copy2010 SMSC All rights reservedwwwsmsccomSMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Christine KingPresident amp CEO

SMSC - A Year We Deliver Continuing Top Line Growth

Accelerating Bottom Line Growth

2

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Safe Harbor StatementForward Looking Statements

This presentation includes forward-looking statements about expected future events and financial and operating results that involve risks and uncertainties which may cause actual future results to be materially different from those discussed in forward-looking statements Such statements are subject to change and the Company does not undertake to update such statements except to the extent required under applicable law and regulation See SMSCrsquos ldquoOther Factors That May Affect Future Operating Resultsrdquo and ldquoRisk Factorsrdquo included within the Companyrsquos filings with the Securities amp Exchange Commission and the ldquoForward Looking Statementsrdquodescription accompanying the Companyrsquos earnings releases

Non-GAAP Financial MeasuresNon-GAAP financial measures referenced in this presentation are offered to provide additional insight into underlying operating performanceThese non-GAAP measures exclude charges and credits for stock appreciation rights (SARs) and stock options associated with the accounting pursuant to SFAS 123R the amortization of acquired intangible assets restructuring charges and related accelerated depreciation on certain test equipment litigation settlement expenses goodwill impairment charges and an out-of-period adjustment for the release of an inventory liability The Companys management believes that this information assists in evaluating operational trends financial performance and cash generating capacity Non-GAAP measures are not meant as a substitute for GAAP but are included solely for informational and comparative purposes Guidance and the Companyrsquos target operating models are presented on a non-GAAP basis only given that the GAAP basis charges for equity-based compensation related to SARs cannot be projected reasonably A reconciliation of GAAP and non-GAAP measures used through this presentation can be found in theappendix

3

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

1000 AM SMSC A Year We Deliver Chris King President amp CEO

1020 AM Growth in Connectivity Robert Hollingsworth Senior VP amp GM Computing amp Connectivity

1040 AM Expanding Automotive Content Christian Thiel VP amp GM Automotive Information Systems

1100 AM A Successful Analog Portfolio Mark Beadle VP amp GM Analog Products

1120 AM Growth Through Portable Connectivity Eric Kawamoto VP amp GM Portable

Products

1140 AM A Diverse amp Growing Customer Base Roger Wendelken VP Worldwide Sales

1200 PM Operations Driving Financial Results Dave Coller Senior VP Operations

1215 PM 15-minute break for lunch (return to seats)

1230 PM Drive for Profitable Growth Kris Sennesael VP amp CFO

1245 PM Closing Remarks Chris King President amp CEO

Agenda

4

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Ecosystem Consumer Connectivity Automotive Networking

Smart Mixed-Signal Connectivitytrade

SMSC Facts

Deliver Market-Differentiating Mixed-Signal Solutions Enable our Customersrsquo

SuccessGenerate Attractive Returns

Our Mission

$308M Fiscal 2010 Revenue~$390M revenue run-rate in Q1FY11

55 Gross Margin in Q1FY11

SMSC Building a Connectivity Ecosystem

$193M in Cash and investments

95 Revenue Single SourcedNon-GAAP

5

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearFinancials

56 year-over-year revenue growth in Q1FY11~ frac12

market recovery and frac12

market share increasesReached 55 non-GAAP gross margin

~ 430 bps cost reductions~ 370 bps scale

Positioned to achieve 16 non-GAAP operating margin in Q2Q3FY11Product Lines

Increased market position and reached record revenue levels in Automotive Portable and Analog product salesEstablished leadership in new USB related standardsAdded Wireless Audio products

Engineering CapabilityAdded low-cost engineering centers

Chennai India and Sofia Bulgariagt20 of engineering resources dedicated to softwarefirmware development

Source SMSC Estimates

Improvement versus Q1FY10

6

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Semiconductor Recovery in 1HCY10Healthy Bookings Environment

Record bookingshellip

Book to bill during Q1FY11 = 15

12 when normalized for early orders

ODMDistributor inventory remains relatively healthy

End Customer Demand Highlights

Automotive sales recovery

Strong Industrial demand

Moderate enterprise PC recovery

PC units expected to growhellip

2010 Industry Outlook

Strong first half

2010 seasonality may be mutedOn Watch

European consumerPCAutomotive

Channel inventory levels

7

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Executing on Financial ObjectivesQ1FY11 Highlights

Exceeded revenue gross margin and earnings guidanceRevenue of $972M up 17 sequentially Record non-GAAP gross margin of over 55 Non-GAAP operating margin of 131$033 non-GAAP EPS

Generated ~$121M in cash from operations

Q2FY11 ExpectationsExpect revenue to increase 4 to 7 sequentially

Growth expected in all product areasCurrent Q2FY11 OEM backlog coverage gt80

Looking Ahead to 2HFY11Anticipate muted seasonalityCurrent Q3 OEM backlog coverage at gt30Expect to achieve 16 non-GAAP operating margin by Q3FY11

See reconciliations from GAAP to non-GAAP information at the end of this presentation

8

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Connectivity Is Everywhere amp Converging

9

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Is A Player

Consumer

PC Embedded Controller USB

Human Interfaces Ethernet RightTouchtrade

Automotive Infotainment Networking MOSTreg USB amp Ethernet Wireless Headphones

Q1 FY11 of Connectivity

Revenue

~85 of Revenue Related to Connectivity

USB Connectivity Battery Charging Port Protection Wireless Audio Ethernet

Hubs Graphics Security

All Data is Unaudited

10

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Ecosystem

Wireless Portable Home Audio

USB ConnectivityPeripheral InterfacesUSB 20 rarr 30GraphicsSecurity

MOST Networkingamp Adjacent Devices

A $14B Market in 2011

Growing at gt20 CAGR

Human Interface DevicesRightTouchtradeNatural Interfaces

Source SMSC and Third Party Estimates CAGR represents growth opportunity

11

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Investing In Our FutureRationale Business Model Investment

First SMSC design facility in low-cost geography

Broad technical capabilities

Drives 2-3X product productivity

$34MSept 8 2009~50 resources

Extends SMSC design capabilities in low-cost geographies

World-class analog mixed-

signal expertise

Drives 2-3X product productivity

$0April 1 2010~20 resources

Middleware and framework for MOSTreg

enabled technologies

gt60 GM $89MNov 5 2009~30 resources

Entreacutee into wireless audio market with strong IP portfolio

38 rarr ~50 GM $55MFeb 16 2010~15 resources

Expand consumer presence and solidify position in wireless audio market

35 rarr ~50 GM $22MJune 14 2010~40 resources

Sofia DesignSofia DesignCenterCenter

Investments exclude potential earnout payments gross margin goals are non-GAAP

12

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems A High Growth Opportunity

June 29 2010NASDAQ Market Site ndash New York

13

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio

Portable applicationsLow powerRF IP amp expertise

Home standardsSupports HD audioDigital baseband expertise

Expect gt$25M annual revenue run-rate exiting FY11gt30 CAGR marketGross margin opportunity in line with company strategy

CANADA SINGAPORE THE NETHERLANDS

14

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer and STS are complementary and positioned for fast growth

Source Gartner press release - 03042010 SMSC Marketing

STS Wide Band

Best-in-class interference robustness amp co-

existence combined with lowest latency

High QoS scalable platform based on back-

and forward compatible baseband ICs

Fit for all multi-stream home applications

Dedicated architecture for seamless switching between 24G 52 amp 58Ghz

Kleer Narrow Band

Best-in-class low-operating Power

Full interoperability between products and customers

High QoS RF ICs

Strongly positioned for battery-operated devices

Dedicated architecture for co-existence in crowded 24GHz spectrum

A Growing Market Major Customers

~30 CAGR

CY09 CY10 CY11 CY12 CY13

15

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems ndash A Compelling Growth Opportunity

Our Business Model

The established leader for Wireless Audio

Proven unique proprietary technology

Leadership through complete coverage of all volume audio applications

Intimacy with major global customers

Leading presence in Home and Portable products

Our Products

Full systems amp support

Architecture

Hardware

Software

ODMOEM support

Back ndash

and forward compatible products spanning multiple product life

cycles

Our Customers

Major global brands

Major OEMs worldwide

16

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities are Driven by a Changing Landscape

CD-quality audio content is streamed wirelessly from rear seat displays to wireless headphones

Multiple displays show selectable content vehicle occupants wear wireless headphones to tune into the content on the display they are watching

Super thin LED TVrsquos require external speakers systems while TV-included Skype functionality requests wireless headsets

3-DPortable 3-D screens will fuel penetration of

wireless HD Surround Audio Wireless Video link for real streaming wireless video from portable products to TVrsquos PCrsquos etc

17

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Wireless Audio Growth Opportunity

Addressing a SAM of ~$109M growing to ~$235M in 2013(~30 CAGR)

Home Theatre

Stereo amp Docking systems

Gaming amp Head sets

Headphones ampEar buds

LED TV Audio

PC Audio

InfotainmentVideoNew

Applications

Automotive

Television

Home Audio

Ear buds

Headphonessets

Source SMSC amp Third Party Estimates

Handheld

Gaming

Desktop

Mobile

Automotive

18

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Continued Commitment to Growth

Expanding Product Portfolio

USBHSIC

MOSTreg Expansion

RightTouchtrade

Wireless Audio

Meeting Our FinancialTargets

16 Operating Margin

Continued CorporateOptimization

Addressing theConnectivity Ecosystem

Higher Value Solutions

Continued Growth inProfitability

2009 2010 2011 Future

Based on SMSC fiscal years

Increasing MarketPresence

Automotive MarketShare

PC Customer Base

Analog amp PortableGrowth

Expanded SoftwarePresence

Picking Our Spots

PC Connectivity

USB

Automotive

Rightsized the Business

Greater Percentage of Product System Solutions

Meeting 20 Operating Margin Target

19

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

5 Product Lines Driving Growth OpportunitiesComputing amp Connectivity Products

Our Core Business

Pie pieces reflect Q1FY11 revenues

USB applicationsLow power USB (HSIC)Continued PC market recoveryNew customer acquisition

Next speed generationMOSTreg companionsTrueAutotrade ProductsWireless Audio

RightTouchtradeEnvironmental controlEnergy managementPort Power

USB feature integrationPortable connectivityBattery charging

~20

gt30

~30

~30

Percentages reflect anticipated revenue growth opportunity in coming years

Average ASP $100

Average ASP $350

Average ASP $029

Average ASP $050

Automotive ProductsMarket Share Leader

Analog ASSPsBuilding our Portfolio

Computing amp Connectivity

62 or $611M

Automotive19 or $183M

Analog11 or $103M

Portables7 or $63M

Audio amp videoHybrid bandwidthNetwork connectivityAverage ASP $400

Wireless AudioGrowth through Features Wireless Audio

1 or $12M

~35

Portable ProductsPortable Connectivity Leader

20

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Content Value Provides Growth OpportunitiesNext generation MOSTregCompanion devicesUSB amp EthernetWireless Audio

$700 $5000

Embedded controllersUSB applicationsEnvironmental control RightTouchtrade

$015 $500

$040 $100

Average ~$10car

Average ~$050phone

Average ~$115computer

USB SubsystemIncreased connectivity Portable power

$030 $250

In the Home Environmenthellip

Average ~$090environment

Ethernet controllers

USB Products

RightTouch

Wireless Audio

In the smartphonehellip

In the PChellip

Content value in the carhellip Todayrsquos Content Range

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

2

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Safe Harbor StatementForward Looking Statements

This presentation includes forward-looking statements about expected future events and financial and operating results that involve risks and uncertainties which may cause actual future results to be materially different from those discussed in forward-looking statements Such statements are subject to change and the Company does not undertake to update such statements except to the extent required under applicable law and regulation See SMSCrsquos ldquoOther Factors That May Affect Future Operating Resultsrdquo and ldquoRisk Factorsrdquo included within the Companyrsquos filings with the Securities amp Exchange Commission and the ldquoForward Looking Statementsrdquodescription accompanying the Companyrsquos earnings releases

Non-GAAP Financial MeasuresNon-GAAP financial measures referenced in this presentation are offered to provide additional insight into underlying operating performanceThese non-GAAP measures exclude charges and credits for stock appreciation rights (SARs) and stock options associated with the accounting pursuant to SFAS 123R the amortization of acquired intangible assets restructuring charges and related accelerated depreciation on certain test equipment litigation settlement expenses goodwill impairment charges and an out-of-period adjustment for the release of an inventory liability The Companys management believes that this information assists in evaluating operational trends financial performance and cash generating capacity Non-GAAP measures are not meant as a substitute for GAAP but are included solely for informational and comparative purposes Guidance and the Companyrsquos target operating models are presented on a non-GAAP basis only given that the GAAP basis charges for equity-based compensation related to SARs cannot be projected reasonably A reconciliation of GAAP and non-GAAP measures used through this presentation can be found in theappendix

3

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

1000 AM SMSC A Year We Deliver Chris King President amp CEO

1020 AM Growth in Connectivity Robert Hollingsworth Senior VP amp GM Computing amp Connectivity

1040 AM Expanding Automotive Content Christian Thiel VP amp GM Automotive Information Systems

1100 AM A Successful Analog Portfolio Mark Beadle VP amp GM Analog Products

1120 AM Growth Through Portable Connectivity Eric Kawamoto VP amp GM Portable

Products

1140 AM A Diverse amp Growing Customer Base Roger Wendelken VP Worldwide Sales

1200 PM Operations Driving Financial Results Dave Coller Senior VP Operations

1215 PM 15-minute break for lunch (return to seats)

1230 PM Drive for Profitable Growth Kris Sennesael VP amp CFO

1245 PM Closing Remarks Chris King President amp CEO

Agenda

4

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Ecosystem Consumer Connectivity Automotive Networking

Smart Mixed-Signal Connectivitytrade

SMSC Facts

Deliver Market-Differentiating Mixed-Signal Solutions Enable our Customersrsquo

SuccessGenerate Attractive Returns

Our Mission

$308M Fiscal 2010 Revenue~$390M revenue run-rate in Q1FY11

55 Gross Margin in Q1FY11

SMSC Building a Connectivity Ecosystem

$193M in Cash and investments

95 Revenue Single SourcedNon-GAAP

5

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearFinancials

56 year-over-year revenue growth in Q1FY11~ frac12

market recovery and frac12

market share increasesReached 55 non-GAAP gross margin

~ 430 bps cost reductions~ 370 bps scale

Positioned to achieve 16 non-GAAP operating margin in Q2Q3FY11Product Lines

Increased market position and reached record revenue levels in Automotive Portable and Analog product salesEstablished leadership in new USB related standardsAdded Wireless Audio products

Engineering CapabilityAdded low-cost engineering centers

Chennai India and Sofia Bulgariagt20 of engineering resources dedicated to softwarefirmware development

Source SMSC Estimates

Improvement versus Q1FY10

6

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Semiconductor Recovery in 1HCY10Healthy Bookings Environment

Record bookingshellip

Book to bill during Q1FY11 = 15

12 when normalized for early orders

ODMDistributor inventory remains relatively healthy

End Customer Demand Highlights

Automotive sales recovery

Strong Industrial demand

Moderate enterprise PC recovery

PC units expected to growhellip

2010 Industry Outlook

Strong first half

2010 seasonality may be mutedOn Watch

European consumerPCAutomotive

Channel inventory levels

7

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Executing on Financial ObjectivesQ1FY11 Highlights

Exceeded revenue gross margin and earnings guidanceRevenue of $972M up 17 sequentially Record non-GAAP gross margin of over 55 Non-GAAP operating margin of 131$033 non-GAAP EPS

Generated ~$121M in cash from operations

Q2FY11 ExpectationsExpect revenue to increase 4 to 7 sequentially

Growth expected in all product areasCurrent Q2FY11 OEM backlog coverage gt80

Looking Ahead to 2HFY11Anticipate muted seasonalityCurrent Q3 OEM backlog coverage at gt30Expect to achieve 16 non-GAAP operating margin by Q3FY11

See reconciliations from GAAP to non-GAAP information at the end of this presentation

8

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Connectivity Is Everywhere amp Converging

9

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Is A Player

Consumer

PC Embedded Controller USB

Human Interfaces Ethernet RightTouchtrade

Automotive Infotainment Networking MOSTreg USB amp Ethernet Wireless Headphones

Q1 FY11 of Connectivity

Revenue

~85 of Revenue Related to Connectivity

USB Connectivity Battery Charging Port Protection Wireless Audio Ethernet

Hubs Graphics Security

All Data is Unaudited

10

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Ecosystem

Wireless Portable Home Audio

USB ConnectivityPeripheral InterfacesUSB 20 rarr 30GraphicsSecurity

MOST Networkingamp Adjacent Devices

A $14B Market in 2011

Growing at gt20 CAGR

Human Interface DevicesRightTouchtradeNatural Interfaces

Source SMSC and Third Party Estimates CAGR represents growth opportunity

11

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Investing In Our FutureRationale Business Model Investment

First SMSC design facility in low-cost geography

Broad technical capabilities

Drives 2-3X product productivity

$34MSept 8 2009~50 resources

Extends SMSC design capabilities in low-cost geographies

World-class analog mixed-

signal expertise

Drives 2-3X product productivity

$0April 1 2010~20 resources

Middleware and framework for MOSTreg

enabled technologies

gt60 GM $89MNov 5 2009~30 resources

Entreacutee into wireless audio market with strong IP portfolio

38 rarr ~50 GM $55MFeb 16 2010~15 resources

Expand consumer presence and solidify position in wireless audio market

35 rarr ~50 GM $22MJune 14 2010~40 resources

Sofia DesignSofia DesignCenterCenter

Investments exclude potential earnout payments gross margin goals are non-GAAP

12

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems A High Growth Opportunity

June 29 2010NASDAQ Market Site ndash New York

13

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio

Portable applicationsLow powerRF IP amp expertise

Home standardsSupports HD audioDigital baseband expertise

Expect gt$25M annual revenue run-rate exiting FY11gt30 CAGR marketGross margin opportunity in line with company strategy

CANADA SINGAPORE THE NETHERLANDS

14

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer and STS are complementary and positioned for fast growth

Source Gartner press release - 03042010 SMSC Marketing

STS Wide Band

Best-in-class interference robustness amp co-

existence combined with lowest latency

High QoS scalable platform based on back-

and forward compatible baseband ICs

Fit for all multi-stream home applications

Dedicated architecture for seamless switching between 24G 52 amp 58Ghz

Kleer Narrow Band

Best-in-class low-operating Power

Full interoperability between products and customers

High QoS RF ICs

Strongly positioned for battery-operated devices

Dedicated architecture for co-existence in crowded 24GHz spectrum

A Growing Market Major Customers

~30 CAGR

CY09 CY10 CY11 CY12 CY13

15

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems ndash A Compelling Growth Opportunity

Our Business Model

The established leader for Wireless Audio

Proven unique proprietary technology

Leadership through complete coverage of all volume audio applications

Intimacy with major global customers

Leading presence in Home and Portable products

Our Products

Full systems amp support

Architecture

Hardware

Software

ODMOEM support

Back ndash

and forward compatible products spanning multiple product life

cycles

Our Customers

Major global brands

Major OEMs worldwide

16

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities are Driven by a Changing Landscape

CD-quality audio content is streamed wirelessly from rear seat displays to wireless headphones

Multiple displays show selectable content vehicle occupants wear wireless headphones to tune into the content on the display they are watching

Super thin LED TVrsquos require external speakers systems while TV-included Skype functionality requests wireless headsets

3-DPortable 3-D screens will fuel penetration of

wireless HD Surround Audio Wireless Video link for real streaming wireless video from portable products to TVrsquos PCrsquos etc

17

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Wireless Audio Growth Opportunity

Addressing a SAM of ~$109M growing to ~$235M in 2013(~30 CAGR)

Home Theatre

Stereo amp Docking systems

Gaming amp Head sets

Headphones ampEar buds

LED TV Audio

PC Audio

InfotainmentVideoNew

Applications

Automotive

Television

Home Audio

Ear buds

Headphonessets

Source SMSC amp Third Party Estimates

Handheld

Gaming

Desktop

Mobile

Automotive

18

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Continued Commitment to Growth

Expanding Product Portfolio

USBHSIC

MOSTreg Expansion

RightTouchtrade

Wireless Audio

Meeting Our FinancialTargets

16 Operating Margin

Continued CorporateOptimization

Addressing theConnectivity Ecosystem

Higher Value Solutions

Continued Growth inProfitability

2009 2010 2011 Future

Based on SMSC fiscal years

Increasing MarketPresence

Automotive MarketShare

PC Customer Base

Analog amp PortableGrowth

Expanded SoftwarePresence

Picking Our Spots

PC Connectivity

USB

Automotive

Rightsized the Business

Greater Percentage of Product System Solutions

Meeting 20 Operating Margin Target

19

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

5 Product Lines Driving Growth OpportunitiesComputing amp Connectivity Products

Our Core Business

Pie pieces reflect Q1FY11 revenues

USB applicationsLow power USB (HSIC)Continued PC market recoveryNew customer acquisition

Next speed generationMOSTreg companionsTrueAutotrade ProductsWireless Audio

RightTouchtradeEnvironmental controlEnergy managementPort Power

USB feature integrationPortable connectivityBattery charging

~20

gt30

~30

~30

Percentages reflect anticipated revenue growth opportunity in coming years

Average ASP $100

Average ASP $350

Average ASP $029

Average ASP $050

Automotive ProductsMarket Share Leader

Analog ASSPsBuilding our Portfolio

Computing amp Connectivity

62 or $611M

Automotive19 or $183M

Analog11 or $103M

Portables7 or $63M

Audio amp videoHybrid bandwidthNetwork connectivityAverage ASP $400

Wireless AudioGrowth through Features Wireless Audio

1 or $12M

~35

Portable ProductsPortable Connectivity Leader

20

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Content Value Provides Growth OpportunitiesNext generation MOSTregCompanion devicesUSB amp EthernetWireless Audio

$700 $5000

Embedded controllersUSB applicationsEnvironmental control RightTouchtrade

$015 $500

$040 $100

Average ~$10car

Average ~$050phone

Average ~$115computer

USB SubsystemIncreased connectivity Portable power

$030 $250

In the Home Environmenthellip

Average ~$090environment

Ethernet controllers

USB Products

RightTouch

Wireless Audio

In the smartphonehellip

In the PChellip

Content value in the carhellip Todayrsquos Content Range

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

3

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

1000 AM SMSC A Year We Deliver Chris King President amp CEO

1020 AM Growth in Connectivity Robert Hollingsworth Senior VP amp GM Computing amp Connectivity

1040 AM Expanding Automotive Content Christian Thiel VP amp GM Automotive Information Systems

1100 AM A Successful Analog Portfolio Mark Beadle VP amp GM Analog Products

1120 AM Growth Through Portable Connectivity Eric Kawamoto VP amp GM Portable

Products

1140 AM A Diverse amp Growing Customer Base Roger Wendelken VP Worldwide Sales

1200 PM Operations Driving Financial Results Dave Coller Senior VP Operations

1215 PM 15-minute break for lunch (return to seats)

1230 PM Drive for Profitable Growth Kris Sennesael VP amp CFO

1245 PM Closing Remarks Chris King President amp CEO

Agenda

4

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Ecosystem Consumer Connectivity Automotive Networking

Smart Mixed-Signal Connectivitytrade

SMSC Facts

Deliver Market-Differentiating Mixed-Signal Solutions Enable our Customersrsquo

SuccessGenerate Attractive Returns

Our Mission

$308M Fiscal 2010 Revenue~$390M revenue run-rate in Q1FY11

55 Gross Margin in Q1FY11

SMSC Building a Connectivity Ecosystem

$193M in Cash and investments

95 Revenue Single SourcedNon-GAAP

5

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearFinancials

56 year-over-year revenue growth in Q1FY11~ frac12

market recovery and frac12

market share increasesReached 55 non-GAAP gross margin

~ 430 bps cost reductions~ 370 bps scale

Positioned to achieve 16 non-GAAP operating margin in Q2Q3FY11Product Lines

Increased market position and reached record revenue levels in Automotive Portable and Analog product salesEstablished leadership in new USB related standardsAdded Wireless Audio products

Engineering CapabilityAdded low-cost engineering centers

Chennai India and Sofia Bulgariagt20 of engineering resources dedicated to softwarefirmware development

Source SMSC Estimates

Improvement versus Q1FY10

6

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Semiconductor Recovery in 1HCY10Healthy Bookings Environment

Record bookingshellip

Book to bill during Q1FY11 = 15

12 when normalized for early orders

ODMDistributor inventory remains relatively healthy

End Customer Demand Highlights

Automotive sales recovery

Strong Industrial demand

Moderate enterprise PC recovery

PC units expected to growhellip

2010 Industry Outlook

Strong first half

2010 seasonality may be mutedOn Watch

European consumerPCAutomotive

Channel inventory levels

7

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Executing on Financial ObjectivesQ1FY11 Highlights

Exceeded revenue gross margin and earnings guidanceRevenue of $972M up 17 sequentially Record non-GAAP gross margin of over 55 Non-GAAP operating margin of 131$033 non-GAAP EPS

Generated ~$121M in cash from operations

Q2FY11 ExpectationsExpect revenue to increase 4 to 7 sequentially

Growth expected in all product areasCurrent Q2FY11 OEM backlog coverage gt80

Looking Ahead to 2HFY11Anticipate muted seasonalityCurrent Q3 OEM backlog coverage at gt30Expect to achieve 16 non-GAAP operating margin by Q3FY11

See reconciliations from GAAP to non-GAAP information at the end of this presentation

8

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Connectivity Is Everywhere amp Converging

9

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Is A Player

Consumer

PC Embedded Controller USB

Human Interfaces Ethernet RightTouchtrade

Automotive Infotainment Networking MOSTreg USB amp Ethernet Wireless Headphones

Q1 FY11 of Connectivity

Revenue

~85 of Revenue Related to Connectivity

USB Connectivity Battery Charging Port Protection Wireless Audio Ethernet

Hubs Graphics Security

All Data is Unaudited

10

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Ecosystem

Wireless Portable Home Audio

USB ConnectivityPeripheral InterfacesUSB 20 rarr 30GraphicsSecurity

MOST Networkingamp Adjacent Devices

A $14B Market in 2011

Growing at gt20 CAGR

Human Interface DevicesRightTouchtradeNatural Interfaces

Source SMSC and Third Party Estimates CAGR represents growth opportunity

11

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Investing In Our FutureRationale Business Model Investment

First SMSC design facility in low-cost geography

Broad technical capabilities

Drives 2-3X product productivity

$34MSept 8 2009~50 resources

Extends SMSC design capabilities in low-cost geographies

World-class analog mixed-

signal expertise

Drives 2-3X product productivity

$0April 1 2010~20 resources

Middleware and framework for MOSTreg

enabled technologies

gt60 GM $89MNov 5 2009~30 resources

Entreacutee into wireless audio market with strong IP portfolio

38 rarr ~50 GM $55MFeb 16 2010~15 resources

Expand consumer presence and solidify position in wireless audio market

35 rarr ~50 GM $22MJune 14 2010~40 resources

Sofia DesignSofia DesignCenterCenter

Investments exclude potential earnout payments gross margin goals are non-GAAP

12

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems A High Growth Opportunity

June 29 2010NASDAQ Market Site ndash New York

13

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio

Portable applicationsLow powerRF IP amp expertise

Home standardsSupports HD audioDigital baseband expertise

Expect gt$25M annual revenue run-rate exiting FY11gt30 CAGR marketGross margin opportunity in line with company strategy

CANADA SINGAPORE THE NETHERLANDS

14

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer and STS are complementary and positioned for fast growth

Source Gartner press release - 03042010 SMSC Marketing

STS Wide Band

Best-in-class interference robustness amp co-

existence combined with lowest latency

High QoS scalable platform based on back-

and forward compatible baseband ICs

Fit for all multi-stream home applications

Dedicated architecture for seamless switching between 24G 52 amp 58Ghz

Kleer Narrow Band

Best-in-class low-operating Power

Full interoperability between products and customers

High QoS RF ICs

Strongly positioned for battery-operated devices

Dedicated architecture for co-existence in crowded 24GHz spectrum

A Growing Market Major Customers

~30 CAGR

CY09 CY10 CY11 CY12 CY13

15

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems ndash A Compelling Growth Opportunity

Our Business Model

The established leader for Wireless Audio

Proven unique proprietary technology

Leadership through complete coverage of all volume audio applications

Intimacy with major global customers

Leading presence in Home and Portable products

Our Products

Full systems amp support

Architecture

Hardware

Software

ODMOEM support

Back ndash

and forward compatible products spanning multiple product life

cycles

Our Customers

Major global brands

Major OEMs worldwide

16

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities are Driven by a Changing Landscape

CD-quality audio content is streamed wirelessly from rear seat displays to wireless headphones

Multiple displays show selectable content vehicle occupants wear wireless headphones to tune into the content on the display they are watching

Super thin LED TVrsquos require external speakers systems while TV-included Skype functionality requests wireless headsets

3-DPortable 3-D screens will fuel penetration of

wireless HD Surround Audio Wireless Video link for real streaming wireless video from portable products to TVrsquos PCrsquos etc

17

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Wireless Audio Growth Opportunity

Addressing a SAM of ~$109M growing to ~$235M in 2013(~30 CAGR)

Home Theatre

Stereo amp Docking systems

Gaming amp Head sets

Headphones ampEar buds

LED TV Audio

PC Audio

InfotainmentVideoNew

Applications

Automotive

Television

Home Audio

Ear buds

Headphonessets

Source SMSC amp Third Party Estimates

Handheld

Gaming

Desktop

Mobile

Automotive

18

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Continued Commitment to Growth

Expanding Product Portfolio

USBHSIC

MOSTreg Expansion

RightTouchtrade

Wireless Audio

Meeting Our FinancialTargets

16 Operating Margin

Continued CorporateOptimization

Addressing theConnectivity Ecosystem

Higher Value Solutions

Continued Growth inProfitability

2009 2010 2011 Future

Based on SMSC fiscal years

Increasing MarketPresence

Automotive MarketShare

PC Customer Base

Analog amp PortableGrowth

Expanded SoftwarePresence

Picking Our Spots

PC Connectivity

USB

Automotive

Rightsized the Business

Greater Percentage of Product System Solutions

Meeting 20 Operating Margin Target

19

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

5 Product Lines Driving Growth OpportunitiesComputing amp Connectivity Products

Our Core Business

Pie pieces reflect Q1FY11 revenues

USB applicationsLow power USB (HSIC)Continued PC market recoveryNew customer acquisition

Next speed generationMOSTreg companionsTrueAutotrade ProductsWireless Audio

RightTouchtradeEnvironmental controlEnergy managementPort Power

USB feature integrationPortable connectivityBattery charging

~20

gt30

~30

~30

Percentages reflect anticipated revenue growth opportunity in coming years

Average ASP $100

Average ASP $350

Average ASP $029

Average ASP $050

Automotive ProductsMarket Share Leader

Analog ASSPsBuilding our Portfolio

Computing amp Connectivity

62 or $611M

Automotive19 or $183M

Analog11 or $103M

Portables7 or $63M

Audio amp videoHybrid bandwidthNetwork connectivityAverage ASP $400

Wireless AudioGrowth through Features Wireless Audio

1 or $12M

~35

Portable ProductsPortable Connectivity Leader

20

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Content Value Provides Growth OpportunitiesNext generation MOSTregCompanion devicesUSB amp EthernetWireless Audio

$700 $5000

Embedded controllersUSB applicationsEnvironmental control RightTouchtrade

$015 $500

$040 $100

Average ~$10car

Average ~$050phone

Average ~$115computer

USB SubsystemIncreased connectivity Portable power

$030 $250

In the Home Environmenthellip

Average ~$090environment

Ethernet controllers

USB Products

RightTouch

Wireless Audio

In the smartphonehellip

In the PChellip

Content value in the carhellip Todayrsquos Content Range

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

4

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Ecosystem Consumer Connectivity Automotive Networking

Smart Mixed-Signal Connectivitytrade

SMSC Facts

Deliver Market-Differentiating Mixed-Signal Solutions Enable our Customersrsquo

SuccessGenerate Attractive Returns

Our Mission

$308M Fiscal 2010 Revenue~$390M revenue run-rate in Q1FY11

55 Gross Margin in Q1FY11

SMSC Building a Connectivity Ecosystem

$193M in Cash and investments

95 Revenue Single SourcedNon-GAAP

5

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearFinancials

56 year-over-year revenue growth in Q1FY11~ frac12

market recovery and frac12

market share increasesReached 55 non-GAAP gross margin

~ 430 bps cost reductions~ 370 bps scale

Positioned to achieve 16 non-GAAP operating margin in Q2Q3FY11Product Lines

Increased market position and reached record revenue levels in Automotive Portable and Analog product salesEstablished leadership in new USB related standardsAdded Wireless Audio products

Engineering CapabilityAdded low-cost engineering centers

Chennai India and Sofia Bulgariagt20 of engineering resources dedicated to softwarefirmware development

Source SMSC Estimates

Improvement versus Q1FY10

6

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Semiconductor Recovery in 1HCY10Healthy Bookings Environment

Record bookingshellip

Book to bill during Q1FY11 = 15

12 when normalized for early orders

ODMDistributor inventory remains relatively healthy

End Customer Demand Highlights

Automotive sales recovery

Strong Industrial demand

Moderate enterprise PC recovery

PC units expected to growhellip

2010 Industry Outlook

Strong first half

2010 seasonality may be mutedOn Watch

European consumerPCAutomotive

Channel inventory levels

7

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Executing on Financial ObjectivesQ1FY11 Highlights

Exceeded revenue gross margin and earnings guidanceRevenue of $972M up 17 sequentially Record non-GAAP gross margin of over 55 Non-GAAP operating margin of 131$033 non-GAAP EPS

Generated ~$121M in cash from operations

Q2FY11 ExpectationsExpect revenue to increase 4 to 7 sequentially

Growth expected in all product areasCurrent Q2FY11 OEM backlog coverage gt80

Looking Ahead to 2HFY11Anticipate muted seasonalityCurrent Q3 OEM backlog coverage at gt30Expect to achieve 16 non-GAAP operating margin by Q3FY11

See reconciliations from GAAP to non-GAAP information at the end of this presentation

8

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Connectivity Is Everywhere amp Converging

9

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Is A Player

Consumer

PC Embedded Controller USB

Human Interfaces Ethernet RightTouchtrade

Automotive Infotainment Networking MOSTreg USB amp Ethernet Wireless Headphones

Q1 FY11 of Connectivity

Revenue

~85 of Revenue Related to Connectivity

USB Connectivity Battery Charging Port Protection Wireless Audio Ethernet

Hubs Graphics Security

All Data is Unaudited

10

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Ecosystem

Wireless Portable Home Audio

USB ConnectivityPeripheral InterfacesUSB 20 rarr 30GraphicsSecurity

MOST Networkingamp Adjacent Devices

A $14B Market in 2011

Growing at gt20 CAGR

Human Interface DevicesRightTouchtradeNatural Interfaces

Source SMSC and Third Party Estimates CAGR represents growth opportunity

11

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Investing In Our FutureRationale Business Model Investment

First SMSC design facility in low-cost geography

Broad technical capabilities

Drives 2-3X product productivity

$34MSept 8 2009~50 resources

Extends SMSC design capabilities in low-cost geographies

World-class analog mixed-

signal expertise

Drives 2-3X product productivity

$0April 1 2010~20 resources

Middleware and framework for MOSTreg

enabled technologies

gt60 GM $89MNov 5 2009~30 resources

Entreacutee into wireless audio market with strong IP portfolio

38 rarr ~50 GM $55MFeb 16 2010~15 resources

Expand consumer presence and solidify position in wireless audio market

35 rarr ~50 GM $22MJune 14 2010~40 resources

Sofia DesignSofia DesignCenterCenter

Investments exclude potential earnout payments gross margin goals are non-GAAP

12

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems A High Growth Opportunity

June 29 2010NASDAQ Market Site ndash New York

13

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio

Portable applicationsLow powerRF IP amp expertise

Home standardsSupports HD audioDigital baseband expertise

Expect gt$25M annual revenue run-rate exiting FY11gt30 CAGR marketGross margin opportunity in line with company strategy

CANADA SINGAPORE THE NETHERLANDS

14

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer and STS are complementary and positioned for fast growth

Source Gartner press release - 03042010 SMSC Marketing

STS Wide Band

Best-in-class interference robustness amp co-

existence combined with lowest latency

High QoS scalable platform based on back-

and forward compatible baseband ICs

Fit for all multi-stream home applications

Dedicated architecture for seamless switching between 24G 52 amp 58Ghz

Kleer Narrow Band

Best-in-class low-operating Power

Full interoperability between products and customers

High QoS RF ICs

Strongly positioned for battery-operated devices

Dedicated architecture for co-existence in crowded 24GHz spectrum

A Growing Market Major Customers

~30 CAGR

CY09 CY10 CY11 CY12 CY13

15

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems ndash A Compelling Growth Opportunity

Our Business Model

The established leader for Wireless Audio

Proven unique proprietary technology

Leadership through complete coverage of all volume audio applications

Intimacy with major global customers

Leading presence in Home and Portable products

Our Products

Full systems amp support

Architecture

Hardware

Software

ODMOEM support

Back ndash

and forward compatible products spanning multiple product life

cycles

Our Customers

Major global brands

Major OEMs worldwide

16

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities are Driven by a Changing Landscape

CD-quality audio content is streamed wirelessly from rear seat displays to wireless headphones

Multiple displays show selectable content vehicle occupants wear wireless headphones to tune into the content on the display they are watching

Super thin LED TVrsquos require external speakers systems while TV-included Skype functionality requests wireless headsets

3-DPortable 3-D screens will fuel penetration of

wireless HD Surround Audio Wireless Video link for real streaming wireless video from portable products to TVrsquos PCrsquos etc

17

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Wireless Audio Growth Opportunity

Addressing a SAM of ~$109M growing to ~$235M in 2013(~30 CAGR)

Home Theatre

Stereo amp Docking systems

Gaming amp Head sets

Headphones ampEar buds

LED TV Audio

PC Audio

InfotainmentVideoNew

Applications

Automotive

Television

Home Audio

Ear buds

Headphonessets

Source SMSC amp Third Party Estimates

Handheld

Gaming

Desktop

Mobile

Automotive

18

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Continued Commitment to Growth

Expanding Product Portfolio

USBHSIC

MOSTreg Expansion

RightTouchtrade

Wireless Audio

Meeting Our FinancialTargets

16 Operating Margin

Continued CorporateOptimization

Addressing theConnectivity Ecosystem

Higher Value Solutions

Continued Growth inProfitability

2009 2010 2011 Future

Based on SMSC fiscal years

Increasing MarketPresence

Automotive MarketShare

PC Customer Base

Analog amp PortableGrowth

Expanded SoftwarePresence

Picking Our Spots

PC Connectivity

USB

Automotive

Rightsized the Business

Greater Percentage of Product System Solutions

Meeting 20 Operating Margin Target

19

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

5 Product Lines Driving Growth OpportunitiesComputing amp Connectivity Products

Our Core Business

Pie pieces reflect Q1FY11 revenues

USB applicationsLow power USB (HSIC)Continued PC market recoveryNew customer acquisition

