Investor Presentation · 2020. 8. 27. · This presentation contains forward-looking statements,...

Embedded wisely, Embedded widely

Investor Presentation

Embedded Wisely, Embedded Widely 2

IPR NoticeAll rights, titles and interests contained in this information, texts,

images, figures, tables or other files herein, including, but not

limited to, its ownership and the intellectual property rights, are

reserved to eMemory. This information may contain privileged and

confidential information. Some contents in this information can be

found in Logic Non-Volatile Memory (The NVM solutions from

eMemory), published in 2014. Any and all information provided

herein shall not be disclosed, copied, distributed, reproduced or

used in whole or in part without prior written permission of

eMemory Technology Inc.

eMemory, NeoBit, NeoFuse, NeoEE, NeoMTP, NeoROM, EcoBit

and NeoPUF are all trademarks and/or service marks of eMemory

in Taiwan and/or in other countries.


Cautionary StatementThis presentation contains forward-looking statements, which are subject to

risk factors associated with semiconductor and intellectual property business.

It is believed that the expectations reflected in these statements are

reasonable. But they may be affected by a variety of variables, many of which

are beyond our control. These variables could cause actual results or trends

to differ materially which include, but are not limited to: wafer price

fluctuation, actual demand, rapid technology change, delays or failures of

customers’ tape-outs into wafer production, our ability to negotiate, monitor

and enforce agreements for the determination and payment of royalties, any

bug or fault in our technology which leads to significant damage to our

technology and reputation, actual or potential litigation, semiconductor

industry cycle and general economic conditions. Except as required by law,

eMemory undertakes no obligation to update or revise any forward-looking

statements, whether as a result of new information, future events, or

otherwise.

Contents

Embedded Wisely, Embedded Widely

1

2

3

4

Review of Operations

Future Outlook

Q&A

Appendix

4


Review of

Operations

Q2 2020 Financial Results

6

The EPS of Q2 2020 was 2.28 NTD, ROE was 41.9%

(thousands of NT dollars)

Q2 2020 Q1 2020Change

(QoQ)Q2 2019

Change

(YoY)H1 2020 H1 2019

Change

(YoY)

Revenue 423,276 415,436 1.9% 316,541 33.7% 838,712 711,602 17.9%

Gross Margin 100% 100% - 100% - 100% 100% -

Operating Expenses 227,364 221,463 2.7% 187,889 21.0% 448,827 388,977 15.4%

Operating Income 195,912 193,973 1.0% 128,652 52.3% 389,885 322,625 20.8%

Operating Margin 46.3% 46.7% -0.4ppt 40.6% 5.7ppts 46.5% 45.3% 1.2ppts

Net Income 169,317 176,758 -4.2% 115,098 47.1% 346,075 292,249 18.4%

Net Margin 40.0% 42.5% -2.5ppts 36.4% 3.6ppts 41.3% 41.1% 0.2ppt

EPS (Unit: NTD) 2.28 2.38 -4.2% 1.55 47.1% 4.66 3.94 18.3%

ROE 41.9% 39.5% 2.4ppts 29.0% 12.9ppts 42.8% 36.9% 5.9ppts


Note: Revenue of Q2 2020 in terms of US$ is US$14.1 mil, up 2.0% QoQ, and up 38.1% YoY.

Revenue in Different Stream

7

Q2 revenue up 38.1% YoY in US dollar terms


$0

$200,000

$400,000

Licensing Royalty

20Q2 in comparison to 20Q1

20Q1 20Q2 Royalty

72.1%

Licensing27.9%

Revenue Breakdown

Revenue

NT$ Thousands Q2 2020 Q1 2020 QoQ Q2 2019 YoY H1 2020 H1 2019 YoY

Licensing 118,062 106,446 10.9% 104,806 12.6% 224,508 210,630 6.6%

Royalty 305,214 308,990 -1.2% 211,735 44.1% 614,204 500,972 22.6%

Total 423,276 415,436 1.9% 316,541 33.7% 838,712 711,602 17.9%

US$ Thousands Q2 2020 Q1 2020 QoQ Q2 2019 YoY H1 2020 H1 2019 YoY

Licensing 3,953 3,542 11.6% 3,373 17.2% 7,495 6,811 10.0%

Royalty 10,196 10,336 -1.4% 6,870 48.4% 20,532 16,275 26.2%

Total 14,149 13,878 2.0% 10,243 38.1% 28,027 23,086 21.4%

Q2 Revenue by Technology

8

The royalty of NeoFuse has a growth of 100.4% YoY


Technology

Q2 2020

Total Revenue Licensing Revenue Royalty Revenue% ofQ2

Revenue

Change (QoQ)

Change (YoY)

% ofQ2

Licensing

Change (QoQ)

Change (YoY)

% ofQ2

Royalty

Change (QoQ)

Change (YoY)

NeoBit 52.1% -1.2% 22.1% 17.2% -15.6% -26.7% 65.6% 0.5% 31.0%

NeoFuse 42.5% 4.0% 58.3% 71.0% 12.3% 27.6% 31.5% -2.3% 100.4%

PUF-Based 0.7% 364.7% 347.0% 2.4% 364.7% 347.0% 0.0% 0.0% 0.0%

MTP 4.7% 7.8% -7.6% 9.4% 56.3% 3.3% 2.9% -22.2% -18.3%

The licensing revenue of NeoFuse increased 12.3% QoQ and 27.6% YoY. Its royalty revenue decreased 2.3% QoQ

but increased 100.4% YoY.

The licensing revenue of NeoBit decreased 15.6% QoQ and 26.7% YoY. Its royalty revenue increased 0.5% QoQ

and 31.0% YoY.

The licensing revenue of MTP (NeoEE+NeoMTP) increased 56.3% QoQ and 3.3% YoY; while its royalty revenue

decreased 22.2% QoQ and 18.3% YoY.

PUF-based has not contributed to any royalty but its licensing revenue has an increased of 364.7% QoQ and 347.0%

YoY.

H1 Revenue by Technology

9

The royalty of NeoFuse has a growth of 136.8% YoY


Technology

H1 2020

Total Revenue Licensing Revenue Royalty Revenue

% ofH1

Revenue

Change (YoY)

% ofH1

Licensing

Change (YoY)

% ofH1

Royalty

Change (YoY)

NeoBit 52.9% 0.3% 19.8% -6.9% 65.1% 1.2%

NeoFuse 42.1% 65.9% 70.6% 21.4% 31.6% 136.8%

PUF-Based 0.4% 443.2% 1.5% 443.2% 0.0% 0.0%

MTP 4.6% -30.7% 8.1% -42.6% 3.3% -15.2%

The licensing revenue of NeoFuse increased 21.4% YoY. Its royalty revenue increased 136.8% YoY.

