credit suisse 15 annual asia technology conference

September 10, 2014 © 2014 Nanya Technology Corp.

Nanya Technology CREDIT SUISSE 15th Annual Asia Technology

Conference

Presentation to Investors 10-11 September 2014

Dr. Pei-Ing Lee , SVP & Spokesman

2 September 10, 2014 © 2014 Nanya Technology Corp.

01. Company Overview

02. 2Q’14 Highlights

03. 2Q’14 Revenue & Results

04. Business Highlights

05. Market Outlook

06. Business Outlook

Agenda


01

COMPANY OVERVIEW


Founded in March, 1995

Shareholders TWSE* Listed Company, 87% shares owned by FPG

conglomerate (Formosa Plastic Group)

Business DRAM for diversified applications

Technology 30nm wafer output over 80% of total capacity

Capacity 55,000 WSPM**

Employee Approx. 2,400

Nanya Technology Company Overview

* TWSE: Taiwan Stock Exchange Corporation

**WSPM : wafers per month


Sales Office

FAE Application Lab

FAE/ Service Center

Distribution Center

Amsterdam, Netherlands

Houston, USA

Dusseldorf, Germany

Tokyo, Japan

Shenzhen, China San Jose, USA

Burlington, USA

Design Center

Shanghai, China

San Jose, USA

Shenzhen, China

Tokyo,

Japan

Dusseldorf,

Germany

Fab

New Taipei City

Headquarter

Taoyuan

Worldwide Coverage


02

2Q’14 HIGHLIGHTS


Q1'14 Q2'14

2.56 2.54

EPS (NT$)

Q1'14 Q2'14

0.67

10.16

Net Value Per Share (NT$)

Capital Reduction Plan Effective

(2)

(Million NT$) (NT$)

90% Capital reduction plan

effective on June 27th.

Accumulated 2014 1H

EPS NT$ 5.1

(2) Calculation is based on the outstanding

shares of March 31 of 23,961M

(3) Calculation is based on the outstanding

shares of June 30 of 2,396M

(1) Calculation is based on post-

capital reduction shares of 2,396

million.

Equity attributable to NTC

ended Q2’14 was NT$

24,335 million

Capital EPS Net Value Per Share

(NT$)

239,610

23,961

Q1'14 Q2'14

Capital (Million NT$)

(3)

(1) (1)


03

2Q’14 REVENUE & RESULTS


-31%

-102%

-85%

-30%

-4%

13%17.8%

39.9% 43.8%

-110%

70%

-20,000

-

20,000

Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14

Revenue (Million NT$) Net Income (Million NT$) Gross Margin(%, LCM excluded)

Re

ve

nu

e, N

et In

co

me

(M

illio

n N

T$

)

Gro

ss M

arg

in (%

)

*LCM: Lower of cost or market.

Financial Highlights


Q2'14 Q1'14 QoQ

Q2'13 YoY

Amount in Million NT$, except for EPS Audited Audited Audited

Net Sales 11,916 100% 11,692 100% 1.9% 13,456 100% -11%

Gross Margin (Loss) Gross Margin(%) 5,220 43.8% 4,661 40% 12% 2,484 18% 110%

Operating Income (Loss) Operating Margin(%) 4,243 35.6% 3,956 34% 7.2% 1,684 13% 152%

EBITDA* EBITDA Margin (%) 5,622 47.2% 5,455 47% 3.1% 3,358 25%

Non-operating Income (Exp.) 2,178*** 18.3% 2,860 24% 220 2%

Income (Loss) from Discontinued Operation -334 -2.8% -744 -6% -209 -2%

Net Income (Loss) Net Margin (%) 6,083 51 % 6,128 52% -0.7% 1,676 12% 265%

Earnings Per Share 2.54 2.56* * 0.70

Shares Outstanding

(million shares) 2,396 23,961 23,961

Net Value Per Share 10.16 0.67 0.16

*EBITDA = Operating income + Depreciation & Amortization Expenses

** Q1’14 EPS is based on post-capital reduction shares of 2,396 million

*** Non-Operating income included NT$ 2,717M from Inotera’s profits in Q2

2Q’14 Financial Results Summary


Operating Expenses

(Million NT$) (Million NT$)

R&D Expenses SG&A Expenses

Note: Q2’14 SG&A recognized NT$ 217M from settling and

clearing Sumpro employees’ seniority of service.

