armanalystday 2012 final

7/31/2019 Armanalystday 2012 Final

1/71

1

ARM Holdings plc2012 Analyst & Investor Day

23 May 2012

London


2/71

2

Cautionary Statement ConcerningForward-Looking Statements

This presentation contains forward-looking statements as defined in section 102 of the PrivateSecurities Litigation Reform Act of 1995. These statements are subject to risk factorsassociated with the semiconductor and intellectual property businesses. When used in this

document, the words anticipates, may, can, believes, expects, projects, intends,likely, similar expressions and any other statements that are not historical facts, in each caseas they relate to ARM, its management or its businesses and financial performance andcondition are intended to identify those assertions as forward-looking statements. It is believedthat the expectations reflected in these statements are reasonable, but they may be affected bya variety of variables, many of which are beyond our control. These variables could causeactual results or trends to differ materially and include, but are not limited to: failure to realizethe benefits of our recent acquisitions, unforeseen liabilities arising from our recentacquisitions, price fluctuations, actual demand, the availability of software and operating

systems compatible with our intellectual property, the continued demand for products includingARMs intellectual property, delays in the design process or delays in a customers project thatuses ARMs technology, the success of our semiconductor partners, loss of market andindustry competition, exchange and currency fluctuations, any future strategic investments oracquisitions, rapid technological change, regulatory developments, ARMs ability to negotiate,structure, monitor and enforce agreements for the determination and payment of royalties,actual or potential litigation, changes in tax laws, interest rates and access to capital markets,political, economic and financial market conditions in various countries and regions, includingthe commercial credit environment and uncertainties arising out of the financial market and

liquidity crises, and capital expenditure requirements. ARM does not intend or assume anyobligation to update or revise these forward-looking statements in light of developments whichdiffer from those anticipated.

More information about potential factors that could affect ARMs business and financial resultsis included in ARMs Annual Report on Form 20-F for the fiscal year ended December 31, 2011including (without limitation) under the captions, Risk Factors and Operating and FinancialReview and Prospects, which is on file with the Securities and Exchange Commission (theSEC) and available at the SECs website at www.sec.gov.


3/71

3

AgendaTiming Topic

10:00 10:35 Partnering for SuccessSimon Segars, EVP & GM Product Divisions

10:35 11:00 ARMs Low Power DNATom Cronk, Deputy GM Processor Division

11:00 11:20 Break

11:20 11:40 Foundations for Leadership in GraphicsPete Hutton, GM Media Processing Division

11:40 12:00 Transforming the Data CenterIan Ferguson, Director of Server Development

12:00 12:15 Long-Term Growth OpportunityTim Score, CFO

12:15 12:45 Q&AChaired by Warren East, CEO

12:45 13:30 Buffet Lunch


4/71

4

Partnering

for SuccessSimon Segars

EVP & GM Physical IP and

Processor Divisions


5/71

5

21 Years of Rapid Transformation

>5 Billion connected people

$10 - Price of worlds cheapest phone

Mobile devices outsell PCs

Always on, always connected

2012

1991


6/71

6

1970

Collaborating to Reduce Costs

1970s

VerticalSuppliers

FullyVerticallyIntegrated

1980s

ASICVendors

SystemManufacturer

ASICVendor

1990s

FablessSemis

Design &Distribution

Manufacture

EDA

2000s

IP DrivenDesign

Design

EDA

IP

Manufacture

FabEquipment

Design

IP

ManufactureFab

Equipment

EDA

Design & Verification

Design ForManufacturing

1980 1990 2000 Today

Transistor Count

Design Cost

RelativeIncrea

se

LogarithmicSc

ale* Industry disaggregating into

specialist players lowers cost Close collaboration required

to align goals and roadmaps

*ARM estimates


7/717

Partnering for Success

ARMs business model enables an ecosystem of companies to succeed

Efficient

Scalable

Resilient

ARM is at the nexus of an ecosystem of 100s of companies

Choice

Innovation

Differentiation

ARMARM

Business Development

ARM

royalty

ARMChip

Designer

OEM

Customer

License


8/718

Increasing Capability, Low Cost

Partnership approach enables innovation and increased

capability at very low cost

1991

2001

2011

Analog baseband $n/a

Apps Processor $102.5G Baseband $10

Integrated Apps/BB $15Integrated WiFi/BT $5Touchscreen, camera, etc. $2

CPU $250

CPU $200

CPU $100Integrated WiFi/BT $5HDD $5

Main Chip Cost Main Chip Cost

2016

Application Processor $20LTE Modem $10Integrated WiFi/BT $3Touchscreen, camera, NFC, etc. $5

