MK ELECTRON Investor Relation April - 2017
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* PNG FILE * MK ELECTRON Investor Relation April - 2017 Since 1982, MKE has been developing and manufacturing key connection materials for semiconductor, such as bonding wire, solder ball, sputtering target and evaporate materials. As the only major supplier specializing in connection materials, MKE commits to serve the market continuously with dedication. * PNG FILE * CONTENTS Ⅰ History Ⅱ Company Info. Ⅲ Shareholder Ⅳ Business Area Ⅴ Sales Status Ⅵ MKE Highlights Secondary Battery Ⅶ New Business (Anode Material) Ⅷ Financial Status * ⅠPNG. HistoryFILE * • 2016. MKE China(Kunshan) Branch was floated on ‘16 the unlisted securities Market(Dec.’16) • 2016. Constructed a new Factory in China(Apr. ‘16) • 2015. KOREIT(The Korea Real Estate Investment & Trust Co.,Ltd) became an affiliated company(Q4. ‘15) ‘10 • 2014. Became largest shareholder owning 37.56% of KOREIT • 2009. Started Production in China(Kunshan) • 2001. Started on Solder Ball Business • 1997. Registered on KOSDAQ(Korean Stock Market) ‘90 • 1986. Opened Yong-In Plant and R&D Center • 1983. Patented Gold Bonding Wire Manufacturing Technology and initiated Gold bonding wire business. ‘80 • 1982. Established MK Electron Co.,Ltd. 3 * ⅡPNG. CompanyFILE * Info. CEO Jin Lee Established December, 1982 Products Gold, Copper and Silver Bonding wire, Solder Ball, Sputtering Target, EVM Costumers IDM & Top 5 packaging assembly companies Capital 10.9 billion(KRW) Employees Korea : 281, China : 110 Production Sites Location (Domestic : Yongin City in Korea / Overseas : Kunshan in China) Sales Office in Taiwan 4 * ⅢPNG. ShareholderFILE * Share info. • Total Number of Issued Stocks : 21,807,689 (Common Stock) • Company Own Stocks : 1,203,198 (5.5%) 1,380,000 [6.3%] T S Major Shareholder Others S R 5,251,800 13,972,691 P [24.1%] [64.1%] 1,203,198 [5.5%] Major Shareholder & Specially related Persons • Major Shareholder : Oceanbe Holdings • Specially related persons : Chairman Cha Jung Hun, Shin Sung Construction Company 5 * ⅣPNG. BusinessFILE * Area Consumer product Mobile Bonding Wire Solder Ball (Interconnection Material) (Interconnection Material) [Gold] [Copper] [Silver] 6 * ⅣPNG. BusinessFILE * Area What We Do Raw materials Raw materials Bonding Wire Process Solder Ball Process Refining Casting Drawing Winding Test & Insp. Alloying Ball Forming Sorting Insp. Customized bonding wires Customized solder balls Evaporation materials Multiple functional types of Integrated circuits Solder paste Sputtering target 7 * ⅣPNG. BusinessFILE * Area Bonding Wire Market Outlook Technical Trend ▪ ‘16 YoY Estimated about 2.3% growth by length ~ ’11yr ’11 ~ ’14yr ’14yr ~ ▪ ‘17 YoY Forecasted about 2.9% growth by length Gold Wire ▪ ‘17 YoY Forecasted about -3.5% decrease in terms PC/APC Wire of Revenue, due to material changes from gold Ag Wire to non-gold Bonding wire Length of 1gr Gold *Sourced by Global Semiconductor Packaging Material outlook 8 * ⅣPNG. BusinessFILE * Area Semiconductor Package Production Forecast ▪ Semiconductor Package Production Quantity : 233 Billion in 2017 263 Billion in 2020 (13.0% Growth) ▪ Flip Chip & WLP package Production Quantity : 34.4 Billion in 2017 39.7 Billion in 2020 (15.4% Growth) ▪ Flip Chip & WLP package Portion : 14.8% in 2017 15.1% in 2020 ▪ Bonding Wire Package Quantity : 198 Billion in 2017 223 Billion in 2020 (12.5% Growth) *Sourced by 2014 エレクトロニクス実装 ニューマテリアル便覧 9 * ⅣPNG. BusinessFILE * Area Solder Ball Market Outlook Technical Trend Low PKG Count Pin (Using Single Die) High PKG Counts (Using Multiple Die) ▪ ‘17 YoY Forecasted about 5.2% growth by units ▪ Reliability – High Temperature, Drop Performance due to strong growth of Flip-Chip, SIP & WLP PKG, ▪ Low Melting Temperature Solder Ball in terms of revenue estimated about 2.8% growth Solder ball Size Trend *Sourced by Global Semiconductor Packaging Material outlook 10 * ⅤPNG. SalesFILE * Status Global Company Based on Strong Customer Portfolio Sales by Product(Revenue) 4.5% 4.3% 6.4% 84.5% Gold Wire Cu Wire Ag Wire Solder Ball Others Wire Sales by Material(Length) ▪ World Wide Key customers as mainly IDMs, Fabless, 50.7% 47.5% Assembly & Test company(more than 140 companies) ▪ Strong customer portfolio & Stable AR ▪ Export portion is 95.7% including local export. Gold Wire Cu Wire Ag Wire 11 *Yr 2016(MKE Korea) * ⅤPNG. SalesFILE * Status Global Market Share of MKE (Yr 2016) 12 * ⅤPNG. SalesFILE * Status Customer Recognition & Awards TI, Supplier Recognition Award in 2016 TOSHIBA, Excellent Supplier