Think of Frequency, Think of TXC TXC Proprietary 1

TXC Corporation

Investor ConferenceMay 23, 2008

Think of Frequency, Think of TXC TXC Proprietary 2

Agenda

• Financial Results

• Sales & Marketing

• Technology and Product

• Highlights

• Q & A

Think of Frequency, Think of TXC TXC Proprietary 3

Unit: NT$ in MillionYoY

Net Sales 1,322 1,383 1,709 1,836 6,250 5,206 20.1%

Cost of Sales 913 976 1,185 1,283 4,357 3,704 17.6%

Gross Profit 409 407 524 553 1,893 1,502 26.0%

Gross Margin (%) 30.9% 29.4% 30.7% 30.1% 30.3% 28.9%

Operating Expenses 146 154 182 167 649 506 28.3%

Operating Income 263 253 342 386 1,244 996 24.9%

Net Non Income(Expense) 1 4 (21) (22) (38) (36) 5.6%

Pre-tax Income(Loss) 264 257 321 364 1,206 960 25.6%

Net Income(Loss) 244 219 297 380 1,140 842 35.4%

Net Profit (%) 18.5% 15.8% 17.4% 20.7% 18.2% 16.2%

EPS (NT$) 1.01 0.91 1.23 1.57 4.72 4.09 15.3%

(2007/12/E Capital stock : 2.42Bn)

200620071Q'07 2Q'07 3Q'07 4Q'07

2007 Consolidated IS-Audited

Think of Frequency, Think of TXC TXC Proprietary 4

Unit: NT$ in MillionYoY

Net Sales 1,614 1,614 1,836 1,322 -12.1% 22.1%

Cost of Sales 1,190 1,181 1,283 913 -8.0% 29.4%

Gross Profit 424 433 553 409 -21.7% 5.9%

Gross Margin (%) 26.3% 26.8% 30.1% 30.9%

Operating Expenses 208 185 167 146 10.8% 26.7%

Operating Income 216 248 386 263 -35.8% -5.7%

Net Non Income(Expense) 1 1 (22) 1 -104.5% 0.0%

Pre-tax Income(Loss) 217 249 364 264 -31.6% -5.7%

Net Income(Loss) 206 233 380 244 -38.7% -4.5%

Net Profit (%) 12.8% 14.4% 20.7% 18.5%

EPS (NT$) 0.85 0.96 1.57 1.01 -38.7% -4.5%

*1Q'08 results do not include expenses of employee bonus and rewards for Board of Directors.(2008/03/E Capital stock : 2.42Bn)

QoQ1Q'08 1Q'08* 4Q'07 1Q'07

2008Q1 Consolidated IS-Audited

Think of Frequency, Think of TXC TXC Proprietary 5

Revenue Trend

Unit: NT$ in Million

1,125

1,359 1,3831,322

1,6141,709 1,836

1,5031,219

7.4%

-12.1%

23.6%

4.6%

-26.9%-12.0%

10.6%11.5%8.4%

-

200

400

600

800

1,0001,200

1,400

1,600

1,800

2,000

1Q '06 2Q '06 3Q '06 4Q '06 1Q '07 2Q '07 3Q '07 4Q '07 1Q '08-30%

-20%

-10%

0%

10%

20%

30%

Revenue Q oQ

Think of Frequency, Think of TXC TXC Proprietary 6

Profit Trend

244

297

219

380

233

14.4%20.7%17.4%15.8%18.5%

-30.3%

19.1%

9.7%

-14.2%

-5.0%

(30)2070

120170220270320370420

1Q'07 2Q'07 3Q'07 4Q'07 1Q'08 -40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

Net Profit NP Margin (% ) NP QoQ

Unit: NT$ in Million

*1Q’08 Net Profit do not include expenses of employee bonus and rewards for Board of Directors and Supervisors .

