Slide 1: Q4 2019 Investor Conference
Q4 2019 Investor Conference Feb 12th, 2020 Embedded wisely, Embedded widely
Slide 2: IPR Notice
IPR Notice All rights, titles and interests contained in this information, texts, images, figures, tables or other files herein, including, but not limited to, its ownership and the intellectual property rights, are reserved to eMemory. This information may contain privileged and confidential inform
Slide 3: Cautionary Statement
Cautionary Statement This presentation contains forward-looking statements, which are subject to risk factors associated with semiconductor and intellectual property business. It is believed that the expectations reflected in these statements are reasonable. But they may be affected by a variety of
Slide 4: Contents
Contents 1 Review of Operations 2 Future Outlook 3 Q&A 4 Appendix Embedded Wisely, Embedded Widely 4
Slide 5: Review of Operations
Review of Operations Embedded Wisely, Embedded Widely 5
Slide 6: Q4 2019 Financial Results
Q4 2019 Financial Results The EPS of Q4 2019 was 1.74 NTD, ROE was 30.2%. (thousands of NT dollars) Q4 2019 Change Change Q3 2019 Q4 2018 (Unaudited) (QoQ) (YoY) Revenue 361,896 336,587 406,752 7.5% -11.0% Gross Margin 100% 100% 100% - - Operating Expenses 202,386 197,399 222,532 2.5% -9.1% Operatin
Slide 7: FY 2019 Financial Results
FY 2019 Financial Results The EPS of 2019 was 7.30 NTD, ROE was 31.6%. (thousands of NT dollars) FY 2019 Change FY 2018 (Unaudited) (YoY) Revenue 1,410,085 1,476,516 -4.5% Gross Margin 100% 100% - Operating Expenses 788,762 803,781 -1.9% Operating Income 621,323 672,735 -7.6% Operating Margin 44.1%
Slide 8: Revenue in Different Stream
Revenue in Different Stream Revenue up 7.5% QoQ but down 11.0% YoY. Comparison to 19Q4 Revenue Breakdown $300,000 19Q3 19Q4 Royalty 68.0% $200,000 $100,000 $0 Licensing 32.0% Licensing Royalty Revenue NT$ Thousands Q4 2019 Q3 2019 Q4 2018 QoQ YoY FY 2019 FY 2018 YoY Licensing 115,944 103,689 124,726
Slide 9: Q4 Revenue by Technology
Q4 Revenue by Technology The royalty of NeoFuse has a growth of 49% QoQ. The licensing revenue of NeoFuse increased 36.9% QoQ and 9.4% YoY. Its royalty revenue increased 49% QoQ and 15.8% YoY. The royalty revenue of NeoBit decreased 6.8% QoQ and 20.7% YoY. Its licensing revenue decreased 12.1% Q
Slide 10: 2019 Revenue by Technology
2019 Revenue by Technology The royalty of NeoFuse has a growth of 50.7% YoY. The licensing revenue of NeoFuse increased 26.4% YoY. Its royalty revenue increased 50.7% YoY. The royalty revenue of NeoBit decreased 10% YoY. Its licensing revenue decreased 14.8% YoY. The licensing revenue of MTP (
Slide 11: Royalty Revenue by Wafer Size
Royalty Revenue by Wafer Size 12-inch wafer contributed to 30.0%. Q4 Royalty Breakdown 12-inch 30.0% Royalty for 12-inch wafers contributed 30% of royalty, decreased by 4.2% sequentially and 20% YoY. The sequential decline is due to DDI customers inventory adjustment. 8-inch 70.0% Royalty Q4 201
Slide 12: Future Outlook
Future Outlook Embedded Wisely, Embedded Widely 12
Slide 13: eMemory Embedded Everywhere: Security
eMemory Embedded Everywhere eMemory’s IP seeks to penetrate across all the applications. Core Tech Security Product Applications: The Future in Security Chip IP: eMemory’s IP are already applied into different The rapid growth in AIoT and 5G drive the scenarios, which includes PMIC, LCD driver,
Slide 14: Our Perspectives
Our Perspectives eMemory continue to create value for the industry and our shareholders. New Licensing & Application & Royalty Technology Development Licensing: For new applications: •NeoFuse and NeoPUF will continue to grow due to • NeoPUF was designed into leading customers for IoT increasing
Slide 15: Q&A
Q&A Embedded Wisely, Embedded Widely 15
Slide 16: Appendix
Appendix Embedded Wisely, Embedded Widely 16
