ChipMOS Technologies Inc (IMOS) 2023 Q1 法說會逐字稿

Greetings, and welcome to the ChipMOS First Quarter 2023 Results Conference Call. (Operator Instructions) I would now like to turn the conference over to Dr. G.S. Shen of ChipMOS TECHNOLOGIES Strategy and Investor Relations team to introduce the management team of the company in conference. Dr. Shen, you may begin.

您好，歡迎來到 ChipMOS 2023 年第一季度業績電話會議。 （操作員說明）現在我想將會議轉交給 ChipMOS TECHNOLOGIES 戰略和投資者關係團隊的 G.S. Shen 博士，介紹公司的管理團隊。沉醫生，你可以開始了。

Thank you, operator. Welcome, everyone to ChipMOS First Quarter 2023 Results Conference Call. Joining us today from the company are Mr. S.J. Cheng, Chairman and President; and Ms. Silvia Su, Vice President of Finance and Accounting Management Center. We are also joined on the call today by Mr. Jesse Huang, Spokesperson and Senior Vice President of Strategy and Investor Relations. S.J. will chair the meeting and review business highlights and provide color on the operating environment. After Silvia's review of the company's key financial results, S.J. will provide our current business outlook. All company executives will then participate in an open Q&A session. Please note, we have posted a presentation on the MOPS and also on the ChipMOS website www.chipmos.com to accompany today's conference call.

謝謝你，運營商。歡迎大家參加 ChipMOS 2023 年第一季度業績電話會議。今天從公司加入我們的是 S.J. 先生。程，董事長兼總裁；財務與會計管理中心副總裁Silvia Su女士。發言人兼戰略與投資者關係高級副總裁 Jesse Huang 先生今天也加入了我們的電話會議。 S.J.將主持會議並審查業務亮點並為運營環境提供色彩。在 Silvia 審查了公司的主要財務業績後，S.J.將提供我們當前的業務前景。所有公司高管隨後將參加公開問答環節。請注意，我們已經在 MOPS 和 ChipMOS 網站 www.chipmos.com 上發布了演示文稿，以配合今天的電話會議。

Before we begin the prepared comments, we advise you to review our forward-looking statements disclaimer, which is noted as the safe harbor notice on the second page of today's presentation. As a reminder, today's conference call is being recorded, and a replay will be made available later today on the company's website. At this time, I'd like to now turn the call over to our company's Chairman and President, Mr. S.J. Cheng. Please go ahead, sir.

在我們開始準備好的評論之前，我們建議您查看我們的前瞻性聲明免責聲明，該聲明在今天的演示文稿的第二頁被稱為安全港通知。提醒一下，今天的電話會議正在錄製中，今天晚些時候將在公司網站上提供重播。現在，我想把電話轉給我們公司的董事長兼總裁 S.J.誠。請繼續，先生。

Yes. Thank you, G.S. We appreciate everyone joining our call today. We are pleased with our results in Q1 as the industry was impacted by macroeconomic weakness, inflation and continued inventory adjustments at customers. In terms of Q1 2023, our Q1 revenue was just slightly down 1.7% from Q4 2022. And as you know, there are always fewer working days in Q1 due to holidays. Q1 gross margin came in at 12.4%, down to 10 basis points compared to Q4 2022 with net earnings of TWD 0.28 in Q1, increased 27% compared to TWD 0.22 of Q4 2022. I am pleased to report that our overall utilization rate increased to 52% in Q1 2023. Assembly utilization was at 42%, and testing average was 55%. DDIC increased to 58%, and bumping UT level significantly up to 52%.

是的。謝謝 G.S. 我們感謝今天加入我們電話會議的每一個人。我們對第一季度的業績感到滿意，因為該行業受到宏觀經濟疲軟、通貨膨脹和客戶持續庫存調整的影響。就 2023 年第一季度而言，我們的第一季度收入僅比 2022 年第四季度略微下降 1.7%。而且如您所知，由於假期，第一季度的工作日總是較少。第一季度毛利率為 12.4%，與 2022 年第四季度相比下降了 10 個基點，第一季度淨收益為 0.28 新台幣，與 2022 年第四季度的 0.22 新台幣相比增長了 27%。我很高興地報告，我們的整體利用率增加到2023 年第一季度為 52%。裝配利用率為 42%，測試平均值為 55%。 DDIC 增加到 58%，並且 UT 水平顯著增加到 52%。