Next speed generationMOSTreg companionsTrueAutotrade ProductsWireless Audio

RightTouchtradeEnvironmental controlEnergy managementPort Power

USB feature integrationPortable connectivityBattery charging

~20

gt30

~30

~30

Percentages reflect anticipated revenue growth opportunity in coming years

Average ASP $100

Average ASP $350

Average ASP $029

Average ASP $050

Automotive ProductsMarket Share Leader

Analog ASSPsBuilding our Portfolio

Computing amp Connectivity

62 or $611M

Automotive19 or $183M

Analog11 or $103M

Portables7 or $63M

Audio amp videoHybrid bandwidthNetwork connectivityAverage ASP $400

Wireless AudioGrowth through Features Wireless Audio

1 or $12M

~35

Portable ProductsPortable Connectivity Leader

20

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Content Value Provides Growth OpportunitiesNext generation MOSTregCompanion devicesUSB amp EthernetWireless Audio

$700 $5000

Embedded controllersUSB applicationsEnvironmental control RightTouchtrade

$015 $500

$040 $100

Average ~$10car

Average ~$050phone

Average ~$115computer

USB SubsystemIncreased connectivity Portable power

$030 $250

In the Home Environmenthellip

Average ~$090environment

Ethernet controllers

USB Products

RightTouch

Wireless Audio

In the smartphonehellip

In the PChellip

Content value in the carhellip Todayrsquos Content Range

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

5

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearFinancials

56 year-over-year revenue growth in Q1FY11~ frac12

market recovery and frac12

market share increasesReached 55 non-GAAP gross margin

~ 430 bps cost reductions~ 370 bps scale

Positioned to achieve 16 non-GAAP operating margin in Q2Q3FY11Product Lines

Increased market position and reached record revenue levels in Automotive Portable and Analog product salesEstablished leadership in new USB related standardsAdded Wireless Audio products

Engineering CapabilityAdded low-cost engineering centers

Chennai India and Sofia Bulgariagt20 of engineering resources dedicated to softwarefirmware development

Source SMSC Estimates

Improvement versus Q1FY10

6

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Semiconductor Recovery in 1HCY10Healthy Bookings Environment

Record bookingshellip

Book to bill during Q1FY11 = 15

12 when normalized for early orders

ODMDistributor inventory remains relatively healthy

End Customer Demand Highlights

Automotive sales recovery

Strong Industrial demand

Moderate enterprise PC recovery

PC units expected to growhellip

2010 Industry Outlook

Strong first half

2010 seasonality may be mutedOn Watch

European consumerPCAutomotive

Channel inventory levels

7

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Executing on Financial ObjectivesQ1FY11 Highlights

Exceeded revenue gross margin and earnings guidanceRevenue of $972M up 17 sequentially Record non-GAAP gross margin of over 55 Non-GAAP operating margin of 131$033 non-GAAP EPS

Generated ~$121M in cash from operations

Q2FY11 ExpectationsExpect revenue to increase 4 to 7 sequentially

Growth expected in all product areasCurrent Q2FY11 OEM backlog coverage gt80

Looking Ahead to 2HFY11Anticipate muted seasonalityCurrent Q3 OEM backlog coverage at gt30Expect to achieve 16 non-GAAP operating margin by Q3FY11

See reconciliations from GAAP to non-GAAP information at the end of this presentation

8

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Connectivity Is Everywhere amp Converging

9

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Is A Player

Consumer

PC Embedded Controller USB

Human Interfaces Ethernet RightTouchtrade

Automotive Infotainment Networking MOSTreg USB amp Ethernet Wireless Headphones

Q1 FY11 of Connectivity

Revenue

~85 of Revenue Related to Connectivity

USB Connectivity Battery Charging Port Protection Wireless Audio Ethernet

Hubs Graphics Security

All Data is Unaudited

10

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Ecosystem

Wireless Portable Home Audio

USB ConnectivityPeripheral InterfacesUSB 20 rarr 30GraphicsSecurity

MOST Networkingamp Adjacent Devices

A $14B Market in 2011

Growing at gt20 CAGR

Human Interface DevicesRightTouchtradeNatural Interfaces

Source SMSC and Third Party Estimates CAGR represents growth opportunity

11

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Investing In Our FutureRationale Business Model Investment

First SMSC design facility in low-cost geography

Broad technical capabilities

Drives 2-3X product productivity

$34MSept 8 2009~50 resources

Extends SMSC design capabilities in low-cost geographies

World-class analog mixed-

signal expertise

Drives 2-3X product productivity

$0April 1 2010~20 resources

Middleware and framework for MOSTreg

enabled technologies

gt60 GM $89MNov 5 2009~30 resources

Entreacutee into wireless audio market with strong IP portfolio

38 rarr ~50 GM $55MFeb 16 2010~15 resources

Expand consumer presence and solidify position in wireless audio market

35 rarr ~50 GM $22MJune 14 2010~40 resources

Sofia DesignSofia DesignCenterCenter

Investments exclude potential earnout payments gross margin goals are non-GAAP

12

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems A High Growth Opportunity

June 29 2010NASDAQ Market Site ndash New York

13

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio

Portable applicationsLow powerRF IP amp expertise

Home standardsSupports HD audioDigital baseband expertise

Expect gt$25M annual revenue run-rate exiting FY11gt30 CAGR marketGross margin opportunity in line with company strategy

CANADA SINGAPORE THE NETHERLANDS

14

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer and STS are complementary and positioned for fast growth

Source Gartner press release - 03042010 SMSC Marketing

STS Wide Band

Best-in-class interference robustness amp co-

existence combined with lowest latency

High QoS scalable platform based on back-

and forward compatible baseband ICs

Fit for all multi-stream home applications

Dedicated architecture for seamless switching between 24G 52 amp 58Ghz

Kleer Narrow Band

Best-in-class low-operating Power

Full interoperability between products and customers

High QoS RF ICs

Strongly positioned for battery-operated devices

Dedicated architecture for co-existence in crowded 24GHz spectrum

A Growing Market Major Customers

~30 CAGR

CY09 CY10 CY11 CY12 CY13

15

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems ndash A Compelling Growth Opportunity

Our Business Model

The established leader for Wireless Audio

Proven unique proprietary technology

Leadership through complete coverage of all volume audio applications

Intimacy with major global customers

Leading presence in Home and Portable products

Our Products

Full systems amp support

Architecture

Hardware

Software

ODMOEM support

Back ndash

and forward compatible products spanning multiple product life

cycles

Our Customers

Major global brands

Major OEMs worldwide

16

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities are Driven by a Changing Landscape

CD-quality audio content is streamed wirelessly from rear seat displays to wireless headphones

Multiple displays show selectable content vehicle occupants wear wireless headphones to tune into the content on the display they are watching

Super thin LED TVrsquos require external speakers systems while TV-included Skype functionality requests wireless headsets

3-DPortable 3-D screens will fuel penetration of

wireless HD Surround Audio Wireless Video link for real streaming wireless video from portable products to TVrsquos PCrsquos etc

17

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Wireless Audio Growth Opportunity

Addressing a SAM of ~$109M growing to ~$235M in 2013(~30 CAGR)

Home Theatre

Stereo amp Docking systems

Gaming amp Head sets

Headphones ampEar buds

LED TV Audio

PC Audio

InfotainmentVideoNew

Applications

Automotive

Television

Home Audio

Ear buds

Headphonessets

Source SMSC amp Third Party Estimates

Handheld

Gaming

Desktop

Mobile

Automotive

18

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Continued Commitment to Growth

Expanding Product Portfolio

USBHSIC

MOSTreg Expansion

RightTouchtrade

Wireless Audio

Meeting Our FinancialTargets

16 Operating Margin

Continued CorporateOptimization

Addressing theConnectivity Ecosystem

Higher Value Solutions

Continued Growth inProfitability

2009 2010 2011 Future

Based on SMSC fiscal years

Increasing MarketPresence

Automotive MarketShare

PC Customer Base

Analog amp PortableGrowth

Expanded SoftwarePresence

Picking Our Spots

PC Connectivity

USB

Automotive

Rightsized the Business

Greater Percentage of Product System Solutions

Meeting 20 Operating Margin Target

19

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

5 Product Lines Driving Growth OpportunitiesComputing amp Connectivity Products

Our Core Business

Pie pieces reflect Q1FY11 revenues

USB applicationsLow power USB (HSIC)Continued PC market recoveryNew customer acquisition

Next speed generationMOSTreg companionsTrueAutotrade ProductsWireless Audio

RightTouchtradeEnvironmental controlEnergy managementPort Power

USB feature integrationPortable connectivityBattery charging

~20

gt30

~30

~30

Percentages reflect anticipated revenue growth opportunity in coming years

Average ASP $100

Average ASP $350

Average ASP $029

Average ASP $050

Automotive ProductsMarket Share Leader

Analog ASSPsBuilding our Portfolio

Computing amp Connectivity

62 or $611M

Automotive19 or $183M

Analog11 or $103M

Portables7 or $63M

Audio amp videoHybrid bandwidthNetwork connectivityAverage ASP $400

Wireless AudioGrowth through Features Wireless Audio

1 or $12M

~35

Portable ProductsPortable Connectivity Leader

20

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Content Value Provides Growth OpportunitiesNext generation MOSTregCompanion devicesUSB amp EthernetWireless Audio

$700 $5000

Embedded controllersUSB applicationsEnvironmental control RightTouchtrade

$015 $500

$040 $100

Average ~$10car

Average ~$050phone

Average ~$115computer

USB SubsystemIncreased connectivity Portable power

$030 $250

In the Home Environmenthellip

Average ~$090environment

Ethernet controllers

USB Products

RightTouch

Wireless Audio

In the smartphonehellip

In the PChellip

Content value in the carhellip Todayrsquos Content Range

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

6

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Semiconductor Recovery in 1HCY10Healthy Bookings Environment

Record bookingshellip

Book to bill during Q1FY11 = 15

12 when normalized for early orders

ODMDistributor inventory remains relatively healthy

End Customer Demand Highlights

Automotive sales recovery

Strong Industrial demand

Moderate enterprise PC recovery

PC units expected to growhellip

2010 Industry Outlook

Strong first half

2010 seasonality may be mutedOn Watch

European consumerPCAutomotive

Channel inventory levels

7

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Executing on Financial ObjectivesQ1FY11 Highlights

Exceeded revenue gross margin and earnings guidanceRevenue of $972M up 17 sequentially Record non-GAAP gross margin of over 55 Non-GAAP operating margin of 131$033 non-GAAP EPS

Generated ~$121M in cash from operations

Q2FY11 ExpectationsExpect revenue to increase 4 to 7 sequentially

Growth expected in all product areasCurrent Q2FY11 OEM backlog coverage gt80

Looking Ahead to 2HFY11Anticipate muted seasonalityCurrent Q3 OEM backlog coverage at gt30Expect to achieve 16 non-GAAP operating margin by Q3FY11

See reconciliations from GAAP to non-GAAP information at the end of this presentation

8

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Connectivity Is Everywhere amp Converging

9

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Is A Player

Consumer

PC Embedded Controller USB

Human Interfaces Ethernet RightTouchtrade

Automotive Infotainment Networking MOSTreg USB amp Ethernet Wireless Headphones

Q1 FY11 of Connectivity

Revenue

~85 of Revenue Related to Connectivity

USB Connectivity Battery Charging Port Protection Wireless Audio Ethernet

Hubs Graphics Security

All Data is Unaudited

10

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Ecosystem

Wireless Portable Home Audio

USB ConnectivityPeripheral InterfacesUSB 20 rarr 30GraphicsSecurity

MOST Networkingamp Adjacent Devices

A $14B Market in 2011

Growing at gt20 CAGR

Human Interface DevicesRightTouchtradeNatural Interfaces

Source SMSC and Third Party Estimates CAGR represents growth opportunity

11

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Investing In Our FutureRationale Business Model Investment

First SMSC design facility in low-cost geography

Broad technical capabilities

Drives 2-3X product productivity

$34MSept 8 2009~50 resources

Extends SMSC design capabilities in low-cost geographies

World-class analog mixed-

signal expertise

Drives 2-3X product productivity

$0April 1 2010~20 resources

Middleware and framework for MOSTreg

enabled technologies

gt60 GM $89MNov 5 2009~30 resources

Entreacutee into wireless audio market with strong IP portfolio

38 rarr ~50 GM $55MFeb 16 2010~15 resources

Expand consumer presence and solidify position in wireless audio market

35 rarr ~50 GM $22MJune 14 2010~40 resources

Sofia DesignSofia DesignCenterCenter

Investments exclude potential earnout payments gross margin goals are non-GAAP

12

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems A High Growth Opportunity

June 29 2010NASDAQ Market Site ndash New York

13

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio

Portable applicationsLow powerRF IP amp expertise

Home standardsSupports HD audioDigital baseband expertise

Expect gt$25M annual revenue run-rate exiting FY11gt30 CAGR marketGross margin opportunity in line with company strategy

CANADA SINGAPORE THE NETHERLANDS

14

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer and STS are complementary and positioned for fast growth

Source Gartner press release - 03042010 SMSC Marketing

STS Wide Band

Best-in-class interference robustness amp co-

existence combined with lowest latency

High QoS scalable platform based on back-

and forward compatible baseband ICs

Fit for all multi-stream home applications

Dedicated architecture for seamless switching between 24G 52 amp 58Ghz

Kleer Narrow Band

Best-in-class low-operating Power

Full interoperability between products and customers

High QoS RF ICs

Strongly positioned for battery-operated devices

Dedicated architecture for co-existence in crowded 24GHz spectrum

A Growing Market Major Customers

~30 CAGR

CY09 CY10 CY11 CY12 CY13

15

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems ndash A Compelling Growth Opportunity

Our Business Model

The established leader for Wireless Audio

Proven unique proprietary technology

Leadership through complete coverage of all volume audio applications

Intimacy with major global customers

Leading presence in Home and Portable products

Our Products

Full systems amp support

Architecture

Hardware

Software

ODMOEM support

Back ndash

and forward compatible products spanning multiple product life

cycles

Our Customers

Major global brands

Major OEMs worldwide

16

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities are Driven by a Changing Landscape

CD-quality audio content is streamed wirelessly from rear seat displays to wireless headphones

Multiple displays show selectable content vehicle occupants wear wireless headphones to tune into the content on the display they are watching

Super thin LED TVrsquos require external speakers systems while TV-included Skype functionality requests wireless headsets

3-DPortable 3-D screens will fuel penetration of

wireless HD Surround Audio Wireless Video link for real streaming wireless video from portable products to TVrsquos PCrsquos etc

17

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Wireless Audio Growth Opportunity

Addressing a SAM of ~$109M growing to ~$235M in 2013(~30 CAGR)

Home Theatre

Stereo amp Docking systems

Gaming amp Head sets

Headphones ampEar buds

LED TV Audio

PC Audio

InfotainmentVideoNew

Applications

Automotive

Television

Home Audio

Ear buds

Headphonessets

Source SMSC amp Third Party Estimates

Handheld

Gaming

Desktop

Mobile

Automotive

18

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Continued Commitment to Growth

Expanding Product Portfolio

USBHSIC

MOSTreg Expansion

RightTouchtrade

Wireless Audio

Meeting Our FinancialTargets

16 Operating Margin

Continued CorporateOptimization

Addressing theConnectivity Ecosystem

Higher Value Solutions

Continued Growth inProfitability

2009 2010 2011 Future

Based on SMSC fiscal years

Increasing MarketPresence

Automotive MarketShare

PC Customer Base

Analog amp PortableGrowth

Expanded SoftwarePresence

Picking Our Spots

PC Connectivity

USB

Automotive

Rightsized the Business

Greater Percentage of Product System Solutions

Meeting 20 Operating Margin Target

19

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

5 Product Lines Driving Growth OpportunitiesComputing amp Connectivity Products

Our Core Business

Pie pieces reflect Q1FY11 revenues

USB applicationsLow power USB (HSIC)Continued PC market recoveryNew customer acquisition

Next speed generationMOSTreg companionsTrueAutotrade ProductsWireless Audio

RightTouchtradeEnvironmental controlEnergy managementPort Power

USB feature integrationPortable connectivityBattery charging

~20

gt30

~30

~30

Percentages reflect anticipated revenue growth opportunity in coming years

Average ASP $100

Average ASP $350

Average ASP $029

Average ASP $050

Automotive ProductsMarket Share Leader

Analog ASSPsBuilding our Portfolio

Computing amp Connectivity

62 or $611M

Automotive19 or $183M

Analog11 or $103M

Portables7 or $63M

Audio amp videoHybrid bandwidthNetwork connectivityAverage ASP $400

Wireless AudioGrowth through Features Wireless Audio

1 or $12M

~35

Portable ProductsPortable Connectivity Leader

20

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Content Value Provides Growth OpportunitiesNext generation MOSTregCompanion devicesUSB amp EthernetWireless Audio

$700 $5000

Embedded controllersUSB applicationsEnvironmental control RightTouchtrade

$015 $500

$040 $100

Average ~$10car

Average ~$050phone

Average ~$115computer

USB SubsystemIncreased connectivity Portable power

$030 $250

In the Home Environmenthellip

Average ~$090environment

Ethernet controllers

USB Products

RightTouch

Wireless Audio

In the smartphonehellip

In the PChellip

Content value in the carhellip Todayrsquos Content Range

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

7

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Executing on Financial ObjectivesQ1FY11 Highlights

Exceeded revenue gross margin and earnings guidanceRevenue of $972M up 17 sequentially Record non-GAAP gross margin of over 55 Non-GAAP operating margin of 131$033 non-GAAP EPS

Generated ~$121M in cash from operations

Q2FY11 ExpectationsExpect revenue to increase 4 to 7 sequentially

Growth expected in all product areasCurrent Q2FY11 OEM backlog coverage gt80

Looking Ahead to 2HFY11Anticipate muted seasonalityCurrent Q3 OEM backlog coverage at gt30Expect to achieve 16 non-GAAP operating margin by Q3FY11

See reconciliations from GAAP to non-GAAP information at the end of this presentation

8

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Connectivity Is Everywhere amp Converging

9

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Is A Player

Consumer

PC Embedded Controller USB

Human Interfaces Ethernet RightTouchtrade

Automotive Infotainment Networking MOSTreg USB amp Ethernet Wireless Headphones

Q1 FY11 of Connectivity

Revenue

~85 of Revenue Related to Connectivity

USB Connectivity Battery Charging Port Protection Wireless Audio Ethernet

Hubs Graphics Security

All Data is Unaudited

10

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Ecosystem

Wireless Portable Home Audio

USB ConnectivityPeripheral InterfacesUSB 20 rarr 30GraphicsSecurity

MOST Networkingamp Adjacent Devices

A $14B Market in 2011

Growing at gt20 CAGR

Human Interface DevicesRightTouchtradeNatural Interfaces

Source SMSC and Third Party Estimates CAGR represents growth opportunity

11

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Investing In Our FutureRationale Business Model Investment

First SMSC design facility in low-cost geography

Broad technical capabilities

Drives 2-3X product productivity

$34MSept 8 2009~50 resources

Extends SMSC design capabilities in low-cost geographies

World-class analog mixed-

signal expertise

Drives 2-3X product productivity

$0April 1 2010~20 resources

Middleware and framework for MOSTreg

enabled technologies

gt60 GM $89MNov 5 2009~30 resources

Entreacutee into wireless audio market with strong IP portfolio

38 rarr ~50 GM $55MFeb 16 2010~15 resources

Expand consumer presence and solidify position in wireless audio market

35 rarr ~50 GM $22MJune 14 2010~40 resources

Sofia DesignSofia DesignCenterCenter

Investments exclude potential earnout payments gross margin goals are non-GAAP

12

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems A High Growth Opportunity

June 29 2010NASDAQ Market Site ndash New York

13

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio

Portable applicationsLow powerRF IP amp expertise

Home standardsSupports HD audioDigital baseband expertise

Expect gt$25M annual revenue run-rate exiting FY11gt30 CAGR marketGross margin opportunity in line with company strategy

CANADA SINGAPORE THE NETHERLANDS

14

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer and STS are complementary and positioned for fast growth

Source Gartner press release - 03042010 SMSC Marketing

STS Wide Band

Best-in-class interference robustness amp co-

existence combined with lowest latency

High QoS scalable platform based on back-

and forward compatible baseband ICs

Fit for all multi-stream home applications

Dedicated architecture for seamless switching between 24G 52 amp 58Ghz

Kleer Narrow Band

Best-in-class low-operating Power

Full interoperability between products and customers

High QoS RF ICs

Strongly positioned for battery-operated devices

Dedicated architecture for co-existence in crowded 24GHz spectrum

A Growing Market Major Customers

~30 CAGR

CY09 CY10 CY11 CY12 CY13

15

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems ndash A Compelling Growth Opportunity

Our Business Model

The established leader for Wireless Audio

Proven unique proprietary technology

Leadership through complete coverage of all volume audio applications

Intimacy with major global customers

Leading presence in Home and Portable products

Our Products

Full systems amp support

Architecture

Hardware

Software

ODMOEM support

Back ndash

and forward compatible products spanning multiple product life

cycles

Our Customers

Major global brands

Major OEMs worldwide

16

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities are Driven by a Changing Landscape

CD-quality audio content is streamed wirelessly from rear seat displays to wireless headphones

Multiple displays show selectable content vehicle occupants wear wireless headphones to tune into the content on the display they are watching

Super thin LED TVrsquos require external speakers systems while TV-included Skype functionality requests wireless headsets

3-DPortable 3-D screens will fuel penetration of

wireless HD Surround Audio Wireless Video link for real streaming wireless video from portable products to TVrsquos PCrsquos etc

17

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Wireless Audio Growth Opportunity

Addressing a SAM of ~$109M growing to ~$235M in 2013(~30 CAGR)

Home Theatre

Stereo amp Docking systems

Gaming amp Head sets

Headphones ampEar buds

LED TV Audio

PC Audio

InfotainmentVideoNew

Applications

Automotive

Television

Home Audio

Ear buds

Headphonessets

Source SMSC amp Third Party Estimates

Handheld

Gaming

Desktop

Mobile

Automotive

18

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Continued Commitment to Growth

Expanding Product Portfolio

USBHSIC

MOSTreg Expansion

RightTouchtrade

Wireless Audio

Meeting Our FinancialTargets

16 Operating Margin

Continued CorporateOptimization

Addressing theConnectivity Ecosystem

Higher Value Solutions

Continued Growth inProfitability

2009 2010 2011 Future

Based on SMSC fiscal years

Increasing MarketPresence

Automotive MarketShare

PC Customer Base

Analog amp PortableGrowth

Expanded SoftwarePresence

Picking Our Spots

PC Connectivity

USB

Automotive

Rightsized the Business

Greater Percentage of Product System Solutions

Meeting 20 Operating Margin Target

19

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

5 Product Lines Driving Growth OpportunitiesComputing amp Connectivity Products

Our Core Business

Pie pieces reflect Q1FY11 revenues

USB applicationsLow power USB (HSIC)Continued PC market recoveryNew customer acquisition

Next speed generationMOSTreg companionsTrueAutotrade ProductsWireless Audio

RightTouchtradeEnvironmental controlEnergy managementPort Power

USB feature integrationPortable connectivityBattery charging

~20

gt30

~30

~30

Percentages reflect anticipated revenue growth opportunity in coming years

Average ASP $100

Average ASP $350

Average ASP $029

Average ASP $050

Automotive ProductsMarket Share Leader

Analog ASSPsBuilding our Portfolio

Computing amp Connectivity

62 or $611M

Automotive19 or $183M

Analog11 or $103M

Portables7 or $63M

Audio amp videoHybrid bandwidthNetwork connectivityAverage ASP $400

Wireless AudioGrowth through Features Wireless Audio

1 or $12M

~35

Portable ProductsPortable Connectivity Leader

20

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Content Value Provides Growth OpportunitiesNext generation MOSTregCompanion devicesUSB amp EthernetWireless Audio

$700 $5000

Embedded controllersUSB applicationsEnvironmental control RightTouchtrade

$015 $500

$040 $100

Average ~$10car

Average ~$050phone

Average ~$115computer

USB SubsystemIncreased connectivity Portable power

$030 $250

In the Home Environmenthellip

Average ~$090environment

Ethernet controllers

USB Products

RightTouch

Wireless Audio

In the smartphonehellip

In the PChellip

Content value in the carhellip Todayrsquos Content Range

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

8

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Connectivity Is Everywhere amp Converging

9

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Is A Player

Consumer

PC Embedded Controller USB

Human Interfaces Ethernet RightTouchtrade

Automotive Infotainment Networking MOSTreg USB amp Ethernet Wireless Headphones

Q1 FY11 of Connectivity

Revenue

~85 of Revenue Related to Connectivity

USB Connectivity Battery Charging Port Protection Wireless Audio Ethernet

Hubs Graphics Security

All Data is Unaudited

10

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Ecosystem

Wireless Portable Home Audio

USB ConnectivityPeripheral InterfacesUSB 20 rarr 30GraphicsSecurity

MOST Networkingamp Adjacent Devices

A $14B Market in 2011

Growing at gt20 CAGR

Human Interface DevicesRightTouchtradeNatural Interfaces

Source SMSC and Third Party Estimates CAGR represents growth opportunity

11

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Investing In Our FutureRationale Business Model Investment

First SMSC design facility in low-cost geography

Broad technical capabilities

Drives 2-3X product productivity

$34MSept 8 2009~50 resources

Extends SMSC design capabilities in low-cost geographies

World-class analog mixed-

signal expertise

Drives 2-3X product productivity

$0April 1 2010~20 resources

Middleware and framework for MOSTreg

enabled technologies

gt60 GM $89MNov 5 2009~30 resources

Entreacutee into wireless audio market with strong IP portfolio

38 rarr ~50 GM $55MFeb 16 2010~15 resources

Expand consumer presence and solidify position in wireless audio market

35 rarr ~50 GM $22MJune 14 2010~40 resources

Sofia DesignSofia DesignCenterCenter

Investments exclude potential earnout payments gross margin goals are non-GAAP

12

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems A High Growth Opportunity

June 29 2010NASDAQ Market Site ndash New York

13

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio

Portable applicationsLow powerRF IP amp expertise

Home standardsSupports HD audioDigital baseband expertise

Expect gt$25M annual revenue run-rate exiting FY11gt30 CAGR marketGross margin opportunity in line with company strategy

CANADA SINGAPORE THE NETHERLANDS

14

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer and STS are complementary and positioned for fast growth

Source Gartner press release - 03042010 SMSC Marketing

STS Wide Band

Best-in-class interference robustness amp co-

existence combined with lowest latency

High QoS scalable platform based on back-

and forward compatible baseband ICs

Fit for all multi-stream home applications

Dedicated architecture for seamless switching between 24G 52 amp 58Ghz

Kleer Narrow Band

Best-in-class low-operating Power

Full interoperability between products and customers

High QoS RF ICs

Strongly positioned for battery-operated devices

Dedicated architecture for co-existence in crowded 24GHz spectrum

A Growing Market Major Customers

~30 CAGR

CY09 CY10 CY11 CY12 CY13

15

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems ndash A Compelling Growth Opportunity

Our Business Model

The established leader for Wireless Audio

Proven unique proprietary technology

Leadership through complete coverage of all volume audio applications

Intimacy with major global customers

Leading presence in Home and Portable products

Our Products

Full systems amp support

Architecture

Hardware

Software

ODMOEM support

Back ndash

and forward compatible products spanning multiple product life

cycles

Our Customers

Major global brands

Major OEMs worldwide

16

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities are Driven by a Changing Landscape

CD-quality audio content is streamed wirelessly from rear seat displays to wireless headphones

Multiple displays show selectable content vehicle occupants wear wireless headphones to tune into the content on the display they are watching

Super thin LED TVrsquos require external speakers systems while TV-included Skype functionality requests wireless headsets

3-DPortable 3-D screens will fuel penetration of

wireless HD Surround Audio Wireless Video link for real streaming wireless video from portable products to TVrsquos PCrsquos etc

17

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Wireless Audio Growth Opportunity

Addressing a SAM of ~$109M growing to ~$235M in 2013(~30 CAGR)

Home Theatre

Stereo amp Docking systems

Gaming amp Head sets

Headphones ampEar buds

LED TV Audio

PC Audio

InfotainmentVideoNew

Applications

Automotive

Television

Home Audio

Ear buds

Headphonessets

Source SMSC amp Third Party Estimates

Handheld

Gaming

Desktop

Mobile

Automotive

18

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Continued Commitment to Growth

Expanding Product Portfolio

USBHSIC

MOSTreg Expansion

RightTouchtrade

Wireless Audio

Meeting Our FinancialTargets

16 Operating Margin

Continued CorporateOptimization

Addressing theConnectivity Ecosystem

Higher Value Solutions

Continued Growth inProfitability

2009 2010 2011 Future

Based on SMSC fiscal years

Increasing MarketPresence

Automotive MarketShare

PC Customer Base

Analog amp PortableGrowth

Expanded SoftwarePresence

Picking Our Spots

PC Connectivity

USB

Automotive

Rightsized the Business

Greater Percentage of Product System Solutions

Meeting 20 Operating Margin Target

19

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

5 Product Lines Driving Growth OpportunitiesComputing amp Connectivity Products

Our Core Business

Pie pieces reflect Q1FY11 revenues

USB applicationsLow power USB (HSIC)Continued PC market recoveryNew customer acquisition

Next speed generationMOSTreg companionsTrueAutotrade ProductsWireless Audio

RightTouchtradeEnvironmental controlEnergy managementPort Power

USB feature integrationPortable connectivityBattery charging

~20

gt30

~30

~30

Percentages reflect anticipated revenue growth opportunity in coming years

Average ASP $100

Average ASP $350

Average ASP $029

Average ASP $050

Automotive ProductsMarket Share Leader

Analog ASSPsBuilding our Portfolio

Computing amp Connectivity

62 or $611M

Automotive19 or $183M

Analog11 or $103M

Portables7 or $63M

Audio amp videoHybrid bandwidthNetwork connectivityAverage ASP $400

Wireless AudioGrowth through Features Wireless Audio

1 or $12M

~35

Portable ProductsPortable Connectivity Leader

20

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Content Value Provides Growth OpportunitiesNext generation MOSTregCompanion devicesUSB amp EthernetWireless Audio

$700 $5000

Embedded controllersUSB applicationsEnvironmental control RightTouchtrade

$015 $500

$040 $100

Average ~$10car

Average ~$050phone

Average ~$115computer

USB SubsystemIncreased connectivity Portable power

$030 $250

In the Home Environmenthellip

Average ~$090environment

Ethernet controllers

USB Products

RightTouch

Wireless Audio

In the smartphonehellip

In the PChellip

Content value in the carhellip Todayrsquos Content Range

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

9

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Is A Player

Consumer

PC Embedded Controller USB

Human Interfaces Ethernet RightTouchtrade

Automotive Infotainment Networking MOSTreg USB amp Ethernet Wireless Headphones

Q1 FY11 of Connectivity

Revenue

~85 of Revenue Related to Connectivity

USB Connectivity Battery Charging Port Protection Wireless Audio Ethernet

Hubs Graphics Security

All Data is Unaudited

10

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Ecosystem

Wireless Portable Home Audio

USB ConnectivityPeripheral InterfacesUSB 20 rarr 30GraphicsSecurity

MOST Networkingamp Adjacent Devices

A $14B Market in 2011

Growing at gt20 CAGR

Human Interface DevicesRightTouchtradeNatural Interfaces

Source SMSC and Third Party Estimates CAGR represents growth opportunity

11

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Investing In Our FutureRationale Business Model Investment

First SMSC design facility in low-cost geography

Broad technical capabilities

Drives 2-3X product productivity

$34MSept 8 2009~50 resources

Extends SMSC design capabilities in low-cost geographies

World-class analog mixed-

signal expertise

Drives 2-3X product productivity

$0April 1 2010~20 resources

Middleware and framework for MOSTreg

enabled technologies

gt60 GM $89MNov 5 2009~30 resources

Entreacutee into wireless audio market with strong IP portfolio

38 rarr ~50 GM $55MFeb 16 2010~15 resources

Expand consumer presence and solidify position in wireless audio market

35 rarr ~50 GM $22MJune 14 2010~40 resources

Sofia DesignSofia DesignCenterCenter

Investments exclude potential earnout payments gross margin goals are non-GAAP

12

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems A High Growth Opportunity

June 29 2010NASDAQ Market Site ndash New York

13

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio

Portable applicationsLow powerRF IP amp expertise

Home standardsSupports HD audioDigital baseband expertise

Expect gt$25M annual revenue run-rate exiting FY11gt30 CAGR marketGross margin opportunity in line with company strategy

CANADA SINGAPORE THE NETHERLANDS

14

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer and STS are complementary and positioned for fast growth

Source Gartner press release - 03042010 SMSC Marketing

STS Wide Band

Best-in-class interference robustness amp co-

existence combined with lowest latency

High QoS scalable platform based on back-

and forward compatible baseband ICs

Fit for all multi-stream home applications

Dedicated architecture for seamless switching between 24G 52 amp 58Ghz

Kleer Narrow Band

Best-in-class low-operating Power

Full interoperability between products and customers

High QoS RF ICs

Strongly positioned for battery-operated devices

Dedicated architecture for co-existence in crowded 24GHz spectrum

A Growing Market Major Customers

~30 CAGR

CY09 CY10 CY11 CY12 CY13

15

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems ndash A Compelling Growth Opportunity

Our Business Model

The established leader for Wireless Audio

Proven unique proprietary technology

Leadership through complete coverage of all volume audio applications

Intimacy with major global customers

Leading presence in Home and Portable products

Our Products

Full systems amp support

Architecture

Hardware

Software

ODMOEM support

Back ndash

and forward compatible products spanning multiple product life

cycles

Our Customers

Major global brands

Major OEMs worldwide

16

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities are Driven by a Changing Landscape

CD-quality audio content is streamed wirelessly from rear seat displays to wireless headphones

Multiple displays show selectable content vehicle occupants wear wireless headphones to tune into the content on the display they are watching

Super thin LED TVrsquos require external speakers systems while TV-included Skype functionality requests wireless headsets

3-DPortable 3-D screens will fuel penetration of

wireless HD Surround Audio Wireless Video link for real streaming wireless video from portable products to TVrsquos PCrsquos etc

17

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Wireless Audio Growth Opportunity

Addressing a SAM of ~$109M growing to ~$235M in 2013(~30 CAGR)

Home Theatre

Stereo amp Docking systems

Gaming amp Head sets

Headphones ampEar buds

LED TV Audio

PC Audio

InfotainmentVideoNew

Applications

Automotive

Television

Home Audio

Ear buds

Headphonessets

Source SMSC amp Third Party Estimates

Handheld

Gaming

Desktop

Mobile

Automotive

18

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Continued Commitment to Growth

Expanding Product Portfolio

USBHSIC

MOSTreg Expansion

RightTouchtrade

Wireless Audio

Meeting Our FinancialTargets

16 Operating Margin

Continued CorporateOptimization

Addressing theConnectivity Ecosystem

Higher Value Solutions

Continued Growth inProfitability

2009 2010 2011 Future

Based on SMSC fiscal years

Increasing MarketPresence

Automotive MarketShare

PC Customer Base

Analog amp PortableGrowth

Expanded SoftwarePresence

Picking Our Spots

PC Connectivity

USB

Automotive

Rightsized the Business

Greater Percentage of Product System Solutions

Meeting 20 Operating Margin Target

19

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

5 Product Lines Driving Growth OpportunitiesComputing amp Connectivity Products

Our Core Business

Pie pieces reflect Q1FY11 revenues

USB applicationsLow power USB (HSIC)Continued PC market recoveryNew customer acquisition

Next speed generationMOSTreg companionsTrueAutotrade ProductsWireless Audio

RightTouchtradeEnvironmental controlEnergy managementPort Power

USB feature integrationPortable connectivityBattery charging

~20

gt30

~30

~30

Percentages reflect anticipated revenue growth opportunity in coming years

Average ASP $100

Average ASP $350

Average ASP $029

Average ASP $050

Automotive ProductsMarket Share Leader

Analog ASSPsBuilding our Portfolio

Computing amp Connectivity

62 or $611M

Automotive19 or $183M

Analog11 or $103M

Portables7 or $63M

Audio amp videoHybrid bandwidthNetwork connectivityAverage ASP $400

Wireless AudioGrowth through Features Wireless Audio

1 or $12M

~35

Portable ProductsPortable Connectivity Leader

20

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Content Value Provides Growth OpportunitiesNext generation MOSTregCompanion devicesUSB amp EthernetWireless Audio

$700 $5000

Embedded controllersUSB applicationsEnvironmental control RightTouchtrade

$015 $500

$040 $100

Average ~$10car

Average ~$050phone

Average ~$115computer

USB SubsystemIncreased connectivity Portable power

$030 $250

In the Home Environmenthellip

Average ~$090environment

Ethernet controllers

USB Products

RightTouch

Wireless Audio

In the smartphonehellip

In the PChellip

Content value in the carhellip Todayrsquos Content Range

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

10

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Ecosystem

Wireless Portable Home Audio

USB ConnectivityPeripheral InterfacesUSB 20 rarr 30GraphicsSecurity

MOST Networkingamp Adjacent Devices

A $14B Market in 2011

Growing at gt20 CAGR

Human Interface DevicesRightTouchtradeNatural Interfaces

Source SMSC and Third Party Estimates CAGR represents growth opportunity

11

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Investing In Our FutureRationale Business Model Investment

First SMSC design facility in low-cost geography

Broad technical capabilities

Drives 2-3X product productivity

$34MSept 8 2009~50 resources

Extends SMSC design capabilities in low-cost geographies

World-class analog mixed-

signal expertise

Drives 2-3X product productivity

$0April 1 2010~20 resources

Middleware and framework for MOSTreg

enabled technologies

gt60 GM $89MNov 5 2009~30 resources

Entreacutee into wireless audio market with strong IP portfolio

38 rarr ~50 GM $55MFeb 16 2010~15 resources

Expand consumer presence and solidify position in wireless audio market

35 rarr ~50 GM $22MJune 14 2010~40 resources

Sofia DesignSofia DesignCenterCenter

Investments exclude potential earnout payments gross margin goals are non-GAAP

12

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems A High Growth Opportunity

June 29 2010NASDAQ Market Site ndash New York

13

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio

Portable applicationsLow powerRF IP amp expertise

Home standardsSupports HD audioDigital baseband expertise

Expect gt$25M annual revenue run-rate exiting FY11gt30 CAGR marketGross margin opportunity in line with company strategy

CANADA SINGAPORE THE NETHERLANDS

14

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer and STS are complementary and positioned for fast growth

Source Gartner press release - 03042010 SMSC Marketing

STS Wide Band

Best-in-class interference robustness amp co-

existence combined with lowest latency

High QoS scalable platform based on back-

and forward compatible baseband ICs

Fit for all multi-stream home applications

Dedicated architecture for seamless switching between 24G 52 amp 58Ghz

Kleer Narrow Band

Best-in-class low-operating Power

Full interoperability between products and customers

High QoS RF ICs

Strongly positioned for battery-operated devices

Dedicated architecture for co-existence in crowded 24GHz spectrum

A Growing Market Major Customers

~30 CAGR

CY09 CY10 CY11 CY12 CY13

15

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems ndash A Compelling Growth Opportunity

Our Business Model

The established leader for Wireless Audio

Proven unique proprietary technology

Leadership through complete coverage of all volume audio applications

Intimacy with major global customers

Leading presence in Home and Portable products

Our Products

Full systems amp support

Architecture

Hardware

Software

ODMOEM support

Back ndash

and forward compatible products spanning multiple product life

cycles

Our Customers

Major global brands

Major OEMs worldwide

16

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities are Driven by a Changing Landscape

