Slide 1: Synaptics to Acquire Rights to Broadcom's Wireless IoT Connectivity Business
Synaptics to Acquire Rights to Broadcom’s Wireless IoT Connectivity Business July 7, 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Forward-looking statements give our current expectations and projections relatin
Slide 3: Strategically Compelling Transaction
Strategically Compelling Transaction Adds best-in-class Wi-Fi, Bluetooth, and GPS solutions • Strong existing business with tier-one OEMs and broad base customers Immediate footprint and leadership in the fast growing wireless IoT connectivity market • Well-positioned to capitalize on 10%+ CAGR mark
Slide 4: The IoT Design Opportunity
The IoT Design Opportunity CONNECTIVITY Wi-Fi Display Bluetooth Driver GPS Touch Controller EDGE SoC Audio Codec Voice Video Vision © 2020 Synaptics Incorporated 4
Slide 5: Extend and Deepen Leadership in IoT Markets
Extend and Deepen Leadership in IoT Markets Existing Synaptics IoT Portfolio Target Applications Wireless IoT Connectivity Additions Edge Computing SoCs Smart Media Smart Display Assistants Streamers Wi-Fi 4, 5, 6 & 6E High-Speed Video Interface Docking Station TV Automotive Bluetooth 5 & BLE Digita
Slide 6: Significant Addressable Market Expansion with Room to Grow
Significant Addressable Market Expansion with Room to Grow Synaptics SAM Today Proforma SAM with Wireless IoT Connectivity Connectivity 9% CAGR 7% CAGR IoT IoT $5B $6B+ $8B $11B+ SAM SAM SAM SAM 2019 2023 2019 2023 IoT IoT Source: Industry analysts, Omdia Research, and Synaptics management estimates
Slide 7: Technology Competitive Landscape
Technology Competitive Landscape Focused on IoT ✓ Focused on IoT ✓ Best-in-class Performance ✓ Integrated Connectivity w/ GPS Full Suite ✓ Lowest BOM Wi-Fi Best-in-class Bluetooth Performance GPS © 2020 Synaptics Incorporated 7
Slide 8: Long Technology Runway
Long Technology Runway Increasing Addressable Market Wireless IoT Connectivity Portfolio Wi-Fi 6, 6E Wi-Fi 4, 5, 6 & 6E 802.11b 802.11g 802.11n 802.11ac & Beyond Bluetooth 5 & BLE GPS L5 / GNSS Co-developed IoT roadmap products 1999 – 2003 – 2009 – 2014 – 2019 – Maintain Technology Leadership & Firs
Slide 9: Transaction Overview
Transaction Overview • Acquiring certain Broadcom Wireless IoT Connectivity rights and assets Transaction • Additional co-developed roadmap products purpose-built for IoT • Limited exclusivity for three years Consideration • $250M total consideration at closing • Expected to close during Synaptics f
Slide 10: Redeploying Capital to Accelerate Growth
Redeploying Capital to Accelerate Growth $711 TDDI Divestiture $139 $250 Wireless IoT Connectivity Revolver Draw $100 Transaction $472 $472 $461 Remaining cash balance Post- Transaction Q3'20 Ending Available Balance Post-Transaction Cash balance Cash balance See 10Q for F3Q20 filed on May 7, 2020.
Slide 11: Accretive to our Financial Model
Accretive to our Financial Model Wireless IoT Long-Term Model Connectivity Revenue +4-6% Non-GAAP Gross Margin >50% Non-GAAP Operating Margin ~20% Long-term financial model as presented on June 9, 2020 Accelerates Synaptics Ability to Achieve Long-Term Financial Model © 2020 Synaptics Incorporated 1
Slide 12: Accelerating Synaptics Transformation to an IoT Leader
Accelerating Synaptics Transformation to an IoT Leader YTD Synaptics Pro Forma with Long-Term Revenue Mix Wireless IoT Model IoT IoT 28% 33% IoT 40% Connectivity YTD Synaptics: Q1-Q3’20 FY2020 Net Revenue less divested LCD TDDI Net Revenue Pro Forma: Expected Net Revenue from transaction in addition
Slide 13: Closing Summary
Closing Summary Accelerates Synaptics’ IoT growth and long-term diversification strategy Adding $3 billion SAM opportunity at 10%+ CAGR Best-in-class solutions today and roadmap tailored to IoT applications Immediately accretive to non-GAAP earnings Source: Industry analysts, Omdia Research, and Syn
Slide 14: Q&A
Q&A © 2020 Synaptics Incorporated 14