WT — Investor Presentation 2018

Oct 12, 2018

2018 Second Quarter Investor Conference Presented by Cheryl Yang August 8, 2018

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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Agenda

1. Overview

2. Financial Update

3. Business Outlook

4. Recap of Recent Major Events

5. Questions and Answers

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1. Overview

Strong secular growth with economies of scale

• A leading Asian semiconductor distributor, founded in 1993 and listed in 2000 (ticker: 3036 TT)

• Strategic focus on Asia region and Automotive & Internet of Things (IoT) applications

• 2017 revenues of NT$189bn, up 31% YoY

• 45 offices in Asia (30 offices in China and 15 offices in Korea, Taiwan, and South Asia) with over 8,000 customers

• Over 2,000 headcounts after Maxtek acquisition in 4Q17 (over 650 sales, 200 PMs, and 450 FAEs)

• Completion of warehouse semi automation (total 6 warehouses in Taiwan, HK, Shenzhen China, Shanghai China, Korea, and Singapore)

• Completion of B2B service platform for major vendors and customers

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1. Overview

China Offices (30)

Korea Office (1)

Harbin Shenyang Offices Across Asia Seoul Dalian Beijing Taiwan Offices (4) Qingdao Zhengzhou Taipei, Headquarters Jinan Xian Hsinchu, R&D Ningbo Taichung Shanghai Wuxi Tainan Suzhou Kunshan South Asia Offices (10) Nanjing Hangzhou New Delhi, N. India Wenzhou Hefei Mumbai, N. India Chengdu Chongqing Pune, N. India Changsha Wuhan Vietnam Fuzhou Fuqing Bangalore, S. India Xiamen Dongguan Bangkok, Thailand Shunde Guangzhou Penang, Malaysia Zhuhai Hong Kong Singapore Shenzhen

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1. Overview

NR (Net Revenue)

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YoY=31%
NT$B
YoY=27%
200 189
180
CAGR(2011~2015)=12%
160
144
CAGR(2006~2010)=16%
140
120 114
108
100
88
80
80 71
64
60
47
39 41
34
40 30
21
20 9 10 14
5
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
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2. Financial Update

2Q18 result highlights

• Net revenue in line with guidance, up 7% QoQ and 31% YoY

• Gross margin and operating profit margin outperformed guidance

• Net profit up 7% QoQ and 14% YoY

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2. Financial Update

Statement of Comprehensive Income

Unit: NT$M

K t	2Q18	2Q18	1Q18	QQ	2Q17	YY
ey accouns	Amount %	Guidance	Amount %	o	Amount %	o
Net Operating revenues Gross profit Operating expenses Operating income Financing costs Others Earning before tax Income tax expense Non-Controlling Interests Profit after tax EPS (in dollars)	53,248 100.00% 2,560 4.81% (1,332) -2.50% 1,228 2.31% (383) -0.72% 41 0.07% 886 1.66% (266) -0.50% - - 620 1.16% 1.12		49,635 100.00% 2,288 4.61% (1,247) -2.51% 1,041 2.10% (346) -0.70% 18 0.04% 713 1.44% (133) -0.27% - - 580 1.17% 1.05	7.28% +0.2ppt -0.01ppt +0.21ppt +0.02ppt 24.26% 100.00% 6.90% 6.67%	40,364 100.00% 1,924 4.77% (1,015) -2.52% 909 2.25% (208) -0.51% 12 0.03% 713 1.77% (167) -0.42% - - 546 1.35% 1.15	31.92% +0.04ppt -0.02ppt +0.06ppt +0.21ppt 24.26% 59.28% 13.55% -2.61%

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2. Financial Update

Statement of Comprehensive Income

Unit: NT$M

Key accounts	1H18		Amount % 2H17	HoH	Amount % 1H17	YoY
	Amount %
Net Operating revenues Gross profit Operating expenses Operating income Financing costs Others Earning before tax Income tax expense Non-Controlling Interests Profit after tax EPS (in dollars)	102,883 100.00% 4,848 4.71% (2,579) -2.50% 2,269 2.21% (729) -0.71% 59 0.06% 1,599 1.56% (399) -0.39% - - 1,200 1.17% 2.17		110,677 100.00% 4,701 4.25% (2,509) -2.27% 2,192 1.98% (550) -0.49% 135 0.12% 1,777 1.61% (306) -0.28% - - 1,471 1.33% 2.66	-7.04% +0.46ppt +0.23ppt +0.23ppt +0.22ppt -10.02% 30.39% -18.42% -18.53%	78,742 100.00% 3,721 4.73% (1,994) -2.54% 1,727 2.19% (413) -0.52% 14 0.02% 1,328 1.69% (279) -0.36% - - 1,049 1.33% 2.21	30.66% -0.02ppt -0.04ppt +0.02ppt +0.19ppt 20.41% 43.01% 14.39% -1.81%