CD-quality audio content is streamed wirelessly from rear seat displays to wireless headphones

Multiple displays show selectable content vehicle occupants wear wireless headphones to tune into the content on the display they are watching

Super thin LED TVrsquos require external speakers systems while TV-included Skype functionality requests wireless headsets

3-DPortable 3-D screens will fuel penetration of

wireless HD Surround Audio Wireless Video link for real streaming wireless video from portable products to TVrsquos PCrsquos etc

17

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Wireless Audio Growth Opportunity

Addressing a SAM of ~$109M growing to ~$235M in 2013(~30 CAGR)

Home Theatre

Stereo amp Docking systems

Gaming amp Head sets

Headphones ampEar buds

LED TV Audio

PC Audio

InfotainmentVideoNew

Applications

Automotive

Television

Home Audio

Ear buds

Headphonessets

Source SMSC amp Third Party Estimates

Handheld

Gaming

Desktop

Mobile

Automotive

18

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Continued Commitment to Growth

Expanding Product Portfolio

USBHSIC

MOSTreg Expansion

RightTouchtrade

Wireless Audio

Meeting Our FinancialTargets

16 Operating Margin

Continued CorporateOptimization

Addressing theConnectivity Ecosystem

Higher Value Solutions

Continued Growth inProfitability

2009 2010 2011 Future

Based on SMSC fiscal years

Increasing MarketPresence

Automotive MarketShare

PC Customer Base

Analog amp PortableGrowth

Expanded SoftwarePresence

Picking Our Spots

PC Connectivity

USB

Automotive

Rightsized the Business

Greater Percentage of Product System Solutions

Meeting 20 Operating Margin Target

19

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

5 Product Lines Driving Growth OpportunitiesComputing amp Connectivity Products

Our Core Business

Pie pieces reflect Q1FY11 revenues

USB applicationsLow power USB (HSIC)Continued PC market recoveryNew customer acquisition

Next speed generationMOSTreg companionsTrueAutotrade ProductsWireless Audio

RightTouchtradeEnvironmental controlEnergy managementPort Power

USB feature integrationPortable connectivityBattery charging

~20

gt30

~30

~30

Percentages reflect anticipated revenue growth opportunity in coming years

Average ASP $100

Average ASP $350

Average ASP $029

Average ASP $050

Automotive ProductsMarket Share Leader

Analog ASSPsBuilding our Portfolio

Computing amp Connectivity

62 or $611M

Automotive19 or $183M

Analog11 or $103M

Portables7 or $63M

Audio amp videoHybrid bandwidthNetwork connectivityAverage ASP $400

Wireless AudioGrowth through Features Wireless Audio

1 or $12M

~35

Portable ProductsPortable Connectivity Leader

20

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Content Value Provides Growth OpportunitiesNext generation MOSTregCompanion devicesUSB amp EthernetWireless Audio

$700 $5000

Embedded controllersUSB applicationsEnvironmental control RightTouchtrade

$015 $500

$040 $100

Average ~$10car

Average ~$050phone

Average ~$115computer

USB SubsystemIncreased connectivity Portable power

$030 $250

In the Home Environmenthellip

Average ~$090environment

Ethernet controllers

USB Products

RightTouch

Wireless Audio

In the smartphonehellip

In the PChellip

Content value in the carhellip Todayrsquos Content Range

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

11

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Investing In Our FutureRationale Business Model Investment

First SMSC design facility in low-cost geography

Broad technical capabilities

Drives 2-3X product productivity

$34MSept 8 2009~50 resources

Extends SMSC design capabilities in low-cost geographies

World-class analog mixed-

signal expertise

Drives 2-3X product productivity

$0April 1 2010~20 resources

Middleware and framework for MOSTreg

enabled technologies

gt60 GM $89MNov 5 2009~30 resources

Entreacutee into wireless audio market with strong IP portfolio

38 rarr ~50 GM $55MFeb 16 2010~15 resources

Expand consumer presence and solidify position in wireless audio market

35 rarr ~50 GM $22MJune 14 2010~40 resources

Sofia DesignSofia DesignCenterCenter

Investments exclude potential earnout payments gross margin goals are non-GAAP

12

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems A High Growth Opportunity

June 29 2010NASDAQ Market Site ndash New York

13

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio

Portable applicationsLow powerRF IP amp expertise

Home standardsSupports HD audioDigital baseband expertise

Expect gt$25M annual revenue run-rate exiting FY11gt30 CAGR marketGross margin opportunity in line with company strategy

CANADA SINGAPORE THE NETHERLANDS

14

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer and STS are complementary and positioned for fast growth

Source Gartner press release - 03042010 SMSC Marketing

STS Wide Band

Best-in-class interference robustness amp co-

existence combined with lowest latency

High QoS scalable platform based on back-

and forward compatible baseband ICs

Fit for all multi-stream home applications

Dedicated architecture for seamless switching between 24G 52 amp 58Ghz

Kleer Narrow Band

Best-in-class low-operating Power

Full interoperability between products and customers

High QoS RF ICs

Strongly positioned for battery-operated devices

Dedicated architecture for co-existence in crowded 24GHz spectrum

A Growing Market Major Customers

~30 CAGR

CY09 CY10 CY11 CY12 CY13

15

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems ndash A Compelling Growth Opportunity

Our Business Model

The established leader for Wireless Audio

Proven unique proprietary technology

Leadership through complete coverage of all volume audio applications

Intimacy with major global customers

Leading presence in Home and Portable products

Our Products

Full systems amp support

Architecture

Hardware

Software

ODMOEM support

Back ndash

and forward compatible products spanning multiple product life

cycles

Our Customers

Major global brands

Major OEMs worldwide

16

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities are Driven by a Changing Landscape

CD-quality audio content is streamed wirelessly from rear seat displays to wireless headphones

Multiple displays show selectable content vehicle occupants wear wireless headphones to tune into the content on the display they are watching

Super thin LED TVrsquos require external speakers systems while TV-included Skype functionality requests wireless headsets

3-DPortable 3-D screens will fuel penetration of

wireless HD Surround Audio Wireless Video link for real streaming wireless video from portable products to TVrsquos PCrsquos etc

17

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Wireless Audio Growth Opportunity

Addressing a SAM of ~$109M growing to ~$235M in 2013(~30 CAGR)

Home Theatre

Stereo amp Docking systems

Gaming amp Head sets

Headphones ampEar buds

LED TV Audio

PC Audio

InfotainmentVideoNew

Applications

Automotive

Television

Home Audio

Ear buds

Headphonessets

Source SMSC amp Third Party Estimates

Handheld

Gaming

Desktop

Mobile

Automotive

18

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Continued Commitment to Growth

Expanding Product Portfolio

USBHSIC

MOSTreg Expansion

RightTouchtrade

Wireless Audio

Meeting Our FinancialTargets

16 Operating Margin

Continued CorporateOptimization

Addressing theConnectivity Ecosystem

Higher Value Solutions

Continued Growth inProfitability

2009 2010 2011 Future

Based on SMSC fiscal years

Increasing MarketPresence

Automotive MarketShare

PC Customer Base

Analog amp PortableGrowth

Expanded SoftwarePresence

Picking Our Spots

PC Connectivity

USB

Automotive

Rightsized the Business

Greater Percentage of Product System Solutions

Meeting 20 Operating Margin Target

19

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

5 Product Lines Driving Growth OpportunitiesComputing amp Connectivity Products

Our Core Business

Pie pieces reflect Q1FY11 revenues

USB applicationsLow power USB (HSIC)Continued PC market recoveryNew customer acquisition

Next speed generationMOSTreg companionsTrueAutotrade ProductsWireless Audio

RightTouchtradeEnvironmental controlEnergy managementPort Power

USB feature integrationPortable connectivityBattery charging

~20

gt30

~30

~30

Percentages reflect anticipated revenue growth opportunity in coming years

Average ASP $100

Average ASP $350

Average ASP $029

Average ASP $050

Automotive ProductsMarket Share Leader

Analog ASSPsBuilding our Portfolio

Computing amp Connectivity

62 or $611M

Automotive19 or $183M

Analog11 or $103M

Portables7 or $63M

Audio amp videoHybrid bandwidthNetwork connectivityAverage ASP $400

Wireless AudioGrowth through Features Wireless Audio

1 or $12M

~35

Portable ProductsPortable Connectivity Leader

20

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Content Value Provides Growth OpportunitiesNext generation MOSTregCompanion devicesUSB amp EthernetWireless Audio

$700 $5000

Embedded controllersUSB applicationsEnvironmental control RightTouchtrade

$015 $500

$040 $100

Average ~$10car

Average ~$050phone

Average ~$115computer

USB SubsystemIncreased connectivity Portable power

$030 $250

In the Home Environmenthellip

Average ~$090environment

Ethernet controllers

USB Products

RightTouch

Wireless Audio

In the smartphonehellip

In the PChellip

Content value in the carhellip Todayrsquos Content Range

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

12

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems A High Growth Opportunity

June 29 2010NASDAQ Market Site ndash New York

13

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio

Portable applicationsLow powerRF IP amp expertise

Home standardsSupports HD audioDigital baseband expertise

Expect gt$25M annual revenue run-rate exiting FY11gt30 CAGR marketGross margin opportunity in line with company strategy

CANADA SINGAPORE THE NETHERLANDS

14

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer and STS are complementary and positioned for fast growth

Source Gartner press release - 03042010 SMSC Marketing

STS Wide Band

Best-in-class interference robustness amp co-

existence combined with lowest latency

High QoS scalable platform based on back-

and forward compatible baseband ICs

Fit for all multi-stream home applications

Dedicated architecture for seamless switching between 24G 52 amp 58Ghz

Kleer Narrow Band

Best-in-class low-operating Power

Full interoperability between products and customers

High QoS RF ICs

Strongly positioned for battery-operated devices

Dedicated architecture for co-existence in crowded 24GHz spectrum

A Growing Market Major Customers

~30 CAGR

CY09 CY10 CY11 CY12 CY13

15

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems ndash A Compelling Growth Opportunity

Our Business Model

The established leader for Wireless Audio

Proven unique proprietary technology

Leadership through complete coverage of all volume audio applications

Intimacy with major global customers

Leading presence in Home and Portable products

Our Products

Full systems amp support

Architecture

Hardware

Software

ODMOEM support

Back ndash

and forward compatible products spanning multiple product life

cycles

Our Customers

Major global brands

Major OEMs worldwide

16

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities are Driven by a Changing Landscape

CD-quality audio content is streamed wirelessly from rear seat displays to wireless headphones

Multiple displays show selectable content vehicle occupants wear wireless headphones to tune into the content on the display they are watching

Super thin LED TVrsquos require external speakers systems while TV-included Skype functionality requests wireless headsets

3-DPortable 3-D screens will fuel penetration of

wireless HD Surround Audio Wireless Video link for real streaming wireless video from portable products to TVrsquos PCrsquos etc

17

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Wireless Audio Growth Opportunity

Addressing a SAM of ~$109M growing to ~$235M in 2013(~30 CAGR)

Home Theatre

Stereo amp Docking systems

Gaming amp Head sets

Headphones ampEar buds

LED TV Audio

PC Audio

InfotainmentVideoNew

Applications

Automotive

Television

Home Audio

Ear buds

Headphonessets

Source SMSC amp Third Party Estimates

Handheld

Gaming

Desktop

Mobile

Automotive

18

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Continued Commitment to Growth

Expanding Product Portfolio

USBHSIC

MOSTreg Expansion

RightTouchtrade

Wireless Audio

Meeting Our FinancialTargets

16 Operating Margin

Continued CorporateOptimization

Addressing theConnectivity Ecosystem

Higher Value Solutions

Continued Growth inProfitability

2009 2010 2011 Future

Based on SMSC fiscal years

Increasing MarketPresence

Automotive MarketShare

PC Customer Base

Analog amp PortableGrowth

Expanded SoftwarePresence

Picking Our Spots

PC Connectivity

USB

Automotive

Rightsized the Business

Greater Percentage of Product System Solutions

Meeting 20 Operating Margin Target

19

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

5 Product Lines Driving Growth OpportunitiesComputing amp Connectivity Products

Our Core Business

Pie pieces reflect Q1FY11 revenues

USB applicationsLow power USB (HSIC)Continued PC market recoveryNew customer acquisition

Next speed generationMOSTreg companionsTrueAutotrade ProductsWireless Audio

RightTouchtradeEnvironmental controlEnergy managementPort Power

USB feature integrationPortable connectivityBattery charging

~20

gt30

~30

~30

Percentages reflect anticipated revenue growth opportunity in coming years

Average ASP $100

Average ASP $350

Average ASP $029

Average ASP $050

Automotive ProductsMarket Share Leader

Analog ASSPsBuilding our Portfolio

Computing amp Connectivity

62 or $611M

Automotive19 or $183M

Analog11 or $103M

Portables7 or $63M

Audio amp videoHybrid bandwidthNetwork connectivityAverage ASP $400

Wireless AudioGrowth through Features Wireless Audio

1 or $12M

~35

Portable ProductsPortable Connectivity Leader

20

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Content Value Provides Growth OpportunitiesNext generation MOSTregCompanion devicesUSB amp EthernetWireless Audio

$700 $5000

Embedded controllersUSB applicationsEnvironmental control RightTouchtrade

$015 $500

$040 $100

Average ~$10car

Average ~$050phone

Average ~$115computer

USB SubsystemIncreased connectivity Portable power

$030 $250

In the Home Environmenthellip

Average ~$090environment

Ethernet controllers

USB Products

RightTouch

Wireless Audio

In the smartphonehellip

In the PChellip

Content value in the carhellip Todayrsquos Content Range

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

13

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio

Portable applicationsLow powerRF IP amp expertise

Home standardsSupports HD audioDigital baseband expertise

Expect gt$25M annual revenue run-rate exiting FY11gt30 CAGR marketGross margin opportunity in line with company strategy

CANADA SINGAPORE THE NETHERLANDS

14

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer and STS are complementary and positioned for fast growth

Source Gartner press release - 03042010 SMSC Marketing

STS Wide Band

Best-in-class interference robustness amp co-

existence combined with lowest latency

High QoS scalable platform based on back-

and forward compatible baseband ICs

Fit for all multi-stream home applications

Dedicated architecture for seamless switching between 24G 52 amp 58Ghz

Kleer Narrow Band

Best-in-class low-operating Power

Full interoperability between products and customers

High QoS RF ICs

Strongly positioned for battery-operated devices

Dedicated architecture for co-existence in crowded 24GHz spectrum

A Growing Market Major Customers

~30 CAGR

CY09 CY10 CY11 CY12 CY13

15

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems ndash A Compelling Growth Opportunity

Our Business Model

The established leader for Wireless Audio

Proven unique proprietary technology

Leadership through complete coverage of all volume audio applications

Intimacy with major global customers

Leading presence in Home and Portable products

Our Products

Full systems amp support

Architecture

Hardware

Software

ODMOEM support

Back ndash

and forward compatible products spanning multiple product life

cycles

Our Customers

Major global brands

Major OEMs worldwide

16

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities are Driven by a Changing Landscape

CD-quality audio content is streamed wirelessly from rear seat displays to wireless headphones

Multiple displays show selectable content vehicle occupants wear wireless headphones to tune into the content on the display they are watching

Super thin LED TVrsquos require external speakers systems while TV-included Skype functionality requests wireless headsets

3-DPortable 3-D screens will fuel penetration of

wireless HD Surround Audio Wireless Video link for real streaming wireless video from portable products to TVrsquos PCrsquos etc

17

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Wireless Audio Growth Opportunity

Addressing a SAM of ~$109M growing to ~$235M in 2013(~30 CAGR)

Home Theatre

Stereo amp Docking systems

Gaming amp Head sets

Headphones ampEar buds

LED TV Audio

PC Audio

InfotainmentVideoNew

Applications

Automotive

Television

Home Audio

Ear buds

Headphonessets

Source SMSC amp Third Party Estimates

Handheld

Gaming

Desktop

Mobile

Automotive

18

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Continued Commitment to Growth

Expanding Product Portfolio

USBHSIC

MOSTreg Expansion

RightTouchtrade

Wireless Audio

Meeting Our FinancialTargets

16 Operating Margin

Continued CorporateOptimization

Addressing theConnectivity Ecosystem

Higher Value Solutions

Continued Growth inProfitability

2009 2010 2011 Future

Based on SMSC fiscal years

Increasing MarketPresence

Automotive MarketShare

PC Customer Base

Analog amp PortableGrowth

Expanded SoftwarePresence

Picking Our Spots

PC Connectivity

USB

Automotive

Rightsized the Business

Greater Percentage of Product System Solutions

Meeting 20 Operating Margin Target

19

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

5 Product Lines Driving Growth OpportunitiesComputing amp Connectivity Products

Our Core Business

Pie pieces reflect Q1FY11 revenues

USB applicationsLow power USB (HSIC)Continued PC market recoveryNew customer acquisition

Next speed generationMOSTreg companionsTrueAutotrade ProductsWireless Audio

RightTouchtradeEnvironmental controlEnergy managementPort Power

USB feature integrationPortable connectivityBattery charging

~20

gt30

~30

~30

Percentages reflect anticipated revenue growth opportunity in coming years

Average ASP $100

Average ASP $350

Average ASP $029

Average ASP $050

Automotive ProductsMarket Share Leader

Analog ASSPsBuilding our Portfolio

Computing amp Connectivity

62 or $611M

Automotive19 or $183M

Analog11 or $103M

Portables7 or $63M

Audio amp videoHybrid bandwidthNetwork connectivityAverage ASP $400

Wireless AudioGrowth through Features Wireless Audio

1 or $12M

~35

Portable ProductsPortable Connectivity Leader

20

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Content Value Provides Growth OpportunitiesNext generation MOSTregCompanion devicesUSB amp EthernetWireless Audio

$700 $5000

Embedded controllersUSB applicationsEnvironmental control RightTouchtrade

$015 $500

$040 $100

Average ~$10car

Average ~$050phone

Average ~$115computer

USB SubsystemIncreased connectivity Portable power

$030 $250

In the Home Environmenthellip

Average ~$090environment

Ethernet controllers

USB Products

RightTouch

Wireless Audio

In the smartphonehellip

In the PChellip

Content value in the carhellip Todayrsquos Content Range

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

14

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer and STS are complementary and positioned for fast growth

Source Gartner press release - 03042010 SMSC Marketing

STS Wide Band

Best-in-class interference robustness amp co-

existence combined with lowest latency

High QoS scalable platform based on back-

and forward compatible baseband ICs

Fit for all multi-stream home applications

Dedicated architecture for seamless switching between 24G 52 amp 58Ghz

Kleer Narrow Band

Best-in-class low-operating Power

Full interoperability between products and customers

High QoS RF ICs

Strongly positioned for battery-operated devices

Dedicated architecture for co-existence in crowded 24GHz spectrum

A Growing Market Major Customers

~30 CAGR

CY09 CY10 CY11 CY12 CY13

15

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems ndash A Compelling Growth Opportunity

Our Business Model

The established leader for Wireless Audio

Proven unique proprietary technology

Leadership through complete coverage of all volume audio applications

Intimacy with major global customers

Leading presence in Home and Portable products

Our Products

Full systems amp support

Architecture

Hardware

Software

ODMOEM support

Back ndash

and forward compatible products spanning multiple product life

cycles

Our Customers

Major global brands

Major OEMs worldwide

16

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities are Driven by a Changing Landscape

CD-quality audio content is streamed wirelessly from rear seat displays to wireless headphones

Multiple displays show selectable content vehicle occupants wear wireless headphones to tune into the content on the display they are watching

Super thin LED TVrsquos require external speakers systems while TV-included Skype functionality requests wireless headsets

3-DPortable 3-D screens will fuel penetration of

wireless HD Surround Audio Wireless Video link for real streaming wireless video from portable products to TVrsquos PCrsquos etc

17

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Wireless Audio Growth Opportunity

Addressing a SAM of ~$109M growing to ~$235M in 2013(~30 CAGR)

Home Theatre

Stereo amp Docking systems

Gaming amp Head sets

Headphones ampEar buds

LED TV Audio

PC Audio

InfotainmentVideoNew

Applications

Automotive

Television

Home Audio

Ear buds

Headphonessets

Source SMSC amp Third Party Estimates

Handheld

Gaming

Desktop

Mobile

Automotive

18

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Continued Commitment to Growth

Expanding Product Portfolio

USBHSIC

MOSTreg Expansion

RightTouchtrade

Wireless Audio

Meeting Our FinancialTargets

16 Operating Margin

Continued CorporateOptimization

Addressing theConnectivity Ecosystem

Higher Value Solutions

Continued Growth inProfitability

2009 2010 2011 Future

Based on SMSC fiscal years

Increasing MarketPresence

Automotive MarketShare

PC Customer Base

Analog amp PortableGrowth

Expanded SoftwarePresence

Picking Our Spots

PC Connectivity

USB

Automotive

Rightsized the Business

Greater Percentage of Product System Solutions

Meeting 20 Operating Margin Target

19

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

5 Product Lines Driving Growth OpportunitiesComputing amp Connectivity Products

Our Core Business

Pie pieces reflect Q1FY11 revenues

USB applicationsLow power USB (HSIC)Continued PC market recoveryNew customer acquisition

Next speed generationMOSTreg companionsTrueAutotrade ProductsWireless Audio

RightTouchtradeEnvironmental controlEnergy managementPort Power

USB feature integrationPortable connectivityBattery charging

~20

gt30

~30

~30

Percentages reflect anticipated revenue growth opportunity in coming years

Average ASP $100

Average ASP $350

Average ASP $029

Average ASP $050

Automotive ProductsMarket Share Leader

Analog ASSPsBuilding our Portfolio

Computing amp Connectivity

62 or $611M

Automotive19 or $183M

Analog11 or $103M

Portables7 or $63M

Audio amp videoHybrid bandwidthNetwork connectivityAverage ASP $400

Wireless AudioGrowth through Features Wireless Audio

1 or $12M

~35

Portable ProductsPortable Connectivity Leader

20

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Content Value Provides Growth OpportunitiesNext generation MOSTregCompanion devicesUSB amp EthernetWireless Audio

$700 $5000

Embedded controllersUSB applicationsEnvironmental control RightTouchtrade

$015 $500

$040 $100

Average ~$10car

Average ~$050phone

Average ~$115computer

USB SubsystemIncreased connectivity Portable power

$030 $250

In the Home Environmenthellip

Average ~$090environment

Ethernet controllers

USB Products

RightTouch

Wireless Audio

In the smartphonehellip

In the PChellip

Content value in the carhellip Todayrsquos Content Range

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

15

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Wireless Audio Systems ndash A Compelling Growth Opportunity

Our Business Model

The established leader for Wireless Audio

Proven unique proprietary technology

Leadership through complete coverage of all volume audio applications

Intimacy with major global customers

Leading presence in Home and Portable products

Our Products

Full systems amp support

Architecture

Hardware

Software

ODMOEM support

Back ndash

and forward compatible products spanning multiple product life

cycles

Our Customers

Major global brands

Major OEMs worldwide

16

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities are Driven by a Changing Landscape

CD-quality audio content is streamed wirelessly from rear seat displays to wireless headphones

Multiple displays show selectable content vehicle occupants wear wireless headphones to tune into the content on the display they are watching

Super thin LED TVrsquos require external speakers systems while TV-included Skype functionality requests wireless headsets

3-DPortable 3-D screens will fuel penetration of

wireless HD Surround Audio Wireless Video link for real streaming wireless video from portable products to TVrsquos PCrsquos etc

17

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Wireless Audio Growth Opportunity

Addressing a SAM of ~$109M growing to ~$235M in 2013(~30 CAGR)

Home Theatre

Stereo amp Docking systems

Gaming amp Head sets

Headphones ampEar buds

LED TV Audio

PC Audio

InfotainmentVideoNew

Applications

Automotive

Television

Home Audio

Ear buds

Headphonessets

Source SMSC amp Third Party Estimates

Handheld

Gaming

Desktop

Mobile

Automotive

18

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Continued Commitment to Growth

Expanding Product Portfolio

USBHSIC

MOSTreg Expansion

RightTouchtrade

Wireless Audio

Meeting Our FinancialTargets

16 Operating Margin

Continued CorporateOptimization

Addressing theConnectivity Ecosystem

Higher Value Solutions

Continued Growth inProfitability

2009 2010 2011 Future

Based on SMSC fiscal years

Increasing MarketPresence

Automotive MarketShare

PC Customer Base

Analog amp PortableGrowth

Expanded SoftwarePresence

Picking Our Spots

PC Connectivity

USB

Automotive

Rightsized the Business

Greater Percentage of Product System Solutions

Meeting 20 Operating Margin Target

19

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

5 Product Lines Driving Growth OpportunitiesComputing amp Connectivity Products

Our Core Business

Pie pieces reflect Q1FY11 revenues

USB applicationsLow power USB (HSIC)Continued PC market recoveryNew customer acquisition

Next speed generationMOSTreg companionsTrueAutotrade ProductsWireless Audio

RightTouchtradeEnvironmental controlEnergy managementPort Power

USB feature integrationPortable connectivityBattery charging

~20

gt30

~30

~30

Percentages reflect anticipated revenue growth opportunity in coming years

Average ASP $100

Average ASP $350

Average ASP $029

Average ASP $050

Automotive ProductsMarket Share Leader

Analog ASSPsBuilding our Portfolio

Computing amp Connectivity

62 or $611M

Automotive19 or $183M

Analog11 or $103M

Portables7 or $63M

Audio amp videoHybrid bandwidthNetwork connectivityAverage ASP $400

Wireless AudioGrowth through Features Wireless Audio

1 or $12M

~35

Portable ProductsPortable Connectivity Leader

20

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Content Value Provides Growth OpportunitiesNext generation MOSTregCompanion devicesUSB amp EthernetWireless Audio

$700 $5000

Embedded controllersUSB applicationsEnvironmental control RightTouchtrade

$015 $500

$040 $100

Average ~$10car

Average ~$050phone

Average ~$115computer

USB SubsystemIncreased connectivity Portable power

$030 $250

In the Home Environmenthellip

Average ~$090environment

Ethernet controllers

USB Products

RightTouch

Wireless Audio

In the smartphonehellip

In the PChellip

Content value in the carhellip Todayrsquos Content Range

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

16

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities are Driven by a Changing Landscape

CD-quality audio content is streamed wirelessly from rear seat displays to wireless headphones

Multiple displays show selectable content vehicle occupants wear wireless headphones to tune into the content on the display they are watching

Super thin LED TVrsquos require external speakers systems while TV-included Skype functionality requests wireless headsets

3-DPortable 3-D screens will fuel penetration of

wireless HD Surround Audio Wireless Video link for real streaming wireless video from portable products to TVrsquos PCrsquos etc

17

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Wireless Audio Growth Opportunity

Addressing a SAM of ~$109M growing to ~$235M in 2013(~30 CAGR)

Home Theatre

Stereo amp Docking systems

Gaming amp Head sets

Headphones ampEar buds

LED TV Audio

PC Audio

InfotainmentVideoNew

Applications

Automotive

Television

Home Audio

Ear buds

Headphonessets

Source SMSC amp Third Party Estimates

Handheld

Gaming

Desktop

Mobile

Automotive

18

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Continued Commitment to Growth

Expanding Product Portfolio

USBHSIC

MOSTreg Expansion

RightTouchtrade

Wireless Audio

Meeting Our FinancialTargets

16 Operating Margin

Continued CorporateOptimization

Addressing theConnectivity Ecosystem

Higher Value Solutions

Continued Growth inProfitability

2009 2010 2011 Future

Based on SMSC fiscal years

Increasing MarketPresence

Automotive MarketShare

PC Customer Base

Analog amp PortableGrowth

Expanded SoftwarePresence

Picking Our Spots

PC Connectivity

USB

Automotive

Rightsized the Business

Greater Percentage of Product System Solutions

Meeting 20 Operating Margin Target

19

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

5 Product Lines Driving Growth OpportunitiesComputing amp Connectivity Products

Our Core Business

Pie pieces reflect Q1FY11 revenues

USB applicationsLow power USB (HSIC)Continued PC market recoveryNew customer acquisition

Next speed generationMOSTreg companionsTrueAutotrade ProductsWireless Audio

RightTouchtradeEnvironmental controlEnergy managementPort Power

USB feature integrationPortable connectivityBattery charging

~20

gt30

~30

~30

Percentages reflect anticipated revenue growth opportunity in coming years

Average ASP $100

Average ASP $350

Average ASP $029

Average ASP $050

Automotive ProductsMarket Share Leader

Analog ASSPsBuilding our Portfolio

Computing amp Connectivity

62 or $611M

Automotive19 or $183M

Analog11 or $103M

Portables7 or $63M

Audio amp videoHybrid bandwidthNetwork connectivityAverage ASP $400

Wireless AudioGrowth through Features Wireless Audio

1 or $12M

~35

Portable ProductsPortable Connectivity Leader

20

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Content Value Provides Growth OpportunitiesNext generation MOSTregCompanion devicesUSB amp EthernetWireless Audio

$700 $5000

Embedded controllersUSB applicationsEnvironmental control RightTouchtrade

$015 $500

$040 $100

Average ~$10car

Average ~$050phone

Average ~$115computer

USB SubsystemIncreased connectivity Portable power

$030 $250

In the Home Environmenthellip

Average ~$090environment

Ethernet controllers

USB Products

RightTouch

Wireless Audio

In the smartphonehellip

In the PChellip

Content value in the carhellip Todayrsquos Content Range

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

17

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

The Wireless Audio Growth Opportunity

Addressing a SAM of ~$109M growing to ~$235M in 2013(~30 CAGR)

Home Theatre

Stereo amp Docking systems

Gaming amp Head sets

Headphones ampEar buds

LED TV Audio

PC Audio

InfotainmentVideoNew

Applications

Automotive

Television

Home Audio

Ear buds

Headphonessets

Source SMSC amp Third Party Estimates

Handheld

Gaming

Desktop

Mobile

Automotive

18

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Continued Commitment to Growth

Expanding Product Portfolio

USBHSIC

MOSTreg Expansion

RightTouchtrade

Wireless Audio

Meeting Our FinancialTargets

16 Operating Margin

Continued CorporateOptimization

Addressing theConnectivity Ecosystem

Higher Value Solutions

Continued Growth inProfitability

2009 2010 2011 Future

Based on SMSC fiscal years

Increasing MarketPresence

Automotive MarketShare

PC Customer Base

Analog amp PortableGrowth

Expanded SoftwarePresence

Picking Our Spots

PC Connectivity

USB

Automotive

Rightsized the Business

Greater Percentage of Product System Solutions

Meeting 20 Operating Margin Target

19

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

5 Product Lines Driving Growth OpportunitiesComputing amp Connectivity Products

Our Core Business

Pie pieces reflect Q1FY11 revenues

USB applicationsLow power USB (HSIC)Continued PC market recoveryNew customer acquisition

Next speed generationMOSTreg companionsTrueAutotrade ProductsWireless Audio

RightTouchtradeEnvironmental controlEnergy managementPort Power

USB feature integrationPortable connectivityBattery charging

~20

gt30

~30

~30

Percentages reflect anticipated revenue growth opportunity in coming years

Average ASP $100

Average ASP $350

Average ASP $029

Average ASP $050

Automotive ProductsMarket Share Leader

Analog ASSPsBuilding our Portfolio

Computing amp Connectivity

62 or $611M

Automotive19 or $183M

Analog11 or $103M

Portables7 or $63M

Audio amp videoHybrid bandwidthNetwork connectivityAverage ASP $400

Wireless AudioGrowth through Features Wireless Audio

1 or $12M

~35

Portable ProductsPortable Connectivity Leader

20

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Content Value Provides Growth OpportunitiesNext generation MOSTregCompanion devicesUSB amp EthernetWireless Audio

$700 $5000

Embedded controllersUSB applicationsEnvironmental control RightTouchtrade

$015 $500

$040 $100

Average ~$10car

Average ~$050phone

Average ~$115computer

USB SubsystemIncreased connectivity Portable power

$030 $250

In the Home Environmenthellip

Average ~$090environment

Ethernet controllers

USB Products

RightTouch

Wireless Audio

In the smartphonehellip

In the PChellip

Content value in the carhellip Todayrsquos Content Range

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

18

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Continued Commitment to Growth

Expanding Product Portfolio

USBHSIC

MOSTreg Expansion

RightTouchtrade

Wireless Audio

Meeting Our FinancialTargets

16 Operating Margin

Continued CorporateOptimization

Addressing theConnectivity Ecosystem

Higher Value Solutions

Continued Growth inProfitability

2009 2010 2011 Future

Based on SMSC fiscal years

Increasing MarketPresence

Automotive MarketShare

PC Customer Base

Analog amp PortableGrowth

Expanded SoftwarePresence

Picking Our Spots

PC Connectivity

USB

Automotive

Rightsized the Business

Greater Percentage of Product System Solutions

Meeting 20 Operating Margin Target

19

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

5 Product Lines Driving Growth OpportunitiesComputing amp Connectivity Products

Our Core Business

Pie pieces reflect Q1FY11 revenues

USB applicationsLow power USB (HSIC)Continued PC market recoveryNew customer acquisition

Next speed generationMOSTreg companionsTrueAutotrade ProductsWireless Audio

RightTouchtradeEnvironmental controlEnergy managementPort Power

USB feature integrationPortable connectivityBattery charging

~20

gt30

~30

~30

Percentages reflect anticipated revenue growth opportunity in coming years

Average ASP $100

Average ASP $350

Average ASP $029

Average ASP $050

Automotive ProductsMarket Share Leader

Analog ASSPsBuilding our Portfolio

Computing amp Connectivity

62 or $611M

Automotive19 or $183M

Analog11 or $103M

Portables7 or $63M

Audio amp videoHybrid bandwidthNetwork connectivityAverage ASP $400

Wireless AudioGrowth through Features Wireless Audio

1 or $12M

~35

Portable ProductsPortable Connectivity Leader

20

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Content Value Provides Growth OpportunitiesNext generation MOSTregCompanion devicesUSB amp EthernetWireless Audio

$700 $5000

Embedded controllersUSB applicationsEnvironmental control RightTouchtrade

$015 $500

$040 $100

Average ~$10car

Average ~$050phone

Average ~$115computer

USB SubsystemIncreased connectivity Portable power

$030 $250

In the Home Environmenthellip

Average ~$090environment

Ethernet controllers

USB Products

RightTouch

Wireless Audio

In the smartphonehellip

In the PChellip

Content value in the carhellip Todayrsquos Content Range

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

19

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

5 Product Lines Driving Growth OpportunitiesComputing amp Connectivity Products

Our Core Business

Pie pieces reflect Q1FY11 revenues

USB applicationsLow power USB (HSIC)Continued PC market recoveryNew customer acquisition

Next speed generationMOSTreg companionsTrueAutotrade ProductsWireless Audio

RightTouchtradeEnvironmental controlEnergy managementPort Power

USB feature integrationPortable connectivityBattery charging

~20

gt30

~30

~30

Percentages reflect anticipated revenue growth opportunity in coming years

Average ASP $100

Average ASP $350

Average ASP $029

Average ASP $050

Automotive ProductsMarket Share Leader

Analog ASSPsBuilding our Portfolio

Computing amp Connectivity

62 or $611M

Automotive19 or $183M

Analog11 or $103M

Portables7 or $63M

Audio amp videoHybrid bandwidthNetwork connectivityAverage ASP $400

Wireless AudioGrowth through Features Wireless Audio

1 or $12M

~35

Portable ProductsPortable Connectivity Leader

20

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Content Value Provides Growth OpportunitiesNext generation MOSTregCompanion devicesUSB amp EthernetWireless Audio

$700 $5000

Embedded controllersUSB applicationsEnvironmental control RightTouchtrade

$015 $500

$040 $100

Average ~$10car

Average ~$050phone

Average ~$115computer

USB SubsystemIncreased connectivity Portable power

$030 $250

In the Home Environmenthellip

Average ~$090environment

Ethernet controllers

USB Products

RightTouch

Wireless Audio

In the smartphonehellip

In the PChellip

Content value in the carhellip Todayrsquos Content Range

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

20

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Content Value Provides Growth OpportunitiesNext generation MOSTregCompanion devicesUSB amp EthernetWireless Audio

$700 $5000

Embedded controllersUSB applicationsEnvironmental control RightTouchtrade

$015 $500

$040 $100

Average ~$10car

Average ~$050phone

Average ~$115computer

USB SubsystemIncreased connectivity Portable power

$030 $250

In the Home Environmenthellip

Average ~$090environment

Ethernet controllers

USB Products

RightTouch

Wireless Audio

In the smartphonehellip

In the PChellip

Content value in the carhellip Todayrsquos Content Range

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

21

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Growth Driven by Market Recovery amp Share Gains

Return to 2008 revenue run-rates

Record revenue levels based on market share gains

Record revenue levels based on smartphone market share

Increased market share primarily in Asia

RightTouchtrade ramp

Automotive industry recovery

Ramps primarily in Japan amp Europe

PC unit decline

Fall in Automotive units worldwide

PC unit decline primarily in N America

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

22

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Expanding the Value ChainMoving to Full Systems Solutions

Automotive Network (MOSTreg)

Wireless Audio Portable

USB Graphics

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

23

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Market Share Positions in Our Target Markets

SMSC PC Market Share

SMSC USB Market Share

SMSC PC SAM

$457M $667M

SMSC USB SAMSMSC Automotive SAM

Embedded Controllers

$269MIO

Controllers

$81M

Thermal Management

$81M

$191M $244M

Hubs

$98M

Media Readers

$35MUSB to

Ethernet

$32M

USB Subsystems in Smartphones

$79M

$96M $144M

MOSTreg NIC

$72M

MOST Companion

$47MTrueAutotrade

USB

$20M

SMSC Auto Market Share

TrueAuto Ethernet

$5MRightTouchtrade

$106M

Source SMSC and Third Party Estimates

SMSC Wireless Audio Market Share

Energy Management

$130M

SMSC Wireless Audio SAM

$109M

Consumer ampAutomotive

$109M

CY09 CY10 CY09 CY10CY09 CY10 CY10

25 20Q1FY10 Q1FY11

33 51Q1FY10 Q1FY11

28 39Q1FY10 Q1FY11

23Q1FY11

SMSC amp Third Party Estimates Market share calculated by dividing quarterly SAM estimate by Q1FY11 revenue except for Wireless Audio Based on FY11 quarterly exit revenue run-rate

(CY10) (CY10) (CY10) (CY10)

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

24

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Diverse Company with an Evolving MixVertical Market RevenuesRevenues by Product Line

Now

SMSC Estimates All Data is Unaudited

Future

Now

Future

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

25

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

World Class Customers and Partners

Automotive

Portable

Peripherals

PCMajor PC brands worldwide Major ODM white box PCs

Expanding OEM presence Tier 1 automotive suppliers

Smartphone OEMs Major reference designs

Monitors PrintersDocks

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

26

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Our Growing Worldwide RampD Presence

Sofia Bulgaria Analog Engineering

Sofia Bulgaria Analog Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Gothenburg SwedenKarlsruhe Germany Pforzheim Germany Automotive Engineering

