www.iteq.com.tw

ITEQ Your Partner of Advanced Materials & Mass Lam Service

Company Presentation

ITEQ Corporation

www.iteq.com.tw

Disclaimer Statement

⚫ This presentation and release contain “forward-looking statements” which may include

projections of future results of operations, financial condition or business prospects based

on our own information and other sources.

⚫ Our actual results of operations, financial condition or business prospects may differ from

those expressed or implied in these forward-looking statements for a variety of reasons,

including but not limited to market demand, price fluctuations, competition, international

economic conditions, supply chain issues, exchange rate fluctuations and other risks and

factors beyond our control.

⚫ The forward-looking statements in this release reflect the current belief of ITEQ as of the

date of this release. ITEQ undertakes no obligation to update these forward-looking

statements for events or circumstances that occur subsequent to such date.

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⚫ Establishment ：April 10th, 1997

⚫ Headquarter ：Hsin Pu, Taiwan

⚫ Capital ：US$ 110 millions

⚫ Employees ：2,906

⚫ Chairman ：Mr. John Tsai

⚫ CEO ：Mrs. Audrey Tsai

⚫ Products ：- Copper Clad Laminate & Prepreg

- Masslam service (4~16L / 2+N+2 HDI)

- Flexible CCL

- Metal CCL

Company Overview

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CCL & Prepreg Manufacturing Flow

Glass

FabricTreating

Mixing

(Compounding)

PrepregPly-up Cutting

Copper

Foil

LaminationCCL

Resin(s)

Filler(s)

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Smartphone

Networking

Cloud

Computing

Consumer

Electronics

Automotive Electronics

Material Science

Process Engineering

Low Dk

FR-4

Halogen Free

Anti-CAF

Low Df

Core Technology

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Resin

Cost/Entry Barrier

Applications

Material Development

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Product Line

IT-8350A

IT-8338A

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Manufacturing Plant

Distributor / Agent

Manufacturing Plant

Distributor / Agent

USA

Japan

Korea

Wuxi

Europe

Israel

Singapore

DG/HJ/GZ Taiwan

Manufacturing Plant

Distributor / Agent

New Plant

WuxiLaminate：1,800 K sheets

Prepreg ：8,500 K meters

Hsin Pu(Taiwan)Laminate：450 K sheets

Prepreg ：1,800 K meters

Dong GuanLaminate：1,000 K sheets

Prepreg ：4,500 K meters

Huang JiangMass lam：500 K SQFT

Guang Zhou(Flexible CCL)3 Layer FCCL：750 K SQM

2 Layer FCCL：140 K SQMJiangXi (First stage)Laminate：600 K sheets

Prepreg ：4,500 K meters

Investment：2.1 Billion NTD

Mass Production：3Q, 2019

New Production Site - JiangXi

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(Million NTD)

4,5504,345

5,021 5,161

4,6464,818

5,0275,190 5,124

4,851

5,562 5,677 5,694 5,6975,862

11.29%10.81%

13.21%

14.11%

16.02%

13.92%14.70%

13.73%

15.75%15.06% 14.75%

13.06%13.71%

14.50%

15.81%

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18

Revenue Gross Margin Rate

Revenue & Gross Margin Rate

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49% 48% 47% 46% 44% 42%

30% 31% 32% 34% 36% 38%

10% 10% 10% 10% 10% 10%

11% 11% 11% 10% 10% 10%

2015 2016 2017 1Q18 2Q18 3Q18

Consumer Electronics Networking

Smartphone Automotive

Product Mix

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44% 42%

36%38%

10% 10%10% 10%

0

500

1,000

1,500

2,000

2,500

3,000

2Q18 3Q18

SALES ( NT$ MILLION)

(Total 5,697 M) (Total 5,862 M)

QoQ Change

Consumer Electronics

↓ 1.8%

Networking

↑ 8.6%

Smartphone

↑ 2.9%

Automotive

↑ 2.9%

Total Revenue

QoQ +2.9%

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46% 42%

32%

38%

10% 10%12% 10%

0

500

1,000

1,500

2,000

2,500

3,000

3Q17 3Q18

SALES ( NT$ MILLION)

(Total 5,561 M) (Total 5,862 M)Consumer Electronics

↓ 3.8%

Networking

↑ 25.2%

Smartphone

↑ 5.4%

Automotive

↓ 12.2%

Total Revenue

YoY +5.4%

YoY Change

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2017Q3 & 2018Q3 Income Statement