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2. Financial Update

Balance Sheet

Unit: NT$M

Key accounts	2Q18		Amount % 1Q18	2Q17
	Amount %			Amount %
Cash and cash equivalents Accounts receivable Inventory Other current assets Non-current assets	2,283 3 35,865 43 38,500 46 2,321 2 4,926 6		2,542 3 31,765 41 35,426 46 2,929 4 4,837 6	2,178 4 24,001 42 25,441 44 1,684 3 4,135 7
Total Assets	83,895 100		77,499 100	57,439 100
Short-term loans Accounts payable Other current liabilities Long-term loans	33,033 39 24,039 29 4,513 5 494 1		29,385 38 22,239 29 3,451 4 670 1	19,118 33 18,262 32 2,576 4 - -
Other liabilities	1,806 2		1,703 2	1,550 3
Total Liabilities Total Equity	63,885 76 20,010 24		57,448 74 20,051 26	41,506 72 15,933 28
Indices	2Q18		1Q18	2Q17
Current ratio Debt/Assets ratio Debt/Equity ratio Gearing ratio	128% 76% 319% 1.56		132% 74% 287% 1.37	133% 72% 261% 1.06

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2. Financial Update

NR by Geography (Ship-to Destination)

0 10 20 30 40 50 60 Revenue (NT$B) Revenue (NT$B) 0 10 20 30 40 50 60	China Taiwan Korea ASEAN 1Q18 (Left) vs. 2Q18 (Right) QoQ +40% QoQ +11% QoQ +5% QoQ +7%
	China Taiwan Korea ASEAN 2Q17 (Left) vs. 2Q18 (Right) YoY +104% YoY -1% YoY +23% YoY +34%

0% 20% 40% 60% 80% 100%	79.9% 84.7% 79.8% 80.7% 81.7% 86.0% 82.7% 82.1% 7.2% 6.4% 9.2% 8.5% 7.1% 6.0% 8.1% 7.9% 10.5% 7.0% 8.1% 8.1% 8.5% 5.7% 5.9% 6.1% 1.7% 1.5% 2.3% 2.2% 2.0% 1.8% 2.6% 3.4% 0.7% 0.4% 0.6% 0.5% 0.6% 0.5% 0.7% 0.5% 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 China Taiwan Korea ASEAN Others

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2. Financial Update

NR by Customer Base

0% 20% 40% 60% 80% 100%	51.4% 60.2% 55.6% 52.7% 50.7% 57.8% 56.2% 53.5% 35.7% 30.4% 33.1% 36.5% 38.5% 34.1% 34.7% 36.6% 11.2% 7.8% 9.3% 8.6% 8.8% 6.4% 6.3% 6.6% 1.7% 1.6% 2.0% 2.2% 2.0% 1.7% 2.8% 3.3% 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Taiwan Customer China Customer Korea Customer ASEAN Customer

Revenue (NT$B) 0 5 10 15 20 25 30 0 5 10 15 20 25 30 Revenue (NT$B)	Taiwan Customer China Customer Korea Customer ASEAN Customer QoQ +2% QoQ +13% QoQ +12% QoQ +26% 1Q18 (Left) vs. 2Q18 (Right)
	Taiwan Customer China Customer Korea Customer ASEAN Customer 2Q17 (Left) vs. 2Q18 (Right) YoY +34% YoY +32% YoY +1% YoY +98%

