Powerchip Semiconductor Manufacturing Corporation(力積電 6770)

Investor ConferenceBrian ShiehPresident

11/10/2021

Risk Factors1. Industry risk

(1) Increased pressure from competitorsIn recent years, the main support of the semiconductor industry has come from products such as mobile devices, 5G, andAI, benefiting semiconductor foundries and attracting the attention of the industry. Over the past few years, the Chinagovernment has been committed to supporting the semiconductor industry, with the goal of building a one-stop industrialchain, actively investing in equipment, and recruiting talents. With the increase in the global supply of foundry capacity,pressure due to the horizontal competition may arise.

2. Operational risk(1) Potential risk of capacity expansion

Due to the continuous increase in demand from the 12-inch foundry customers, PSMC's current 12-inch productioncapacity can no longer meet customer needs. In order to fulfill the mid- and long-term operation plan, PSMC hasofficially leased land from Tongluo Science Park in July 2020 after a comprehensive assessment, planning to build a 12-inch production base over a 10-year period. However, due to the fact that the predicted demand may vary significantlywith the change of the market environment, when the demand decreases, the purchased equipment and the additionalrecruited personnel will have a negative impact on PSMC's financial performance.

(2)Risks related to intellectual property rightsPSMC and its subsidiaries maintain their advantages in the semiconductor manufacturing industry with self-developedprocessing technologies, business secrets, and related know-how. However, there is no guarantee that such businesssecrets and related know-how will not be stolen or copied. If this happens, it may lead to a decrease in PSMC's revenue,and the unintentional infringement of the intellectual property rights of others. If a related lawsuit resulted, PSMC maybe at risk of not being able to manufacture certain products.

3. Other important risksFor other important risks of PSMC, please refer to "I. 2. Risk Items" in the Prospectus.

Supplementary Disclosure ItemsThe Board of Directors and Securities Listing Review Committee of Taiwan Stock ExchangeCorporation requested supplementary disclosure items in accordance with the official letterNo. 1101805401 dated October 5, 2021, issued by Taiwan Stock Exchange Corporation.1. The rationality of the changes in performance in the last three years and up to the most recent period.

2. In 2019, the capital increase was conducted to acquire the wafer fabrication business and net assets ofthe original parent company, Powerchip Technology Corporation, and in 2020, the original parentcompany, Powerchip Technology Corporation, conducted capital reduction to refund shares with PSMCstocks and planned to apply for the listing of PSMC, its reasons, as well as the suitability, necessity andrationality of the procedures.

3. In 2021, PSMC has conducted a cash injection to expand its production capacity, andinvested in the construction of the Tongluo plant. Please explain the feasibility assessment ofthe plant construction, the important schedule for the construction, the production capacityplan, the source of funds, and the countermeasures in response to future economicfluctuations.

For related information, please refer to the Market Observation Post System and the Prospectus of PSMC for the cashinjection.

Corporate Governance and Corporate Social Responsibility

The corporate governance and corporate social responsibility of PSMC areimplemented in accordance with relevant laws and regulations formulated bythe competent authority. For related information, please refer to the MarketObservation Post System, the Prospectus of PSMC for the cash injection, andthe Annual Report of PSMC.

Agenda

1. Company Profile

2. Business Scope

3. Sales and Market Position

4. Future Prospect

1

PSMC

IndustryIndustry

BusinessBusiness

EmployeeEmployee

ManufactureManufacture

Semiconductor ManufacturingPay-in Capital: NT34BStockholder:~320K

~7,373PhD 1%，Master 32%，Bachelor 53%

Specialty Logic BUMemory BU

8-inch Fab*212-inch Fab*3

By 10/31/2021

2

PSMC History300mm (12”)

200mm (8”)

2011

PTCP1/2+P3Standard

DRAM

PTCP1/2+P3

Standard DRAM +Logic Foundry

PTC(Holding Company)

Maxchip

8A

Logic Foundry

PSMC8A+8B

Logic Foundry

PSCM8A+8B+P1/2+P3

(Logic+Memory)Foundry

PTC8A+P1/2+P3

DRAM

Spin-offAsset

Acquisition

Capital reduction and conversion of assets other than cash

Foundry

20082018

20201994

8ADRAM Tech Transfer

from Mitsubishi 2010

2019 Listed on OTC2020Foundry: Pricing before input,

ASIC in nature

Standard DRAM: Pricing before shipping,Commodity in nature

3

FAB 8B

FAB 8AFab P1/2

FAB P3

Hsinchu Science Park

Technology

Capacity

12”(300mm)P1/2 P3

8”(200mm)8A 8B (Zhunan)

MP Start 1996 2019 2002/2005 2007

75K 40K/60K*

180~110nm

70K 35K

180~28nm 30~21nm

* Fully Equipped in 2022

Fab Location

Zhunan

Mainly Power Discretes

Mainly DRAM

4

Title Name Date Elected Education Experience

Independentdirector

Peter Wu 11/24/2020 Ph.D. in Electrical Engineering of National Chiao Tung University

Principal of National Chiao Tung University.Chairman and Chief Technology Officer ofA-Neuron Electronic Corporation.