409

524

407

553433

26.8%30.1%30.7%29.4%30.9%

-10.9%

-1.8%4.2%

-4.9%0.9%

0

100

200

300

400

500

600

700

1Q'07 2Q'07 3Q'07 4Q'07 1Q'08-20%

-10%

0%

10%

20%

30%

40%

Gross Profit Gross Margin (% ) GM QoQ

■ Net Profit■ Gross Profit

Think of Frequency, Think of TXC TXC Proprietary 7

Unit: NT$ in Million

618716

41 84 98

528

979

1,332

302

61.08%

71.77%65.05%

3.73%2.88%2.65%

-

200

400

600

800

1,000

1,200

1,400

2005 2006 20070%

10%

20%

30%

40%

50%

60%

70%

80%

Available Allocation Dividend PSE Payout Ratio (%) Yield

Dividend Distribution

* PSE includes Employee Profit sharing expensing and rewards for Board of Directors and Supervisors.** 2005 & 2006 Yield according to the closing share price on the Shareholders meeting date,

2007 on the Board of Directors date.

Think of Frequency, Think of TXC TXC Proprietary 8

Unit: NT$ in Million

Impact of PSE per Share

*EPS after Employee Profit sharing expensing (PSE) according to the Par value.** 2005 & 2006 EPS after PSE according to the closing share price on the Shareholders meeting date,

2007 on the Board of Directors date.

1,140

842

480

1,042

758

439

4.884.46

3.70

4.13

2.73

2.50

3.72

2.69

1.96

-

200

400

600

800

1,000

1,200

2005 2006 2007-

1

2

3

4

5

6

Net Income Net Income after PSE EPS EPS-By PV* EPS-By MV**

Think of Frequency, Think of TXC TXC Proprietary 9

Unit: NT$ in Million

Cash & Marketable Securities 1,008 13.0% 1,244 16.0%Accounts Receivable 1,981 25.5% 2,214 28.5%Inventory 968 12.5% 747 9.6%Current Assets 4,139 53.4% 4,342 56.0%Long-Term Investments 3 0.0% 3 0.0%Fixed Assets 3,478 44.8% 3,221 41.5%Total Assets 7,757 100.0% 7,694 100.0%Accounts Payable 1,416 18.3% 1,386 17.9%Short-Term Debt 668 8.6% 692 8.9%Current Liabilities 2,384 30.7% 2,126 27.4%Long-Term Debt 199 2.6% 441 5.7%Total Liabilities 2,592 33.4% 2,577 33.5%Total Equity 5,165 66.6% 5,117 66.5%

Key IncicesA/R Turnover Days 121 119 Inventory Turnover Days 57 54 Current Ratio 207% 222%Total Assets turnover Rate 0.81 0.81

1Q'08 4Q'07

Balance Sheets & Key Indices

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Unit: NT$ in Million

-Net Income -Depreciation & Amortization -OthersFrom Operating Activities

-Capital Expenditure -Marketable Financial Instruments -OthersFrom Investing Activities

-Increase(Decrease) in Loans -Share buybacks & Stock option -Cash Dividends (Common Stock) -OthersFrom Financing ActivitiesEffect of changes in exchange ratesNet Cash Position ChangeEnding Cash Balance

(485)

(90)(1) (43)

(260)884 1,144

244

(349)(18)

Q1'08 4Q'071,140528

1,645

(1,111)

(412)(123)

0

62(87)

(1,136)

997

84

206165(38)333

(492)30(23)

34

(23)

Cash Flows

Think of Frequency, Think of TXC TXC Proprietary 11

CapEx Line Amount$ Date (F) Capacity/M Revenue/M (F)

Ping-Cheng factoryexpansion plant (2)