The licensing revenue of NeoBit decreased 6.9% YoY. Its royalty revenue increased 1.2% YoY.

The licensing revenue of MTP (NeoEE+NeoMTP) decreased 42.6% YoY; while its royalty revenue

decreased 15.2% YoY.

PUF-based has not contributed to any royalty but its licensing revenue has an increased of 443.2% YoY.

Royalty Revenue by Wafer Size

10

12-inch wafer increased 109.4% YoY


12-inch35.9%

8-inch64.1%

Q2 Royalty Breakdown

Royalty

12-inch wafers contributed 35.9% of royalty, decreased

1.2% sequentially but increased 109.4% YoY.

8-inch wafers contributed 64.1% of royalty, decreased

1.2% sequentially but increased 22.7% YoY.

Wafer SizeQ2 2020 H1 2020

% of Q2 Change (QoQ) Change (YoY) % of H1 Change (YoY)

8-Inch 64.1% -1.2% 22.7% 64.1% 12.1%

12-Inch 35.9% -1.2% 109.4% 35.9% 47.1%


Future

Outlook

eMemory Embedded Everywhere

12

eMemory’s IP seeks to penetrate across all the applications


Co

re T

ec

h Se

cu

rity

The Future in Security Chip IP:The rapid growth in AIoT and 5G drive the

demand for hardware security. OTP and PUF

are indispensable for root of trust in hardware

security.

PUF-based Security Solutions: To satisfy the market needs, eMemory

developed a new series of PUF-based security

solution, including PUFrt, PUFiot, PUFse and

PUFflash.

Product Applications: eMemory’s IP are already applied into different

applications, which includes PMIC, LCD driver,

Sensors, RFID, OLED Driver, Connectivity IC, DTV,

STB, SSD Controller, Bluetooth, TDDI, MCU,

Fingerprint Sensor, Smart Meters, Surveillance, ISP,

CIS, DRAM, embedded Flash and FPGA.

Future Target: AP, GPU, CPU, Flash, IoT, AI, autonomous driving

Our Perspectives

13

eMemory continue to create value for the industry and our shareholders


Licensing &

Royalty

New

Application &

Technology

Development

Licensing:

• NeoFuse and NeoPUF will continue to grow due to

increasing advanced technology platforms and more

comprehensive PUF-based security IPs.

Royalty:

• 8” wafers – 2 to 3 times PMIC content increase in 5G

smartphones. Expect the EV automotive applications to

drive further growth momentum.

• 12” wafers – more than 300 tape outs in the pipelines

ready for productions, applications including TDDI,

OLED, ISP, CIS, Bluetooth, TWS, Networking-related

IC, SSD controllers, video processor, STB, DTV,

surveillance, and DRAM.

For new applications:

• PUF-based security IPs adopted by customers in AI, IoT,

FGPA, Blockchain, and industrial automation.

• Security platform cooperation with ARM.

For new technology development:

• Developed 6nm and 5nm plus (N5P) technology with leading

foundry partners; demonstrated 6nm silicon results successfully;

7nm has been adopted into automotive application.

• PUF-based IoT security solution, security elements and

hardware security module IPs are under development.

• Built PUF-based hardware security IP open platform, by

integrating OTP, PUF, security-functioned IPs, and

cryptographic algorithm IPs.

Q&A



Appendix

Company Overview

16

eMemory is the global leader of embedded non-volatile memory IP


Licensing &

Royalty

Based in Hsinchu, Taiwan.

IPO in 2011. Over 30M wafers

shipped.

In 2000Founded

265 pending patents. 281

employees with 68% R&D

personnel.

Patents Issued700+

TSMC Best IP Partner Award

since 2010.

With TSMCBest IP Partner

Revenue Trend

(Unit: NT$ 1,000)

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Royalty License/Design Revenue

240,849

193,955

291,486

229,864

263,159

184,375

286,629 284,940 286,201

197,324

225,993 235,420

290,059

241,928

308,050

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

First Month Second Month Third Month

(Unit: NT$ 1,000)

2017 2018 2019 2020

Quarterly Revenue Pattern

17

eMemory’s quarterly revenue pattern

Embedded Wisely, Embedded WidelyEmbedded Wisely, Embedded Widely

1st month: Receive License Fees of the month and Royalty from most foundries on previous quarter’s wafer

shipments.

2nd month: Receive License Fees of the month and Royalty from other foundries.

3rd month: License Fees Only.

Note: One foundry pays royalty semiannually, reported in Jan and July revenue.

Worldwide Customers

18

Our IP solutions are adopted by leading foundries, IDMs and fabless worldwide


Licensing &

Royalty

New

Application &

Technology

Development

Country Foundry IDM Fabless

Taiwan 4 1 302

China 8 0 812

Korea 4 0 87

Japan 4 7 64

North

America1 1 306

Europe 2 1 177

Others 1 0 76


http://www.maxim-ic.com/

http://www.maxim-ic.com/

Business Model

19

Recurring royalty is the backbone of our business


Foundries Process

Development

License FeeFabless Product

Development

Design License FeeWafer Mass Production

Royalty

2-3 years

2-3 yearsRevenue

Breakdown

70-75% revenue are from royalty based on wafer production

More adoption = more volume shipment

More advanced node wafers = higher ASP per wafer

Technology Licenses

20

Cumulative technology licenses


2042 61

85113

141181 201 213 232

253281

324 344370 388

2219

24

28

28

40

2012

1921

28

43

2026

1817

0

50

100

150

200

250

300

350

400

450

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 H1 2020

No. of New Technology Licenses in the Corresponding Period

No. of Cumulative Technology Licenses of the Previous Years

Year 2016 2017 2018 2019 H1 2020

License 43 20 26 18 17

Note: Terms (including number of process platforms and licensing fees) for each technology license are set contractually.

Payments are made according to set milestones, and there are no particular seasonal factors involved.

