Slide 1: Ude Corp. Investor Presentation Dec. 2020
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Slide 2: UDE Possesses Excellent Electromagnetic Signal Processing and Customization Capability
UDE Possesses Excellent Electromagnetic Signal Processing and Customization Capability Signal Input Signal Filtering System Protection Signal Output Integrated RJ45 LAN Cable Filter Surge/ESD Protection Ethernet IC Noise Filtering Protection of networking IC Signal Purification and motherboard EMI C
Slide 3: High Entry Barriers for Conventional Connector Producers
High Entry Barriers for Conventional Connector Producers RJ45 port production requires mastery of conventional connector production techniques and additional techniques specific to high speed data transfer Conventional Connector RJ45 Port (RJM) Mechanical Precision High Speed Transmission Structural
Slide 4: Monthly Revenue Trend
Monthly Revenue Trend NT$ million 2018 2019 2020 550 500 499 466 487 449 450 446 444 450 426 434 424 415 404 401 411 397 416 417 418 400 387 383 380 384 377 391 387 387 350 339 365 371 369 353 335 300 249 250 234 201 200 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 4
Slide 5: Quarterly Revenue Trend
Quarterly Revenue Trend YoY Growth 29% NT$ million 11% 7% 1,600 1% 5% 1% 5% 5% 3% 4% 1,463 1,500 -12% 1,342 1,400 1,219 1,257 1,222 1,300 1,177 1,134 1,200 1,001 1,078 1,053 1,100 1,000 927 900 800 700 600 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 5
Slide 6: Gross Profit and Operating Profit
Gross Profit and Operating Profit Gross Margin % Operating Margin % 17.5%19.2%18.6% 19.6% 19.2% 17.9% 22.2%18.6% 7.8% 15.1% 2.2% 324 0.7% -0.1% 1.6% 14.7% 3.2% 114 2.2% 234 241 249 211 223 219 0.3% -5.1% -4.6% 188 157 38 136 27 30 20 7 3 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 (1) 1Q19 2Q1
Slide 7: Operating Costs Structure
Operating Costs Structure Material Labor- direct & indirect Moudling outsourcing Depreciation & Amortization Others 100% 9% 9% 6% 7% 6% 7% 80% 22% 28% 27% 60% 19% 18% 17% 40% 47% 20% 39% 40% 0% 2018 2019 1-3Q20 7
Slide 8: Operating Expenses Structure
Operating Expenses Structure Employee Depreciation & Amortization Others 100% 80% 37% 36% 41% 60% 12% 15% 10% 40% 49% 51% 49% 20% 0% 2018 2019 1-3Q20 8
Slide 9: Operating Expenses by Function
Operating Expenses by Function NT$ million Selling G&A R&D 250.0 NT$210.2m 220.4 220.0 219.6 210.1 213.2 210.7 NT$ 193.6.3m 195.6 197.4 181.1 200.0 177.2 59.0 178.6 62.1 69.8 64.8 71.5 64.5 59.5 64.2 54.4 54.2 52.4 150.0 109.8 95.4 100.0 96.3 101.2 88.8 92.5 78.0 85.5 82.8 83.2 84.5 50.0 51.6 52.9 5
Slide 10: Manpower Costs & Expenses
