Investor Relations 2020
Disclaimer
1
The financial results of PI Advanced Materials in this presentation have been prepared in accordance with K-IFRS.
This presentation contains forecast information for the future.
The above forecast information is affected by changes in the business environment and inherently contains uncertainties, and
due to this uncertainty, actual future performance may be significantly different from what is stated or implied in the forecast
information.
Also, please note that the future outlook is based on the current market situation and the company's management direction, and
that the data, forms and figures to be provided can be changed without any prior notice due to changes in the market
environment and changes in management strategies. This presentation shall not, under any circumstances, be used as proof of
the legal responsibility of the investor's investment results.
In addition, the management performance and financial performance of PI Advanced Materials included in this material were
prepared early without the completion of external auditors' review for the convenience of investors, some of which may vary
from the final review process of external auditors.
CONTENTS
Section 01
01. PI industry overview
02. Competitive dynamics
03. Revenue breakdown
04. Profitability
Overview
01. Company overview
02. Company history
03. What is PI film?
04. PI film applications
Section 02
01. Business portfolio
02. Product overview
03. FPCB
04. Graphite sheet
05. CoF
06. Flexible display
07. Electric vehicle
2
Appendix
01. Summary financials
Overview
01. Company overview
02. Corporate history
03. What is PI film?
04. PI film applications
3
Company overview
Name PI Advanced Materials Co., Ltd.
Established June 2, 2008
CEO Matt Kim
Total equity KRW272.8bn (As of 3Q 2020)
LocationAnyang Office, Jincheon Plant
and Gumi Plant
CapacityFilm 3,900 Ton/Yr (Design Capa)
Varnish 600 Ton/Yr (Design Capa)
Headcount 290 (As of 3Q 2020)
Homepage www.pimaterials.com
Main products Polyimide film and varnish
Snapshot Shareholding structure
As of 3Q 2020
40.5%
0.2
29,366,322 shares
outstanding
5.2%
4
PI Advanced Materials at a glance
Global no.1 PI film manufacturer
Industry leading profitability (3Q 2020 cumulative EBITDA margin)
Global no.1 market share (as of 2019)30.2%
The largest PI film annual production capacity (as of 2019)3,900ton
30.6%
Consistent double digit growth (2016~2019 revenue CAGR)13.2%
The largest PI film production capacity 1
PI film market share(2)PI film production capacity (1)
The largest PI film market share globally 2
#1 #1
5Source: Yano Research, Company dataNotes: (1) As of December 2019
(2) Based on 2019 sales quantity
3,900 3,600
2,100 1,9101,200 1,000
PIAM K T T-D D U
30.2%
13.9% 12.6%8.1% 7.8% 6.9%
PIAM K D T T-D U
(metric ton)
Corporate history 6
6
2018~20202017~20182012 ~ 20162008 ~ 20112001 ~ 2007
On path to becoming an advanced materials company leveraging 19 years of PI film experience
Oct 2001
Commenced PI film R&D
Aug 2004
Commercial PI Film
Production (Pilot#0)
~Sales Commenced (May
2005)
Jul 2006
SKC J1 production
commenced
Dec 2006
Kolon G1 production
commenced
June 2008
SKCKolonPI established
2010
Reached KRW100bn
in revenue
Dec 2014
Listed on KOSDAQ
Ranked no.1
in global market share(2014 ~ present)
2016
Reached KRW150bn
in revenue
2017
Developed 5.5㎛ Black PI
film
Anode material binder
R&D contract with Korea
Research Institute of
Chemical Technology
Reached KRW200bn
in revenue
2018
Graphitization test facility
completed
IP management system
installed
PI Powder R&D contact
with Yonsei Univ.
Film pilot upgrade
2019
Commercialized Black PI film
Developed 5G MPI
J4 commercial production
commenced
Varnish P1 production
commenced
2020
Semiconductor PI varnish
PI varnish for EV motor coil
High thickness G/S production
Developed 2nd generation 5G
MPI
Developed CoF(First in Korea)
What is PI film?
