#1OHOLO Nanya Technology Morgan Stanley 7th Annual Hong Kong Investor Summit Nanya Memory for Automotive Home Entertainment Home Automation Office Presentation to Investors & Analysts, March 24th, 2017 AHO Dr. Pei Ing Lee, President & Spokesman March 24, 2017 ©2017 Nanya Technology Corp.#2Safe Harbor NɅNYA The information herein and the presentation made during the conference contain forward-looking statements and are provided for information purposes only. Neither Nanya Technology Corp. nor any other person assumes responsibility for the accuracy and completeness of the forward- looking statements or undertakes duty to update the statements. You are urged to review the information provided herein carefully, and please don't distribute, reproduce or disclose the information in whole or in part without prior written permission of NANYA Technology Corp. March 24, 2017 ©2017 Nanya Technology Corp. 2#3Outline 01. Nanya Technology Overview 02. DRAM Industry 03. Business Strategy March 24, 2017 ©2017 Nanya Technology Corp. NɅNYA 3#4Nanya Technology Overview NɅNYA IDM Company Technology & Capacity Partnerships Founded in 1995, IPO in 2000 DRAM Process, Design, Production & Sales Headquarters: New Taipei, Taiwan Employees: >2,600 Focus on value-added DRAM market Formosa Plastic Group (FPG) has 75.8% equity ownership Technology: Starts 20nm piloting in Jan. '17 Plan to ramp 20nm to 38K WSPM in 1H'18 Capacity: • Current: 60,000 WSPM(12") 2018: 68,000 WSPM(12") (38K 20nm + 30K 30nm) Memory Home Tor Technology license form MU Option rights to license Micron 1x and 1y nm technologies and products. Shareholding in Micron Acquired about 5.26% of Micron's share. *WSPM: Wafer Starts Per Month Automation Home Memory Memory for o Entert for Office " March 24, 2017 ©2017 Nanya Technology Corp. 4#5Strong Performance 30 20 Net Income (NT$ billion) EPS (NT$) NɅNYA 28.2 14 23.7 11.77 17.2 8.67 7 7.07 10 8.1 3.40 0 0 Y2013 Y2014 Y2015 Y2016 Net Income 8.1 28.2 17.2 23.7 (NT$ Billion) EPS(NT$) 3.40 11.77 7.07 8.67 March 24, 2017 ©2017 Nanya Technology Corp. LO 5#62016 P&L Results NɅNYA NT$B: Billion NɅNYA 2015 Q1'16 Q2'16 Q3'16 Q4'16 2016 Revenue 43.9B 10.4B 8.9B 10.2B 12.1B 41.6B Gross Profit 17.3B 3.4B 2.5B 3.2B 3.8B 12.9B Gross Margin (%) 39.4% 32.7% 28.4% 31.1% 31.1% 30.9% Operating Income 13.5B 2.6B 1.7B 1.7B 2.6B 8.6B Operating Margin (%) 30.7% 25.3% 18.5% 16.6% 21.2% 20.5% Non-operating Income 4.2B -0.79B -0.6B -0.3B 18.8B 17.2B Net Income 17.1B 1.8B 0.4B 1.4B 20.1B 23.7B Net Margin (%) 39.1% 18% 4.4% 13.7% 165.9% 57.0% Capital EPS 24B 27B 7.07 0.68 0.14 0.51 7.33 8.67 Company highlights in 2016 . NT$ 23.72B net income of 2016, EPS NT$ 8.67. Shipment increased 20.3% yoy, ASP decreased 22.1% yoy. Recognized NT$17.94B profit from Inotera share disposal. Debt ratio 37.5% at the end of the 31st of Dec, 2016. March 24, 2017 ©2017 Nanya Technology Corp. 6#7Revenue, Net Income (Million NT$) Financial Highlights Q1'17 gross margin likely to improve QoQ due to favorable market condition. 