2016/3 1H Presentation Note:This document is a translation of the 2016/3 1H Presentation written in Japanese. In the event of any discrepancies in words, accounts, figures, or the like between this report and the original, original the original Japanese version shall govern govern. © 2015 ROHM Co.,Ltd. Presentation 1 AGENDA ■Financial Results of 2016/3 1H Financial Results of 2016/3 1H Factors for Sales Change in the 1H YOY Comparison of OP in the 1H ■Plan of 2016/3 Revised Plan of 2016/3 Factors for Sales Change in 2016/3 Expectations for 2016/3 YOY Comparison C i off OP in i 2016/3 ■ROHM’s Strategy ■CAPEX Plan ■Return to Shareholders ■ICs Business Strategy ■Discrete Semiconductor Devices ・Modules Business Strategy © 2015 ROHM Co.,Ltd. 113J044A Presentation 2 Financial Results of 2016/3 1H (YOY) (￥billion) '16/3 1H Net Sales Operating income （Ratio） Ordinary income （Ratio） Net income(※) （Ratio） EBITDA （Ratio） Average rate（¥/US$) © 2015 ROHM Co.,Ltd. '15/3 1H Change from the previous year Amount Percentage g 189.6 182.2 +7.4 +4.0% 23.4 21.2 +2.2 +10.3% － － +4.1 +14.7% － － +4.6 +21.7% － － +5.5 55 +15.5% 15 5% － － (12.4%) 32.6 (17.2%) 26.1 (13.8%) 41 5 41.5 (21.9%) (121 5) (121.5) (11.7%) 28.4 (15.6%) 21.5 (11.8%) 36 0 36.0 (19.8%) (103 5) (103.5) ※Profit attributable to owners of parent is defined as “Net income” in this presentation 1509E1117H Presentation 3 Sales by Segments (HOH) Exchange rate (¥/US$) ʼ15/3 １H ʼ15/3 2H ʼ16/3 1H （¥103.5） （¥116.5） （¥121.5） 182.2 180.5 189.6 ʼ16/3 2H Revised Plan （¥115.0） 173.3 180.0 Change factors of sales in 1H (YOY) ICs (YOY+2.7%) 160.0 ICs 140.0 （¥billion） 85.8 84 1 84.1 88.1 ・Adoption of drivers for large-size flat panels increased 80 9 80.9 ・Adoption of microcontrollers for Chinese power meters increased 120.0 ・Market share of power ICs increased due to recovery of the OA market 100.0 Discrete semiconductor devices (YOY 2 5%) (YOY+2.5%) Discrete 80.0 semiconductor devices ・The auto electronics market expanded 60.0 65.3 63.6 66.9 61.5 Modules (YOY+19.8%) 40.0 Modules 20.0 Others 0.0 ・The OA market recovered and market share of MOSFET increased. 17.5 18.5 13.5 14.1 20.9 13 5 13.5 17.6 13 2 13.2 ・Optical modules were adopted in wearable devices Others (YOY▲0.4%) ・Sales of lighting equipment declined © 2015 ROHM Co.,Ltd. 1509E1117H Presentation 4 Trend of Profits by Segments ʼ14/3 1H (¥billion) ʼ14/3 2H 13.2 10.3 ʼ15/3 1H ʼ15/3 2H ʼ16/3 1H 21.2 17.5 23.4 14.0 12.0 12.9 11.4 10.0 ICs 9.2 8.0 Discrete 6.0 semiconductor devices 70 7.0 5.1 Modules 4.0 3.8 1.3 0.1 Others 0.8 -0.3 -0.4 1.2 0.0 0.0 -2.0 7.7 5.8 4.0 2.0 8.8 8.2 0.8 -0.8 © 2015 ROHM Co.,Ltd. 1509E1117H Presentation 5 Revised Plan of 2016/3 (YOY) (￥billion) '16/3 Revised plan Net Sales Operating income （Ratio） Ordinary income （Ratio） N t iincome(※) Net （Ratio） EBITDA （Ratio） Average g rate（¥/US$) （ / $) © 2015 ROHM Co.,Ltd. '15/3 Change from the previous year Amount Percentage 363.0 362.7 +0.2 +0.1% 34.0 38.8 ▲4.8 ▲12.4% (9.4%) (10.7%) － － 40.0 59.2 ▲19.2 ▲32.5% (11.0%) (16.3%) － － 31 0 31.0 45 2 45.2 ▲14 2 ▲14.2 ▲31 6% ▲31.6% (8.5%) (12.5%) － － 74.8 73.2 +1.5 +2.1% (20.6%) (20.2%) － － 2H: 115.0 ((110.0)) ※Profit attributable to owners of parent is defined as “Net income” in this presentation 1509E1117H Presentation 6 Plan of Sales by Segments Exchange rate (¥/US$) ʼ15/3 R i d Pl Plan ʼ16/3 Initial I iti l Pl Plan ʼ16/3 Revised （¥115.0） （¥110.0） （¥115.0） 362.7 388.0 (YOY) 363.0 (+0.1%) Change factors of revised plan (YOY) 350.0 ICs ・The PC market was weak 300.0 ICs 169.9 181.4 169.0 (▲0.5%) ・Orders decreased due to weak sales of