
	Amount %			Amount %
Cash and cash equivalents Accounts receivable Inventory Other current assets Non-current assets	5,062 4 61,920 44 53,985 38 2,134 1 19,201 13		5,297 4 58,936 44 49,477 37 1,960 - 19,771 15	5,050 4 43,322 38 46,753 41 2,147 1 17,938 16
Total Assets	142,302 100		135,441 100	115,210 100
Short-term loans	36,281 25		31,662 23	30,037 26
Accounts payable Other current liabilities Long-term loans	53,214 37 3,690 3 200 -		51,017 38 3,608 3 400 -	42,989 37 4,402 4 - -
Other liabilities	1,526 1		1,494 1	1,547 1
Total Liabilities Total Equity	94,911 67 47,391 33		88,181 65 47,260 35	78,975 69 36,235 31
Indices	2Q21		1Q21	2Q20
Current ratio Debt/Assets ratio Debt/Equity ratio Gearing ratio	132% 67% 200% 0.66		134% 65% 187% 0.57	126% 69% 218% 0.69

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2. Financial Update

NR by Geography (Ship-to Destination)

60% 80% 100%	4.8% 3.2% 3.0% 0.3%	4.8% 3.2% 3.0% 0.3%	4.8% 3.2% 3.0% 0.3%	5.6% 2.9% 3.3% 0.6%	5.6% 2.9% 3.3% 0.6%	5.6% 2.9% 3.3% 0.6%	8.4% 3.6% 6.6% 0.7%	8.4% 3.6% 6.6% 0.7%	8.4% 3.6% 6.6% 0.7%	8.0% 2.8% 6.3% 1.0%	6.4% 2.0% 6.2% 1.3%	6.4% 2.0% 6.2% 1.3%	4.6% 2.2% 5.4% 1.5%	4.6% 2.2% 5.4% 1.5%	6.9% 2.9% 8.2% 1.5%	6.9% 2.9% 8.2% 1.5%	7.6% 2.7% 9.9% 1.5%		Revenue (NT$B)	0 10 20 30 40 50 60 70 80 90	China QoQ +2%	China QoQ +2%	Taiwan QoQ +15%	Taiwan QoQ +15%	Korea QoQ -3%	Korea QoQ -3%	S.E.Asia & 1Q21 (Left) vs. 2Q21 (Right) QoQ +26%	S.E.Asia & 1Q21 (Left) vs. 2Q21 (Right) QoQ +26%
40%	88.7%			87.6%			80.7%			81.9%	84.1%		86.3%		80.5%		78.3%			90	YoY	+31%					India
																				80
0% 20% 3Q19 China				4Q19 1Q20 Taiwan						2Q20 Korea	3Q20 4Q20 1Q21 S.E.Asia & India						2Q21 Others		Revenue (NT$B)	0 10 20 30 40 50 60 70			YoY +30%		YoY +32%		2Q20 (Left) vs. 2Q21 (Right) YoY +115%
																					China		Taiwan			Korea	S.E.Asia &
																											India

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2. Financial Update

NR by Customer Base

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%	Revenue (NT$B) 67.5% 67.7% 63.4% 61.0% 68.0% 71.8% 60.8% 56.2% 26.7% 26.7% 27.8% 31.7% 26.6% 22.9% 31.8% 34.4% 3.8% 3.3% 4.1% 3.1% 2.4% 2.3% 2.9% 3.4% 2.0% 2.3% 4.7% 4.2% 3.0% 3.0% 4.5% 6.0% 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 Taiwan Customer China Customer Korea Customer S.E.Asia & India Customer 0 10 20 30 40 50 60 70 0 10 20 30 40 50 60 70 Revenue (NT$B)
		Taiwan Customer China Customer Korea Customer S.E.Asia & India Customer QoQ -3% QoQ +13% QoQ +23% QoQ +39% 1Q21 (Left) vs. 2Q21 (Right)
		Taiwan Customer China Customer Korea Customer S.E.Asia & India Customer 2Q20 (Left) vs. 2Q21 (Right) YoY +26% YoY +48% YoY +50% YoY +95%

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2. Financial Update

NR by Application

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40 1Q21
100.0% 3.1% 4.9% 2.6% 5.0% 3.1% 5.3% 3.2% 5.7% 3.0% 5.3% 2.7% 5.1% 2.5% 6.4% 3.1% 6.4% QoQ -11% (Left)
30 vs.
8.2% 7.4% 8.5% 7.9% 6.7% 6.5% 8.3% 9.9% QoQ +7% 2Q21
80.0% 12.1% 13.0% 10.4% 20 QoQ +13% (Right )
14.1% 14.1% 13.6% 12.8%
13.7% QoQ +12% QoQ +25%
10 QoQ +5%
17.8%
19.2%
60.0% 18.9% 23.5%
23.7% 23.2% 0
30.8% 23.8%
9.4%
15.3%
14.8%
40.0% 14.2% 14.5%
16.6%
15.7%
17.3%
2Q20
48.1% 30 YoY +74% (Left)
20.0% 36.0% 38.4% 34.3% 32.3% YoY +6% vs.
28.7% 27.4% 2Q21
21.5%
20 YoY +24% (Right )
YoY +38%
0.0%
YoY +71%
3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 10 YoY +53%
Mobile Phone Communication
Computing Consumer 0
Industry & Instrument (I&I) Automotive
Others
Revenue (NT$B)
Revenue (NT$B)
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16

2. Financial Update

ROE vs. EPS

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EPS
3.00 20%
ROE%
16.9%
2.50
14.2% 15%
13.0%
2.00 12.0% 12.3% 11.7%
10.7% 10.8%
1.50 10%
1.00
5%
0.50
1.38 1.21 1.04 1.07 1.46 1.57 1.92 2.54
0.00 0%
3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21
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2. Financial Update

ROWC vs. NWC/Sales

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NWC/Sales
0.25 20%
ROWC
17.1%
0.20
14.0% 15%
13.5%
12.5%
12.2%
12.1%
0.15
10.1% 10%
0.10
8.1%
5%
0.05
0.12 0.12 0.18 0.16 0.13 0.12 0.15 0.15
0.00 0%
3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21
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2. Financial Update

Operating Cash Cycle

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90 AR INV AP Operating cash cycle
64
60
60
53
50
46 42 46
40
30
0
3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21
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3. Business Outlook

We currently expect 3Q21 :

• Revenue : between NT$116 billion ~ NT$122 billion, at a

• forecast exchange rate of 27.9 NT Dollars to 1 US Dollar

• Revenue guidance between 13.6% ~ 19.5% QoQ growth and

• 26.3% ~ 32.8% YoY growth

• Gross profit margin : between 3.65% ~ 3.85%

• Operating profit margin : between 2.3% ~ 2.5%

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Thank You !

WT Microelectronics Co., Ltd. Website : www.wtmec.com

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