Slide 1: Q3 2020 Investor Conference
Q3 2020 Investor Conference Nov 11th, 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 How PUF Works for AI Security 4 Q&A 5 Appendix Embedded Wisely, Embedded Widely 4
Slide 5: Review of Operations
Review of Operations Embedded Wisely, Embedded Widely 5
Slide 6: Q3 2020 Financial Results
Q3 2020 Financial Results The EPS of Q3 2020 was 2.26 NTD, ROE was 38.8% (thousands of NT dollars) Change Change Change Q3 2020 Q2 2020 Q3 2019 Q1-Q3 2020 Q1-Q3 2019 (QoQ) (YoY) (YoY) Revenue 441,259 423,276 4.2% 336,587 31.1% 1,279,971 1,048,189 22.1% Gross Margin 100% 100% - 100% - 100% 100% - Ope
Slide 7: Revenue in Different Stream
Revenue in Different Stream Q3 revenue up 38.2% YoY in US dollar terms Revenue Breakdown 20Q3 in comparison to 20Q2 $400,000 20Q2 20Q3 Royalty 74.8% $200,000 $0 Licensing Licensing Royalty 25.2% Revenue NT$ Thousands Q3 2020 Q2 2020 QoQ Q3 2019 YoY Q1-Q3 2020 Q1-Q3 2019 YoY Licensing 111,125 118,062
Slide 8: Revenue by Technology
Revenue by Technology The royalty of NeoFuse has a growth of 128.2% YoY in Q3 Q3 2020 Total Revenue Licensing Revenue Royalty Revenue Technology % of % of % of Change Change Change Change Change Change Q3 Q3 Q3 (QoQ) (YoY) (QoQ) (YoY) (QoQ) (YoY) Revenue Licensing Royalty NeoBit 53.7% 7.3% 10.4% 22.
Slide 9: Royalty Revenue by Wafer Size
Royalty Revenue by Wafer Size 12-inch wafer increased 70.5% YoY Q3 Royalty Breakdown 12-inch 12-inch wafers contributed 39.8% of royalty, increased 39.8% 19.8% sequentially and 70.5% YoY. 8-inch wafers contributed 60.2% of royalty, increased 1.7% sequentially and 27.6% YoY. 8-inch 60.2% Royalty
Slide 10: Future Outlook
Future Outlook Embedded Wisely, Embedded Widely 10
Slide 11: eMemory Embedded Everywhere
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 applications, which includes PMIC, LCD driver
Slide 12: Our Perspectives
Our Perspectives eMemory continue to create value for the industry and our shareholders New Licensing & Application & Royalty Technology Development Licensing: For New Business Development: • NeoFuse and NeoPUF will continue to grow due to • NeoFuse in advanced process is adopted for secure key
Slide 13: How PUF Works for AI Security
How PUF Works for AI Security Embedded Wisely, Embedded Widely 13
Slide 14: Typical AI Security Concerns We Face
Typical AI Security Concerns We Face We utilize cryptographic operations and keys to ensure security Data in transit Confidentiality Data Integrity Authenticity A B Non-repudiation Data at rest Confidentiality Signature Embedded Wisely, Embedded Widely 14
Slide 15: The Foundation of AI Security: RoT
The Foundation of AI Security: RoT We refer to the anchor of secure device as Root-of-Trust (RoT) • Protecting keys right from generation is therefore pivotal Data Key Generation Key Storage Crypto Engine Cipher 1 2 3 4 Embedded Wisely, Embedded Widely 15
Slide 16: Towards a RoT for AI Security
Towards a RoT for AI Security Generating key, storing key and using key in cryptographic operation • It all comes down to 3 essential problems to solve. How can we How can we How can we secure key generate secret key? store keys securely? usage in operations? Utilize process variation Static & Dynam
Slide 17: NeoPUF: The Inborn Chip Fingerprint
NeoPUF: The Inborn Chip Fingerprint A truly random sequences for applications with high security requirements can be generated • NeoPUF utilizes Quantum Tunneling mechanism to generate a one-and- only “biometric identifier” of each and every chip Embedded Wisely, Embedded Widely 17
Slide 18: PUFrt: A PUF-based Hardware RoT