Q1, 493 Q1, 429

Q2, 423 Q2, 643

Q3, 449

Q4, 392

2013 2014

Q1, 329 Q1, 275

Q2, 377 Q2, 334

Q3, 388

Q4, 310

2013 2014


Q2'14 Q1'14 Q2'13

(Unit: Million NT$) Audited &

Consolidated

Audited & Consolidated

Audited & Consolidated

Beginning Balance 7,109 3,996 2,529

Cash from Operating

Activities 5,935 7,096 5,232

Capital expenditures -485 -128 -2,989

Long-term & Short-term

loans -5,005 -4,066 1,742

Investments and others -132 211 -1,829

Ending Balance 7,422 7,109 4,685

Free Cash Flow (1) 5,450 6,968 2,243

(1) Free Cash Flow = Cash from operating activities – Capital expenditures

2Q’14 Cash Flows


* Revenue portion

% o

f To

tal R

eve

nu

e

Applications

Commodity

Server

Low Power

Consumer &

Specialty

63.3% 66%

10.3% 7.9%

26.4% 26.1%

0%

50%

100%

Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14

Consumer Low Power Server Commodity

Non PC :

reach 73.9%

Sales Breakdown by Application


04

BUSINESS HIGHLIGHTS


Business Highlights

Financial Summary

1H’14 Net income of NT$ 12,211M, EPS NT$ 5.1, BVPS NT$ 10.16

Improved Gross margin to 43.8% in Q2 from 39.9% in Q1

Recognized NT$ 5,689M from Inotera’s profits in 1H’14

Cost per bit improved mid-single digit % in Q2 QoQ

Capital Reduction Effective on June 27

Sumpro’s transaction closed on July 1

Recognized Sumpro’s operating loss NT$ 334M in Q2

Recognized NT$ 217M from settling and clearing Sumpro employees’

seniority of service

Capital reduced from NT$ 239.6B to NT$ 23.96B

Accumulated deficit reduced to NT$ 5,246M

*BVPS: Book Value Per Share


0%

50%

100%

Q1'13 Q2'13 Q3'13 Q4'13 2014(E)

Consumer & Specialty Low Power Server Commodity

Applications

Commodity

Server

Low Power

Consumer &

Specialty

Consumer &

Specialty :

>65%

Low Power :

10%

Non

PC :

54%

* Revenue portion by Application

Non-PC:

>75%

2014 Revenue Breakdown Guidance


57%

37%

15%

53%

28%

Flat

~ - mid-

teen%

2008 2009 2010 2011 2012 2013 2014

Bit Shipment (YoY)NT$ Billion

12 13

23

11

2 5.61

3Q/4QE6.07

0

5

10

15

20

25

2008 2009 2010 2011 2012 2013 2014

Capex

6.69

Capex NT$ 5.61B Capex of 2013.

Estimated NT$ 6.69B for 2014 Capex.

(Plan to add 1 immersion tool to reduce cycle time and to

relieve capacity bottlenecks.)

Bit Shipment Estimated up to mid-teen% bit shipment decrease in 2014.

30nm wafer output over 80% of total capacity.

Capex & Bit Shipment


05

MARKET OUTLOOK


Market Outlook

Supply Q3 DRAM supply shortage tapered.

Supply growth by 2Xnm conversion peak at Q2, slow down in Q3/Q4.

Demand

Strong PC demand in enterprise PC replacement and will further lead to PC

units shipment increase in 2014.

Ongoing strong demand from Sever and cloud computing applications.

Consumer sectors remains strong for various applications from gaming,

Industrial grade, networking, M2M, infotainment. However, TV and STB demand

in China lower than expectation.

Low Power DRAM seasonality strong due to mobile devices, such as iPhone 6,

other major brands, and increase of 4G/LTE shipment in China.

Price QoQ, DRAM pricing is anticipated to increase in Q3, and minor correction

expected in Q4.

DRAM Market Outlook


PC 25%

Others 7%

Server 20%

Consumer 18%

Mobile 30%

PC 52%

Others 14%

Server 11%

Consumer 20%

Mobile 3%

2014 2010

Source: Gartner/MKT, 2014/Q2

The demand growth of PC DRAM reduced to 25% in 2014 down from 52% in 2010.

DRAM in Mobile Devices application surged to 30% in 2014 from 2% in 2010.

(1) TAM unit: 2Gb equiv.

(2) Consumer: DTV, NW, Tablet, STB, Printer, IT grade, etc.

(3) Others: PC module in non-PC applications, E reader, Feature Phone, CRT TV, Cellular Modem etc.

