ARM Holdings PLC · NASDAQ:ARM
ARM — Q2 2016 Earnings Presentation
27 slides from ARM's earnings presentation, 2016
Slide 1: Q2 2016 Roadshow Slides
Q2 2016 Roadshow Slides A subsidiary of
Slide 2: ARM Introduction
ARM Introduction Global leader in the development of licensable technology R&D outsourcing for semiconductor companies Innovative business model yields high margins Upfront licence fee – flexible licensing models Ongoing royalties – typically based on a percentage of chip price Technolog
Slide 3: ARM's Strategy
ARM’s Strategy Maintain or gain share in long-term growth markets From mobile phones to networking infrastructure and servers to embedded smart devices and automotive Increase value of ARM technology per smart device Invest in developing more advanced processors with higher royalty rates P
Slide 4: History of ARM
History of ARM Joint venture between Designed into first mobile Now all electronic devices can Acorn Computers and Apple phones and then smartphones use smart ARM technology 1990 1993 onwards Today 4 © ARM 2016
Slide 5: ARM-based chip shipments
ARM-based chip shipments 90bn 15.1bn 14 12 ARM-powered SoCs shipped (billions) ARM-based chips to date 10 8 6 4 2 0 1991 2015 5 © ARM 2016
Slide 6: ARM Business Model
ARM Business Model ARM develops technology that is licensed to semiconductor companies ARM receives an upfront license fee and a royalty on every chip that contains its technology Business Development ARM licenses technology to Partner Technology ARM SemiCo License Fee Partner OEM Per chip royal
Slide 7: Standard platform enables a software ecosystem
Standard platform enables a software ecosystem ARM processors are licensed to many different semiconductor companies create a standard platform shared across multiple chips from different companies Software can be run on an ARM processor regardless of who designed or manufactured the chip Stan
Slide 8: ARM's opportunity continues to broaden
ARM’s opportunity continues to broaden Semiconductor industry continues to grow – 5% by volume, 2.5% by value 80bn Chips by volume 70bn Series1 Series2 60bn Series3 Proportion of chips with processors 5% 50bn CAGR 2006-2015 is increasing – 70% in 2015 40bn 30bn 10% CAGR 2006-2015 ARM is gainin
Slide 9: ARM's main growth markets
ARM’s main growth markets Application Processors Networking & Servers Embedded Intelligence $40bn $36bn $45bn TAM 2020 TAM 2020 TAM 2020 Smartphones, tablets and laptops Base stations, routers, switches, and Automotive, white-goods, wearables, Apps processor, modem, connectivity, servers for
Slide 10: ARM's expanding opportunity
ARM’s expanding opportunity Share 2015* TAM 2015 TAM 2020 Mobile Application Processors Includes smartphones, tablets and ARM addressable laptops 85% $18bn $25bn Networking Infrastructure 15% $13bn $16bn Servers <1% $15bn $20bn Embedded Intelligence 30% $21bn $30bn Includes microcontrollers, smartca
Slide 11: ARM's expanding opportunity
ARM’s expanding opportunity Share 2015* TAM 2015 TAM 2020 Automotive Includes Automotive Infotainment 10% $10bn $15bn Other Mobile Chips Modems, WiFi/BT, GPS, NFC, sensor hubs, image sensors, eMMC, etc… 35% $13bn $15bn Consumer Electronics Includes Desktop PCs, DTVs and STBs 40% $20bn $20bn Chips in
Slide 12: Licensing enables future royalties
Licensing enables future royalties ARM signed182 licences in FY2015 ARM’s current royalty revenues are derived from licences signed many years ago Growing base yields royalty revenues over long period ~700 licences signed 1500 Significant Royalty Potential since Jan 2011 +45 from Recent Licenc
Slide 13: Licensing drives market share
Licensing drives market share ARM gains share by winning designs at leading semiconductor companies Shipping mainly ARM-based chips 2015 Share Shipping some ARM-based chips Public ARM design wins, but not yet shipping Mobile Apps Processors >85% No ARM design win or not yet public Computing* Connect
Slide 14: Delivering more value per chip
Delivering more value per chip ARM is developing more advanced technology, delivering a greater benefit to customers and generating a higher royalty percentage per chip: More capable processor command a higher royalty per chip Higher royalty for the ARMv8-A architecture Multiple processors p
Slide 15: 2020 opportunity in smartphones