PUFrt: A PUF-based Hardware RoT PUFrt integrates altogether key generation, key storage, and entropies to protect operations A Highly Integrated PUF-based HRoT with complete Anti-tampering Design On-chip UIDs PUF-based TRNG Secure Key storage for Authentication for crypto usages for asset protection
Slide 19: PUFiot: A PUF-based Security Crypto Processor
PUFiot: A PUF-based Security Crypto Processor PUFiot incorporates crypto-algorithms, enabling all security functions A HW Crypto processor with entropy protection on data, keys and crypto operations • Key Generation • Symm. & Asymm. • Key Wrapping Authentication • Integrity Check • Secure Boot • Enc
Slide 20: PUF-based Solutions Secure All AI Operations
PUF-based Solutions Secure All AI Operations PUFrt and PUFiot enhance security functions during AI operations Security Threat Model Countermeasure Security Function Security Solution AI Operation • Secure Booting Device Boot & • Malicious FW loaded • Secure key storage • Authentication and Authentic
Slide 21: Summary: PUF-based Solutions for AI Security
Summary: PUF-based Solutions for AI Security The underlying benefit of using a PUF in cryptography is its “uniqueness” and “unpredictability” NeoPUF-based Hardware Root of Trust, containing NeoPUF and OTP, provides • Unique Identity • Secure Key Storage • True Random Number Generator • Anti-Tamperin
Slide 22: PUF-based Solutions Safeguard Products Throughout Entire Lifecycle
PUF-based Solutions Safeguard Products Throughout Entire Lifecycle Software & Data Protection SoC Anti Counterfeit Cloud Server Authentication Secure Communication Unique ID Secure Boot Secure Key Storage Secure Update Embedded Wisely, Embedded Widely 22
Slide 23: Q&A
Q&A Embedded Wisely, Embedded Widely 23
Slide 24: Appendix
Appendix Embedded Wisely, Embedded Widely 24
Slide 25: 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 20
Slide 26: Quarterly Revenue Pattern
Quarterly Revenue Pattern eMemory’s quarterly revenue pattern 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. 3rd month: License Fees Only. Note: O
Slide 27: Worldwide Customers
Worldwide Customers Our IP solutions are adopted by leading foundries, IDMs and fabless worldwide New Country Licensing Foundry IDM & Fabless Application & Royalty Technology Taiwan 4 1 302 Development China 8 0 812 Korea 4 0 87 Japan 4 7 64 North 1 1 306 America Europe 2 1 177 Others 1 0 76 Embedde
Slide 28: 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 1-4 years 1-4 years License Fee Design License Fee Royalty Foundrie
Slide 29: Technology Licenses
Technology Licenses Cumulative technology licenses Number of Licenses Year 2016 2017 2018 2019 Q1-Q3 2020 License 43 20 26 18 24 Note: Terms (including number of process platforms and licensing fees) for each technology license are set contractually. Payments are made according to set milestones, an
Slide 30: New Technology Under Development
New Technology Under Development Products in different process nodes New technologies are being developed for 98 platforms by Q3 2020. 7 licensing contracts were signed, 6 for NeoFuse and 1 for NeoMTP. 0.11~ 0.15~ Technology 5/6nm 7/10nm 12/16nm 22/28nm 40nm 55/65nm 80/90nm >0.25um 0.13um 0.18um
Slide 31: Technology Development
Technology Development Developments by process nodes 12" Fabs Production Development IP Type Process Type 5/6nm 0 4 OTP, PUF FF 7/10nm 2 1 OTP, PUF FF, FF+ 12/16nm 3 5 OTP, PUF FF, FF+ 22/28nm 31 11 OTP, PUF, MTP LP/ULP/ULL, HPC/HPC+, HV-OLED, DRAM, SOI 40nm 15 5 OTP, PUF, MTP LP/ULP, E-Flash, HV-DD
Slide 32: Embedded wisely, Embedded widely
Embedded wisely, Embedded widely Embedded Wisely, Embedded Widely 32