Chennai India SMSC Corporate Engineering

Chennai India SMSC Corporate Engineering

TucsonAnalog Engineering

Tucson Analog Engineering

Austin Automotive EngineeringPC amp Connectivity Engineering

Austin Automotive Engineering PC amp Connectivity Engineering

New YorkPC amp Connectivity EngineeringWW Test Engineering

New York PC amp Connectivity Engineering WW Test Engineering

Ottawa Wireless Audio

Ottawa Wireless Audio

A Successful Design ModelProduct Line Engineering

ArchitectureHigh Level Design

Design Solutions Execution

Validation amp Verification

gt500 Engineers WorldwideAmsterdamSingapore Wireless Audio

AmsterdamSingapore Wireless Audio

Phoenix Corporate EngineeringPortable EngineeringSMSC Corporate Engineering

Phoenix Corporate Engineering Portable EngineeringSMSC Corporate Engineering

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

27

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Continuing to Deliver Expanding Earnings

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

28

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC A Compelling Company

Delivering Top and Bottom Line Growth

Participating in Exciting Markets with New and Differentiating Products

Has the Team to Execute

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

29

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Robert HollingsworthSenior VP amp GM

SMSC Growth in Connectivity

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

30

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Now a Growth Business

Our ProductsSystem Management Embedded ControllersInnovative USB solutionsHuman Interface Device controllersIndustrial grade embedded networking and IO solutions

Our CustomersWorldwide PC and Consumer brandsLeading ODM manufacturers Major peripheral design companies

Our Business ModelA Close Engineering Strategic Selling relationship with CustomersApplication-specific SolutionsStandard Interfaces plus Architectural content

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

31

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket Events

Consumer PC sales recovered in 2009Beginning of Enterprise PC refresh cycleSmartBooks fail to deploy iPad revives Tablet PCs

Our ProductsDelivered next generation PC Embedded ControllersRamped production of USB-to-Ethernet SolutionNew USB 20 opportunities continue to be identifiedReceived patent for Inter-Chip Connectivitytrade (ICC) a portion of the High Speed Interconnect (HSIC) specification

The FUTURE1st USB 30 product sampling (USB Graphics)Architected 3D sensor solutions based on Canesta investmentTransaction and Secure Storage application opportunities identified

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

32

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

PC Market Forecast Indicates Robust Growth in 2010

Looking back at 20096 higher growth than we expectedNetbook sales drive the increaseSmartBook volumes never materializedWindowsreg 7 had little if any impact

So what happenedbull

All-In-One Desktops proliferate in Consumerbull

Intel and AMD eliminate 3rd

party chipsetsbull

SmartBooks

wait for Google Operating Systembull

Muted Enterprise PC sales

Looking Ahead in 2010Pent-up Demand in EnterpriseWindows XP replaced by Windows 7Netbook volumes continue to increaseNotebook volumes return to normal

Hinge Factorsbull

Worldwide economy factorbull

Netbook

versus Notebook ratio in Consumerbull

Semiconductor cycle implicationsbull

Impact of iPadTablet sales on PC growth

PC Platforms 2009 2010 2011 2012(K units) (K units) (K units) (K units) Market CAGR

Data Source Gartner SMSC SMSC SMSC

Commercial Desktop 79800 81300 86000 88000 25Commercial Notebook 58000 67000 75000 79000 80Consumer Notebook 108000 156600 180000 200000 167

Netbook

Subset 30000 60000 80000 90000 316PC Totals 245800 304900 341000 367000 105Year-over-Year Growth 20 12 8

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

33

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Successfully Expanding Our Global PC Related Customer Base

2008 Today Future

Estimates based on major customer forecast

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

34

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Revenue Growth from Core + New Initiatives

FY10 FY11 FY12 FY13

CAGR Opportunity 20

New Initiatives - USB Graphics USB30 Security Applications HIDUSB 20 Peripherals - Flash Media Readers Hubs Ethernet Combo Devices

PC -

Commercial Desktop PCs Commercial Notebook PCs Consumer Notebook PCsEmbedded Legacy - Embedded Networking Ethernet Controllers Industrial Devices

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

35

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Market Opportunities Driven by a Changing Landscape

Home Entertainment Home amp Business Computers

Automotive Mobile Applications

Solving big problems with application-specific hardware and software

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

36

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

StandardCustom Interconnect

High Performance

System Connection

3D Revolutionary Human Interface Device

USB Graphics Revolutionary

Human Interface Device

Data Security Enable the Cloud

Innovative ValueHigh Value Differentiated User Experience

ldquoDisplay InterfaceControllerrdquo

ldquoSystem InterfaceControllerrdquo

ldquoID InterfaceControllerrdquo

SMSC

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

37

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

What We Do and Where We Are

TodayASP ~$1

TomorrowASP ~$6

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

38

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Green USB High Speed Inter-Chip (HSIC)Low-power Interconnect Solution

Addresses on-board USB communications in battery-powered portable devices while preserving software compatibilityHSIC incorporates SMSCrsquos patented Inter-Chip Connectivitytrade (ICC) technologySMSCrsquos US patent for ICC was recently awarded and SMSC has announced a Patent Licensing Program

New Connectivity PossibilitiesUSB 20 connectivity has now become THE standard for all new peripheral controllersAs many as 15 of USB 20 interconnect opportunities will occur inside systems -requiring low powerHSIC enables a low power USB 20 interconnect option which utilizes the existing USB 20 software infrastructure

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

39

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB 20 IO Performance

Flash Storage MP3 Players Battery Charging

USB 11 Connectivity

Legacy replacement Human Interface 1st Regulated Power

USB 30 Video Transfer

Data Density YouTube High Definition

ldquoUSB 400 Video IO

3D High Definition Chip-to-Chip speed

USB 20 USB 11 USB 30 ldquoUSB 400

USB ndash The Evolution Continues

The GOOD NEWS ishellipUSB 20 Applications Continue to Expand

Power Battery Charging Power ManagementHigh Speed Inter Chip (HSIC) reduces cost

User Input Devices Printers 1st Generation Storage

SuperSpeed Storage amp Connectivity

Ultra High-Speed Storage amp Connectivity

HoweverhellipUSB 30 Deploys Slower than Expected

Chipset Integration OS driver support missing

20021998 2009 ~2015

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

40

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics USB 30 Expands the MarketUniversal Display Connectivity

USB interface embedded in display platformDisplay graphics and video over USBAny device with USB could connect to displays

Market Opportunity Digital WorldProliferation of mobile content amp devicesUSB as universal connectivity standard

-Data power graphics

Secondary Displays

($200M TAM)

Ubiquitous Display Standard

($Billion TAM)

A Growing Market Top ApplicationsProfessional Productivity ndash 2nd or 3rd MonitorUniversal display interface for ProjectorsMulti User Server Display InterfaceDigital SignageRemote Display for Consumer Devices

$M

CY10 CY11 CY12

USB20

USB30

USB 20 Video ~35 CAGR Opportunity

USB 30 Video ~358 CAGR Opportunity

Source SMSC Estimates

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

41

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC USB Graphics SolutionHost Systems

Render images ndash graphic amp video2D3D acceleration

SMSC Solution

Manipulate amp compress host rendered images

Recompose images on remote display via USB

SMSC Deliverables

SystemSoftware Microsoft MacOS Linux Android ChromeGraphics drivers

TransmittingOver USB

(rendering image)

Frame Buffer DisplayedImage

Host Software Drivers

Selective compression software

USB to Graphics Device

Decompression hardware

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

42

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Graphics FuturesUSB is standard for every display

Desktop Extension

Display Replication Shared Resource ComputingDigital Signage

Remote Display

Consumer Commercial Education

Mobile

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

43

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Top Applications

bull

Remote Touch

Screen navigation

Virtual Keyboard

bull

Gesture

Remote control Command

Gaming Security

Natural Human Interface The 3D Sensor Impact

Market Opportunity Design RevolutionCommercial PC (Remote Touch Proximity)Consumer PC (Remote Touch Gesture)IndustrialEmbedded PC (Control Remote Touch)

SMSC Positioned to CapitalizeCustom business modelPC ecosystem experts

A Growing Market

Remote Touch amp Gesture ControllerSenses user position and movements

Natural InteractionLarge screen Remote TouchNatural gesture-based control

Remote TouchGesture Revenue

$M

CY11 CY12 CY13

~295 CAGR Opportunity

Source SMSC Estimates

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

44

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Partnering to Provide Natural Human Interface Solutions

SMSC Solutionbull Calculates pixel position

bull SMSC firmware for system customization

bull

SMSC Deliverables

Custom controller to interface to 3D Sensor

Firmware to manage pixel position

USB interface to system

Remote-Touch amp GesturingCanesta Sensor

Scans 2rsquo to 10rsquo field of sensitivityFilters out ambient light

SystemSoftwareMicrosoft Canesta3rd party applications

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

45

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

FY11 FY12-14

3D The Future of Human Interaction

Scalable Technology Spanning home office and handheld

TelevisionMobile HandheldAutomotive

Desktop

Gaming

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

46

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Security Evolution Creates Unique Opportunities

Evolution and IntegrationUSB is the ubiquitous interface

Key SMSC customer relationships

Revenue ramp in 2011

SecurityTransaction ManagementStrong AuthenticationSecure Storage

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

47

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Computing amp Connectivity Core Business Growth Opportunity

Source SMSC Estimates

FY10 FY11 FY12 FY13

Revenue CAGR Opportunity ~20

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

48

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems Expanding Automotive Content

June 29 2010NASDAQ Market Site ndash New York

Dr Christian ThielVice President amp GM

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

49

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Automotive Information Systems ndash A Compelling Business Model

Our Business ModelThe leader for ldquoin cabinrdquo networkingUnique all-layer capabilityLeadership through complete system solutionsIntimacy with system customersLeading presence in automotive standards

Our CustomersMajor OEMs worldwideGlobal tier 1 suppliers

Our ProductsFull systems amp support

ArchitechtureHardwareSoftwareToolsTraining amp Consulting

8-10 year life An Established Business

$50M in revenues in FY10

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

50

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearAutomotive Market ndash Out of the hole but how far

Historic down-turn with slow recovery through 2009Luxury cars affected especially hardUnexpectedly fast recovery this springToyota quality issues

New Customers Ramping ndash Expanding the market23 new car models - ~95 in totalBroad Toyota rampFirst VW on the roadShipping TrueAutotrade USB and Ethernet products

Acquisitions ndash Adding to our portfolioK2L ndash Connecting automotive networks

through softwareKleerreg - Best-in-class RF Audio

Product Roadmap ndash Expanding our offeringInfotainment VideoDriver AssistRightTouchtrade for Automotive

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

51

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiple Vectors for Growth

MOSTreg

Car ModelProliferation

USB

Ethernet

AdditionalContent per MOST Node

K2L

Wireless Audio

InfotainmentVideo

NewApplications

ie Driver Assist

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

52

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Synergistic Technology Standards

Ethernet is

the

mandated

standard

diagnostic

interface

by

automotive

industry

regulation

(ISOSAE)

USB is

rapidly

becoming

the

consumer

interface

of choice

for

mobile device

connection

MOST is

the

de-facto

industry

standard

for

high bandwidth

infotainment

networking

Kleer provides unique combination of low power and high quality wireless audio and control

SMSC is uniquely positioned to offer all four technologies

EthernetDiagnostics amp SoftwareDownload

MOSTregThe Infotainment Backbone

KleerregWireless Audio

USBThe Consumer Port

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

53

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

K2L ndash Connecting Networks Through Software

K2L ndash The leading provider of Gateway software for BMW Daimler and other car makers

Expands SMSC automotive opportunities significantlyApply capability across global marketsAdditional competency in other car networksMiddleware and application portfolio

Acquired

Nov 2009

CAN ndash

Car body

control

network

LIN ndash

Local

sensoractor

network

FlexRayreg ndash

Safety

network

MOSTreg ndash

Infotainment network

Ethernet ndash

Repair

shop

link

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

54

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Kleer Technology ndash Best-In-Class RF Audio

Wireless audio technologyKey features

Lossless uncompressed 16-bit 44Kss CD quality audio streaming Lowest power consumption in the industryBest-in-class 24GHz ISM band WiFi coexistenceFull interoperability between products and manufacturers

Mercedes E amp S Classes on the road with Kleer

Bluetooth Kleer

Acquired

Feb 2010

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

55

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Working Out of a Deep Automotive Recession

Market inventories cleared by end of CY09Seeing stronger quarterly automotive sales growth in FY11 (CY10) as new models ramp and market recoversExpected market recovery alone drives 10 YoY growth rateSome risk for attenuated recovery due to European credit crisis

Source JD Powers and SMSC Marketing

30

25

20

15

10

5

0

90

80

70

60

50

40

30

20

10

0t2007 2008 2009 2010 2011 2012 2013

Mill

ions

(Reg

ions

)

Mill

ions

(Wor

ld)

Calendar Year

Americas Europe Asia World

Global Light Vehicle sales (JD Powers)

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

56

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Is The Base of Our Business

CONVENTIONAL CABLING MOSTreg TECHNOLOGY

COST 25XWEIGHT 375lbs

COST 1XWEIGHT 027lbs

Fewer cablesFewer connectorsHigher reliabilityLower weightLower volumespace requirementsReducing susceptibility to interferenceEasier recycling

DATA TRANSPORT USING MOST

MOST is ldquotherdquo StandardProliferation driven by the ldquodigital revolutionrdquoIn ~95 car modelsNo competing technology successfulIncreasing content per carComplete systems solution

Built on SMSC TechnologyA founding member of MOSTCOLeading semiconductor companyFundamental technology contributionJoint extension with customers

From a real-world car example

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

57

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

MOST Adoption ndash A Success Story

Early Adopters are Luxury European Car MakersFirst non-European Penetration Including Leading Japanese and Korean Car MakersMOST Continues Global Expansion Including Mid and Low End Volume Brands

1st Wave2nd Wave3rd Wave

Platform ramps are subject to change and may shift Auto makers

may run parallel production during initial transition to MOST up until platform launch

AUTOMOTIVE MOSTreg ADOPTION OUTLOOK

2001 2004 2008 2012 2016Years First Model Stop

Nod

es P

er Y

ear

Further OpportunitiesRound-out opportunities in Europe Asia and the USInitial activity in China

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

58

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Winning Ground ndash 23 New Models in Past Year

Status 2010-03-15MOST in ~95 Models on Road Today

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

59

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success at VWAudi ndash Next Gen MOST In All Car Models

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

60

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Holds An Impressive Market Share

SMSC serves ~90 of SAM formultimedia networking in cars100 of network controllersExpecting to keep share in comingyears

Recent design wins of VW and GM give MOST a potential reach of closeto 50 of cars produced worldwide

Source JD Powers and SMSC Marketing

SMSC MOST Vehicle Reach

Current Share Potential withRecent Wins

60

50

40

30

20

10

0

Glo

bal L

ight

Veh

icle

Pro

duct

ion

SAM Car Multimedia Networks

2009 2010 2011 2012 2013

120

100

80

60

40

20

0

$ M

illio

ns

Calendar Year

12

46

27 CAGR Opportunity

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

61

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

New Products Poised for Growth

TrueAutotrade USB ICsConsumer device interfaceMost cars will offer at least 1 USB port

TrueAutotrade Ethernet ICsNew On Board Diagnostics standard under definitionAll autos will have Ethernet interfacae

Companion ICsAdded value ldquoaroundrdquo the MOSTreg interfacePower CompanionIO CompanionVideo Companion

Kleer Transceivers ICsQuality audio and lowest powerGreat technology for headphones and remote controls

K2L Software ProductsHigh performance gateways Versatile software framework

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

62

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Multiplying The Size Of The Opportunity

Infotainment Device (eg Headunit)

Today

~$10Today

$2 $4

Tomorrow

$2 $30

Additional MOST nodes through video transmissionDisplays Instrument Clusters Rear Seat Entertainment Units

Tomorrow

$20 $30

USB

Ethernet

KleerK2L

Gateway Software amp Software Framework

IO FunctionContent Protection

MOST Base Node

VideoPower Management

Average Content Per Car Maximum Content Per Device

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

63

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Night VisionNight Vision

Outlook Driver Assist ndash A System without a Network

Legislation mandates enhanced siderear view to avoid accidentsNew driver assistance systems based on image sensorsTAM around 50 100 Million vehicle cameras by 2015Challenge

Point-to-point todayApplications need to share sensorsNo multimedia network selected

MOSTreg is the ideal candidate

Source Strategy Analytics

PreCrash Emergency Brake

Lane Departure Warning

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

64

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

2009 2010 2011 2012 2013 2014

SMSC Automotive ndash Sustainable Growth Opportunity

Existing independent growth vectors drive CAGR opportunity gt 30New vectors in preparation expected to sustain growth rate long termSMSC Automotive revenue expected to be gt $100M annually in 2 years

Growth DriversR

even

ue

Wireless Audio

gt30 CAGR Opportunity

CAGR represents growth opportunity

New Applications

USB amp Ethernet

Companions

MOST Nodes

K2L

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

65

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Mark BeadleVP amp GM

SMSC Analog Products and Technology

A Successful Analog Portfolio

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

66

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Successful Analog Business Model

Revenue

29 CAGR

$M

FY06 FY08 FY09FY07 FY10

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

67

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

An Expanding Product Portfolio

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

68

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearMarket

Strong growth in Consumer PCContinued transfer of ldquoDesign Controlrdquo to AsiaProliferation of ldquoalternativerdquo input methods

Our ProductsCompleted 1st RightTouchtrade deviceRamped production of RightTouch in several productsSampled first Energy Management device

Our BusinessMaintained market-share in Consumer PCSecured more sockets in Commercial PCExceeded expectations for 1st Year RightTouch revenue

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

69

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Thermal Management - Our Core Business

A Growing Market Major Customers

Market Opportunity Intelligent CoolingNew designs require more control and less powerTechnology still matters

Thermal profiles are a differentiator Three Phase Fan (TPF) offers less power andbetter acoustics

System controllers can now managemore efficiently

Managing the Thermal EnvelopeSensing temperatures accuratelyManaging system cooling profiles Driving fans quietly

Source Gartner press release -

03042010 SMSC Marketing

32 CAGR

$M

CY10 CY11 CY12

TPF

Controllers

Thermal Sensors

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

70

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade - Our Growth Business in 2010 amp 2011Human Interfaces are Changing

Proximity expanding the imagination of interfaceIndustrial design advantages driving incorporation

Major Customers

Many Application Opportunities

UB GFX

bull

Appliance

bull

Handheld

bull

Automotive

A Growing Market

40 CAGR

Source Internal Marketing Estimates

$M

CY10 CY11 CY12

Automotive

Appliance

PrinterLCD Monitor

Mobile PC

Portables

71

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

RightTouchtrade is Replacing Mechanical Buttons

72

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Buttons Waiting to be Replaced

73

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Focusing on Changing the Human Interface

TAM Button Replacement

$13 Billion

2010

Internal estimate based on several market size studies

And the application space is growingProximity will add toys lighting securityMicro-switches have promise

74

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Source Gartner press release - 03042010 SMSC Marketing

32 CAGR

Energy Conservation is Driving New Opportunities Market Opportunity Conserving Energy

Consumer demand for monitoring power usage Emphasis on system level monitoring and throttling International legislation driving change

Guidelines for Energy Mgmt

bull Meter energy consumption collect data

bull Findquantify opportunities

bull Taking action on opportunities

bull Tracking progress by analyzing data wwwenergylenscomarticlesenergy-management

Monitoring Power for a Green TomorrowMeasuring power instantaneously and over time

CPU GPU DIMM System current LCD Monitor backlighting etc

Analog and digital system interfaces needed

A Growing Market Major Customers

$M

CY10 CY11 CY12

Server

Mobile

Desktop

75

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Monitoring Power for Better System Management

12V 5V

33V

SMSC Energy Management Devices

1) Measures Voltage and Current off of Power Rails

2) Calculates Power

3) Communicates to System Controller

Power Rails run throughout motherboard to supply power to each computing function

76

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Port Power - A New Standard and Opportunity

Projected Customers

Power Over USBPrimary power is available from batteries amp outletsMany peripherals now charge via USB

Market Opportunity Universal Charging

USB is becoming the universal charging standardBC11 adoption by cell phones

Desktop + Note PC

5 amp 20 Adoption

($29M SAM FY12)

Desktop + Note PC

20 amp 70 Adoption

(SAM $129M in FY14)

UB GFX

A Growing Market

Source Internal Marketing Estimates

270 CAGR

$M

CY10 CY11 CY12

MonitorDocking

Notebook

Desktop

73

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Focusing on Changing the Human Interface

TAM Button Replacement

$13 Billion

2010

Internal estimate based on several market size studies

And the application space is growingProximity will add toys lighting securityMicro-switches have promise

74

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Source Gartner press release - 03042010 SMSC Marketing

32 CAGR

Energy Conservation is Driving New Opportunities Market Opportunity Conserving Energy

Consumer demand for monitoring power usage Emphasis on system level monitoring and throttling International legislation driving change

Guidelines for Energy Mgmt

bull Meter energy consumption collect data

bull Findquantify opportunities

bull Taking action on opportunities

bull Tracking progress by analyzing data wwwenergylenscomarticlesenergy-management

Monitoring Power for a Green TomorrowMeasuring power instantaneously and over time

CPU GPU DIMM System current LCD Monitor backlighting etc

Analog and digital system interfaces needed

A Growing Market Major Customers

$M

CY10 CY11 CY12

Server

Mobile

Desktop

75

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Monitoring Power for Better System Management

12V 5V

33V

SMSC Energy Management Devices

1) Measures Voltage and Current off of Power Rails

2) Calculates Power

3) Communicates to System Controller

Power Rails run throughout motherboard to supply power to each computing function

76

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Port Power - A New Standard and Opportunity

Projected Customers

Power Over USBPrimary power is available from batteries amp outletsMany peripherals now charge via USB

Market Opportunity Universal Charging

USB is becoming the universal charging standardBC11 adoption by cell phones

Desktop + Note PC

5 amp 20 Adoption

($29M SAM FY12)

Desktop + Note PC

20 amp 70 Adoption

(SAM $129M in FY14)

UB GFX

A Growing Market

Source Internal Marketing Estimates

270 CAGR

$M

CY10 CY11 CY12

MonitorDocking

Notebook

Desktop

74

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Source Gartner press release - 03042010 SMSC Marketing

32 CAGR

Energy Conservation is Driving New Opportunities Market Opportunity Conserving Energy

Consumer demand for monitoring power usage Emphasis on system level monitoring and throttling International legislation driving change

Guidelines for Energy Mgmt

bull Meter energy consumption collect data

bull Findquantify opportunities

bull Taking action on opportunities

bull Tracking progress by analyzing data wwwenergylenscomarticlesenergy-management

Monitoring Power for a Green TomorrowMeasuring power instantaneously and over time

CPU GPU DIMM System current LCD Monitor backlighting etc

Analog and digital system interfaces needed

A Growing Market Major Customers

$M

CY10 CY11 CY12

Server

Mobile

Desktop

75

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Monitoring Power for Better System Management

12V 5V

33V

SMSC Energy Management Devices

1) Measures Voltage and Current off of Power Rails

2) Calculates Power

3) Communicates to System Controller

Power Rails run throughout motherboard to supply power to each computing function

76

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Port Power - A New Standard and Opportunity

Projected Customers

Power Over USBPrimary power is available from batteries amp outletsMany peripherals now charge via USB

Market Opportunity Universal Charging

USB is becoming the universal charging standardBC11 adoption by cell phones

Desktop + Note PC

5 amp 20 Adoption

($29M SAM FY12)

Desktop + Note PC

20 amp 70 Adoption

(SAM $129M in FY14)

UB GFX

A Growing Market

Source Internal Marketing Estimates

270 CAGR

$M

CY10 CY11 CY12

MonitorDocking

Notebook

Desktop

75

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Monitoring Power for Better System Management

12V 5V

33V

SMSC Energy Management Devices

1) Measures Voltage and Current off of Power Rails

2) Calculates Power

3) Communicates to System Controller

Power Rails run throughout motherboard to supply power to each computing function

76

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Port Power - A New Standard and Opportunity

Projected Customers

Power Over USBPrimary power is available from batteries amp outletsMany peripherals now charge via USB

Market Opportunity Universal Charging

USB is becoming the universal charging standardBC11 adoption by cell phones

Desktop + Note PC

5 amp 20 Adoption

($29M SAM FY12)

Desktop + Note PC

20 amp 70 Adoption

(SAM $129M in FY14)

UB GFX

A Growing Market

Source Internal Marketing Estimates

270 CAGR

$M

CY10 CY11 CY12

MonitorDocking

Notebook

Desktop

76

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB Port Power - A New Standard and Opportunity

Projected Customers

Power Over USBPrimary power is available from batteries amp outletsMany peripherals now charge via USB

Market Opportunity Universal Charging

USB is becoming the universal charging standardBC11 adoption by cell phones

Desktop + Note PC

5 amp 20 Adoption

($29M SAM FY12)

Desktop + Note PC

20 amp 70 Adoption

(SAM $129M in FY14)

UB GFX

A Growing Market

Source Internal Marketing Estimates

270 CAGR

$M

CY10 CY11 CY12

MonitorDocking

Notebook

Desktop

77

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Itrsquos on your desktop PC docking station laptop

hellipand charging time will be minimized

Industry Problem

PC is off or in standby charging is slow (lt100mA)

Devices not recognized for proper charging

SMSC Solution

USB Port Power provides up to 15A (15x more current to charge)

USB Port Power recognizes high profile devices

USB ndash The Charging Port of ChoiceSit Down and Plug In

78

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Solid SMSC Revenue Growth Opportunity

FY10 FY11 FY12

Mill

ions

~30 CAGR Opportunity

79

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Eric KawamotoVP amp GM

SMSC Portable Products Growth through Portable Connectivity

80

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Portable Products A Growth BusinessOur Business Model

Capitalize on SMSCrsquos Connectivity InvestmentsOptimize for lowest power amp smallest footprintFlexible amp nimble to respond to market amp customer changesHigh value amp profitability

Our CustomersSmartphone + Portable Consumer Electronics

Our ProductsFeature rich connectivity solutionsHighly differentiated mixed-signal portable solutionsCentered around USB and its low power derivatives

81

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearPortable Market ndash Smartphones amp eReader Drive Growth

Smartphones continue to increase share of total cell phone TAMDriven by features enabled by new hardware and OS platforms

Introduction of Multiple eReader devicesOptimized for long battery life and ease of content access

New Product Design Wins ndash Expanding Market Sharegt30 new portable product design winsIncludes Amazon Kindle RIM Tour amp Motorola CliqMultiple design wins in Japan Smartphone MarketPortable SAM expansion with eReader and PMP design wins Delivered new USB Transceiver products w expanded features

Product Roadmap ndash Expanding Beyond USB TransceiversPortable ConnectivityPortable PowerSideloader product not needed due to SoC download speed changes

82

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Reference Design Participation Portable Engineering amp Marketing Expertise

Connectivity Intellectual Property and Expertise

Standards Leadership and Participation

USB-IF

The Components of SMSC Success

Customers

SMSC

Reference Designs

SoC Developers

79

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Eric KawamotoVP amp GM

SMSC Portable Products Growth through Portable Connectivity

80

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Portable Products A Growth BusinessOur Business Model

Capitalize on SMSCrsquos Connectivity InvestmentsOptimize for lowest power amp smallest footprintFlexible amp nimble to respond to market amp customer changesHigh value amp profitability

Our CustomersSmartphone + Portable Consumer Electronics

Our ProductsFeature rich connectivity solutionsHighly differentiated mixed-signal portable solutionsCentered around USB and its low power derivatives

81

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearPortable Market ndash Smartphones amp eReader Drive Growth

Smartphones continue to increase share of total cell phone TAMDriven by features enabled by new hardware and OS platforms

Introduction of Multiple eReader devicesOptimized for long battery life and ease of content access

New Product Design Wins ndash Expanding Market Sharegt30 new portable product design winsIncludes Amazon Kindle RIM Tour amp Motorola CliqMultiple design wins in Japan Smartphone MarketPortable SAM expansion with eReader and PMP design wins Delivered new USB Transceiver products w expanded features

Product Roadmap ndash Expanding Beyond USB TransceiversPortable ConnectivityPortable PowerSideloader product not needed due to SoC download speed changes

82

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Reference Design Participation Portable Engineering amp Marketing Expertise

Connectivity Intellectual Property and Expertise

Standards Leadership and Participation

USB-IF

The Components of SMSC Success

Customers

SMSC

Reference Designs

SoC Developers

80

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Portable Products A Growth BusinessOur Business Model

Capitalize on SMSCrsquos Connectivity InvestmentsOptimize for lowest power amp smallest footprintFlexible amp nimble to respond to market amp customer changesHigh value amp profitability

Our CustomersSmartphone + Portable Consumer Electronics

Our ProductsFeature rich connectivity solutionsHighly differentiated mixed-signal portable solutionsCentered around USB and its low power derivatives

81

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearPortable Market ndash Smartphones amp eReader Drive Growth

Smartphones continue to increase share of total cell phone TAMDriven by features enabled by new hardware and OS platforms

Introduction of Multiple eReader devicesOptimized for long battery life and ease of content access

New Product Design Wins ndash Expanding Market Sharegt30 new portable product design winsIncludes Amazon Kindle RIM Tour amp Motorola CliqMultiple design wins in Japan Smartphone MarketPortable SAM expansion with eReader and PMP design wins Delivered new USB Transceiver products w expanded features

Product Roadmap ndash Expanding Beyond USB TransceiversPortable ConnectivityPortable PowerSideloader product not needed due to SoC download speed changes

82

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Reference Design Participation Portable Engineering amp Marketing Expertise

Connectivity Intellectual Property and Expertise

Standards Leadership and Participation

USB-IF

The Components of SMSC Success

Customers

SMSC

Reference Designs

SoC Developers

81

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearPortable Market ndash Smartphones amp eReader Drive Growth

Smartphones continue to increase share of total cell phone TAMDriven by features enabled by new hardware and OS platforms

Introduction of Multiple eReader devicesOptimized for long battery life and ease of content access

New Product Design Wins ndash Expanding Market Sharegt30 new portable product design winsIncludes Amazon Kindle RIM Tour amp Motorola CliqMultiple design wins in Japan Smartphone MarketPortable SAM expansion with eReader and PMP design wins Delivered new USB Transceiver products w expanded features

Product Roadmap ndash Expanding Beyond USB TransceiversPortable ConnectivityPortable PowerSideloader product not needed due to SoC download speed changes

82

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Reference Design Participation Portable Engineering amp Marketing Expertise

Connectivity Intellectual Property and Expertise

Standards Leadership and Participation

USB-IF

The Components of SMSC Success

Customers

SMSC

Reference Designs

SoC Developers

82

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Reference Design Participation Portable Engineering amp Marketing Expertise

Connectivity Intellectual Property and Expertise

Standards Leadership and Participation

USB-IF

The Components of SMSC Success

Customers

SMSC

Reference Designs

SoC Developers

83

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Smallest form factor

Lowest Power

Maximum feature integrationIntegrated switches amp voltage regulatorsExtreme ESD amp Over-Voltage ProtectionProgrammable Receiver Sensitivity

Source SMSC Marketing

SMSC Has Achieved USB Transceiver Market Leadership for Portable Devices

SMSC USB Transceiver Market Share ($)

~97 smaller and ~98 lower power

84

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Acquiring Customers Through Design Wins

Wireless ModemsWireless Modems Consumer ElectronicsConsumer Electronics eReaderseReaders

SmartphonesSmartphones

84

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Acquiring Customers Through Design Wins

Wireless ModemsWireless Modems Consumer ElectronicsConsumer Electronics eReaderseReaders

SmartphonesSmartphones

85

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Demonstrated Success through gt100 CAGRYear over Year Growth

Revenue driven by introduction of new USB Transceiver productsDesign Wins through SoC reference designsGrowth driven by smartphone product launches

Future success will depend on additional

Feature deploymentSoC Strategies

Consumer seasonalityPotentially volatile growth

FY08 FY09 FY10

gt100 CAGR

86

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Value Add

Expanding Our MarketEnhanced USB SubsystemsAdded Features amp FunctionsStaying ahead of SoC Integration

87

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Charger Detection

USB Data

Accessories

Display

Expansion of SMSC Portable Products beyond the USB Transceiver

Added Content USB Port Protection amp Detection

Portable Power FeaturesExtreme ESD protectionSystem level over-voltage protectionHigh Speed analog switchesBattery charger detectionUltra small footprint

88

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB HUB

Controller

Battery Charging Opportunity Portable Power

USB HUB

ControllerSMSC Port

Power

USB Battery Charging

USB-IF Battery Charging 11

150 Faster

SoC

SoCSMSC

Charger Detection

Actual charging time will vary by product

89

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whatrsquos Happening with SmartphonesCreating Portable

Connectivity Requirements

Smartphones

Feature Phones

Multimedia Phones

Baseband

Baseband

Baseband with Integrated Apps Processor

Apps Processor

Smartphone Unit Shipments

Source iSuppli Morgan Stanley and SMSC Marketing

90

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Future SoCrsquos

Portable Connectivity Solves Portable Interface Challenges

ULPI amp HSIC Interfaces on Portable SoCrsquos Today

UTMIUTMI+

22-35 pins

ULPI

12 pins

HSIC

2 pins

SLPI

2 pins

Leverages USB Hub Analog Switches ULPI and HSIC

Expertise

SoCrsquos Today

Baseband Apps Processor

SMSC

91

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Driving SAM GrowthExpanding USB Portable Content

Add high-performance USB and analog subsystemsIncrease SMSC content in end productFuture penetration in portable CE market

$79M

$195M

~35 CAGR

Source iSuppli Morgan Stanley and SMSC Marketing

2010 2013

$050

92

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Portable Connectivity ndash An Exciting Growth Opportunity

FY11 FY12 FY13

~35 CAGR Opportunity

93

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Roger WendelkenVice President

SMSC A Diverse and Growing Customer Base

94

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearCustomer Design Win Focus

New large customer in Secure Transaction Won major PC Printer and Monitor customers for RightTouchtradeDelivered custom PHY to large cell phone customer in JapanMOSTreg and companion chip design wins at GM and VW Toyota ramped

Channel OptimizationReset WW distribution margin to reflect industry averagesStarted plan for Automotive distributor margin reductionReduced of distributors in some areas added in others

FutureContinued optimization of the channelGrow customers with over $10M in salesSignificant design win growth in 2HFY11

95

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing Customer Base

Expect FY11 Will Double The Number Ofgt $10MYr Customers

Expect FY12 Will Double The Number Of gt $20MYr Customers

Only one gt10 customer

96

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing amp Diversified Customer Base

Traditional PC

46New Wave of Consumer

and PC Customers

22

Automotive

19ODMs

13

Top 20 Customers By Revenue

97

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

How Did We Get There

98

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Growing SMSC Market ShareDesigning in SMSC USB HubsWhen the customer wanted to add functionality to existing systems they placed a call to SMSC ndash the USB ExpertsFrom the first call to production ramp was 4 months

Completed the design and the rigorous testing this customer is known to conduct

SMSC provided value in multiple ways Application Expertise Design Experience Fast Time To Market Competitive Cost Structure

Customer ldquoWe love SMSC and want to give you more business Irsquove never heard anyone say something bad about SMSCrdquo

99

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Entering New MarketsEuropean leader in digital security solutions for cashless payments connected machines and mobile broadband

Over 1 year of visits led to a RFQ for 3 designs

SMSC was a brand new supplier but was awarded all 3 programs ndash custom silicon

Opens up a new and growing market for SMSC

New Customer New Products New SAM and New Revenue ndash We estimate this account will quickly grow to be a top 10 SMSC account

SMSC Provided Value in Multiple Ways Application Experience Customer Experience Engineering Execution Innovation and Technology

100

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Momentum Is Broad Based

APAC design base growing ndash includes little automotive todayStrategic accounts continue to growDiversification across customer base and multiple geographiesAutomotive in Japan is large

FY10 Design Win $ by Region

101

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

We Continue To Hit The Bulls Eye

Rated 3rd

out of 87 suppliersat Strategic Account

Market Leadership

Technology Partner

New Product Adoption

Operation Excellence

Sole source for embedded controllersfor multiple customers

Awarded sole source for RightTouchtrade

inclusion with major monitor supplier

Automotive market wins growingas we expand our real estate per MOSTreg

node

102

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Sales StructureOn Target for 6 Cost of Sales at $100MQtr

Efficient use of Reps and Distributors for WW coverageFocus on winning designs that fuel the growth engineImproving the Quote-to-Cash Process

Channel Optimization and StandardizationOur approach

Fulfillment ndash SMSC does the heavy lifting limited distributor marginsJoint Demand Creation ndash Joint efforts ndashhigher distributor marginsFull Demand Creation ndash All distribution work ndash high margins

Expect industry standard margins on fulfillment and joint demand creation will generate significant gross margin savings in FY11 (~$2M) and beyond

103

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Worldwide Sales Model

Geographically Positioned to be Close to the Customer

Direct Sales Manufacturerrsquos Representatives

Global amp Regional Distribution

54

Sales Associates

Field Application Engineers

15Partners WW

4629 Fulfillment

17 Demand Creation

40 40+ +

104

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC ndash A Differentiated Sales ModelDelivers gt20 CAGR opportunity

Intimate customer relationshipsFocus on key customers amp design winsTechnical expertise for solutions-based selling

Supports company financial modelStable ASP product portfolioOptimizing channel costsStructured to scale with revenue Sales CostRevenue

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

86

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Value Add

Expanding Our MarketEnhanced USB SubsystemsAdded Features amp FunctionsStaying ahead of SoC Integration

87

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Charger Detection

USB Data

Accessories

Display

Expansion of SMSC Portable Products beyond the USB Transceiver

Added Content USB Port Protection amp Detection

Portable Power FeaturesExtreme ESD protectionSystem level over-voltage protectionHigh Speed analog switchesBattery charger detectionUltra small footprint

88

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB HUB

Controller

Battery Charging Opportunity Portable Power

USB HUB

ControllerSMSC Port

Power

USB Battery Charging

USB-IF Battery Charging 11

150 Faster

SoC

SoCSMSC

Charger Detection

Actual charging time will vary by product

89

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whatrsquos Happening with SmartphonesCreating Portable

Connectivity Requirements

Smartphones

Feature Phones

Multimedia Phones

Baseband

Baseband

Baseband with Integrated Apps Processor

Apps Processor

Smartphone Unit Shipments

Source iSuppli Morgan Stanley and SMSC Marketing

90

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Future SoCrsquos

Portable Connectivity Solves Portable Interface Challenges

ULPI amp HSIC Interfaces on Portable SoCrsquos Today

UTMIUTMI+

22-35 pins

ULPI

12 pins

HSIC

2 pins

SLPI

2 pins

Leverages USB Hub Analog Switches ULPI and HSIC

Expertise

SoCrsquos Today

Baseband Apps Processor

SMSC

91

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Driving SAM GrowthExpanding USB Portable Content

Add high-performance USB and analog subsystemsIncrease SMSC content in end productFuture penetration in portable CE market

$79M

$195M

~35 CAGR

Source iSuppli Morgan Stanley and SMSC Marketing

2010 2013

$050

92

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Portable Connectivity ndash An Exciting Growth Opportunity

FY11 FY12 FY13

~35 CAGR Opportunity

93

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Roger WendelkenVice President

SMSC A Diverse and Growing Customer Base

94

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearCustomer Design Win Focus

New large customer in Secure Transaction Won major PC Printer and Monitor customers for RightTouchtradeDelivered custom PHY to large cell phone customer in JapanMOSTreg and companion chip design wins at GM and VW Toyota ramped

Channel OptimizationReset WW distribution margin to reflect industry averagesStarted plan for Automotive distributor margin reductionReduced of distributors in some areas added in others