400

SMD Seam X’tal (TWN)3225 / 2520 / 2016 4 240 1Q 4.0M 40

SMD CXO (TWN)5032 / 3225 / 2520 2 140 1Q.3Q 2.0M 16

SMD TCXO (TWN)3225 / 2520 1 100 3Q 0.5M 12

NGB factoryexpansion plant 220

SMD Glass X’tal (NGB)5032 / 3225 2 100 2Q 2M 10

SMD Seam X’tal (NGB)5032 / 3225

4 220 2Q.3Q 4M 24

Total 13 1,420 12.5M 102

20082008 Unit:NT$ Million

Capital Expenditures

Think of Frequency, Think of TXC TXC Proprietary 12

Worldwide Industrial Overview

X’TAL & Oscillator growth trend：

Source：TIC

9,81510,867

14,53616,099

17,939

4,640

13,13911,975

4,1983,8213,5643,2863,0692,883

14.7%

11.4%10.8%10.6%9.7%10.2%10.7%

10.5%9.9%7.2%8.5%

7.1%6.5%

12.6%

02,0004,0006,0008,000

10,000

12,00014,00016,00018,00020,000

2004 2005 2006 2007 2008(f) 2009(f) 2010(f)0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

Units Revenue Units(YoY) Revenue(YoY)

Units: M Pcs ; Revenue: US$ Million

Think of Frequency, Think of TXC TXC Proprietary 13

Worldwide Rank

Worldwide Revenue of the Top Crystal and Oscillator Suppliers (Millions of Dollars)

* Data Courtesy of CS & A

2006 Rank

2007 Rank

Company Name 2005

Revenue 2006

Revenue 2007

Revenue

% Change

(05-06)

% Change

(06-07)

