TXC Corporation Investment Conference-201411Fitbit Flex Apple Google Microsoft MOTO SONY Samsung LG TI (Norway) Nodic (Norway) Qualcomm (USA) Broadcom (USA) CSR (Norway) Quintic (China)

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Think of FrequencyThink of

Investment Conference November, 2014

www.txccorp.com

Think of Frequency, Think of TXC

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• 14 Sales and Marketing offices, 150+ Professionals at service

Japan• Yokohama• Osaka

Taiwan• Ping Cheng • Peitou

Europe• Germany

China• Ningbo • Chongqing • Shenzhen• Shanghai• Suzhou• Beijing• Wuhan

America• San Jose• Los Angeles

Personalized and Locally-Based Support


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• 3 manufacturing facilities

• 200+ automated production lines

• 260M+ monthly capacity

• 2 R&D centers (PCF, NGB)

• 400+ engineers

Manufacturing Facilities

Taiwan, Ping Cheng (PCF) China, Ningbo (NGB) China, Chongqing (CKG)

• Sensors

• kHz/MHz Crystal

• XO/SO/MO

• TCXO/VCTCXO

• VCXO

• OCXO

• kHz/MHz Crystal

• TSX

• MHz Crystal

• TSX

• XO

• RTC


4

Product Portfolios

• 10,000+ product variations

Crystals Oscillators & Modules Sensors

Seam Seal

Metal Can Glass Seal

Tuning Fork

Temperature Sensor Crystal

(TSX)

SAW Oscillators(SO)

MEMS Oscillators(MO)

Crystal Oscillators(XO)

Temperature Compensated(TCXO/VC-TCXO)

Voltage Controlled

(VCXO)

Oven Controlled

(OCXO)

Real Time Clock(RTC)

Light Sensors(3-in-1)

Coming Soon

Motion SensorsBio Sensors

Diverse product for long-term

Total solution, innovation and integration as sustainable competitive advantage


2,394 2,579

2,974 2,981

2,327 2,331 2,446 2,400 2,166

2,358 2,519

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

12.Q1 12.Q2 12.Q3 12.Q4 13.Q1 13.Q2 13.Q3 13.Q4 14.Q1 14.Q2 14.Q3

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Revenue Trend

Unit: $NT in Million


2012:10,928 2013:

9,504

12.Q1 12.Q2 12.Q3 12.Q4 13.Q1 13.Q2 13.Q3 13.Q4 14.Q1 14.Q2 14.Q3Revenue (QoQ) ‐8.1% 7.7% 15.3% 0.2% ‐21.9% 0.2% 4.9% ‐1.9% ‐9.8% 8.9% 6.8%Revenue (YoY) 3.1% 4.2% 19.2% 14.4% ‐2.8% ‐9.6% ‐17.8% ‐19.5% ‐6.9% 1.2% 3.0%

522 621 682 683

522 566 557 549 509 579 609

0

200

400

600

800

12.Q1 12.Q2 12.Q3 12.Q4 13.Q1 13.Q2 13.Q3 13.Q4 14.Q1 14.Q2 14.Q3

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Unit: $NT in MillionGross Profit Trend


2012:2,508

2013:2,194

21.8%

24.1%

22.9%

22.9%

22.4%

24.3%

22.8%

22.9%23.5%

24.6%

24.2%

12.Q1 12.Q2 12.Q3 12.Q4 13.Q1 13.Q2 13.Q3 13.Q4 14.Q1 14.Q2 14.Q3

12.Q1 12.Q2 12.Q3 12.Q4 13.Q1 13.Q2 13.Q3 13.Q4 14.Q1 14.Q2 14.Q3Gross Profit (QoQ) ‐10.9% 19.0% 9.8% 0.1% ‐23.6% 8.4% ‐1.6% ‐1.4% ‐7.3% 13.8% 5.2%Gross Profit (YoY) ‐9.4% 2.0% 8.3% 16.6% 0.0% ‐8.9% ‐18.3% ‐19.6% ‐2.5% 2.3% 9.3%

2012:1,149

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Net Profit TrendUnit: $NT in Million


2013:935

8.3%

10.1%12.2% 10.9%

9.0%

9.4% 10.8%10.1% 10.2% 10.3% 10.6%

12.Q1 12.Q2 12.Q3 12.Q4 13.Q1 13.Q2 13.Q3 13.Q4 14.Q1 14.Q2 14.Q3

199 261

363 326

209 220 264 242 222 242 268

‐50

50

150

250

350

450

12.Q1 12.Q2 12.Q3 12.Q4 13.Q1 13.Q2 13.Q3 13.Q4 14.Q1 14.Q2 14.Q3

12.Q1 12.Q2 12.Q3 12.Q4 13.Q1 13.Q2 13.Q3 13.Q4 14.Q1 14.Q2 14.Q3Net Profit (QoQ) ‐23.5% 31.2% 39.1% ‐10.2% ‐35.9% 5.3% 20.0% ‐8.3% ‐8.3% 9.0% 10.7%Net Profit (YoY) ‐16.0% 5.2% 19.0% 25.4% 5.0% ‐15.7% ‐27.3% ‐25.8% 6.2% 10.0% 1.5%

