2018 Business Overview - mops.twse.com.tw

Wafer Works Corp

Confidential Property

2018 Business Overview

To become the customer-centered solution provider of semiconductor materials

Jun.,2018

Wafer Works Corp Confidential 2

Disclaimer

PLEASE READ THIS DISCLAIMER CAREFULLY BEFORE USING THE DOCUMENTS. Documents furnished herein, including but not limited to any financial reports, files, annual report, news, or other relevant message, are sole for the purpose of information provision rather than recommendation of investments, offer or offer for sale of trading Wafer Works (hereinafter referred to as the “WWX”) or other companies' shares. Any decisions with respect to investments should be made based on your own judgment. These documents may contain statements that pertain to projections of WWX, including but not limited to any future business activities and developments. These predictions were made based on information available at the time the statements were made, the assumptions, suppositions, and judgments of Wafer Works or of affiliated companies (hereinafter referred to as the “Company”) as well as on some factors such as politics, economics, and marketing. Thus, the accuracy of such statements may be affected by known and unknown risks and inherent uncertainties, the existence or emergence of facts, factors that differ from the assumptions, suppositions, or judgments of the Company, or other factors. Consequently, there may be discrepancies between actual results pertaining to the Company's future earnings, management results, financial conditions, and other matters as explicitly or implicitly referred to in the statements on these documents. Information provided on these documents constitutes information that is valid at the time it was provided and does not reflect situational changes that subsequently arise or that may subsequently arise. Therefore, the Company herein declares that we would not warranty the appropriateness, accuracy and completeness of the statements expressly or impliedly. In addition, information disclosed by the Company on these documents may in some cases be incomplete or inconsistent with information disclosed by other means by the Company in terms of description or expression. In no event shall the Company assume any liability for the incorrectness or incompleteness of information, delay to update information on these documents, and any utilization or investment on the basis of the information. Information on these documents is also subject to revision, supplementation, or deletion without notice. In particular, the Company's annual formal report and the reports submitted to the agencies in accordance with the relevant laws shall dominate all the announcements regarding the Company's finance. Without the Company's prior written consent, any person shall not reproduce all or a portion of the documents in any manners. If any discrepancies exist between different language Versions, the Chinese one would prevail.

July 1997

May 2002

NTD$ 33.6 Billion (as the end of 05.31.2018)

Polished Wafer, Epitaxial Wafer, DSP, SOI

Taiwan: Longtan (Headquarters), Yangmei

China: WWXS, WWXE, WWXY, WWXZ

Founded

IPO

Market Cap.

Market Position

Products

Locations

Company Profile

3

Worldwide 6th silicon wafer provider; Global top 3 power substrate supplier

Wafer Works Corp Confidential


Group Holding Structure

4

Source：WWXS Consolidated Financial Statement (Q1’18)

Wafer Works Shanghai Corp.

(WWXS)

Wafer Works Epitaxial Corp.

(WWXE)

79.16%

100%

Wafer Works Corporation

(WWX)

96.91%

STIC

Wafer Works Yangzhou Corp.

(WWXY)

37.60%

Xing Gang Investment

Wafer Works Zhenzhou Corp.

(WWXZ)

60.47%


Korea

Fabs

Sales Representatives

Europe Office

WWXS WWXE

WWXY WWXZ

Taiwan Japan

Zhenzhou

Shanghai Yangzhou

California, US

Helitek

Sales Office

Pennsylvania, US

Europe

Sales Representative

Headquarters Longtan/ Yangmei

Netherlands

Service Locations and Customers

5

USA Europe Greater China APAC

Source: iHS Markit (Q1’18)

US$ Billion YoY Growth

Semiconductor Remains Uptrend

Worldwide Semiconductor Revenue

6 Wafer Works Corp Confidential

2012 2013 2014 2015 2016 2017 2018 (E) 2019 (F) 2020 (F) 2021(F) 2022 (F)

Total Semiconductor 308 327 355 346 353 429 460 457 470 482 503

YoY Growth -2.5% 6.4% 8.4% -2.5% 2.0% 21.7% 7.1% -0.6% 2.7% 2.7% 4.3%

-5%

5%

15%

25%

0

100

200

300

400

500

Billi

on

of

Do

lla

rs


Growth Momentum

IoT CAGR 13.2%

Automotive CAGR 13.4%

Medical CAGR 9.7%

Wearables CAGR 9.0%

Source: IC Insights (Dec, 17), WWX summarized

7

The biggest end-use market

application

Standard PCs remain stable

Automotive and IoT Will Drive IC Growth 2016 - 2021

-3% -1% 1% 3% 5% 7% 9% 11% 13% 15%

Automotive IoT Medical Electronics wearable systems Cellphone

Server Computers Digital TVs Standard PCs Set-Top-Boxes Tablets

CAGR


1.44

1.03 1.06 1.09

0.96

0.83 0.76

0.69 0.67 0.74

0.94

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Wafer Pricing Trend

8

ASP is anticipated to climb by a double-digit percentage and reach $0.94 this year, as a supply shortage persists amid robust demand for chips used in cars, industrial and IoT devices.