Regarding our manufacturing business, our assembly represented 23.4% of Q1 revenue. Mixed signal and memory testing represented around 22.3%, and wafer bumping represented around 19.6% of Q1 revenue. On a product basis, our DDIC product increased to 35% with gold bumping representing about 18%. Revenue from DRAM and SRAM represented about 15% of Q1 revenue. Our mixed signal products represented about 10.8%. As additional color on our business, our memory products represented about 36.3% of total Q1 revenue. Memory product revenue was down about 11.1% compared to Q4 2022 and down around 38.8% on a year-over-year basis. DRAM revenue represented about 14.6% of total Q1 revenue. Flash revenue represented about 21.3% of Q1 revenue, and this was down 14.7% compared to Q4. NAND represented about 33.3% of Q1 total flash revenue and kept flat compared to Q4.

關於我們的製造業務，我們的組裝佔第一季度收入的 23.4%。混合信號和內存測試佔第一季度收入的 22.3% 左右，晶圓凸塊測試佔第一季度收入的 19.6% 左右。在產品基礎上，我們的 DDIC 產品增加到 35%，其中金塊約佔 18%。來自 DRAM 和 SRAM 的收入約佔第一季度收入的 15%。我們的混合信號產品約佔 10.8%。作為我們業務的附加色彩，我們的內存產品約佔第一季度總收入的 36.3%。與 2022 年第四季度相比，內存產品收入下降了約 11.1%，同比下降了約 38.8%。 DRAM 收入約佔第一季度總收入的 14.6%。閃存收入約佔第一季度收入的 21.3%，與第四季度相比下降了 14.7%。 NAND 佔第一季度閃存總收入的 33.3% 左右，與第四季度持平。

Moving on to driver IC and gold bump revenue. It represented about 52.9% of total Q1 2023 revenue and increased 6.7% compared to Q4 2022. The revenue increase in March was the most significant. Q1 benefited from a product demand rebound in specific areas and customer restocking. The improvement led DDIC revenue and increased about 1.8% compared to Q4 2022. At the same time, gold bump revenue increased 18%, which was a significant move up with an obvious reduction in our wafer bank. I am also pleased to report that more than 24% of DDIC revenue came from automotive panels in Q1, which was also up significantly by nearly 19%. It is early, but we also saw some encouraging signs in COG for small panel driven by automotive panel, TDDI and OLED demand, which was up over 7%. TDDI revenue increased about 15% and represented around 17% of Q1 DDIC revenue.

轉向驅動器 IC 和金塊收入。它約佔 2023 年第一季度總收入的 52.9%，比 2022 年第四季度增長 6.7%。3 月份的收入增長最為顯著。第一季度受益於特定領域的產品需求反彈和客戶補貨。這一改善帶動了 DDIC 收入，與 2022 年第四季度相比增長了約 1.8%。與此同時，金塊收入增長了 18%，這是一個顯著的增長，我們的晶圓庫明顯減少。我也很高興地報告，第一季度超過 24% 的 DDIC 收入來自汽車面板，也大幅增長了近 19%。現在還早，但我們也看到一些令人鼓舞的跡象，在汽車面板、TDDI 和 OLED 需求的推動下，小型面板的 COG 增長超過 7%。 TDDI 收入增長約 15%，佔第一季度 DDIC 收入的 17% 左右。

Regarding OLED, represented about 9% of Q1 DDIC revenue. On an end market basis, total revenue from automotive and industrial represented about 23.3% of Q1 revenue and increased about 10.8%. Smartphones and TVs, as an end market, accounted about 29% and about 17%, respectively. Computing represented just about 4.4%, and consumer represented 26.3% of Q1 revenue. Now let me turn the call to Ms. Silvia Su to review the first quarter 2023 financial results. Silvia, please go ahead.

