2018 business overview - mops.twse.com.tw
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Wafer Works Corp
Confidential Property
2018 Business Overview
To become the customer-centered solution provider of semiconductor materials
Jun.,2018
Wafer Works Corp Confidential 2
Disclaimer
PLEASE READ THIS DISCLAIMER CAREFULLY BEFORE USING THE DOCUMENTS. Documents furnished herein, including but not limited to any financial reports, files, annual report, news, or other relevant message, are sole for the purpose of information provision rather than recommendation of investments, offer or offer for sale of trading Wafer Works (hereinafter referred to as the “WWX”) or other companies' shares. Any decisions with respect to investments should be made based on your own judgment. These documents may contain statements that pertain to projections of WWX, including but not limited to any future business activities and developments. These predictions were made based on information available at the time the statements were made, the assumptions, suppositions, and judgments of Wafer Works or of affiliated companies (hereinafter referred to as the “Company”) as well as on some factors such as politics, economics, and marketing. Thus, the accuracy of such statements may be affected by known and unknown risks and inherent uncertainties, the existence or emergence of facts, factors that differ from the assumptions, suppositions, or judgments of the Company, or other factors. Consequently, there may be discrepancies between actual results pertaining to the Company's future earnings, management results, financial conditions, and other matters as explicitly or implicitly referred to in the statements on these documents. Information provided on these documents constitutes information that is valid at the time it was provided and does not reflect situational changes that subsequently arise or that may subsequently arise. Therefore, the Company herein declares that we would not warranty the appropriateness, accuracy and completeness of the statements expressly or impliedly. In addition, information disclosed by the Company on these documents may in some cases be incomplete or inconsistent with information disclosed by other means by the Company in terms of description or expression. In no event shall the Company assume any liability for the incorrectness or incompleteness of information, delay to update information on these documents, and any utilization or investment on the basis of the information. Information on these documents is also subject to revision, supplementation, or deletion without notice. In particular, the Company's annual formal report and the reports submitted to the agencies in accordance with the relevant laws shall dominate all the announcements regarding the Company's finance. Without the Company's prior written consent, any person shall not reproduce all or a portion of the documents in any manners. If any discrepancies exist between different language Versions, the Chinese one would prevail.
July 1997
May 2002
NTD$ 33.6 Billion (as the end of 05.31.2018)
Polished Wafer, Epitaxial Wafer, DSP, SOI
Taiwan: Longtan (Headquarters), Yangmei
China: WWXS, WWXE, WWXY, WWXZ
Founded
IPO
Market Cap.
Market Position
Products
Locations
Company Profile
3
Worldwide 6th silicon wafer provider; Global top 3 power substrate supplier
Wafer Works Corp Confidential
Wafer Works Corp Confidential
Group Holding Structure
4
Source:WWXS Consolidated Financial Statement (Q1’18)
Wafer Works Shanghai Corp.
(WWXS)
Wafer Works Epitaxial Corp.
(WWXE)
79.16%
100%
Wafer Works Corporation
(WWX)
96.91%
STIC
Wafer Works Yangzhou Corp.
(WWXY)
37.60%
Xing Gang Investment
Wafer Works Zhenzhou Corp.
(WWXZ)
60.47%
Wafer Works Corp Confidential
Korea
Fabs
Sales Representatives
Europe Office
WWXS WWXE
WWXY WWXZ
Taiwan Japan
Zhenzhou
Shanghai Yangzhou
California, US
Helitek
Sales Office
Pennsylvania, US
Europe
Sales Representative
Headquarters Longtan/ Yangmei
Netherlands
Service Locations and Customers
5
USA Europe Greater China APAC
Source: iHS Markit (Q1’18)
US$ Billion YoY Growth
Semiconductor Remains Uptrend
Worldwide Semiconductor Revenue
6 Wafer Works Corp Confidential
2012 2013 2014 2015 2016 2017 2018 (E) 2019 (F) 2020 (F) 2021(F) 2022 (F)
Total Semiconductor 308 327 355 346 353 429 460 457 470 482 503
YoY Growth -2.5% 6.4% 8.4% -2.5% 2.0% 21.7% 7.1% -0.6% 2.7% 2.7% 4.3%
-5%
5%
15%
25%
0
100
200
300
400
500
Billi
on
of
Do
lla
rs
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Growth Momentum
IoT CAGR 13.2%
Automotive CAGR 13.4%
Medical CAGR 9.7%
Wearables CAGR 9.0%
Source: IC Insights (Dec, 17), WWX summarized
7
The biggest end-use market
application
Standard PCs remain stable
Automotive and IoT Will Drive IC Growth 2016 - 2021
-3% -1% 1% 3% 5% 7% 9% 11% 13% 15%
Automotive IoT Medical Electronics wearable systems Cellphone
Server Computers Digital TVs Standard PCs Set-Top-Boxes Tablets
CAGR
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1.44
1.03 1.06 1.09
0.96
0.83 0.76
0.69 0.67 0.74
0.94
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
Wafer Pricing Trend
8
ASP is anticipated to climb by a double-digit percentage and reach $0.94 this year, as a supply shortage persists amid robust demand for chips used in cars, industrial and IoT devices.