Major suppliers are disciplined on capacity

expansion, the pricing trend remains upward before large-scale investments in capacity.

Unit: ASP/ Sq-in (USD)

Source: SEMI (Q2’18), TOPOLOGY RESEARCH INSTITUTE (May, 18) WWX summarized

From 2008 to 2016, surplus wafer supply led to a 50% price slump, no major supplier generated enough profit to fund a new fab.

Benefit from multiple end applications of semiconductor and insufficient wafer supply, wafer price rebounded 30%, starting from Q1’17.

Rebounded 30%

$0.66

$0.67

$0.68

$0.68

$0.69

$0.71

$0.76

$0.79

$0.86

0.0

0.2

0.4

0.6

0.8

1.0

6 new Fabs

2 new Fabs

2 new Fabs

3 new Fabs

2 new Fabs

1 new Fabs

Installed Capacity in 2020 5,700 Kpcs

New Fab Capacity in 2015to 2018 274 Kpcs

Capacity Expansion and Utility Rate Increasing (Estimated)

400~500 Kpcs

Installed Capacity in 2015 5,000 Kpcs

Source: Semi (Jul, 17), iHS (Q1’18), WWX summarized

Strong 8” Demand

9

8” Fab installed monthly Capacity in 2015 to 2020

Source: Topology Research Institute (May, 18)

Source: SEMI (Jul, 17 & Oct, 16), WWX summarized

700 Kpcs

16 Fabs & Lines begin operation in 2015~2018


2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

8" Demand 4,800 4,800 4,900 4,850 5,050 5,200 5,400 5,500 5,600 5,700 5,800

8" Supply 5,021 4,805 4,738 4,845 4,897 4,999 5,065 5,247 5,453 5,576 5,599

4,000

4,500

5,000

5,500

6,000

8”

WP

M/T

ho

usa

nd

s

Company Capacity (K) Location

SMIC 15 Tianjin

YUZHOU 20 Dalian

Tacoma 100 20

Nanjing Huaian

YDME 50 Beijing

Silan 50 Hangzhou

Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118

Epi Slices 3,858 3,861 3,516 3,662 3,816 3,848 3,678 3,531 3,692 4,023 4,089 4,325 4,899 4,628 4,442 4,691

Polished Slices 9,507 9,768 9,740 9,799 10,220 10,052 8,782 9,521 10,033 10,070 10,317 10,746 11,343 11,479 11,582 11,896

Epi % 28.9% 28.3% 26.5% 27.2% 27.2% 27.7% 29.5% 27.1% 26.9% 28.5% 28.4% 28.7% 30.2% 28.7% 27.7% 28.3%

20%

22%

24%

26%

28%

30%

32%

34%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Source: SEMI (Apr, 18)

Worldwide 8” Polished and Epi Shipments

10

Unit: Kpsc


8” Shipments Remain Stable

Average Monthly Shipment in 2015 5,200 Kpcs

New IC fab Capacity in 2015 to 2020 1,800 Kpcs

12” monthly installed capacity from 2015 to 2020

Source: IC Insights, WWX summarized

Source: Gartner, WWX summarized

IC Fabs expected to begin construction in China

Robust 12” Demand


Source: iHS (Q1’18), WWX summarized

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

12" Wafer Demand 3,839 4,018 4,162 4,571 4,854 5,185 5,637 6,003 6,225 6,479 6,779

12" Wafer Supply 4,539 4,815 4,896 4,971 5,070 5,171 5,256 5,355 5,480 5,566 5,617

2,000

3,000

4,000

5,000

6,000

7,000

8,000

12

” W

PM

/ T

ho

usa

nd

s

CompanyCapacity

(K per month)