EVs 200.0 129.0 137.4 ・Sales Sales for other auto related applications, as well as industrial and OAs expanded 128.5 (▲0.4%) 100.0 50.0 Modules Others 0.0 © 2015 ROHM Co.,Ltd. ・Sales of LCD drivers increased Discrete semiconductor devices 250.0 Discrete 150.0 semiconductor devices (¥billion) Modules odu es ・Sales of OPM for wearable devices increased greatly 36.0 40.1 38.6 (+7.0%) 27.7 28.9 26.7 (▲3.6%) Oth Others ・Orders of passive components for smartphones declined 1509E1117H Presentation 7 ROHM’s Strategy 1. Market Reform ・Focusing F i on the th auto t market k t ・Cultivating the industrial market ・Increasing sales ratio of overseas customers ２. Product Reform ・Aiming Ai i to t be b the th world’s ld’ N No.1 1 iin analog l power ・Focusing on the 4 growth engines ・Becoming a significant player in the IT field by microminiature devices ３. Production Reform ・Aiming for World’s No.1 Manufacturing Plant ■Thoroughly enhancing RPS(Rohm Production System) ■Investing to strengthen our mass production system for a larger supply © 2015 ROHM Co.,Ltd. 113J047A Presentation 8 ROHM’s Strategy Trend of Sales Ratio by Market (2016/3 Estimate) © 2015 ROHM Co.,Ltd. 113E018A Presentation 9 ROHM’s Strategy Focusing on the Auto Market St d progress off development d l t and d 1. Steady adoption to applications for the near future Informatics Environment Connected car HEV/EV Power Device IGBT MOS SiC Analog Power IC Multiple driver IC PMIC Safety ADAS automatic operation Communication technology LIN CXPI © 2015 ROHM Co.,Ltd. 113J057A Presentation 10 ROHM’s Strategy Cultivating the Industrial Market 1. Enhancing product lineup and establishing distribution channels Enhancing E h i lineup for the FA market Design-wins D i i in i industrial i d ti l equipments are increasing Establishing E t bli hi distribution channels Strengthening our online support and relationship with technology distributors Focusing F i on IoT Deploying sensors and wireless technology Wi-Sun Module IoT Sensor + Communication Support to manufacturers General purpose microcontroller board Lazulite series © 2015 ROHM Co.,Ltd. Joining to establish global standards CPS IIC Industry 4.0 113J058A Presentation 11 ROHM’s Strategy Cultivating the Industrial Market 2. Adding new key technology (Digital power technology) ROHM POWERVATION Ltd Ltd. (Acquired in Jul. 22th, 2015) Fabless semiconductor company headquartered in Coak, Ireland, with facility in San Jose, U.S.A. (37 employees) © 2015 ROHM Co.,Ltd. 113E022A Presentation 12 ROHM’s Strategy Increasing Overseas Customers 2. Ensuring larger supply with our newest cutting-edge plants © 2015 ROHM Co.,Ltd. 113E024A Presentation 13 CAPEX Plan Continuing to invest in new products and technology (Partly postponed capacity increase of current manufacturing lines） Wafer process Assembly process ＜Launch of ROHM Shiga＞ ・To become a major fab of IGBT ・To start production of piezoelectric MEMS ■‘16/3 CAPEX Plan Initial plan Ratio Revised plan Ratio ・Building new plants in Thailand (ICs) and Malaysia (discrete semiconductor devices) and expanding capacity ・Renewing old equipment （¥billion） T t l Total Capacity increase Land・ building New products Q lit Quality Oth Others 75.0 100% 65.0 100% 33.3 16.0 11.4 7.9 6.4 44% 27.0 21% 14.5 15% 10.6 11% 9% 7.0 5.9 42% 22% 16% 11% 9% Japan/ Overseas ratio ʻ15/3 ʻ16/3 Initial plan ʻ16/3 Revised plan Japan Overseas 25.4(52%) 23.3(48%) 43.5(58%) 31.5(42%) 37.0(57%) 28.0(43%) Total 48.7(100%) 75.0(100%) 65.0(100%) © 2015 ROHM Co.,Ltd. 113J057A Presentation 14 CAPEX Initial Plan (¥billion) ICs Discrete