Win Semiconductors Corp

Good morning and good evening, ladies and gentlemen, no matter where you are. Welcome to WinSemi's Result Webcast Conference for the first quarter of the year 2021. My name is Zhou Dan, the spokesman and associate vice president of finance in WinSemi. Joining me Secondary, I will go through the financials in detail. After that, we will open to the floor for Q&A. Please freely submit your questions in the input box on the webcast window throughout the conference. Semiconductors Corp Semiconductors Corp Semiconductors Corp Semiconductors Corp

Spicey P.J. Shimon accounted for slightly less than 20% of the overall settlement revenue in the quarter. Revenue of $9 billion decreased 12% quarter-on-quarter, in line with our expectations. This translates into a mild decline of 1% YOY. Due to the impact of the product mix and the capacity utilization, gross margin declined succinctly to 33.4%, with a decline in revenue and an increase in operating expense. The operating margin in the first quarter was 19.9%, declining by 4.4% DPS was NT$ 2.72 Looking at the product list in the first quarter, the magnitude of the sequential decline in cellular and Wi-Fi revenue was relatively mild. We attribute this mainly to the fact that working from home and learning from home has become the new normal. since the outbreak of the COVID-19 pandemic. Driven by the demand for long-time intervals and the large amount of audio and video data transmission from wireless connected devices. Devices including handheld, Wi-Fi-based stations and IoT applications all require better and more stable connection quality. We have provided high-quality and high-performance power amplifiers for a long period of time, and our product has become the first choice for the market. In addition, since last year, despite rapid changes in the market share of the smartphone brand and the tension of the G-Class growth accomplish, Many of our Asia-based customers have actually benefited from this change with a continuous increase in demand. Given our diversified customer base and competitive advantage in technology and capacity, we have always played an important role in the market. We are actively planning the development of the new plant in Southern Taiwan Science Park in Kaohsiung this year, and it is expected to officially start construction in the middle of this year. This is to serve customers' long-term demand for production capacity and to lay the fundamental foundation of our continuous growth in the future. Looking ahead to the second quarter of 2021, we expect revenue to grow low single digits quarter on quarter and growth margin to be around the level of low 30s. I will turn the call back to Joe.

The page in your presentation slide, starting from page four. Page four, we discussed about the revenue and the margin. June 1, 2021, revenue was $65,000. 109 million NT, QOQ was down 12%, and the YOY was down 1%. And because of the product mix and the capacity user addition, our Q1 growth margin declined by 1.5 percentage points to 35.5%. and operating margin was down 4.4% UOQ to 19.9%. And talk about the product mix because Steve mentioned on his management actually below 20% of the overall cellular business, and at the same time, cellular and the Wi-Fi, it looks better than infra and optical, but in this kind of mix, it's unfavorable to our gross margin. And another one is the operation The operation expense is also higher in Q1 compared to last quarter. That's because our button lines and EPS in the is making the Q1 all-tax ratio higher than before. And the next page, we talk about earnings in H5. In Q1 year 2021, the net profit was 1095 million NT, and the QOC was down 14%. and fuel cooling, which is the balance shift figure. In Q1, because the tarbacks were lower than last quarter, so we have an increase in net free cash flow inflow. 500 million Total revenue went down 12 potential cubes. The Wi-Fi and Infra public remained in the same level. So because of the balance and the percentage change, so it is unfavorable. This kind of problem is unfavorable to our growth market. Okay, then... 2021 revenue to growth by low single digit UOQ. And we also expect QQ 2021 growth margin to be around the level of low 30. Okay, then we can quickly go through our financial statements. Before I begin, I still, I always want to remind everybody, all of you here, excuse me, it's the face, it's I'm on it, Facebook, Facebook. The name rather be Corp Corp will be in page 11. The income before income tax was 1,386 million NT. So the net income tax expense was 291 million NT. The tax rate equivalent to 21%. The net income becomes The CTS was $2.72 in this order, and the ROE became 14%, which is 2% lower compared to last quarter. The depreciation expense was $1 billion NT in this quarter and the cost is $1,834,000,000 NT. That's the income statement for Q1. The next page will be the non-off item. In page 311, the money comes from the foreign exchange Then we can talk about balance sheets in page 12. March 31st, 2021, the measure, and first of all because we are with the temporary issue and Liability So the total liability from was almost 280%, and the rate ratio went up to 53% because of the issuance of the ETP. Okay, this is what I have. So now we can talk, or we can Okay, there's a question asking about the growth margin, operating margin, those kind of questions. Okay, and first of all, as I mentioned, the growth margin, the major reason for growth margin this time is because of the changing product mix and also the declining capacity utilization rate. And so, In the future, it depends on both utilization and the product mix. If both are favorable to the mix and the utilization rate can be better than what There is an additional employee bonus for Chinese New Year this time because So it's a one-off reason and one-off item for Q1. And normally our operating ratio most of the time below 12%. So what we believe that after this Q1, then it should be back to normal for the operating ratio. Thank you. Okay, looks like not many questions on the list and then we will give you more card about what we have in the in this quarter and the next quarter. As you can see that in the Q1, our customer in cellular looks like a little bit stronger. And looking forward, we may see a little bit For the Q2, we also still see that the cellular customer has a stronger demand. And at the same time, the 3D sensing, normally the high season for 3D sensing will be in Q3. and this time in Q2 probably the 3D sensing business will be under some kind of product transition period so the 3D sensing business may be weaker in Q2 but the cellular business looks even stronger Since the rest of the other business pretty much in line with Q1, so that's why Although the revenue will look a little bit growing in Q2, but the margin may be still not favorable from the product mix perspective. So yeah, that's what we see here. and also I would like to talk about a lot of investors are interesting about the demand for IBM customers. As you know, You guys know that right now the compound semiconductor, there is limited IDM for RF, it's only few, and most of the business, Winsani has those IDN customers in the Wi-Fi products, especially Wi-Fi routers, IoT Gameways, which is like Wi-Fi base station, those kind of business. In the past, over one year, because of the COVID-19 pandemic, work from home, learn from home, making the Wi-Fi base station, the demand stronger. And so the Wi-Fi sticks. Normally the Wi-Fi router or Wi-Fi base station will need a better performance, higher volume in comparison to the smartphone, I mean the mid-end and low-end smartphone. So Wi-Fi 6, we do see Wi-Fi 6 migration. We have a very good relationship and business with those IBM on this kind of business. in the Wi-Fi business. And I think, I know there's a lot of investors also interested about Wi-Fi succeed. I have to say, yes, we do see Wi-Fi 6E is coming, and we already have projects with important customers, including those IBM customers, and I believe that Wi-Fi 6E should contribute our revenue further in the near future. Yeah, that's about the problem in the IBM customer and the Wi-Fi. Thank you.