Globalwafers Co., Ltd. · TPEX:6488

Globalwafers — Q2 2020 Earnings Presentation

39 slides from Globalwafers's earnings presentation, September 2020

  1. Slide 1: GlobalWafers 2Q20 Results Presentation

    GlobalWafers (6488 TT) 2Q20 Results Presentation September, 2020 © GlobalWafers Co., Ltd. All rights reserved 1

  2. Slide 2: Disclaimer

    Disclaimer This presentation has been prepared by GlobalWafers Co., Ltd. (the “Company”). This presentation and the materials provided herewith do not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Company in any jurisdiction or an inducement

  3. Slide 3: Executive Comments

    Executive Comments  1H20  Robust demand for WFH and medical electronics make 2Q better than 1Q.  The logistic challenges resulted from COVID-19 outbreak and the subsequent restriction measures offset partial profits.  Utilization  8” – good  12” – very good, demands for 12” advanced wafers are

  4. Slide 4: Outlook

     Outlook  Expect 2H20 to stabilize and close out 2020 flat to modestly up because unprecedented levels of government aide has been pumped into economies much faster than in prior crisis.  Semiconductor industry is expected to be hurt less by COVID-19 than other industries as it is essential to ke

  5. Slide 5: Production Strategy

     Production Strategy  12” EPI Wafer Expansion in Taiwan (Taisil Branch)  12” advanced EPI wafers target at the fast growing market of miniaturization, lightweight, low-power consumption and high-speed computing.  Mass production in 2 years, >90K wafers per quarter.  12” PW Wafer Expansion in Ko

  6. Slide 6: Industry Overview

    Industry Overview © GlobalWafers Co., Ltd. All rights reserved 6

  7. Slide 7: World Economic Projections

    World Economic Projections  All major countries’ economies are projected to contract in 2020 (with the exception of China, which will slip from its normal 6%+ annual GDP growth rate to only 1% in 2020).  It is estimated that all major counties economy will recover in 2021. Real GDP Growth World US

  8. Slide 8: Worldwide Semiconductor Market Forecast

    Worldwide Semiconductor Market Forecast  Analyst expects the world semiconductor market to be up by 3.3% to US$ 426 bn in 2020, accelerating to 6.2% in 2021 driven by double-digit growth of Memory. All regions are projected to show a positive growth rate. Worldwide Semiconductor Market Forecast by

  9. Slide 9: Semiconductor Fabs Log Record Spending in 2021

    Semiconductor Fabs Log Record Spending in 2021  2021 is poised to mark a banner year for global fab equipment spending with 24% growth to a record US$67.7 billion, 10% higher than the previous forecast, and all product segments promising solid growth rates, according to SEMI Report. © GlobalWafers

  10. Slide 10: Global Silicon Wafer Area Shipments

    Global Silicon Wafer Area Shipments  Worldwide silicon wafer area shipments rose 7.9% to 3,152 million square inches in 2Q20 and surpassed 2Q19 shipments by 6 %. Silicon Area Shipment Trends – Semiconductor Applications Only (Millions of square inches) 3,500 Wafer Area Shipment QoQ 10% 7.9% 3,400 4

  11. Slide 11: Power & Compound Fab Spending Rebounds in 2H20

    Power & Compound Fab Spending Rebounds in 2H20  Analysis shows that global fab equipment spending for power and compound devices is expected to rebound in 2H20 to meet resurgent end-product demand and jump 59 % to a segment record US$6.9 billion in 2021. © GlobalWafers Co., Ltd. All rights reserved

  12. Slide 12: Power & Compound Capacity & Count of Facilities

    Power & Compound Capacity & Count of Facilities  The 804 facilities and lines with installed capacity of 8 million wafers per month (in 200mm equivalent wafers) are tracked by research institute in 2019. By 2024, 38 new facilities and lines will begin operation, fueling installed capacity growth of

  13. Slide 13: Compound Semiconductor – SiC & GaN

    Compound Semiconductor – SiC & GaN  SiC & GaN leverage many important advantages over traditional silicon technology, conveniently exploited to fabricate ultra performance power device  Will play a crucial role in the future of electronics owing to its potential in boosting power handling capabili

  14. Slide 14: How SiC & GaN Captures Market Shares Over Incumbent Silicon Technologies

    How SiC & GaN Captures Market Shares Over Incumbent Silicon Technologies SiC & GaN vs. Silicon Technologies 1 Home Grid Wind Rail PV EV/HEV Appliances 1 Thyristor Switching Power (W) SiC UPS Power supplies for AC adapters 1013 servers Switching power supplies 1012 IGBT/ Audio equipment 01 10 Si IPM