Number of Licenses

New Technology Under Development

21

Products in different process nodes


Technology 5/6nm 7/10nm 12/16nm 22/28nm 40nm 55/65nm 80/90nm 0.11~

0.13um

0.15~

0.18um >0.25um

NeoBit - - - - - 1 2 9 9 1

NeoFuse 2 1 3 11 4 11 6 - 1 -

PUF-Based 1 - - 3 2 1 - - - -

MTP - - - - - 2 5 8 10 -

Note: As of June 30th, 2020

New technologies are being developed for 93 platforms by Q2 2020.

12 licensing contracts were signed, 1 for NeoBit and 11 for NeoFuse.

Technology Development

22

Developments by process nodes


12" Fabs Production Development IP Type Process Type

5/6nm 0 3 OTP, PUF FF

7/10nm 2 1 OTP, PUF FF, FF+

12/16nm 3 3 OTP FF, FF+

22/28nm 27 14 OTP, PUF, MTP LP/ULP/ULL, HPC/HPC+, HV-OLED, DRAM, SOI

40nm 14 6 OTP, PUF, MTP LP/ULP, E-Flash, HV-DDI/OLED

55/65nm 24 15 OTP, PUF, MTP LP/ULP, E-Flash, HV-DDI/OLED, DRAM, CIS, BCD, PM

80/90nm 16 12 OTP, MTP HV-DDI/OLED, LP, Generic, BCD, CIS

0.11/0.13um 17 5 OTP, MTP HV-DDI, BCD, Generic

0.18um 1 2 OTP BCD, Generic

Total 104 61

8" Fabs Development IP Type Process Type

90nm 1 OTP HV-DDI, LL, BCD

0.11/0.13um 12 OTP, MTP, PUF HV/HV-MR, BCD, LP/LL, CIS, Green, Flash, SOI, Generic

0.152/0.16/0.18um 18 OTP, MTP HV/HV-MR, BCD, LP/LL, CIS, Green, Generic

0.25um 1 OTP BCD

0.35um 0 OTP UHV

Total 32

Note: As of June 30th, 2020

NeoFuse Mechanism


Programming and Read Mechanism

Programming Mechanism

• Apply one high voltage, V+++, to form a Quantum Tunneling path.

Read Mechanism

• Apply a normal operation voltage, VR, to read the current flow through the tunneling path.

0V 0V

Initial Programming

0V 0V

VRI = 0

I = 0

0V 0V

VR

I ≠ 0

I

“1” “0”

Quantum Tunneling Mechanism


Quantum Tunneling Phenomenon of NeoFuse and NeoPUF

• Electrons transport from Si substrate to

metal gate through dangling bonds

(oxide traps)

• Electron tunneling through the gate

oxide if there are many dangling bonds

(oxide traps) in the oxide

• If no dangling bonds are in the oxide, the

probability for electron to transport in

the oxide is very small

• It is very difficult for electrons to tunnel

through the oxide if no traps in the oxide

NeoFuse vs. eFuse


NeoFuse’s invisibility ensures no exposure risk from invasive attack

NeoFuse

Un-programmed “0” Programmed “1”

eFuse under SEM


NeoFuse under SEM

e-Fuse

Blown fuse

Source

/ Drain

Drain /

Source

Gate

Oxide

Source

/ Drain

Drain /

Source

Gate

Oxide


• Invisible

• Untraceable

• Reliable

No visible difference


• Visible

• Insecure

NeoPUF Mechanism


Enrollment and Extraction

• A path of oxide quantum tunneling would be located at either left or right one after high voltage is applied to a pair of

NeoFuse in parallel, which depends on the micro-difference in oxide quality variations.

• Awarded 2018 ISSCC outstanding paper

NeoFuse NeoFuse

HW Root-of-Trust (HRoT)


OTP, PUF and TRNG are the basis of HRoT

A Trusted HW RoT should have:

● Secure Storage to store the sensitive data (key)

● Protected Realm to further protect key/cryptographic

Secure Storage:

● Invisible OTP with anti-tampering design

Protected Realm:

● Entropy to hide crypto operations using TRNG

● Entropy to hide storage/bus using TRNG/PUF

Application Layer

Software Layer

Physical Layer

Trusted Secure Realm

Entropy, Crypto Operations

Secure Storage

HW RoT

Data

PUFrt


A trusted macro meets all the needs of HRoT

A Highly Integrated PUF-based HRoT

PRTC: R/W Access Authority Control Interface

PUFuid: Instant Ready On-chip UIDs

PUFtrng: Instant Ready PUF-based TRNG

PUFkeyst: Trusted Self-encrypted Storage

Complete Anti-Tampering Design

PRTC(APB Interface)

System BUS

PUFkeyst(PUF-based Key Storage)

PUFuid(PUF-based Unique ID)

PUFtrng(PUF-based True Random

Number Generator)

OTP/PUF Hard Macro

PUFrt Integrated Macro

PUF Series Articles


Press Release:

8/4 PUFsecurity Launches Unique Quantum-Tunneling PUF-based Root-of-Trust

Link: https://blog.pufsecurity.com/2020/08/04/pufsecurity-launches-unique-quantum-tunneling-puf-based-root-of-trust/

6/2 PUFsecurity Launches IP Open Source Program: Bridging the Gap in Chip Security

Link: https://blog.pufsecurity.com/2020/06/02/pufsecurity-ip-open-source-program-bridging-the-gap-in-chip-security/

Technical Articles:

PUF Series 4：Why a True Hardware PUF is more Reliable as RooT of Trust

Link: https://blog.pufsecurity.com/2020/06/22/puf-series-4%ef%bc%9asoftware-post-processing-makes-sram-puf-vulnerable-as-rot/

PUF Series 3: The Quantum Tunneling Mechanism of NeoPUF

Link: https://blog.pufsecurity.com/2020/06/16/puf-series-3-the-quantum-tunneling-mechanism-of-neopuf/

PUF Series 2: NeoPUF, A Reliable and Non-traceable Quantum Tunneling PUF

Link: https://blog.pufsecurity.com/2020/03/27/neopuf-a-reliable-and-non-traceable-quantum-tunneling-puf/

PUF Series 1: SRAM PUF is Increasingly Vulnerable

Link: https://blog.pufsecurity.com/2020/02/19/sram-puf-is-increasingly-vulnerable/

Press release and articles regarding security with NeoPUF

https://blog.pufsecurity.com/2020/08/04/pufsecurity-launches-unique-quantum-tunneling-puf-based-root-of-trust/

https://blog.pufsecurity.com/2020/06/02/pufsecurity-ip-open-source-program-bridging-the-gap-in-chip-security/

https://blog.pufsecurity.com/2020/06/22/puf-series-4%ef%bc%9asoftware-post-processing-makes-sram-puf-vulnerable-as-rot/

https://blog.pufsecurity.com/2020/06/16/puf-series-3-the-quantum-tunneling-mechanism-of-neopuf/

https://blog.pufsecurity.com/2020/03/27/neopuf-a-reliable-and-non-traceable-quantum-tunneling-puf/

https://blog.pufsecurity.com/2020/02/19/sram-puf-is-increasingly-vulnerable/

Q&A



Embedded wisely, Embedded widely

1

Management Report for Second Quarter Fiscal 2020

Hsinchu, Taiwan, August 12th, 2020 – eMemory Technology Inc. (TPE: 3529) reported financial results for its fiscal quarter, which ended 30th June 2020.

