Phison Electronics announced today (3/11) the results of its consolidated financial results for the fourth quarter of 2020. Consolidated revenue was NT$12.84 billion, an increase of nearly 8% (QoQ) compared to the previous quarter. Consolidated revenue for the whole year of 2020 also hit a record high of NT$48.496 billion, an increase of nearly 9% from the previous year (YoY). Gross profit of the fourth quarter reached NT$2.961 billion, an 8% increase compared to the previous quarter (QoQ). In the fourth quarter, the gross profit margin not only maintained an excellent 23.06%, the overall gross profit margin for the whole year of 2020 also reached 25.25%, the second highest in the same period in history. In addition, the net profit after tax and EPS in the fourth quarter reached NT$3.784 billion and NT$19.2 respectively. The EPS affected by the benefit of Hefei Core-Storage and related expenses was about NT$12.26, meaning the regularly operated EPS in the fourth quarter was approximately NT$6.94. Furthermore, the net profit after tax and EPS for the whole year of 2020 also reached NT$8.707 billion and NT$44.14, all setting new historical highs over the same period.

Compared with the same period in 2019 (YoY), total PCIe SSD controller shipments in the fourth quarter of 2020 have grown by 42%. Furthermore, in the cumulative part of the year (1Q to 4Q), the total shipments of PCIe SSD controller have grown by nearly 82%, a record high over the same period in history; the total shipments of BGA SSD modules grew by 270%; and the total shipments of memory bits (Total Bits) grew by nearly 12%, which also set a record high for the same period in history. According to the shipment data, PCIe SSD has gradually become the main growth driver of the storage market. Whether in the Retail market, the PC market, the NB market, even the industrial market and the server market, the penetration rate of PCIe SSDs is constantly increasing. With its leading technology in PCIe Gen4 SSD controller, Phison will have the opportunity to become a major winner in this wave of PCIe SSD conversion trends.

K.S. Pua, the CEO and chairman of Phison, said that in the fourth quarter of 2020, research and development expenses accounted for 80% of overall operating expenses, and the entire year's research and development expenses reached a record high of NT$6.75 billion. The main reason is that in addition to increasing R&D investment to maintain technological leadership, Phison is also actively planning for the future growth, including the establishment of an enterprise-level SSD controller R&D center with strategic partners in Colorado, the development of new-generation automotive storage controllers with strategic partners, and the development of customized BGA SSD storage solutions for high-end portable gaming devices, and the development of industrial-grade storage solutions that meet wide temperature and high reliability, etc. We hope to create the greatest benefits for employees and shareholders through a comprehensive strategy.

K.S. Pua went on to explain that compared with the same period last year (YoY), in the fourth quarter of 2020, non-operating investments have increased profits by more than 26 times, mainly including the disposal benefit of Hefei Core-Storage of NT$4 billion. In the future, Phison will continue to expand the Chinese mainland market through the reinvestment company Shenzhen Hosin-Global. As for the part that affects gross profit due to the depreciation of the US dollar, apart from continuing to launch high-margin products and maintaining good inventory management to stabilize gross profit margin, Phison will also carefully manage the US-dollar-based assets and liabilities to reduce the impact of foreign exchange losses. In addition, Phison will also seize market opportunities through the "growth formula", and then return profits to employees and shareholders, and continue to increase R&D investment, forming a positive cycle of long-term stable profit model, and then achieve sustainable operation.