Heat resistance Does not melt at over 400°C and retains
its original elasticity and strength
Flexibility and dimensional stability Exceptional flexibility and dimensional stability
Restores to its original form and maintains its
original physical and chemical properties
Insulation Superior insulator resistant to high voltage
Reduces electrical loss and provides surge
protection
0
200
400
600
800
051015202530
Heat resistance(℃)
Thin film processability (㎛)
PI(400℃↑)
PEEK(250℃)
LCP(270℃)
“PI has the best heat resistant properties and processability
in its class ”
PEN
PPSPBTPET
Essential across diverse downstream industries using PI film and varnish for core components
FPCB Chip on Film Graphite sheet Flexible display Secondary battery
Foldable phone
8K display
5G
EV battery
A super engineering plastic material with superior thermal, physical and electrical properties
7
A powerful super engineering plastic material Comparison of super engineering plastics
PI film applications
Widely used across products in various industries requiring high heat resistance/electrical insulation for durability and stability
- FPCB (+5G MPI)
- G/S (For Heat sink)
- Display (Foldable+CoF)
- Semiconductor PKG
- Battery insulating tape
- EV battery insulation
- Battery management system
- Semiconductor passivation
- EV FPCB (+Autonomous
driving)
- EV cable coating8
Section 01
01. PI industry overview
02. Competitive dynamics
03. Revenue breakdown
04. Profitability
9
Others
PI industry overview
0.1 0.1 0.1 0.1 0.1 0.1
0.3 0.3 0.3 0.3 0.3 0.3
0.4 0.4 0.40.5 0.5 0.5
0.1 0.10.2
0.2 0.20.3
1.2 1.2
1.3
1.41.5
1.7
2020 2021 2022 2023 2024 2025
Continued growth in PI industry, driven by downstream growth and expanding PI applications
(KRWtrn)
2.1 2.2
2.3
2.52.6
2.9
Film
Varnish
Powder
Foam
10Source: Current Status and Future Prospects of Functional Polymer Films (Fuji Keizai, 2019), Current Status and Future Prospects of Electronics Advanced Materials (Fuji Keizai, 2020), Global Polyimide Tape Market Insights (Stratagem,2020) and Global Polyimide Foam Market Professional (QYResearch, 2019)
CAGR 6.7%
CAGR
7.2%
CAGR
24.6%
CAGR
4.6%
Competitive dynamics
PI film production capacity PI film M/S
(2019)
30.2%
13.9%
12.6%
7.8%
8.1%
6.9%
79.5%
Tie
r II
Tie
r II
I
Source: Yano Research, Company data
FPCB G/S F/D CoF MPIRechargeable
Battery
N/AMainly for
domestic low
spec, low
priced
smartphones
Country
Presence in all applications
Strong in 2L FCCL
Strong in Stiffener
c.60% global M/S
Mainly for Internal useMinimal external sales
Heat curing method –Unable to enter
Attempting entry –little or no M/S
Tie
r I
N
T
S
R
Total (Tier 1 & 2)
U
T
D
T-D
K
PIAM(ton)
Attempting entry –little or no M/S
Global PI industry is dominated by 6 Tier I and Tier II players
3,900
3,600
1,910
1,200
2,100
1,000
1,200
600
350
30011
Product applications
108.2 98.4 96.8 80.1
74.9 93.3 74.9
68.8
33.2 53.8
51.8
42.9
2017 2018 2019 2020 3Q
17.0
28.5 25.2 26.2 24.8 23.6
31.1
7.8
22.6 25.5
19.0 22.2 18.0
28.6
15.4
11.3 13.6
11.6 14.6
14.1
14.8
1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20
[Quarterly]
Revenue breakdown by product
Diversifying product portfolio and achieving stable growth by penetrating new markets for fast-growing downstream sectors
(42%)
(38%)
(20%)
40.2
62.4
56.7
64.3
55.8
61.6
FPCB
Explosive growth since 2009 after
smartphones became mainstream
Maintaining growth in line with the
smartphone market since 2012
Graphite Sheet
Smartphone makers began to adopt PI
film based graphite sheet for flagship
models since 2010
LCD being replaced by OLED is
raising overheating risk, prompting the
need for more graphite sheet
Advanced Industrials
Demand strengthening for insulation
materials such as PI insulation tapes
Expected to gain strong momentum in
line with downstream growth (EV and