2020 opportunity in smartphones Overall Smartphone Device CAGR: 6% 2020 Smartphone Chips ARM’s advanced technology 2,200 commands a higher royalty Applications percentage per chip 2,000 Processor $15-$20 5% Connectivity } $5-$10 Mali graphics based Smartphone Shipments (m, units) 1,800 CAGR Sensors
Slide 16: ARM's opportunity in networking infrastructure
ARM’s opportunity in networking infrastructure Investing today to accelerate long-term share gains Earlier scale-out Product Development Creating software deployments Network Function Applications OpenStack >75% OpenDaylight market share in wireless Linux access by 2020 Hypervisors Open vSwitch Open
Slide 17: Accelerating share in networking infrastructure
Accelerating share in networking infrastructure Market OEM selling into Current design wins Each dot represents a leading Wireless access OEM providing equipment Wireless into each market. Mobile backhaul Colour codes represent whether Wired access an ARM-based chip is the main Wired chip in the dev
Slide 18: ARM's opportunity in servers
ARM’s opportunity in servers Investing today to accelerate long-term share gains Early deployments Product Development Optimising software started AMD A1100 based SoftIron Overdrive 3000 7.1x Power Consumption Traditional Data Center Applied Micro based E4 ARKA HP ProLiant ARM-based Data Center serv
Slide 19: Accelerating share in servers
Accelerating share in servers Over 1,000 ARM-based server chips being shipped every month High Performance ARM-based servers are being tested at national labs and research institutions in several Computing (HPC) regions. Three deployments so far. Three early deployments by Tier 1 cloud companies. Cl
Slide 20: ARM's opportunity in embedded intelligence
ARM’s opportunity in embedded intelligence ARM technology Large and fast growing Diverse range of is at the heart of IoT market end-market opportunities ARM expects to gain share in a market growing at 7% CAGR Smart City Smart Home Industrial Sensor MCU Radio ARM Share: 26% >50% $21bn $30bn Agricult
Slide 21: ARM's automotive opportunity
ARM’s automotive opportunity Functional safety, consolidation, partitioning, virtualisation, performance, power, cost Autonomous driving, ADAS, Cluster, Connectivity Powertrain, chassis Body electronics, sensors, actuators, communications 21 © ARM 2016
Slide 22: ARM technology for the IoT opportunity
ARM technology for the IoT opportunity Licence and Licence and Licence and Royalty bearing Royalty bearing Royalty bearing Controller Physical IP Sub one volt radio Bluetooth RF PHY Zigbee, Thread Cortex-M Standard Link layer Cells Memory Baseband Processor controller 10-year battery life ARMv6 ARMv
Slide 23: Investing in the software platform for a secure IoT
Investing in the software platform for a secure IoT Connecting chip and device to the cloud and services Device software Device services Third party cloud services mbed Cloud IoT Cloud applications IoT device application Update Analytics and rules App management mbed clients – Provision Web servers
Slide 24: From Revenue to Profits and Cash
From Revenue to Profits and Cash FY 2015 Revenues $m £m %revs Over 95% of revenues earned in Licensing 603 394 39% US dollars Royalty 832 563 53% Software and Services 124 82 8% Royalties approximately 50% of Total 1,559 1,039 100% revenues Total Costs 500 10% move in $/£ impacts profits by ~15% Adj
Slide 25: Qtr ending Sept. 2016 – Progress against strategy
Qtr ending Sept. 2016* – Progress against strategy Licences signed Reported Royalty Units Growing for broad range of end markets 10 Cortex-M +11% for Embedded 4.0bn Intelligence 20 2 Cortex-A for Mobile, and Enterprise Q2 3 Mali IP for Mobile and Q2 FY2015 FY2016 Consumer CY2015 CY2016 Key market pe
Slide 26: Investment leading to technology adoption in Q2 2016
Investment leading to technology adoption in Q2 2016 Introducing technologies for a broad range of industry-leaders in different markets New processors for secure embedded Intel announced partnership with ARM applications such as for physical IP on 10nm foundry process Internet of Things Mali-V61 ad
Slide 27: Contact information
Contact information Contact Title Contact +44 1223 400796 Ian Thornton Head of Investor Relations ian.thornton@arm.com +44 1223 400566 Philip Sparks Investor Relations Manager philip.sparks@arm.com More content available on our website Most quarters ARM hosts a series of investor events. Recording