Application Processor $20LTE Modem $10Integrated WiFi/BT $3Touchscreen, camera, NFC, etc. $5


9/719

Driving the Next Five Years of Transformation

MobileComputing

Servers

The Internetof Things

Connectivity


10/7110

2012-2016 Mobile Computing Trends

Great user experience across segments

Right-sized computing

Approximately 1 server for every 600 phones

More pixels, more screens

Securing your mobile device

LTE redefining connectivity


11/7111

0

200

400

600

800

1,000

1,200Tablets

Superphone

Mass Market Smartphones

Entry Level Smartphones

Increasing Performance, Low Power

Source: Gartner Q3 2011 Forecast

RelativePerformance

Volume(M

u)

ARM 11

Cortex-A8

Cortex-A8

2x Cortex-A92 x Mali-400


1x Cortex-A9Mali-400

1x Cortex-A5

Mali-300


2x Cortex-A152 x Mali-T604

2x Cortex-A15/Cortex-A7

4 x Mali-T658



0

2

4

6

8

10

12

14

16

18

20

2008 2009 2010 2011 2012 2013 2014

200

400

600

800

1,000

1,200


12/7112

Smart Connected Device Opportunity

PowerManagement

WiFi/ Bluetooth

AppsProcessor

CellularModem

CameraSIM

GPS

TouchscreenController

FlashController

SecureCore (Cortex-M)

Cortex-M

65/45nm

Cortex-M

65/45nm

Cortex-A

Cortex-M

180nm

Cortex-M65/45nm

Cortex-R

65/45nm

Cortex-M

130nm

Cortex-M

90nm

Cortex-A

Cortex-M

Mali

32 14nm

ARM Processor

ARM Physical IP

Function


13/7113

Advancing Windows 8 on ARM Windows 8 continues our long history of collaboration with

Microsoft. This year so far Microsoft:

Detailed the features of WOA on the Building Windows 8blog, plus details on WOA for enterprise BYOD scenarios

Confirmed dedication to bringing Windows RT to market as aunique part of the Windows 8 family

ARM processor based devices combined with Windows RT willdeliver a compelling and productive, no compromise experiencefor consumers and enterprises who want a PC that is designed tobe:

Ready and connected

Thin and light

Great battery life

Integrated quality with consistent performance


14/7114

Estimated 20x increase in network traffic

IT is the business

Density, power and cost over raw perf.

One size no longer fits all

Optimized highly integrated SoCs

Open source and end user S/W

2012-2016 Cloud Computing Trends


15/7115

Always connected, always on

All about sensors and user control

Smart appliances everywhere

Personal information at your fingertips

Representing data in a meaningful way

2012-2016 Internet of Things

1 trillion internet connected devices by 2025


16/7116

3m small cells forecast (2016)

2012-2016 Mobile Infrastructure Trends

Heterogeneous form factors

Rapid deployment of new services

Server capacity at edge

Scalable processing

Open software platforms

3G

4G2016

Macro

Micro

Small cell


17/7117

Organising For Success

Collaboration is the Key


18/71


19/7119

Organising for Multi-core Chip Design

Advanced system-on-chip designs

1-2GHz multi-core ARM processors 1-2 additional specialist processors

100-200mW when running typical applications

$10-$20 price range

ARM develops processors, physical IP andsystem components to work together

Partners with EDA and foundry to ensuremanufacturability

Partners with OS and applications/games developers

to ensure optimised content available for OEMs

Semiconductor companies create valuethrough differentiation around ARMtechnology subsystem


20/7120

Organising for 20nm and 14nm

ARM and Partners work with leading

foundries to enable high yields onadvanced manufacturing processes

Process development provides multi-Vt andstrain for performance

Processor, system design, physical IP, tools

and manufacturing process enablespower-reduction design techniques

20nm progressing at leading foundries

Multiple test chips already taped out,

including dual-core Cortex-A15 Production expected in 2013 ready for

big.LITTLE and ARM v8-A processors

14nm first tape outs in 2013

20nm PowerReduction Techniques

Leakagepower

Dynamicpower

Area optimization 1.1X 10%

Multi-Vt optimization 6X 0%

Clock gating 0X 20%

Multi-supply voltage 2X 40-50%

Power shut-off 10-50X ~0%

Dynamic and AdaptiveVoltage Frequency Scaling(DVFS and AVS)