semiconductor devices Wafer process: Intensify IGBT, LAPIS PD ʼ16/3 2H Revised plan ʼ16/3 Revised plan Changes to Plan 75.0 Wafer process：Intensify 8 inch in ROHM HQ, improve productivity in Hamamatsu Assembly process: Expand RIST (new building) & REPI ʼ16/3 ʼ16/3 1H Initial plan Actual ICs 70.0 60.0 65.0 Assembly Process: Partly postponed expansion of RIST 28.9 1H Initial p plan 34.6 50.0 Assembly process： New building in Malaysia, improve productivity in RIST/REPI, etc. 40.0 2H Initial p plan 40.4 23.6 25.8 OPM : Launch of manufacturing lines for new smart phone models 30.0 Others 20.0 38.4 PD: Postponed reinforcement of IGBT 11.1 LED: Reexamining investment for ancillary facilities in Malaysia ROHM HQ: Build a new building for discrete semiconductor devices © 2015 ROHM Co.,Ltd. 26.5 23.3 Modules 12.4 7.3 R： Intensify new products, etc. Sales and administrative di i i division Depreciation Discrete semiconductor devices TR: Partly postponed reinforcement of REPI Modules PH: Intensify front-end process Wafer process: Partly postponed improvement of Hamamatsuʼs 8 inch efficiency 10.0 5.6 7.4 0.0 8.3 1.2 0.7 3.6 Depreciation 14.9 3.4 6.0 2.9 Depreciation Depreciation PH PH: P Partly l postponed d reinforcement of wafer process 4.7 6.8 6.6 OPM: Partly postponed capacity increase of Malaysia Others R: Renewal of facilities in REPI, others 1509E1117H Presentation 15 Return to Shareholders ① Share buy-back (¥17 billion) completed. (Jul., 2015) ② 2016/3 annual dividend of ¥130/share planned. ③ We will strive to put an emphasis on shareholder returns by continuing to improve our performance. performance Thus, we will return 100% of our free cash flow and maintain payout ratio of 30% or more. (¥billion) Calculation of Free cash flow 450 45 350 35 Net income Depreciation CAPEX Acquisition of PV 31.0 31.0 25.8 Net 250 25 17.0 Free cash flow Share buyback 150 15 5.3 50 5 © 2015 ROHM Co.,Ltd. ▲¥1.7 billion Plan to return 100% of our free cash flow 14.0 Dividends -5 -50 Annual dividends per share 13 7 13.7 ＋¥31.0 billion ＋¥40.8 billion ▲¥65.0 billion ▲¥8.5 billion -1.7 '14/3 14/3 ¥50 '15/3 15/3 ¥130 '16/3 16/3 Plan '17/3 17/3 Plan ¥130 (Midterm dividend ¥65, Year-end dividend ¥65） 1509E1117H Presentation 16 ICs Business Strategy ①Our major R&D themes Expanding our product lineup and supplying to power train and A t Auto safety device by gaining customer’s trust in the global market. Reference business Enhancing product lineup and entering the auto and industrial market. market share of high-voltage motor drivers Home appliance Expanding and power ICs in emerging countries. Entering the market with sensors IoT and communication devices enabled by ROHM Group’s synergy. ②Started mass production of BiCDMOS process 0.13μm analog ICs and large current IPD process. process IPD: 9 customers secured. Ensuring high quality and performance of our products enabled by vertical g to achieve competitive p edge g in the auto and industrial markets. integration ③Aggressive investment and innovation in manufacturing lines for long term stable supply and higher quality. ＝Reestablishing RPS for cost reduction and upgrading our products to match auto quality.