FutureContinued optimization of the channelGrow customers with over $10M in salesSignificant design win growth in 2HFY11

95

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing Customer Base

Expect FY11 Will Double The Number Ofgt $10MYr Customers

Expect FY12 Will Double The Number Of gt $20MYr Customers

Only one gt10 customer

96

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing amp Diversified Customer Base

Traditional PC

46New Wave of Consumer

and PC Customers

22

Automotive

19ODMs

13

Top 20 Customers By Revenue

97

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

How Did We Get There

98

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Growing SMSC Market ShareDesigning in SMSC USB HubsWhen the customer wanted to add functionality to existing systems they placed a call to SMSC ndash the USB ExpertsFrom the first call to production ramp was 4 months

Completed the design and the rigorous testing this customer is known to conduct

SMSC provided value in multiple ways Application Expertise Design Experience Fast Time To Market Competitive Cost Structure

Customer ldquoWe love SMSC and want to give you more business Irsquove never heard anyone say something bad about SMSCrdquo

99

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Entering New MarketsEuropean leader in digital security solutions for cashless payments connected machines and mobile broadband

Over 1 year of visits led to a RFQ for 3 designs

SMSC was a brand new supplier but was awarded all 3 programs ndash custom silicon

Opens up a new and growing market for SMSC

New Customer New Products New SAM and New Revenue ndash We estimate this account will quickly grow to be a top 10 SMSC account

SMSC Provided Value in Multiple Ways Application Experience Customer Experience Engineering Execution Innovation and Technology

100

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Momentum Is Broad Based

APAC design base growing ndash includes little automotive todayStrategic accounts continue to growDiversification across customer base and multiple geographiesAutomotive in Japan is large

FY10 Design Win $ by Region

101

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

We Continue To Hit The Bulls Eye

Rated 3rd

out of 87 suppliersat Strategic Account

Market Leadership

Technology Partner

New Product Adoption

Operation Excellence

Sole source for embedded controllersfor multiple customers

Awarded sole source for RightTouchtrade

inclusion with major monitor supplier

Automotive market wins growingas we expand our real estate per MOSTreg

node

102

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Sales StructureOn Target for 6 Cost of Sales at $100MQtr

Efficient use of Reps and Distributors for WW coverageFocus on winning designs that fuel the growth engineImproving the Quote-to-Cash Process

Channel Optimization and StandardizationOur approach

Fulfillment ndash SMSC does the heavy lifting limited distributor marginsJoint Demand Creation ndash Joint efforts ndashhigher distributor marginsFull Demand Creation ndash All distribution work ndash high margins

Expect industry standard margins on fulfillment and joint demand creation will generate significant gross margin savings in FY11 (~$2M) and beyond

103

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Worldwide Sales Model

Geographically Positioned to be Close to the Customer

Direct Sales Manufacturerrsquos Representatives

Global amp Regional Distribution

54

Sales Associates

Field Application Engineers

15Partners WW

4629 Fulfillment

17 Demand Creation

40 40+ +

104

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC ndash A Differentiated Sales ModelDelivers gt20 CAGR opportunity

Intimate customer relationshipsFocus on key customers amp design winsTechnical expertise for solutions-based selling

Supports company financial modelStable ASP product portfolioOptimizing channel costsStructured to scale with revenue Sales CostRevenue

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

87

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Charger Detection

USB Data

Accessories

Display

Expansion of SMSC Portable Products beyond the USB Transceiver

Added Content USB Port Protection amp Detection

Portable Power FeaturesExtreme ESD protectionSystem level over-voltage protectionHigh Speed analog switchesBattery charger detectionUltra small footprint

88

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB HUB

Controller

Battery Charging Opportunity Portable Power

USB HUB

ControllerSMSC Port

Power

USB Battery Charging

USB-IF Battery Charging 11

150 Faster

SoC

SoCSMSC

Charger Detection

Actual charging time will vary by product

89

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whatrsquos Happening with SmartphonesCreating Portable

Connectivity Requirements

Smartphones

Feature Phones

Multimedia Phones

Baseband

Baseband

Baseband with Integrated Apps Processor

Apps Processor

Smartphone Unit Shipments

Source iSuppli Morgan Stanley and SMSC Marketing

90

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Future SoCrsquos

Portable Connectivity Solves Portable Interface Challenges

ULPI amp HSIC Interfaces on Portable SoCrsquos Today

UTMIUTMI+

22-35 pins

ULPI

12 pins

HSIC

2 pins

SLPI

2 pins

Leverages USB Hub Analog Switches ULPI and HSIC

Expertise

SoCrsquos Today

Baseband Apps Processor

SMSC

91

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Driving SAM GrowthExpanding USB Portable Content

Add high-performance USB and analog subsystemsIncrease SMSC content in end productFuture penetration in portable CE market

$79M

$195M

~35 CAGR

Source iSuppli Morgan Stanley and SMSC Marketing

2010 2013

$050

92

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Portable Connectivity ndash An Exciting Growth Opportunity

FY11 FY12 FY13

~35 CAGR Opportunity

93

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Roger WendelkenVice President

SMSC A Diverse and Growing Customer Base

94

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearCustomer Design Win Focus

New large customer in Secure Transaction Won major PC Printer and Monitor customers for RightTouchtradeDelivered custom PHY to large cell phone customer in JapanMOSTreg and companion chip design wins at GM and VW Toyota ramped

Channel OptimizationReset WW distribution margin to reflect industry averagesStarted plan for Automotive distributor margin reductionReduced of distributors in some areas added in others

FutureContinued optimization of the channelGrow customers with over $10M in salesSignificant design win growth in 2HFY11

95

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing Customer Base

Expect FY11 Will Double The Number Ofgt $10MYr Customers

Expect FY12 Will Double The Number Of gt $20MYr Customers

Only one gt10 customer

96

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing amp Diversified Customer Base

Traditional PC

46New Wave of Consumer

and PC Customers

22

Automotive

19ODMs

13

Top 20 Customers By Revenue

97

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

How Did We Get There

98

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Growing SMSC Market ShareDesigning in SMSC USB HubsWhen the customer wanted to add functionality to existing systems they placed a call to SMSC ndash the USB ExpertsFrom the first call to production ramp was 4 months

Completed the design and the rigorous testing this customer is known to conduct

SMSC provided value in multiple ways Application Expertise Design Experience Fast Time To Market Competitive Cost Structure

Customer ldquoWe love SMSC and want to give you more business Irsquove never heard anyone say something bad about SMSCrdquo

99

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Entering New MarketsEuropean leader in digital security solutions for cashless payments connected machines and mobile broadband

Over 1 year of visits led to a RFQ for 3 designs

SMSC was a brand new supplier but was awarded all 3 programs ndash custom silicon

Opens up a new and growing market for SMSC

New Customer New Products New SAM and New Revenue ndash We estimate this account will quickly grow to be a top 10 SMSC account

SMSC Provided Value in Multiple Ways Application Experience Customer Experience Engineering Execution Innovation and Technology

100

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Momentum Is Broad Based

APAC design base growing ndash includes little automotive todayStrategic accounts continue to growDiversification across customer base and multiple geographiesAutomotive in Japan is large

FY10 Design Win $ by Region

101

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

We Continue To Hit The Bulls Eye

Rated 3rd

out of 87 suppliersat Strategic Account

Market Leadership

Technology Partner

New Product Adoption

Operation Excellence

Sole source for embedded controllersfor multiple customers

Awarded sole source for RightTouchtrade

inclusion with major monitor supplier

Automotive market wins growingas we expand our real estate per MOSTreg

node

102

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Sales StructureOn Target for 6 Cost of Sales at $100MQtr

Efficient use of Reps and Distributors for WW coverageFocus on winning designs that fuel the growth engineImproving the Quote-to-Cash Process

Channel Optimization and StandardizationOur approach

Fulfillment ndash SMSC does the heavy lifting limited distributor marginsJoint Demand Creation ndash Joint efforts ndashhigher distributor marginsFull Demand Creation ndash All distribution work ndash high margins

Expect industry standard margins on fulfillment and joint demand creation will generate significant gross margin savings in FY11 (~$2M) and beyond

103

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Worldwide Sales Model

Geographically Positioned to be Close to the Customer

Direct Sales Manufacturerrsquos Representatives

Global amp Regional Distribution

54

Sales Associates

Field Application Engineers

15Partners WW

4629 Fulfillment

17 Demand Creation

40 40+ +

104

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC ndash A Differentiated Sales ModelDelivers gt20 CAGR opportunity

Intimate customer relationshipsFocus on key customers amp design winsTechnical expertise for solutions-based selling

Supports company financial modelStable ASP product portfolioOptimizing channel costsStructured to scale with revenue Sales CostRevenue

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

88

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

USB HUB

Controller

Battery Charging Opportunity Portable Power

USB HUB

ControllerSMSC Port

Power

USB Battery Charging

USB-IF Battery Charging 11

150 Faster

SoC

SoCSMSC

Charger Detection

Actual charging time will vary by product

89

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whatrsquos Happening with SmartphonesCreating Portable

Connectivity Requirements

Smartphones

Feature Phones

Multimedia Phones

Baseband

Baseband

Baseband with Integrated Apps Processor

Apps Processor

Smartphone Unit Shipments

Source iSuppli Morgan Stanley and SMSC Marketing

90

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Future SoCrsquos

Portable Connectivity Solves Portable Interface Challenges

ULPI amp HSIC Interfaces on Portable SoCrsquos Today

UTMIUTMI+

22-35 pins

ULPI

12 pins

HSIC

2 pins

SLPI

2 pins

Leverages USB Hub Analog Switches ULPI and HSIC

Expertise

SoCrsquos Today

Baseband Apps Processor

SMSC

91

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Driving SAM GrowthExpanding USB Portable Content

Add high-performance USB and analog subsystemsIncrease SMSC content in end productFuture penetration in portable CE market

$79M

$195M

~35 CAGR

Source iSuppli Morgan Stanley and SMSC Marketing

2010 2013

$050

92

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Portable Connectivity ndash An Exciting Growth Opportunity

FY11 FY12 FY13

~35 CAGR Opportunity

93

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Roger WendelkenVice President

SMSC A Diverse and Growing Customer Base

94

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearCustomer Design Win Focus

New large customer in Secure Transaction Won major PC Printer and Monitor customers for RightTouchtradeDelivered custom PHY to large cell phone customer in JapanMOSTreg and companion chip design wins at GM and VW Toyota ramped

Channel OptimizationReset WW distribution margin to reflect industry averagesStarted plan for Automotive distributor margin reductionReduced of distributors in some areas added in others

FutureContinued optimization of the channelGrow customers with over $10M in salesSignificant design win growth in 2HFY11

95

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing Customer Base

Expect FY11 Will Double The Number Ofgt $10MYr Customers

Expect FY12 Will Double The Number Of gt $20MYr Customers

Only one gt10 customer

96

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing amp Diversified Customer Base

Traditional PC

46New Wave of Consumer

and PC Customers

22

Automotive

19ODMs

13

Top 20 Customers By Revenue

97

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

How Did We Get There

98

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Growing SMSC Market ShareDesigning in SMSC USB HubsWhen the customer wanted to add functionality to existing systems they placed a call to SMSC ndash the USB ExpertsFrom the first call to production ramp was 4 months

Completed the design and the rigorous testing this customer is known to conduct

SMSC provided value in multiple ways Application Expertise Design Experience Fast Time To Market Competitive Cost Structure

Customer ldquoWe love SMSC and want to give you more business Irsquove never heard anyone say something bad about SMSCrdquo

99

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Entering New MarketsEuropean leader in digital security solutions for cashless payments connected machines and mobile broadband

Over 1 year of visits led to a RFQ for 3 designs

SMSC was a brand new supplier but was awarded all 3 programs ndash custom silicon

Opens up a new and growing market for SMSC

New Customer New Products New SAM and New Revenue ndash We estimate this account will quickly grow to be a top 10 SMSC account

SMSC Provided Value in Multiple Ways Application Experience Customer Experience Engineering Execution Innovation and Technology

100

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Momentum Is Broad Based

APAC design base growing ndash includes little automotive todayStrategic accounts continue to growDiversification across customer base and multiple geographiesAutomotive in Japan is large

FY10 Design Win $ by Region

101

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

We Continue To Hit The Bulls Eye

Rated 3rd

out of 87 suppliersat Strategic Account

Market Leadership

Technology Partner

New Product Adoption

Operation Excellence

Sole source for embedded controllersfor multiple customers

Awarded sole source for RightTouchtrade

inclusion with major monitor supplier

Automotive market wins growingas we expand our real estate per MOSTreg

node

102

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Sales StructureOn Target for 6 Cost of Sales at $100MQtr

Efficient use of Reps and Distributors for WW coverageFocus on winning designs that fuel the growth engineImproving the Quote-to-Cash Process

Channel Optimization and StandardizationOur approach

Fulfillment ndash SMSC does the heavy lifting limited distributor marginsJoint Demand Creation ndash Joint efforts ndashhigher distributor marginsFull Demand Creation ndash All distribution work ndash high margins

Expect industry standard margins on fulfillment and joint demand creation will generate significant gross margin savings in FY11 (~$2M) and beyond

103

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Worldwide Sales Model

Geographically Positioned to be Close to the Customer

Direct Sales Manufacturerrsquos Representatives

Global amp Regional Distribution

54

Sales Associates

Field Application Engineers

15Partners WW

4629 Fulfillment

17 Demand Creation

40 40+ +

104

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC ndash A Differentiated Sales ModelDelivers gt20 CAGR opportunity

Intimate customer relationshipsFocus on key customers amp design winsTechnical expertise for solutions-based selling

Supports company financial modelStable ASP product portfolioOptimizing channel costsStructured to scale with revenue Sales CostRevenue

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

89

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whatrsquos Happening with SmartphonesCreating Portable

Connectivity Requirements

Smartphones

Feature Phones

Multimedia Phones

Baseband

Baseband

Baseband with Integrated Apps Processor

Apps Processor

Smartphone Unit Shipments

Source iSuppli Morgan Stanley and SMSC Marketing

90

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Future SoCrsquos

Portable Connectivity Solves Portable Interface Challenges

ULPI amp HSIC Interfaces on Portable SoCrsquos Today

UTMIUTMI+

22-35 pins

ULPI

12 pins

HSIC

2 pins

SLPI

2 pins

Leverages USB Hub Analog Switches ULPI and HSIC

Expertise

SoCrsquos Today

Baseband Apps Processor

SMSC

91

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Driving SAM GrowthExpanding USB Portable Content

Add high-performance USB and analog subsystemsIncrease SMSC content in end productFuture penetration in portable CE market

$79M

$195M

~35 CAGR

Source iSuppli Morgan Stanley and SMSC Marketing

2010 2013

$050

92

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Portable Connectivity ndash An Exciting Growth Opportunity

FY11 FY12 FY13

~35 CAGR Opportunity

93

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Roger WendelkenVice President

SMSC A Diverse and Growing Customer Base

94

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearCustomer Design Win Focus

New large customer in Secure Transaction Won major PC Printer and Monitor customers for RightTouchtradeDelivered custom PHY to large cell phone customer in JapanMOSTreg and companion chip design wins at GM and VW Toyota ramped

Channel OptimizationReset WW distribution margin to reflect industry averagesStarted plan for Automotive distributor margin reductionReduced of distributors in some areas added in others

FutureContinued optimization of the channelGrow customers with over $10M in salesSignificant design win growth in 2HFY11

95

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing Customer Base

Expect FY11 Will Double The Number Ofgt $10MYr Customers

Expect FY12 Will Double The Number Of gt $20MYr Customers

Only one gt10 customer

96

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing amp Diversified Customer Base

Traditional PC

46New Wave of Consumer

and PC Customers

22

Automotive

19ODMs

13

Top 20 Customers By Revenue

97

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

How Did We Get There

98

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Growing SMSC Market ShareDesigning in SMSC USB HubsWhen the customer wanted to add functionality to existing systems they placed a call to SMSC ndash the USB ExpertsFrom the first call to production ramp was 4 months

Completed the design and the rigorous testing this customer is known to conduct

SMSC provided value in multiple ways Application Expertise Design Experience Fast Time To Market Competitive Cost Structure

Customer ldquoWe love SMSC and want to give you more business Irsquove never heard anyone say something bad about SMSCrdquo

99

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Entering New MarketsEuropean leader in digital security solutions for cashless payments connected machines and mobile broadband

Over 1 year of visits led to a RFQ for 3 designs

SMSC was a brand new supplier but was awarded all 3 programs ndash custom silicon

Opens up a new and growing market for SMSC

New Customer New Products New SAM and New Revenue ndash We estimate this account will quickly grow to be a top 10 SMSC account

SMSC Provided Value in Multiple Ways Application Experience Customer Experience Engineering Execution Innovation and Technology

100

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Momentum Is Broad Based

APAC design base growing ndash includes little automotive todayStrategic accounts continue to growDiversification across customer base and multiple geographiesAutomotive in Japan is large

FY10 Design Win $ by Region

101

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

We Continue To Hit The Bulls Eye

Rated 3rd

out of 87 suppliersat Strategic Account

Market Leadership

Technology Partner

New Product Adoption

Operation Excellence

Sole source for embedded controllersfor multiple customers

Awarded sole source for RightTouchtrade

inclusion with major monitor supplier

Automotive market wins growingas we expand our real estate per MOSTreg

node

102

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Sales StructureOn Target for 6 Cost of Sales at $100MQtr

Efficient use of Reps and Distributors for WW coverageFocus on winning designs that fuel the growth engineImproving the Quote-to-Cash Process

Channel Optimization and StandardizationOur approach

Fulfillment ndash SMSC does the heavy lifting limited distributor marginsJoint Demand Creation ndash Joint efforts ndashhigher distributor marginsFull Demand Creation ndash All distribution work ndash high margins

Expect industry standard margins on fulfillment and joint demand creation will generate significant gross margin savings in FY11 (~$2M) and beyond

103

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Worldwide Sales Model

Geographically Positioned to be Close to the Customer

Direct Sales Manufacturerrsquos Representatives

Global amp Regional Distribution

54

Sales Associates

Field Application Engineers

15Partners WW

4629 Fulfillment

17 Demand Creation

40 40+ +

104

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC ndash A Differentiated Sales ModelDelivers gt20 CAGR opportunity

Intimate customer relationshipsFocus on key customers amp design winsTechnical expertise for solutions-based selling

Supports company financial modelStable ASP product portfolioOptimizing channel costsStructured to scale with revenue Sales CostRevenue

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

90

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Future SoCrsquos

Portable Connectivity Solves Portable Interface Challenges

ULPI amp HSIC Interfaces on Portable SoCrsquos Today

UTMIUTMI+

22-35 pins

ULPI

12 pins

HSIC

2 pins

SLPI

2 pins

Leverages USB Hub Analog Switches ULPI and HSIC

Expertise

SoCrsquos Today

Baseband Apps Processor

SMSC

91

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Driving SAM GrowthExpanding USB Portable Content

Add high-performance USB and analog subsystemsIncrease SMSC content in end productFuture penetration in portable CE market

$79M

$195M

~35 CAGR

Source iSuppli Morgan Stanley and SMSC Marketing

2010 2013

$050

92

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Portable Connectivity ndash An Exciting Growth Opportunity

FY11 FY12 FY13

~35 CAGR Opportunity

93

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Roger WendelkenVice President

SMSC A Diverse and Growing Customer Base

94

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearCustomer Design Win Focus

New large customer in Secure Transaction Won major PC Printer and Monitor customers for RightTouchtradeDelivered custom PHY to large cell phone customer in JapanMOSTreg and companion chip design wins at GM and VW Toyota ramped

Channel OptimizationReset WW distribution margin to reflect industry averagesStarted plan for Automotive distributor margin reductionReduced of distributors in some areas added in others

FutureContinued optimization of the channelGrow customers with over $10M in salesSignificant design win growth in 2HFY11

95

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing Customer Base

Expect FY11 Will Double The Number Ofgt $10MYr Customers

Expect FY12 Will Double The Number Of gt $20MYr Customers

Only one gt10 customer

96

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing amp Diversified Customer Base

Traditional PC

46New Wave of Consumer

and PC Customers

22

Automotive

19ODMs

13

Top 20 Customers By Revenue

97

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

How Did We Get There

98

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Growing SMSC Market ShareDesigning in SMSC USB HubsWhen the customer wanted to add functionality to existing systems they placed a call to SMSC ndash the USB ExpertsFrom the first call to production ramp was 4 months

Completed the design and the rigorous testing this customer is known to conduct

SMSC provided value in multiple ways Application Expertise Design Experience Fast Time To Market Competitive Cost Structure

Customer ldquoWe love SMSC and want to give you more business Irsquove never heard anyone say something bad about SMSCrdquo

99

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Entering New MarketsEuropean leader in digital security solutions for cashless payments connected machines and mobile broadband

Over 1 year of visits led to a RFQ for 3 designs

SMSC was a brand new supplier but was awarded all 3 programs ndash custom silicon

Opens up a new and growing market for SMSC

New Customer New Products New SAM and New Revenue ndash We estimate this account will quickly grow to be a top 10 SMSC account

SMSC Provided Value in Multiple Ways Application Experience Customer Experience Engineering Execution Innovation and Technology

100

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Momentum Is Broad Based

APAC design base growing ndash includes little automotive todayStrategic accounts continue to growDiversification across customer base and multiple geographiesAutomotive in Japan is large

FY10 Design Win $ by Region

101

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

We Continue To Hit The Bulls Eye

Rated 3rd

out of 87 suppliersat Strategic Account

Market Leadership

Technology Partner

New Product Adoption

Operation Excellence

Sole source for embedded controllersfor multiple customers

Awarded sole source for RightTouchtrade

inclusion with major monitor supplier

Automotive market wins growingas we expand our real estate per MOSTreg

node

102

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Sales StructureOn Target for 6 Cost of Sales at $100MQtr

Efficient use of Reps and Distributors for WW coverageFocus on winning designs that fuel the growth engineImproving the Quote-to-Cash Process

Channel Optimization and StandardizationOur approach

Fulfillment ndash SMSC does the heavy lifting limited distributor marginsJoint Demand Creation ndash Joint efforts ndashhigher distributor marginsFull Demand Creation ndash All distribution work ndash high margins

Expect industry standard margins on fulfillment and joint demand creation will generate significant gross margin savings in FY11 (~$2M) and beyond

103

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Worldwide Sales Model

Geographically Positioned to be Close to the Customer

Direct Sales Manufacturerrsquos Representatives

Global amp Regional Distribution

54

Sales Associates

Field Application Engineers

15Partners WW

4629 Fulfillment

17 Demand Creation

40 40+ +

104

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC ndash A Differentiated Sales ModelDelivers gt20 CAGR opportunity

Intimate customer relationshipsFocus on key customers amp design winsTechnical expertise for solutions-based selling

Supports company financial modelStable ASP product portfolioOptimizing channel costsStructured to scale with revenue Sales CostRevenue

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

91

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Driving SAM GrowthExpanding USB Portable Content

Add high-performance USB and analog subsystemsIncrease SMSC content in end productFuture penetration in portable CE market

$79M

$195M

~35 CAGR

Source iSuppli Morgan Stanley and SMSC Marketing

2010 2013

$050

92

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Portable Connectivity ndash An Exciting Growth Opportunity

FY11 FY12 FY13

~35 CAGR Opportunity

93

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Roger WendelkenVice President

SMSC A Diverse and Growing Customer Base

94

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearCustomer Design Win Focus

New large customer in Secure Transaction Won major PC Printer and Monitor customers for RightTouchtradeDelivered custom PHY to large cell phone customer in JapanMOSTreg and companion chip design wins at GM and VW Toyota ramped

Channel OptimizationReset WW distribution margin to reflect industry averagesStarted plan for Automotive distributor margin reductionReduced of distributors in some areas added in others

FutureContinued optimization of the channelGrow customers with over $10M in salesSignificant design win growth in 2HFY11

95

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing Customer Base

Expect FY11 Will Double The Number Ofgt $10MYr Customers

Expect FY12 Will Double The Number Of gt $20MYr Customers

Only one gt10 customer

96

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing amp Diversified Customer Base

Traditional PC

46New Wave of Consumer

and PC Customers

22

Automotive

19ODMs

13

Top 20 Customers By Revenue

97

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

How Did We Get There

98

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Growing SMSC Market ShareDesigning in SMSC USB HubsWhen the customer wanted to add functionality to existing systems they placed a call to SMSC ndash the USB ExpertsFrom the first call to production ramp was 4 months

Completed the design and the rigorous testing this customer is known to conduct

SMSC provided value in multiple ways Application Expertise Design Experience Fast Time To Market Competitive Cost Structure

Customer ldquoWe love SMSC and want to give you more business Irsquove never heard anyone say something bad about SMSCrdquo

99

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Entering New MarketsEuropean leader in digital security solutions for cashless payments connected machines and mobile broadband

Over 1 year of visits led to a RFQ for 3 designs

SMSC was a brand new supplier but was awarded all 3 programs ndash custom silicon

Opens up a new and growing market for SMSC

New Customer New Products New SAM and New Revenue ndash We estimate this account will quickly grow to be a top 10 SMSC account

SMSC Provided Value in Multiple Ways Application Experience Customer Experience Engineering Execution Innovation and Technology

100

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Momentum Is Broad Based

APAC design base growing ndash includes little automotive todayStrategic accounts continue to growDiversification across customer base and multiple geographiesAutomotive in Japan is large

FY10 Design Win $ by Region

101

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

We Continue To Hit The Bulls Eye

Rated 3rd

out of 87 suppliersat Strategic Account

Market Leadership

Technology Partner

New Product Adoption

Operation Excellence

Sole source for embedded controllersfor multiple customers

Awarded sole source for RightTouchtrade

inclusion with major monitor supplier

Automotive market wins growingas we expand our real estate per MOSTreg

node

102

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Sales StructureOn Target for 6 Cost of Sales at $100MQtr

Efficient use of Reps and Distributors for WW coverageFocus on winning designs that fuel the growth engineImproving the Quote-to-Cash Process

Channel Optimization and StandardizationOur approach

Fulfillment ndash SMSC does the heavy lifting limited distributor marginsJoint Demand Creation ndash Joint efforts ndashhigher distributor marginsFull Demand Creation ndash All distribution work ndash high margins

Expect industry standard margins on fulfillment and joint demand creation will generate significant gross margin savings in FY11 (~$2M) and beyond

103

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Worldwide Sales Model

Geographically Positioned to be Close to the Customer

Direct Sales Manufacturerrsquos Representatives

Global amp Regional Distribution

54

Sales Associates

Field Application Engineers

15Partners WW

4629 Fulfillment

17 Demand Creation

40 40+ +

104

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC ndash A Differentiated Sales ModelDelivers gt20 CAGR opportunity

Intimate customer relationshipsFocus on key customers amp design winsTechnical expertise for solutions-based selling

Supports company financial modelStable ASP product portfolioOptimizing channel costsStructured to scale with revenue Sales CostRevenue

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

92

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Portable Connectivity ndash An Exciting Growth Opportunity

FY11 FY12 FY13

~35 CAGR Opportunity

93

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Roger WendelkenVice President

SMSC A Diverse and Growing Customer Base

94

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearCustomer Design Win Focus

New large customer in Secure Transaction Won major PC Printer and Monitor customers for RightTouchtradeDelivered custom PHY to large cell phone customer in JapanMOSTreg and companion chip design wins at GM and VW Toyota ramped

Channel OptimizationReset WW distribution margin to reflect industry averagesStarted plan for Automotive distributor margin reductionReduced of distributors in some areas added in others

FutureContinued optimization of the channelGrow customers with over $10M in salesSignificant design win growth in 2HFY11

95

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing Customer Base

Expect FY11 Will Double The Number Ofgt $10MYr Customers

Expect FY12 Will Double The Number Of gt $20MYr Customers

Only one gt10 customer

96

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing amp Diversified Customer Base

Traditional PC

46New Wave of Consumer

and PC Customers

22

Automotive

19ODMs

13

Top 20 Customers By Revenue

97

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

How Did We Get There

98

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Growing SMSC Market ShareDesigning in SMSC USB HubsWhen the customer wanted to add functionality to existing systems they placed a call to SMSC ndash the USB ExpertsFrom the first call to production ramp was 4 months

Completed the design and the rigorous testing this customer is known to conduct

SMSC provided value in multiple ways Application Expertise Design Experience Fast Time To Market Competitive Cost Structure

Customer ldquoWe love SMSC and want to give you more business Irsquove never heard anyone say something bad about SMSCrdquo

99

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Entering New MarketsEuropean leader in digital security solutions for cashless payments connected machines and mobile broadband

Over 1 year of visits led to a RFQ for 3 designs

SMSC was a brand new supplier but was awarded all 3 programs ndash custom silicon

Opens up a new and growing market for SMSC

New Customer New Products New SAM and New Revenue ndash We estimate this account will quickly grow to be a top 10 SMSC account

SMSC Provided Value in Multiple Ways Application Experience Customer Experience Engineering Execution Innovation and Technology

100

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Momentum Is Broad Based

APAC design base growing ndash includes little automotive todayStrategic accounts continue to growDiversification across customer base and multiple geographiesAutomotive in Japan is large

FY10 Design Win $ by Region

101

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

We Continue To Hit The Bulls Eye

Rated 3rd

out of 87 suppliersat Strategic Account

Market Leadership

Technology Partner

New Product Adoption

Operation Excellence

Sole source for embedded controllersfor multiple customers

Awarded sole source for RightTouchtrade

inclusion with major monitor supplier

Automotive market wins growingas we expand our real estate per MOSTreg

node

102

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Sales StructureOn Target for 6 Cost of Sales at $100MQtr

Efficient use of Reps and Distributors for WW coverageFocus on winning designs that fuel the growth engineImproving the Quote-to-Cash Process

Channel Optimization and StandardizationOur approach

Fulfillment ndash SMSC does the heavy lifting limited distributor marginsJoint Demand Creation ndash Joint efforts ndashhigher distributor marginsFull Demand Creation ndash All distribution work ndash high margins

Expect industry standard margins on fulfillment and joint demand creation will generate significant gross margin savings in FY11 (~$2M) and beyond

103

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Worldwide Sales Model

Geographically Positioned to be Close to the Customer

Direct Sales Manufacturerrsquos Representatives

Global amp Regional Distribution

54

Sales Associates

Field Application Engineers

15Partners WW

4629 Fulfillment

17 Demand Creation

40 40+ +

104

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC ndash A Differentiated Sales ModelDelivers gt20 CAGR opportunity

Intimate customer relationshipsFocus on key customers amp design winsTechnical expertise for solutions-based selling

Supports company financial modelStable ASP product portfolioOptimizing channel costsStructured to scale with revenue Sales CostRevenue

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

93

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Roger WendelkenVice President

SMSC A Diverse and Growing Customer Base

94

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearCustomer Design Win Focus

New large customer in Secure Transaction Won major PC Printer and Monitor customers for RightTouchtradeDelivered custom PHY to large cell phone customer in JapanMOSTreg and companion chip design wins at GM and VW Toyota ramped

Channel OptimizationReset WW distribution margin to reflect industry averagesStarted plan for Automotive distributor margin reductionReduced of distributors in some areas added in others

FutureContinued optimization of the channelGrow customers with over $10M in salesSignificant design win growth in 2HFY11

95

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing Customer Base

Expect FY11 Will Double The Number Ofgt $10MYr Customers

Expect FY12 Will Double The Number Of gt $20MYr Customers

Only one gt10 customer

96

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing amp Diversified Customer Base

Traditional PC

46New Wave of Consumer

and PC Customers

22

Automotive

19ODMs

13

Top 20 Customers By Revenue

97

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

How Did We Get There

98

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Growing SMSC Market ShareDesigning in SMSC USB HubsWhen the customer wanted to add functionality to existing systems they placed a call to SMSC ndash the USB ExpertsFrom the first call to production ramp was 4 months

Completed the design and the rigorous testing this customer is known to conduct

SMSC provided value in multiple ways Application Expertise Design Experience Fast Time To Market Competitive Cost Structure

Customer ldquoWe love SMSC and want to give you more business Irsquove never heard anyone say something bad about SMSCrdquo

99

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Entering New MarketsEuropean leader in digital security solutions for cashless payments connected machines and mobile broadband

Over 1 year of visits led to a RFQ for 3 designs

SMSC was a brand new supplier but was awarded all 3 programs ndash custom silicon

Opens up a new and growing market for SMSC

New Customer New Products New SAM and New Revenue ndash We estimate this account will quickly grow to be a top 10 SMSC account

SMSC Provided Value in Multiple Ways Application Experience Customer Experience Engineering Execution Innovation and Technology

100

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Momentum Is Broad Based

APAC design base growing ndash includes little automotive todayStrategic accounts continue to growDiversification across customer base and multiple geographiesAutomotive in Japan is large

FY10 Design Win $ by Region

101

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

We Continue To Hit The Bulls Eye

Rated 3rd

out of 87 suppliersat Strategic Account

Market Leadership

Technology Partner

New Product Adoption

Operation Excellence

Sole source for embedded controllersfor multiple customers

Awarded sole source for RightTouchtrade

inclusion with major monitor supplier

Automotive market wins growingas we expand our real estate per MOSTreg

node

102

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Sales StructureOn Target for 6 Cost of Sales at $100MQtr

Efficient use of Reps and Distributors for WW coverageFocus on winning designs that fuel the growth engineImproving the Quote-to-Cash Process

Channel Optimization and StandardizationOur approach

Fulfillment ndash SMSC does the heavy lifting limited distributor marginsJoint Demand Creation ndash Joint efforts ndashhigher distributor marginsFull Demand Creation ndash All distribution work ndash high margins

Expect industry standard margins on fulfillment and joint demand creation will generate significant gross margin savings in FY11 (~$2M) and beyond

103

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Worldwide Sales Model

Geographically Positioned to be Close to the Customer

Direct Sales Manufacturerrsquos Representatives

Global amp Regional Distribution

54

Sales Associates

Field Application Engineers

15Partners WW

4629 Fulfillment

17 Demand Creation

40 40+ +

104

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC ndash A Differentiated Sales ModelDelivers gt20 CAGR opportunity

Intimate customer relationshipsFocus on key customers amp design winsTechnical expertise for solutions-based selling

Supports company financial modelStable ASP product portfolioOptimizing channel costsStructured to scale with revenue Sales CostRevenue

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

94

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Whats Happened in the Last YearCustomer Design Win Focus

New large customer in Secure Transaction Won major PC Printer and Monitor customers for RightTouchtradeDelivered custom PHY to large cell phone customer in JapanMOSTreg and companion chip design wins at GM and VW Toyota ramped

Channel OptimizationReset WW distribution margin to reflect industry averagesStarted plan for Automotive distributor margin reductionReduced of distributors in some areas added in others

FutureContinued optimization of the channelGrow customers with over $10M in salesSignificant design win growth in 2HFY11

95

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing Customer Base

Expect FY11 Will Double The Number Ofgt $10MYr Customers

Expect FY12 Will Double The Number Of gt $20MYr Customers

Only one gt10 customer

96

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing amp Diversified Customer Base

Traditional PC

46New Wave of Consumer

and PC Customers

22

Automotive

19ODMs

13

Top 20 Customers By Revenue

97

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

How Did We Get There

98

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Growing SMSC Market ShareDesigning in SMSC USB HubsWhen the customer wanted to add functionality to existing systems they placed a call to SMSC ndash the USB ExpertsFrom the first call to production ramp was 4 months

Completed the design and the rigorous testing this customer is known to conduct

SMSC provided value in multiple ways Application Expertise Design Experience Fast Time To Market Competitive Cost Structure

Customer ldquoWe love SMSC and want to give you more business Irsquove never heard anyone say something bad about SMSCrdquo

99

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Entering New MarketsEuropean leader in digital security solutions for cashless payments connected machines and mobile broadband

Over 1 year of visits led to a RFQ for 3 designs

SMSC was a brand new supplier but was awarded all 3 programs ndash custom silicon

Opens up a new and growing market for SMSC

New Customer New Products New SAM and New Revenue ndash We estimate this account will quickly grow to be a top 10 SMSC account

SMSC Provided Value in Multiple Ways Application Experience Customer Experience Engineering Execution Innovation and Technology

100

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Momentum Is Broad Based

APAC design base growing ndash includes little automotive todayStrategic accounts continue to growDiversification across customer base and multiple geographiesAutomotive in Japan is large

FY10 Design Win $ by Region

101

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

We Continue To Hit The Bulls Eye

Rated 3rd

out of 87 suppliersat Strategic Account

Market Leadership

Technology Partner

New Product Adoption

Operation Excellence

Sole source for embedded controllersfor multiple customers

Awarded sole source for RightTouchtrade

inclusion with major monitor supplier

Automotive market wins growingas we expand our real estate per MOSTreg

node

102

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Sales StructureOn Target for 6 Cost of Sales at $100MQtr

Efficient use of Reps and Distributors for WW coverageFocus on winning designs that fuel the growth engineImproving the Quote-to-Cash Process

Channel Optimization and StandardizationOur approach

Fulfillment ndash SMSC does the heavy lifting limited distributor marginsJoint Demand Creation ndash Joint efforts ndashhigher distributor marginsFull Demand Creation ndash All distribution work ndash high margins

Expect industry standard margins on fulfillment and joint demand creation will generate significant gross margin savings in FY11 (~$2M) and beyond

103

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Worldwide Sales Model

Geographically Positioned to be Close to the Customer

Direct Sales Manufacturerrsquos Representatives

Global amp Regional Distribution

54

Sales Associates

Field Application Engineers

15Partners WW

4629 Fulfillment

17 Demand Creation

40 40+ +

104

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC ndash A Differentiated Sales ModelDelivers gt20 CAGR opportunity

Intimate customer relationshipsFocus on key customers amp design winsTechnical expertise for solutions-based selling

Supports company financial modelStable ASP product portfolioOptimizing channel costsStructured to scale with revenue Sales CostRevenue

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

95

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing Customer Base

Expect FY11 Will Double The Number Ofgt $10MYr Customers

Expect FY12 Will Double The Number Of gt $20MYr Customers

Only one gt10 customer

96

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing amp Diversified Customer Base

Traditional PC

46New Wave of Consumer

and PC Customers

22

Automotive

19ODMs

13

Top 20 Customers By Revenue

97

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

How Did We Get There

98

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Growing SMSC Market ShareDesigning in SMSC USB HubsWhen the customer wanted to add functionality to existing systems they placed a call to SMSC ndash the USB ExpertsFrom the first call to production ramp was 4 months

Completed the design and the rigorous testing this customer is known to conduct

SMSC provided value in multiple ways Application Expertise Design Experience Fast Time To Market Competitive Cost Structure

Customer ldquoWe love SMSC and want to give you more business Irsquove never heard anyone say something bad about SMSCrdquo

99

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Entering New MarketsEuropean leader in digital security solutions for cashless payments connected machines and mobile broadband

Over 1 year of visits led to a RFQ for 3 designs

SMSC was a brand new supplier but was awarded all 3 programs ndash custom silicon

Opens up a new and growing market for SMSC

New Customer New Products New SAM and New Revenue ndash We estimate this account will quickly grow to be a top 10 SMSC account

SMSC Provided Value in Multiple Ways Application Experience Customer Experience Engineering Execution Innovation and Technology

100

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Momentum Is Broad Based

APAC design base growing ndash includes little automotive todayStrategic accounts continue to growDiversification across customer base and multiple geographiesAutomotive in Japan is large

