Thermal Technology &Financial Information

RoHS Compliance !ISO 14001

OHSAS 1800 Apr.07, 2020

Thermal Technology

& Financial Information

1

Agenda

• Thermal Technology and Product

Dr. Chen

• Financial Information Sidney Yen

2

Agenda

• Thermal Technology and Product

Dr. Chen

3

Company Revenue

million

(USD$)

4

COVID -19 Alternative Business Opportunities

Due to the epidemic, many companies have begun working from home,

so the demand for home appliances has recently increased strongly.

At the same time, otaku economy has become the rage now.

5

COVID -19 Alternative Business Opportunities

AI applications

Cloud services

5G internet

connection

Core Technologies for Cloud Server / AI Chips / Data Center / Network Thermal Solutions

5G

Internet connection

IoT Data CenterCentral OfficeEdge

Work

everywhere!

AI applications

Auras

Ready

Cloud services

Taiwan HeadquartersSince：1999

Location：Taipei

Area：3,375 M2

Employees：200

KS, East China Factory

Since：2003

Location：Kun Shan

Area：17,800 M2

Employees：1,000

Capacity：6KK pcs/M

GZ, South China Factory

Since：2007Location：Guang Zhou

Area：55,000 M2

Employees：3,500

Capacity：Module : 6KK pcs/MHP : 5KK/MVC : 10KK/M

CQ, West China Factory

Since：2012Location：Chong Qing

Area：10,100 M2

Employees：1,000

Capacity：Module : 2KK pcs/MHP : 5KK pcs/M

HF, East China Factory

Since：2013

Location：He Fei

Area：8,000 M2

Employees：150

Capacity：1KK pcs/M

7

Global Manufacturing Sites

8

Our Clients

9

Big Data→Big business – IBM

102000 2004 2008 2010 2012 2014 2016 2018 2020

10nm

14nm

32nm

45nm

185nm

(Year)

130nm

90nm

65nm

Cascades

Pentium III Xeon 90030.8W

PrestoniaXeon 3.0685W

NoconaXeon 3.6103W

WoodcrestXeon 5160

80W

WolfdaleXeon X527080W

WestmereXeon E7-8870

130W

Skylake165W

Knights Landing215-260W

TylersburgXeon X5680130W

Sandy BridgeXeon E5-2690135W

Ivy BridgeXeon E7-8895 v2155W

Haswell

Xeon E7-8895 v3175W

Broadwell

Xeon E7-8890 v4165W

22nm

Cascadelake

205-255W

Icelake230-300W

305

140-250WCooper lake

255

205

155

105

300W

Intel Server CPU Evolution

Handheld

Devices>1 billion sets

IoT>10 billion sets

PC>100 million

11

Process Technology Brings ApplicationInnovation

12

Main Server Client / The % Change on Client’s Order /Demand Stands for Global Order / Demand

2018

3Q

2018

4Q

2019

1Q

2019

2Q

2019

3Q

2019

4Q

Facebook 7.6% 7.7% 11.4% 11.0% 12.6% 16.1%

Dell 14.0% 15.2% 15.0% 14.0% 12.1% 12.4%

HPE 11.6% 12.4% 12.1% 11.3% 10.8% 10%

Super micro 10.2% 8.2% 7.5% 7.9% 9.3% 8%

Amazon 7.8% 8.9% 10.8% 10.5% 8.4% 6.3%

Google 6.1% 5.9% 4.9% 5.6% 6.8% 5.9%

Inspur 5.9% 6.9% 4.3% 5.7% 6.6% 7.4%

Lenovo 4.1% 4.2% 4.1% 4.0% 4.7% 5.0%

Microsoft 7.1% 5.3% 4.6% 4.6% 4.0% 4.8%

Others 25.6% 25.2% 25.2% 25.4% 24.8% 24.3%

52.8 %

13

U-shape technology (AI chips) US patent obtained (2018)

Core Technologies for Cloud Server / AI Chips / Data Center / Network Thermal Solutions

Intel NB CPU Evolution

125W

60W

Turbo

60W

125W

15

Core Technologies for Notebook / Gaming Thermal Solutions

Powerful VC Thermal Solutionfor 45+90W Power Consumption

Heat Pipe Thermal Solutionfor 15+25W Power Consumption

Turbo-Boost NG! Turbo-Boost OK!

16

Core Technologies for Notebook / Gaming Thermal Solutions

Powerful VC + HP Thermal Solutionfor 125+200W Power Consumption

Multi Heat Pipe Thermal Solutionfor 100+150W Power Consumption

Turbo-Boost NG! Turbo-Boost OK!

17

Main NB Client / The % Change on Client’s Order /Demand Stands for Global Order / Demand

2019 2019 2019

2Q 3Q 4Q

HP 24.9% 27.9% 28.3%

Dell 17.2% 17.1% 17.2%

Lenovo 23.9% 21.1% 20.7%

Apple 8.5% 9.1% 7.5%

Asus 6.2% 7.6% 8.0%

Acer 8.4% 7.5% 6.7%

Huawei 2.4% 1.4% 2.7%

Samsung 1.8% 2.0% 2.0%

Toshiba 0.6% 0.6% 0.6%

Microsoft 0.3% 0.4% 0.5%

Xiaomi 1.3% 0.8% 1.1%

VAIO 0.1% 0.1% 0.1%

Others 4.5% 4.6% 4.6%

93.1 %

18

Huge demand for 5G cellphone thermal solutions!