2-3X 40-70%

Multi-channel standardcells

5X -


21/7121

Organising for Ecosystems

Delivering on all the benefits of differentiation with a common

architecture and a software tool chain scaling from servers tosensors

300 Semiconductor Partners

20 Foundries150 Development board vendors

150 Design services

75 Tools providers

200 OS and middleware

100 Apps developers


22/7122

Smarter Consumer Electronics

Mobile Computing: Windows 8

Microcontrollers: IoT and Sensors

Networking Infrastructure and Clients

Servers: Data Center Applications

Entry-level and Super Smartphones


Disaggregated partnership model has demonstrated

efficiency and scalability through industry cycles No one can do it all best technology needs team work

Everyone benefits from being a part of a rich ecosystem

Leaving space for all companies to make a profit
http://images.google.com/imgres?imgurl=http://www.bpesolutions.com/pgimages/robotarm2.jpg&imgrefurl=http://www.bpesolutions.com/photo7.html&h=394&w=558&sz=27&tbnid=G8euluzq9JeuLM:&tbnh=92&tbnw=131&hl=en&start=1&prev=/images?q=robot+arm&svnum=10&hl=en&lr=


23/71

23

ARMs Low

Power DNATom CronkDeputy GM

Processor Division


24/71

24

Low Power DNA

ARM processors have always been designed

to be energy efficient Each generation required more computing, but

battery density wasnt improving quickly

Focus of the company has been on computeefficiency, balancing Performance, Power and Area

Foundations of low-power design

Instruction set architecture

Processor micro-architecture

System design

Implementation

Operating systems and software

Partnership and ecosystem


25/71

25

Scalability of the ARM Architecture

Low power foundation enables ARM processor

technology to scale from sensors to servers Software compatibility makes it easier to scale up

Lower power processors enables a more integratedsystem-on-chip

Power efficiency is important for all applications

More attractive system design thinner and lighter

Lower cost plastic chip packaging, no heat sink orfan, cheaper components

Lower energy use reduced running costs andcarbon footprint

New product categories wireless sensorswith 15 year battery life

infrastructure

consumer

mobile

microcontrollers

sensors


26/71

26

Cortex-A15 Low Power Computing

Cortex-A15 is ARMs highest performance

applications processor to date Delivers 2x performance of a current super

smartphone in same low-power envelope

Can deliver up to 8x performance for mobilecomputing applications

Wide range of end markets

Consumer electronics digital TVs, mobile computers

Enterprise computing servers, cloud, networking

16 leading semiconductor companies licensed

Note: Relative performance based on estimates and targets for Cortex-A15 in mobile and tethered implementations

RelativePerformance

1

Cortex-A8

1.5 GHz SingleCortex-A15

20

10

5

15

1.2 GHz DualCortex-A9

1.5 GHz DualCortex-A15

2.0 GHz QuadCortex-A15Seahawk

Currentsmartphones


27/71

27

Cortex-A7 Low Power Mobile

Cortex-A7 is ARMs most power-efficient

applications processor to date Up to 1/5th the size and 5x energy-efficiency of

Cortex-A processors in todays smartphones

Multi-core capable delivering higher performancethan majority of todays smartphones

Small size enables cheaper chips for low costconsumer electronics

$5-10 apps processor for sub $100 smartphone

14 leading semiconductor companies licensed

2013, Entry-Level SmartphoneCortex-A7, 28 nm, 1.2 GHz


28/71

28

Low Power Mobile Computing

Cortex-A15 and Cortex-A7 are functionally identical

Same programmers view, looks the same to OS and applications

big.LITTLE processing high-performance and low power

Automatically selects the right processor for the right job

Redefines the efficiency/performance trade-off

11 leading semiconductor companies licensed both

big

Demanding tasks

LITTLE

Always on, always

connected tasks20% of the Power

Currentsmartphone

big.LITTLECurrentsmartphone

big.LITTLE

>2x Performance


29/71

29

Performance and Energy Efficiency

Right processor doing the right job

Transparent to operating systems and applications Compatible with current OS power management mechanisms

100,000s applications already optimised for Cortex-A

0%

20%

40%

60%

80%

Internet radio OS/UI activity Casual Gaming HD gaming Rich webservices

Energy saved versus todayshigh-end multicore phones

LITTLE cluster activity

Cortex-A7Big cluster activity

Cortex-A15

* Dual Cortex-A15 + Dual Cortex-A7 big.LITTLE system estimate in 32/28nm

compared with a dual-Cortex-A9 system estimate in 40nm

Energys

aved

Cortex-A15 MPCore

L2 Cache

CPUCortex-A7 MPCore

L2 Cache

Coherent Memory and System

CPUCPU CPU

Shared Resources

Firmware

OS

Power Management Software

Applications andMiddleware


30/71

30

Energy Efficient Chip Design

Designing systems-on-chip for low-power

Transferring data to/from external memory takes 10x more

power than moving internally

ARMs smart interconnect and system components balancethe demands of multiple asymmetric processors withwidely differing memory requirements