FY10 Design Win $ by Region

101

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

We Continue To Hit The Bulls Eye

Rated 3rd

out of 87 suppliersat Strategic Account

Market Leadership

Technology Partner

New Product Adoption

Operation Excellence

Sole source for embedded controllersfor multiple customers

Awarded sole source for RightTouchtrade

inclusion with major monitor supplier

Automotive market wins growingas we expand our real estate per MOSTreg

node

102

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Sales StructureOn Target for 6 Cost of Sales at $100MQtr

Efficient use of Reps and Distributors for WW coverageFocus on winning designs that fuel the growth engineImproving the Quote-to-Cash Process

Channel Optimization and StandardizationOur approach

Fulfillment ndash SMSC does the heavy lifting limited distributor marginsJoint Demand Creation ndash Joint efforts ndashhigher distributor marginsFull Demand Creation ndash All distribution work ndash high margins

Expect industry standard margins on fulfillment and joint demand creation will generate significant gross margin savings in FY11 (~$2M) and beyond

103

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Worldwide Sales Model

Geographically Positioned to be Close to the Customer

Direct Sales Manufacturerrsquos Representatives

Global amp Regional Distribution

54

Sales Associates

Field Application Engineers

15Partners WW

4629 Fulfillment

17 Demand Creation

40 40+ +

104

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC ndash A Differentiated Sales ModelDelivers gt20 CAGR opportunity

Intimate customer relationshipsFocus on key customers amp design winsTechnical expertise for solutions-based selling

Supports company financial modelStable ASP product portfolioOptimizing channel costsStructured to scale with revenue Sales CostRevenue

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

96

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Growing amp Diversified Customer Base

Traditional PC

46New Wave of Consumer

and PC Customers

22

Automotive

19ODMs

13

Top 20 Customers By Revenue

97

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

How Did We Get There

98

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Growing SMSC Market ShareDesigning in SMSC USB HubsWhen the customer wanted to add functionality to existing systems they placed a call to SMSC ndash the USB ExpertsFrom the first call to production ramp was 4 months

Completed the design and the rigorous testing this customer is known to conduct

SMSC provided value in multiple ways Application Expertise Design Experience Fast Time To Market Competitive Cost Structure

Customer ldquoWe love SMSC and want to give you more business Irsquove never heard anyone say something bad about SMSCrdquo

99

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Entering New MarketsEuropean leader in digital security solutions for cashless payments connected machines and mobile broadband

Over 1 year of visits led to a RFQ for 3 designs

SMSC was a brand new supplier but was awarded all 3 programs ndash custom silicon

Opens up a new and growing market for SMSC

New Customer New Products New SAM and New Revenue ndash We estimate this account will quickly grow to be a top 10 SMSC account

SMSC Provided Value in Multiple Ways Application Experience Customer Experience Engineering Execution Innovation and Technology

100

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Momentum Is Broad Based

APAC design base growing ndash includes little automotive todayStrategic accounts continue to growDiversification across customer base and multiple geographiesAutomotive in Japan is large

FY10 Design Win $ by Region

101

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

We Continue To Hit The Bulls Eye

Rated 3rd

out of 87 suppliersat Strategic Account

Market Leadership

Technology Partner

New Product Adoption

Operation Excellence

Sole source for embedded controllersfor multiple customers

Awarded sole source for RightTouchtrade

inclusion with major monitor supplier

Automotive market wins growingas we expand our real estate per MOSTreg

node

102

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Sales StructureOn Target for 6 Cost of Sales at $100MQtr

Efficient use of Reps and Distributors for WW coverageFocus on winning designs that fuel the growth engineImproving the Quote-to-Cash Process

Channel Optimization and StandardizationOur approach

Fulfillment ndash SMSC does the heavy lifting limited distributor marginsJoint Demand Creation ndash Joint efforts ndashhigher distributor marginsFull Demand Creation ndash All distribution work ndash high margins

Expect industry standard margins on fulfillment and joint demand creation will generate significant gross margin savings in FY11 (~$2M) and beyond

103

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Worldwide Sales Model

Geographically Positioned to be Close to the Customer

Direct Sales Manufacturerrsquos Representatives

Global amp Regional Distribution

54

Sales Associates

Field Application Engineers

15Partners WW

4629 Fulfillment

17 Demand Creation

40 40+ +

104

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC ndash A Differentiated Sales ModelDelivers gt20 CAGR opportunity

Intimate customer relationshipsFocus on key customers amp design winsTechnical expertise for solutions-based selling

Supports company financial modelStable ASP product portfolioOptimizing channel costsStructured to scale with revenue Sales CostRevenue

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

97

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

How Did We Get There

98

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Growing SMSC Market ShareDesigning in SMSC USB HubsWhen the customer wanted to add functionality to existing systems they placed a call to SMSC ndash the USB ExpertsFrom the first call to production ramp was 4 months

Completed the design and the rigorous testing this customer is known to conduct

SMSC provided value in multiple ways Application Expertise Design Experience Fast Time To Market Competitive Cost Structure

Customer ldquoWe love SMSC and want to give you more business Irsquove never heard anyone say something bad about SMSCrdquo

99

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Entering New MarketsEuropean leader in digital security solutions for cashless payments connected machines and mobile broadband

Over 1 year of visits led to a RFQ for 3 designs

SMSC was a brand new supplier but was awarded all 3 programs ndash custom silicon

Opens up a new and growing market for SMSC

New Customer New Products New SAM and New Revenue ndash We estimate this account will quickly grow to be a top 10 SMSC account

SMSC Provided Value in Multiple Ways Application Experience Customer Experience Engineering Execution Innovation and Technology

100

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Momentum Is Broad Based

APAC design base growing ndash includes little automotive todayStrategic accounts continue to growDiversification across customer base and multiple geographiesAutomotive in Japan is large

FY10 Design Win $ by Region

101

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

We Continue To Hit The Bulls Eye

Rated 3rd

out of 87 suppliersat Strategic Account

Market Leadership

Technology Partner

New Product Adoption

Operation Excellence

Sole source for embedded controllersfor multiple customers

Awarded sole source for RightTouchtrade

inclusion with major monitor supplier

Automotive market wins growingas we expand our real estate per MOSTreg

node

102

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Sales StructureOn Target for 6 Cost of Sales at $100MQtr

Efficient use of Reps and Distributors for WW coverageFocus on winning designs that fuel the growth engineImproving the Quote-to-Cash Process

Channel Optimization and StandardizationOur approach

Fulfillment ndash SMSC does the heavy lifting limited distributor marginsJoint Demand Creation ndash Joint efforts ndashhigher distributor marginsFull Demand Creation ndash All distribution work ndash high margins

Expect industry standard margins on fulfillment and joint demand creation will generate significant gross margin savings in FY11 (~$2M) and beyond

103

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Worldwide Sales Model

Geographically Positioned to be Close to the Customer

Direct Sales Manufacturerrsquos Representatives

Global amp Regional Distribution

54

Sales Associates

Field Application Engineers

15Partners WW

4629 Fulfillment

17 Demand Creation

40 40+ +

104

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC ndash A Differentiated Sales ModelDelivers gt20 CAGR opportunity

Intimate customer relationshipsFocus on key customers amp design winsTechnical expertise for solutions-based selling

Supports company financial modelStable ASP product portfolioOptimizing channel costsStructured to scale with revenue Sales CostRevenue

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

98

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Growing SMSC Market ShareDesigning in SMSC USB HubsWhen the customer wanted to add functionality to existing systems they placed a call to SMSC ndash the USB ExpertsFrom the first call to production ramp was 4 months

Completed the design and the rigorous testing this customer is known to conduct

SMSC provided value in multiple ways Application Expertise Design Experience Fast Time To Market Competitive Cost Structure

Customer ldquoWe love SMSC and want to give you more business Irsquove never heard anyone say something bad about SMSCrdquo

99

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Entering New MarketsEuropean leader in digital security solutions for cashless payments connected machines and mobile broadband

Over 1 year of visits led to a RFQ for 3 designs

SMSC was a brand new supplier but was awarded all 3 programs ndash custom silicon

Opens up a new and growing market for SMSC

New Customer New Products New SAM and New Revenue ndash We estimate this account will quickly grow to be a top 10 SMSC account

SMSC Provided Value in Multiple Ways Application Experience Customer Experience Engineering Execution Innovation and Technology

100

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Momentum Is Broad Based

APAC design base growing ndash includes little automotive todayStrategic accounts continue to growDiversification across customer base and multiple geographiesAutomotive in Japan is large

FY10 Design Win $ by Region

101

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

We Continue To Hit The Bulls Eye

Rated 3rd

out of 87 suppliersat Strategic Account

Market Leadership

Technology Partner

New Product Adoption

Operation Excellence

Sole source for embedded controllersfor multiple customers

Awarded sole source for RightTouchtrade

inclusion with major monitor supplier

Automotive market wins growingas we expand our real estate per MOSTreg

node

102

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Sales StructureOn Target for 6 Cost of Sales at $100MQtr

Efficient use of Reps and Distributors for WW coverageFocus on winning designs that fuel the growth engineImproving the Quote-to-Cash Process

Channel Optimization and StandardizationOur approach

Fulfillment ndash SMSC does the heavy lifting limited distributor marginsJoint Demand Creation ndash Joint efforts ndashhigher distributor marginsFull Demand Creation ndash All distribution work ndash high margins

Expect industry standard margins on fulfillment and joint demand creation will generate significant gross margin savings in FY11 (~$2M) and beyond

103

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Worldwide Sales Model

Geographically Positioned to be Close to the Customer

Direct Sales Manufacturerrsquos Representatives

Global amp Regional Distribution

54

Sales Associates

Field Application Engineers

15Partners WW

4629 Fulfillment

17 Demand Creation

40 40+ +

104

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC ndash A Differentiated Sales ModelDelivers gt20 CAGR opportunity

Intimate customer relationshipsFocus on key customers amp design winsTechnical expertise for solutions-based selling

Supports company financial modelStable ASP product portfolioOptimizing channel costsStructured to scale with revenue Sales CostRevenue

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

99

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Success ndash Entering New MarketsEuropean leader in digital security solutions for cashless payments connected machines and mobile broadband

Over 1 year of visits led to a RFQ for 3 designs

SMSC was a brand new supplier but was awarded all 3 programs ndash custom silicon

Opens up a new and growing market for SMSC

New Customer New Products New SAM and New Revenue ndash We estimate this account will quickly grow to be a top 10 SMSC account

SMSC Provided Value in Multiple Ways Application Experience Customer Experience Engineering Execution Innovation and Technology

100

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Momentum Is Broad Based

APAC design base growing ndash includes little automotive todayStrategic accounts continue to growDiversification across customer base and multiple geographiesAutomotive in Japan is large

FY10 Design Win $ by Region

101

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

We Continue To Hit The Bulls Eye

Rated 3rd

out of 87 suppliersat Strategic Account

Market Leadership

Technology Partner

New Product Adoption

Operation Excellence

Sole source for embedded controllersfor multiple customers

Awarded sole source for RightTouchtrade

inclusion with major monitor supplier

Automotive market wins growingas we expand our real estate per MOSTreg

node

102

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Sales StructureOn Target for 6 Cost of Sales at $100MQtr

Efficient use of Reps and Distributors for WW coverageFocus on winning designs that fuel the growth engineImproving the Quote-to-Cash Process

Channel Optimization and StandardizationOur approach

Fulfillment ndash SMSC does the heavy lifting limited distributor marginsJoint Demand Creation ndash Joint efforts ndashhigher distributor marginsFull Demand Creation ndash All distribution work ndash high margins

Expect industry standard margins on fulfillment and joint demand creation will generate significant gross margin savings in FY11 (~$2M) and beyond

103

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Worldwide Sales Model

Geographically Positioned to be Close to the Customer

Direct Sales Manufacturerrsquos Representatives

Global amp Regional Distribution

54

Sales Associates

Field Application Engineers

15Partners WW

4629 Fulfillment

17 Demand Creation

40 40+ +

104

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC ndash A Differentiated Sales ModelDelivers gt20 CAGR opportunity

Intimate customer relationshipsFocus on key customers amp design winsTechnical expertise for solutions-based selling

Supports company financial modelStable ASP product portfolioOptimizing channel costsStructured to scale with revenue Sales CostRevenue

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

100

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Design Win Momentum Is Broad Based

APAC design base growing ndash includes little automotive todayStrategic accounts continue to growDiversification across customer base and multiple geographiesAutomotive in Japan is large

FY10 Design Win $ by Region

101

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

We Continue To Hit The Bulls Eye

Rated 3rd

out of 87 suppliersat Strategic Account

Market Leadership

Technology Partner

New Product Adoption

Operation Excellence

Sole source for embedded controllersfor multiple customers

Awarded sole source for RightTouchtrade

inclusion with major monitor supplier

Automotive market wins growingas we expand our real estate per MOSTreg

node

102

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Sales StructureOn Target for 6 Cost of Sales at $100MQtr

Efficient use of Reps and Distributors for WW coverageFocus on winning designs that fuel the growth engineImproving the Quote-to-Cash Process

Channel Optimization and StandardizationOur approach

Fulfillment ndash SMSC does the heavy lifting limited distributor marginsJoint Demand Creation ndash Joint efforts ndashhigher distributor marginsFull Demand Creation ndash All distribution work ndash high margins

Expect industry standard margins on fulfillment and joint demand creation will generate significant gross margin savings in FY11 (~$2M) and beyond

103

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Worldwide Sales Model

Geographically Positioned to be Close to the Customer

Direct Sales Manufacturerrsquos Representatives

Global amp Regional Distribution

54

Sales Associates

Field Application Engineers

15Partners WW

4629 Fulfillment

17 Demand Creation

40 40+ +

104

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC ndash A Differentiated Sales ModelDelivers gt20 CAGR opportunity

Intimate customer relationshipsFocus on key customers amp design winsTechnical expertise for solutions-based selling

Supports company financial modelStable ASP product portfolioOptimizing channel costsStructured to scale with revenue Sales CostRevenue

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

101

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

We Continue To Hit The Bulls Eye

Rated 3rd

out of 87 suppliersat Strategic Account

Market Leadership

Technology Partner

New Product Adoption

Operation Excellence

Sole source for embedded controllersfor multiple customers

Awarded sole source for RightTouchtrade

inclusion with major monitor supplier

Automotive market wins growingas we expand our real estate per MOSTreg

node

102

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Sales StructureOn Target for 6 Cost of Sales at $100MQtr

Efficient use of Reps and Distributors for WW coverageFocus on winning designs that fuel the growth engineImproving the Quote-to-Cash Process

Channel Optimization and StandardizationOur approach

Fulfillment ndash SMSC does the heavy lifting limited distributor marginsJoint Demand Creation ndash Joint efforts ndashhigher distributor marginsFull Demand Creation ndash All distribution work ndash high margins

Expect industry standard margins on fulfillment and joint demand creation will generate significant gross margin savings in FY11 (~$2M) and beyond

103

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Worldwide Sales Model

Geographically Positioned to be Close to the Customer

Direct Sales Manufacturerrsquos Representatives

Global amp Regional Distribution

54

Sales Associates

Field Application Engineers

15Partners WW

4629 Fulfillment

17 Demand Creation

40 40+ +

104

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC ndash A Differentiated Sales ModelDelivers gt20 CAGR opportunity

Intimate customer relationshipsFocus on key customers amp design winsTechnical expertise for solutions-based selling

Supports company financial modelStable ASP product portfolioOptimizing channel costsStructured to scale with revenue Sales CostRevenue

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

102

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Sales StructureOn Target for 6 Cost of Sales at $100MQtr

Efficient use of Reps and Distributors for WW coverageFocus on winning designs that fuel the growth engineImproving the Quote-to-Cash Process

Channel Optimization and StandardizationOur approach

Fulfillment ndash SMSC does the heavy lifting limited distributor marginsJoint Demand Creation ndash Joint efforts ndashhigher distributor marginsFull Demand Creation ndash All distribution work ndash high margins

Expect industry standard margins on fulfillment and joint demand creation will generate significant gross margin savings in FY11 (~$2M) and beyond

103

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Worldwide Sales Model

Geographically Positioned to be Close to the Customer

Direct Sales Manufacturerrsquos Representatives

Global amp Regional Distribution

54

Sales Associates

Field Application Engineers

15Partners WW

4629 Fulfillment

17 Demand Creation

40 40+ +

104

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC ndash A Differentiated Sales ModelDelivers gt20 CAGR opportunity

Intimate customer relationshipsFocus on key customers amp design winsTechnical expertise for solutions-based selling

Supports company financial modelStable ASP product portfolioOptimizing channel costsStructured to scale with revenue Sales CostRevenue

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

103

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC Worldwide Sales Model

Geographically Positioned to be Close to the Customer

Direct Sales Manufacturerrsquos Representatives

Global amp Regional Distribution

54

Sales Associates

Field Application Engineers

15Partners WW

4629 Fulfillment

17 Demand Creation

40 40+ +

104

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC ndash A Differentiated Sales ModelDelivers gt20 CAGR opportunity

Intimate customer relationshipsFocus on key customers amp design winsTechnical expertise for solutions-based selling

Supports company financial modelStable ASP product portfolioOptimizing channel costsStructured to scale with revenue Sales CostRevenue

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

104

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

SMSC ndash A Differentiated Sales ModelDelivers gt20 CAGR opportunity

Intimate customer relationshipsFocus on key customers amp design winsTechnical expertise for solutions-based selling

Supports company financial modelStable ASP product portfolioOptimizing channel costsStructured to scale with revenue Sales CostRevenue

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

105

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Dave CollerSenior VP

SMSC Operations Driving Financial Results

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

106

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

A Results Oriented Manufacturing Philosophy

Manufacturing strategyPartner with world class vendorsMulti source strategyCostqualityperformance

Wafer Fabrication Assembly Test

Regular rigorous business reviews

Gross margin improvement amp cost reduction strategy

107

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Driving Non-GAAP Gross Margin to 56

CostYield

Gro

ss M

argi

n

47

55

Q1 2010 Q1 2011 Model

Key projectsBusiness process re-engineering

Gold reduction program

Cost reduction programsLogistics managementCycle time reductionYield managementInventory reduction program

56

Base Line

Increased Business

Absorption

Offshore Test Cost

Base Line

Sustainable Business

ModelOther Cost Reduction

2011 Initiatives

108

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success in 2010

Completed offshoring test operations to Sigurd Microelectronics

Inventory reduction program resulted in gt$12M WIP reduction achieving 4 turns

Cost reduction programs generated gt$15M in reductions

Ship-To Location

109

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Gross Margin Improvement Strategy in 2011Wafer fab

Focusing on the 180nm sweet spot for productionQualifying 65nm (future sweet spot)

Test cost reductions opportunitiesMultisite testing deployment up to X16 testing for standard devicesAggressive test time reduction Investigation for new low cost of ownership platform

Yield

Assembly cost reductionsQualification of additional low cost sourcesReduction in gold wire diameters Copper wire introductionSiP integration

Continuous yield improvementImplementing new yield management software working across supply chain

110

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Summary ndash Driving for 56 Gross MarginThe supply chain for wafer fabrication assembly test is tight Guaranteeing assurance of supply for our customer base is being treated as top priority and being managed through a multi-sourcing strategy and strategic vendor management

Driving unlimited growth as a now truly fablessscalable company

Driving to 56 non-GAAP sustainable gross margins through a continuous aggressivecost reduction roadmap and ensuring technically economically smart technologies are targeted for the future

111

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Lunch 15-minute break

112

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Kris SennesaelVP amp CFO

SMSC Drive for Profitable Growth

113

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Last Yearrsquos Model

Non-GAAP measures see reconciliation of GAAP and non-GAAP measures in the appendix

Approaching Mid-term Model

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

Model at $100MQ

Model at $120MQ

Q1FY11 Actual

Model at $100MQ

Model at $120MQ

Q1FY11 Actual

Model at $100MQ

Model at $120MQ

$972M$100M $120M

55355 55

22220 18

20019 17

13116 20

Q2FY11 Guidance

$101 $104M

553

214 206

192 187

147 160

114

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Top-line Growth Since Q4FY09 Bottom

Strong sequential growth Unit growth + expanding addressable market + market share gains

Expect to beat our mid-term model of $100M in Q2FY11 SMSC Guidance

Steady Market Recovery

Seasonal Consumer

Decline

Enterprise PC Rebound Automotive Recovery and

Continued Market Share Gains$120

$100

$80

$60

$40

$20

$0

115

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Record Company Gross Margin

Operational Excellence Gross Margin

Beat the 55 Model in Q1FY11 5531000 basis points of non-GAAP gross margin improvements

~ Half from cost reductions~ Half from scale

Non-GAAP measures SMSC Guidance

116

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Opex Keep spending in line with model

SGampA on target RampD up 100 basis pointsRampD spend increased as a result of acquisitions (K2L Kleer STS)RampD additions in low cost areas (India Bulgaria)

Non-GAAP measures SMSC Guidance

Downsizing

SGampARampD

117

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Focus on Profitable Growth Approaching 16 in Q2FY11

Focus on profitable growth Meet the model = mid-term model of 16 operating margin

Non-GAAP measures SMSC Guidance

118

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

20 Operating Margin Target Model

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

119

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

CashST Investments

Balance Sheet Remains Strong

~$85 in cashinvestments per share hellip and no debt$40M net cash provided by operating activities in FY10Low capex model $86M capex in FY10 down from $178M in FY09Cash-out of $196M in FY 10 for acquisitions and investments

Auction Rate Securities

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

$0

120

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Reached Our Inventory Turns Target

Inventory turns at 42 beating target of 4X

$60

$50

$40

$30

$20

$10

$0

121

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Drive for Profitable Growth

Productmarket strategy drives organic top-line growth

Accelerated top-line growth through acquisitions

Focus on PROFITABLE growthContinue gross margin improvementsOpex control

Deliver on the 20 non-GAAP operating margin model

122

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

123

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (in thousands except per share amounts)

FY09 FY 10 FY 11Q4 Q1 Q2 Q3 Q4 FY 10 Q1

Gross profit - GAAP basis 21753$ 27712$ 35543$ 45034$ 44688$ 152923$ 51795$ Stock-based compensation 531 550 904 (342) 281 1394 782 Amortization of intangible assets 1022 1112 1058 941 1140 4304 1078 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Gross profit - non-GAAP basis 23306$ 29374$ 39204$ 47866$ 45087$ 161531$ 53700$

Income (loss) from operations ndash GAAP basis (78752)$ (14597)$ (10056)$ 9439$ 1227$ (13987)$ 1802$

Non-GAAP adjustments

Stock-based compensation included in Costs of Goods Sold 531 550 904 (342) 281 1394 782 Research amp Development 1558 1482 2384 (559) 968 4274 2224 Selling general and administrative 2954 3393 5698 (1889) 1717 8918 4639

5043 5425 8986 (2790) 2966 14586 7645 Amortization of intangible assets included in Costs of Goods Sold 1022 1112 1058 941 1140 4304 1078 Selling general and administrative 484 395 496 478 691 2007 687

1506 1507 1554 1419 1831 6311 1765 Other non-GAAP adjustments Restructuring charges 5197 221 649 393 860 2123 821 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Impairment of goodwill 52300 - - - - - - Settlement charge - 2050 - (31) - 2019 -

Transaction costs - mergers and acquisitions - - - 141 339 480 182 Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Executive transition costs - - - - - - 429 Income (loss) from operations ndash non-GAAP basis (14706)$ (5394)$ 2832$ 10804$ 6201$ 14442$ 12689$

Net (loss) income ndash GAAP basis (71643) (9196) (6534) 6806 946 (7978) 627

Non-GAAP adjustments (as scheduled above) 64046 9203 12888 1365 4974 28429 10887

Tax effect of non-GAAP adjustments (4229) (3313) (4640) (491) (1791) (10234) (3919) Net income (loss) ndash non-GAAP basis (11826)$ (3306)$ 1714$ 7680$ 4129$ 10217$ 7595$

Net income (loss) per share ndash diluted GAAP (330)$ (042)$ (030)$ 030$ 004$ (036)$ 003$

Non-GAAP (054)$ (015)$ 008$ 034$ 018$ 046$ 033$

Weighted average common shares outstanding - diluted GAAP 21742 21901 22054 22442 22579 22133 22787 Non-GAAP 21742 21901 22191 22442 22579 22310 22787

• Slide Number 1
• Safe Harbor Statement
• Agenda
• Smart Mixed-Signal Connectivitytrade
• Whats Happened in the Last Year
• Strong Semiconductor Recovery in 1HCY10
• Executing on Financial Objectives
• Connectivity Is Everywhere amp Converging
• SMSC Is A Player
• An Expanding Ecosystem
• Investing In Our Future
• Wireless Audio Systems A High Growth Opportunity
• The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio
• Kleer and STS are complementary and positioned for fast growth
• Wireless Audio Systems ndash A Compelling Growth Opportunity
• New Market Opportunities are Driven by a Changing Landscape
• The Wireless Audio Growth Opportunity
• SMSC Continued Commitment to Growth
• 5 Product Lines Driving Growth Opportunities
• Content Value Provides Growth Opportunities
• Growth Driven by Market Recovery amp Share Gains
• Expanding the Value Chain
• Strong Market Share Positions in Our Target Markets
• A Diverse Company with an Evolving Mix
• World Class Customers and Partners
• Our Growing Worldwide RampD Presence
• Continuing to Deliver Expanding Earnings
• SMSC A Compelling Company
• Slide Number 29
• Computing amp Connectivity Now a Growth Business
• Whats Happened in the Last Year
• PC Market Forecast Indicates Robust Growth in 2010
• Successfully Expanding Our Global PC Related Customer Base
• Strong Revenue Growth from Core + New Initiatives
• New Market Opportunities Driven by a Changing Landscape
• Slide Number 36
• What We Do and Where We Are
• Green USB High Speed Inter-Chip (HSIC)
• USB ndash The Evolution Continues
• Slide Number 40
• SMSC USB Graphics Solution
• USB Graphics Futures
• Slide Number 43
• Partnering to Provide Natural Human Interface Solutions
• 3D The Future of Human Interaction
• Security Evolution Creates Unique Opportunities
• Computing amp Connectivity Core Business Growth Opportunity
• Automotive Information Systems Expanding Automotive Content
• Automotive Information Systems ndash A Compelling Business Model
• Whats Happened in the Last Year
• Multiple Vectors for Growth
• Synergistic Technology Standards
• K2L ndash Connecting Networks Through Software
• Kleer Technology ndash Best-In-Class RF Audio
• Working Out of a Deep Automotive Recession
• MOST Is The Base of Our Business
• Slide Number 57
• Winning Ground ndash 23 New Models in Past Year
• Success at VWAudi ndash Next Gen MOST In All Car Models
• SMSC Holds An Impressive Market Share
• New Products Poised for Growth
• Multiplying The Size Of The Opportunity
• Outlook Driver Assist ndash A System without a Network
• SMSC Automotive ndash Sustainable Growth Opportunity
• Slide Number 65
• A Successful Analog Business Model
• An Expanding Product Portfolio
• Whats Happened in the Last Year
• Thermal Management - Our Core Business
• RightTouchtrade - Our Growth Business in 2010 amp 2011
• RightTouchtrade is Replacing Mechanical Buttons
• Buttons Waiting to be Replaced
• Focusing on Changing the Human Interface
• Energy Conservation is Driving New Opportunities
• Monitoring Power for Better System Management
• USB Port Power - A New Standard and Opportunity
• USB ndash The Charging Port of Choice
• A Solid SMSC Revenue Growth Opportunity
• Slide Number 79
• SMSC Portable Products A Growth Business
• Whats Happened in the Last Year
• The Components of SMSC Success
• SMSC Has Achieved USB Transceiver Market Leadership for Portable Devices
• Acquiring Customers Through Design Wins
• Demonstrated Success through gt100 CAGR
• Expanding Our Market
• Added Content USB Port Protection amp Detection
• Battery Charging Opportunity Portable Power
• Whatrsquos Happening with Smartphones
• Portable Connectivity Solves Portable Interface Challenges
• Driving SAM Growth
• Portable Connectivity ndash An Exciting Growth Opportunity
• Slide Number 93
• Whats Happened in the Last Year
• A Growing Customer Base
• A Growing amp Diversified Customer Base
• How Did We Get There
• Design Win Success ndash Growing SMSC Market Share
• Design Win Success ndash Entering New Markets
• Design Win Momentum Is Broad Based
• We Continue To Hit The Bulls Eye
• Sales Structure
• SMSC Worldwide Sales Model
• SMSC ndash A Differentiated Sales Model
• Slide Number 105
• A Results Oriented Manufacturing Philosophy
• Driving Non-GAAP Gross Margin to 56
• Success in 2010
• Gross Margin Improvement Strategy in 2011
• Summary ndash Driving for 56 Gross Margin
• Slide Number 111
• Slide Number 112
• Last Yearrsquos Model
• Strong Top-line Growth Since Q4FY09 Bottom
• Operational Excellence Gross Margin
• Opex Keep spending in line with model
• Focus on Profitable Growth Approaching 16 in Q2FY11
• 20 Operating Margin Target Model
• Balance Sheet Remains Strong
• Reached Our Inventory Turns Target
• Drive for Profitable Growth
• Slide Number 122
• Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures(in thousands except per share amounts)

108

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Success in 2010

Completed offshoring test operations to Sigurd Microelectronics

Inventory reduction program resulted in gt$12M WIP reduction achieving 4 turns

Cost reduction programs generated gt$15M in reductions

Ship-To Location

109

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Gross Margin Improvement Strategy in 2011Wafer fab

Focusing on the 180nm sweet spot for productionQualifying 65nm (future sweet spot)

Test cost reductions opportunitiesMultisite testing deployment up to X16 testing for standard devicesAggressive test time reduction Investigation for new low cost of ownership platform

Yield

Assembly cost reductionsQualification of additional low cost sourcesReduction in gold wire diameters Copper wire introductionSiP integration

Continuous yield improvementImplementing new yield management software working across supply chain

110

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Summary ndash Driving for 56 Gross MarginThe supply chain for wafer fabrication assembly test is tight Guaranteeing assurance of supply for our customer base is being treated as top priority and being managed through a multi-sourcing strategy and strategic vendor management

Driving unlimited growth as a now truly fablessscalable company

Driving to 56 non-GAAP sustainable gross margins through a continuous aggressivecost reduction roadmap and ensuring technically economically smart technologies are targeted for the future

111

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Lunch 15-minute break

112

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Kris SennesaelVP amp CFO

SMSC Drive for Profitable Growth

113

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Last Yearrsquos Model

Non-GAAP measures see reconciliation of GAAP and non-GAAP measures in the appendix

Approaching Mid-term Model

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

Model at $100MQ

Model at $120MQ

Q1FY11 Actual

Model at $100MQ

Model at $120MQ

Q1FY11 Actual

Model at $100MQ

Model at $120MQ

$972M$100M $120M

55355 55

22220 18

20019 17

13116 20

Q2FY11 Guidance

$101 $104M

553

214 206

192 187

147 160

114

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Top-line Growth Since Q4FY09 Bottom

Strong sequential growth Unit growth + expanding addressable market + market share gains

Expect to beat our mid-term model of $100M in Q2FY11 SMSC Guidance

Steady Market Recovery

Seasonal Consumer

Decline

Enterprise PC Rebound Automotive Recovery and

Continued Market Share Gains$120

$100

$80

$60

$40

$20

$0

115

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Record Company Gross Margin

Operational Excellence Gross Margin

Beat the 55 Model in Q1FY11 5531000 basis points of non-GAAP gross margin improvements

~ Half from cost reductions~ Half from scale

Non-GAAP measures SMSC Guidance

116

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Opex Keep spending in line with model

SGampA on target RampD up 100 basis pointsRampD spend increased as a result of acquisitions (K2L Kleer STS)RampD additions in low cost areas (India Bulgaria)

Non-GAAP measures SMSC Guidance

Downsizing

SGampARampD

117

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Focus on Profitable Growth Approaching 16 in Q2FY11

Focus on profitable growth Meet the model = mid-term model of 16 operating margin

Non-GAAP measures SMSC Guidance

118

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

20 Operating Margin Target Model

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

119

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

CashST Investments

Balance Sheet Remains Strong

~$85 in cashinvestments per share hellip and no debt$40M net cash provided by operating activities in FY10Low capex model $86M capex in FY10 down from $178M in FY09Cash-out of $196M in FY 10 for acquisitions and investments

Auction Rate Securities

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

$0

120

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Reached Our Inventory Turns Target

Inventory turns at 42 beating target of 4X

$60

$50

$40

$30

$20

$10

$0

121

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Drive for Profitable Growth

Productmarket strategy drives organic top-line growth

Accelerated top-line growth through acquisitions

Focus on PROFITABLE growthContinue gross margin improvementsOpex control

Deliver on the 20 non-GAAP operating margin model

122

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

123

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (in thousands except per share amounts)

FY09 FY 10 FY 11Q4 Q1 Q2 Q3 Q4 FY 10 Q1

Gross profit - GAAP basis 21753$ 27712$ 35543$ 45034$ 44688$ 152923$ 51795$ Stock-based compensation 531 550 904 (342) 281 1394 782 Amortization of intangible assets 1022 1112 1058 941 1140 4304 1078 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Gross profit - non-GAAP basis 23306$ 29374$ 39204$ 47866$ 45087$ 161531$ 53700$

Income (loss) from operations ndash GAAP basis (78752)$ (14597)$ (10056)$ 9439$ 1227$ (13987)$ 1802$

Non-GAAP adjustments

Stock-based compensation included in Costs of Goods Sold 531 550 904 (342) 281 1394 782 Research amp Development 1558 1482 2384 (559) 968 4274 2224 Selling general and administrative 2954 3393 5698 (1889) 1717 8918 4639

5043 5425 8986 (2790) 2966 14586 7645 Amortization of intangible assets included in Costs of Goods Sold 1022 1112 1058 941 1140 4304 1078 Selling general and administrative 484 395 496 478 691 2007 687

1506 1507 1554 1419 1831 6311 1765 Other non-GAAP adjustments Restructuring charges 5197 221 649 393 860 2123 821 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Impairment of goodwill 52300 - - - - - - Settlement charge - 2050 - (31) - 2019 -

Transaction costs - mergers and acquisitions - - - 141 339 480 182 Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Executive transition costs - - - - - - 429 Income (loss) from operations ndash non-GAAP basis (14706)$ (5394)$ 2832$ 10804$ 6201$ 14442$ 12689$

Net (loss) income ndash GAAP basis (71643) (9196) (6534) 6806 946 (7978) 627

Non-GAAP adjustments (as scheduled above) 64046 9203 12888 1365 4974 28429 10887

Tax effect of non-GAAP adjustments (4229) (3313) (4640) (491) (1791) (10234) (3919) Net income (loss) ndash non-GAAP basis (11826)$ (3306)$ 1714$ 7680$ 4129$ 10217$ 7595$

Net income (loss) per share ndash diluted GAAP (330)$ (042)$ (030)$ 030$ 004$ (036)$ 003$

Non-GAAP (054)$ (015)$ 008$ 034$ 018$ 046$ 033$

Weighted average common shares outstanding - diluted GAAP 21742 21901 22054 22442 22579 22133 22787 Non-GAAP 21742 21901 22191 22442 22579 22310 22787

• Slide Number 1
• Safe Harbor Statement
• Agenda
• Smart Mixed-Signal Connectivitytrade
• Whats Happened in the Last Year
• Strong Semiconductor Recovery in 1HCY10
• Executing on Financial Objectives
• Connectivity Is Everywhere amp Converging
• SMSC Is A Player
• An Expanding Ecosystem
• Investing In Our Future
• Wireless Audio Systems A High Growth Opportunity
• The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio
• Kleer and STS are complementary and positioned for fast growth
• Wireless Audio Systems ndash A Compelling Growth Opportunity
• New Market Opportunities are Driven by a Changing Landscape
• The Wireless Audio Growth Opportunity
• SMSC Continued Commitment to Growth
• 5 Product Lines Driving Growth Opportunities
• Content Value Provides Growth Opportunities
• Growth Driven by Market Recovery amp Share Gains
• Expanding the Value Chain
• Strong Market Share Positions in Our Target Markets
• A Diverse Company with an Evolving Mix
• World Class Customers and Partners
• Our Growing Worldwide RampD Presence
• Continuing to Deliver Expanding Earnings
• SMSC A Compelling Company
• Slide Number 29
• Computing amp Connectivity Now a Growth Business
• Whats Happened in the Last Year
• PC Market Forecast Indicates Robust Growth in 2010
• Successfully Expanding Our Global PC Related Customer Base
• Strong Revenue Growth from Core + New Initiatives
• New Market Opportunities Driven by a Changing Landscape
• Slide Number 36
• What We Do and Where We Are
• Green USB High Speed Inter-Chip (HSIC)
• USB ndash The Evolution Continues
• Slide Number 40
• SMSC USB Graphics Solution
• USB Graphics Futures
• Slide Number 43
• Partnering to Provide Natural Human Interface Solutions
• 3D The Future of Human Interaction
• Security Evolution Creates Unique Opportunities
• Computing amp Connectivity Core Business Growth Opportunity
• Automotive Information Systems Expanding Automotive Content
• Automotive Information Systems ndash A Compelling Business Model
• Whats Happened in the Last Year
• Multiple Vectors for Growth
• Synergistic Technology Standards
• K2L ndash Connecting Networks Through Software
• Kleer Technology ndash Best-In-Class RF Audio
• Working Out of a Deep Automotive Recession
• MOST Is The Base of Our Business
• Slide Number 57
• Winning Ground ndash 23 New Models in Past Year
• Success at VWAudi ndash Next Gen MOST In All Car Models
• SMSC Holds An Impressive Market Share
• New Products Poised for Growth
• Multiplying The Size Of The Opportunity
• Outlook Driver Assist ndash A System without a Network
• SMSC Automotive ndash Sustainable Growth Opportunity
• Slide Number 65
• A Successful Analog Business Model
• An Expanding Product Portfolio
• Whats Happened in the Last Year
• Thermal Management - Our Core Business
• RightTouchtrade - Our Growth Business in 2010 amp 2011
• RightTouchtrade is Replacing Mechanical Buttons
• Buttons Waiting to be Replaced
• Focusing on Changing the Human Interface
• Energy Conservation is Driving New Opportunities
• Monitoring Power for Better System Management
• USB Port Power - A New Standard and Opportunity
• USB ndash The Charging Port of Choice
• A Solid SMSC Revenue Growth Opportunity
• Slide Number 79
• SMSC Portable Products A Growth Business
• Whats Happened in the Last Year
• The Components of SMSC Success
• SMSC Has Achieved USB Transceiver Market Leadership for Portable Devices
• Acquiring Customers Through Design Wins
• Demonstrated Success through gt100 CAGR
• Expanding Our Market
• Added Content USB Port Protection amp Detection
• Battery Charging Opportunity Portable Power
• Whatrsquos Happening with Smartphones
• Portable Connectivity Solves Portable Interface Challenges
• Driving SAM Growth
• Portable Connectivity ndash An Exciting Growth Opportunity
• Slide Number 93
• Whats Happened in the Last Year
• A Growing Customer Base
• A Growing amp Diversified Customer Base
• How Did We Get There
• Design Win Success ndash Growing SMSC Market Share
• Design Win Success ndash Entering New Markets
• Design Win Momentum Is Broad Based
• We Continue To Hit The Bulls Eye
• Sales Structure
• SMSC Worldwide Sales Model
• SMSC ndash A Differentiated Sales Model
• Slide Number 105
• A Results Oriented Manufacturing Philosophy
• Driving Non-GAAP Gross Margin to 56
• Success in 2010
• Gross Margin Improvement Strategy in 2011
• Summary ndash Driving for 56 Gross Margin
• Slide Number 111
• Slide Number 112
• Last Yearrsquos Model
• Strong Top-line Growth Since Q4FY09 Bottom
• Operational Excellence Gross Margin
• Opex Keep spending in line with model
• Focus on Profitable Growth Approaching 16 in Q2FY11
• 20 Operating Margin Target Model
• Balance Sheet Remains Strong
• Reached Our Inventory Turns Target
• Drive for Profitable Growth
• Slide Number 122
• Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures(in thousands except per share amounts)