Executive Summary

• Q2 2020 revenue was record high, up 1.9% sequentially and 33.7% year-over-year.

Operating income increased 1.0% sequentially and 52.3% year-over-year. EPS was NT$

2.28, and ROE 41.9%.

• We expect 8-inch wafer royalty to regain momentum due to the 2 to 3 times PMIC content

increase in 5G smartphones. We have also developed various automobile-grade

processes, and expect the EV automotive sector to drive further growth momentum for

8-inch application royalty. 12-inch wafer royalty will continue to grow as more than 300

tape outs for various applications in the pipe line ready for production.

• We are actively engaging with leading customers to embed our NeoPUF into their

security architecture.

Financial Results (Amounts in thousands of NT$)

Q2 2020 Q1 2020

Change

(QoQ) Q2 2019

Change

(YoY) H1 2020 H1 2019

Change

(YoY)

Revenue 423,276 415,436 1.9% 316,541 33.7% 838,712 711,602 17.9%

Gross Margin 100% 100% - 100% - 100% 100% -

Operating

Expenses 227,364 221,463 2.7% 187,889 21.0% 448,827 388,977 15.4%

Operating

Income 195,912 193,973 1.0% 128,652 52.3% 389,885 322,625 20.8%

Operating

Margin 46.3% 46.7% -0.4ppt 40.6% 5.7ppts 46.5% 45.3% 1.2ppts

Net Income 169,317 176,758 -4.2% 115,098 47.1% 346,075 292,249 18.4%

Net Margin 40.0% 42.5% -2.5ppts 36.4% 3.6ppts 41.3% 41.1% 0.2ppt

EPS

(Unit: NTD) 2.28 2.38 -4.2% 1.55 47.1% 4.66 3.94 18.3%

ROE 41.9% 39.5% 2.4ppts 29.0% 12.9ppts 42.8% 36.9% 5.9ppts

Revenue Analysis (Amounts in thousands of NT$)

Q2 2020 Q1 2020 Change

(QoQ) Q2 2019

Change

(YoY) H1 2020 H1 2019

Change

(YoY)

Licensing 118,062 106,446 10.9% 104,806 12.6% 224,508 210,630 6.6%

Royalty 305,214 308,990 -1.2% 211,735 44.1% 614,204 500,972 22.6%

Total 423,276 415,436 1.9% 316,541 33.7% 838,712 711,602 17.9%

2

(Amounts in thousands of US$)

Q2 2020 Q1 2020 Change

(QoQ) Q2 2019

Change

(YoY) H1 2020 H1 2019

Change

(YoY)

Licensing 3,953 3,542 11.6% 3,373 17.2% 7,495 6,811 10.0%

Royalty 10,196 10,336 -1.4% 6,870 48.4% 20,532 16,275 26.2%

Total 14,149 13,878 2.0% 10,243 38.1% 28,027 23,086 21.4%

Revenue analysis by technology

Technology

Q2 2020


% of Q2

Revenue

Change

(QoQ)

Change

(YoY)

% of Q2

Licensing

Change

(QoQ)

Change

(YoY)

% of Q2

Royalty

Change

(QoQ)

Change

(YoY)

NeoBit 52.1% -1.2% 22.1% 17.2% -15.6% -26.7% 65.6% 0.5% 31.0%

NeoFuse 42.5% 4.0% 58.3% 71.0% 12.3% 27.6% 31.5% -2.3% 100.4%

PUF-Based 0.7% 364.7% 347.0% 2.4% 364.7% 347.0% 0.0% 0.0% 0.0%

MTP 4.7% 7.8% -7.6% 9.4% 56.3% 3.3% 2.9% -22.2% -18.3%

Technology

H1 2020


% of H1

Revenue Change (YoY)

% of H1

Licensing Change (YoY)

% of H1

Royalty Change (YoY)

NeoBit 52.9% 0.3% 19.8% -6.9% 65.1% 1.2%

NeoFuse 42.1% 65.9% 70.6% 21.4% 31.6% 136.8%

PUF-Based 0.4% 443.2% 1.5% 443.2% 0.0% 0.0%

MTP 4.6% -30.7% 8.1% -42.6% 3.3% -15.2%

NeoBit：OTP technology covers from 0.25um to 55nm.

NeoFuse：OTP technology covers mainly from 0.18um to 5nm.

PUF-Based：OTP technology covers mainly from 65nm to 5nm.

MTP：MTP technology covers from 0.18um to 55nm, offering high density memory and

allowing up to 100K rewritable times with zero additional masking layers.

3

Royalty revenue analysis by wafer size (8-inch vs 12-inch)

Wafer Size

Q2 2020 H1 2020

% of Q2 Change

(QoQ)

Change

(YoY) % of H1

Change

(YoY)

8-inch 64.1% -1.2% 22.7% 64.1% 12.1%

12-inch 35.9% -1.2% 109.4% 35.9% 47.1%

Key Business Developments

Licensing

Technology License

12 licensing contracts were signed during this quarter, 1 for NeoBit and 11 for

NeoFuse.

As of June 30th, 2020, we have technologies under development for the adoption of

93 different process platforms, ranging from 0.25um to 5nm.

Development of Key Technology on 12-inch Nodes

5/6nm 7/10nm 12/16nm 22/28nm 40nm 55/65nm 80/90nm 0.11/0.13um 0.18um Total

Qualified 0 2 3 27 14 24 16 17 1 104

Developing 3 1 3 14 6 15 12 5 2 61

Design License

A total of 115 product tape-outs occurred in the second quarter of 2020.