Manpower Costs & Expenses NT$ million Operaring cost Operating expenses 350.0 314.4 NT$ 291.9m 284.6 285.3 283.2 289.4 284.8 272.7 300.0 NT$ 257.3m 252.3 257.8 254.1 234.7 115.0 250.0 104.2 104.9 102.3 105.9 105.1 98.2 96.9 93.7 95.4 200.0 85.2 150.0 100.0 199.4 185.2 179.7 164.1 176.4 180.4 178.1 1
Slide 11: Manpower by location
Manpower by location TW - UDE+CDE+DYP DG+RD+ATG+HL SC DGDY Units 3,818 3,722 4,000 3,313 3,307 3,379 3,279 203 159 3,278 3,500 3,192 3,202 3,216 3,174 3,120 72 3029 111 136 52 65 149 235 59 203 3,000 2,500 2,539 2,534 2,502 2,370 2,234 2,171 2,099 2,023 1,968 2,000 2,292 2,401 1,500 1,000 801 784 87
Slide 12: Inventory
Inventory Raw materials Work in process Finished goods NT$ million NT$ 1,086.7m NT$ 1,065.7m 1,111.6 1,124.0 1,124.7 1,200.0 1,088.9 1,073.7 1,084.2 1,064.8 1,071.2 1,076.5 1,045.9 1,016.4 1,000.0 329.6 343.3 335.4 301.8 316.9 374.5 323.5 324.3 385.9 331.4 391.2 800.0 600.0 590.5 610.8 596.3 580.9 5
Slide 13: Depreciation & Amortization
Depreciation & Amortization NT$ million Operating costs Operating expenses 120.0 101.4 95.2 100.0 92.1 87.5 86.7 86.1 85.2 77.3 16.2 74.6 72.9 27.8 80.0 12.1 28.5 70.8 26.4 25.0 26.5 16.4 15.3 22.2 60.0 24.0 40.0 73.1 73.4 63.6 67.4 58.1 57.6 59.6 61.1 61.7 55.1 46.8 20.0 0.0 1Q18 2Q18 3Q18 4Q18 1Q1
Slide 14: Marketing Overview
Marketing Overview 14
Slide 15: Sales Breakdown by Main Application-RJ45 Related
Sales Breakdown by Main Application-RJ45 Related NT$ million 1600 PC Consumer Networking Others 1400 6% 1200 5% 5% 9% 5% 5% 5% 7% 7% 1000 10% 8% 6% 7% 9% 55% 43% 49% 6% 53% 800 47% 49% 51% 51% 45% 50% 41% 45% 47% 50% 600 53% 400 29% 23% 23% 22% 23% 20% 16% 21% 31% 26% 25% 19% 19% 28% 19% 200 23% 24%
Slide 16: 2020 Sales breakdown by product
2020 Sales breakdown by product Xfmr SFP Others Pure 4.6% 1.4% 0.4% 4.0% 單位:USD ICM 89.6%
Slide 17: 2020 Sales breakdown by product line
2020 Sales breakdown by product line NT$ million Product % YoY(%) 0/10/100M 18.1% -11.6% Integrated RJ45 1G 51.3% -16.2% 2.5G/5G/10G 15.5% 153.8% RJ45 Related Pure RJ45 4.2% 72.0% LAN Transformer 4.2% 31.4% Others(Audio Jack/USB/SFP..) 2.1% 145.9% Silicon Rubber 4.5% 158.0% Total 100.0% 4.1%
Slide 18: Top Customers
Top 10 Customers Rank Company % 1 F 9.78 2 C 7.46 3 F 6.09 4 A 4.96 5 S 4.76 6 P 4.73 7 K 4.28 8 W 4.27 9 A 4.07 10 G 4.01
Slide 19: Market growth momentum
Market growth momentum IoT
Slide 20: Networking - Server Market
Networking - Server Market ODM Direct Brand NIC
Slide 21: Networking - 5G & WiFi6
woe Networking - 5G & WiFi6 NETGEAR Foxconn Arun Accton She eas SERCOM pee TF RUCKUS WNC e€efo amazon ALPHA cisco Meraki — GY COMPAL