關於 OLED，約佔第一季度 DDIC 收入的 9%。在終端市場基礎上，汽車和工業總收入約佔第一季度收入的 23.3%，增長約 10.8%。智能手機和電視作為終端市場，分別佔比約29%和約17%。計算僅佔 4.4%，消費者佔第一季度收入的 26.3%。現在讓我請 Silvia Su 女士回顧 2023 年第一季度的財務業績。西爾維亞，請繼續。

Thank you, S.J. All dollar amounts cited in our presentation are in NT dollars. The following numbers are based on the exchange rates of TWD 30.48 against USD 1 as of March 31, 2023. All the figures were prepared in accordance with Taiwan International Financial Reporting Standards.

謝謝你，S.J.我們介紹中引用的所有美元金額均以新台幣計。以下數字是根據 2023 年 3 月 31 日 30.48 新台幣兌 1 美元的匯率計算得出。所有數據均根據台灣國際財務報告準則編制。

Referencing presentation, Page 12, consolidated operating results summary. For the first quarter of 2023, total revenue was TWD 4,605 million. Net profit attributable to the company was TWD 202 million in Q1. Net earnings for the first quarter of 2023 were TWD 0.28 per basic common share or USD 0.18 per basic ADS. EBITDA for Q1 was TWD 1,383 million. EBITDA was calculated by adding depreciation and amortization together with operating profit. Return on equity of Q1 was 3.2%.

參考演示文稿，第 12 頁，合併運營結果摘要。 2023 年第一季度總收入為新台幣 46.05 億元。第一季度歸屬於公司的淨利潤為新台幣2.02億元。 2023 年第一季度的淨收益為每基本普通股 0.28 新台幣或每基本 ADS 0.18 美元。第一季度的 EBITDA 為新台幣 13.83 億元。 EBITDA 的計算方法是將折舊和攤銷與營業利潤相加。第一季度的股本回報率為 3.2%。

Referencing presentation, Page 13, consolidated statements of comprehensive income. Compared to 4Q '22. Total 1Q '23 revenue decreased 1.7% compared to 4Q '22. 1Q '23 gross profit was TWD 570 million with gross margin at 12.4% compared to 14.5% in 4Q '22. This represents a decrease of 2.1 ppts. Our operating expenses in 1Q 23 were TWD 401 million or 8.7% of total revenue, which is about 3.9% lower compared to 4Q '22. Operating profit for 1Q '23 was TWD 185 million with operating profit margin at 4%, which is about a 2.6 ppts decrease compared to 4Q '22.

參考介紹，第 13 頁，合併綜合收益表。與 22 年第四季度相比。與 22 年第四季度相比，23 年第一季度的總收入下降了 1.7%。 23 年第一季度毛利為 5.7 億新台幣，毛利率為 12.4%，而 22 年第四季度為 14.5%。這表示減少了 2.1 個百分點。我們在 23 年第一季度的運營費用為 4.01 億新台幣，佔總收入的 8.7%，比 22 年第四季度低約 3.9%。 23 年第一季度營業利潤為 1.85 億新台幣，營業利潤率為 4%，與 22 年第四季度相比下降約 2.6 個百分點。

Net nonoperating income in 1Q '23 was TWD 44 million compared to net nonoperating expenses of TWD 130 million in 4Q '22. The difference is mainly due to a decrease of the foreign exchange losses of TWD 173 million. Profit attributable to the company in 1Q '23 increased 30.7% compared to 4Q '22. This primarily reflects an increase of net nonoperating income of TWD 174 million and partially offset by the decrease of operating profit of TWD 125 million. Basic weighted average outstanding shares were 727 million shares.

23 年第一季度的非營業淨收入為 4400 萬新台幣，而 22 年第四季度的非營業淨支出為 1.3 億新台幣。差異主要是匯兌虧損減少新台幣1.73億元所致。與 22 年第四季度相比，23 年第一季度公司應占利潤增長了 30.7%。這主要反映了 1.74 億新台幣的營業外淨收入增加，部分被 1.25 億新台幣的營業利潤減少所抵消。基本加權平均流通股為7.27億股。

Compared to 1Q '22. Total revenue for 1Q '23 decreased 31.5% compared to 1Q '22. Gross margin at 12.4% decreased 12.6 ppts compared to 1Q '22. Operating expenses decreased 14.2% compared to 1Q '22. Operating profit margin at 4% decreased 14.3 ppts compared to 1Q '22. Net nonoperating income of TWD 44 million in 1Q '23 compared to TWD 229 million in 1Q '22, which decreased TWD 185 million. The difference is mainly due to an increase of the foreign exchange losses of TWD 187 million from the foreign exchange gains of TWD 143 million in 1Q '22 to the foreign exchange losses of TWD 44 million in 1Q '23. Profit decreased 83.5% compared to 1Q '22. The difference is mainly due to a decrease of operating profit of TWD 1,047 million and decrease of the net nonoperating income of TWD 185 million and partially offset by the decrease of income tax expense of TWD 210 million.