2007 Market Share

1 1 Epson Toyocom 589 645 656 9.5% 1.7% 18.4%

2 2 NDK 515 626 649 21.6% 3.7% 18.2%

3 3 Kyocera Kinseki 338 372 380 10.1% 2.2% 10.7%

4 4 KDS 253 290 293 14.6% 1.0% 8.2%

5 5 Vectron 188 211 206 12.2% -2.4% 5.8%

6 6 TXC 117 161 192 37.6% 19.3% 5.4%

9 7 Rakon 53 59 109 11.3% 84.7% 3.1%

7 8 TEW 83 88 88 6.0% 0.0% 2.5%

8 9 Micro Crystal 56 60 62 7.1% 3.3% 1.7%

10 10 River 63 59 60 -6.3% 1.7% 1.7%

11 11 Pericom 45 49 57 8.9% 16.3% 1.6%

12 12 Fox 39 48 51 23.1% 6.3% 1.4%

Other Companies 730 618 761 -15.3% 23.1% 21.3%

Total Revenue 3,069 3,286 3,564 7.1% 8.5% 100.0%

Think of Frequency, Think of TXC TXC Proprietary 14

Business Model

Global Giants

IC DesignHouses EMS/CMs

TXC

Our Target Customers• Global Giants

• EMS/CMs

• IC Design Houses

Think of Frequency, Think of TXC TXC Proprietary 15

S/I/D21%

Mobile9%

PC22%

Automotive0.2%Digital Home

1%

Others6%

Global14%

Networking27%

S/I/D18%

Global14%

Digital Home0.8%

Others7%

PC19%

Automotive0.3%

Mobile15%

Networking26%

S/I/D18%

Mobile16%

PC19%

Automotive0.8%

DigitalHome

1%

Others6%

Global13%

Networking27%

Sales by IndustrySales by Industry

2007 2008 forecast

2008 Q1

Think of Frequency, Think of TXC TXC Proprietary 16

Sales by ApplicationSales by Application

Storage12%

Others8%

NB14%

Bluetooth3%

MP3/PMP11%

Mobile8%

Wireless21%

Game Console2%

DSC4%

STB5%

MB5%

NetworkCommunication

7%

2007 2008 forecast

NB13%

Storage11%

MP3 /PMP7%

Mobile13%

Wireless/WiMax21%

NetworkCommunicati

on7%

GameConsole

4%

Others9%

Bluetooth3%

MB3%

DSC3%

STB6%

Think of Frequency, Think of TXC TXC Proprietary 17

DIP X'tal14%

Seam 503216%

GLASS 804510%

Seam 6035/70509%

GLASS 50329%

Seam 322522%

TCXO/VCXO0.25%

Other0.04%

Automotive0.07%

SAW1.2%T/F

2%

LVPECL/LVDS4%

CXO 2520/32253%

Glass 3225/50321.3%Seam 2016/2520

1.9%

CXO 5032/70507%

Seam 6035/705010%

DIP X'tal16%

Seam 503214%

GLASS 50329%

GLASS 804510%

Seam 322516%

CXO 5032/70507%

LVPECL/LVDS3.2%

TCXO/VCXO0.8%

Seam 2016/25204%

T/F5%

CXO 2520/32254%

SAW0.7%

Glass 3225/50320.03%

Other0.02%

Automotive0.03%

Sales by Product CategorySales by Product Category

2007

2008Q1

18Think of Frequency, Think of TXC TXC Proprietary

Wireless Communication

Wireless Communication

Mobile

Bluetooth

WLAN

GPS

Networking INetworking I

WAN

Others

Networking IINetworking II

MAN

Long Haul

Crystal / SAW

PC / SID / ITPC / SID / IT

Multimedia

Desktop/Laptop

Peripherals

Digital Imaging

Others

Compact Low Power

HFF LVPECL / LVDS / HF VCXO / FX / VCSO

Stratum 3 / CS / CDR / OCXOSmaller Crystal

Smaller CXO TCXO SAWF SAWR Tuning Fork

High Frequency

Low Jitter

High Reliability

High Reliability

High Frequency

High Stability

Quartz SensorQuartz Sensor

Pressure

Gyroscopes

Gases

AutomotiveProducts

AutomotiveProducts

Non-Safety

TPMS

Products and Technology Strategy

DIP Crystal SMD CrystalSMD CXO

Current and MaturedCurrent and Matured

Technology Integration

ZERO Defect

Safety

RFID

Think of Frequency, Think of TXC TXC Proprietary 19

Technologies Roadmap

Think of Frequency, Think of TXC TXC Proprietary 20

Pursuit of Zero Defect Goal

TXC Zero Defect

Goal

Manufacturing

TestingCapabilityEnhancement

Continuous Improvement

Design

Application

TXC is striving for Zero

Defect and Manufacturing

Excellence!

Think of Frequency, Think of TXC TXC Proprietary 21

2008 Highlights

Q208 Revenue is expected 8-10% growth than Q108 (YoY 25%).

Gross margin should be maintained between 26% and 28%.

Operating income ratio should be maintained between 13% and 15%.

Sales contributed from Telecom application (i.e., wireless network and mobile devices) is expected to increase from 39% (’07) to 46% (’08) and will become the major driving force of sales growth .

Think of Frequency, Think of TXC TXC Proprietary 22

2008 Highlights

Getting the certification from top automotive companies, TXC expects to enjoy 200% sales growth in 2008 compared with year before.

Growth rate of high frequency/stability devices (i.e., LVPECL, TCXO, and SAW Filter) is expected to be 6.6% in 2008 other than 3.9% last year. Product applications include Fiber Channels, Gigabit Ethernet, GPS, and CDMA.

Sales from miniaturized crystal parts (i.e., 3225, 2520, and 2016) goes up from 24% (’07) to 36% (’08) and it is the main source contributed to our profit margin.

Think of Frequency, Think of TXC TXC Proprietary 23

2008 Highlights

Total production capacity will be increased to 160 million pcs per month (YoY 20%).

Expect to be listed as one of the Top 5 FCP suppliers in 2008.

Launch KM . TCRM . e-Learning systems, to share and maintain information efficiently.

Expect to establish 2~3 new sales offices in Asia.

Think of Frequency, Think of TXC TXC Proprietary 24

Q & A

Thanks!

http://www.txccorp.com