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Nanya Technology Corporation — Investor Presentation 2017
Aug 28, 2017
52061_rns_2017-08-28_bc7a3cd0-1b1c-427c-8890-3b0fd10fc62f.pdf
Investor Presentation
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Nanya Technology WATERLAND Investment Forum 2017
Presentation to Investors & Analysts, August 29[th] , 2017 Joseph Wu, AVP & Deputy Spokesman
August 29 2017 © 2017 Nanya Technology Corp.
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Safe Harbor
The information 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 forwardlooking statements or undertakes duty to update the statements. You are urged to review the information provided herein carefully, and please don’t distribute, reproduce or disclose the information in whole or in part without prior written permission of NANYA Technology Corp.
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August 29 2017 © 2017 Nanya Technology Corp.
Outline
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| 01. | DRAM Industry Landscape |
|---|---|
| 02. | NTC Overview |
| 03. | Business Strategy |
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August 29 2017 © 2017 Nanya Technology Corp.
DRAM Essential to Electronic Devices
Diversified applications create segmented opportunities
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IoT Servers
Tablets
Phones
Wearables IoT, AI
Smart Car
PC Era
Portable Big
Devices Data
Smart Home,
Smart Office,
Smart City
August 29 2017 © 2017 Nanya Technology Corp. 4
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Vigorous Development of New Data Era
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Smart Home Health
Care
Machine
Smart City
Learning
Smart
Smart
Vehicle
Industry
Smart
Devices
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New data era has been expediting the proliferation of semiconductor
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Memory (DRAM and NAND) plays as key semiconductor components
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August 29 2017 © 2017 Nanya Technology Corp.
Strong Momentum of Semiconductor Industry
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Smart Phone + Server Smart Car + IoT
+ Consumer + PC + AI
400,000
Unit: US$ M
300,000
200,000
100,000
0
2015 2016 2017 2018 2019~
WW Semiconductor WW Memory Source: Gartner
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In 2017, 17% YoY and US$401.4B revenue of semiconductor is forecasted
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In 2017, 52% YoY and US$121.7B market size of memory is predicted
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August 29 2017 © 2017 Nanya Technology Corp.
Stable DRAM Industry Structure
| ~2013 | 2013~2017 | 2018~ | ||
| Market | ASP Fluctuation |
|||
| Supply | Supplier | >40 (Keen Competition) |
3 Major + 1 Medium + 2 Small (Oligopoly) |
3 Major + 1 Medium + 2 Small (New comers facing enormous barrier) |
| Technology, Cost & Product |
Cost down due to rapid technology conversion |
Product portfolio diversified and technology conversion slowed down |
New generation product and cost reduction continue slowing down |
|
| August 29 2017 © Demand |
Driving Force |
PC | Smart Phone, Server, Consumer , PC |
Smart Phone, Server, Consumer, PC, Smart Car, IoT, AI |
| 2017 Nanya Technology Corp. Product Spec. |
Standard module | eMCP, Component, Module, SiP |
7 eMCP 、Component,Module, SiP, TSV |
Memory Capex Allocation Shift
Unit: US$ M
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25,000
20,000
15,000
10,000
5,000
-
2015 2016 2017 2018
DRAM NAND
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Source: Gartner
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Significant NAND capex expected for 3D NAND
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DRAM capex mainly for technology conversion and maintaining current capacity level
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Capacity non-exchangeable between NAND and DRAM
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Annual bit growth forecast: DRAM 20%~25%, NAND>45%
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August 29 2017 © 2017 Nanya Technology Corp.
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WW DRAM Capacity
WW DRAM Wafer Start (K/M, 300mm)
1,500
1,304
1,213
1,161
1,098
1,082 1,096 1,135
1,058 1,072
1,000
500
0
2010 2011 2012 2013 2014 2015 2016 2017 2018
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Source: DRAMexchange, NTC MKT
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WW DRAM capacity at the level of 1,100K/M
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No major capacity expected to come on-line in 2018
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August 29 2017 © 2017 Nanya Technology Corp.