Slide 22: Networking - 5G & WiFi6
Networking - 5G & WiFi6 Source: CMoney 產業研究中心
Slide 23: Consumer Market Overview
Consumer Market Overview TV/Monitor Printer/MTF STB BD/BDR Others
Slide 24: Consumer - Customized
Consumer - Customized 12.00 單位:M/USD、 PCMCIA Card- C17 & C180 M/Ports 10.20 10.00 8.00 7.10 6.00 5.12 4.00 3.66 94% 2.00 1.31 0.95 0.00 285% 2019 2020 2021 銷售額 Ports
Slide 25: PC Market Overview
Unit : M/USD PC Market Overview 2019-2020 PC Sales amount 25.0 21.8 19.5 20.0 15.0 10.0 9.0 8.9 5.0 2.4 2.3 0.8 0.8 0.0 MB & DT IPC AIO NB 2019 2020
Slide 26: PC – over 2.5G for MB
PC – over 2.5G for MB Unit:M/USD、MPorts 2019-2020 over 2.5G for MB 1.40 1.26 1.21 1.20 1.00 0.80 0.60 0.40 0.26 0.18 0.20 - 2019 2020 銷售 Ports
Slide 27: 2021 Business Estimate
2021 BUSINESS ESTIMATE ICM Flat Pure Growing X’fmer Growing SFF Growing
Slide 28: UDE Technology Roadmap
UDE Technology Roadmap 28
Slide 29: Network applications and CPE infrastructure
WiFi 6 WiFi 5 CP E CAT5e Customer Premise Equipment WiFi 5 HFC CPRI Fiber CAT5e DSL WiFi 6 CAT6a PON Data Center Edge Computing Baseband Unit Fiber 29
Slide 30: ICM RJ, Pure RJ and SFF speed roadmap
ICM RJ (PoE) 10M/100M → 1G → 2.5G/5G → 10G CAT 5e Cable (UTP) 2.5G/5G CAT 6a Cable (STP) 10G Pure RJ SFF Series (SFP, SFP+, SFP28, QSFP+, SFP DD, QSFP28, QSFP DD, OSFP) 10M/100M → 1G → 2.5G/5G → 10G 1G → 10G → 25G → 40G → 50G → 100G → 200G → 400G → 800G 30
Slide 31: SFF Product development list
SFF Product development list SFF各類型產品開發狀態 “V”已量產 ，“O”已送樣，“X”待開發， “空白”不開發 系列 速度 1X1 conn 1X1 Cage 1X2 Cage 1X4 Cage 2X1 conn 2X1 Cage 2X2 Cage 2X3 Cage 2X4 Cage 2X6 Cage 2X8 Cage SFP 1G V V V V V V V X O O SFP+ 10G V V V V V V V X O O O SFP28 25G V V V V V V V X O O X QSFP+ 40G V V V X V O X X QSFP28
Slide 32: Industry 4.0 concepts
FRG ToC womroup PROJECT members RUSE e 4th ERA Technologies walletwork FOURTH exchange CLOU wer mos RELIABILITY Computing data pau. industry REVOLUTION «Safety, infastruture Maintenance EFFICIENCY cesx, INDUSTRY 4. O'ontsrns cyber-physical system Adaptability effectiveness CPPS BIG DATA INTERNET OF
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Slide 34: Noise Vibration Dust
• Noise • Vibration • Dust • Moisture • Oils • Temperature • Abrasion • Chemicals • Cable stress 34
Slide 35: CMC Transformer
CMC Transformer 35
Slide 36: EtherCAT and EtherCAT P
EtherCAT. =~ EtherCAT. =~P He) [e) [e) [e) Ey © —- ©) m-. © =. © a. Ll MOtotolo + Lue) (6) (6) (6) | Power: 2x 24V DC, 3A (Us, Up) GND, 2-cable connection: EtherCAT and power supply One cable solution: EtherCAT P
Slide 37: ICM RJ, Pure RJ, PoE applications