Building the most energy efficient chips

ARM partners with leading foundries to develop advancedphysical IP for desired balance of power, area, size and yield

Memories

Low power or highspeed

Multiple power modes

Multi-Vt construction

Standard Cells

Multi-Voltage andmulti-channel cell libraries

Optimized cells

Processor Optimization Pack

Optimized physical IP

Specific for processor andfoundry process

Interface

Integrated DDR PHY

Low power operating modes

Architected for low power

Power Management Comprehensive components

for low power implementation

Multi-voltage characterization

GPU

Renderer

Geometryprocessor

Tiling

GPUGeometryprocessor

Tiling

Renderer

GPUGeometryprocessor

Tiling

Renderer

GPU

Primitives Primitives Tile lists

Framebuffer

Texture

DisplayController

ImageTransform

Mediasource

Code

Networkinterface

buffer

AudioCODEC

peripheral

peripheral

peripheral

peripheral

ApplicationMemory

buffer

DMAController

StaticMemory Ctrl

DynamicMemory Ctrl

Interconnect

CPU

MotionEstimation

MotionCompensate

Video

Geometryprocessor

Tiling

Renderer

Mass

Media

Commscontrol

Appsprocessor

CPU

Apps

processor

Commscontrol

CPUCommscontrol

Appsprocessor

CPUCommscontrol

Appsprocessor


31/71

31

Energy Efficient Ecosystem

A low power partnership - 100s of companies specialising in

low-cost and energy-efficient technology Best of breed comes from combining different DNA

Fabless designer

Foundry manufacture

EDA vendor

Software tools

Operating systems

Application software

Low-power foundation delivers high performance andmaximum battery life

Software engineers can take advantage of a system designed for low-power from processor architecture to manufactured chip


32/71

32

Right Performance at the Right Power

Cortex-M0+ is >2x energy efficient as any other processor

Mobile technology know-how applied tomicrocontrollers

New markets: connected sensors,internet of things, medical devices, etc.

64-bit Support

CryptographySupport

Computing, consumer and enterprise applications all need 64-bit support.

Brings >4GB virtual memory and IO support, higher performance with more registersand also double-precision floating point support

Ubiquitous connectivity and content consumption requires security leading to mosttransactions being encrypted

Acceleration gives 10x performance improvement for authentication/encryption algorithms

Cortex-M0+at


33/71

33

ARMs Low Power DNA

For over 20 years ARM has developed the foundations

for energy-efficient chip design From architecture to system design to operating systems

Close collaboration with Partners

big.LITTLE brings higher performance and lowerpower to smartphones and mobile computers

Right performance at the right power level is scaling

ARM technology from sensors to servers


34/71

34

Foundations for

Leadership in GraphicsPete Hutton

General Manager, Media Processing Division

Th I f G hi


35/71

35

The Importance of Graphics

Graphics capability becoming a key

factor in consumer purchasingdecisions

Rich graphics a priority for anything

with a screen Smartphones, DTVs, STBs, Tablets,

hand-held games consoles,In-Car entertainment

Large and growing market for GPUs

4 billion internet connected screensin 2016, most with embedded graphics

F d i f G hi L d hi


36/71

36

Foundations for Graphics Leadership

Mali is the most widely licensedgraphics processor

60 licenses; 48 partners

32 licenses for Mali-400, 7 Mali-T600

High volume design wins

High-end & entry-level smartphones

Tablets and mobile computers

Digital TV and set-top-boxes

Malis leadership position

#1 in Digital TVs (>70%)

#1 in Android tablets (>50%)

>20% Android smartphones

Mali share gains continue asmultiple Partners ramp to volume

12 partners shipped 48m units in2011

Expecting 25 partners to ship totalof over 100m units in CY2012Mali Processor

Licenses

+8

+14

+11

2007 2008 2009 2010 2011 Q1 2012

60

+2

+4

+19

M li L d hi i DTV


37/71

37

Mali: Leadership in DTV

Cortex-A9 and Mali-400 chosen by majorityof consumer electronic OEMs

Samsung and LG building chips for own DTVs

Strong adoption with China DTV OEMs

Multiple DTV/STB silicon partners driving

design wins and volume for Mali Samsung, LG, Mediatek, Mstar, ST, Amlogic

Leadership for Mali in DTV through

Performance density leadership in graphics Maturity and quality of software and support