Major suppliers are disciplined on capacity
expansion, the pricing trend remains upward before large-scale investments in capacity.
Unit: ASP/ Sq-in (USD)
Source: SEMI (Q2’18), TOPOLOGY RESEARCH INSTITUTE (May, 18) WWX summarized
From 2008 to 2016, surplus wafer supply led to a 50% price slump, no major supplier generated enough profit to fund a new fab.
Benefit from multiple end applications of semiconductor and insufficient wafer supply, wafer price rebounded 30%, starting from Q1’17.
Rebounded 30%
$0.66
$0.67
$0.68
$0.68
$0.69
$0.71
$0.76
$0.79
$0.86
0.0
0.2
0.4
0.6
0.8
1.0
6 new Fabs
2 new Fabs
2 new Fabs
3 new Fabs
2 new Fabs
1 new Fabs
Installed Capacity in 2020 5,700 Kpcs
New Fab Capacity in 2015to 2018 274 Kpcs
Capacity Expansion and Utility Rate Increasing (Estimated)
400~500 Kpcs
Installed Capacity in 2015 5,000 Kpcs
Source: Semi (Jul, 17), iHS (Q1’18), WWX summarized
Strong 8” Demand
9
8” Fab installed monthly Capacity in 2015 to 2020
Source: Topology Research Institute (May, 18)
Source: SEMI (Jul, 17 & Oct, 16), WWX summarized
700 Kpcs
16 Fabs & Lines begin operation in 2015~2018
Wafer Works Corp Confidential
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
8" Demand 4,800 4,800 4,900 4,850 5,050 5,200 5,400 5,500 5,600 5,700 5,800
8" Supply 5,021 4,805 4,738 4,845 4,897 4,999 5,065 5,247 5,453 5,576 5,599
4,000
4,500
5,000
5,500
6,000
8”
WP
M/T
ho
usa
nd
s
Company Capacity (K) Location
SMIC 15 Tianjin
YUZHOU 20 Dalian
Tacoma 100 20
Nanjing Huaian
YDME 50 Beijing
Silan 50 Hangzhou
Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118
Epi Slices 3,858 3,861 3,516 3,662 3,816 3,848 3,678 3,531 3,692 4,023 4,089 4,325 4,899 4,628 4,442 4,691
Polished Slices 9,507 9,768 9,740 9,799 10,220 10,052 8,782 9,521 10,033 10,070 10,317 10,746 11,343 11,479 11,582 11,896
Epi % 28.9% 28.3% 26.5% 27.2% 27.2% 27.7% 29.5% 27.1% 26.9% 28.5% 28.4% 28.7% 30.2% 28.7% 27.7% 28.3%
20%
22%
24%
26%
28%
30%
32%
34%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Source: SEMI (Apr, 18)
Worldwide 8” Polished and Epi Shipments
10
Unit: Kpsc
Wafer Works Corp Confidential
8” Shipments Remain Stable
Average Monthly Shipment in 2015 5,200 Kpcs
New IC fab Capacity in 2015 to 2020 1,800 Kpcs
12” monthly installed capacity from 2015 to 2020
Source: IC Insights, WWX summarized
Source: Gartner, WWX summarized
IC Fabs expected to begin construction in China
Robust 12” Demand
11 Wafer Works Corp Confidential
Source: iHS (Q1’18), WWX summarized
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
12" Wafer Demand 3,839 4,018 4,162 4,571 4,854 5,185 5,637 6,003 6,225 6,479 6,779
12" Wafer Supply 4,539 4,815 4,896 4,971 5,070 5,171 5,256 5,355 5,480 5,566 5,617
2,000
3,000
4,000
5,000
6,000
7,000
8,000
12
” W
PM
/ T
ho
usa
nd
s
CompanyCapacity
(K per month)
Year of Initial
ProductionLocations Products
AOS 25 - Chongqing Power Discrete
Fujian Jin Hua 60 2018 Fujian DRAM
GigaDevice 125 2018 Hefei DRAM/Flash
GlobalFoundries 65 2018 Chengdu Foundry
Huaian Imaging Device
Manufacturer (HIDM)20 - Huaian CIS
Intel 100 2019 Dalian 3D NAND
Hua Li Micro 40 2018 Shanghai Foundry
Shanghai Huahong
Grace30 2019 Wuxi