Award in 2016 ST MICROELECTRONICS, Best Supplier Award in 2016 TI, Supplier Appreciation Award in 2014 MKE’s great honor to provide ‘Great Seal of South Korea’ for years ASE, Excellent Supplier Award in 2011 SPIL, Outstanding Performance Award in 2010 TI, Supplier Excellence Award in 2010 TI, Supplier Appreciation Award in 2010 SAMSUNG, Best in Value Supplier Award in 2005 Amkor, Excellence in Quality in 2005 13 * ⅥPNG. MKEFILE * Highlights Profit Improvement through New Bonding Wire Ag wire Market & Biz Status New Alloyed Cu wire Automotive PKG 3. New Cu Wire 3,000 for Automotive 2. Prevention Oxidation 2,000 1. Cost Savings 1,000 Au Wire Pd Coated Cu Wire - Cu Wire Silver Market(k km) 2014 2015 2016 2017 2018 2019 *Sourced by Global Semiconductor Packaging Material outlook . No.1 among major 4 suppliers . Cu wire Pd Coated Cu wire . Mass Production : Mobile AP & LED PKG Improvement : Coating Tech for Cu Oxidation . Usage increase forecasted by WW Top . New Alloyed Cu wire for Automotive PKG Memory Companies & LED Lighting Improvement : Low Cost & High Reliability 14 * ⅥPNG. MKEFILE * Highlights Continuous Growth of Solder Ball Biz & New Biz of Solder Status of Solder Ball Biz Recycling 1,500 1,000 Ag 500 Sn - . Plan of Recycling Business of Sn/Ag from 2H, 2017 Sales Volume(B Pcs) Cu Cored Solder Ball(CCSB) 2013 2014 2015 2016 2017 *Sourced by MKE Sales Records Electrical Short Prevent Electrical Short . Expected growth of supplying to Korea Top Memory Company & their sub-con houses. Started solder ball Biz. in China from 2H, 2016 . Good stand off property at CCSB . World Wide Customer Portfolio . Good Joint Property, Uniform SAC Composition, Uniform Thickness 15 * ⅥPNG. MKEFILE * Highlights Continuous Growth of Solder Ball Biz & New Biz of Solder Solder Paste & Flux Global Market Forecast for Solder Paste [U$ 10Million] CAGR 12.5% . Mass Production for Semiconductor from Nov. 2016 Ultra Fine Solder Powder for Paste * Sourced by China Electronic Material Industry Association . Plan of Powder Business from 2017 . Expected Market Growth by Increasing SIP . Ultra Fine Solder Powder for SMT & & Automotive Automotive (Under 50~10um Size) 16 * ⅥPNG. MKEFILE * Highlights Strong Growth of MKE China Business Bonding Wire Market Portion of China 18.4M Km 18.9M Km 19.9M Km 19.9M Km . Continuous Growth of China Semiconductor 32% 34% 35% 37% Market (Approxi. CAGR 20%) . Most Biggest Market of Bonding Wire WW (Approxi. 37%~40%, Currently) 2012 2013 2014 2015 Others중국 외 중국China Revenue & Profit Trend(MKE China) * Sourced by Global Semiconductor Packaging Material outlook [Unit : 100Million KRW] 2,000 140 120 1,500 100 80 1,000 60 500 40 20 - - 20142014년 20152015년 20162016년 20172017년 20182018년 20192019년 20202020년 매출액Revenue 영업이익Operating Income 17 * ⅥPNG. MKEFILE * Highlights First Listing in China Stock Market as Korean Company 18 * ⅥPNG. MKEFILE * Highlights Share Structure of KOREIT . MKE Share Ratio of PF : 70.27%(41.44+28.83%) . MKE Quality Share Ratio : 27.43% (70.27*(0.3408)%+3.49%) 19 * ⅦPNG. NewFILE * Business(Secondary Battery) New Business – Anode Material for Secondary Battery High Capacity Material has being requested for Automotive and Portable IT products Capacity of Anode Material Synthetic graphite Natural graphite Silicon Capacity(mAh/g) 350~360 360~370 1,000~2,000 Retention Ratio High High Relatively Low * Source: Argonne National Laboratory Silicon Type Si-alloy Si/C Composite SiOx Capacity Retention Ratio(@300 Cy) 80% 80% 80% Initial Capacity Efficiency 90% 89% 75% . Merits of Si-Alloy Material 1) Better Capacity Retention Ratio 2) Better Initial Capacity Efficiency 3) More better Competitive Manufacturing Cost 20 * ⅦPNG. NewFILE * Business(Secondary Battery) Market Forecast(Small Cell Battery) Status of Business . Small Scale Mass Production . Monthly Capa. : 1ton/mon. Under testing Small Cell Battery like Portable & IT * Source : SNE Research . Mass Production plan . Y 2018 Mobile Phone : 38%, 2,700 M Cell/Yr from 2019 for Automotive . Y 2018 Tablet PC : 15%, 1,100 M Cell/Yr . Y 2018 Power Tool : 13%, 900 M Cell/Yr . Y 2018 Note Book PC : 11%, 700 M Cell/Yr 21 * ⅧPNG. FinancialFILE * Status Statement of Profit and Loss(Summary) [Unit : Million KRW] Yr 2016 Yr 2015 Yr 2014 Indiv. Consol. Indiv. Consol. Indiv. Consol. Revenue(Sales) 337,653 619,601 323,894 453,106 381,237 469,590 Gross Profit 18,348 187,527 19,351 59,997 21,860 28,633 SG&A 11,933 61,988 11,184 35,225 12,402 19,310 Operating Income 6,415 125,539 8,167 24,772 9,458 9,323 Net Income 3,180 74,507 5,562 152,222 6,198 -33,807 22 * PNG FILE * THANK YOU.