與 22 年第一季度相比。與 22 年第一季度相比，23 年第一季度的總收入下降了 31.5%。毛利率為 12.4%，與 22 年第一季度相比下降了 12.6 個百分點。與 22 年第一季度相比，運營費用下降了 14.2%。營業利潤率為 4%，與 22 年第一季度相比下降了 14.3 個百分點。 23 年第一季度非營業淨收入為 4400 萬新台幣，而 22 年第一季度為 2.29 億新台幣，減少了 1.85 億新台幣。差異主要是由於匯兌損失 1.87 億新台幣從 22 年第一季度的匯兌收益 1.43 億新台幣增加到 23 年第一季度的匯兌損失 4400 萬新台幣。與 22 年第一季度相比，利潤下降了 83.5%。差異主要是由於營業利潤減少新台幣 10.47 億元和營業外淨收入減少新台幣 1.85 億元，部分被所得稅費用減少新台幣 2.1 億元所抵消。

Referencing presentation, Page 14, consolidated statements of financial position and key indices. Total assets at the end of 1Q '23 were TWD 45,710 million. Total liabilities at the end of 1Q '23 were TWD 20,663 million. Total equity at the end of 1Q '23 was TWD 25,047 million. Accounts receivable turnover days in 1Q '23 were 86 days. Inventory turnover days was 69 days in 1Q '23.

參考介紹，第 14 頁，合併財務狀況表和主要指數。 23 年第一季度末的總資產為新台幣 457.1 億元。 23 年第一季度末的總負債為新台幣 206.63 億元。 23 年第一季度末的總股本為新台幣 250.47 億元。 23 年第一季度的應收賬款周轉天數為 86 天。 23 年第一季度的庫存周轉天數為 69 天。

Referencing presentation, Page 15, consolidated statements of cash flows. As of March 31, 2023, our balance of cash and cash equivalents was TWD 11,736 million, which represents an increase of TWD 1,839 million compared to the beginning of the year. Net free cash inflow for the first quarter of 2023 was TWD 1,033 million compared to TWD 1,536 million for the same period in 2022. The difference is mainly due to the decrease of operating profit of TWD 1,047 million and partially offset by the decrease of CapEx of TWD 311 million and income tax expense of TWD 210 million. Free cash flow was calculated by adding depreciation, amortization, interest income together with operating profit and then subtracting CapEx, interest expense, income tax expense and dividend from the sum.

參考介紹，第 15 頁，合併現金流量表。截至2023年3月31日，現金及現金等價物餘額為新台幣117.36億元，較年初增加新台幣18.39億元。 2023 年第一季度淨自由現金流入為新台幣 10.33 億，而 2022 年同期為新台幣 15.36 億。差異主要是由於營業利潤減少新台幣 10.47 億，部分被 CapEx 的減少所抵消新台幣3.11億元及所得稅費用新台幣2.1億元。自由現金流的計算方法是將折舊、攤銷、利息收入與營業利潤相加，然後從總和中減去資本支出、利息費用、所得稅費用和股息。

Referencing presentation, Page 16, capital expenditures and depreciation. We invested TWD 313 million in CapEx in Q1. The breakdown of CapEx in Q1 was 9.6% for bumping, 49.9% for LCD driver, 25.1% for assembly and 15.4% for testing. Depreciation expenses were TWD 1,198 million in Q1. As of April 30, 2023, the company's outstanding ADS number was approximately 4.3 million units, which represents around 11.9% of the company's outstanding common shares. That concludes the financial review. I will now turn the call back to our Chairman, Mr. S.J. Cheng, for our outlook. Please go ahead, sir.