NT$ Million 2017Q3 2018Q3

Revenue 5,562 5,862

Gross Profit 821 927

Operating Expenses 356 353

Selling 151 137

Administrative 150 136

R&D 55 80

Operating Profit 465 575

Non-Op Income/ Loss 55 (34)

Income Before Tax 519 540

Tax Expenses 157 141

Net Income to Parent 362 399

EPS(NT$) 1.20 1.31

Key Financial

Ratio(%)2017Q3 2018Q3

Gross Margin 14.75 15.82

Operating Expense

Ratio6.40 6.01

Operating Margin 8.35 9.80

Effective Tax Rate 30.28 26.18

Net Margin 6.51 6.81

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2017Q3 & 2018Q3 Balance Sheet

NT$ Million 2017Q3 2018Q3

Total Assets 18,334 19,001

Cash 3,624 3,536

Marketable Securities 538 27

NR/AR 7,875 8,941

Inventories 1,662 2,145

Fixed Assets 2,932 2,753

Total Liabilities 11,316 11,600

Short-term Debt 3,457 3,389

NP/ AP 4,600 5,409

Long-Term Debt 1,153 1,035

Total Equities 7,019 7,401

Key Financial

Ration(%)2017Q3 2018Q3

A/R Turnover Days 137 137

Inventory Turnover

Days32 36

A/P Turnover Days 94 96

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⚫ Key contributors to data demand include

- Ultra-High-Definition Video streaming

- Connected Home, Work, Health and Car

- Analytics, Big Data, and AI applications

- Cloud computing and Cloud Storage

- Virtual Reality (VR) and Augmented Reality (AR)

Global Data Traffic

(Source: Cisco VNI, 2017)

The rapid growth of internet traffic will bring the demand to upgrade equipment

from operators .

(Exabytes per month)

Market Trend

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⚫ The growth of data throughput

⚫ 5G networking commercialization

Market Trend

- The interconnect performance bandwidth of PCIe 4.o is double that of the PCIe 3.0 specification

achieving 16Gbps..

- PCIe 5.0 is still in the process, which been estimated will deliver up to 32Gbps, 4x higher data rate

than PCIe 3.0.

- Data rate would up to 1-10 Gbps, 10-100 times faster than 4G.

- The high data rate and small coverage of 5G would bring increasing demand of infrastructure.

- Massive MIMO and mmWave - the number of antenna on base station will increase from dozens to

hundreds

High Speed Material Application- Lower Dielectric constant (Dk) and Dissipation factor (Df)

- Higher reliability and consistency over temperature, frequency, and humidity

- High Thermal durability and conductivity

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Central

Cloud

Edge

Cloud

5G Opportunities for ITEQ - Network

Building Baseband Unit(BBU)• Low latency requirements• Including Macro Cell, Micro Cell to Small Cell

Core Network (Telecom Data Center):• Including Server, Storage, Switch

High Speed Material

IOT(Internet of Things):

High Speed Material

High Speed Material

High Speed/ Frequency Material

Remote Radio Unit (RRU)+ Antenna• Including Antenna, LNA, RF Network

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⚫ ITEQ Solution for Networking

- Middle Low Loss: Server、Industrial PC

- Low Loss: Whitley Platform、AMD Rome

- Ultra Low Loss: 5G base station、Optical Module、RF Board

- RF Microwave: 5G Antenna、PA Module、RF Board

Networking

Typical Phased Array Modular Units

⚫ ITEQ solution for smartphone

- Standard : Standard smartphone

- Low Dk Material: Middle to high-end smartphone

- High Tg, Low Dk Material: mSAP Process

- Low Dk Low Loss Material: 5G smartphone

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⚫ Continuous Growing

– Output value of automotive PCB：

USD 4.9 Billion/2015 USD 7.5 Billion/2020

⚫ Complete Anti-CAF Product Line

Automatic Driving

• Safety-Driving

• ADAS

Connected Mobility

• Infotainment

• Networking

Powertrain

• Energy-Saving

• Power Charging

• 77~79GHz Radar

• Antenna Module • Multilayer HDI

• Large Current

• High Voltage

• Heavy Copper

(Source: NTI Information)

(S

High Frequency MaterialHDI Material

High Speed Material

High Tg Material

5G Opportunities for ITEQ - Automotive

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Q&A

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