Transcription of Nanya Technology
1 december 14 2017 2017 NanyaTechnology to Investors & Analysts, december 14th, 2017 Joseph Wu, AVP & Deputy Spokesman NanyaTechnology KGI Greater China Corporate Day 2017Q4 2 december 14 2017 2017 NanyaTechnology HarborThe information herein and the presentation made during the conference contain forward-looking statements and are provided for information purposes only. Neither NanyaTechnology Corp. nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements or undertakes duty to update the statements. You are urged to review the information provided herein carefully, and please don t distribute, reproduce or disclose the information in whole or in part without prior written permission of Nanya Technology Corp.
2 3 december 14 2017 2017 NanyaTechnology OverviewOutline4 december 14 2017 2017 NanyaTechnology CarSmart DeviceSmartIndustrySmart CityIoTBig Data ComputingVigorous Development of Big Data Era AI, IoT, Smart Car and High Performance Computingare expediting the proliferationof semiconductor 5 december 14 2017 2017 NanyaTechnology Performance Computing ( , Big Data, Cloud)PC EraPortable DevicesSmart Home Smart Office Smart CityIoT Smart CarIndustry Data ComputingDRAM Essential to Electronic Devices6 december 14 2017 2017 NanyaTechnology : $ MSource: Gartner Sep 17 0%5%10%15%20%25%30%35%050,000100,000150, 000200,000250,000300,000350,000400,00045 0,0002015201620172018 (e)WW SemiconductorWW MemoryWW Memory/SemiconductorSmart Phone+ Server+Consumer+PCSmart Car+ IoT+ AIStrong Momentum of Semiconductor Industry In 2017 , semiconductor YoY revised upward to 20%, total revenue $ In 2017 , Memory YoY revised upward to 57%, total revenue $126B In 2017 , Memory accounts for 31% of total semiconductor revenue7 december 14 2017 2017 NanyaTechnology : Gartner Sep 17 Unit.
3 $ M - 20,000 40,000 60,000 80,000 100,000 120,000 140,0002015201620172018 ( e )DRAMNANDO thersMemory Industry Growth Solid In 2017 , Memory annual revenue will exceed $120 Bmark In 2017 , 67% YoY and $ revenue of DRAM is forecasted In 2017 , 57% YoY and $ market size of NAND is predicted DRAM + NAND consisting of 97% memory market8 december 14 2017 2017 NanyaTechnology : Gartner Sep 17, IHSOct 17 Unit: $ M Significant NAND capex expected for 3 DNAND capacity ramp-up DRAM capex mainly for advanced Technology conversion and maintainingcurrent capacity level DRAM capacity addition expected to come on-line from 2H 18 Annual bit growth forecast: DRAM 20%~25%, NAND 40%~45% - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,0002015201620172018 (e )DRAMNANDM emory Industry Capex9 december 14 2017 2017 NanyaTechnology ,304 1,213 1,098 1,082 1,096 1,058 1,072 1,133 1,210 05001,0001,50020102011201220132014201520 1620172018WW DRAM Wafer Start (K/M, 300mm)Source.
4 DRAMeXchange, inSpectrum, IHS, NTC MKTWW DRAM Capacity WW DRAM average monthly capacity will moderately increase to 1,210K/M in 201810 december 14 2017 2017 NanyaTechnology :QTY(Mu) C/B(GB)QTYC/BBit GrowthCloudServer + Work 188 34% 4% , 101%Consumer & others includes: STB, Storage (HDD/SSD), Printer, Game Console, Graphic card, DSC, IP Camera, Industrial, smart watch, + upgrade modules, 16%Server + WS, 24%Handset, 38%Tablet, 3%DTV, 4%Auto + Industrial, 3%Consumer & Others, 12%2018 (4Gb YR) 23% YoY bit demand growth forecastedfor 2018 Source: IHS, Gartner, NTC MKTD emand Forecast for 201811 december 14 2017 2017 NanyaTechnology : Gartner, IHS,DRAM exchange, NTC MKTS upply Demand SufficiencyQty(M, 4Gb eq.)