  15. Slide 15: SiC & GaN Power Semiconductor Market Forecast

    SiC & GaN Power Semiconductor Market Forecast  Research shows that the emerging market for SiC and GaN power semiconductors is forecast to rise to $854 mn by the end of 2020, pass $1 bn in 2021, and to increase at a double-digit annual rate to $5 bn by 2029, energized by demand from hybrid & electr

  16. Slide 16: 5G Continues Progress Despite COVID-19

    5G Continues Progress Despite COVID-19  5G progress in connections and deployments continues despite the COVID-19 pandemic.  There are now over 63.6 million 5G connections globally as of 1Q20, representing 308.66% growth over Q4 2019. The number of 5G commercial networks is expected to grow from 8

  17. Slide 17: 5G Subscription Uptake

    5G Subscription Uptake  5G subscription uptake is expected to be more significantly than 4G. Key factors are China’s earlier engagement with 5G compared to 4G, as well as the earlier availability of devices from several vendors. Comparison of 5G and 4G subscriptions Uptake in the First Year of Depl

  18. Slide 18: Global Mobile Network Data Traffic

    Global Mobile Network Data Traffic  Mobile network data traffic grew 56% between 1Q19 and 1Q20. This effect was most pronounced in 1Q20 caused by COVID-19 lockdown restrictions, fueled primarily by more viewing of video content. Global Mobile Network Data Traffic & YoY Growth Source: Ericsson Mobil

  19. Slide 19: Global Mobile Network Data Traffic Outlook

    Global Mobile Network Data Traffic Outlook  Global total mobile data traffic reached around 33EB per month by the end of 2019, and is projected to reach 164EB per month in 2025.  In 2025, 5G networks will carry nearly half of the world’s mobile data traffic. Global Mobile Data Traffic (EB Per Mont

  20. Slide 20: 2Q20 Performance Update

    2Q20 Performance Update © GlobalWafers Co., Ltd. All rights reserved 20

  21. Slide 21: 2Q20 Financial Highlights

    2Q20 Financial Highlights  2Q20 profitability (%) edges up and beats last 3 quarters.  Net Profit 24.8% hits record.  Robust demand for WFH and medical electronics make 2Q better than 1Q.  Revenue: 13,701mn (QoQ : 1.4%)  EBITDA: 5,609mn (QoQ : 11.8%)  EBIT: 4,344mn (QoQ : 13%)  Good Profits d

  22. Slide 22: Financial Highlight: 2Q20 vs. 1Q20

    Financial Highlight : 2Q20 vs. 1Q20 (NT$mn) 2Q20 1Q20 QoQ Revenue 13,701 13,515 1.4% EBITDA*1 5,609 5,015 11.8% EBITDA % 40.9% 37.1% 3.9% EBIT 4,344 3,845 13.0% Operating Profit 4,229 3,805 11.2% Operating Profit % 30.9% 28.2% 2.7% Net Profit 3,397 2,880 18.0% Net Profit % 24.8% 21.3% 3.5% EPS NT$7.

  23. Slide 23: Financial Highlight: 2Q20 vs. 2Q19

    Financial Highlight : 2Q20 vs. 2Q19 (NT$mn) 2Q20 2Q19 YoY Revenue 13,701 14,694 -6.8% EBITDA*1 5,609 5,872 -4.5% EBITDA % 40.9% 40.0% 0.9% EBIT 4,344 4,682 -7.2% Operating Profit 4,229 4,673 -9.5% Operating Profit % 30.9% 31.8% -0.9% Net Profit 3,397 3,542 -4.1% Net Profit % 24.8% 24.1% 0.7% EPS NT$

  24. Slide 24: Financial Highlight: 1H20 vs. 1H19

    Financial Highlight : 1H20 vs. 1H19 (NT$mn) 1H20 1H19 YoY Revenue 27,216 30,285 -10.1% EBITDA*1 10,624 12,235 -13.2% EBITDA % 39.0% 40.4% -1.4% EBIT 8,189 9,922 -17.5% Operating Profit 8,034 9,873 -18.6% Operating Profit % 29.5% 32.6% -3.1% Net Profit 6,278 7,399 -15.2% Net Profit % 23.1% 24.4% -1.3

  25. Slide 25: Financial Highlight: 1H20 vs. 2H19

    Financial Highlight : 1H20 vs. 2H19 (NT$mn) 1H20 2H19 YoY Revenue 27,216 27,809 -2.1% EBITDA*1 10,624 10,412 2.0% EBITDA % 39.0% 37.4% 1.6% EBIT 8,189 7,980 2.6% Operating Profit 8,034 8,024 0.1% Operating Profit % 29.5% 28.9% 0.6% Net Profit 6,278 6,237 0.7% Net Profit % 23.1% 22.4% 0.7% EPS NT$14.

