GCS Proprietary1

May 12, 2019

Simon Yu 余有崇

Senior Vice President

General Manager

Worldwide Sales & Marketing

Component Business Group

syu@gcsincorp.com

US: (650) 892 8676

Taiwan:(886) (0 )918 818 824

China: (86) 136 9989 4206

環宇

芯系天下

2

GCS Holdings, Inc.

GCS, LLCGCS

Device

Technologies

Global

Advanced

Semi

D-Tech

Optoelectronics

JV withSanan IC

6” WaferPure-playWafer Foundry

D-Tech Taiwan

Backend Ops

Sales & Marketing

Customer

Services

KGD:PD/LD

FrontendWafer Fab

2/3/4/6”Foundry

Wafer Fab

APD FrontendWafer Fab

PD/APD BackendChip Fab

Unikorn

Semi-

conductor

5G GaN RF PABAW Filter3D Sensing VCSEL

6” WaferPure-playWafer Foundry

3

GCS Businesses

Brand Name Optical Chip Products

Wafer Foundry

RF

PowerElectronics

Optoelectronics

PD/MPD

APD

VCSEL

LDKGD: Known-Good-Die

KGD

4

Revenue Mix % vs Gross Margin - QoQ

5

GCS Brand Name Chip Products:Applications & Markets

PD, MPD, APD, VCSEL, LD

AOCHDMIMobile

Wearable

LTE4G

4.5G5G

40G100G200G400G800G

Data Centers

Consumer &

IoT

LTEBASE

STATION

FTTx2.5G10G25G

PON

6

Value-added Customer DelightWafer Foundry Services

RF

PowerElectronics

Opto-Electronics

4”/6”

FAB

4”/6”

FAB

2”/3”/4”

FAB

We provide Best Outfit for customers’ product!

Wafer Foundry Business

RF Foundry:Applications & Markets

RF Wafer Foundry

RFIC、HEMT、pHEMT、HBT,InP HBT, GaN/Si、GaN/SiC,

BAW Filters

Base StationMobile Phones

4/4.5/5G

Wifi802.11AC802.11AX

Wireless(Mobile & Infrastructure

6” Wafer Production

Power Electronics Foundry:Applications & Markets

Power Electronics Wafer Foundry

GaN/Si, SiC

6” Wafer Production

9

Optoelectronics Foundry:Applications & Markets

Optoelectronics Wafer Foundry

APD, VCSEL, FP/DFB LD, EML, 2D Image Sensors

Photonic Integrated Circuits……

Optical

Fiber

Networks

Industrial Medical Consumer

VCSEL(3D Sensing)LD/Micro LED

VCSELImager

VCSEL/APDLD

VCSEL/DFBEML/PIC

6” Wafer Production

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MARKET OVERVIEWCAPTURE MARKET OPPORTUNITIES

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Smart Devices Smarter and Greener Vehicles

5G Networks

3D Sensing, Lasers, Detectors, Power Amplifiers,

Power Amplifiers, Power Converters Filters

Filters WiFi optical components,

Switches Antenna Switches

Future Growth Opportunities

Self-driving

Car is not “IF”

but “WHEN”

12

Global Optical Transceiver Market

Slower than expected growth in 2017-2018

CAGR of 14% from 2003-2016

2019 – still slow, but 2H is better than 1H

What is the CAGR going forward to 2024?

What it takes to drive growth:- Deployment of 400G (8x50, 2x200 or 4x100)

Ethernet modules (need reliable supply chain)- Transceiver price decline slows down

(5% to 38% in 2011-2018)- Roll out of 5G networks, especially in China

(wireless back-haul and front-haul)- No more trade-war (Trump please)- Too many players, especially in China with small

volume – driving price decline- Limit # of new generation products

(too many form-factors: 100G, 200G, 400G…)

13

5G is coming sooner than expected?

Huawei – 40 5G network construction as of April 2019(6 in Asia Pacific, 10 in Middle East, 23 in Europe)

Verizon activated 5G fixed wireless mobile broadband network (Chicago and Minneapolis) – April 3, 2019

Commercial launch of 5G mobile services by SK Telecom, KT and LG Uplus – April 7, 2019

Samsung began sales pf 5G-enabled Galaxy S10

5G – two worlds:- China: follow the same foot step as 4G LTE (abrupt

market dislocation)- ROW (investment is driven by market force): slow-

motion evolution - only deployed for distinctly different use cases

14

Customer and Technology Activities

Data Center momentum continuing – 100G in volume and 200G/400G starts production

Major customers evaluating GCS 25G VCSEL (for 100G/200G/400G)

In discussion with major customers on GaN 6” production for base stations

SMART BAW process in final development with strategic customers and move to 6” fab

3D sensing VCSELs qualified move to 6” fab

PIC customers in 6” production

Several automotive Advanced Driver Assistance Systems (ADAS) customers in development phase

The compound semi conductor (CS) industry revenue is

still dominated by IDM’s.

The foundry is not yet a viable industry as WIN is the only

game in town.

– The foundry service option is limited

– The fabless cannot grow to become giants like Qualcomm

in the silicon world.

– The IDM’s has to bear the burden of their internal fabs.

15

Status of the CS Industry

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Evolving Business Model

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Offering all customers another viable foundry solution like the silicon foundry industry

– Driving high efficiency and lower cost

– Driving leading & competitive technologies

Growing foundry market size together by increasing IDMs’ outsourcing

– Creating CS fabless giants like Qualcomm, Broadcom, nVidia in

silicon

– Releasing IDM’s capital burden and inefficiency

Why GCS?

Driving CS Foundry Growth

18

Outsource Commodity

RF Foundry (6” wafer)

fab

Increase Focus on Opto

Foundry Business Higher Revenue per Wafer

Developing Next Generation

Technologies and Products

Take Advantage of GCS’s Core Strength: Technologies & Innovations

GaAs, InP, GaN, SiC, BAW Filter

Niche RF

Foundry (4” wafer)

fab

GCS owned 5G

RF Foundry (6” wafer)

Fab

Move to 6”

volume production

3D VCSEL, PIC, ADAS…..

Move to 6”

volume production

Brand-name Optical KGD Chip Sales Leverage lower cost 4” and 6” Fab

Growth Strategies

Low

Volume

High

ASP

High

Volume

Removing the capacity constraints to capture the growth

opportunities

– Continue US HQ as the technology development and incubation center

– Capture low-volume high ASP manufacturing and emerging markets

– Build capacities in Taiwan and China for high-volume manufacturing

– Offer GCS customers the flexibility to meet their end-customers’ supply

chain logistics requirements.

Grow the CS foundry business with partners TOGETHER

19

New World Dynamics – Growth with Partners

Initial technologies to transfer: GaN and VCSEL

Iron out details of technologies & products transfer

Target to complete qualification of technologies by the

end of 2019

Start production no later than 3Q2020

20

Status of UnikornSemiconductor

GCS Proprietary21

Simon Yu 余有崇Senior Vice President

General Manager

Corporate Spokesperson

Worldwide Sales & Marketing

Component Business Group

syu@gcsincorp.com

US: (650) 892 8676

Taiwan:(886) (0 )918 818 824

China: (86) 136 9989 4206

環宇

芯系天下