Market Trend-5G

Today

19

� Slim Heat Pipe vs. slim VCHeat pipe / VC5,000 / 8,000 W/moC

Heat conductiontemperature profile of VC

Heat conductiontemperature profile of Heat pipe

APAP

AP heat is conducted downwards

in x direction!

x y

x

AP heat is conducted

in x/y multiple directions!

High Density Heat Flux Smartphone Solutions

vs. Graphite -- conductivityvs. 1000 W/moC

Smartphone Slim VC MPin 2018

Smartphone Slim Heat Pipe MPin 2016

� Slim pipe vs. VC

Thermal Product for Smartphone

20

& 2019

2019 2019 2019

2Q 3Q 4QSamsung 24.1% 22.1% 18.1%

Apple 12.0% 13.2% 18.7%

Huawei 16.1% 17.8% 13.7%

Oppo 9.4% 8.0% 7.8%

Xiaomi 9.1% 8.1% 8.0%

Vivo 8.5% 7.4% 7.0%

Transsion 2.8% 2.4% 2.8%

LG 2.7% 2.4% 2.1%

Lenovo 2.7% 2.4% 2.5%

Nokia 1.3% 0.9% 1.1%

TCL 1.0% 1.3% 1.3%

ZTE 0.9% 0.8% 0.7%

Reliance LYF 1.0% 0.4% 0.8%

Meizu 0.5% 0.3% 0.3%

Sony 0.3% 0.2% 0.3%

Coolpad 0.3% 0.1% 0.2%

HTC 0.1% 0.1% 0.1%

Asus 0.2% 0.1% 0.1%

Others 6.9% 11.7% 14.5% 21

Main Cellphone Client / The % Change on Client’s Order / Demand Stands for Global Order / Demand

54.6 %

22

5G Smartphone Perspective

� According to the latest prediction from Strategy Analystics, 5G smartphones

will take up a much larger portion of global shipments this year, growing

more than tenfold to reach 199 million shipments worldwide. This translates

to an estimated 15% of all smartphone shipments, up from just 1% in 2019.

The report also estimates that China, the United States, South Korea, Japan

and Germany will account for 90% of all 5G smartphone sales.

� According to Qualcomm 2019 forecast，5G smartphone shipment

• 2021-450 million

• 2022-750 million in production

2020/4/6 23

Auras Core Technology

24

Agenda

• Financial Information Sidney Yen

25

Safe Harbor Notice

There are variety of factors which may influence statements or

contents been drafted within this presentation, therefore we

strongly recommend audience to refer to the information

published on MOPS (Market Observation Post System)website

in case any adjustment has been made.

26

1 .2019 Financial Information

2 .Q & A

Financial Information

27

• Sales Revenue• 2019 accumulated sales revenue is 10.24 billion(NT), Growth 34% compared to Year of 2018. Due to the

increasing sale on Smartphone and Server.

• Profit• 2019 accumulated gross margin rate is 21 % compared to that of 2018’s 12%, which increased 9%, due to the

changes of product portfolio and improvements on production efficiency.

• 2019 H2 gross margin rate 22%、 2019 H1 gross margin rate 20%; Net operating profit rate 2019 H2 10% 、2019 H1 9%、profit ability continues to grow by semi-year。

2019 Financial InformationUnit: in NT$ Thousand 2019 2018 YOY YOY(%) 2019 H2 2019 H1 HOH HOH(%)

Sales Revenue 10,247,561 7,654,265 2,593,296 34% 5,582,707 4,664,854 917,853 20%

Gross Margin Rate 21% 12% 9% 75% 22% 20% 2% 10%

Operating Expenses 928,217 784,592 143,625 18% 509,596 418,621 90,975 22%

Operating Expenses Rate 9% 10% -1% -10% 9% 9% 0.2% 2%

Operating Profit Rate 12% 2% 10% 500% 13% 11% 2% 17%

Non-Operating Income (Expenses) 24,887 111,916 (87,029) -78% (1,313) 26,200 (27,513) -105%

Profits after taxes 969,071 231,505 737,566 319% 553,036 416,035 137,001 33%

Net Operating Profit Rate 10% 3% 7% 233% 10% 9% 1% 11%

Basic EPS 11.7 2.9 8.8 303% 6.6 5.1 1.56 31%

28

2019 Product Portfolio and Retrospect

� 2019 Product Portfolio:

� NB/DT：Accounts for 31%

� VGA/Gaming: Accounts for 25%

� Smart Phone: Accounts for 20%

� Sever: Accounts for 18%

� 2019 Retrospect:

� Annual Sales growth rate is 34%.

� Annual Gross margin rate is 21%.

� Gross margin rate for the second half year

exceeds the first half year

NB

24%

DT

7%

VGA/Gaming

25%

Smart

Phone

20%

Server

18%

others

6%

29