30,000 NɅNYA Revenue (Million NT$) Net Income (Million NT$) Gross Margin (%) 70% 49% 48% 44% 47% 42% 40% 37% 32.7% 31.1% 31.1% 30% 28.4% Q2'12 -31% Q3'12 Q4'12 Q1'13 -30,000 -102% -85% March 24, 2017 ©2017 Nanya Technology Corp. -4% 13% ¿Q2'13 응 Q3'13 18% Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 -110% Gross Margin (%) 7#8NɅNYA (Unit: Million NT$) Beginning Balance Cash Flows 2016 Audited & Consolidated 2015 Audited & Consolidated 7,268 3,104 Cash from Operating Activities 15,945 18,522 Capital expenditures -22,336 -3,842 Long-term & Short-term loans -6,351 -14,382 Investments and others 18,740 -4,463 Ending Balance 9,102 3,104 Free Cash Flow (1) -6,391 14,680 (1) Free Cash Flow = Cash from operating activities - Capital expenditures March 24, 2017 ©2017 Nanya Technology Corp. 8#920nm CAPEX & Bit Shipment CAPEX NT$19.84B Phase 3 NɅNYA Bit Shipment (YoY) -45% Phase 1 NT$35.9B 20% 16% + Phase 2 Flat -8.6% down single digits% 2013 2014 2015 2016 2017 2018 ■ Capital Expenditure (CAPEX) Y2016 Y2018E ■Bit Shipment Anticipated CAPEX of NT$55.74B for 38K WSPM 20nm migration. (2016 CAPEX NT$ 20.6B for 20nm) BoD approved 3rd stage 20nm CAPEX of NT$19.84B. (as of 2017/3/9) Estimated 2017 CAPEX of NT$ 34.3B 2017 CAPEX mainly from: 1. Cash on hand 2. US$5B ECB, 3. Cash from operating activities 2017 bit shipment down single digits. Bit shipment resume positive (2018 +45% yoy, 2019 +15% yoy). March 24, 2017 ©2017 Nanya Technology Corp. 20nm cost per bit expected to cross over by end of 2017 9#10NɅNYA 20nm Plan Plan to convert 38K WSPM to 20nm Technology. Total capacity increase to 68K WSPM. 20nm volume production schedule in Q3'17, 30K wafers input expected in Q4'17. Cost cross over expected by end of 2017. Initial offering DDR4 & LPDDR4X. 匡 8Gb 8Gb DDR4 LPDDR4X Jul, 2015 Oct, 2016 Ground breaking of new HQ and additional 12" Fab for 20nm Jan, 2017 Jan. 2017 Piloting of 20nm Starts 2H, 2017 New 12" Fab (FAB-3A-N) complete March 24, 2017 ©2017 Nanya Technology Corp. 2018 . Ramping up to 38k 1H'18 8Gb LPDDR4X Mass Production Q3'18 • 20nm Volume Production . 8Gb DDR4 Mass Production Q4'17 Ramping up to 30K Q4'17 10#11NANYA Investment of Micron Private Placement The Investment as of 2016/12/02 Volume Purchase price & EX rate • Accounting Treatment as of 2016/2/28 57,780,138 shares Account US$ 17.29 per share (=NT$544.42752) US$ 1: NT$ 31.488 • Market Price • Available-for-sales financial assets US$ 23.44 per share (=NT$718.436) US$ 1: NT$ 30.65 Investment amount . NT$ 31,457,097,237 Market Value • NT$41,511,331,233 Shareholding about 5.26% of Micron's interest • Measurement Lock-up period Six months (till 2017/6/2) Unrealized gain • Mark to market on monthly basis NT$10,054,233,987 March 24, 2017 ©2017 Nanya Technology Corp. 11#12Dividend for Y2016 Subject • BoD Approval Cash yields . Payout ratio Remark NɅNYA Cash dividend of NT$ 1.5 per common share BoD approved cash dividend of NT$ 1.5 per common share