Win Semiconductors Corp

Good morning and good evening, ladies and gentlemen, no matter where you are. Welcome to Winsamy's Resolve Webcast Conference for the fourth quarter of 2021. My name is Zhou Zhen, the spokesman and Associate Vice President of Finance in Winsamy. Joining me today, on today's call, are our CEO, Kyle Chen, and our General Manager of Corporate Administration, Steve Chen. Today's call is organized into three sections. First of all, our CEO Kyle will comment on the company's results and provide brief guidance for the first quarter of 2022. And secondly, I will go through the financials in detail and Kyle will have the industry outlook to share with you. 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. Before we begin, I would like to draw your attention to the safe harbor notice on page one of the presentation slide. Please note that this presentation contains forward-looking statements. These statements are based on our current expectations. Actual results may differ materially from our expectations, and the company undertakes no obligation to update this forward-looking statement going forward. Now, let me hand over the call to Mr. Kyle Chen, the CEO of WaySami.

In the fourth quarter of 2021, customer demand continues to grow, reflecting a sustained momentum from the third quarter. Our revenue reached $7.2 billion in the quarter. is an increase of 7% to 5% year-on-year. This marked another record high for single quarter during the past two years, surpassed the previous one set in the fourth quarter of 2019. Achieving by full capacity and better product mix, our growth margin in this quarter was 40.5%, which was better than our previous expectation. And earnings per share was 4.19 NT dollars. For the full year of the 2021, our revenue set another historical record high to 26.2 billion NT dollars. with an annual growth rate of 2% and earnings per share reached $12.9 NTD. Looking at the growth in the first quarter, we saw strong demand for the smartphone PAs, which not only driven by the continuous momentum from the just newly released a US-based smartphone in the third quarter, but also the strong demand from China smartphone customers. In addition, our infrastructure revenue, which included a 5G and low-Earth orbit so-called VEO, has delivered growth for two consecutive quarters, This was another important key contributor to revenue growth and the better product mix in the fourth quarter. For the full year of 2021, we see the opportunity to be a key beneficiary amidst this shuffling of the China smartphone market. By leveraging our strength of the advanced technology, excellent product use, and industrial leading production capacity. This was our most outstanding growth drivers. Last year, in addition, when the size shrink of the new generation of 3D sensing chip for US-based smartphones caused the market to be cautious about The overall Assumments for Wafers Our 3G sensing revenue actually increased year by year on year, giving the increased difficulty of the wafer production technology, making another key growth driver for us last year. This demonstrates that our strategy of the focusing on technology leadership and customer diversification has served us well, allowing WIM to continue to outperform despite the volatility and uncertainties in the market. Looking ahead to the upcoming new year, while the COVID-19 pandemic continues to impact the world, we believe the global 5G network infrastructure is still incomplete and the penetration rate of the 5G smartphones is still lower than that of the 4G. However, the long-term development of the IoT, AI, and big data and the evolution from the AR and VR even to XR and the recent very hot topic, Metaverse. All require the characteristics of the broadband, high speed transmission, and the low latency for the 5G networks. Thus, we continue to be optimistic about the growth trend of the 5G in the next few years. As well as the construction of the satellite communication infrastructure. In addition, our technologies in optical communications and optical sensing are becoming more mature as we continue to accumulate more experience, which also helps us to attract more potential customers. As a result, we continue to invest in R&D resources and cooperates with key customers closely, aiming to become a pioneer of the next new application. In terms of the capacity extension, the clearing extension, our Fab C, that's our third Fab, will be completed in the first half of this year. And we will install equipment immediately after that. The new Travesty is expected to come online in the second half of the year to meet the demand for the transceivers. For the new LuZhu Fab in the Southern Taiwan Science Park in Kaohsiung. As it's groundbreaking in the middle of the last year, the construction of the new Fab is a key focus for this year. And the goal is to enter must production before end of the 2024. In addition to achieving operational excellency, we also prioritize corporate sustainability and corporate governance. For the 2021 Corporate Governance Evaluation Survey by TWAC, this is the Taiwan Stock Exchange. we not only have been ranked top five among the Taipei listed companies for several years but also ranked the top 10 among all TWSE and Taipei exchange listed companies in the electronic industry with a market value over 10 billion NT dollars In addition, we were also the winner of the 14th PCSS Sustainability Report, President Award, internationally. We have been selected to join the Dow Jones Stock World Index for the second year this 2020. As ESG continues to grow to importance globally, it is encouraging for us to be included in the Dow Jones Stock Index again. Along with the global leading semiconductor companies and again recognition for our effort in the corporate governance and the sustainability. Looking ahead to the first quarter of the 2022 because due to the annual maintenance of our three fabs and the traditional slower season, our revenue is expected to decline 20 than the previous quarter. And the growth margin will be about mid 30. I will turn back the call back to the Joe. Okay.