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2. Financial Update

NR by Application

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20 QoQ -5%
100% 1Q18
2.9% 3.0% 3.7% 4.0% 4.2% 3.4% 3.9% 4.3% 18
(Left)
6.9% 6.2% 7.2% 7.8% 6.6% 6.4% 7.3% 7.5% 1614 QoQ +14% vs.
QoQ +15%
12.8% 10.9% 11.4% 12 2Q18
80% 13.4% 14.9% 13.8% 13.5% 14.0% 10 QoQ +11% (Right )
8
15.5% 6 QoQ +10%
17.1% 17.2% 4
17.7% 16.4% 18.7% 2
19.5% 20.1%
0
60%
19.2%
19.0% 19.7%
18.9% 21.3%
21.5%
22.6% 22.9%
40%
2Q17
YoY +32%
18 (Left)
45.2% 16 vs.
20% 41.3% 39.1% 31.2% 37.7% 41.9% 35.1% 31.2% 1412 YoY +34% YoY +36% 2Q18 (Right )
10 YoY +24%
8
0% 6 YoY +27%
4
3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18
2
0
Communication Computing
Consumer Industry & Instrument (I&I)
Automotive Others
Revenue (NT$B)
Revenue (NT$B)
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2. Financial Update

ROE vs. EPS

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EPS
6.00 ROE% 18.82% 20%
16.03%
5.00
14.05% 15.28%
13.42% 15%
4.00 12.88% 12.01% 11.56% 12.38%
10.67%
9.55%
3.00 10%
2.00
5%
1.00 4.69%
0.00 0%
2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18
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ITEM	2014	2015	1Q16	2Q16	3Q16	4Q16	1Q17	2Q17	3Q17	4Q17	1Q18	2Q18
ROE%	14.05%	12.88%	9.55%	10.67%	16.03%	4.69%	12.01%	13.42%	18.82%	15.28%	11.56%	12.38%
EPS	5.18	4.49	0.90	0.93	1.40	0.42	1.06	1.15	1.61	1.43	1.05	1.12

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2. Financial Update

ROWC vs. NWC/Sales

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0.30 NWC/Sales 25%
ROWC
0.25
20%
0.20
14.83%
15%
12.04%
0.15
9.04% 10.91% 10.57% 9.76%
8.81% 8.72% 11.64% 11.66% 10%
0.10 9.26%
5%
0.05
4.54%
0.00 0%
2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18
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ITEM	2014	2015	1Q16	2Q16	3Q16	4Q16	1Q17	2Q17	3Q17	4Q17	1Q18	2Q18
NWC/Sales	0.15	0.25	0.25	0.24	0.19	0.18	0.18	0.19	0.18	0.17	0.23	0.24
ROWC	14.83%	8.81%	8.72%	9.04%	10.91%	4.54%	11.64%	11.66%	12.04%	10.57%	9.26%	9.76%

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2. Financial Update

Operating Cash Cycle

	Operating Cash Cycle	Operating Cash Cycle	Operating Cash Cycle	Operating Cash Cycle	Operating Cash Cycle	Operating Cash Cycle	Operating Cash Cycle	Operating Cash Cycle	Operating Cash Cycle	Operating Cash Cycle	Operating Cash Cycle	Operating Cash Cycle	Operating Cash Cycle	Operating Cash Cycle
0 20 40 60 80 100	52 72 93 85 67 65 73 68 61 60 80 83 2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 AR INV AP Operating cash cycle
	Turnover days	2014	2015	1Q16	2Q16	3Q16	4Q16	1Q17	2Q17	3Q17	4Q17	1Q18	2Q18
	AR	43	58	78	72	57	58	59	50	48	48	59	58
	INV	50	54	59	59	49	46	58	59	52	50	66	67
	AP	(41)	(40)	(44)	(46)	(39)	(39)	(44)	(41)	(39)	(38)	(45)	(42)
	Operating cash cycle	52	72	93	85	67	65	73	68	61	60	80	83

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3. Business Outlook

We currently expect 3Q18 :

• Revenue : between NT$74 billion ~ NT$78 billion, at a forecast

• exchange rate of 30.6 NT Dollars to 1 US Dollar

• Gross profit margin : between 3.7% ~ 3.9%

• Operating profit margin : between 1.9% ~ 2.1%

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4. Recap of Recent Major Events

 WT set August 6 as ex-dividend date and August 31 as cash dividend issue date.

• WT was ranked as 2017 APAC Best Performance Distributor from STMicroelectronics.

• WT was ranked as 2017 APAC Best Distributor Partner from ON Semiconductor.

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Thank You !

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

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