Independentdirector

Chia Lin Chang

11/24/2020 Ph.D. in Electrical Engineering ofPrinceton UniversityMBA of Wharton School of the University of Pennsylvania

Semiconductor engineer of Motorola Corporation.Global partner of The Goldman Sachs Investment Bank.President and Chief Financial Officer of HTC Corporation.Chairman of CHANGING.AI Corporation.

Independentdirector

Simon Lin 11/24/2020 Bachelor of National Chiao Tung University

President of Acer Inc.Chairman & Chief Strategy Officer of Wistron Corporation.

PSMC Board of Directors

5

Title Name Date Elected Education Experience

Independentdirector

Burn J. Lin 07/02/2021 Ph.D. in Electrical Engineering of The Ohio State University

R&D manager of IBM.President of Linnovation,. Inc.Vice president of TSMC.Distinguished Research Chair Professor of National Tsing Hua University.Distinguished Research Chair Professor of National Chiao Tung University.Distinguished Research Chair Professor of National Taiwan University.

Independentdirector

Shu Yeh 07/02/2021 Ph.D. in Accountancy of UCLA Chief Financial Officer and Executive vice president of Chunghwa Telecom Co.Professor of Accounting of National Taiwan University.

PSMC Board of Directors

6

Agenda

1. Company Profile

2. Business Scope

3. Sales and Market Position

4. Future Prospect

7

Operation Guidance

1. Open Foundry model, integrate special device and process required by customer into PSMC process platform.

2. 8-inch Fab focuses on power discretes to meet future e-CAR need.

3. 12-inch Fab focuses on specialty logic ICs.

4. Memory foundry focuses on mid-low density niche products for network and IOT applications, known-good-die in nature.

5. Promote wafer on wafer technology aiming at high bandwidth/low energy loss applications.

8

Four areas50 technology categories

216 foundry platforms

•Display IC•MCU-based•Logic IC

•Image Sensor•Power Management IC

•Power Discrete

Specialty Logic Foundry

DC/DC AC/DC BCD MOSFET IGBT GaN

STN a-Si TFT OLED e-paper/e-tag

MCU (OTP, MTP, eflash) RFID/NFC OIS RF/BlueTooth/WiFi MRAM

CIS(FSI/BSI) a-Si FoD

9

Memory Foundry

• Consumer DRAM

• Niche DRAM (≤4Gb DRAM)

• AIM• WoW (Wafer on Wafer)

• SLC NAND Flash

(1/2/4Gb)

• NOR Flash

( ≧64Mb)

Flash

New Memory

DRAM

Auto/ IOT/ Network Network/ Portables

Not to JEDEC Standards10

ConsumerElectronics

Automotive Electronics/Security

White goods IoT

End Market

IndustrialElectronics

Stimulated by 5G/6G

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Agenda

1. Company Profile

2. Business Scope

3. Sales and Market Position

4. Future Prospect

12

Performance in Recent Years

$(0.94)$2.56 $1.23 $3.07EPS (NT$)

NT$B

13

Performance in 2021(by 9/30)

BNT$

Item (Q3) (%) (Q1+Q2+Q3) (%)

Revernue 17.29 100 45.86 100

Gross Margin

7.52 44 18.01 39

Income before Tax

5.32 31 11.83 26

Net Profit 4.41 26 9.89 22

EPS (NT$) 1.3 3.07

14

$35.9$49.9 $45.7 $45.9

Logic Line

MemoryLine

Sales by Technology

Revenue(BNT$)

15

Logic Line

MemoryLine

Sales by Product

16

Phone/Pad (TDDI): 35%TV/NB(DDI): 12%eTag(DDI): 40%

Driver IC

Phone: 35%Surveillance: 47%

CIS

NFC: 20%RFID: 30%

PMIC for Phone: 30%

Image stabilizer IC: 75%

Market Shares

DRAM (≦2Gb ): >50%

IoT Memory

2020Rank

2019Rank

Company(Headquarters)