109

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Gross Margin Improvement Strategy in 2011Wafer fab

Focusing on the 180nm sweet spot for productionQualifying 65nm (future sweet spot)

Test cost reductions opportunitiesMultisite testing deployment up to X16 testing for standard devicesAggressive test time reduction Investigation for new low cost of ownership platform

Yield

Assembly cost reductionsQualification of additional low cost sourcesReduction in gold wire diameters Copper wire introductionSiP integration

Continuous yield improvementImplementing new yield management software working across supply chain

110

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Summary ndash Driving for 56 Gross MarginThe supply chain for wafer fabrication assembly test is tight Guaranteeing assurance of supply for our customer base is being treated as top priority and being managed through a multi-sourcing strategy and strategic vendor management

Driving unlimited growth as a now truly fablessscalable company

Driving to 56 non-GAAP sustainable gross margins through a continuous aggressivecost reduction roadmap and ensuring technically economically smart technologies are targeted for the future

111

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Lunch 15-minute break

112

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Kris SennesaelVP amp CFO

SMSC Drive for Profitable Growth

113

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Last Yearrsquos Model

Non-GAAP measures see reconciliation of GAAP and non-GAAP measures in the appendix

Approaching Mid-term Model

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

Model at $100MQ

Model at $120MQ

Q1FY11 Actual

Model at $100MQ

Model at $120MQ

Q1FY11 Actual

Model at $100MQ

Model at $120MQ

$972M$100M $120M

55355 55

22220 18

20019 17

13116 20

Q2FY11 Guidance

$101 $104M

553

214 206

192 187

147 160

114

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Top-line Growth Since Q4FY09 Bottom

Strong sequential growth Unit growth + expanding addressable market + market share gains

Expect to beat our mid-term model of $100M in Q2FY11 SMSC Guidance

Steady Market Recovery

Seasonal Consumer

Decline

Enterprise PC Rebound Automotive Recovery and

Continued Market Share Gains$120

$100

$80

$60

$40

$20

$0

115

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Record Company Gross Margin

Operational Excellence Gross Margin

Beat the 55 Model in Q1FY11 5531000 basis points of non-GAAP gross margin improvements

~ Half from cost reductions~ Half from scale

Non-GAAP measures SMSC Guidance

116

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Opex Keep spending in line with model

SGampA on target RampD up 100 basis pointsRampD spend increased as a result of acquisitions (K2L Kleer STS)RampD additions in low cost areas (India Bulgaria)

Non-GAAP measures SMSC Guidance

Downsizing

SGampARampD

117

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Focus on Profitable Growth Approaching 16 in Q2FY11

Focus on profitable growth Meet the model = mid-term model of 16 operating margin

Non-GAAP measures SMSC Guidance

118

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

20 Operating Margin Target Model

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

119

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

CashST Investments

Balance Sheet Remains Strong

~$85 in cashinvestments per share hellip and no debt$40M net cash provided by operating activities in FY10Low capex model $86M capex in FY10 down from $178M in FY09Cash-out of $196M in FY 10 for acquisitions and investments

Auction Rate Securities

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

$0

120

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Reached Our Inventory Turns Target

Inventory turns at 42 beating target of 4X

$60

$50

$40

$30

$20

$10

$0

121

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Drive for Profitable Growth

Productmarket strategy drives organic top-line growth

Accelerated top-line growth through acquisitions

Focus on PROFITABLE growthContinue gross margin improvementsOpex control

Deliver on the 20 non-GAAP operating margin model

122

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

123

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (in thousands except per share amounts)

FY09 FY 10 FY 11Q4 Q1 Q2 Q3 Q4 FY 10 Q1

Gross profit - GAAP basis 21753$ 27712$ 35543$ 45034$ 44688$ 152923$ 51795$ Stock-based compensation 531 550 904 (342) 281 1394 782 Amortization of intangible assets 1022 1112 1058 941 1140 4304 1078 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Gross profit - non-GAAP basis 23306$ 29374$ 39204$ 47866$ 45087$ 161531$ 53700$

Income (loss) from operations ndash GAAP basis (78752)$ (14597)$ (10056)$ 9439$ 1227$ (13987)$ 1802$

Non-GAAP adjustments

Stock-based compensation included in Costs of Goods Sold 531 550 904 (342) 281 1394 782 Research amp Development 1558 1482 2384 (559) 968 4274 2224 Selling general and administrative 2954 3393 5698 (1889) 1717 8918 4639

5043 5425 8986 (2790) 2966 14586 7645 Amortization of intangible assets included in Costs of Goods Sold 1022 1112 1058 941 1140 4304 1078 Selling general and administrative 484 395 496 478 691 2007 687

1506 1507 1554 1419 1831 6311 1765 Other non-GAAP adjustments Restructuring charges 5197 221 649 393 860 2123 821 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Impairment of goodwill 52300 - - - - - - Settlement charge - 2050 - (31) - 2019 -

Transaction costs - mergers and acquisitions - - - 141 339 480 182 Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Executive transition costs - - - - - - 429 Income (loss) from operations ndash non-GAAP basis (14706)$ (5394)$ 2832$ 10804$ 6201$ 14442$ 12689$

Net (loss) income ndash GAAP basis (71643) (9196) (6534) 6806 946 (7978) 627

Non-GAAP adjustments (as scheduled above) 64046 9203 12888 1365 4974 28429 10887

Tax effect of non-GAAP adjustments (4229) (3313) (4640) (491) (1791) (10234) (3919) Net income (loss) ndash non-GAAP basis (11826)$ (3306)$ 1714$ 7680$ 4129$ 10217$ 7595$

Net income (loss) per share ndash diluted GAAP (330)$ (042)$ (030)$ 030$ 004$ (036)$ 003$

Non-GAAP (054)$ (015)$ 008$ 034$ 018$ 046$ 033$

Weighted average common shares outstanding - diluted GAAP 21742 21901 22054 22442 22579 22133 22787 Non-GAAP 21742 21901 22191 22442 22579 22310 22787

• Slide Number 1
• Safe Harbor Statement
• Agenda
• Smart Mixed-Signal Connectivitytrade
• Whats Happened in the Last Year
• Strong Semiconductor Recovery in 1HCY10
• Executing on Financial Objectives
• Connectivity Is Everywhere amp Converging
• SMSC Is A Player
• An Expanding Ecosystem
• Investing In Our Future
• Wireless Audio Systems A High Growth Opportunity
• The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio
• Kleer and STS are complementary and positioned for fast growth
• Wireless Audio Systems ndash A Compelling Growth Opportunity
• New Market Opportunities are Driven by a Changing Landscape
• The Wireless Audio Growth Opportunity
• SMSC Continued Commitment to Growth
• 5 Product Lines Driving Growth Opportunities
• Content Value Provides Growth Opportunities
• Growth Driven by Market Recovery amp Share Gains
• Expanding the Value Chain
• Strong Market Share Positions in Our Target Markets
• A Diverse Company with an Evolving Mix
• World Class Customers and Partners
• Our Growing Worldwide RampD Presence
• Continuing to Deliver Expanding Earnings
• SMSC A Compelling Company
• Slide Number 29
• Computing amp Connectivity Now a Growth Business
• Whats Happened in the Last Year
• PC Market Forecast Indicates Robust Growth in 2010
• Successfully Expanding Our Global PC Related Customer Base
• Strong Revenue Growth from Core + New Initiatives
• New Market Opportunities Driven by a Changing Landscape
• Slide Number 36
• What We Do and Where We Are
• Green USB High Speed Inter-Chip (HSIC)
• USB ndash The Evolution Continues
• Slide Number 40
• SMSC USB Graphics Solution
• USB Graphics Futures
• Slide Number 43
• Partnering to Provide Natural Human Interface Solutions
• 3D The Future of Human Interaction
• Security Evolution Creates Unique Opportunities
• Computing amp Connectivity Core Business Growth Opportunity
• Automotive Information Systems Expanding Automotive Content
• Automotive Information Systems ndash A Compelling Business Model
• Whats Happened in the Last Year
• Multiple Vectors for Growth
• Synergistic Technology Standards
• K2L ndash Connecting Networks Through Software
• Kleer Technology ndash Best-In-Class RF Audio
• Working Out of a Deep Automotive Recession
• MOST Is The Base of Our Business
• Slide Number 57
• Winning Ground ndash 23 New Models in Past Year
• Success at VWAudi ndash Next Gen MOST In All Car Models
• SMSC Holds An Impressive Market Share
• New Products Poised for Growth
• Multiplying The Size Of The Opportunity
• Outlook Driver Assist ndash A System without a Network
• SMSC Automotive ndash Sustainable Growth Opportunity
• Slide Number 65
• A Successful Analog Business Model
• An Expanding Product Portfolio
• Whats Happened in the Last Year
• Thermal Management - Our Core Business
• RightTouchtrade - Our Growth Business in 2010 amp 2011
• RightTouchtrade is Replacing Mechanical Buttons
• Buttons Waiting to be Replaced
• Focusing on Changing the Human Interface
• Energy Conservation is Driving New Opportunities
• Monitoring Power for Better System Management
• USB Port Power - A New Standard and Opportunity
• USB ndash The Charging Port of Choice
• A Solid SMSC Revenue Growth Opportunity
• Slide Number 79
• SMSC Portable Products A Growth Business
• Whats Happened in the Last Year
• The Components of SMSC Success
• SMSC Has Achieved USB Transceiver Market Leadership for Portable Devices
• Acquiring Customers Through Design Wins
• Demonstrated Success through gt100 CAGR
• Expanding Our Market
• Added Content USB Port Protection amp Detection
• Battery Charging Opportunity Portable Power
• Whatrsquos Happening with Smartphones
• Portable Connectivity Solves Portable Interface Challenges
• Driving SAM Growth
• Portable Connectivity ndash An Exciting Growth Opportunity
• Slide Number 93
• Whats Happened in the Last Year
• A Growing Customer Base
• A Growing amp Diversified Customer Base
• How Did We Get There
• Design Win Success ndash Growing SMSC Market Share
• Design Win Success ndash Entering New Markets
• Design Win Momentum Is Broad Based
• We Continue To Hit The Bulls Eye
• Sales Structure
• SMSC Worldwide Sales Model
• SMSC ndash A Differentiated Sales Model
• Slide Number 105
• A Results Oriented Manufacturing Philosophy
• Driving Non-GAAP Gross Margin to 56
• Success in 2010
• Gross Margin Improvement Strategy in 2011
• Summary ndash Driving for 56 Gross Margin
• Slide Number 111
• Slide Number 112
• Last Yearrsquos Model
• Strong Top-line Growth Since Q4FY09 Bottom
• Operational Excellence Gross Margin
• Opex Keep spending in line with model
• Focus on Profitable Growth Approaching 16 in Q2FY11
• 20 Operating Margin Target Model
• Balance Sheet Remains Strong
• Reached Our Inventory Turns Target
• Drive for Profitable Growth
• Slide Number 122
• Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures(in thousands except per share amounts)

110

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Summary ndash Driving for 56 Gross MarginThe supply chain for wafer fabrication assembly test is tight Guaranteeing assurance of supply for our customer base is being treated as top priority and being managed through a multi-sourcing strategy and strategic vendor management

Driving unlimited growth as a now truly fablessscalable company

Driving to 56 non-GAAP sustainable gross margins through a continuous aggressivecost reduction roadmap and ensuring technically economically smart technologies are targeted for the future

111

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Lunch 15-minute break

112

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Kris SennesaelVP amp CFO

SMSC Drive for Profitable Growth

113

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Last Yearrsquos Model

Non-GAAP measures see reconciliation of GAAP and non-GAAP measures in the appendix

Approaching Mid-term Model

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

Model at $100MQ

Model at $120MQ

Q1FY11 Actual

Model at $100MQ

Model at $120MQ

Q1FY11 Actual

Model at $100MQ

Model at $120MQ

$972M$100M $120M

55355 55

22220 18

20019 17

13116 20

Q2FY11 Guidance

$101 $104M

553

214 206

192 187

147 160

114

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Top-line Growth Since Q4FY09 Bottom

Strong sequential growth Unit growth + expanding addressable market + market share gains

Expect to beat our mid-term model of $100M in Q2FY11 SMSC Guidance

Steady Market Recovery

Seasonal Consumer

Decline

Enterprise PC Rebound Automotive Recovery and

Continued Market Share Gains$120

$100

$80

$60

$40

$20

$0

115

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Record Company Gross Margin

Operational Excellence Gross Margin

Beat the 55 Model in Q1FY11 5531000 basis points of non-GAAP gross margin improvements

~ Half from cost reductions~ Half from scale

Non-GAAP measures SMSC Guidance

116

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Opex Keep spending in line with model

SGampA on target RampD up 100 basis pointsRampD spend increased as a result of acquisitions (K2L Kleer STS)RampD additions in low cost areas (India Bulgaria)

Non-GAAP measures SMSC Guidance

Downsizing

SGampARampD

117

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Focus on Profitable Growth Approaching 16 in Q2FY11

Focus on profitable growth Meet the model = mid-term model of 16 operating margin

Non-GAAP measures SMSC Guidance

118

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

20 Operating Margin Target Model

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

119

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

CashST Investments

Balance Sheet Remains Strong

~$85 in cashinvestments per share hellip and no debt$40M net cash provided by operating activities in FY10Low capex model $86M capex in FY10 down from $178M in FY09Cash-out of $196M in FY 10 for acquisitions and investments

Auction Rate Securities

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

$0

120

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Reached Our Inventory Turns Target

Inventory turns at 42 beating target of 4X

$60

$50

$40

$30

$20

$10

$0

121

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Drive for Profitable Growth

Productmarket strategy drives organic top-line growth

Accelerated top-line growth through acquisitions

Focus on PROFITABLE growthContinue gross margin improvementsOpex control

Deliver on the 20 non-GAAP operating margin model

122

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

123

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (in thousands except per share amounts)

FY09 FY 10 FY 11Q4 Q1 Q2 Q3 Q4 FY 10 Q1

Gross profit - GAAP basis 21753$ 27712$ 35543$ 45034$ 44688$ 152923$ 51795$ Stock-based compensation 531 550 904 (342) 281 1394 782 Amortization of intangible assets 1022 1112 1058 941 1140 4304 1078 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Gross profit - non-GAAP basis 23306$ 29374$ 39204$ 47866$ 45087$ 161531$ 53700$

Income (loss) from operations ndash GAAP basis (78752)$ (14597)$ (10056)$ 9439$ 1227$ (13987)$ 1802$

Non-GAAP adjustments

Stock-based compensation included in Costs of Goods Sold 531 550 904 (342) 281 1394 782 Research amp Development 1558 1482 2384 (559) 968 4274 2224 Selling general and administrative 2954 3393 5698 (1889) 1717 8918 4639

5043 5425 8986 (2790) 2966 14586 7645 Amortization of intangible assets included in Costs of Goods Sold 1022 1112 1058 941 1140 4304 1078 Selling general and administrative 484 395 496 478 691 2007 687

1506 1507 1554 1419 1831 6311 1765 Other non-GAAP adjustments Restructuring charges 5197 221 649 393 860 2123 821 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Impairment of goodwill 52300 - - - - - - Settlement charge - 2050 - (31) - 2019 -

Transaction costs - mergers and acquisitions - - - 141 339 480 182 Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Executive transition costs - - - - - - 429 Income (loss) from operations ndash non-GAAP basis (14706)$ (5394)$ 2832$ 10804$ 6201$ 14442$ 12689$

Net (loss) income ndash GAAP basis (71643) (9196) (6534) 6806 946 (7978) 627

Non-GAAP adjustments (as scheduled above) 64046 9203 12888 1365 4974 28429 10887

Tax effect of non-GAAP adjustments (4229) (3313) (4640) (491) (1791) (10234) (3919) Net income (loss) ndash non-GAAP basis (11826)$ (3306)$ 1714$ 7680$ 4129$ 10217$ 7595$

Net income (loss) per share ndash diluted GAAP (330)$ (042)$ (030)$ 030$ 004$ (036)$ 003$

Non-GAAP (054)$ (015)$ 008$ 034$ 018$ 046$ 033$

Weighted average common shares outstanding - diluted GAAP 21742 21901 22054 22442 22579 22133 22787 Non-GAAP 21742 21901 22191 22442 22579 22310 22787

• Slide Number 1
• Safe Harbor Statement
• Agenda
• Smart Mixed-Signal Connectivitytrade
• Whats Happened in the Last Year
• Strong Semiconductor Recovery in 1HCY10
• Executing on Financial Objectives
• Connectivity Is Everywhere amp Converging
• SMSC Is A Player
• An Expanding Ecosystem
• Investing In Our Future
• Wireless Audio Systems A High Growth Opportunity
• The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio
• Kleer and STS are complementary and positioned for fast growth
• Wireless Audio Systems ndash A Compelling Growth Opportunity
• New Market Opportunities are Driven by a Changing Landscape
• The Wireless Audio Growth Opportunity
• SMSC Continued Commitment to Growth
• 5 Product Lines Driving Growth Opportunities
• Content Value Provides Growth Opportunities
• Growth Driven by Market Recovery amp Share Gains
• Expanding the Value Chain
• Strong Market Share Positions in Our Target Markets
• A Diverse Company with an Evolving Mix
• World Class Customers and Partners
• Our Growing Worldwide RampD Presence
• Continuing to Deliver Expanding Earnings
• SMSC A Compelling Company
• Slide Number 29
• Computing amp Connectivity Now a Growth Business
• Whats Happened in the Last Year
• PC Market Forecast Indicates Robust Growth in 2010
• Successfully Expanding Our Global PC Related Customer Base
• Strong Revenue Growth from Core + New Initiatives
• New Market Opportunities Driven by a Changing Landscape
• Slide Number 36
• What We Do and Where We Are
• Green USB High Speed Inter-Chip (HSIC)
• USB ndash The Evolution Continues
• Slide Number 40
• SMSC USB Graphics Solution
• USB Graphics Futures
• Slide Number 43
• Partnering to Provide Natural Human Interface Solutions
• 3D The Future of Human Interaction
• Security Evolution Creates Unique Opportunities
• Computing amp Connectivity Core Business Growth Opportunity
• Automotive Information Systems Expanding Automotive Content
• Automotive Information Systems ndash A Compelling Business Model
• Whats Happened in the Last Year
• Multiple Vectors for Growth
• Synergistic Technology Standards
• K2L ndash Connecting Networks Through Software
• Kleer Technology ndash Best-In-Class RF Audio
• Working Out of a Deep Automotive Recession
• MOST Is The Base of Our Business
• Slide Number 57
• Winning Ground ndash 23 New Models in Past Year
• Success at VWAudi ndash Next Gen MOST In All Car Models
• SMSC Holds An Impressive Market Share
• New Products Poised for Growth
• Multiplying The Size Of The Opportunity
• Outlook Driver Assist ndash A System without a Network
• SMSC Automotive ndash Sustainable Growth Opportunity
• Slide Number 65
• A Successful Analog Business Model
• An Expanding Product Portfolio
• Whats Happened in the Last Year
• Thermal Management - Our Core Business
• RightTouchtrade - Our Growth Business in 2010 amp 2011
• RightTouchtrade is Replacing Mechanical Buttons
• Buttons Waiting to be Replaced
• Focusing on Changing the Human Interface
• Energy Conservation is Driving New Opportunities
• Monitoring Power for Better System Management
• USB Port Power - A New Standard and Opportunity
• USB ndash The Charging Port of Choice
• A Solid SMSC Revenue Growth Opportunity
• Slide Number 79
• SMSC Portable Products A Growth Business
• Whats Happened in the Last Year
• The Components of SMSC Success
• SMSC Has Achieved USB Transceiver Market Leadership for Portable Devices
• Acquiring Customers Through Design Wins
• Demonstrated Success through gt100 CAGR
• Expanding Our Market
• Added Content USB Port Protection amp Detection
• Battery Charging Opportunity Portable Power
• Whatrsquos Happening with Smartphones
• Portable Connectivity Solves Portable Interface Challenges
• Driving SAM Growth
• Portable Connectivity ndash An Exciting Growth Opportunity
• Slide Number 93
• Whats Happened in the Last Year
• A Growing Customer Base
• A Growing amp Diversified Customer Base
• How Did We Get There
• Design Win Success ndash Growing SMSC Market Share
• Design Win Success ndash Entering New Markets
• Design Win Momentum Is Broad Based
• We Continue To Hit The Bulls Eye
• Sales Structure
• SMSC Worldwide Sales Model
• SMSC ndash A Differentiated Sales Model
• Slide Number 105
• A Results Oriented Manufacturing Philosophy
• Driving Non-GAAP Gross Margin to 56
• Success in 2010
• Gross Margin Improvement Strategy in 2011
• Summary ndash Driving for 56 Gross Margin
• Slide Number 111
• Slide Number 112
• Last Yearrsquos Model
• Strong Top-line Growth Since Q4FY09 Bottom
• Operational Excellence Gross Margin
• Opex Keep spending in line with model
• Focus on Profitable Growth Approaching 16 in Q2FY11
• 20 Operating Margin Target Model
• Balance Sheet Remains Strong
• Reached Our Inventory Turns Target
• Drive for Profitable Growth
• Slide Number 122
• Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures(in thousands except per share amounts)

111

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Lunch 15-minute break

112

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Kris SennesaelVP amp CFO

SMSC Drive for Profitable Growth

113

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Last Yearrsquos Model

Non-GAAP measures see reconciliation of GAAP and non-GAAP measures in the appendix

Approaching Mid-term Model

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

Model at $100MQ

Model at $120MQ

Q1FY11 Actual

Model at $100MQ

Model at $120MQ

Q1FY11 Actual

Model at $100MQ

Model at $120MQ

$972M$100M $120M

55355 55

22220 18

20019 17

13116 20

Q2FY11 Guidance

$101 $104M

553

214 206

192 187

147 160

114

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Top-line Growth Since Q4FY09 Bottom

Strong sequential growth Unit growth + expanding addressable market + market share gains

Expect to beat our mid-term model of $100M in Q2FY11 SMSC Guidance

Steady Market Recovery

Seasonal Consumer

Decline

Enterprise PC Rebound Automotive Recovery and

Continued Market Share Gains$120

$100

$80

$60

$40

$20

$0

115

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Record Company Gross Margin

Operational Excellence Gross Margin

Beat the 55 Model in Q1FY11 5531000 basis points of non-GAAP gross margin improvements

~ Half from cost reductions~ Half from scale

Non-GAAP measures SMSC Guidance

116

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Opex Keep spending in line with model

SGampA on target RampD up 100 basis pointsRampD spend increased as a result of acquisitions (K2L Kleer STS)RampD additions in low cost areas (India Bulgaria)

Non-GAAP measures SMSC Guidance

Downsizing

SGampARampD

117

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Focus on Profitable Growth Approaching 16 in Q2FY11

Focus on profitable growth Meet the model = mid-term model of 16 operating margin

Non-GAAP measures SMSC Guidance

118

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

20 Operating Margin Target Model

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

119

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

CashST Investments

Balance Sheet Remains Strong

~$85 in cashinvestments per share hellip and no debt$40M net cash provided by operating activities in FY10Low capex model $86M capex in FY10 down from $178M in FY09Cash-out of $196M in FY 10 for acquisitions and investments

Auction Rate Securities

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

$0

120

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Reached Our Inventory Turns Target

Inventory turns at 42 beating target of 4X

$60

$50

$40

$30

$20

$10

$0

121

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Drive for Profitable Growth

Productmarket strategy drives organic top-line growth

Accelerated top-line growth through acquisitions

Focus on PROFITABLE growthContinue gross margin improvementsOpex control

Deliver on the 20 non-GAAP operating margin model

122

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

123

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (in thousands except per share amounts)

FY09 FY 10 FY 11Q4 Q1 Q2 Q3 Q4 FY 10 Q1

Gross profit - GAAP basis 21753$ 27712$ 35543$ 45034$ 44688$ 152923$ 51795$ Stock-based compensation 531 550 904 (342) 281 1394 782 Amortization of intangible assets 1022 1112 1058 941 1140 4304 1078 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Gross profit - non-GAAP basis 23306$ 29374$ 39204$ 47866$ 45087$ 161531$ 53700$

Income (loss) from operations ndash GAAP basis (78752)$ (14597)$ (10056)$ 9439$ 1227$ (13987)$ 1802$

Non-GAAP adjustments

Stock-based compensation included in Costs of Goods Sold 531 550 904 (342) 281 1394 782 Research amp Development 1558 1482 2384 (559) 968 4274 2224 Selling general and administrative 2954 3393 5698 (1889) 1717 8918 4639

5043 5425 8986 (2790) 2966 14586 7645 Amortization of intangible assets included in Costs of Goods Sold 1022 1112 1058 941 1140 4304 1078 Selling general and administrative 484 395 496 478 691 2007 687

1506 1507 1554 1419 1831 6311 1765 Other non-GAAP adjustments Restructuring charges 5197 221 649 393 860 2123 821 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Impairment of goodwill 52300 - - - - - - Settlement charge - 2050 - (31) - 2019 -

Transaction costs - mergers and acquisitions - - - 141 339 480 182 Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Executive transition costs - - - - - - 429 Income (loss) from operations ndash non-GAAP basis (14706)$ (5394)$ 2832$ 10804$ 6201$ 14442$ 12689$

Net (loss) income ndash GAAP basis (71643) (9196) (6534) 6806 946 (7978) 627

Non-GAAP adjustments (as scheduled above) 64046 9203 12888 1365 4974 28429 10887

Tax effect of non-GAAP adjustments (4229) (3313) (4640) (491) (1791) (10234) (3919) Net income (loss) ndash non-GAAP basis (11826)$ (3306)$ 1714$ 7680$ 4129$ 10217$ 7595$

Net income (loss) per share ndash diluted GAAP (330)$ (042)$ (030)$ 030$ 004$ (036)$ 003$

Non-GAAP (054)$ (015)$ 008$ 034$ 018$ 046$ 033$

Weighted average common shares outstanding - diluted GAAP 21742 21901 22054 22442 22579 22133 22787 Non-GAAP 21742 21901 22191 22442 22579 22310 22787

• Slide Number 1
• Safe Harbor Statement
• Agenda
• Smart Mixed-Signal Connectivitytrade
• Whats Happened in the Last Year
• Strong Semiconductor Recovery in 1HCY10
• Executing on Financial Objectives
• Connectivity Is Everywhere amp Converging
• SMSC Is A Player
• An Expanding Ecosystem
• Investing In Our Future
• Wireless Audio Systems A High Growth Opportunity
• The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio
• Kleer and STS are complementary and positioned for fast growth
• Wireless Audio Systems ndash A Compelling Growth Opportunity
• New Market Opportunities are Driven by a Changing Landscape
• The Wireless Audio Growth Opportunity
• SMSC Continued Commitment to Growth
• 5 Product Lines Driving Growth Opportunities
• Content Value Provides Growth Opportunities
• Growth Driven by Market Recovery amp Share Gains
• Expanding the Value Chain
• Strong Market Share Positions in Our Target Markets
• A Diverse Company with an Evolving Mix
• World Class Customers and Partners
• Our Growing Worldwide RampD Presence
• Continuing to Deliver Expanding Earnings
• SMSC A Compelling Company
• Slide Number 29
• Computing amp Connectivity Now a Growth Business
• Whats Happened in the Last Year
• PC Market Forecast Indicates Robust Growth in 2010
• Successfully Expanding Our Global PC Related Customer Base
• Strong Revenue Growth from Core + New Initiatives
• New Market Opportunities Driven by a Changing Landscape
• Slide Number 36
• What We Do and Where We Are
• Green USB High Speed Inter-Chip (HSIC)
• USB ndash The Evolution Continues
• Slide Number 40
• SMSC USB Graphics Solution
• USB Graphics Futures
• Slide Number 43
• Partnering to Provide Natural Human Interface Solutions
• 3D The Future of Human Interaction
• Security Evolution Creates Unique Opportunities
• Computing amp Connectivity Core Business Growth Opportunity
• Automotive Information Systems Expanding Automotive Content
• Automotive Information Systems ndash A Compelling Business Model
• Whats Happened in the Last Year
• Multiple Vectors for Growth
• Synergistic Technology Standards
• K2L ndash Connecting Networks Through Software
• Kleer Technology ndash Best-In-Class RF Audio
• Working Out of a Deep Automotive Recession
• MOST Is The Base of Our Business
• Slide Number 57
• Winning Ground ndash 23 New Models in Past Year
• Success at VWAudi ndash Next Gen MOST In All Car Models
• SMSC Holds An Impressive Market Share
• New Products Poised for Growth
• Multiplying The Size Of The Opportunity
• Outlook Driver Assist ndash A System without a Network
• SMSC Automotive ndash Sustainable Growth Opportunity
• Slide Number 65
• A Successful Analog Business Model
• An Expanding Product Portfolio
• Whats Happened in the Last Year
• Thermal Management - Our Core Business
• RightTouchtrade - Our Growth Business in 2010 amp 2011
• RightTouchtrade is Replacing Mechanical Buttons
• Buttons Waiting to be Replaced
• Focusing on Changing the Human Interface
• Energy Conservation is Driving New Opportunities
• Monitoring Power for Better System Management
• USB Port Power - A New Standard and Opportunity
• USB ndash The Charging Port of Choice
• A Solid SMSC Revenue Growth Opportunity
• Slide Number 79
• SMSC Portable Products A Growth Business
• Whats Happened in the Last Year
• The Components of SMSC Success
• SMSC Has Achieved USB Transceiver Market Leadership for Portable Devices
• Acquiring Customers Through Design Wins
• Demonstrated Success through gt100 CAGR
• Expanding Our Market
• Added Content USB Port Protection amp Detection
• Battery Charging Opportunity Portable Power
• Whatrsquos Happening with Smartphones
• Portable Connectivity Solves Portable Interface Challenges
• Driving SAM Growth
• Portable Connectivity ndash An Exciting Growth Opportunity
• Slide Number 93
• Whats Happened in the Last Year
• A Growing Customer Base
• A Growing amp Diversified Customer Base
• How Did We Get There
• Design Win Success ndash Growing SMSC Market Share
• Design Win Success ndash Entering New Markets
• Design Win Momentum Is Broad Based
• We Continue To Hit The Bulls Eye
• Sales Structure
• SMSC Worldwide Sales Model
• SMSC ndash A Differentiated Sales Model
• Slide Number 105
• A Results Oriented Manufacturing Philosophy
• Driving Non-GAAP Gross Margin to 56
• Success in 2010
• Gross Margin Improvement Strategy in 2011
• Summary ndash Driving for 56 Gross Margin
• Slide Number 111
• Slide Number 112
• Last Yearrsquos Model
• Strong Top-line Growth Since Q4FY09 Bottom
• Operational Excellence Gross Margin
• Opex Keep spending in line with model
• Focus on Profitable Growth Approaching 16 in Q2FY11
• 20 Operating Margin Target Model
• Balance Sheet Remains Strong
• Reached Our Inventory Turns Target
• Drive for Profitable Growth
• Slide Number 122
• Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures(in thousands except per share amounts)

112

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

June 29 2010NASDAQ Market Site ndash New York

Kris SennesaelVP amp CFO

SMSC Drive for Profitable Growth

113

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Last Yearrsquos Model

Non-GAAP measures see reconciliation of GAAP and non-GAAP measures in the appendix

Approaching Mid-term Model

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

Model at $100MQ

Model at $120MQ

Q1FY11 Actual

Model at $100MQ

Model at $120MQ

Q1FY11 Actual

Model at $100MQ

Model at $120MQ

$972M$100M $120M

55355 55

22220 18

20019 17

13116 20

Q2FY11 Guidance

$101 $104M

553

214 206

192 187

147 160

114

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Top-line Growth Since Q4FY09 Bottom

Strong sequential growth Unit growth + expanding addressable market + market share gains

Expect to beat our mid-term model of $100M in Q2FY11 SMSC Guidance

Steady Market Recovery

Seasonal Consumer

Decline

Enterprise PC Rebound Automotive Recovery and

Continued Market Share Gains$120

$100

$80

$60

$40

$20

$0

115

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Record Company Gross Margin

Operational Excellence Gross Margin

Beat the 55 Model in Q1FY11 5531000 basis points of non-GAAP gross margin improvements

~ Half from cost reductions~ Half from scale

Non-GAAP measures SMSC Guidance

116

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Opex Keep spending in line with model

SGampA on target RampD up 100 basis pointsRampD spend increased as a result of acquisitions (K2L Kleer STS)RampD additions in low cost areas (India Bulgaria)

Non-GAAP measures SMSC Guidance

Downsizing

SGampARampD

117

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Focus on Profitable Growth Approaching 16 in Q2FY11

Focus on profitable growth Meet the model = mid-term model of 16 operating margin

Non-GAAP measures SMSC Guidance

118

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

20 Operating Margin Target Model

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

119

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

CashST Investments

Balance Sheet Remains Strong

~$85 in cashinvestments per share hellip and no debt$40M net cash provided by operating activities in FY10Low capex model $86M capex in FY10 down from $178M in FY09Cash-out of $196M in FY 10 for acquisitions and investments

Auction Rate Securities

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

$0

120

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Reached Our Inventory Turns Target

Inventory turns at 42 beating target of 4X

$60

$50

$40

$30

$20

$10

$0

121

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Drive for Profitable Growth

Productmarket strategy drives organic top-line growth

Accelerated top-line growth through acquisitions

Focus on PROFITABLE growthContinue gross margin improvementsOpex control

Deliver on the 20 non-GAAP operating margin model

122

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

123

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (in thousands except per share amounts)

FY09 FY 10 FY 11Q4 Q1 Q2 Q3 Q4 FY 10 Q1

Gross profit - GAAP basis 21753$ 27712$ 35543$ 45034$ 44688$ 152923$ 51795$ Stock-based compensation 531 550 904 (342) 281 1394 782 Amortization of intangible assets 1022 1112 1058 941 1140 4304 1078 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Gross profit - non-GAAP basis 23306$ 29374$ 39204$ 47866$ 45087$ 161531$ 53700$

Income (loss) from operations ndash GAAP basis (78752)$ (14597)$ (10056)$ 9439$ 1227$ (13987)$ 1802$

Non-GAAP adjustments

Stock-based compensation included in Costs of Goods Sold 531 550 904 (342) 281 1394 782 Research amp Development 1558 1482 2384 (559) 968 4274 2224 Selling general and administrative 2954 3393 5698 (1889) 1717 8918 4639

5043 5425 8986 (2790) 2966 14586 7645 Amortization of intangible assets included in Costs of Goods Sold 1022 1112 1058 941 1140 4304 1078 Selling general and administrative 484 395 496 478 691 2007 687

1506 1507 1554 1419 1831 6311 1765 Other non-GAAP adjustments Restructuring charges 5197 221 649 393 860 2123 821 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Impairment of goodwill 52300 - - - - - - Settlement charge - 2050 - (31) - 2019 -

Transaction costs - mergers and acquisitions - - - 141 339 480 182 Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Executive transition costs - - - - - - 429 Income (loss) from operations ndash non-GAAP basis (14706)$ (5394)$ 2832$ 10804$ 6201$ 14442$ 12689$

Net (loss) income ndash GAAP basis (71643) (9196) (6534) 6806 946 (7978) 627

Non-GAAP adjustments (as scheduled above) 64046 9203 12888 1365 4974 28429 10887

Tax effect of non-GAAP adjustments (4229) (3313) (4640) (491) (1791) (10234) (3919) Net income (loss) ndash non-GAAP basis (11826)$ (3306)$ 1714$ 7680$ 4129$ 10217$ 7595$

Net income (loss) per share ndash diluted GAAP (330)$ (042)$ (030)$ 030$ 004$ (036)$ 003$

Non-GAAP (054)$ (015)$ 008$ 034$ 018$ 046$ 033$

Weighted average common shares outstanding - diluted GAAP 21742 21901 22054 22442 22579 22133 22787 Non-GAAP 21742 21901 22191 22442 22579 22310 22787

• Slide Number 1
• Safe Harbor Statement
• Agenda
• Smart Mixed-Signal Connectivitytrade
• Whats Happened in the Last Year
• Strong Semiconductor Recovery in 1HCY10
• Executing on Financial Objectives
• Connectivity Is Everywhere amp Converging
• SMSC Is A Player
• An Expanding Ecosystem
• Investing In Our Future
• Wireless Audio Systems A High Growth Opportunity
• The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio
• Kleer and STS are complementary and positioned for fast growth
• Wireless Audio Systems ndash A Compelling Growth Opportunity
• New Market Opportunities are Driven by a Changing Landscape
• The Wireless Audio Growth Opportunity
• SMSC Continued Commitment to Growth
• 5 Product Lines Driving Growth Opportunities
• Content Value Provides Growth Opportunities
• Growth Driven by Market Recovery amp Share Gains
• Expanding the Value Chain
• Strong Market Share Positions in Our Target Markets
• A Diverse Company with an Evolving Mix
• World Class Customers and Partners
• Our Growing Worldwide RampD Presence
• Continuing to Deliver Expanding Earnings
• SMSC A Compelling Company
• Slide Number 29
• Computing amp Connectivity Now a Growth Business
• Whats Happened in the Last Year
• PC Market Forecast Indicates Robust Growth in 2010
• Successfully Expanding Our Global PC Related Customer Base
• Strong Revenue Growth from Core + New Initiatives
• New Market Opportunities Driven by a Changing Landscape
• Slide Number 36
• What We Do and Where We Are
• Green USB High Speed Inter-Chip (HSIC)
• USB ndash The Evolution Continues
• Slide Number 40
• SMSC USB Graphics Solution
• USB Graphics Futures
• Slide Number 43
• Partnering to Provide Natural Human Interface Solutions
• 3D The Future of Human Interaction
• Security Evolution Creates Unique Opportunities
• Computing amp Connectivity Core Business Growth Opportunity
• Automotive Information Systems Expanding Automotive Content
• Automotive Information Systems ndash A Compelling Business Model
• Whats Happened in the Last Year
• Multiple Vectors for Growth
• Synergistic Technology Standards
• K2L ndash Connecting Networks Through Software
• Kleer Technology ndash Best-In-Class RF Audio
• Working Out of a Deep Automotive Recession
• MOST Is The Base of Our Business
• Slide Number 57
• Winning Ground ndash 23 New Models in Past Year
• Success at VWAudi ndash Next Gen MOST In All Car Models
• SMSC Holds An Impressive Market Share
• New Products Poised for Growth
• Multiplying The Size Of The Opportunity
• Outlook Driver Assist ndash A System without a Network
• SMSC Automotive ndash Sustainable Growth Opportunity
• Slide Number 65
• A Successful Analog Business Model
• An Expanding Product Portfolio
• Whats Happened in the Last Year
• Thermal Management - Our Core Business
• RightTouchtrade - Our Growth Business in 2010 amp 2011
• RightTouchtrade is Replacing Mechanical Buttons
• Buttons Waiting to be Replaced
• Focusing on Changing the Human Interface
• Energy Conservation is Driving New Opportunities
• Monitoring Power for Better System Management
• USB Port Power - A New Standard and Opportunity
• USB ndash The Charging Port of Choice
• A Solid SMSC Revenue Growth Opportunity
• Slide Number 79
• SMSC Portable Products A Growth Business
• Whats Happened in the Last Year
• The Components of SMSC Success
• SMSC Has Achieved USB Transceiver Market Leadership for Portable Devices
• Acquiring Customers Through Design Wins
• Demonstrated Success through gt100 CAGR
• Expanding Our Market
• Added Content USB Port Protection amp Detection
• Battery Charging Opportunity Portable Power
• Whatrsquos Happening with Smartphones
• Portable Connectivity Solves Portable Interface Challenges
• Driving SAM Growth
• Portable Connectivity ndash An Exciting Growth Opportunity
• Slide Number 93
• Whats Happened in the Last Year
• A Growing Customer Base
• A Growing amp Diversified Customer Base
• How Did We Get There
• Design Win Success ndash Growing SMSC Market Share
• Design Win Success ndash Entering New Markets
• Design Win Momentum Is Broad Based
• We Continue To Hit The Bulls Eye
• Sales Structure
• SMSC Worldwide Sales Model
• SMSC ndash A Differentiated Sales Model
• Slide Number 105
• A Results Oriented Manufacturing Philosophy
• Driving Non-GAAP Gross Margin to 56
• Success in 2010
• Gross Margin Improvement Strategy in 2011
• Summary ndash Driving for 56 Gross Margin
• Slide Number 111
• Slide Number 112
• Last Yearrsquos Model
• Strong Top-line Growth Since Q4FY09 Bottom
• Operational Excellence Gross Margin
• Opex Keep spending in line with model
• Focus on Profitable Growth Approaching 16 in Q2FY11
• 20 Operating Margin Target Model
• Balance Sheet Remains Strong
• Reached Our Inventory Turns Target
• Drive for Profitable Growth
• Slide Number 122
• Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures(in thousands except per share amounts)

