Silicon Motion Technology Corporation · NASDAQ:SIMO
Silicon Motion Technology — Merger or Acquisition (September 2022)
35 slides from Silicon Motion Technology's merger presentation, Sep 9, 2022
Slide 1: MaxLinear Investor Presentation September 2022
MaxLinear Investor Presentation September 2022
Slide 2: Cautionary Note Concerning Forward-Looking Statements
Disclaimer Cautionary Note Concerning Forward - Looking Statements This presentation contains forward - looking statements within the meaning of Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securities Exchange Act of 1934 , as amended . Unless otherwise indicated,
Slide 3: MaxLinear Snapshot
MaxLinear Snapshot Leading Semiconductor Supplier in Broadband, Connectivity, and Infrastructure FOUNDED IN 2003 IPO IN 2010 EMPLOYEES 1,775+ WORLDWIDE IP PORTFOLIO 1,700+ PATENTS REVENUE* $1.11B FY22E EPS* $4.18 FY22E Global Footprint Engineering Centric Competitive Advantage 5Y CAGR 20%+ EBIT Marg
Slide 4: Diversified End-Market Portfolio
Diversified End - Market Portfolio Across the Board Secular and MXL Specific Growth Opportunities BROADBAND CONNECTIVITY INDUSTRIAL / MULTI - MARKET INFRASTRUCTURE Gateway SoC RF Front - End MoCA / Ethernet WiFi Power / Analog Interface PAM4 DSP TRX / MOD
Slide 5: Execute Plan to Deliver Profitable Growth
ADDRESS GROWING MARKETS INCREASE SHARE & CONTENT DRIVE OPERATING LEVERAGE Execute Plan to Deliver Profitable Growth 5 Utilize best - in - class technology to outperform our growing end - markets and deliver strong returns Market Strategy Growth Strategy Financial Strategy
Slide 6: Market Strategy
Market Strategy Target & Address Dynamic Growth Markets
Slide 7: Target Large and Growing End-Markets
*All data based on a combination of industry research reports and management estimates Target Large and Growing End - Markets SAM expansion driven by organic growth and strategic acquisitions SAM GROWTH Broadband Connectivity Infrastructure FY20 $4B SAM $500M $1.8B $1.2B $400M FY22 $8B SAM $2.2B $2.
Slide 8: Platform Approach Expands Our SAM
Platform Approach Expands Our SAM Transformation to broadband platform provider is driving higher content opportunity FY19 – Cable Gateway FY22 – Cable Gateway Cable FE / Tuner MoCA Cable FE / Tuner MoCA WiFi GW SoC Power Ethernet SLIC/SLAC Gateway content opportunity increasing by >3x
Slide 9: Product Cycles Drive Opportunity
Product Cycles Drive Opportunity 9 Well positioned to benefit from dynamically changing technology transition Product cycles across our end markets create opportunity for share gains and higher ASPs Wireless Backhaul Wireless Access Optical Ethernet WiFi Fiber Cable mWave 4T4R TRX 200G 2.5G Single P
Slide 10: Secular Trends
Secular Trends Strong macro drivers across all support long - term growth BROADBAND CONNECTIVITY OPTICAL WIRELESS ACCESS Fiber gateway market growing at 7% CAGR through 2030 WiFi access point growth to accelerate above 10% driven by WiFi6 Hyperscale data center traffic increasing by 70% annually 5G
Slide 11: Expanding into New Markets
Expanding into New Markets 11 Leverage existing technologies to ramp new products in new and growing markets RF Analog Mixed - Signal Digital Signal Processing Security Compression Optical $300M 5G Access $400M Storage $200M Power $300M Core Markets - $7B New product introductions have unlocked an i
Slide 12: Growth Strategy
Growth Strategy Increase Market Share & Content per Platform
Slide 13: Long-Term Growth Drivers
Long - Term Growth Drivers Product Innovation Drives Opportunity to Grow Content and Share FIBER GATEWAY WIFI WIRELESS INFRASTRUCTURE OPTICAL STORAGE
Slide 14: Fiber Gateway
Fiber Gateway Capturing new fiber gateway design wins 2022 2023 2024 2025 2021 MXL 100 90 80 70 60 50 40 30 20 10 0 Fiber GW Units (mm) Fiber gateway wins in North America to drive initial share gain Current Fiber gateway design win pipeline of $300M+ in play *Combination of market research and inte
Slide 15: WiFi
WiFi Attach rates, share gain, and product cycles will accelerate growth over time Growth Rate % Time WiFi 7 Ramp Multi - Band Adoption WiFi 6 / 6e
Slide 16: Wireless Infrastructure
Wireless Infrastructure Scaling product offerings across existing applications Wireless Access Wireless Backhaul FY19 FY22 Content opportunity up by >4x Content opportunity up by >3x 4x4 RF Transceiver Baseband SoC 8x8 RF Transceiver Baseband SoC Power Management Ultra - Wband DPD Digital Front End
Slide 17: Optical
Optical Best - in - class technology poised to disrupt hyperscale DC interconnect Keystone is the industry’s first 5nm 800G PAM4 DSP with integrated EML driver Best - in - class power consumption with 12mm² package to enable next - gen optical module form factors New PAM4 DSP offering expands presen
Slide 18: Storage