Next generation Tyr designed to extendleadership position

M li R d t L d hi I M bil
http://www.hisense.com/en/


38/71

38

Mali: Roadmap to Leadership In Mobile

0

200

400

600

800

1,000

1,200Tablets

Superphone

Mass Market Smartphones

Entry Level Smartphones

RelativePerformance

Volume(M

u)

ARM 11

Cortex-A8

Cortex-A8

2x Cortex-A9

2 x Mali-400

4x Cortex-A9

4 x Mali-400

1x Cortex-A9

Mali-400

1x Cortex-A5

Mali-300

2x Cortex-A5

2 x Mali-400

2x Cortex-A15

2 x Mali-T604

2x Cortex-A15/

Cortex-A7

4 x Mali-T658

2x Cortex-A7

2 x Mali-400

4x Cortex-A7

4 x Mali-400

0

2

4

6

8

10

12

14

16

18

20

2008 2009 2010 2011 2012 2013 2014

200

400

600

800

1,000

1,200

#1 graphics in Android tablets

Android, the fastest growing mobile OS

Mali-400 shipping in volume today

Momentum in smartphones with Samsung,Mediatek, Spreadtrum, Mstar, Rockchip

Right technology roadmap for the right markets

Best graphics for fast growing entry-level smartphones market

Best graphics and GPU compute for high-value apps processors in smartphones

O Si D N t Fit All


39/71

39

One Size Does Not Fit All

Market requirements are bifurcating

Advanced graphics for CE and mobile

Higher screen resolutions

Richer, more complex user interfaces,applications and games

Graphics and GPU Compute formobile computing

Enabling next generation use cases Combine ARM and Mali processors

into a unified computing sub-system

Roadmap aligned with market to giveuncompromised choice balancing

Die area (cost and yield)

Compute capability

Software requirements

Extend Mali leadership in graphicsperformance, power and cost

Performance

Graphics and GPU Computing

Graphics

2009 2010 2011 2012 2013

B t f G hi


40/71

40

Best for GraphicsPerformance

2009 2010 2011 2012 2013

Mali-400 MPFirst OpenGL ES 2.0 multicore GPUScalable from 1 to 4 coresLow cost solution with Mali-300

Mali-200OpenGL ES 2.0compliant

TyrDate of production chips

Best balance of graphicsperformance, power and cost

Emerging graphics in DTV/STBmarket

Fastest growing entry-level andmid-range smartphone markets

Protecting partner investments

Common software platform reducescosts and TTM

Multicore delivers performancescalability over multiple form factors

Roadmap for further share gains Tyr will drive volume in next

generation products in CE andmobile markets

B t f G hi d f GPU C t


41/71

41

Best for Graphics and for GPU ComputePerformance

2012 2013 2014

Mali-T604First Midgardarchitecture product

Scalable to 4 cores

Mali-T658High end solutionMaximum computecapability

Skrymir

Date of production chips

Designed for GPU Compute

Uncompromised support for OS / API

choiceCloser CPU-GPU links

Efficient use of all device resources

Maximize performance and batterylife

Protecting partner investments Common software platform reduces

costs and TTM

Multicore delivers performancescalability over multiple form factors

Roadmap for further share gains

Mali-T600 silicon shipping inconsumer products H2 2012

Skrymir driving design wins in nextgeneration super-smartphones andmobile computers

C h i GPU C t S t


42/71

42

ARMs best-in-class CPU know-how combined with expertisein graphics technology is enabling complex use-cases

Computational photography: eg, Panorama stitching

Image recognition: Face, smile, landmark, context

Image improvement, stabilization, editing, filtering

Extensive application developer support for Mali

Full range of GPU Compute OS & programming interfaces supported

Ease of programmability key to application developers being able toutilize advanced technology

Comprehensive GPU Compute Support

Leading on Lo ering S stem Po er


43/71

43

Leading on Lowering System Power

Mali GPUs are industry leading in balancing

power, area and functionality ARM focuses on system wide power

efficiency not just individual IP components

Coherency between ARM and Mali processors

System components to minimise contention andoff-chip memory access

System-wide power management policies toslow down or shut down components when notneeded

Additional power reduction from optimisedPhysical IP (Graphics POPs) and systemmodelling in development systems tools