semiconductors)
12
74.5
FPCB G/S Advanced Industrials
245.5
216.4223.7
191.9
[Annual]
(42%)
(36%)
(22%)
*
*2020 3Q cumulative numbers
86.9 84.6 77.8 70.6
129.4 160.9
145.8
121.3
2017 2018 2019 2020 3Q
19.9 17.7 21.8
18.4 21.0 20.4
29.0
20.3
44.7 42.5
38.3 40.6
35.3
45.4
1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20
245.5
216.4 223.7
(35%)
(65%)
[Annual]
(39%)
(61%)
40.2
62.4
56.7
64.3
55.8
61.6
[Quarterly]
Domestic Export
Revenue breakdown by region
Balanced and well-diversified customer base both domestic and overseas
FPCB: Main sources of demand include components for mobile, display, auto electronics and semiconductors,
all of which are predominantly based in East Asia
G/S: Most G/S manufacturers have production base in China. While most G/S Revenue is generated by China
based customers, sales in Korea is starting to grow on the back of localization trends.
Advanced Industrials: Mainly insulation tapes supplied to Korea based customers
Cumulative revenues by region as of 3Q 2020: Korea 39%, China 49%, Taiwan 10% and Japan & RoW 2%
13
74.5
191.9
*2020 3Q cumulative numbers
*
12.5%13.7%
15.2%14.3%
7.9%
16.2%
Net margin
17.0
21.0
32.8 35.0
17.7
31.1
15 '16 '17 '18 '19 '20.3Q
NP
2.8%
5.5%
13.7% 13.9%
2.7%
Industry average
28.9 32.3
53.0
60.5
33.6
43.2
15 '16 '17 '18 '19 '20.3Q
OP
1.7%4.3%
11.1% 10.6%
1.0%
Industry average
21.2% 21.1%
24.5% 24.7%
15.0%
22.5%
OP margin
Profitability
Historical OP & OP margins Historical NP & NP margins
(%, KRWbn)(%, KRWbn)
Superior profitability consistently above the industry average
14Source: Bank of Korea “Financial Statement Analysis for 2019 – Semiconductor and Electronic Components”
01. Business portfolio
02. Product overview
03. FPCB
04. Graphite sheet
05. CoF
06. Flexible display
07. Electric vehicle
Section 02
15
Application Description Entry stage
Heat cured PI varnish used as flexible
substrate
Higher flexibility and heat resistance
than glass substrate
Color &
Colorless PI
under
development
/evaluation
Used for insulating magnet wire for EV
motor
Superb heat resistant properties allow
for smaller EV motor size and higher
horsepower
Production
and Sale
starting in
Oct.2020
Durable replacement for synthetic
rubber binders susceptible to cracking
Stabilizes EV batteries with higher
capacity
Under
customer
evaluation
Used for creating passivation /sacrificial
layers protecting the internal
semiconductor devices during
production process
Expanding
domestic
customers
Used for heat resistant industrial
binders and paste for holding pigments
in place
Superior heat resistance, adhesiveness
and electric properties vs. epoxy
polymers and others
Undergoing
a quality test
by customer
Business portfolio
Expanding applications beyond mobile handsets to high-growth industries
PI film
Application Description
Entry
stage
3L FCCL, 2L FCCL laminate, coverlay and
stiffener
Used as substrate, protection and
reinforcement for mobile handsets and
other electrical devices
Diffuses heat away from a hot spot in
mobile and other heat generating devices
Prevents malfunctioning caused by
overheating
Used in batteries, displays and wireless
charging modules
Insulates EV batteries/products exposed to
heat during production process
IC packaging method of attaching DDIC to
a panel substrate by bonding PI film
Allows for larger screen-to-body ratio and
essential for bezel-less displays
Used as protection film under PI substrate
in flexible displays after antistatic treatment
Allows for smaller radius of curvature,
durable and heat resistant
FPCB
Flexible display
All range of
applications
PI varnish
Graphite sheet
c.60% M/Sin China
Industrials
CoF
Flexible substrate
Magnet wire
EV Battery binder
Semiconductorpassivation
Industrial binder
16
Product application overview