Amounts:120 millionSMD X’TAL (Q3)*10 KK

Amounts:150 millionSMD TSX (Q2)*3 KK (Q3)*2KK

Amounts:250 millionSMD TSX / VCXO/ OCXO/ Sensors / RTC Sapphire BW & PSS

Capital Expenditures of 2014

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(Unit: $NT)


PCF

NGB

CKG

Total Amounts:520 million

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Dividend Policy


(Unit: $NT)

4.13

4.88

3.56

2.75

4.06

3.483.79

3.02

1.94 1.98 2 2

2.52.2 2.2 2.2

0.97 0.99

0.50.2 0.2

0 00

1

2

3

4

5

6

2006 2007 2008 2009 2010 2011 2012 2013

2006 2007 2008 2009 2010 2011 2012 2013

Earning Per Share 4.13 4.88 3.56 2.75 4.06 3.48 3.79 3.02

Cash Dividend Per Share 1.94 1.98 2 2 2.5 2.2 2.2 2.2

Stock Dividend Per Share 0.97 0.99 0.5 0.2 0.2 0 0 0

Share Prices 60.6 54.6 32 52.1 55.9 43.55 44.85 40.7

Yield (%) 3.20% 3.63% 6.25% 3.84% 4.47% 5.05% 4.91% 5.41%

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KHz Xtal36%

MHz Xtal52%

XO5%

TCXO6%

VCXO0.52%

OCXO0.02%

KHz Xtal19%

MHz Xtal35%XO

13%

TCXO21%

VCXO7.14%

OCXO5.17%

Worldwide FCP T.A.M. Splits


Source: CS&A 2014.04

11Source: CS&A 2014.04

Worldwide Ranking No. 3 in 2013


Rank Company Name Area 2011 2012 2013(11-12)Change

%

(12-13)Change

%

2011MarketShare

2012MarketShare

2013MarketShare

1 Epson Toyocom Japan 592 610 500 3.0% -18.0% 16.7% 17.5% 15.3%

2 NDK Japan 557 540 433 -3.1% -19.8% 15.7% 15.5% 13.3%

3 TXC Taiwan 327 377 326 15.3% -13.5% 9.2% 10.8% 10.0%

4 KED Japan 265 292 298 10.2% 2.1% 7.5% 8.4% 9.1%

5 KDS Japan 389 309 260 -20.6% -15.9% 11.0% 8.9% 8.0%

6 Ventron USA 196 166 170 -15.3% 2.4% 5.5% 4.8% 5.2%

7 SiWard Taiwan 90 97 96 7.8% -1.0% 2.5% 2.8% 2.9%

8 Rakon New Zealand 111 106 95 -4.5% -10.4% 3.1% 3.0% 2.9%

9 Hosonic Taiwan 101 92 94 -8.9% 2.2% 2.9% 2.6% 2.9%

10 River Japan 52 73 66 -5.8% -9.6% 1.5% 1.4% 2.0%

11 CTS USA 53 55 61 3.8% 10.9% 1.5% 1.6% 1.9%

12 Murata(TEW) Japan 59 57 59 -5.1% 3.5% 1.7% 1.6% 1.8%

13 Taitien Taiwan 79 59 57 -25.3% -3.4% 2.2% 1.7% 1.7%

14 Micro Crystal Switzerland 63 58 55 -7.9% -5.2% 1.8% 1.7% 1.7%

15 Pericom USA 52 54 52 3.8% -3.7% 1.5% 1.5% 1.6%

- Others - 553 570 642 - - 15.6% 16.3% 19.7%

TotalRevenue

3,539 3,489 3,264 -1.4% -6.4%

TXC keep penetrating and developing in high end products

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MHz Crystal/kHz Crystal

XO/MO

VCXO

TCXO

14.5%13.2%

3.4%

9.0%

2.4%

8.0%

7.3%

3.5%


12.9%

7.6%

7.0%

7.1%

Source: CS&A 2014.04

3%7%

31%

18%

29%

9%3%

6%

11%

27%

15%

32%

6%3%

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MobileCommunication

MobileComputing

Networking

Others

Infrastructure

AutomotiveSapphire

TXC’s Revenue Splits by Product Category


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Market focus


IT and Network

Public Safety

Public facilities

Industrial Monitor System

Medical Application

Consumer & Digital Home

Transportation

Smart Building/Home

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M2M Market FCST

17%15

%

30%25

%

2014TW:60M

2015TW:140M

2016TW:160M

2017TW:200M

2017TW:200M


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Solutions for Base Station and Smallcell Infrastructure

TCXOHigh stability ±100ppbStratum 3

OCXOUltra Stability ±3ppbStratum 3/3E Grade

VCXOUltra Low Jitter 50fsHigh Frequency 700MHz

XOUltra Low Jitter 50fsHigh Frequency 800MHz

Crystal Stability ±10ppmFund. Frequency 400MHz

32kHz RTCHigh Stability ±5ppmTemperature Compensated

Migrating to LTE…SDH/SONET


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Telecommunication & Network IEEE 3GPP