參考介紹，第 16 頁，資本支出和折舊。我們在第一季度的資本支出中投入了 3.13 億新台幣。第一季度的資本支出細分為凸塊 9.6%、LCD 驅動器 49.9%、組裝 25.1% 和測試 15.4%。第一季度的折舊費用為新台幣 11.98 億元。截至2023年4月30日，公司已發行ADS數量約為430萬股，約占公司已發行普通股的11.9%。財務審查到此結束。我現在將電話轉回給我們的主席 S.J. 先生。程，我們的展望。請繼續，先生。

Thank you, Silvia. According to the current industry situation and customers' feedback, we expect Q1 will be the bottom with operating momentum expected to gradually rebound as we move through 2023. We remain conservative, however, because the headwinds from inflation, inventory adjustments and macroeconomic pressure remain. In our memory product, we expect the business will continue its momentum in Q2 from Q1 with memory IDMs lowering their UT level and the short order benefit. This momentum will help offset the impact from customers that continue destocking.

謝謝你，西爾維亞。根據目前的行業形勢和客戶的反饋，我們預計一季度將是底部，隨著2023年的到來，經營動能有望逐步回升。但我們仍然保守，因為通脹、庫存調整和宏觀經濟壓力的逆風仍在。在我們的內存產品中，我們預計該業務將在第一季度的第二季度繼續保持增長勢頭，內存 IDM 降低其 UT 水平和短期訂單收益。這種勢頭將有助於抵消客戶繼續去庫存的影響。

In DDIC automotive panel, TDDI and OLED demand is gradually rebounding. This results in the need to immediately load new wafers coming in for the gold bumping process. This also leads to the UT level of high-end DDIC test platforms further improving. According to the current situation, we think memory product will rebound later than DDIC and mixed signal products. As a result, we continue to take a cautious approach with our CapEx budget in 2023. We plan to carefully invest in green energy, AI and automation and depends on the UT level and customers' demand to do suitable capacity plan.

在DDIC車用面板中，TDDI和OLED需求逐步回升。這導致需要立即裝載新晶圓以進行金凸點工藝。這也導致高端DDIC測試平台的UT水平進一步提升。根據目前的情況，我們認為內存產品的反彈時間會晚於 DDIC 和混合信號產品。因此，我們對 2023 年的資本支出預算繼續採取謹慎態度。我們計劃謹慎投資綠色能源、人工智能和自動化，並根據 UT 級別和客戶需求制定合適的產能計劃。

Finally, our Board approved another dividend. This reflects our balance sheet strength, strong market position, our focus on building shareholder value and returning capital to shareholders. Pending shareholder approval at our May AGM, we will distribute TWD 2.3 per common share. Operator, that concludes our formal remarks. We can now take questions.

最後，我們的董事會批准了另一筆股息。這反映了我們的資產負債表實力、強大的市場地位、我們對建立股東價值和向股東返還資本的關注。在我們 5 月的年度股東大會上等待股東批准，我們將分配每股普通股 2.3 新台幣。接線員，我們的正式發言到此結束。我們現在可以提問了。

(Operator Instructions) Our first question comes from Stanley Wang from SinoPac Securities.

（操作員說明）我們的第一個問題來自 SinoPac Securities 的 Stanley Wang。

Could you comment whether lower gross margin in Q1 is impacted by price cuts from customers or a foreign exchange rate issue?

您能否評論一下第一季度毛利率下降是否受到客戶降價或匯率問題的影響？

As reported, in Q1, March revenue M-o-M grew about 28%, which was much better than that of January and February. Therefore, we still suffered from some negative factors to the gross margin.

據報導，在第一季度，3 月收入環比增長約 28%，遠好於 1 月和 2 月。因此，我們的毛利率仍然受到一些負面因素的影響。

By the way, our Q1 revenue was also impacted by weaker U.S. dollar comparing to Q4.

順便說一句，與第四季度相比，我們第一季度的收入也受到美元疲軟的影響。

The Q1 tax rate is 11.6%. Would there be a favorable investment tax credit? How would you comment for 2023 full year tax rate?

第一季度稅率為11.6%。會有優惠的投資稅收抵免嗎？您如何評價2023年全年稅率？

Certainly, there are unrealized items, such as investment by equity method, valuation of financial assets by fair value method and equipment investment tax credit in Q1. Generally speaking, our average tax rate would be in the range between 19% to 21%.

