Slide 1: Financial Results & Company Outlook
Scan & Join Phison's IR list Financial Results & Company Outlook 2021 Second Quarter K.S. Pua | Chairman and CEO of Phison August 6, 2021 CONFIDENTIAL 2Q21 Financial Results
Slide 2: Forward-Looking Statement
Forward-Looking Statement Information included in this press release that are not historical in nature are "forward looking statements“. Phison cautions readers that forward looking statements are based on Phison’sreasonable knowledge and current expectations and are subject to various risks and unc
Slide 3: Executive Summary
Executive Summary 1 Phison’s Business Transformation 2 Financial Results 3 Business Highlights 4 Technology Leadership Update 5 Q&A CONFIDENTIAL 2Q21 Financial Results
Slide 4: Phison's Business Transformation
1 Phison’s Business Transformation CONFIDENTIAL 2Q21 Financial Results
Slide 5: Phison's Transformation to Application-driven & Leadership Solutions
Phison’s Transformation to Application-driven & Leadership Solutions Gaming Enterprise Automotive Industrial Embedded ODM Technology- Leadership Application-Driven 1,800 Consumer-driven 1,600 1,642 Millions in USD 1,400 1,447 1,360 1,377 1,355 1,200 1,173 1,100 1,118 1,093 1,000 1,085 1,023 1,007 80
Slide 6: Phison Expands Beyond Consumer-focused NAND Solutions
Phison Expands Beyond Consumer-focused NAND Solutions 6% 6% Others Others 16% 19% 29% Industrial 26% Industrial Consumer Module Consumer Module Module Module 2Q21 Revenue 16% 15% Contribution Gaming Gaming Module Module revenue from non-consumer products 12% 21% 20% 14% Controller Embedded Controlle
Slide 7: 2Q21 Financial Results
2 2Q21 Financial Results CONFIDENTIAL 2Q21 Financial Results
Slide 8: 2Q21 Revenue and Gross Profit
2Q21 Revenue and Gross Profit 2Q21 Revenue 2Q21 Gross Profit $15.9B $5.16B Revenue up 23% Q/Q Gross profit up 36% Q/Q A record high over the same period in history A record high over the same period in history A new historical single-season high A new historical single-season high Revenue in $NT CON
Slide 9: 2Q21 Business performance
2Q21 Business performance 20% of total revenue in 2Q 2021 ASIC 50% YoY SATA and PCIe controller unit growth 190% YoY PCIe controller unit growth 74% of total revenue in 2Q 2021 28% YoY unit growth in BGA SSD modules Module 56% YoY revenue growth in industrial modules 137% YoY revenue growth in gamin
Slide 10: Revenue Trend
Revenue Trend Keep Q/Q and Y/Y growth Even IC industry is in shortage Revenue NT$ millions $18,000 $16,000 $15,910 $14,000 $13,174 $12,866 $12,888 $12,000 $12,844 $12,393 $11,933 $10,000 $10,854 $9,783 $8,000 $6,000 $4,000 $2,000 $0 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 CONFIDENTIAL 2Q21 Fina
Slide 11: Gross Margin Trend
Gross Margin Trend Continuing transformation improves gross profit margin Gross Margin % 32.5% 30.0% 29.5% 27.4% 26.4% 24.6% 23.0% 23.1% 22.2% 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 CONFIDENTIAL 2Q21 Financial Results
Slide 12: Earnings Per Share Trend
Earnings Per Share Trend Phison’s unique business model drives strong profitability In NT$ $19.20 $12.26 Epostar disposed subsidiary Disposal of HFCS $9.63 $11.49 $9.30 $1.66 $4.02 $8.56 $8.24 $7.97 Disposal of KSI $6.94 $6.38 $6.00 $5.28 $3.96 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 *EPS contr
Slide 13: Income Statement Highlights
Income Statement Highlights A record high over the same period in history NT$mn 2Q21 1Q21 Q/Q (%) 2Q20 Y/Y (%) Revenue in US$Mn 568 455 24.8 363 56.5 Revenue 15,910 12,888 23.4 10,855 46.6 Gross Profit 5,164 3,804 35.8 2,673 93.2 Operating Expenses 2,628 1,969 33.5 1,593 65.0 Operating Profit 2,536