4G(WiMax, WiGrid)

3.75G(HSPA+)

3.9G(LTE)

4G(LTE-A)

B4G/5G(LTE-B,C,D)

2M shipped in 2012, 5M in 2013


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Solutions for Wireless and Smart Wearable

TCXOHigh stability ±0.5ppmMiniature 1.6x1.2x0.55mm

XO, MO (MEMS based) Low Jitter 1psSmallest 2.0x1.6x 0.75mm

TSXSmallest and Thinnest1.6x1.2x0.55mm


Crystal unitsSmallest and Thinnest 1.2x1.0x0.30mm

3-in-1 Light SensorsALS+PS+IR LED (Ceramic)Smallest 2.5x2.0x1.0mm

Wearable technology...BT/BLE, WiFi, GNSS

Sensor


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Google GlassesQualcomm ToqNike+ FuelBanedTom TomSONY wristband

Garmin watchJawbone UPFitbit Flex

Apple

GoogleMicrosoftMOTO

SONYSamsungLG

TI (Norway) Nodic(Norway)

Qualcomm (USA)Broadcom (USA)

CSR (Norway)Quintic (China)NXP (Holland)ST Micro (Geneva)

Potential Application‧Integrated combo chipset‧Improved transmission capacity and

the effective distance‧Reduced power consumption‧Improved operational efficiency‧Smart system management

‧Improved detected precision‧Size miniaturization‧Multi-axis data sensing

• 3-axis accelerometer • 3-axis gyroscope • 3-axis magnetometer• IR image sensor• Micro-Microphone• Oscillator

• 3-axis accelerometer • 3-axis gyroscope • 3-axis magnetometer• IR image sensor• Micro-Microphone• Oscillator

• Crystal• Oscillator• TCXO• T/F

• Crystal• Oscillator• TCXO• T/F

SensorMEMS Sensor

SensorMEMS Sensor

Crystal UnitWireless

CommunicationSystem

Performance

Crystal UnitWireless

CommunicationSystem

Performance

• BLE• WiFi• GPS• NFC• MCU• CPU• Motion

Detection• Ambient

Detection• Bio Info.

Detection

Time schedule 2014 Q1 2014Q2 2014 Q3 2014 Q4

Targ

et t

asks

Wearable Potential Customer


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Solutions for Smart Medical

TCXOHigh stability ±0.5ppmMiniature 1.6x1.2x0.55mm

XO, MO (MEMS based) Low Jitter 1psSmallest 2.0x1.6x 0.75mm

TSXSmallest and Thinnest1.6x1.2x0.55mm


Crystal unitsSmallest and Thinnest 1.2x1.0x0.30mm

3-in-1 Light SensorsALS+PS+IR LED (Ceramic)Smallest 2.5x2.0x1.0mm

Healthcare monitoring...BT/BLE, WiFi, GNSS

Sensor


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Medical device market


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Safety ElectronicsSystem (Airbag, ABS, TPMS)

ADAS(Advanced Driver Assisted System)

Infotainment, (Telematics, GPS, AV)

Solutions for Automotive

Notes: G3:-40~85ºC / G2: -40~105ºC / G1: -40~125ºC / G0: -40~150ºC

XO (AEC Q100) Seam: G1

Crystal units(AEC Q200)Metal Can: G2Glass: G0Seam: G1

TCXO (AEC Q100)Seam: G2

Smart connected car….


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In Car Wireless Charging & 4G LTE


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Smartphone PhabletTablet

Digital Camera(DSLR, etc.)SMART Home

SMART WearableSport & FitnessHealthcare

Sensors are widely used in Smartphone and many other SMART applications

New Launched3-in-1 Light Sensors2.5x2.0mm

World Smallest 3-in-1 Light Sensors


Sapphire Substrate Usage Trend

OpportunityNew application growth (Mobile)LED market (4”PSS) growth

Mobile application booming by Apple iphone5

Mobile application booming by Apple iphone5

4”PSS demand for LED growth by Epistar4”PSS demand for LED growth by Epistar

4”PSS demand keep increase to Q34”PSS demand keep increase to Q3

2014 H1 (Taiwan)4”PSS demand & supply gap~20k/M2014 H1 (Taiwan)4”PSS demand & supply gap~20k/M

TXC StrategyFocus on 4”SSP/PSS for LED application

25Think of Frequency, Think of TXC

26

Summary


Revenue trend will be stable consistent with the demand . Price Pressure incurs at reasonable range.

Gross margin is maintained and supposed to be similar with 2014 H1.

New automotive, networking, wearable device related products will bring new business.

4G /LTE application is the major driving force for high-end products along with raising Cloud Computing.

New products are on market smoothly and will bring growth momentum.

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04

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Thank you


Documents

TXC Corporation Investment Conference-201411Fitbit Flex Apple Google Microsoft MOTO SONY Samsung LG TI (Norway) Nodic (Norway) Qualcomm (USA) Broadcom (USA) CSR (Norway) Quintic (China)