當然，一季度還有權益法投資、金融資產公允價值法估值、設備投資稅收抵免等未實現項目。一般來說，我們的平均稅率會在 19% 到 21% 之間。

In the revenue breakdown for end applications, smart mobile segment performed Q-o-Q 5.9% growth. Could you give us more color about the result from what kind of end application or customer?

在終端應用的收入細分中，智能移動部門實現了 5.9% 的環比增長。你能給我們更多關於什麼樣的最終應用程序或客戶的結果的顏色嗎？

We saw some encouraging signs driven by TDDI and OLED demand. TDDI demand benefited from repair market demand.

我們看到了一些受 TDDI 和 OLED 需求推動的令人鼓舞的跡象。 TDDI需求受益於維修市場需求。

Could you provide more color about NOR in Q1?

您能否在 Q1 中提供更多有關 NOR 的顏色？

Overall, the NOR revenue Q-o-Q declined in Q1. However, we also received some NOR rush orders in March.

總體而言，第一季度 NOR 收入環比下降。但是，我們在 3 月份也收到了一些 NOR 緊急訂單。

Next question comes Jerry Su from Crédit Suisse.

下一個問題來自 Crédit Suisse 的 Jerry Su。

Follow up to Q1 gross margin, except foreign exchange rate due to significant revenue growth from gold bumping, would it be one of the causes for lower gross margin? If yes, please comment how could it be reverted. Secondly, please comment on the price pressure from DDIC.

跟進Q1毛利率，除了淘金收入大幅增長帶來匯率影響外，是否是毛利率下降的原因之一？如果是，請評論如何恢復它。其次，請評價一下來自DDIC的價格壓力。

I mentioned earlier on the call that gold bump revenue increased in Q1. That means gold consumption increased in our gold bumping, which led the Q1 raw material cost increase. We would still maintain the price level of high-end tester due to higher UT rate. For low-end tester and COF, we are taking this on a customer-by-customer basis and retaining some flexibility in the OEM price to the further improvement of the utilization rate.

我早些時候在電話會議上提到，第一季度的金塊收入有所增加。這意味著我們淘金過程中的黃金消耗量增加，從而導致第一季度原材料成本增加。由於較高的 UT 率，我們仍將維持高端測試儀的價格水平。對於低端測試機和COF，我們是根據客戶的情況來考慮，在代工價格上保留一定的靈活性，以進一步提高利用率。

As previous mentioned, you could grow Q-o-Q under the conditions of flattish memory and much better in DDIC. Would company grow double digits in Q2?

如前所述，您可以在平坦內存的條件下提高 Q-o-Q，並且在 DDIC 中更好。公司會在第二季度增長兩位數嗎？

Firstly, there has been an obvious reduction in our wafer bank, and customer also started to place new order to foundry in DDIC. Therefore, we expect DDIC revenue could grow significantly.

首先，我們的wafer bank明顯減少，客戶也開始向DDIC代工下單。因此，我們預計 DDIC 收入將大幅增長。

Any visibility for memory segment business recovery?

內存段業務恢復的可見性？

Because customers'’ inventory levels are still high, we expect the recovery would be more obvious starting in Q3.

由於客戶的庫存水平仍然很高，我們預計從第三季度開始復蘇會更加明顯。

Please give us more color about memory segment recovery in Q3.

請給我們更多有關 Q3 內存段恢復的顏色。

It seems NOR, NAND and niche DRAM would perform better than commodity DRAM.

NOR、NAND 和利基 DRAM 似乎比商品 DRAM 表現更好。

And I am not showing any further questions in the queue. I would like to turn the call back over to G.S.

我不會在隊列中顯示任何其他問題。我想把電話轉回給 G.S.

That concludes our question-and-answer session. Thank you for participating. I'll turn the floor back to Mr. S.J. Cheng for any closing comments.

我們的問答環節到此結束。感謝您的參與。我會把發言權轉回給 S.J. 先生。 Cheng 的任何結束評論。

Thank you, everyone, for joining our conference call. Please email our IR Team if you have any more questions. We appreciate your support. Goodbye.

謝謝大家參加我們的電話會議。如果您有任何問題，請給我們的 IR 團隊發送電子郵件。感謝您的支持。再見。

Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.

女士們，先生們，今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。