Slide 14: Balance Sheet Highlights
Balance Sheet Highlights 2Q21 4Q20 2Q20 NT$mn Amount % Amount % Amount % Total Assets 56,124 100.0 47,564 100.0 41,310 100.0 Cash & Current Financial 19,701 35.1 20,456 43.0 14,825 35.9 assets at fair value Account Receivable 8,134 14.5 6,018 12.7 5,151 12.5 Inventories 15,600 27.8 10,141 21.3 13,06
Slide 15: July 2021 Consolidated Revenue
July 2021 Consolidated Revenue July 2021 Consolidated Revenue Cumulative Consolidated Revenue (January to July in 2021) $5.482B $34.28B Annual revenue growth of 42% (YoY) Annual revenue growth of 24% A record high over the same period in history The third highest in a single month in history A recor
Slide 16: Phison Proposed to Issue the First Domestic Unsecured Convertible Bonds
Phison Proposed to Issue the First Domestic Unsecured Convertible Bonds • Proposal for Issue of Domestic Unsecured Corporate Bonds: The Board approved the company to offer and issue the first domestic unsecured convertible corporate bonds, in order to suffice the needs of business development for pu
Slide 17: Reasons for the Issuance of the First Domestic Unsecured Convertible Bonds
Reasons for the Issuance of the First Domestic Unsecured Convertible Bonds • Semiconductor production capacity is tight, requiring close cooperation with upstream manufacturers in the semiconductor supply chain to ensure production capacity • The NAND market is booming, and Phison needs to expand it
Slide 18: Building High Walls, Accumulating Resources
Building Accumulating High Walls Resources CONFIDENTIAL 2Q21 Financial Results
Slide 19: The Board Approved the Earnings Distribution of the First Half of 2021
The Board Approved the Earnings Distribution of the First Half of 2021 On August 6th, the Board has approved the proposal to allocate a cash dividend to shareholders for 1H21 NT$10/share *Unit is NTD CONFIDENTIAL 2Q21 Financial Results
Slide 20: Business Highlights
3 Business Highlights CONFIDENTIAL 2Q21 Financial Results
Slide 21: 2Q 2021 Business Highlights
2Q 2021 Business Highlights Retail OEM Gaming Server / DC Industrial • Phison started shipping • PCIe Gen4 E16 SSD • Delivering PCIe Gen4 • Phison shipping world’s • Phison and Cigent ship first world’s fastest E18 design-in for high-end E19T performance to highest capacity 15.36TB self-defending cy
Slide 22: 3Q 2021 NAND Market Demand Highlights
3Q 2021 NAND Market Demand Highlights 2021 is the Year of the SONY IS FINALLY ALLOWING PS5 Gaming Handheld, Said CNET Phison and Cigent Partnership Sets USERS TO EXPAND SSD STORAGE New Standard in Cybersecurity with Self-Defending Flash Storage Drives https://www.cgmagonline.com/2021/07/29/ps5-expan
Slide 23: Technology Leadership Update
4 Technology Leadership Update CONFIDENTIAL 2Q21 Financial Results
Slide 24: Continue to strengthen our leading technology position (1/2)
Continue to strengthen our leading technology position (1/2) Category 2014 2015 2016 2017 2018 2019 2020 1H21 R&D Headcount 530 674 809 942 1,112 1,450 1,531 1,834 R&D Exp. / Revenue (%) 5% 6% 7% 9% 9% 11% 14% 13% R&D Exp. / Operating Exp. 65% 71% 73% 78% 79% 79% 81% 80% 250 Phison R&D Expenses 200
Slide 25: Continue to strengthen our leading technology position (2/2)
Continue to strengthen our leading technology position (2/2) Average R&D intensity Industry-leading R&D talents: 2X of industry peers 2,500 R&D by 2025 3,000 Phison Peers 2,500 70% 66% 2,500 61% 60% 2,000 50% 44% 43% 1,834 1,531 40% 37% 1,500 1,450 35% 27% 1,112 30% 1,000 942 809 20% 24% 674 22% 22%
Slide 26: Thank you
Thank you CONFIDENTIAL 2Q21 Financial Results