Essential for manufacturing FPCBs in mobile and other electronic devices
PI film and copper bonded together using adhesive (Flexible Copper
Clad Laminates or “FCCLs”)
PI film acts as a substrate for copper foils on FCCLs used for FPCBs,
the integral components used in mobile and other electronic devices
Description
FPCB
Application Schematic EV Semi
3L FCCL(2008)
2L FCCL
Laminate
(2010)
Coverlay(2008)
Stiffener(2008)
Other
PI film
Adhesive
PI film
PI film
Adhesive
Copper foil
✓ ✓
✓ ✓
✓ ✓
✓ ✓
✓5G
FPCB
3L FCCL(2019)
2L FCCL Laminate
(2020)
Coverlay(2019)
Stiffener(To come)
5G FPCBs offer similar functionalities as regular FPCBs with the
following key differences:
− Production process: additional ingredients added to lower
moisture absorption
− Function: Low permittivity (Low Dk, Df) for minimizing data loss
− Use: 5G mobile handsets including 5G antenna
See preceding
PI film
Adhesive
Release film/paper
Copper foil
Copper foil
TPI
TPI
PI film
Mobile/Display
Thermoplastic PI resin attached to both sides of PI film, then copper foils
bonded on both sides
PI film is used for removing copper foils from 2L FCCL after etching
process in semiconductor manufacturing
PI film bonded to release film/paper
During FPCB manufacturing process, the release paper is
removed and circuits are formed on multi-layers of FCCLs
Coverlay protects and insulates the exposed surface of the FCCLs
after circuits have been patterned
PI film bonded to another layer of PI film
Used for firming up certain surfaces on the FPCB to support the
areas of FPCB components and connectors requiring firmness
PI
film
17
Product application overview
Essential for mobile and display applications, expanding to EV batteries and semiconductors
DescriptionApplication Schematic
PI
film
IC packaging method of attaching Display Driver IC (“DDIC”) to
a panel substrate by bonding PI film
For use in high resolution displays (4K & 8K)
CoF(2010)
PI film
Copper foil
✓
✓ ✓
✓
✓ ✓
✓
✓ ✓
Artificially graphitized PI film with high thermal conductivity for heat diffusion
Flexible, light and thin(10㎛), graphite sheets are widely used for mobile handset batteries, displays and camera modules
Graphite Sheet (2013)
G/S for mobile
handset insulation
Ad
va
nc
ed
In
du
str
ials
PI film bonded to battery cells
Used for leak-proofing electrolyte in large secondary battery
cells and protecting electrodes
Adhesive tape made of PI film
Consumable insulating tape used for reducing product damage in various industrial manufacturing processes
Mid & large
battery (2015)
Small battery (2015)
Semiconductor
(2017)
Other(2008)
PI film bonded to battery cells
Used for leak-proofing electrolyte in small secondary batter cells
and protecting electrodes
For use in small wireless electronic devices such as wireless
vacuums, electronic bikes, wireless tools and wireless speakers
PI film wrapped on ceramic sheet with vinyl laminate
A variant PI fim used in the metal forming process for manufacturing
Multi-layer Ceramic Capacitors (“MLCCs”)
PI필름
Ceramic sheet
Clean paper
Vinyl
PI film
Battery cell
Adhesive
18
EV Semi OtherMobile/Display
Essential for mobile and display applications, expanding to EV batteries and semiconductors
Coated and heat cured PI varnish attached to TFT and RGB
device
Glass substrate is replaced by PI varnish to employ
curved/flexible display
Flexible display
Enamel wire(2018)
Rechargeable battery binder
Semiconductorpassivation
(2018)
CPI film
PI varnish
PI film
R G B
Binder holding solder mask and heat sink
Used for protective coating on the wafer surface after wiring
integrated circuits in non-memory and memory semiconductors
Solder mask
PI varnish
Cu Cu
Heat sink
Binder holds the active material particles within the negative
electrodes of a lithium-ion battery
Highly heat resistant and adhesive, PI varnish binder can replace