＝ © 2015 ROHM Co.,Ltd. 1509E1117H Presentation 17 Progress of ICs Business for Auto © 2015 ROHM Co.,Ltd. 113E015A Presentation 18 ICs Business for Industrial © 2015 ROHM Co.,Ltd. 113E007A Presentation 19 Manufacturing Plant of the Next Generation Using IoT Technology Establishing a plant that will only produce non-defective products! Under action ■Automation of abnormal detection ●Monitoring operation progress by online equipment ●Managing 4M※ and traceability by using IT tools such as tablet PCs ●Full guarantee of external appearance quality due to automatic detection equipment NEXT STEP ■Preventive action by change-point change point detection ●Eradication of human errors by using automatic sensing technology ●Change-point detection by automatic monitoring SPC (R (ResQ) Q) system t ●Dispersion detection by automatic analyzing system of mass production observed data g g Highly-efficient g y production and p ●Managing equipment operation by installing scheduler 【Space between machines】 RIST new building under construction © 2015 ROHM Co.,Ltd. 【Number of contacts】 【WA surface unevenness】 Installing in all manufacturing plants ※4M: Men, Machine, Material, Method 1509E1117H Presentation 20 Discrete Semiconductor Devices・Modules Business Strategy Market Reform Product Reform Expanding g sales by y providing g various product lineup matching g market demand and ensuring stable supply for the auto, smartphone・wearable device markets. ① ①Auto Industrial Enhancing development of power device products - Cutting-edge C tti d SiC power device d i products d t - R&D of SiC applications for the future ②Smartphone Wearable Leading the world by ultra-small and high performance devices -Enhancing product lineup of ROHM’s world’s smallest devices “RASMID“ series -Development of world’s smallest and high performance devices ③IoT Developing and deploying “Wi-SUN” small-size communication modules Production Reform -Continuing to invest for stable supply and production efficiency -Promoting P ti RPS tto thoroughly th hl eliminate li i t ““wastes” t ” © 2015 ROHM Co.,Ltd. 1509E1117H Presentation 21 Development of High-Performance Micro Devices Developed l d using i iinnovative, i b breakthrough k h h technologies h l i aiming i i for “worldʼs smallest and thinnest” ROHMʼs ultra-small components for mobile phones and wearable devices * August 2015 ROHM Survey © 2015 ROHM Co.,Ltd. 113E035A Presentation 22 Development of SiC Power Devices and Market ＜Market Estimate of SiC Power Devices＞ 3,300V〜 Sample period Mass production period After 2020 600V〜1 700V 600V〜1,700V Shift from Si to SiC will expand Shift to hi h voltage higher lt Power infrastructure Power Large-size industrial equipment 2015 2016 2017 2018 2019 2020 2021〜 （Research by ROHM）※Based on Yole Industrial equipment 3,300V 1,700V Solar power Applying to series high voltage technology Under mass production 1 200V 1,200V 2015 20kV 〜8kV Under development 6,600V High voltage pulse switch (Accelerometer, medical equipments ) Bidirectional AC switch Home appliance 2010 Under development 2015 600V © 2015 ROHM Co.,Ltd. 6,600V 4,500V 2015 Railway 2010 2016 2016 Wind power Industrial EV/PHV/PV power supply ・inverter 2010 12kV+ 2015 1509E1117H Presentation 23 Note Regarding Future Forecasts The forecast statements in this report are based on information currently available and deemed by ROHM Group as reasonable, and therefore, are not intended to guarantee to be achieved by ROHM Group, G and d actuall results l may differ diff materially i ll b by various factors. ROHM Group does not bear responsibility to update and disclose any future forecasts in this report. Also, since the purpose of this report is to provide an outline of business performance, many figures are shown in unit of a billion yen, therefore, totals and differences of figures may appear inaccurate. i t Please Pl refer f to t our Financial Fi i lR Reportt ffor detailed figures. © 2015 ROHM Co.,Ltd. 1509E1117H © 2015 ROHM Co.,Ltd.