5 Sufficiency (%) Favorable DRAM market conditions expected to continue throughout 2018 DRAM Demand/Supply Sufficiency102%101% ,00010,00015,00020,00025,00030,000201520 1620172018 (E)12 december 14 2017 2017 NanyaTechnology OverviewOutline13 december 14 2017 2017 NanyaTechnology <512Mb1Gb2Gb4Gb8Gb16Gb0%20%40%60%80%100% 201620172018201920202021 DDR4 Low Power(LPDDR5/4/3/2/1)DDR3 DRAM Interface(%)8Gb4Gb16 GbDDR5 OthersDDR/ DDR2 DRAM Density(%)Source: IHS, Gartner, NTC MKTDRAM Specification Trend Forecast14 december 14 2017 2017 NanyaTechnology Center/ CommodityConsumerServerCommodityDataCent erSTBTVN etworkingSSDS urveillance20nm DDR4 8Gb DeploymentStrategy15 december 14 2017 2017 NanyaTechnology DDR/DDR2/DDR3 LPDDR1/LPDDR2/LPDDR3 Custom DDR3/DDR4 LPDDR3/LPDDR4 CustomDensity512Mb/1Gb/2Gb/4Gb1Gb/2Gb/4G b/6Gb/8 GbGradeCommercial / Industrial / AutomotiveLifecycleLong-life andstable supplyComprehensive DRAM Product Portfolio 20nm enable DDR4 and LPDDR4 offerings to fully fulfill diversified requirements16 december 14 2017 2017 NanyaTechnology DDR4 Continuous Optimization
6 8Gb LPDDR34Gb LPDDR4XQ2 17Q4 172H 182019 Q4 17 38K/M wafer start >20K/M wafer output Bit output to exceed 30nm node in December20nmProductionPlan Q2 17: 4Gb DDR3 verified and mass production Q4 17: 8Gb DDR4 mass production, shipment from december 2H 18: 8Gb LPDDR3& 4 GbLPDDR4X rolloutProduct Schedule 38K/20nm + 30K/30nmMonthly Capacity Mix20nm Execution17 december 14 2017 2017 NanyaTechnology Technology20nm in productionand new generation Technology developmentNew Product DevelopmentProduct VerificationSiP(System in Package)Auto & IndustrialNew Product DesignDDR4/LPDDR4 CustomProductsNTC as Key DRAM Supplier18 december 14 2017 2017 NanyaTechnology OverviewOutline19 december 14 2017 2017 NanyaTechnology 20171H 2017Q1-Q3 ProfitGross Margin (%) IncomeOperating Margin (%) IncomeNet Margin (%) (NT$) $B.
7 BillionCompany highlights 1Q 17 Net Income of NT$ 3,275M, Net Margin , EPS NT$ 2Q 17 Net Income of NT$ 6,490M, Net Margin , EPS NT$ * Financial numbers are reviewedby CPAQ1 17 ~ Q3 17 P&L Results20 december 14 2017 2017 NanyaTechnology ,00030,000Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15 Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17 Q3'17 Revenue (Million NT$)Net Income (Million NT$)Gross Margin(%)Operating Margin(%)Revenue, Net Income (Million NT$)Gross Margin, Operating Margin (%)Financial Highlights 20nm ramp-up will further enhance operating results21 december 14 2017 2017 NanyaTechnology ~Q3 201720162015(Unit: Million NT$)Beginning Balance9,1023,1047,268 Cash from Operating Activities13,83515,94518,522 Capital expenditures-26,530-22,336-3,842 Long-term & Short-term loans-2,439-6,351-14,382 Investments and others30,57218,740-4,463 Ending Balance24,5409,1023,104 FreeCash Flow (1)-12,695 -6,391 14,680(1) Free Cash Flow = Cash from operating activities Capital expenditures Q1 17 ~ Q3 17 Cash Flows22 december 14 2017 2017 NanyaTechnology RatioY2017 Monthly '2017Q2'2017Q3'20174,067 3,970 4,193 4,317 4,115 4,193 4,297 4,352 4,644 5,072 5,745 JanFebMarAprMayJunJulAugSepOctNovNet operating revenues(Million NT$)
8 Monthly Revenue & Debt Ratio Successful 20nm ramp-up resulting in revenue growth in Q4 17 Debt/Asset ratio down to at the end of the 30th of September, 2017 Debt ratio to be further reduced in Q4 17 by repaying FPG borrowings and Bank loans23 december 14 2017 2017 NanyaTechnology Corp. Tight supplycontinued into Q1 18, solid ASP movement 2018 DRAM market in balance and healthy expected NanyaTechnology OperationFocuses: Mid-teen bit growth in Q4 17 and 20nm bit output exceeding 30nm in december expected 20nm capacityramp-up, ~45% YoY bit output in 2018 forecasted Launch 20nm DDR4 8Gb to enhance participation in Server segment Expand 20nm product line up for diversified applicationsKey Takeaways24 december 14 2017 2017 NanyaTechnology &Questions