Content Company Overview Products & Technology Products & T Sales & Marketing Financial Overview New Business

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2 Content Company Overview Products & Technology Sales & Marketing Financial Overview New Business 2

3 Company Profile TXC Corporation, founded in 1983, is a leading professional frequency control product manufacturer. We have devoted to the research, design, manufacture, and sale of Dual-Inline-Package (DIP) and Surface Mount Device (SMD) quartz crystal products. TXC now specializes in five categories of products such as high quality Quartz Crystal, Crystal Oscillator (CXO), Tuning Fork (TF) Surface Acoustic Wave (SAW) Filter, and Timing Module (TM). In addition, to develop the Group s future development and the application of core technical capabilities, in the Q2 of 2011, the company imports the LED substrate and wafer process and formally enters into the sapphire LED field. Our goal is to add value to our customers by providing a complete solution of frequency devices and modules, design-in service to fully satisfy various needs of the esteemed customers. We believe based upon the competence of cost effectiveness, quality, lead-time, and customer service TXC will go beyond customers' expectation. 3

4 Milestones Business Quality Production Ranked 4 th Paid-in Capital: US$102M Listed in Taiwan Security Exchange (Code- 3042) Taiwan National Quality Award IPO ed- Increased Capital to US$ 34.8M ISO :2006 Founded- Capital US$ 95,000 Implemented Oracle ERP Green Product Policy & QS 9000 ISO 9001:2000 TS16949 IECQ QC OHSAS18001:2007 PAS2050:2008 ISO 14001: Sigma ISO 14001: Established SMD Production Established SAW Production Established TCXO Production Completed Ningbo Factory in China Total Capacity up to 186 M/month 2011 Establishing Chongqing Factory in China 4

5 Worldwide Locations Headquarter - Factories(2)- Sales FAEs(10) - Field Application Engineer Distributors(12)- Representative (8)- Taiwan Taipei Taiwan Ping-Cheng China Ningbo China Chong-Qing (2012) Taiwan Taipei China Shanghai, Suzhou, Shenzhen, Wuhan USA LA Japan Yokohama, Osaka Europe Singapore Europe-UK, Germany Korea, India, Mexico. 5

6 Application v.s. Frequency Control Unit applied 1 Specific requirement for different industry Ultra stable Zero defect (Ex. Automotive products) Miniaturization Price Competitive (Ex. NB, Tablet PC) Stable Price Competitive (Ex. Digital Camera) Miniaturization Price Competitive (Ex. LED TV) Miniaturization Ultra stable Zero Defect (Ex. Medical Device) Audio, Video & Imaging Consumer Electronics Computing & Peripherals Medical Automotives Industrial Communications & Telecom Crystal & Oscillator Connecting Technology Together Energy & Lighting Wireless & Wirelines Security Ultra stable Frequency AOM/TCXO (Ex. Base Station) (Ex. GPS) Miniaturization Stable (Ex. Smart Phone) (Ex. WLAN) Miniaturization Ultra stable (Ex. Security Door System) Stable TCXO (Ex. Smart Grid) Stable Frequency (Ex. Industrial Monitoring System) 6

7 Business Model 7

8 Worldwide Revenue of the Top Crystal and Oscillator Suppliers (Unit: USD in Million) Rank Market Player Countries Resource: CS&A (08-09) Change % (09-10) Change % (10-11) Change % 2008 Market Share 2009 Market Share 2010 Market Share 2011 Market Share 1 Epson Toyocom Japan % 23.69% % 19.90% 22.10% 22.72% 16.73% 2 NDK Japan % 19.23% 1.75% 16.90% 15.80% 15.68% 15.74% 3 KDS Japan % 44.01% -0.44% 9.70% 9.40% 11.19% 10.99% 4 TXC Taiwan % 25.16% 8.64% 6.60% 8.30% 8.62% 9.24% 5 Kyocera Kinseki Japan % 1.47% % 9.00% 10.10% 8.50% 7.49% 6 Ventron USA % 38.61% -4.39% 5.90% 5.10% 5.87% 5.54% 7 Rakon New Zealand % 29.94% 4.82% 2.80% 2.80% 3.03% 3.14% 8 Hosonic Taiwan % 11.61% -7.00% 3.50% 3.40% 3.11% 2.85% 9 Taitien Taiwan % % 2.23% 10 TEW Japan % 9.98% % 2.20% 2.10% 1.89% 1.67% 11 Micro Crystal Switzerland % 20.00% 10.53% 1.70% 1.60% 1.63% 1.78% 12 Pericom USA % 18.07% -7.47% 1.60% 1.60% 1.61% 1.47% 13 River Japan % 14.95% 10.87% 1.50% 1.40% 1.34% 1.47% 14 Conner-Winfield Singaopre % 10.26% 5.94% 1.30% 1.20% 1.11% 1.16% - Others % 18.51% Total Revenue 3,388 2,900 3,490 3, % 20.36% 1.39% 8