DRAM Supply and Demand Growth
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Qty (M, 4Gb eq.) Supply Demand Sufficiency Sufficiency (%)
30,000 110%
102%
101%
97.9% 98.0%
25,000 100%
20,000 90%
15,000 80%
10,000 70%
5,000 60%
0 50%
2015 2016 2017 2018
Source: Gartner, IHS, DRAMexchange, NTC MKT
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2017~2018 DRAM market conditions are expected to stay stable
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Supply growth contributed mainly by technology conversion
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Demand growth driven by smart phone, server and specialty applications
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August 29 2017 © 2017 Nanya Technology Corp.
| Outline | Outline |
|---|---|
| 01. | DRAM Industry Landscape |
| 02. | NTC Overview |
| 03. | Business Strategy |
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August 29 2017 © 2017 Nanya Technology Corp.
P&L Results
| NT$B: Billion | |||
|---|---|---|---|
| 1H’2017 | 1H’2016 | Growth Rate | |
| Revenue | 24.9B 10.4B 42.0% 8.0B 32.3% 3.3B 9.8B 39.3% |
19.3B 5.9B 30.7% 4.3B 22.2% (1.4B) 2.2B 11.6% |
28.6% 76.0% 87.2% 334.9% |
| Gross Profit Gross Margin (%) |
|||
| Operating Income Operating Margin (%) |
|||
| Non-operating Income | |||
| Net Income Net Margin (%) |
|||
| Capital | 27.5B | 27.5B | |
| EPS 3.55 |
0.82 |
Company highlights
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1Q’17 Net Income of NT$ 3,275M, Net Margin 26.8%, EPS NT$ 1.19
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2Q’17 Net Income of NT$ 6,490M, Net Margin 51.4%, EPS NT$ 2.36
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Financial numbers are reviewed by CPA
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August 29 2017 © 2017 Nanya Technology Corp.
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Financial Highlights
30,000 60%
Revenue (Million NT$) Net Income (Million NT$) Gross Margin(%) Operating Margin(%)
49%
48%
47%
44% 44%
42%
40% 40%
37%
42% 42%
40%
33%
31% 31%
36%
30%
34% 34% 28%
15,000 33% 30%
32%
28%
25%
21%
18% 18%
17%
0 0%
Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17
Gross Margin (%)
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Financial Highlights
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Gross Margin resumed to 40% in Q1’2017
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Better operating performance expected in Q3’17, due to seasonality and contribution from 20nm products
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August 29 2017 © 2017 Nanya Technology Corp.
| 1H’17 Cash Flows | 1H’17 Cash Flows | |||
|---|---|---|---|---|
| 1H'17 | 2016 | 2015 | ||
| (Unit: Million NT$) | ||||
| Beginning Balance | 9,102 | 3,104 | 7,268 | |
| Cash from Operating Activities |
8,511 | 15,945 | 18,522 | |
| Capital expenditures | -18,311 | -22,336 | -3,842 | |
| Long-term & Short-term loans |
9,992* | -6,351 | -14,382 | |
| Investments and others | 13,722** | 18,740 | -4,463 | |
| Ending Balance | 23,015 | 9,102 | 3,104 | |
| Free Cash Flow(1) | -9,800 | -6,391 | 14,680 |
(1) Free Cash Flow = Cash from operating activities – Capital expenditures
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Mainly due NT$15.68 billion from ECB issuance & debt repayment
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** Mainly from the proceeds of Micron shares disposal of NT$11.0 billion Annual financial numbers are audited by CPA and approved by BoD
August 29 2017 © 2017 Nanya Technology Corp.