Mali Ecosystem Strength


44/71

44

Mali Ecosystem Strength

Focus on software ecosystem

Gaming and User Interface

Games developers build on top ofcommon engines

Optimizing these engines for Maliensures quicker, easier

development

Focus on developers

Free tools, content, demos, whitepapers, low cost board programs

Enabled through web portal

Tools to optimize the wholesystem

Software Partnerships


45/71

45

Software Partnerships

ARM GPU roadmapenables partner choiceand flexibility on software

Partnerships in place toenable a leadership

position

Foundations for Leadership in Graphics


46/71

46

Foundations for Leadership in Graphics

Any consumer product with a screen represents aMali opportunity

Mali-based devices are in a leadership position

#1 in DTV and Android tablets

Over 100M units of Mali-based chips expected toship in CY2012

Right technology roadmap for the right markets Best graphics for fast growing markets

such as entry-level smartphones and DTV

Best graphics and GPU compute for

high-value apps processors in smartphonesand mobile computing

Next generation Mali-T600 shipsin high volume CE products in 2012


47/71

47

Transforming

the Data CenterIan Ferguson

Director of Server Systems

Data Centers Are Energy Constrained


48/71

48

Data Centers Are Energy Constrained

Server infrastructure is primarygenerator of profit for social

networking and hostingcompanies

Server optimization is critical

to maximize revenue andminimize running costs

Power budget cannot beincreased limiting throughput

Open source software can beadopted to save cost

Facebook Data Center: North Carolina, USA

Note: Logos and photo denote representative data centercompanies. No specific commitment of companies to

adopting ARM technology should be inferred

Social Networking Cloud Hosting

Data Center Workloads for ARM Platforms Today


49/71

49

Data Center Workloads for ARM Platforms Today

Data center workloads differ fromtraditional servers

Less CPU intensive

Dedicated to small number oftasks running sporadically

Appropriate for ARMs current

Cortex processor technology 64-bit extends the opportunity

Light scale-out examples

Static web servers Content delivery, i.e. video, music

Large distributed memory caching

Simple search systems (Hadoop,offline data analytics etc)

Source: HP, Project Moonshot Launch,November 2011

100%50%0%-50%-100%

Cost

Power

Space

Lightscale-out

MainstreamWorkloads

ComputeIntensive

Advantageous for ARM Microservers

ARM Technology in the Data Center


50/71

50

Networking StorageCompute

ARM Technology in the Data Center

Data center applications consist of compute, networking andstorage functionality

Partnership business model enables efficient integration ofmultiple subsystems

Hadoop

Management and search ofunstructured data. Scalable

across many processorsnodes

Content delivery

Content delivery networksserve content to end userswith high availability. Powerdown when inactive

Integrated:

- Access to Infiniband, SAS- DDR3 interface

Webserver

Platforms that serve upWeb pages. Maintain datasecurity between URLs I

ncreasingPerformance

Multi-coreCortex-A9 or A15

Multi-coreCortex-A9 or A15

V8-A for latencysensitive systems

Many-coreCortex-A15 or v8-A

Video coprocessors

Encryption engines

Integrated:- 1Gbit Ethernet interface- USB interface

- Processor node interconnect

Same

Same

Integrated:- SATA interface- DDR3 interface

ARM Partnership in the Data Center


51/71

51

ARM Partnership in the Data Center

Calxeda Server

Node

4GB

DRAM

Quadcore Cortex-A9

1.2GHz

5W power including 4GBDRAM

Integrated server fabric

PCIe GbE

USB 2.0

Up to 32, 64-bit cores perSoC. 128 coherentprocessors per system

3GHz

Network processors

PCIe

SATA

10GbE

Quadcore Cortex-A15

Integrated DSPs

SRIO

PCIe

4 x 1GbE

A New Ecosystem From 2011
http://www.ti.com/hdr_home


52/71

52

Future

Ecosystems are built and evolve over many years

Identify, educate, and create relationships with enterprise S/W cos

Invest in the s/w components not covered by existing ecosystem

Reuse our existing ecosystem to expand our software reach

A New Ecosystem From 2011

To gain share in servers ARM is partnering and investing withthought leaders to create a new ecosystem

2008 2009 2010 YTD

ARM and Marvelldemonstrate

ARM based server

Exploratoryserver R&D

and marketingteam set up

Invest instart-up

Cortex-A15launched

ServerVirtualisation

software

Start dialoguewith semis

OEMs and S/W

Key strategicapplications

OEMs and S/Wexperimenting

ValidatingTCO benefits

ARM based chipsdeveloped for servers

ARM based serversinitially into niche

applications

Enterprise OSsand runtimes

optimised for ARM

A New Ecosystem Today


53/71

53

Critical software pieces now in place to enable initial platform shipments

Commercial grade server Linux

Performance optimized Java compiler, including offline data analytics

Prototype ARM Powered hardware demonstrated running server Linux

OEMs expected to ship first ARM based server products H2 2012

A New Ecosystem Today

To gain share in servers ARM is partnering and investing withthought leaders to create a new ecosystem