9 TXC Competitors of Japan Competitors of Taiwan Competitors of China Overhead Cost Medium Medium Low Quotation advantage due to JPY appreciation Low Market Focus Asia USA, Europe Asia China (Growing) (Declining) (Growing) (Growing) Flexibility Low Relationship with ODM Low Low Diversification Low Low PC, Automotive, Networking, Mobile, Consumer, Global Automotive, Networking, Mobile, Consumer, Global Specific to one or two field PC, Consumer Ability Of Production Line Transfer Medium Medium Economic Scale est Low (SMD) (SMD & TCXO) (DIP) Manufacturing Technology 2016,1612, ,1210 Medium 2520,2016 Low 3225,2520 Quality Control est Medium Low 9

10 Unit: USD in Million 18% 5% 25% 9% 31% 19% 22% 40% 20% 10

11 SAPPHIRE 0.1% SAPPHIRE 2% AUTOMOTIVE 2% Others 13% PC 25% AUTOMOTIVE 2% Others 11% PC 20% CONSUMER 8% CONSUMER 9% NETWORKING 24% MOBILE 28% NETWORKING 26% MOBILE 30% 11

12 VCXO 1% TCXO 8% CXO 13% KHz X'tal 8% VCXO 1% CXO 12% TCXO 16% KHz X'tal 4% Others 8% MHz X'tal 62% Others 9% MHz X'tal 58% 12

13 Unit: $NT in Million Quarterly Revenue QoQ Revenue Growth 3,000 2,500 2,000 1, % 2,292 2,217 2,113 1, % 3.39% 1, % 2, % 2,689 2, % 7.14% 2,322 2,605 2,476 2,495 2, % 0.77% 4.45% 8.10% 40% 30% 20% 10% 0% 1, % 10% % 20% 0 09.Q1 09.Q2 09.Q3 09.Q4 10.Q1 10.Q2 10.Q3 10.Q4 11.Q1 11.Q2 11.Q3 11.Q4 12.Q1 30% 13

14 Unit: $NT in Million % % 19.61% % 633 Quarterly Gross Profit Gross Margin 26.91% 27.75% 25.20% 25.16% % 24.69% 25.25% % % % 25% 20% 15% % % 0 09.Q1 09.Q2 09.Q3 09.Q4 10.Q1 10.Q2 10.Q3 10.Q4 11.Q1 11.Q2 11.Q3 11.Q4 12.Q1 0% 14

15 Unit: $NT in Million Quarterly Net Profit Net Margin % 14.37% % 12.34% 10.08% % % % 10.13% 10.02% % % 8.31% % 14% 12% 10% 8% 6% % 2% 0 09.Q1 09.Q2 09.Q3 09.Q4 10.Q1 10.Q2 10.Q3 10.Q4 11.Q1 11.Q2 11.Q3 11.Q4 12.Q1 0% 15

16 (f) Unit: $NT in Million Factories Amounts Notes Amounts Notes Ping Cheng Factory 1,058 a. TCXO/AOM*5 b. Sapphire Equipment 600 a. TCXO/AOM*5 (Back end of line) b. Sapphire Euipment c. RD Equipment c. RD Euipment NGB Factory 250 Tuning Fork*3 250 Miniature X'tal*5 Miniature X'tal*2 Total 1, CKG Factory 156 Factories & Equipments 348 Factories & Equipments Mass Production (2012/2013) 16

17 Compensation payable to directors and supervisors 2%(2011) Employee Bonus 12%(2011) Earning Per Share Cash Dividend Per Share Stock Dividend Per Share Yield(%) 1.95% 3.20% 3.63% 6.25% 3.84% 4.47% 5.05% 17

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19 Source: DIGITIMES Feb, 2012 Existing Customers 19

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21 Taiwan Focus on the 4 Sapphire Wafer Market. & Successfully approved and running into the warm-up production stage Japan Closely co-work with Japan partner to step into the Japan 4 & 6 Market. Product is approval and under line auditing China Hesitate and initially approach the potential China customers. Korea Contact with the potential customer and sampling approving of the 4 & 6 Wafers 21

22 " Capacity(pcs) Sales amount(pcs) Sales (pcs) Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. 22

23 Revenue will grow gradually and stably. Gross margin expected to be greater than Q1. China market is still growing strongly, especially in smartphone, tablet and infrastructure sectors. 4G application is the major driving force for high-end products along with raising Cloud Computing. New products are on market smoothly and will bring growth momentum. 23