Slide 17: Company Overview
Company Overview eMemory is the global leader of embedded non-volatile memory IP. Revenue Trend (Unit: NT$ 1,000) 1,600,000 Licensing & 1,400,000 Royalty License/Design Revenue Royalty 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2
Slide 18: Worldwide Customers
Worldwide Customers Our IP solutions are adopted by leading foundries, IDMs and fabless worldwide. New Licensing Foundry IDM & Fabless Application & Royalty Technology Taiwan 4 1 282 Development China 7 0 688 Korea 4 0 83 Japan 4 7 59 North 1 1 278 America Europe 2 1 137 Others 1 0 60 Embedded Wisel
Slide 19: Business Model
Business Model Recurring royalty is the backbone of our business. 70-75% revenue are from royalty based on wafer production More adoption = more volume shipment More advanced node wafers = higher ASP per wafer Revenue Breakdown 2-3 years 2-3 years License Fee Design License Fee Royalty Foundri
Slide 20: Quarterly Revenue Pattern
Quarterly Revenue Pattern eMemory’s revenue are mostly received in the first month of the quarter. 1st month: Receive License Fees of the month and Royalty from most foundries on previous quarter’s wafer shipments. 2nd month: Receive License Fees of the month and Royalty from other foundries.
Slide 21: Technology Licenses
Technology Licenses Cumulative technology licenses. Number of Licenses Year 2016 2017 2018 2019 License 43 20 26 18 Note: Terms (including number of process platforms and licensing fees) for each technology license are set contractually. Payments are made according to set milestones, and there are n
Slide 22: New Technology Under Development
New Technology Under Development Products in different process nodes. New technologies being developed for 95 platforms by Q4 2019. 7 licensing contracts were signed. 0.11~ 0.15~ 5/6nm 7/10nm 12/16nm 28nm 40nm 55/65nm 80/90nm >0.25um 0.13um 0.18um NeoBit - - - - - 1 2 9 10 2 NeoFuse 2 1 3 10 4 7
Slide 23: Technology Development
Technology Development Developments by process nodes. 12" Fabs Production Development IP Type Process Type 5/6nm 0 3 OTP, PUF FF 7/10nm 2 1 OTP, PUF FF, FF+ 12/16nm 3 3 OTP FF, FF+ 28nm 23 14 OTP, PUF LP/ULP/ULL, HPC/HPC+, HV-OLED, DRAM, SOI 40nm 12 7 OTP, PUF, MTP LP/ULP, E-Flash, HV-DDI/OLED 55/65
Slide 24: PUF-based Hardware Security IP
PUF-based Hardware Security IP NeoPUF provide the foundation for developing eMemory’s security function IPs. Standard Solution: Premium Solution: High-End Solution: Secure Embedded: PUFrt PUFiot PUFse PUFflash Feature Highlights: Feature Highlights: Feature Highlights: Feature Highlights: Fast & l
Slide 25: AIoT Demand is Growing
AIoT Demand is Growing AIoT: AI embedded in IoT. AIoT, The Technological Revolution Golden Era of IoT Connected IoT devices are up to 26 billion in 2020 according to Gartner report AIoT Hardware Attack Surface Data at Rest • Trained Model (Data poisoning on machine learning) • Parameters/S
Slide 26: Wide Range Applications of PUF-based Security Solutions
Wide Range Applications of PUF-based Security Solutions IoT Artificial Intelligence Automotive Fintech AI applications include With the growth of the In smart cars, PUF-based PUF-based inborn secret training and inference. IoT, PUF-based security security can provide a unique ID provide the Both are
Slide 27: IoT Security
IoT Security IoT security has been considered by developed countries. In UK, Legislating for Security in Consumer IoT https://www.copperhorse.co.uk/legislating-for-security-in-consumer-iot/ In USA, California IoT security law https://www.helpnetsecurity.com/2019/11/20/california-iot-security-law
Slide 28: PUF & PUF-based Security Solutions
PUF & PUF-based Security Solutions PUF is random, robust & unique. What is PUF? A physical unclonable function (PUF) is a physically-defined "fingerprint" that serves as a unique identity for a semiconductor device. PUFs depend on the uniqueness of the random physical factors introduced during m