the existing synthetic rubber binder for secondary batteries
When silicon anode materials are charged, overinflated synthetic
rubber binder can crack easily
PI varnish
Active material
External surface of copper magnet wire coated with PI varnish
Used for coating magnet wire to enhance heat resistance and
insulation
A wide range of applications for products with dense wiring
structure including EV motors, inductors and transformers
PI varnish
Copper wire
PI varnish
PI
va
rnis
h
✓
✓
✓ ✓
✓
19
DescriptionApplication Schematic EV Semi OtherMobile/Display
Product application overview
Successfully developed Modified PI (“MPI”) for 5G antenna
substrate used for 5G spectrum and high speed data transmission
Increasing demand for MPI expected, driven by 5G
commercialization
LCP film has a low production yield and is less flexible than MPI
→ Highly likely to be replaced by MPI (MPI is price competitive
at 50-60% of LCP price)
We successfully entered the 5G substrate market in 2019 and
completed development of the 2nd generation MPI
- mmWave MPI under development
FPCB
Secular growth in smart devices driving increasing demand for FPCBs
PI film applications for FPCBs Smartphone market trend
20
2001~2004: Early stage growth of PI film on the back of feature
phone growth
2000~2012: Commercialization of smartphones accelerated the
growth of FPCBs used in smart devices
The number of FPCBs used per device is increasing due to
higher integration and specifications of devices
Black coverlay usage expected to increase for all handsets
globally
14.411.8 10.8 10.5 10.6 11
2
2.6 3.4 4.55.9
7.8
2020 2021 2022 2023 2024 2025
(Hundred million units)
16.4
14.4 14.315.0
16.6
18.7
5G
Non-5G
Graphite sheet
Increasing demand for graphite sheet driven by more heat generating components as smart devices become more compact and complex
• PI film is artificially graphitized by heat treating to 3,000℃. Yields thermal conductivity of 700~1,850W/mk and thickness of
10~100㎛
• Used as a thermal dissipative material in commercial & industrial applications, especially thin and small electronic devices
such as smartphones. Artificial graphite sheet is most commonly used (c.96%) for the purpose of thermal management in
smart devices
• Further growth expected from: 5G smartphone adoption rate ↑ / LCD → OLED ↑ / Maximizing internal space efficiency of
smartphones
Artificial graphite sheet
Production process
Market outlook and business strategy
21
• We currently have a c.60% global market share
• Exploring new markets in response to Chinese supply expansion (Capacity increase and low-end market)
• Focusing on marketing PI film for high thickness graphite sheet to increase sales and maintain market share
• Developing new products and marketing to new customers
8 8 8 8 9 9
13 13 12 12 12 12
20 20 20 2123 25
2020 2021 2022 2023 2024 2025
Chip on Film
Notchless full screen phones and higher resolution TVs expected to drive increasing demand for CoF
CoF structure and applications
Display Driver IC mounting position
CoF market size growth
(KRWbn)
22
Increasing demand for high resolution TVs and full
screen smartphones
Per unit usage of CoF to increase
COF market currently dominated by Japanese
competitors
PI Advanced Materials is the first company to
successfully localize COF production in Korea, and is
expected to benefit from the government’s localization
policy for materials, components and equipmentSource: Current Status and Future Prospects of Functional Polymer Films (Fuji Keizai, 2019)
Display panel source PCB connected to multiple PCBs to trasmit
video signals
Smartphone – CoF is attached to the bottom of TSP (“Touch
Screen Panel”) module
Standardized size and thickness
TV
Laptop
/ Tablet
Smartphone
CoG CoF CoP
scre
en
scre
en
scre
en
scre
en
subst