on 2017/3/9. Will be proposed to the AGM for approval scheduled on 2017/5/26 3.2% (3/20 closing price NT$ 47.20) 17.3% (NT$ 1.5/EPS NT$ 8.67) 70.8% (exclude disposal gain of Inotera, NT$ 1.5/EPS NT$ 2.12) ● Exclude disposal gain of Inotera, EPS was NT$ 2.12 • ● (EPS NT$ 8.67 - NT$ 6.55) Net cash in NT$ 16B (Disposal of IMI shares (NT$ 47.5B), Acquisition of Micron's private placement (NT$ 31.5B)). Expect NT$ 34.3 billion CAPEX in 2017 for 20nm ramping. March 24, 2017 ©2017 Nanya Technology Corp. 12#13Outline 01. Nanya Technology Overview 02. 20 03. DRAM Industry Business Strategy March 24, 2017 ©2017 Nanya Technology Corp. NɅNYA 13#141,500 1,000 500 Rational DRAM Supply Growth WW DRAM Wafer Start (K/M, 300mm) NɅNYA 1,304 1,213 1,098 1,082 1,096 1,111 1,058 1,080 0 2010 2011 2012 2013 2014 2015 2016 2017 Limited supply growth contributed mainly by process conversion About 20% supply growth in 2017 expected March 24, 2017 ©2017 Nanya Technology Corp. Source: DRAMeXchange, NTC MKT 14#15Diversification of Demand ■ 22% yoy bit demand increase in 2017 projected NɅNYA Ongoing growth momentum from cloud computing and mobile applications Y2016 Y2017 YOY Auto + Industrial, 0.1% Unit QTY(Mu) | C/B(GB) QTY, C/B QTY C/B QTY(Y/Y) C/B(Y/Y) Bit Growth Tablet 0.2% Consumer & others, 13.5% Cloud Server 17 110 17.6 133 3.5% 20.9% 25.2% Mobile 8.5% Y2010 Server + WS 11.6% 3.8Bn (4Gb eq) PC 270 5.1 263 5.6 -2.6% 9.8% 7.0% Tablet 180 2.1 164 2.6 -8.9% 23.8% 12.8% P2P Smart Phone Consumer & others, 14.6% 1,480 2.1 1,482 2.7 0.1% 28.6% 28.7% Auto + Industrial, 3.8% Tablet, 3.8% LCD TV 223 1.8 219 2.0 -1.8% 11.1% 9.1% M2M Car PC + upgrade modules 64.3% PC + upgrade modules, 18.9% Y2017 21.8Bn Server + (4Gb eq) WS, 21.3% Mobile, 37.5% 91.3 0.6 93.8 2.1 2.7% 250.0% 259.6% March 24, 2017 ©2017 Nanya Technology Corp. Source: Gartner, IHS, NTC MKT 15#16DRAM Essential to New Data Era Tablets Phones Wearables Portable Devices loT Servers IoT, Smart Car PC Era Big Data NɅNYA Smart Home, Smart Office, Smart City Main DRAM Features High Density for big data. High Bandwidth for data transition Main DRAM Features Low power consumption High Bandwidth for data transit Small form factor by stacking Reasonable density to save cost SMART CITY March 24, 2017 ©2017 Nanya Technology Corp. 16#17Sufficiency Favorable market conditions continues in 1H 2017 Qty (M 4Gb Equiv.) 25,000 20,000 15,000 10,000 5,000 NɅNYA Sufficiency (%) 107% 110% 103% 101% 100% 101% 101% 98% 99% 100% 90% 80% 70% 60% 0 50% 2010 2011 2012 2013 2014 2015 2016 2017 Supply Demand Sufficiency March 24, 2017 ©2017 Nanya Technology Corp. Source: Gartner, IHS, DRAMexchange, NTC MKT 17#18Outline 01. Nanya Technology Overview 02. DRAM Industry 03. Business Strategy March 24, 2017 ©2017 Nanya Technology Corp. NɅNYA 18#19NANYA 2017 Revenue Breakdown Guidance Applications Consumer & Specialty Auto & IT Low Power ■Server PC 100% 8.7% Commodity 26.3% 22.4% 17.4% 12.3% 7.2% 12.1% Low Power 6.4% (Mobile) 4.5% 50% Auto & Industrial grade Consumer & Specialty PC -10% Low Power 20-30% Auto & IT 8-9% 66.7% 57.1% 58.9% Consumer & Specialty 51-62% 0% 2014 2015 2016 March 24, 2017 ©2017 Nanya Technology Corp. 2017(E) Revenue portion by Application 19#20Comprehensive DRAM Portfolio • NɅNYA Specialty Mobile Auto & IT Custom • • DDR4 ~ DDR2 • LPDDR3 ~ LPDDR Packaged & KGD • Foundry • Non-JEDEC DRAM DDR4 DDR 2 Packaged & SiP ~ • LPDDR3 LPDDR • • KGD, POP & MCP TV SSD HDD IP Cam Printer NW GFX POS σ DSC הוום Feature Smart Phone Phone IP Cam (85) ‹D» Car () NW Data Card IPC Tablet = SiP System in Package March 24, 2017 ©2017 Nanya Technology Corp. KGD = Known Good Die = PoP Package on Package MCP = Multiple-Chip Package 20#21Nanya Business Outlook NɅNYA Limited DRAM supply growth 2017, healthy market condition expected. Q1'17 ASP guidance up 10-15% QoQ. 20nm volume production scheduled Q3'17, target 30K WSPM Q4'17. Target 38K WSPM of 20nm in 1H 2018 to better meet customers' needs and improve cost structure. DDR4 & LPDDR4 new product engagement. Nanya offers a comprehensive portfolio of DRAM solutions and continues to focus on specialty DRAM business. March 24, 2017 ©2017 Nanya Technology Corp. *WSPM: Wafer Starts Per Month 21#22NANYA Thanks & Questions March 24, 2017 ©2017 Nanya Technology Corp. 22 22#232016 Income Statement Y2016 NɅNYA Y2015 Audited & Audited & YOY Amount: Million NT$ Consolidated Consolidated Net Sales Cost of Goods Sold Gross Margin 41,633 100.0% 43,876 100.0% -5.1% 28,781 69.1% 26,568 60.6% 12,851 30.9% 17,308 39.4% -25.8% SG&A Expenses 1,821 4.4% 1,867 4.3% R&D Expenses 2,478 6.0% 1,954 4.5% Operating Income 8,552 20.5% 13,487 30.7% -36.6% Non-operating Income (Exp.) 17,173 41.3% 4,190 9.5% Income before Tax 25,726 61.8% 17,677 40.3% 45.5% Income Tax Benefit (Expense) -1,997 -4.8% -506 -1.2% Net Income 23,729 57.0% 17,171 39.1% Net income attributable to non-controlling 7 0.0% 30 0.1% interests Net Income attributable to NTC 23,721 57.0% 17,141 39.1% 38.4% EPS(NT$) 8.67 7.07 March 24, 2017 ©2017 Nanya Technology Corp. 23#24ECB Offering NANYA Subject Issue Size & Coupon Listing Issue Date Issue US$ 500 million Zero Coupon Convertible Bond due 2022 Issue Amount: US$ 500 million Coupon Rate: 0% Singapore Exchange Securities Trading Limited Jan. 24 2017 Maturity Date Initial Conversion Price Yield to Put/ Maturity Put Option Date Call Option Period Conversion Dilution Effect • Jan. 24, 2022 NT$ 52.47 per share . 1.75% March 24, 2017 ©2017 Nanya Technology Corp. On January 24, 2020 (At the end of 3rd year) At any time after January 24, 2020 (36 months from Issue Date) Converted Securities: The newly-issued common shares of Nanya Technology Conversion Period: At any time starting from the day immediately following the 40th day after the Issue Date to the 10th day prior to the Maturity Date. (2017/3/6-2022/1/14) If the bonds are fully converted, the dilution effect to original shareholders is about 9.9%. (excluding book value adjustment)