It's our pleasure to present our financial results for the post quarter of 2021. We also can revert our presentation slides. We're starting from page four. Before that, before I start, please, Revenue and Margin Q4 2021 Revenue 7.2 Billion NT Dollar QOQ 7.0% Wildlife 5% The Q2 2021, the gross margin improved about 1.7 percentage points to about 40.5%. And that was driven by the full capacity in our lab and also the better product mix, which we can discuss it later. that the growth margin was better than our expectation earlier. And therefore, the operating margin improved about 1 percentage point to around 27.8%. The next page, in page 5, is the part of talking about earnings. The Q4 2021, the net profit was 1.7 billion NT dollars. Jewel Q was up 13% and YOY up around 32%. Therefore, the EPS coming at $4.19 NT compared to $3.67 NT in Q3. The whole year of 2021, EPS was We talked about the product mix in K-6 In Q4, the product mix We can compare one by one. The cellular was between 50 and 55%, and the infrastructure was between 20 and 25%, and Wi-Fi was between 5 and 10%, and others, including optical, is around 15%. You can find out that the cellular was up one stage and the infrastructure also up one stage. And the cellular, the continued momentum from the US tier one smartphone supply chain, which is the momentum still continues in the Q4. Other than that, also the China Market is still strong. Infrastructure was another contributor for the revenue growth and also the market growth. Due to the sequential growth in the infrastructure business, from the button in Q2 last year and then the sequential growth in Q3 and Q4. I think our CEO Kyle has mentioned a lot about several factors in the infrastructure momentum and then they can give us more cover later in this presentation. and Q1 guidance in page seven. I think Kyle already mentioned that, so I'll just read it over again. Due to the annual maintenance of the fab and the traditional lower season, we expect the Q1 2022 revenue to decline low 20 QOQ. And we also expect Q1 2022 The income statement and the balance sheet I have to remind everybody that all the figures are based on the audited basis. The actual result will be based on the final TPA's audited report. The Q4 net revenue was $7,217 million and QOQ was up 7% and YOY up 5%. The gross profit around $2,923 million and QOQ up 11% and YOY up 22%. The gross margin, better than our expectations earlier, it was 40.1%, which is improved about 1.7 percentage points. Operating expense about 914 million NT and OPEX ratio is around 13%. Therefore, the operating income was The operating margin became 27.8%, which is improved about 1 percentage point. The number of items was net income around $41 million. for your reference. Income before income tax was $2,049,000,000 and income tax expense was $360,000,000. Therefore, the net income was $1,690,000,000. which is the QOQ was up 30% and YY was up 32%. And the net margin was 23.4%, which is improved about 1.3% each point. So therefore, the EPS for this quarter was $4.19. The equivalent quarter ROE was 21% and the approximate utilization in Q4 was fully loaded at 100%. So the depreciation expense for Q4 was 10% It's $108,000,000 NT and the Compact for this quarter was $2,256,000,000 NT. Okay, that's Q4 for 2021. And for the whole year 2021, the next revenue was $26,182,000,000 NT. The worldwide was up 2% The growth Profit was $9,770 million NT and the growth margin for the whole year was 37.3%. The operating expense was $3,347 million and the OPEC ratio was 13%. The operating income becomes $6,423 million and operating margin was 24.5%. The non-op item, the next expense was negative 23. Again, the detail was in page 11 for your own reference. The income before income tax was $6,400 million. And the income tax expense was $1,189,000,000 NT Therefore the net income was $5,210,000,000 NT The net margin became 19.9% for the whole year The EPI was $12.19 for the whole year So the ROE for 2021 became 16% and the whole year utilization rate was 90%. And the depreciation expense became 4035 million NT. The whole year's half-hack for 2021 was 181 million NT. This is the whole year income statement. And page 11 is the number of items for your own reference. And my last page will be page 12 for balance sheet. The date is 2021, December 31st. The total assets was $74,894,000,000. The total liability was $37,732,000. And the common stock remained the same as last quarter, $4,240 million. So therefore, the total equity was $37,122,000. The book value per share was increased from The current ratio, the key index about current ratio, which is in terms of current asset over current liability, was 367%. The debt ratio, which is in terms of total liability over total assets, was 56%. Okay, this is the financial report, and that's my report. So, yeah, okay, then I will turn the call back to our CEO, Kyle.