Slide 29: NeoPUF vs SRAM PUF
NeoPUF vs SRAM PUF NeoPUF is the ideal PUF. Ideal PUF NeoPUF SRAM PUF Unit Cell Inter- Hamming Distance 50% 50% 47% Hamming Weight 0.5 0.5 0.62 Bit Error Rate 0% 0% 5.5% w/o ECC Correction Methods & Area 128kbit BCH-ECC 42k gates None None Impact 256kbit BCH-ECC 56k gates ECC Helper Data in NVM None
Slide 30: PUFsecurity IP – PUFrt
PUFsecurity IP – PUFrt PUFrt (PUF-based Root of Trust). PUFrt Key Features: Secure Storage Fast TRNG MCU In-born secret with UID PUFrt access Key Storage Hardware UID & TRNG Identity & TRNG Key Software- Crypto based Algorithm security Embedded Wisely, Embedded Widely 30
Slide 31: PUFsecurity IP – PUFiot
PUFsecurity IP – PUFiot PUFiot (PUF-based Engine for IoT). PUFiot Key Features: MCU Suitable for PUFiot IoT/AIoT application PUFrt inside Support Hardware UID & TRNG Identity & Key storage DMA/KEK/KDF Support Bus TRNG Interface Command Crypto Support Firmware Firmware Engine Support Stan
Slide 32: PUFsecurity IP – PUFse
PUFsecurity IP – PUFse PUFse (PUF-based Secure Element). PUFse Key Features: Suitable for High- MCU PUFse UID、Keys level Security Hardware & TRNG PUFiot inside Identity & Support Key TRNG Management Security Crypto Support Software Command Processor API & Driver Support Secure Boot Crypto
Slide 33: PUFsecurity IP – PUFflash
PUFsecurity IP – PUFflash PUFflash (Secured Embedded Flash). eFlash combines with PUFflash: Converting eFlash (pure storage) into Security-Element (SE) like security IP. Enhancing product security, what customer needs is only replacing eFlash by SE-like Flash Sensor Sensor PUFflash SE-like MCU e
Slide 34: PUF-based Solution for AIoT
PUF-based Solution for AIoT Edge Protection with Inborn Feature. Data Communication Secure Data Communication Connectivity Sensor Connectivity Sensor PUFrt Processor Processor Core Flash Crypto Flash Core PUFiot Authentication and encryption by PUF based hardware root of trust for software- base
Slide 35: PUF-based Solution for AIoT
PUF-based Solution for AIoT Business Protection via Identified Module. Product know-how and biz are protected by inborn unique secret & identity from PUFrt Module 1 RAM Reconfigurable Processing Unit PUFrt PUFiot NVM PUFse (Flash) Unique Secret Write ciphertext to NVM Secure Programing Tool Protec
Slide 36: PUF-based Solution for AIoT
PUF-based Solution for AIoT Protecting AIoT System from Counterfeits. Anti-Counterfeits with NeoPUF to prevent ASIC stolen by reverse- engineering. Chip can be enabled only if the designated command/private key is executed. Trained NVIDIA model Edge AI ASIC Xavier DLA NeoPUF NeoPUF Tool Prevent AS
Slide 37: PUF-based Solution for AIoT
PUF-based Solution for AIoT Simply Protect ASIC by using PUF. Weight Chaos with intrinsic recovery code from NeoPUF to protect ASIC Design Cloned ASIC chip cannot clone recovery code from NeoPUF ASIC ASIC Weight Chaos Weight Chaos PUF OTP PUF OTP Wrong Correct Weighting Weighting Write recovery
Slide 38: PUF-based Solution for AIoT
PUF-based Solution for AIoT Building Higher Security Layers for Sensitive Data in AIoT system. With the big entropy pool, user can build in several kinds of security functions at the same time - Apply enable command in chip/module stage or applied from cloud. Enable Command - Apply only a part of
Slide 39: Open Platform & Business Model
Open Platform & Business Model eMemory Security Algorithms Security Function IP Solution NeoPUF AES-ECB SHA-256 ECDH PUFrt PUFflash PUFiot OTP AES-CBC MAC ECDSA PUFuid PUFkeygen PUFse AES-CTR HMAC SM3 PUFtrng PUFauth …… SHA-1 ECC-p256 PUFkeyst PUFenc Security Platform Design Licensing IP Royalty Lic
Slide 40: Embedded wisely, Embedded widely
Embedded wisely, Embedded widely Embedded Wisely, Embedded Widely 40