2008 2009 2010 2011

ARM and Marvelldemonstrate

ARM based server

Exploratoryserver R&D

and marketingteam set up

Invest instart-up

Cortex-A15launched

ServerVirtualisation

software

Start dialoguewith semis

OEMs and S/W

Key strategicapplications

OEMs and S/Wexperimenting

ValidatingTCO benefits

ARM basedserver chips

demonstrated

ARM basedserver shipments

YTD Future

Enterprise OSsand runtimes

optimised for ARM

Readying 64-bit Server Ecosystem


54/71

54

Readying 64-bit Server Ecosystem

ARM 64-bit S/WDevelopment Boardfrom Applied Micro

Initial software release of tools and Linux code into opensource community scheduled for mid 2012

ARM focused on enabling choice at allstages of the ecosystem.

Silicon partners

Operating systems

Hypervisors

Optimized application stacks and tools

Partnering with semiconductor licensees toaccelerate availability of 64-bit ecosystem

ARMs Server Opportunity


55/71

55

ARM s Server Opportunity

Energy constrained servers are driving innovative low-power architectures/platforms

ARM is well placed to take advantage of this transition

Twenty+ year history of developing energy-sipping processors

Business model that enables highly optimized SoC development

Critical mass to deliver the software ecosystem

Market size ~50M servers deployed

Opportunity for ~4 ARM Powered SoCs per server system

First ARM 32-bit servers ship in H2 2012

First ARM 64-bit servers ship in 2014

20% server market addressable by ARM in 2015

ASP range from $50-200 (one size does not fit all)


56/71

56

Long-Term Growth

OpportunityTim Score

Chief Financial Officer

Overview


57/71

57

Overview

Installed license base drives todays royalties

Impact of incremental licensing on future royalties Assessing future market share gains

Increasing royalty percentage per chip

Decreasing effective tax rate

Summary of long-term financial opportunity

Past Licensing Drives Todays Royalties


58/71

58

Past Licensing Drives Today s Royalties

ARMs current royalty revenues are derived from licensessigned many years ago

99.5% of 2011 royalties came from licenses signed 2008 or earlier

Licenses signed 2009-2011 only just starting to contribute

Cortex-A family and Mali in early days

ProcessorLicenses

+62

+61

+87

+91

2006 2007 2008 2009 2010 2011

~870

+121

+66

Q1-12

+22

$0m

$50m

$100m

$150m

$200m

$250m

$300m

$350m

$400m

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2011

2006-10

2001-05

Pre-2001

~100 Licenses

~280 Licenses

~140Licenses

~350

320 most recent licensesare drivers of future royalty

Licensing Increases Market Opportunity


59/71

59

Q1 2012

2011

Licensing Increases Market Opportunity

Application Penetration of KeyCompanies Products

2011ShareShipments

Smartphone Apps >95%

Mobile Computer Apps* 20%

Mobile Modems 100%

Mobile BT 80%

Mobile WiFi 70%

Digital Camera** 80%

Digital TV / Set-Top Box 40%

Networking 30%

Printers** 65%

Disk Drives (HDD & SSD) 90%

Automotive 7%

Smart Card 10%

Microcontrollers 15%

3D Graphics 6%

Public ARM design wins, but not yet shipping

Shipping mainly ARM-based chips

Shipping some ARM-based chips

No ARM design win or not yet public

* Includes handheld computers, tablets, and laptops

**Based on OEM market share rather than semiconductor vendor

ARM gains share by winning designs at leading semiconductor companies

Based on current market sharesand ARMs view of how thesemarkets may develop.

ARM will update the chart on the leftonly as design wins become public

9 companies re-equipped

1 company re-equipped

2 new design wins

1 new design win



2 companies re-equipped

Todays Licensing Drives Future Royalties


60/71

60

Today s Licensing Drives Future Royalties

ARM needs to win 108 majordesigns to gain an >80% sharein all target markets.

Companies with multiple divisions

may have multiple designs forARM to win.

There are 40 companiesrepresented in this chart.