  26. Slide 26: Revenue & Gross Margin

    Revenue & Gross Margin Revenue & Gross Margin (NT$mn) Revenue GM % 15,624 15,591 14,694 15,162 41.0% 14,303 13,506 13,701 14,368 39.0% 40.1% 13,910 38.5% 13,515 37.8% 38.2% 37.0% 36.5% 38.6% 36.2% 12,448 11,978 11,205 30.4% 10,581 26.9% 26.3% 24.4% 24.6% 23.0% 20.0% 6,611 18.2% 4,266 3,647 3,903 1Q1

  27. Slide 27: EBITDA & EPS

    EBITDA & EPS EBITDA EPS (NT$mn) (NT$) EBITDA EBITDA to Revenue 31.18 31.35 22,712 22,648 40.9% 38.5% 39.0% 39.0% 37.1% 26.0% 25.7% 26.4% 26.4% 12,221 14.42 10,624 12.68 16.4% 7.81 5,609 6.60 6.62 5,015 6.14 5.80 4,053 4,087 4,046 3,025 2.54 2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 1H20 2013 2014

  28. Slide 28: Financial Leverage

    Financial Leverage  Sufficient cash makes GlobalWafers capable of sustainable development.  The ability to repay bank loans rapidly reflect our successful navigation through COVID-19. Cash Structure and Bank Loan (NT$mn) Bank Loan Restricted Cash Other Cash Prepayment 50,000 45,000 40,000 35,214 3

  29. Slide 29: Dividend Payout

    Dividend Payout  Record high EPS in conjunction with a high dividend payout. Dividend Payout va.EPS (NT$) Dividend Payout 89.6% 86.4% 86.2% 98.4% 78.9% 80.2% 79.7% Ratio% © GlobalWafers Co., Ltd. All rights reserved 29

  30. Slide 30: Smoothing Out the Shareholder Dividend Stream

    Smoothing Out the Shareholder Dividend Stream  Dividend payout once every 6 months to smooth out the income stream for shareholders.  Our track record of consistently robust dividend payouts reflects GlobalWafers commitment to shareholder value creation.  Dividend Distribution schedule : • 1H20 d

  31. Slide 31: Income Statement

    Income Statement Income Statement (NT$mn) 2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 1H20 Revenue 15,570 15,922 15,310 18,427 46,213 59,064 58,094 13,515 13,701 27,216 Growth (%) - 2.3% -3.8% 20.4% 150.8% 27.8% -1.6% - - - Gross Profit 3,663 3,728 4,073 4,130 11,808 22,299 22,847 4,938 5,284 10,22

  32. Slide 32: Balance Sheet

    Balance Sheet Balance Sheet (NT$mn) 2013 2014 2015 2016 2017 2018 2019 1Q20 1H20 Assets Cash and cash equivalents 1,536 2,685 3,662 5,628 18,794 35,214 32,822 28,285 26,013 Account receivable 3,165 3,694 4,538 7,642 7,869 9,226 8,140 8,574 8,337 Inventories 3,291 2,829 3,262 7,307 7,347 7,040 6,849

  33. Slide 33: ESG Highlights

    ESG Highlights • Responsible Growth is our principle in business practices. • GlobalWafers aims at being at the forefront of global responsibility in the aspects of environment, health & safety and corporate governance. © GlobalWafers Co., Ltd. All rights reserved 33

  34. Slide 34: Sustainable Environment - Electricity

    Sustainable Environment - Electricity  By introducing energy saving measures, GlobalWafers lowers power consumption successfully without impeding it from enlarging production ability.  Optimizing electricity consumption group wide has helped us improve operating profit by 14.8% in 3 years. GWC-Gro

  35. Slide 35: Improvement on Electricity Consumption

    Improvement on Electricity Consumption  Though ingot growing and wafering consume a great deal of energy, GlobalWafers dedicates in enhancing energy efficiency and achieves same revenue with less energy. Electricity Needed to Generate NTD100mn Revenue Unit: MWh 3,000 2,500 2,421 2,000 1,927 1,835 1

  36. Slide 36: Ethical Business Practice

    Ethical Business Practice Achieve compliance with Codes of Formulate guidelines to local legal requirements Legal be observed by all and international Compliance Ethical Conduct directors, managers and standards staff members. Set up grievance system Grievance Risk Establish risk assessment to preve

  37. Slide 37: Diversity and Inclusion

    Diversity and Inclusion  GlobalWafers is committed to supporting gender equality, advancing women in the workplace globally.  Women in our global workforce is 24% overall, 14% on our board. Percentage of Women in Our Global Workforce Percentage of Women on Our Board (%) Female Male Taiwan, 14% 17%

  38. Slide 38: Q&A

    Q&A © GlobalWafers Co., Ltd. All rights reserved 38

  39. Slide 39: Thank You

    Thank You © GlobalWafers Co., Ltd. All rights reserved 39

GlobalWafers — Q2 2020 Earnings Presentation on 6ix