- 11 tape-outs at 22nm/28nm for CIS, OLED driver, Ethernet, DTV, HDMI and etc.

- 2 tape-outs at 25nm for DRAM.

- 12 tape-outs at 40nm for MCU, OLED driver, TDDI and etc.

- 10 tape-outs at 55nm/65nm for PMIC, OLED driver, LCD driver, TDDI, video

camera, audio, and fingerprint sensor.

- 1 tape-out at 63nm for LCOS.

- 7 tape-outs at 80nm/90nm for OLED driver, LCD driver, and TDDI.

- 24 tape-outs at 0.13um for PMIC, ambient light sensor, pressure sensor, MCU,

LCD driver, TDDI, and USB.

- 38 tape-outs at 0.18um for PMIC, ambient light sensor, controller, gyroscope,

magnetics, pressure sensor, MCU, LCD driver, LED driver, wireless charger and

etc.

- 8 tape-outs at 0.25um for PMIC, and temperature sensor.

- 1 tape-out at 0.35um for magnetics.

- 1 tape-out at 0.5um for MCU.

4

As of June 30th, 2020, eMemory’s cumulative number of design licenses has

increased to 4,995––a direct result of our ongoing effort in expanding and diversifying

our technologies for adoption in a wide range of applications.

Future Growth Drivers

License

NeoFuse and NeoPUF will continue to grow due to increasing advanced technology

platforms and more comprehensive PUF-based security IPs.

Royalty

Royalty from 8-inch wafer to regain momentum due to the 2 to 3 times PMIC content

increase in 5G smartphones. In addition, we have developed various automobile-grade

processes, and expect the EV automotive sector to drive further growth momentum for

8-inch application royalty.

Royalty from 12-inch will continue to grow as more than 300 tape outs for various

applications in the pipe line ready for production, which include TDDI, OLED, T-con, ISP,

Bluetooth, WiFi, TWS, switch, set top box, video processor, SSD controller, IoT security

processor, digital power, DRAM and others.

New Application Development

PUFrt was adopted by customers in IoT platform, AI training modules, Blockchain, FPGA,

and industrial automation applications to ensure data security and increase attack-

resistance ability.

PUFiot is well-developed and engagement with customers are ongoing.

Collaboration with ARM to embed NeoFuse in their security platform. Customers’

products are under verification stage.

New Technology Development

Developed 5nm plus and 6nm with production tape outs completed.

Continue working with partners on MRAM and ReRAM.

Developed PUFrt into embedded flash platforms to protect the data stored in the

embedded flash.

Developed open IP platform, by integrating OTP, PUF, security-function IPs,

cryptographic algorithm IPs, security elements and hardware security module IP to

provide total security solutions for AIoT and 5G applications.

Financial Review

Gross margin

Gross margin remained at 100%.

5

Operating expenses and operating margin

The total operating expenses in Q2 2020 were NT$ 227.36 million and represented

53.7% of the total revenue, which decreased from 59.4% of the total revenue in the prior

year.

Operating expenses increased by 2.7% sequentially and 21.0% year-over-year. The

sequential and year-over-year increase were mainly due to the increase in the number

of employees from our 100% owned subsidiary, PUFsecurity, and employee bonuses.

As a result, operating margin for the quarter was 46.3%, down by 0.4 percentage point

from the prior quarter but up by 5.7 percentage points year-over-year.

Non-operating items and income tax expense

Non-operating items for the quarter were NT$ 2.82 million, which decreased 66.4%

sequentially and 38.7% year-over-year. The decreases were due to the exchange losses

caused by the appreciation of Taiwan dollar.

H1 2020 effective tax rate was 13.7%.

Net Income and EPS

Net income for the quarter was NT$ 169.32 million, a decrease of 4.2% sequentially but an increase of 47.1% year-over-year.

Earnings per share was NT$ 2.28 in Q2 2020. ROE was 41.9%.

Current assets and current liabilities

As of June 30th, 2020, cash increased by NT$ 121.49 million from that of June 30th, 2019

to NT$ 1,719.67 million.

Total current assets including cash were NT$ 1,873.94 million, with an increase of NT$

108.02 million from June 30th, 2019. The increase was due to revenue growth and

accounts receivable recovery.

Total current liabilities decreased by NT$ 26.73 million from June 30th, 2019 to NT$

896.23 million, mainly due to the decrease in dividends payable as compared with the

same period last year.

Net working capital was NT$ 977.70 million and the current ratio was 2.1x.

Cash flows

As of June 30th, 2020, net cash generated from operating activities totaled NT$ 453.76

million, including NT$ 401.09 million from income before income tax, NT$ 28.52 million

from depreciation and amortization, and NT$ 24.15 million generated from other

operating activities, which included tax payment of NT$ 74.12 million.

Net cash generated from investing activities was NT$ 5.67 million at the end of June 30th,

2020, primarily related to disposal of financial assets measured at amortized cost.

Net cash used in financing activities was NT$ 1.63 million at the end of June 30th, 2020,

mainly attributable to repayment of the principal portion of lease liabilities and their

6

interest payment.

As a result, cash increased by NT$ 121.49 million to NT$ 1,719.67 million from June 30th,

2019 to June 30th, 2020.

Employee

As of June 30th, 2020, eMemory has 255 full-time employees, including 178 R&D

engineers. 100% owned subsidiary, PUFsecurity has 26 full-time employees, including

14 R&D engineers.

Cautionary Statement

This report contains forward-looking statements, which are subject to risk factors associated

with semiconductor and intellectual property business. We believe that the expectations

reflected in these statements are reasonable. However, they may be affected by a variety of

variables, many of which are beyond our control. These variables could cause actual results

or trends to differ materially which include, but are not limited to: wafer price fluctuation, actual

demand, rapid technology change, delays or failures in customers’ tape-outs into wafer

production, our ability to negotiate, monitor and enforce agreements for the determination

and payment of royalties, any bug or fault in our technology which leads to significant damage

to our technology and reputation, actual or potential litigation, semiconductor industry cycle

and general economic conditions. Unless as required by law, eMemory undertakes no

obligation to update or revise any forward-looking statements, whether as a result of new

information, future events, or otherwise.