49221225





Todays Licensing Drives Future Royalties


61/71

61

Today s Licensing Drives Future Royalties

License status at the end of Q1 2012





49221225





2012-16 Licensing Drives Future Gains


62/71

62





2012 16 Licensing Drives Future Gains

6222186





ARMs expectation of design wins over next five years, based on feedback from commercialteams. For the purpose of this analysis, no change in relative market share has beenassumed.

Licensing is a Precursor to Share Gain


63/71

63

Licensing is a Precursor to Share Gain

Increasing design and ecosystem costs encouragesemiconductor companies to continue to outsource IP

ARM exposed to multiple growth markets

Expect to retain share in markets that are well penetrated

ARMs market share expected to increase in growth markets

Market 2016 Share 2016 Market 2020 Share 2020 Market

SmartphoneApplications Processor

>90%

Mobile ComputerApplications Processor

40-60%

Servers 5-10%

Digital TVs / STBs 70-80%

Microcontrollers 30-40%

TOTAL* 40-50% * Share excludesnew markets

2016 - New Market Opportunities


64/71

64

2016 New Market Opportunities

Analog: 100 billion chips shipped each year.Analog with ARM processor delivers intelligent sensor for Internet of Things

Memory: 35 billion memory chips shipped each yearMemory with ARM processor improves reliability at smaller geometries





Major design opportunities+200

62

2218+100

ARM technology is becomingrelevant to new customers and inmore markets including:

Internet of Things Medical applications

Mesh networks

Sensors

Smart memory

More ....

Delivering More Value Per Chip


65/71

65

Delivering More Value Per Chip

Relative Royalty Percentage per Chip

MultipleProcessors

& Mali

Cortex-AARM7/9/11

Potential~3x increasein royaltypercentage

MultipleProcessors

MultipleProcessors

& Mali &Physical IP

waferroyalty

waferroyalty

NextGeneration

Mali

v8

ARM is developing more advanced technology, delivering a greater benefitto customers and generating a higher royalty percentage per chip:

More capable processor Cortex-A family in early days of penetration Multiple processors per chip Mali started shipping recently, big.LITTLE shipping 2013

Physical IP penetration more design wins at smaller geometries

Higher royalty for v8 architecture production ramp starting in 2014

Effective Tax Rate Decreasing


66/71

66

Effective Tax Rate Decreasing

ARMs effective normalised tax rate is expected to decrease

UK Corporation Tax rate reducing to 23% from April 2013 and to22% from April 2014

Patent box introducing 10% tax rate from April 2013

Patent box applies to qualifying profits

Phased introduction: 60% of the benefit applying to qualifying profitsfrom April 1 2013, increasing in 10% increments per annum

Covers patents granted by UK IPO and European Patent Office

Applies to existing as well as new IP, and to acquired IP

2008 2009 2010 2011 2012

Tax rate could decline 1-2% per year from 2013*

2013 2014 2015 2016

28% 27% 25% 25%

2017

* Before potential reclassification of R&D tax credits


67/71

Summary


68/71

68

Summary

Reach of ARM technology broadening rapidly

Growing installed license base drives long-term royaltyopportunity

Royalty percentage per chip increasing over time

Effective tax rate decreasing

Revenue growth and operating leverage drives marginexpansion and earnings growth


69/71

69

Concluding Remarks

Warren East

Chief Executive Officer

The Architecture for the Digital World


70/71

70

Greater BenefitsDelivers

Higher Royalty

6

Low Power Mobile Computing

Cortex-A15 and Cortex-A7 are functionally identical

Same programmers view, looks the same to OS and applications

big.LITTLEprocessing high-performance and low power

Automatically selects the right processor for the right j ob

Redefines the efficiency/performance trade-off

11 leading semiconductor companies licensed both

big

Demandingtasks

LITTLE

Alwayson,alwaysconnectedtasks

20%of the Power

Currentsmartphone

big.LITTLECurrentsmartphone

big.LITTLE

>2xPerformance

The Architecture for the Digital World

PartneringFor Success

NewCustomers

NewMarkets

GrowingOpportunity

4


ARMs business model enables an ecosystem of companies to succeed

ARM is at the nexus of an ecosystem of 100s of companies

Efficient

Scalable

Resilient

Choice

Innovation

Differentiation

ARMARM

BusinessDevelopment

ARM

royalty

ARMChip

Designer

OEMCustomer

License

11

Always connected, always on

All about sensors and user control

Smart appliances everywhere

Personal information at your fingertips

Representing data in a meaningful way

2012-2016 Internet of Things

1 trillion internet connected devices by 2025


71/71

Q&A

armanalystday 2012 final

Documents