(1) (1)

(2)

(2) (3)

(3)

DRAM Demand Driven by Non-PC


Source: Gartner, 2014/07, NTC marketing

Consumer*: includes upgrade modules, feature phones, graphics, auto, industrial, medical, etc

2014 DRAM demand YoY growth 28% PC unit shipment is better than expectation.

Tablet (include white brand) unit shipment decrease.

Content per box increased in Smartphone (iPhone 6), TV, STB, Game Console and tablet .

27% 25% 25% PC, 25%

20% 22% 21% Server, 19%

22% 23% 24% Smartphone, 26%

5% 5% 6% Tablet, 7%

26% 26% 24%Consumer* & Others, 23%

1Q14 2Q14 3Q14E 4Q14E

Unit: Millions of 2Gb eq

DRAM Demand by Applications


2000 2014

Source: Gartner

Samsung, 21%

Micron , 19%

SK Hynix , 17%

Infineon,

8%

NEC,

7%Toshiba,

6%Hitachi,

4%

Nanya,

1% Mitsubishi, 3%

Mosel Vitelic, 3%

Winbond, 2%

PowerChip , 1%

Fujitsu, 1%

Oki Electric, 1%

Vanguard, 1%IBM, 1%

other, 2%

Others, 17%

Micron

27.4%

Nanya

3.8%

Samsung

37.6%

SK Hynix

27.8%

Others

3.5%

More than 16 suppliers 3 Plus major suppliers

Oligopoly in Memory Market


26%

0

12,500

25,000

Q1'14 Q2'14 Q3'14E Q4'14E Y2014E

Source: Gartner, Companies, 2014/07, NTC marketing

2014 DRAM supply YoY growth 26% Paradigm shift reflects in the consolidation of memory market players.

DRAM supply growth slowing due to complexity of new process technologies migration.

2X nm conversion lead to additional bit increase but limited new wafer capacity.

QoQ up 11% QoQ up 6%

QoQ up 2%

QoQ up 6%

Unit: Millions of 2Gb eq

DRAM Supply by Companies


Source: Gartner, 2013/07

Favorable market conditions continues 2015.

DRAM Supply/ Demand insufficiency with limited capacity addition and DRAM demand

strengthen.

102%98% 98% 98%

50%

100%

150%

0

7,000

14,000

21,000

28,000

35,000

2012 2013 2014E 2015E

Supply, 2Gb eqv. M Demand, 2Gb eqv. M Sufficiency

Y2014/Y2015 DRAM Supply-Demand


06

BUSINESS OUTLOOK


Y2015 DRAM Market outlook slightly supply shortage to

nearly balance.

On track to launch Die Shrink Products and DDR4

products in 2H’14.

Continue to extend 30nm products for industrial grade,

auto infotainment, networking, gaming, storage and

other consumer applications.

Target stock trading back to normal trading in

November 2014.

Business Outlook

nanya.com 27 September 10, 2014 © 2014 Nanya Technology Corp.

Thanks & Questions

“The slides herein and the presentation made during the conference contain forward-looking statements and are provided for

information purposes only. Neither Nanya Technology Corp. nor any other person assumes responsibility for the accuracy and

completeness of the forward-looking statements or undertakes duty to update the statements. Investor(s) is urged to review

carefully the information provided herein and shall make investment decision after conducting their own investigation.”


2Q’14 Consolidated Income Statement

Q2'14 Q1'14 QoQ

Q2'13 YoY

Amount: Million NT$ Audited Audited Audited

Net Sales 11,916 100.0% 11,692 100% 2% 13,456 100% -11%

Cost of Goods Sold 6,696 56.2% 7,031 60% 10,972 82%

Gross Margin 5,220 43.8% 4,661 40% 12% 2,484 18% 110%

SG&A Expenses 643 5.4% 429 4% 423 3%

R&D Expenses 334 2.8% 275 2% 377 3%

Operating Income 4,243 35.6% 3,956 34% 7% 1,684 13% 152%

Non-operating Income (Exp.) 2,178 18.3% 2,860 24% 220 2%

Income before Tax 6,421 53.9% 6,816 58% -6% 1,904 14% 237%

Income Tax Benefit (Expense) -2 0.0% -2 0% -3 0%

Profit from Continuing Operation 6419 53.9% 6814 58% 1901 14%

Income (Loss) from Discontinued

Operation -334 -2.8% -744 -6% -209 -2%

Net income attributable to

noncontrolling interests 2 0.0% -58 0% 16 0%

Net Income attributable to NTC 6,083 51.0% 6,128 52% -1% 1,676 12% 263%

EPS(NT$) 2.54 2.56 0.70

Net Value Per Share 10.16 0.67 0.16

credit suisse 15 annual asia technology conference

Documents