Contact Fiona Lai Investor Relations eMemory Technology Inc. +886-3-5601168 [email protected]

-Financial Statements To Follow-

mailto:[email protected]

7

eMemory Technology Inc. and Subsidiary

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

June 30, 2020

(Reviewed)

December 31, 2019

(Audited)

June 30, 2019

(Reviewed)

June 30, 2020

(Reviewed)

December 31, 2019

(Audited)

June 30, 2019

(Reviewed)

ASSETS Amount ％ Amount ％ Amount ％ LIABILITIES AND EQUITY Amount ％ Amount ％ Amount ％

CURRENT ASSETS CURRENT LIABILITIES

Cash $1,719,667 70 $1,263,858 62 $1,598,180 67 Contract liabilities - current $ 53,311 2 $ 32,837 2 $ 36,958 2

Accounts receivable - net 91,715 4 126,812 7 102,718 4 Other payables 89,436 4 80,914 4 72,410 3

Other receivables 167 - 1,929 - 250 - Bonuses payable to employees and directors 176,013 7 125,120 6 173,193 7

Other receivables - related parties 409 - 410 - 379 - Payables on equipment 1,549 - 4,861 - 1,677 -

Prepayments 58,528 2 19,472 1 61,697 3 Dividends payable 519,866 22 - - 593,790 25

Other current assets 3,450 - 4,275 - 2,692 - Current tax liabilities 51,220 2 56,576 3 40,179 2

Total current assets 1,873,936 76 1,416,756 70 1,765,916 74 Lease liabilities - current 2,543 - 3,114 - 3,093 -

Other current liabilities 2,294 - 1,731 - 1,661 -

Total current liabilities 896,232 37 305,153 15 922,961 39

NON-CURRENT ASSETS

NON-CURRENT LIABILITIES

Financial assets at fair value through other comprehensive income - noncurrent 16,902 1 15,530 1 15,120 1 Lease liabilities - noncurrent 3,306 - 4,246 - 5,804 -

Financial assets at amortized cost - noncurrent 113 - 33,613 2 33,612 2 Net defined benefit liabilities - noncurrent 21,073 1 21,384 1 20,058 1

Investment accounted for using equity method 3,533 - 5,382 - 3,886 - Guarantee deposits received 530 - 530 - 530 -

Property, plant and equipment 474,360 20 477,171 23 486,788 20 Total non-current liabilities 24,909 1 26,160 1 26,392 1

Right-of-use assets 5,767 - 7,287 - 8,852 -

Intangible assets 74,147 3 73,805 4 69,121 3 Total liabilities 921,141 38 331,313 16 949,353 40

Deferred tax assets 2,784 - 3,434 - 2,480 -

Prepayments for equipment - - - - 709 -

EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY

Refundable deposits 356 - 349 - 365 -

Total non-current assets 577,962 24 616,571 30 620,933 26 Ordinary shares 758,336 31 758,336 37 758,050 32

Capital surplus 294,165 12 404,446 20 388,839 16

Retained earnings

Legal reserve 455,518 19 401,471 20 401,471 17

Special reserve 65,586 3 61,932 3 61,932 3

Unappropriated earnings 425,561 17 545,653 27 297,434 12

Total retained earnings 946,665 39 1,009,056 50 760,837 32

Other equity

Exchange differences on translating the financial statements of foreign operations ( 6 ) - ( 4 ) - - -

Unrealized gain (loss) on financial assets at fair value through other comprehensive income ( 64,210 ) ( 3 ) ( 65,582 ) ( 3 ) ( 65,992 ) ( 3 )

Total other equity ( 64,216 ) ( 3 ) ( 65,586 ) ( 3 ) ( 65,992 ) ( 3 )

Treasury shares ( 404,238 ) ( 17 ) ( 404,238 ) ( 20 ) ( 404,238 ) ( 17 )

Total equity attributable to shareholders of the Company 1,530,712 62 1,702,014 84 1,437,496 60

NON-CONTROLLING INTERESTS 45 - - - - -

Total equity 1,530,757 62 1,702,014 84 1,437,496 60

TOTAL $2,451,898 100 $2,033,327 100 $2,386,849 100 TOTAL $2,451,898 100 $2,033,327 100 $2,386,849 100

8


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

(Reviewed, Not Audited)

For the Three Months Ended June 30 For the Six Months Ended June 30

2020 2019 2020 2019

Amount % Amount % Amount % Amount % OPERATING REVENUE $423,276 100 $316,541 100 $838,712 100 $711,602 100 OPERATING COSTS - - - - - - - - GROSS PROFIT 423,276 100 316,541 100 838,712 100 711,602 100 OPERATING EXPENSES

Selling and marketing expenses 30,862 7 30,100 9 60,382 7 59,059 8 General and administrative

expenses

47,920 12 39,298 12 96,263 11 83,406 12 Research and development

expenses

143,985 34 125,301 40 289,678 35 252,874 36 Expected credit loss (gain) 4,597 1 ( 6,810 ) ( 2 ) 2,504 - ( 6,362 ) ( 1 )

Total operating expenses 227,364 54 187,889 59 448,827 53 388,977 55 OPERATING INCOME 195,912 46 128,652 41 389,885 47 322,625 45 NON-OPERATING INCOME AND

EXPENSES

Interest income 2,279 1 2,747 1 4,679 - 5,287 2 Other income 1,191 - 1,325 - 2,379 - 7,473 - Other gains and losses 291 - 1,625 - 6,058 1 3,335 - Finance costs ( 30 ) - ( 48 ) - ( 64 ) - ( 97 ) - Share of loss of associates ( 911 ) - ( 1,049 ) - ( 1,849 ) - ( 2,165 ) -

Total non-operating income and expenses

2,820 1 4,600 1 11,203 1 13,833 2

PROFIT BEFORE INCOME TAX 198,732 47 133,252 42 401,088 48 336,458 47 INCOME TAX EXPENSE 29,415 7 18,154 6 55,013 7 44,209 6 NET PROFIT 169,317 40 115,098 36 346,075 41 292,249 41

(Continued)

9


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)


For the Three Months Ended June 30 For the Six Months Ended June 30

2020 2019 2020 2019

Amount % Amount % Amount % Amount % OTHER COMPREHENSIVE INCOME

Items that will not be reclassified subsequently to profit or loss:

Unrealized gain (loss) on investments in equity instruments at fair value through other comprehensive income

$ 954 - ($ 2,180 ) - $ 1,372 - ( $ 4,060 ) - Items that may be reclassified

subsequently to profit or loss:

Share of the other

comprehensive loss of associates accounted for using the equity method

( 1 ) - - - ( 2 ) - - - Other comprehensive

income (loss)