SK hynix 80 2019 Wuxi DRAM
Powerchip 40 2017 Hefei Foundry
Samsung 80 2019 Xi'an 3D NAND
SMIC 35 2018 Beijing Foundry
SMIC 70 2018 Shanghai Foundry
SMIC 40 2017 Shenzhen Foundry
CanSemi 30 2019 Guanzhou Foundry
Silan 80 Xiamen MEMS/Discrete
SIMC TBA 2019 Qingdao Foundry
Tsinghua Unigroup TBA Chengdu Foundry
Tsinghua Unigroup 100 Nanjing DRAM
TSMC 20 2018 Nanjing Foundry
UMC 25 Xiamen Foundry
Yangtze River/MXC 300 2018-2020 Wuhan 3D NAND
Total 1,365
Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118
Epi Slices 4,086 3,867 3,628 3,854 3,776 3,245 3,273 3,642 3,995 4,108 4,175 4,322 4,398 4,519 4,450 4,773
Polished Slices 10,132 10,358 10,792 11,209 11,552 11,405 11,580 11,074 11,801 11,669 11,809 11,899 12,140 12,313 12,265 12,657
Epi % 28.7% 27.2% 25.2% 25.6% 24.6% 22.2% 22.0% 24.7% 25.3% 26.0% 26.1% 26.6% 26.6% 26.8% 26.6% 27.4%
20%
22%
24%
26%
28%
30%
32%
34%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Source: SEMI (Apr, 18)
Worldwide 12” Polished and Epi Shipments Unit: Kpsc
12” Shipments Remain High
12 Wafer Works Corp Confidential
Wafer Works Corp Confidential
Shanghai Taiwan
Japan Korea
(Helitek) California, US
Netherlands
Headquarters /Fab/Sales
Sales
Yangzhou
LongTan YangMei
WWXS
WWXY
WWXE
200mm(8”)+150mm(6”) 8”equi:280 Kpcs→300 Kpcs
150mm(6”)+200mm(8”) 6” equi:300 Kpcs→330 Kpcs
100/125/150mm(6”) 6” equi: 280 Kpcs
100/125/150/200mm EPI 8” equi: 145 Kpcs→185Kpcs
WWXZ
200mm (under construction) 8” equi: 200 Kpcs
Zhenzhou
Crystal Growth Center
Unit: Kpcs/Month
Substrate Capacity 6” equiv. = 7,500 Kpcs/Yr 8” equiv. = 6,000 Kpcs/Yr EPI Capacity 8” equiv. = 2,000 Kpcs /Yr
13
WWX Capacity Status
Note: WWXZ began crystal growth in June
Note: 200mm ratio > 80%
Wafer Works Corp Confidential 14
Initial Crystal Growth at WWXZ
Q2 Q3 Q4
50 100
150 200 200
0
100
200
300
Q3'18 Q4'18 Q1'19 Q2'19 Q3'19
Monthly Capacity Unit: Kpcs
2017 2018
Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec
Ground breaking
Equipment move-in
Sampling & Production
Crystal growth
5,528 5,345 5,391
6,377
3,502
2014 2015 2016 2017 (Jan-May)2018
Booming Revenue
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Source:WWX Consolidated Financial Statements
Quarterly Accumulated
NTD$ M
1,491 1,580
1,649 1,656
2,066
21.1% 22.8%
24.2%
27.5%
30.9%
20%
25%
30%
35%
1,000
1,200
1,400
1,600
1,800
2,000
2,200
Q1'17 Q2'17 Q3'17 Q4'17 Q1'18
Revenue Gross Margin
70%
60%
50%
67%
70% : HD
30% : LD
Dopant
60% : Polished Wafer
40% : EPI
Product
50% : 8”
30% : 6”
Diameter
67% : Great China
12% : Europe
8% : USA
Geography
Revenue Breakdown
Source:1. WWX Consolidated Financial Statements (Q1’18) 2.WWX Internal SAP System Wafer Works Corp Confidential 16
Gross Margin
Net Margin
Improving Performance
Wafer Works Corp Confidential 17 Source:WWX Consolidated Financial Statements (Q1’18)
Debt Ratio
NTD$M
2,066
NTD$M
368
NTD$
0.51
NTD$M
6,921
Shareholders’ Equity
Revenue
Operating Profit
EPS
NTD$M
1,491
NTD$M
101
NTD$
0.03
NTD$M
5,296
30.9% 21.1%
ROE
Q1’18 Q1’17
36.0% 52.3%
1.2% 14.2%
16.3%↓
13.0%↑
2.0% 14.7%
12.7%↑
9.8%↑
Q1’18 Q1’17
39%
265%
1700%
31%
Wafer Works Corp Confidential 18
http:www.waferworks.com
Q & A