Year of Initial

ProductionLocations Products

AOS 25 - Chongqing Power Discrete

Fujian Jin Hua 60 2018 Fujian DRAM

GigaDevice 125 2018 Hefei DRAM/Flash

GlobalFoundries 65 2018 Chengdu Foundry

Huaian Imaging Device

Manufacturer (HIDM)20 - Huaian CIS

Intel 100 2019 Dalian 3D NAND

Hua Li Micro 40 2018 Shanghai Foundry

Shanghai Huahong

Grace30 2019 Wuxi

SK hynix 80 2019 Wuxi DRAM

Powerchip 40 2017 Hefei Foundry

Samsung 80 2019 Xi'an 3D NAND

SMIC 35 2018 Beijing Foundry

SMIC 70 2018 Shanghai Foundry

SMIC 40 2017 Shenzhen Foundry

CanSemi 30 2019 Guanzhou Foundry

Silan 80 Xiamen MEMS/Discrete

SIMC TBA 2019 Qingdao Foundry

Tsinghua Unigroup TBA Chengdu Foundry

Tsinghua Unigroup 100 Nanjing DRAM

TSMC 20 2018 Nanjing Foundry

UMC 25 Xiamen Foundry

Yangtze River/MXC 300 2018-2020 Wuhan 3D NAND

Total 1,365

Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118

Epi Slices 4,086 3,867 3,628 3,854 3,776 3,245 3,273 3,642 3,995 4,108 4,175 4,322 4,398 4,519 4,450 4,773

Polished Slices 10,132 10,358 10,792 11,209 11,552 11,405 11,580 11,074 11,801 11,669 11,809 11,899 12,140 12,313 12,265 12,657

Epi % 28.7% 27.2% 25.2% 25.6% 24.6% 22.2% 22.0% 24.7% 25.3% 26.0% 26.1% 26.6% 26.6% 26.8% 26.6% 27.4%

20%

22%

24%

26%

28%

30%

32%

34%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Source: SEMI (Apr, 18)

Worldwide 12” Polished and Epi Shipments Unit: Kpsc

12” Shipments Remain High



Shanghai Taiwan

Japan Korea

(Helitek) California, US

Netherlands

Headquarters /Fab/Sales

Sales

Yangzhou

LongTan YangMei

WWXS

WWXY

WWXE

200mm(8”)+150mm(6”) 8”equi:280 Kpcs→300 Kpcs

150mm(6”)+200mm(8”) 6” equi:300 Kpcs→330 Kpcs

100/125/150mm(6”) 6” equi: 280 Kpcs

100/125/150/200mm EPI 8” equi: 145 Kpcs→185Kpcs

WWXZ

200mm (under construction) 8” equi: 200 Kpcs

Zhenzhou

Crystal Growth Center

Unit: Kpcs/Month

Substrate Capacity 6” equiv. = 7,500 Kpcs/Yr 8” equiv. = 6,000 Kpcs/Yr EPI Capacity 8” equiv. = 2,000 Kpcs /Yr

13

WWX Capacity Status

Note: WWXZ began crystal growth in June

Note: 200mm ratio > 80%


Initial Crystal Growth at WWXZ

Q2 Q3 Q4

50 100

150 200 200

0

100

200

300

Q3'18 Q4'18 Q1'19 Q2'19 Q3'19

Monthly Capacity Unit: Kpcs

2017 2018

Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec

Ground breaking

Equipment move-in

Sampling & Production

Crystal growth

5,528 5,345 5,391

6,377

3,502

2014 2015 2016 2017 (Jan-May)2018

Booming Revenue


Source：WWX Consolidated Financial Statements

Quarterly Accumulated

NTD$ M

1,491 1,580

1,649 1,656

2,066

21.1% 22.8%

24.2%

27.5%

30.9%

20%

25%

30%

35%

1,000

1,200

1,400

1,600

1,800

2,000

2,200

Q1'17 Q2'17 Q3'17 Q4'17 Q1'18

Revenue Gross Margin

70%

60%

50%

67%

70% : HD

30% : LD

Dopant

60% : Polished Wafer

40% : EPI

Product

50% : 8”

30% : 6”

Diameter

67% : Great China

12% : Europe

8% : USA

Geography

Revenue Breakdown

Source：1. WWX Consolidated Financial Statements (Q1’18) 2.WWX Internal SAP System Wafer Works Corp Confidential 16

Gross Margin

Net Margin

Improving Performance

Wafer Works Corp Confidential 17 Source：WWX Consolidated Financial Statements (Q1’18)

Debt Ratio

NTD$M

2,066

NTD$M

368

NTD$

0.51

NTD$M

6,921

Shareholders’ Equity

Revenue

Operating Profit

EPS

NTD$M

1,491

NTD$M

101

NTD$

0.03

NTD$M

5,296

30.9% 21.1%

ROE

Q1’18 Q1’17

36.0% 52.3%

1.2% 14.2%

16.3%↓

13.0%↑

2.0% 14.7%

12.7%↑

9.8%↑

Q1’18 Q1’17

39%

265%

1700%

31%


http:www.waferworks.com

Q & A

2018 Business Overview - mops.twse.com.tw

Documents

Transcript of 2018 Business Overview - mops.twse.com.tw