953 - ( 2,180 ) - 1,370 - ( 4,060 ) - TOTAL COMPREHENSIVE INCOME $170,270 40 $112,918 36 $347,445 41 $288,189 41 NET PROFIT ATTRIBUTABLE TO:

Owners of the Company $169,317 40 $115,098 36 $346,075 41 $292,249 41 Non-controlling interests - - - - - - - -

$169,317 40 $115,098 36 $346,075 41 $292,249 41 TOTAL COMPREHENSIVE INCOME

ATTRIBUTABLE TO:

Owners of the Company $170,270 40 $112,918 36 $347,445 41 $288,189 41 Non-controlling interests - - - - - - - -

$170,270 40 $112,918 36 $347,445 41 $288,189 41 EARNINGS PER SHARE

Basic $ 2.28 $ 1.55 $ 4.66 $ 3.94 Diluted $ 2.27 $ 1.55 $ 4.64 $ 3.92

(Concluded)

10


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY



Equity Attributable to Shareholders of the Company

Other Equity

Exchange

Differences

Unrealized Gain

(Loss) on

on

Translating the

Financial

Financial Assets

at Fair Value

Through

Ordinary Shares Retained Earnings Statements Other

Shares

(In Thousands)

Amount Capital Surplus Legal Reserve Special

Reserve

Unappropriated

Earnings

Total of Foreign

Operations

Comprehensive

Income

Treasury

Shares

Total Non-Controlling

Interests

Total Equity

BALANCE, JANUARY 1, 2019 75,791 $ 757,908 $ 416,537 $ 340,160 $ 926 $ 684,180 $ 1,025,266 $ - ( $ 61,932 ) ( $ 404,238 ) $ 1,733,541 $ - $ 1,733,541 Appropriation of 2018 earnings

Legal reserve - - - 61,311 - ( 61,311 ) - - - - - - - Special reserve - - - - 61,006 ( 61,006 ) - - - - - - - Cash dividends distributed by the Company - - - - - ( 556,678 ) ( 556,678 ) - - - ( 556,678 ) - ( 556,678 )

Change in capital surplus from investments in

associates accounted for by using equity method

- - 5 - - - - - - - 5 - 5 Issuance of cash dividends from capital surplus - - ( 37,112 ) - - - - - - - ( 37,112 ) - ( 37,112 ) Net profit for the six months ended June 30, 2019 - - - - - 292,249 292,249 - - - 292,249 - 292,249 Other comprehensive income for the six months

ended June 30, 2019

- - - - - - - - ( 4,060 ) - ( 4,060 ) - ( 4,060 ) Total comprehensive income for the six months

ended June 30, 2019

- - - - - 292,249 292,249 - ( 4,060 ) - 288,189 - 288,189 Issuance of ordinary shares under employee share

options

14 142 4,583 - - - - - - - 4,725 - 4,725 Share-based payment - - 4,826 - - - - - - - 4,826 - 4,826 BALANCE, JUNE 30, 2019 75,805 $ 758,050 $ 388,839 $ 401,471 $ 61,932 $ 297,434 $ 760,837 $ - ( $ 65,992 ) ( $ 404,238 ) $ 1,437,496 $ - $ 1,437,496 BALANCE, JANUARY 1, 2020 75,834 $ 758,336 $ 404,446 $ 401,471 $ 61,932 $ 545,653 $ 1,009,056 ( $ 4 ) ( $ 65,582 ) ( $ 404,238 ) $ 1,702,014 $ - $ 1,702,014 Appropriation of 2019 earnings

Legal reserve - - - 54,047 - ( 54,047 ) - - - - - - - Special reserve - - - - 3,654 ( 3,654 ) - - - - - - - Cash dividends distributed by the Company - - - - - ( 408,466 ) ( 408,466 ) - - - ( 408,466 ) - ( 408,466 )

Changes in ownership interests in subsidiaries - - 32 - - - - - - - 32 - 32 Change in capital surplus from investments in

associates accounted for by using equity method

- - 2 - - - - - - - 2 - 2 Issuance of cash dividends from capital surplus - - ( 111,400 ) - - - - - - - ( 111,400 ) - ( 111,400 ) Net profit for the six months ended June 30, 2020 - - - - - 346,075 346,075 - - - 346,075 - 346,075 Other comprehensive income for the six months

ended June 30, 2020

- - - - - - - ( 2 ) 1,372 - 1,370 - 1,370 Total comprehensive income for the six months

ended June 30, 2020

- - - - - 346,075 346,075 ( 2 ) 1,372 - 347,445 - 347,445 Share-based payment - - 1,085 - - - - - - - 1,085 45 1,130 BALANCE, JUNE 30, 2020 75,834 $ 758,336 $ 294,165 $ 455,518 $ 65,586 $ 425,561 $ 946,665 ( $ 6 ) ( $ 64,210 ) ( $ 404,238 ) $ 1,530,712 $ 45 $ 1,530,757

11


CONSOLIDATED STATEMENTS OF CASH FLOWS



For the Six Months Ended June 30

2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES

Profit before income tax $ 401,088 $ 336,458 Adjustments for:

Depreciation expenses 20,750 19,904 Amortization expenses 7,773 7,333 Expected credit loss (gain) 2,504 ( 6,362 ) Finance costs 64 97 Interest income ( 4,679 ) ( 5,287 ) Share-based payments 1,162 4,826 Share of loss of associates 1,849 2,165 Loss on disposal of property, plant and equipment 35 - Net loss (gain) on foreign currency exchange 2,873 ( 1,591 )

Changes in operating assets and liabilities Accounts receivable 31,712 62,689 Other receivables 1,691 - Other receivables - related parties 1 ( 128 ) Prepayments ( 24,651 ) ( 24,945 ) Other current assets 825 210 Contract liabilities 20,474 ( 864 ) Other payables 8,522 ( 21,698 ) Other current liabilities 563 45 Net defined benefit liabilities ( 311 ) ( 276 ) Bonuses payable to employees and directors 50,893 35,101

Cash generated from operations 523,138 407,677 Interest received 4,750 5,262 Income tax paid ( 74,124 ) ( 92,562 )

Net cash generated from operating activities 453,764 320,377

(Continued)

12


CONSOLIDATED STATEMENTS OF CASH FLOWS



For the Six Months Ended June 30

2020 2019 CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from disposal of financial assets at amortized cost