Storage New product introductions drive share in growing infrastructure space Compression for Hadoop Compression for Storage 40Gbps to 640Gbps Solutions Optimized for Storage, IPsec and SSL Delivers Deflate Level 4 Compression Ratios with 10x Lower Latency Plug N Play Hardware Acceleration Solutions
Slide 19: Financial Strategy
Financial Strategy Drive operating leverage and shareholder returns
Slide 20: Revenue Growth
Revenue Growth 20 Drive sales expansion by at least 2x the semiconductor industry growth rate Industry Growth Rate MXL Target Growth Rate Product Cycles Content Increases New Markets Share Gains Fiber GW WiFi Routers G.hn Ethernet Power Mgmt BB Gateway 5G Base Station Wireless Backhaul Optical 5G Ac
Slide 21: Margin Expansion
Margin Expansion 21 Drive operating leverage with higher gross margin and increasing productivity • Grow slower than revenue • Leverage automation • Emphasize productivity gains • Prudent product investments • Technology re - use across markets • Co - invest with strategic customers • Demand value f
Slide 22: Long-Term Target Model
Long - Term Target Model 22 Target model achieves significant operating leverage over time Revenue Growth Rate 2x Market Share/content growth + product cycles Gross Margin 65% Lower product costs + richer mix Operating Expenses 50% of Sales Growth Drive new project ROI + customer NRE Operating Margi
Slide 23: MaxLinear to Acquire Silicon Motion
MaxLinear to Acquire Silicon Motion Building Transformative Scale
Slide 24: Strategic Rationale
24 Strategic Rationale Accelerates Strategic Infrastructure Growth Establishes Meaningful Position in Storage Builds Transformative Operational Scale Creates Highly Profitable $2B+ Revenue Company Expected non - GAAP EPS Accretion of at Least 25%
Slide 25: Combination Creates $2B+ Revenue Company
2 5 Combination Creates $2B+ Revenue Company and do not represent the opinion of MaxLinear or constitute future guidance or estimates of MaxLinear
Slide 26: Building Transformative Operational Scale
Building Transformative Operational Scale Headcount >3,000 Employees IP Portfolio >4,000 Patents Units Shipped >1 Billion LTM Revenue ~$2 Billion LTM R&D Investment ~$400 Million LTM Enhanced scale to drive substantial operating benefits for customers, suppliers, and employees
Slide 27: Solid Long-Term Growth in Storage
27 Solid Long - Term Growth in Storage 1,860 EB 439 Exabyte 25% 31% 23% 21% Enterprise SSD Client SSD Smartphone Others Worldwide NAND Demand Forecast 2020 2025 Expanding into adjacent growth markets Steady transition to merchant silicon Accelerating demand for cloud - based solutions Increasing ado
Slide 28: Complementary Technology Portfolios
Complementary Technology Portfolios 28 Storage technology portfolio helps to further capture end - to - end platform functionality
Slide 29: Transaction Adds Over $5B of New TAM
Transaction Adds Over $5B of New TAM MaxLinear $8B TAM 2022 $2.0B $2.1B $2.2B $2.1B Combined $15B TAM 2024 $5.1B $5.0B $4.9B Industrial / MM Broadband Infrastructure Connectivity Broadband & Connectivity Industrial & Infrastructure Storage Compelling positions in Broadband, Connectivity, Infrastruct
Slide 30: Unified Focus on Infrastructure Opportunity
30 Unified Focus on Infrastructure Opportunity Data Center & Enterprise Opportunities Strategic Infrastructure Convergence Server - Boot drive Enterprise Server Storage Appliance Hyperscale Applications Data Reduction & Security Expanding High - Performance Solutions into Enterprise SSD Strong Inves
Slide 31: Combined Pro Forma Financial Model
31 Combined Pro Forma Financial Model Combined w/ Synergies Revenue $947 $982 $1,929 Gross Margin 62% 51% 58% EBIT $280 $293 $673 EBIT Margin 30% 30% 35% Highly profitable operating model Expected target cost synergies of $100M spread across COGS and OPEX Non - GAAP EPS accretion target of at least
Slide 32: Robust Cash Flow Allows for Rapid Deleveraging
<4.0x 1 <3.0x 1 EBITDA Expansion Debt Repayment At Close 18 Months Post Close Leverage Robust Cash Flow Allows for Rapid Deleveraging x Target Gross Leverage of <3.0x Within 18 Months Post Close x Use of Equity Consideration Moderates Leverage at Close x Committed to Disciplined and Rapid Deleveragi
Slide 33: Track Record of Synergy Realization and Rapid Deleveraging
$387 $370 $350 $350 $330 $310 $290 $250 Q3 20' Q4 20' Q1 21' Q2 21' Q3 21' Q4 21' Q1 22' Q2 22' $425 $375 $355 $330 $312 $277 $262 $247 $232 $212 Q2 17' Q3 17' Q4 17' Q1 18' Q2 18' Q3 18' Q4 18' Q1 19' Q2 19' Q3 19' Track Record of Synergy Realization and Rapid Deleveraging Exar Acquisition Intel Ho
Slide 34: Transaction Summary
34 Transaction Summary Expecting Closing • Expected transaction closing Q2 or Q3 of 2023 • Subject to customary closing conditions, including approval from SAMR • HSR Approval Obtained • Silicon Motion required shareholder vote obtained August 31, 2022 Financial Impact • Immediately accretive to ope
Slide 35: Thank you
MAXLINEAR Thank you
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