2018Sales($M)

18/17%Change

2018Share

ofTotal

2019Sales($M)

19/18%Change

2019Share

ofTotal

2020Sales($M)

20/19%Change

2020Share

ofTotal

1 1 TSMC(Taiwan) 34,208 6% 60% 34,668 1% 61% 45,572 31% 64%

2 3 UMC Group(Taiwan) 5,021 3% 9% 4,800 -4% 8% 6,011 25% 8%

3 2 GlobalFoundries(U.S.) 6,204 0% 11% 5,810 -6% 10% 5,710 -2% 8%

4 4 SMIC(China) 3,361 8% 6% 3,115 -7% 5% 3,890 25% 5%

5 5 Huahong Group(China) 1,605 15% 3% 1,630 2% 3% 1,720 6% 2%

6 7 Powerchip(Taiwan) 1,633 9% 3% 1,165 -29% 2% 1,553 33% 2%

7 6 Tower(Isreal) 1,304 -6% 2% 1,234 -5% 2% 1,260 2% 2%

8 8 Vanguard(Taiwan) 959 17% 2% 917 -4% 2% 1,127 23% 2%

9 9 WIN(Taiwan) 575 2% 1% 693 21% 1% 860 24% 1%

10 10 DB HiTek(S. Korea) 608 1% 1% 692 14% 1% 785 13% 1%

- - Others 2,327 - <1% 2,242 - <1% 2,452 - <1%

- - Total 57,805 5% 101% 56,966 -1% 100% 70,940 25% 100%

Major Pure-Play Foundries

*Former IDM foundry business of MagnachipSource ：IC Insights, company reports

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Agenda

1. Company Profile

2. Business Scope

3. Sales and Market Position

4. Future Prospect

18

Competitiveness

1. Strengthen ties with Japan IDMs, increase market shares in auto, industrial product areas.

2. Take advantage of 8”production in power discrete area, which was dominated by 6”fabs.

3. Take advantage of 12”aluminum line for ASIC foundry, which was dominated by 8”fabs.

4. Integrate logic and memory technologies for high bandwidth, low energy loss data transmission application need.

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Future Prospect

1. Integrated passive devices- chip cap, chip inductor.

2. Specialty devices- infrared sensor, high power& high frequency elements, heterogeneous semiconductor devices.

3. Wafer-on-wafer technology.

4. Tong-Lo fab in operation.

Continue to advance process technologies in DDIC 、PMIC、CIS/FOD、DRAM/FLASH for customer needs. Increase development activities in some niche areas.

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Driver IC

CIS IC

PMIC

embbed Flash IC

Discrete(IGBT/GaN)

WoW

DRAM

NAND Flash

NOR Flash

MP TR DV PLAIoT Phone Compute5GAuto

Technology node (nm) 350 180 150 130 110 90 70 50 40 30 20 10

90CIS/BSI

HV28 MGHK

HV40 多客戶導入

55CIS

L25

IMC40 55PMIC 80/90/130PMIC

IGBT GaN

L55多客戶導入

SiGe RF

3D Interchip

1.2V NOR48DK24

21/1X DRAM

IMC55

L40

NOR48 1.8/3.3V多客戶導入

Technology Development Plan(2021-2024)

21

3D Interchip WoW Technology 3D Interchip Oxide bond + Paired TSV Hybrid bond Mini HBM (High Bandwidth Memory)

High Bandwidth Data Transfer Low Energy Loss

CIS / DRAM DRAM Multiple layer DRAM

• CIS * edge Computing • HPC, AI • HBM(Chip on wafer)

LogicLogicLogic

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3~5 Year Goal

Additional product lines to be introduce into 12-inch fab

1. OLED Driver IC 55/40/25nm ~20K

2. RF IC 55/140nm ~ 7K

3. PMIC 55/80nm ~ 8K

4. Auto、Industrial IGBT ~ 5K

5. NOR Flash 48nm ~10K

6. Special DRAM (WoW) 38/25/21nm ~20K

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Opportunity：1. Foundry leaders are increasing their nanometer fab

capacity for main AP, stimulate the need of peripheral ICs.

2. Auto electrification and autonomous driving require lots more semiconductor components.

3. 5G/6G infrastructure by itself and the IoT system it supports double the demand for small ASICs.

4. Supply chains restructure.

Challenge：1. Limited engineer talents.2. Longer equipment order lead-time and soaring

material cost.

Opportunity and Challenge

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END