$ 33,500 $ -

Acquisition of property, plant and equipment ( 19,712 ) ( 18,193 ) Increase in refundable deposits ( 8 ) ( 34 ) Acquisition of intangible assets ( 8,115 ) ( 9,292 ) Increase in prepayments for equipment - ( 709 )

Net cash generated from (used in) investing activities 5,665 ( 28,228 ) CASH FLOWS FROM FINANCING ACTIVITIES

Repayment of the principal portion of lease liabilities ( 1,564 ) ( 1,485 ) Exercise of employee share options - 4,725 Interest paid ( 64 ) ( 97 )

Net cash (used in) generated from financing activities ( 1,628 ) 3,143 EFFECTS OF EXCHANGE RATE CHANGES ON THE

BALANCE OF CASH HELD IN FOREIGN CURRENCIES

( 1,992 ) 885 NET INCREASE IN CASH 455,809 296,177 CASH AT THE BEGINNING OF THE PERIOD 1,263,858 1,302,003 CASH AT THE END OF THE PERIOD $ 1,719,667 $ 1,598,180

(Concluded)

13

Notice to Readers

The above financial statements are intended only to present the financial position,

results of operations and cash flows in accordance with accounting principles and

practices generally accepted in the Republic of China and not those of any other

jurisdictions. The standards, procedures and practices to review such financial

statements are those generally accepted and applied in the Republic of China.

For the convenience of readers, the previously mentioned financial statements have

been translated into English from the original Chinese version prepared and used in

the Republic of China. If there is any conflict between the English version and the

original Chinese version or any difference in the interpretation of the two versions, the

Chinese-language auditors’ report and financial statements shall prevail. For the

complete financial statements in Chinese version, please refer to MOPS:

https://mops.twse.com.tw/mops/web/index

http://mops.twse.com.tw/mops/web/index

1

Quantum Tunneling Effect of eMemory’s Security IP Solution

In figure 1, I will explain the mechanism of our NeoFuse. We invented the NeoFuse

transistor. The programing mechanism is to apply voltage just high enough to generate

a tunneling current path in the gate oxide. We call this current path quantum tunneling.

Figure 1: NeoFuse Mechanism

2

Figure 2 tells how quantum tunneling works. On the left side of the figure, it is the

physical structure of the oxide with many defects (upper) and without defects (lower)

respectively. The figure on the right is the corresponding energy band diagram. From

semiconductor physics, we know that the defect in the oxide is a trap, and in the

corresponding band diagram is the quantum well. So, if you have many quantum wells

in the oxide, it will facilitate the electron to tunnel from one well to another such that

the electron can tunnel from the substrate to the gate and contribute to the tunneling

current. For the lower figure, in the oxide without defects, it is very difficult for the

electron to tunnel from the substrate to the gate and consequently generate very little

tunneling current. And once the defect is generated, it is very difficult to recover. From

the literature, it shows that the broken bond (Si-O) needs at least more than 600

degree Celsius to recover. Therefore, the program numbers created by this

mechanism is very stable. It is resilient to voltage variation, temperature variation,

noise, and aging effects.

Figure 2: Quantum Tunneling Mechanism

3

As shown in figure 3, our NeoFuse is known for its reliability (data retention much more

than 10 years), and for being invisible and untraceable, perfect for secure storage.

This is in contrast to eFuse, the most commonly used process that uses fuse burn-out

to establish “1” or “0” in the circuit, and is highly vulnerable to reverse engineering and

data leakage.

Figure 3: NeoFuse vs. eFuse

4

In figure 4, based on our NeoFuse, we design a pair of NeoFuse transistors and apply

the voltage on their gate in parallel. When the voltage is high enough, we will see the

oxide with more defects generated begins to have higher tunneling current; whereas

the oxide with fewer defects generated has less. Thus, every time when we choose a

pair of NeoFuse transistor to compare the tunneling current during high voltage stress,

we will always see one of them, either the left one or the right one, having high

tunneling current. Like tossing a coin, you never know which side will turn up. By doing

this repeatedly, we will generate a group of random numbers which are dependent on

the variation of the gate oxides. As shown in the second figure below, the probability

of high tunneling current occurring first on the right or left is 50%. When high tunneling

current happens on the left hand side, we will define it as “1” and as “0” when it

happens on the right hand side. As our NeoPUF was based on the nature randomness

of oxide quality, we amplify the variation of gate oxide and transform them into digital

signals, which become unique fingerprint for chip itself.

Figure 4: NeoPUF Mechanism

5

In summary, our NeoPUF is built on the foundations of our NeoFuse technology and

shares the same qualities of reliability, invisibility and non-traceablility. Since we have

many NeoFuse platforms, so there are also many NeoPUF platforms that are available

and ready to be used. NeoPUF is the one and only one produced using Quantum

tunneling mechanism. This is something no other competitors or new comers can do

and catch up with. I think our NeoPUF technology will dominate the world's PUF

technology.

In figure 5 and 6, I will explain what hardware root of trust is and how our NeoPUF and

NeoFuse work as a root of trust. A root of trust must ensure that the secret key is

stored in a manner that cannot be detected and is not susceptible to reverse

engineering, guaranteeing the safety of the data. The root of trust is therefore the key

component that protects the storage of system data and maintains its integrity.

Figure 5: Hardware Root-of-Trust (HRoT)

6

Our PUFrt solution leverages our NeoPUF and NeoFuse technologies to establish a

robust root of trust. First, our NeoPUF allows us to extract a unique ID (UID) for the

chip, essentially a digital fingerprint. This UID is then stored within our NeoFuse, where

it remains securely, free from detection and the threat of reverse engineering.

Key generation, which is crucial for coding and decoding sensitive data, can be

executed through the combination of the unique ID and true random number generator.

And the keys are securely protected from physical tampering in the embedded secure

NeoFuse OTP. This helps solve the major security problems that chip designers face.

The root of trust based on NeoFuse and NeoPUF has many outstanding features: in

particular, ease of use, high speed, low power utilization, and low cost. Before the

availability of our root of trust solution, customers need to incorporate at least three IP

vendors’ IP (OTP, PUF, and TRNG) into their designs or use very expensive external

hardware random number generator. Consequently, we have strong conviction that

our PUFrt will become the future market leader due to its overwhelming competitive

advantages.

Figure 6: PUFrt

Investor Presentation · 2020. 8. 27. · This presentation contains forward-looking statements,...

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