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Debt Ratio & CAPEX
Debt to Asset Ratio
CAPEX
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60.1%
47.3%
41.5%
38.9%
37.5%
2014 2015 2016 Q1'2017 Q2'2017
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- Debt ratio 41.5% at the end of the 30th of June, 2017
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C
NT$ Billion
34.3
22.3
12.2
6.1
2016 2017(E)
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NT$55.7B CAPEX approved by BoD for 20nm 38K WSPM migration
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August 29 2017 © 2017 Nanya Technology Corp.
| Prod 20nm |
Prod 20nm |
|---|---|
| 20nm Monthly Wafers Input Plan |
• >10K / month in Q3’17 • 30K / month in Q4’17 • 38K / month in 1H’18 |
| Product Delivery | • 4Gb DDR3 shipment commenced in Q2’17 • 8Gb DDR4, 2Gb DDR3 in 2H’17 • 8Gb LPDDR3 offering in 1H’18 • LPDDR4X offering in 2H’18 |
| Monthly Wafer Capacity *WSPM: wafer starts per month |
• 20nm technology to reach 38K WSPM in 2018. • Total capacity will amount to 68K WSPM (20nm + 30nm) |
| Product Line-up | • DDR3/DDR4 • LPDDR3/LPDDR4X • Custom |
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August 29 2017 © 2017 Nanya Technology Corp.
Bit Shipment
Annual Bit Shipment Quarterly Bit Shipment
Bit Shipment (4Gb equiv.)
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~45%
150,000
20%
16%
Flat
-8.6%
0
2014 2015 2016 2017(E) 2018(E) 1Q'17 2Q'17 3Q'17(E) 4Q'17(E) 1Q'18(E) 2Q'18(E) 3Q'18(E) 4Q'18(E)
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Q3’17 bit shipment forecast to increase by mid single digits % and Q4 bit shipment to grow double digits
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2017 bit shipment growth is expected to be flat
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Expected ~45% bit shipment growth in 2018, mainly contributed by 20nm conversion
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August 29 2017 © 2017 Nanya Technology Corp.
Outline
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| 01. | DRAM Industry Landscape |
|---|---|
| 02. | NTC Overview |
| 03. | Business Strategy |
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August 29 2017 © 2017 Nanya Technology Corp.
Nanya Established Stronghold in Specialty
2017 DRAM Demand
Specialty DRAM Market Characteristics
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Consumer
20%
Auto &
Industrial
3%
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14%
Server
22%
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Increased customers basis
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Diversified product spec
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Long-life and stable supply
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Demand growth
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Solid in Consumer
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Strong in Auto
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Emerging (IoT…)
Source: Gartner, NTC
- 20nm enhances Nanya Technology competitiveness in specialty market as well as participation in other major segments
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August 29 2017 © 2017 Nanya Technology Corp.
2018 Specialty DRAM Driving Forces
| Application | System Shipment (M set) |
2018/2017 DRAM Demand Growth |
DRAM Driving Force |
|---|---|---|---|
| Networking | 421 | 27% | |
| STB | 316 | 37% | |
| 231 | 82% | 128GB ~ 512GB |
|
| DTV | 228 | 17% | |
| Auto | 95 | 201% | Infotainment ADAS |
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Source: Gartner, IHS, NTC MKT
August 29 2017 © 2017 Nanya Technology Corp.
Nanya Specialty DRAM Product Portfolio
Technology 30/42nm 20nm • • DDR/DDR2/DDR3 DDR3/DDR4 • • Spec. LPDDR1/LPDDR2/LPDDR3 LPDDR3/LPDDR4X • • Customized Customized Density 512Mb/1Gb/2Gb/4Gb 1Gb/2Gb/4Gb/6Gb/8Gb Grade Commercial/Industrial/Automotive Lifecycle Long-life and stable supply
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August 29 2017 © 2017 Nanya Technology Corp.
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Key Takeaways
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Tight supply continued in Q4’17, solid ASP movement
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2018 DRAM market in balance and overall healthy environment
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Nanya Technology Operation Focuses:
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20nm execution better than expected, >10% QoQ bit shipment growth in Q4’17
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20nm capacity ramp-up, ~45% YoY bit output in 2018 forecasted
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20nm product design and production efficiency to further enhance competitiveness
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20nm + 30/42nm comprehensive product offering & long-term commitment to specialty DRAM market
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August 29 2017 © 2017 Nanya Technology Corp.
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Thanks & Questions
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August 29 2017 © 2017 Nanya Technology Corp.