rate
Gla
sssu
bst
rate
PI
subst
rate
Flexible display
Increasing popularity of flexible display phones to boost demand for PI-based backplate film
Foldable backplate film applications Flexible display market size growth
(KRWbn)
Rigid OLED
Cover glass
Polaroid film
Touch sensor
Encapsulation
R G B
TFT substrate
(Glass)
Curved OLED
Cover glass
Polaroid film
Touch sensor
Encapsulation
R G B
TFT substrate(PI varnish)
Protection film (PET film)
FoldableOLED
CPI or UTG
Polaroid film
Touch sensor
Encapsulation
R G B
TFT substrate(PI varnish)
Protection film (PI film)
Current Status and Future Prospects of Electronics Advanced Materials (Fuji Keizai, 2020)
Protection film = Base film = Cushion film 23
PI quantity per unit to increase due to larger display size
All foldable devices by domestic and global manufacturers have
adopted our PI films
c.90% in the backplate film market achieved by actively
marketing to end customers from the early stage of development
PI film is used for outermost surface protection beneath the TFT
substrate in foldable display
PI film’s insulating capability/flexibility is suitable for foldable
display requring insulation and low radius of curvature
13 1739
67102
157
2020 2021 2022 2023 2024 2025
Electric vehicle
Solid demand for PI film for the purpose of EV battery insulation
PI film applications by EV battery type
24
1. Prismatic 1) Attached to the outer front surface of a battery can (Black
C/T in the market)
2) Used for detection/management of contaminants between
jelly roll and can inside battery (Dark Green C/T in the market
+ New White C/T under development)
2. Pouch- Attached to battery connectors and surface finish
3. Cylindrical 1) Protects the cathode tab
2) Protects electrodes
※ Usage ratio 1) : 2) = 1:10
▶ Prismatic 1) external surface ▶ Prismatic 2) inside jelly roll ▶ Cylindrical
Anode lead
Anode Protect
Film
liner
AnodeCathode
Cathode lead
Teminal Fixed
Tape
Electrode Fixed
and insulation
Tape
Electric vehicle
PI varnish being used for insulating EV motor coil
Application of PI varnish to EV motor coil
25
PI varnish is used for coating magnet wire wrapping EV motor for electrical insulation
Change from round type to rectangular type magnet wire necessitates withstanding higher voltage and stronger insulation
(PAI→PI)
Confirmed to supply PI varnish for EV motor coils starting in early 2021
Varnish production line completed in July 2019 to be utilized for mass production
Provided samples to global OEMs and customer evaluation in progress → Targeting to expand customer base globally to start
generating significant revenue from EV applications
01. Summary financials
Appendix
26
Summary financials
Summary balance sheet Summary profit & loss statement
(KRWmn)(KRWmn)
341,097 372,365 392,965 407,016
Current assets 130,172 105,904 108,516 147,683
Cash & cash equivalents 71,167 11,203 28,541 54,754
92,878 113,651 141,679 133,889
Current liabilities 57,463 58,764 93,696 93,828
Short- & long-term debt 38,920 53,550 71,828 60,198
248,220 258,714 251,286 273,128
Retained earnings 124,128 134,622 127,194 149,036
Current ratio (%) 226.5% 180.2% 115.8% 141.2%
Debt-to-equity ratio(%) 37.4% 43.9% 56.4% 48.0%
Debt-to-assets ratio (%) 11.4% 14.4% 18.3% 14.9%
0.56x 0.83x 0.26x
27
245,473 223,682 64,364 74,492
Cost of goods sold 165,322 166,404 44,332 51,676
Gross profit 80,151 57,278 20,032 22,816
Gross margin (%) 32.7% 25.6% 31.1% 30.6%
76,370 52,074 19,606 21,142
EBITDA margin (%) 31.1% 23.3% 30.5% 28.4%
60,533 33,602 14,468 15,929
Operating margin (%) 24.7% 15.0% 22.5% 21.4%
Financial incomes 1,149 242 51 46
Financial expenses 1,548 2,298 847 288
Other gains/losses -16,242 -10,383 -2,372 -1,040
43,892 21,164 11,301 14,648
34,984 17,718 8,745 11,718
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