• ICM RJ • Pure RJ • PoE 10 100 1 2.5 5 10 25 40 50 100 400 800 1.6 3.2 6.4 Mbps Gbps Tbps • Desktop • Notebook • Printer • Blue-Ray DVD • Set top Box • TV 37
Slide 38: 5G Fixed Wireless Access
5G Fixed Wireless Access Access unit Central data center Indoor CPE o = ad es es i. Edge data center 38
Slide 39: UDPS Manufacturing System
UDPS Manufacturing System Toyota production system(TPS) Lean production system Flexible production system Digital smart factory 39
Slide 40: UDPS - Implementation framework
UDPS - Implementation framework 成本 交期 安全 品質 士氣 D. C. S. Q. M. 顧客第一 降低成本 •工程流程化 J. 挑 戰 零 •QC工程表 •Delivery設計 維 持 •QM表 I. 改 善 不 •W_W分析 •物與情報流 T. 良 •八字展開法 •十九項調查 現地.現物 QDC目視化管理 5S 4M 流動 標準 OEE 自工程 標準化 變化 QM 生產 W_W 作業 解析 平準化 思考技術 PDCA/目的，應有之姿，條件管理、原理，W_W、八字展開 企業文化(自省、感恩、尊重、執行力、創新)
Slide 41: Cost improvement process I
Cost improvement process I 41 線內平衡率 1 無價值+浪費作業 2 標准作業+少人化 3 管理變革+生產方式革新 裝塑 插電 裝塑 插電 檢查 測 測耐 焊電 點錫 人數 RDX作業人力對比 改 包裝 FQC LCR 壓 容 膏 膠&裝 容&焊 膠&裝 容&焊 鐵殼 電容 鐵殼 電容 73 WIP數百pcs 100 善 組裝 第五工程 焊 焊 第四工程 裝 裝 第三工程 裝導 3-10人/線WIP數十,生產方式 17 革新,作業距離,推行(培訓)標 焊 測耐 測 光體& 50 前 RJ端 子 PCB PCB& PCB& RJ RJ INSE INSE RT RT
Slide 42: Cost improvement process II
Cost improvement process II 42 4 OEE管理+人財育成 5 少人化產線+模塊化 6 手臂自働化 7 自働化+智能化 1.7條機械手臂線體 1.員工轉型升級-多能工化 2.改善效果:PPH60.8提升117% 自動插RJ端子 2.設備模塊化,泛用化改善 3.改善項目:数字化产线, LCR传 &折料帶 3.自動組裝機台開發,T/T 學習總結 输数据,软件扫码调档案软件自 彈性產線的設計,機械手臂 動異常檢知，自動報警 與CCD自動檢測的運用 2013~2015 2015~2016 2016~2017 2017~2018 贴胶布&装塑 折小料帶& 波峰焊PCB& 上塑
Slide 43: Cost improvement process III
Cost improvement process III 43 8 數字化+無紙化 9 人工智能 10人工智能+智慧分析 11 生產排程智慧化 - 物料需求管理 - 先進計劃排程 - 智慧人力/設備調配 保養智能分析 人工智慧報表 2018~2019 2019~2020 2020~2021 2021~ 品管智能化建設 - 設備預防維護 1.7條機械手臂線體 2.改善效果:數位化,無紙化 - 智動產品檢測系統 智慧工廠建設 3.改善項目:電子O/I,機臺異常自動 -中央廠務決策中心 報警,排程/JIT加料/報表自動生成分 -設備狀態自動反饋維護 析,電子總看板,大數據分析 -智働化生產排程/供料
Slide 44: Smart factory system integration
●信息智能化 数据分析 ●物流智能化 异常检质 即时/便利 预警通知 BI 交货系统化入料一站式 移动装置 资料 帐务/成本 交货物流 成本检讨 上架 搬运 收料及检 MES 供货商 MES EE R PP 交货 验 Smart factory system 订单信息 排程 搬运 JIT生产快速供料 ● 产进度 订单生 产线智能设备 成 报表生 析 数据分 零件生产物流 上架 integration 生 下架 采集工厂数据 仓库 零件生产 產 排程 生产 调整 及时 耗 搬运 搬运 材 大 智 数 管 控 据 情报电子化物料直取直投 能 储 PES JIT实时加料 存 组装配送物流 化 互联网
Slide 45: Building a smart factory
Building a smart factory 物流智能化 信息智能化 生产智能化 1.智能撿投 1.生产数据分析 1.设备数据采集 2.智能配送 2.数据异常分析 2.设备数据分析 3.智能收貨 3.异常自动报警 3.设备异常报警 4.智能庫管 4.数据手机互连 4.设备数据互连 5.智能出貨 5.生产汇总共享 5.设备盘点共享 45
Slide 46: UDPS- System structure
UDPS- System structure 生产 智能 化 46
Slide 47: Current status of subsidiaries
Current status of subsidiaries 泉德 CDE : SMD type inductance 德洋 DYP : Silicone product 艾特捷 ATG : Automation equipment / Parts foundry production 翰聯 HL : Assembly customized wire
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