113

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Last Yearrsquos Model

Non-GAAP measures see reconciliation of GAAP and non-GAAP measures in the appendix

Approaching Mid-term Model

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

Model at $100MQ

Model at $120MQ

Q1FY11 Actual

Model at $100MQ

Model at $120MQ

Q1FY11 Actual

Model at $100MQ

Model at $120MQ

$972M$100M $120M

55355 55

22220 18

20019 17

13116 20

Q2FY11 Guidance

$101 $104M

553

214 206

192 187

147 160

114

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Top-line Growth Since Q4FY09 Bottom

Strong sequential growth Unit growth + expanding addressable market + market share gains

Expect to beat our mid-term model of $100M in Q2FY11 SMSC Guidance

Steady Market Recovery

Seasonal Consumer

Decline

Enterprise PC Rebound Automotive Recovery and

Continued Market Share Gains$120

$100

$80

$60

$40

$20

$0

115

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Record Company Gross Margin

Operational Excellence Gross Margin

Beat the 55 Model in Q1FY11 5531000 basis points of non-GAAP gross margin improvements

~ Half from cost reductions~ Half from scale

Non-GAAP measures SMSC Guidance

116

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Opex Keep spending in line with model

SGampA on target RampD up 100 basis pointsRampD spend increased as a result of acquisitions (K2L Kleer STS)RampD additions in low cost areas (India Bulgaria)

Non-GAAP measures SMSC Guidance

Downsizing

SGampARampD

117

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Focus on Profitable Growth Approaching 16 in Q2FY11

Focus on profitable growth Meet the model = mid-term model of 16 operating margin

Non-GAAP measures SMSC Guidance

118

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

20 Operating Margin Target Model

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

119

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

CashST Investments

Balance Sheet Remains Strong

~$85 in cashinvestments per share hellip and no debt$40M net cash provided by operating activities in FY10Low capex model $86M capex in FY10 down from $178M in FY09Cash-out of $196M in FY 10 for acquisitions and investments

Auction Rate Securities

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

$0

120

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Reached Our Inventory Turns Target

Inventory turns at 42 beating target of 4X

$60

$50

$40

$30

$20

$10

$0

121

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Drive for Profitable Growth

Productmarket strategy drives organic top-line growth

Accelerated top-line growth through acquisitions

Focus on PROFITABLE growthContinue gross margin improvementsOpex control

Deliver on the 20 non-GAAP operating margin model

122

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

123

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (in thousands except per share amounts)

FY09 FY 10 FY 11Q4 Q1 Q2 Q3 Q4 FY 10 Q1

Gross profit - GAAP basis 21753$ 27712$ 35543$ 45034$ 44688$ 152923$ 51795$ Stock-based compensation 531 550 904 (342) 281 1394 782 Amortization of intangible assets 1022 1112 1058 941 1140 4304 1078 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Gross profit - non-GAAP basis 23306$ 29374$ 39204$ 47866$ 45087$ 161531$ 53700$

Income (loss) from operations ndash GAAP basis (78752)$ (14597)$ (10056)$ 9439$ 1227$ (13987)$ 1802$

Non-GAAP adjustments

Stock-based compensation included in Costs of Goods Sold 531 550 904 (342) 281 1394 782 Research amp Development 1558 1482 2384 (559) 968 4274 2224 Selling general and administrative 2954 3393 5698 (1889) 1717 8918 4639

5043 5425 8986 (2790) 2966 14586 7645 Amortization of intangible assets included in Costs of Goods Sold 1022 1112 1058 941 1140 4304 1078 Selling general and administrative 484 395 496 478 691 2007 687

1506 1507 1554 1419 1831 6311 1765 Other non-GAAP adjustments Restructuring charges 5197 221 649 393 860 2123 821 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Impairment of goodwill 52300 - - - - - - Settlement charge - 2050 - (31) - 2019 -

Transaction costs - mergers and acquisitions - - - 141 339 480 182 Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Executive transition costs - - - - - - 429 Income (loss) from operations ndash non-GAAP basis (14706)$ (5394)$ 2832$ 10804$ 6201$ 14442$ 12689$

Net (loss) income ndash GAAP basis (71643) (9196) (6534) 6806 946 (7978) 627

Non-GAAP adjustments (as scheduled above) 64046 9203 12888 1365 4974 28429 10887

Tax effect of non-GAAP adjustments (4229) (3313) (4640) (491) (1791) (10234) (3919) Net income (loss) ndash non-GAAP basis (11826)$ (3306)$ 1714$ 7680$ 4129$ 10217$ 7595$

Net income (loss) per share ndash diluted GAAP (330)$ (042)$ (030)$ 030$ 004$ (036)$ 003$

Non-GAAP (054)$ (015)$ 008$ 034$ 018$ 046$ 033$

Weighted average common shares outstanding - diluted GAAP 21742 21901 22054 22442 22579 22133 22787 Non-GAAP 21742 21901 22191 22442 22579 22310 22787

• Slide Number 1
• Safe Harbor Statement
• Agenda
• Smart Mixed-Signal Connectivitytrade
• Whats Happened in the Last Year
• Strong Semiconductor Recovery in 1HCY10
• Executing on Financial Objectives
• Connectivity Is Everywhere amp Converging
• SMSC Is A Player
• An Expanding Ecosystem
• Investing In Our Future
• Wireless Audio Systems A High Growth Opportunity
• The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio
• Kleer and STS are complementary and positioned for fast growth
• Wireless Audio Systems ndash A Compelling Growth Opportunity
• New Market Opportunities are Driven by a Changing Landscape
• The Wireless Audio Growth Opportunity
• SMSC Continued Commitment to Growth
• 5 Product Lines Driving Growth Opportunities
• Content Value Provides Growth Opportunities
• Growth Driven by Market Recovery amp Share Gains
• Expanding the Value Chain
• Strong Market Share Positions in Our Target Markets
• A Diverse Company with an Evolving Mix
• World Class Customers and Partners
• Our Growing Worldwide RampD Presence
• Continuing to Deliver Expanding Earnings
• SMSC A Compelling Company
• Slide Number 29
• Computing amp Connectivity Now a Growth Business
• Whats Happened in the Last Year
• PC Market Forecast Indicates Robust Growth in 2010
• Successfully Expanding Our Global PC Related Customer Base
• Strong Revenue Growth from Core + New Initiatives
• New Market Opportunities Driven by a Changing Landscape
• Slide Number 36
• What We Do and Where We Are
• Green USB High Speed Inter-Chip (HSIC)
• USB ndash The Evolution Continues
• Slide Number 40
• SMSC USB Graphics Solution
• USB Graphics Futures
• Slide Number 43
• Partnering to Provide Natural Human Interface Solutions
• 3D The Future of Human Interaction
• Security Evolution Creates Unique Opportunities
• Computing amp Connectivity Core Business Growth Opportunity
• Automotive Information Systems Expanding Automotive Content
• Automotive Information Systems ndash A Compelling Business Model
• Whats Happened in the Last Year
• Multiple Vectors for Growth
• Synergistic Technology Standards
• K2L ndash Connecting Networks Through Software
• Kleer Technology ndash Best-In-Class RF Audio
• Working Out of a Deep Automotive Recession
• MOST Is The Base of Our Business
• Slide Number 57
• Winning Ground ndash 23 New Models in Past Year
• Success at VWAudi ndash Next Gen MOST In All Car Models
• SMSC Holds An Impressive Market Share
• New Products Poised for Growth
• Multiplying The Size Of The Opportunity
• Outlook Driver Assist ndash A System without a Network
• SMSC Automotive ndash Sustainable Growth Opportunity
• Slide Number 65
• A Successful Analog Business Model
• An Expanding Product Portfolio
• Whats Happened in the Last Year
• Thermal Management - Our Core Business
• RightTouchtrade - Our Growth Business in 2010 amp 2011
• RightTouchtrade is Replacing Mechanical Buttons
• Buttons Waiting to be Replaced
• Focusing on Changing the Human Interface
• Energy Conservation is Driving New Opportunities
• Monitoring Power for Better System Management
• USB Port Power - A New Standard and Opportunity
• USB ndash The Charging Port of Choice
• A Solid SMSC Revenue Growth Opportunity
• Slide Number 79
• SMSC Portable Products A Growth Business
• Whats Happened in the Last Year
• The Components of SMSC Success
• SMSC Has Achieved USB Transceiver Market Leadership for Portable Devices
• Acquiring Customers Through Design Wins
• Demonstrated Success through gt100 CAGR
• Expanding Our Market
• Added Content USB Port Protection amp Detection
• Battery Charging Opportunity Portable Power
• Whatrsquos Happening with Smartphones
• Portable Connectivity Solves Portable Interface Challenges
• Driving SAM Growth
• Portable Connectivity ndash An Exciting Growth Opportunity
• Slide Number 93
• Whats Happened in the Last Year
• A Growing Customer Base
• A Growing amp Diversified Customer Base
• How Did We Get There
• Design Win Success ndash Growing SMSC Market Share
• Design Win Success ndash Entering New Markets
• Design Win Momentum Is Broad Based
• We Continue To Hit The Bulls Eye
• Sales Structure
• SMSC Worldwide Sales Model
• SMSC ndash A Differentiated Sales Model
• Slide Number 105
• A Results Oriented Manufacturing Philosophy
• Driving Non-GAAP Gross Margin to 56
• Success in 2010
• Gross Margin Improvement Strategy in 2011
• Summary ndash Driving for 56 Gross Margin
• Slide Number 111
• Slide Number 112
• Last Yearrsquos Model
• Strong Top-line Growth Since Q4FY09 Bottom
• Operational Excellence Gross Margin
• Opex Keep spending in line with model
• Focus on Profitable Growth Approaching 16 in Q2FY11
• 20 Operating Margin Target Model
• Balance Sheet Remains Strong
• Reached Our Inventory Turns Target
• Drive for Profitable Growth
• Slide Number 122
• Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures(in thousands except per share amounts)

114

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Strong Top-line Growth Since Q4FY09 Bottom

Strong sequential growth Unit growth + expanding addressable market + market share gains

Expect to beat our mid-term model of $100M in Q2FY11 SMSC Guidance

Steady Market Recovery

Seasonal Consumer

Decline

Enterprise PC Rebound Automotive Recovery and

Continued Market Share Gains$120

$100

$80

$60

$40

$20

$0

115

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Record Company Gross Margin

Operational Excellence Gross Margin

Beat the 55 Model in Q1FY11 5531000 basis points of non-GAAP gross margin improvements

~ Half from cost reductions~ Half from scale

Non-GAAP measures SMSC Guidance

116

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Opex Keep spending in line with model

SGampA on target RampD up 100 basis pointsRampD spend increased as a result of acquisitions (K2L Kleer STS)RampD additions in low cost areas (India Bulgaria)

Non-GAAP measures SMSC Guidance

Downsizing

SGampARampD

117

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Focus on Profitable Growth Approaching 16 in Q2FY11

Focus on profitable growth Meet the model = mid-term model of 16 operating margin

Non-GAAP measures SMSC Guidance

118

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

20 Operating Margin Target Model

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

119

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

CashST Investments

Balance Sheet Remains Strong

~$85 in cashinvestments per share hellip and no debt$40M net cash provided by operating activities in FY10Low capex model $86M capex in FY10 down from $178M in FY09Cash-out of $196M in FY 10 for acquisitions and investments

Auction Rate Securities

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

$0

120

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Reached Our Inventory Turns Target

Inventory turns at 42 beating target of 4X

$60

$50

$40

$30

$20

$10

$0

121

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Drive for Profitable Growth

Productmarket strategy drives organic top-line growth

Accelerated top-line growth through acquisitions

Focus on PROFITABLE growthContinue gross margin improvementsOpex control

Deliver on the 20 non-GAAP operating margin model

122

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

123

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (in thousands except per share amounts)

FY09 FY 10 FY 11Q4 Q1 Q2 Q3 Q4 FY 10 Q1

Gross profit - GAAP basis 21753$ 27712$ 35543$ 45034$ 44688$ 152923$ 51795$ Stock-based compensation 531 550 904 (342) 281 1394 782 Amortization of intangible assets 1022 1112 1058 941 1140 4304 1078 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Gross profit - non-GAAP basis 23306$ 29374$ 39204$ 47866$ 45087$ 161531$ 53700$

Income (loss) from operations ndash GAAP basis (78752)$ (14597)$ (10056)$ 9439$ 1227$ (13987)$ 1802$

Non-GAAP adjustments

Stock-based compensation included in Costs of Goods Sold 531 550 904 (342) 281 1394 782 Research amp Development 1558 1482 2384 (559) 968 4274 2224 Selling general and administrative 2954 3393 5698 (1889) 1717 8918 4639

5043 5425 8986 (2790) 2966 14586 7645 Amortization of intangible assets included in Costs of Goods Sold 1022 1112 1058 941 1140 4304 1078 Selling general and administrative 484 395 496 478 691 2007 687

1506 1507 1554 1419 1831 6311 1765 Other non-GAAP adjustments Restructuring charges 5197 221 649 393 860 2123 821 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Impairment of goodwill 52300 - - - - - - Settlement charge - 2050 - (31) - 2019 -

Transaction costs - mergers and acquisitions - - - 141 339 480 182 Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Executive transition costs - - - - - - 429 Income (loss) from operations ndash non-GAAP basis (14706)$ (5394)$ 2832$ 10804$ 6201$ 14442$ 12689$

Net (loss) income ndash GAAP basis (71643) (9196) (6534) 6806 946 (7978) 627

Non-GAAP adjustments (as scheduled above) 64046 9203 12888 1365 4974 28429 10887

Tax effect of non-GAAP adjustments (4229) (3313) (4640) (491) (1791) (10234) (3919) Net income (loss) ndash non-GAAP basis (11826)$ (3306)$ 1714$ 7680$ 4129$ 10217$ 7595$

Net income (loss) per share ndash diluted GAAP (330)$ (042)$ (030)$ 030$ 004$ (036)$ 003$

Non-GAAP (054)$ (015)$ 008$ 034$ 018$ 046$ 033$

Weighted average common shares outstanding - diluted GAAP 21742 21901 22054 22442 22579 22133 22787 Non-GAAP 21742 21901 22191 22442 22579 22310 22787

• Slide Number 1
• Safe Harbor Statement
• Agenda
• Smart Mixed-Signal Connectivitytrade
• Whats Happened in the Last Year
• Strong Semiconductor Recovery in 1HCY10
• Executing on Financial Objectives
• Connectivity Is Everywhere amp Converging
• SMSC Is A Player
• An Expanding Ecosystem
• Investing In Our Future
• Wireless Audio Systems A High Growth Opportunity
• The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio
• Kleer and STS are complementary and positioned for fast growth
• Wireless Audio Systems ndash A Compelling Growth Opportunity
• New Market Opportunities are Driven by a Changing Landscape
• The Wireless Audio Growth Opportunity
• SMSC Continued Commitment to Growth
• 5 Product Lines Driving Growth Opportunities
• Content Value Provides Growth Opportunities
• Growth Driven by Market Recovery amp Share Gains
• Expanding the Value Chain
• Strong Market Share Positions in Our Target Markets
• A Diverse Company with an Evolving Mix
• World Class Customers and Partners
• Our Growing Worldwide RampD Presence
• Continuing to Deliver Expanding Earnings
• SMSC A Compelling Company
• Slide Number 29
• Computing amp Connectivity Now a Growth Business
• Whats Happened in the Last Year
• PC Market Forecast Indicates Robust Growth in 2010
• Successfully Expanding Our Global PC Related Customer Base
• Strong Revenue Growth from Core + New Initiatives
• New Market Opportunities Driven by a Changing Landscape
• Slide Number 36
• What We Do and Where We Are
• Green USB High Speed Inter-Chip (HSIC)
• USB ndash The Evolution Continues
• Slide Number 40
• SMSC USB Graphics Solution
• USB Graphics Futures
• Slide Number 43
• Partnering to Provide Natural Human Interface Solutions
• 3D The Future of Human Interaction
• Security Evolution Creates Unique Opportunities
• Computing amp Connectivity Core Business Growth Opportunity
• Automotive Information Systems Expanding Automotive Content
• Automotive Information Systems ndash A Compelling Business Model
• Whats Happened in the Last Year
• Multiple Vectors for Growth
• Synergistic Technology Standards
• K2L ndash Connecting Networks Through Software
• Kleer Technology ndash Best-In-Class RF Audio
• Working Out of a Deep Automotive Recession
• MOST Is The Base of Our Business
• Slide Number 57
• Winning Ground ndash 23 New Models in Past Year
• Success at VWAudi ndash Next Gen MOST In All Car Models
• SMSC Holds An Impressive Market Share
• New Products Poised for Growth
• Multiplying The Size Of The Opportunity
• Outlook Driver Assist ndash A System without a Network
• SMSC Automotive ndash Sustainable Growth Opportunity
• Slide Number 65
• A Successful Analog Business Model
• An Expanding Product Portfolio
• Whats Happened in the Last Year
• Thermal Management - Our Core Business
• RightTouchtrade - Our Growth Business in 2010 amp 2011
• RightTouchtrade is Replacing Mechanical Buttons
• Buttons Waiting to be Replaced
• Focusing on Changing the Human Interface
• Energy Conservation is Driving New Opportunities
• Monitoring Power for Better System Management
• USB Port Power - A New Standard and Opportunity
• USB ndash The Charging Port of Choice
• A Solid SMSC Revenue Growth Opportunity
• Slide Number 79
• SMSC Portable Products A Growth Business
• Whats Happened in the Last Year
• The Components of SMSC Success
• SMSC Has Achieved USB Transceiver Market Leadership for Portable Devices
• Acquiring Customers Through Design Wins
• Demonstrated Success through gt100 CAGR
• Expanding Our Market
• Added Content USB Port Protection amp Detection
• Battery Charging Opportunity Portable Power
• Whatrsquos Happening with Smartphones
• Portable Connectivity Solves Portable Interface Challenges
• Driving SAM Growth
• Portable Connectivity ndash An Exciting Growth Opportunity
• Slide Number 93
• Whats Happened in the Last Year
• A Growing Customer Base
• A Growing amp Diversified Customer Base
• How Did We Get There
• Design Win Success ndash Growing SMSC Market Share
• Design Win Success ndash Entering New Markets
• Design Win Momentum Is Broad Based
• We Continue To Hit The Bulls Eye
• Sales Structure
• SMSC Worldwide Sales Model
• SMSC ndash A Differentiated Sales Model
• Slide Number 105
• A Results Oriented Manufacturing Philosophy
• Driving Non-GAAP Gross Margin to 56
• Success in 2010
• Gross Margin Improvement Strategy in 2011
• Summary ndash Driving for 56 Gross Margin
• Slide Number 111
• Slide Number 112
• Last Yearrsquos Model
• Strong Top-line Growth Since Q4FY09 Bottom
• Operational Excellence Gross Margin
• Opex Keep spending in line with model
• Focus on Profitable Growth Approaching 16 in Q2FY11
• 20 Operating Margin Target Model
• Balance Sheet Remains Strong
• Reached Our Inventory Turns Target
• Drive for Profitable Growth
• Slide Number 122
• Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures(in thousands except per share amounts)

115

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Record Company Gross Margin

Operational Excellence Gross Margin

Beat the 55 Model in Q1FY11 5531000 basis points of non-GAAP gross margin improvements

~ Half from cost reductions~ Half from scale

Non-GAAP measures SMSC Guidance

116

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Opex Keep spending in line with model

SGampA on target RampD up 100 basis pointsRampD spend increased as a result of acquisitions (K2L Kleer STS)RampD additions in low cost areas (India Bulgaria)

Non-GAAP measures SMSC Guidance

Downsizing

SGampARampD

117

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Focus on Profitable Growth Approaching 16 in Q2FY11

Focus on profitable growth Meet the model = mid-term model of 16 operating margin

Non-GAAP measures SMSC Guidance

118

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

20 Operating Margin Target Model

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

119

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

CashST Investments

Balance Sheet Remains Strong

~$85 in cashinvestments per share hellip and no debt$40M net cash provided by operating activities in FY10Low capex model $86M capex in FY10 down from $178M in FY09Cash-out of $196M in FY 10 for acquisitions and investments

Auction Rate Securities

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

$0

120

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Reached Our Inventory Turns Target

Inventory turns at 42 beating target of 4X

$60

$50

$40

$30

$20

$10

$0

121

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Drive for Profitable Growth

Productmarket strategy drives organic top-line growth

Accelerated top-line growth through acquisitions

Focus on PROFITABLE growthContinue gross margin improvementsOpex control

Deliver on the 20 non-GAAP operating margin model

122

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

123

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (in thousands except per share amounts)

FY09 FY 10 FY 11Q4 Q1 Q2 Q3 Q4 FY 10 Q1

Gross profit - GAAP basis 21753$ 27712$ 35543$ 45034$ 44688$ 152923$ 51795$ Stock-based compensation 531 550 904 (342) 281 1394 782 Amortization of intangible assets 1022 1112 1058 941 1140 4304 1078 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Gross profit - non-GAAP basis 23306$ 29374$ 39204$ 47866$ 45087$ 161531$ 53700$

Income (loss) from operations ndash GAAP basis (78752)$ (14597)$ (10056)$ 9439$ 1227$ (13987)$ 1802$

Non-GAAP adjustments

Stock-based compensation included in Costs of Goods Sold 531 550 904 (342) 281 1394 782 Research amp Development 1558 1482 2384 (559) 968 4274 2224 Selling general and administrative 2954 3393 5698 (1889) 1717 8918 4639

5043 5425 8986 (2790) 2966 14586 7645 Amortization of intangible assets included in Costs of Goods Sold 1022 1112 1058 941 1140 4304 1078 Selling general and administrative 484 395 496 478 691 2007 687

1506 1507 1554 1419 1831 6311 1765 Other non-GAAP adjustments Restructuring charges 5197 221 649 393 860 2123 821 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Impairment of goodwill 52300 - - - - - - Settlement charge - 2050 - (31) - 2019 -

Transaction costs - mergers and acquisitions - - - 141 339 480 182 Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Executive transition costs - - - - - - 429 Income (loss) from operations ndash non-GAAP basis (14706)$ (5394)$ 2832$ 10804$ 6201$ 14442$ 12689$

Net (loss) income ndash GAAP basis (71643) (9196) (6534) 6806 946 (7978) 627

Non-GAAP adjustments (as scheduled above) 64046 9203 12888 1365 4974 28429 10887

Tax effect of non-GAAP adjustments (4229) (3313) (4640) (491) (1791) (10234) (3919) Net income (loss) ndash non-GAAP basis (11826)$ (3306)$ 1714$ 7680$ 4129$ 10217$ 7595$

Net income (loss) per share ndash diluted GAAP (330)$ (042)$ (030)$ 030$ 004$ (036)$ 003$

Non-GAAP (054)$ (015)$ 008$ 034$ 018$ 046$ 033$

Weighted average common shares outstanding - diluted GAAP 21742 21901 22054 22442 22579 22133 22787 Non-GAAP 21742 21901 22191 22442 22579 22310 22787

• Slide Number 1
• Safe Harbor Statement
• Agenda
• Smart Mixed-Signal Connectivitytrade
• Whats Happened in the Last Year
• Strong Semiconductor Recovery in 1HCY10
• Executing on Financial Objectives
• Connectivity Is Everywhere amp Converging
• SMSC Is A Player
• An Expanding Ecosystem
• Investing In Our Future
• Wireless Audio Systems A High Growth Opportunity
• The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio
• Kleer and STS are complementary and positioned for fast growth
• Wireless Audio Systems ndash A Compelling Growth Opportunity
• New Market Opportunities are Driven by a Changing Landscape
• The Wireless Audio Growth Opportunity
• SMSC Continued Commitment to Growth
• 5 Product Lines Driving Growth Opportunities
• Content Value Provides Growth Opportunities
• Growth Driven by Market Recovery amp Share Gains
• Expanding the Value Chain
• Strong Market Share Positions in Our Target Markets
• A Diverse Company with an Evolving Mix
• World Class Customers and Partners
• Our Growing Worldwide RampD Presence
• Continuing to Deliver Expanding Earnings
• SMSC A Compelling Company
• Slide Number 29
• Computing amp Connectivity Now a Growth Business
• Whats Happened in the Last Year
• PC Market Forecast Indicates Robust Growth in 2010
• Successfully Expanding Our Global PC Related Customer Base
• Strong Revenue Growth from Core + New Initiatives
• New Market Opportunities Driven by a Changing Landscape
• Slide Number 36
• What We Do and Where We Are
• Green USB High Speed Inter-Chip (HSIC)
• USB ndash The Evolution Continues
• Slide Number 40
• SMSC USB Graphics Solution
• USB Graphics Futures
• Slide Number 43
• Partnering to Provide Natural Human Interface Solutions
• 3D The Future of Human Interaction
• Security Evolution Creates Unique Opportunities
• Computing amp Connectivity Core Business Growth Opportunity
• Automotive Information Systems Expanding Automotive Content
• Automotive Information Systems ndash A Compelling Business Model
• Whats Happened in the Last Year
• Multiple Vectors for Growth
• Synergistic Technology Standards
• K2L ndash Connecting Networks Through Software
• Kleer Technology ndash Best-In-Class RF Audio
• Working Out of a Deep Automotive Recession
• MOST Is The Base of Our Business
• Slide Number 57
• Winning Ground ndash 23 New Models in Past Year
• Success at VWAudi ndash Next Gen MOST In All Car Models
• SMSC Holds An Impressive Market Share
• New Products Poised for Growth
• Multiplying The Size Of The Opportunity
• Outlook Driver Assist ndash A System without a Network
• SMSC Automotive ndash Sustainable Growth Opportunity
• Slide Number 65
• A Successful Analog Business Model
• An Expanding Product Portfolio
• Whats Happened in the Last Year
• Thermal Management - Our Core Business
• RightTouchtrade - Our Growth Business in 2010 amp 2011
• RightTouchtrade is Replacing Mechanical Buttons
• Buttons Waiting to be Replaced
• Focusing on Changing the Human Interface
• Energy Conservation is Driving New Opportunities
• Monitoring Power for Better System Management
• USB Port Power - A New Standard and Opportunity
• USB ndash The Charging Port of Choice
• A Solid SMSC Revenue Growth Opportunity
• Slide Number 79
• SMSC Portable Products A Growth Business
• Whats Happened in the Last Year
• The Components of SMSC Success
• SMSC Has Achieved USB Transceiver Market Leadership for Portable Devices
• Acquiring Customers Through Design Wins
• Demonstrated Success through gt100 CAGR
• Expanding Our Market
• Added Content USB Port Protection amp Detection
• Battery Charging Opportunity Portable Power
• Whatrsquos Happening with Smartphones
• Portable Connectivity Solves Portable Interface Challenges
• Driving SAM Growth
• Portable Connectivity ndash An Exciting Growth Opportunity
• Slide Number 93
• Whats Happened in the Last Year
• A Growing Customer Base
• A Growing amp Diversified Customer Base
• How Did We Get There
• Design Win Success ndash Growing SMSC Market Share
• Design Win Success ndash Entering New Markets
• Design Win Momentum Is Broad Based
• We Continue To Hit The Bulls Eye
• Sales Structure
• SMSC Worldwide Sales Model
• SMSC ndash A Differentiated Sales Model
• Slide Number 105
• A Results Oriented Manufacturing Philosophy
• Driving Non-GAAP Gross Margin to 56
• Success in 2010
• Gross Margin Improvement Strategy in 2011
• Summary ndash Driving for 56 Gross Margin
• Slide Number 111
• Slide Number 112
• Last Yearrsquos Model
• Strong Top-line Growth Since Q4FY09 Bottom
• Operational Excellence Gross Margin
• Opex Keep spending in line with model
• Focus on Profitable Growth Approaching 16 in Q2FY11
• 20 Operating Margin Target Model
• Balance Sheet Remains Strong
• Reached Our Inventory Turns Target
• Drive for Profitable Growth
• Slide Number 122
• Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures(in thousands except per share amounts)

116

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Opex Keep spending in line with model

SGampA on target RampD up 100 basis pointsRampD spend increased as a result of acquisitions (K2L Kleer STS)RampD additions in low cost areas (India Bulgaria)

Non-GAAP measures SMSC Guidance

Downsizing

SGampARampD

117

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Focus on Profitable Growth Approaching 16 in Q2FY11

Focus on profitable growth Meet the model = mid-term model of 16 operating margin

Non-GAAP measures SMSC Guidance

118

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

20 Operating Margin Target Model

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

119

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

CashST Investments

Balance Sheet Remains Strong

~$85 in cashinvestments per share hellip and no debt$40M net cash provided by operating activities in FY10Low capex model $86M capex in FY10 down from $178M in FY09Cash-out of $196M in FY 10 for acquisitions and investments

Auction Rate Securities

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

$0

120

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Reached Our Inventory Turns Target

Inventory turns at 42 beating target of 4X

$60

$50

$40

$30

$20

$10

$0

121

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Drive for Profitable Growth

Productmarket strategy drives organic top-line growth

Accelerated top-line growth through acquisitions

Focus on PROFITABLE growthContinue gross margin improvementsOpex control

Deliver on the 20 non-GAAP operating margin model

122

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

123

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (in thousands except per share amounts)

FY09 FY 10 FY 11Q4 Q1 Q2 Q3 Q4 FY 10 Q1

Gross profit - GAAP basis 21753$ 27712$ 35543$ 45034$ 44688$ 152923$ 51795$ Stock-based compensation 531 550 904 (342) 281 1394 782 Amortization of intangible assets 1022 1112 1058 941 1140 4304 1078 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Gross profit - non-GAAP basis 23306$ 29374$ 39204$ 47866$ 45087$ 161531$ 53700$

Income (loss) from operations ndash GAAP basis (78752)$ (14597)$ (10056)$ 9439$ 1227$ (13987)$ 1802$

Non-GAAP adjustments

Stock-based compensation included in Costs of Goods Sold 531 550 904 (342) 281 1394 782 Research amp Development 1558 1482 2384 (559) 968 4274 2224 Selling general and administrative 2954 3393 5698 (1889) 1717 8918 4639

5043 5425 8986 (2790) 2966 14586 7645 Amortization of intangible assets included in Costs of Goods Sold 1022 1112 1058 941 1140 4304 1078 Selling general and administrative 484 395 496 478 691 2007 687

1506 1507 1554 1419 1831 6311 1765 Other non-GAAP adjustments Restructuring charges 5197 221 649 393 860 2123 821 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Impairment of goodwill 52300 - - - - - - Settlement charge - 2050 - (31) - 2019 -

Transaction costs - mergers and acquisitions - - - 141 339 480 182 Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Executive transition costs - - - - - - 429 Income (loss) from operations ndash non-GAAP basis (14706)$ (5394)$ 2832$ 10804$ 6201$ 14442$ 12689$

Net (loss) income ndash GAAP basis (71643) (9196) (6534) 6806 946 (7978) 627

Non-GAAP adjustments (as scheduled above) 64046 9203 12888 1365 4974 28429 10887

Tax effect of non-GAAP adjustments (4229) (3313) (4640) (491) (1791) (10234) (3919) Net income (loss) ndash non-GAAP basis (11826)$ (3306)$ 1714$ 7680$ 4129$ 10217$ 7595$

Net income (loss) per share ndash diluted GAAP (330)$ (042)$ (030)$ 030$ 004$ (036)$ 003$

Non-GAAP (054)$ (015)$ 008$ 034$ 018$ 046$ 033$

Weighted average common shares outstanding - diluted GAAP 21742 21901 22054 22442 22579 22133 22787 Non-GAAP 21742 21901 22191 22442 22579 22310 22787

• Slide Number 1
• Safe Harbor Statement
• Agenda
• Smart Mixed-Signal Connectivitytrade
• Whats Happened in the Last Year
• Strong Semiconductor Recovery in 1HCY10
• Executing on Financial Objectives
• Connectivity Is Everywhere amp Converging
• SMSC Is A Player
• An Expanding Ecosystem
• Investing In Our Future
• Wireless Audio Systems A High Growth Opportunity
• The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio
• Kleer and STS are complementary and positioned for fast growth
• Wireless Audio Systems ndash A Compelling Growth Opportunity
• New Market Opportunities are Driven by a Changing Landscape
• The Wireless Audio Growth Opportunity
• SMSC Continued Commitment to Growth
• 5 Product Lines Driving Growth Opportunities
• Content Value Provides Growth Opportunities
• Growth Driven by Market Recovery amp Share Gains
• Expanding the Value Chain
• Strong Market Share Positions in Our Target Markets
• A Diverse Company with an Evolving Mix
• World Class Customers and Partners
• Our Growing Worldwide RampD Presence
• Continuing to Deliver Expanding Earnings
• SMSC A Compelling Company
• Slide Number 29
• Computing amp Connectivity Now a Growth Business
• Whats Happened in the Last Year
• PC Market Forecast Indicates Robust Growth in 2010
• Successfully Expanding Our Global PC Related Customer Base
• Strong Revenue Growth from Core + New Initiatives
• New Market Opportunities Driven by a Changing Landscape
• Slide Number 36
• What We Do and Where We Are
• Green USB High Speed Inter-Chip (HSIC)
• USB ndash The Evolution Continues
• Slide Number 40
• SMSC USB Graphics Solution
• USB Graphics Futures
• Slide Number 43
• Partnering to Provide Natural Human Interface Solutions
• 3D The Future of Human Interaction
• Security Evolution Creates Unique Opportunities
• Computing amp Connectivity Core Business Growth Opportunity
• Automotive Information Systems Expanding Automotive Content
• Automotive Information Systems ndash A Compelling Business Model
• Whats Happened in the Last Year
• Multiple Vectors for Growth
• Synergistic Technology Standards
• K2L ndash Connecting Networks Through Software
• Kleer Technology ndash Best-In-Class RF Audio
• Working Out of a Deep Automotive Recession
• MOST Is The Base of Our Business
• Slide Number 57
• Winning Ground ndash 23 New Models in Past Year
• Success at VWAudi ndash Next Gen MOST In All Car Models
• SMSC Holds An Impressive Market Share
• New Products Poised for Growth
• Multiplying The Size Of The Opportunity
• Outlook Driver Assist ndash A System without a Network
• SMSC Automotive ndash Sustainable Growth Opportunity
• Slide Number 65
• A Successful Analog Business Model
• An Expanding Product Portfolio
• Whats Happened in the Last Year
• Thermal Management - Our Core Business
• RightTouchtrade - Our Growth Business in 2010 amp 2011
• RightTouchtrade is Replacing Mechanical Buttons
• Buttons Waiting to be Replaced
• Focusing on Changing the Human Interface
• Energy Conservation is Driving New Opportunities
• Monitoring Power for Better System Management
• USB Port Power - A New Standard and Opportunity
• USB ndash The Charging Port of Choice
• A Solid SMSC Revenue Growth Opportunity
• Slide Number 79
• SMSC Portable Products A Growth Business
• Whats Happened in the Last Year
• The Components of SMSC Success
• SMSC Has Achieved USB Transceiver Market Leadership for Portable Devices
• Acquiring Customers Through Design Wins
• Demonstrated Success through gt100 CAGR
• Expanding Our Market
• Added Content USB Port Protection amp Detection
• Battery Charging Opportunity Portable Power
• Whatrsquos Happening with Smartphones
• Portable Connectivity Solves Portable Interface Challenges
• Driving SAM Growth
• Portable Connectivity ndash An Exciting Growth Opportunity
• Slide Number 93
• Whats Happened in the Last Year
• A Growing Customer Base
• A Growing amp Diversified Customer Base
• How Did We Get There
• Design Win Success ndash Growing SMSC Market Share
• Design Win Success ndash Entering New Markets
• Design Win Momentum Is Broad Based
• We Continue To Hit The Bulls Eye
• Sales Structure
• SMSC Worldwide Sales Model
• SMSC ndash A Differentiated Sales Model
• Slide Number 105
• A Results Oriented Manufacturing Philosophy
• Driving Non-GAAP Gross Margin to 56
• Success in 2010
• Gross Margin Improvement Strategy in 2011
• Summary ndash Driving for 56 Gross Margin
• Slide Number 111
• Slide Number 112
• Last Yearrsquos Model
• Strong Top-line Growth Since Q4FY09 Bottom
• Operational Excellence Gross Margin
• Opex Keep spending in line with model
• Focus on Profitable Growth Approaching 16 in Q2FY11
• 20 Operating Margin Target Model
• Balance Sheet Remains Strong
• Reached Our Inventory Turns Target
• Drive for Profitable Growth
• Slide Number 122
• Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures(in thousands except per share amounts)

117

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Focus on Profitable Growth Approaching 16 in Q2FY11

Focus on profitable growth Meet the model = mid-term model of 16 operating margin

Non-GAAP measures SMSC Guidance

118

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

20 Operating Margin Target Model

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

119

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

CashST Investments

Balance Sheet Remains Strong

~$85 in cashinvestments per share hellip and no debt$40M net cash provided by operating activities in FY10Low capex model $86M capex in FY10 down from $178M in FY09Cash-out of $196M in FY 10 for acquisitions and investments

Auction Rate Securities

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

$0

120

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Reached Our Inventory Turns Target

Inventory turns at 42 beating target of 4X

$60

$50

$40

$30

$20

$10

$0

121

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Drive for Profitable Growth

Productmarket strategy drives organic top-line growth

Accelerated top-line growth through acquisitions

Focus on PROFITABLE growthContinue gross margin improvementsOpex control

Deliver on the 20 non-GAAP operating margin model

122

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

123

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (in thousands except per share amounts)

FY09 FY 10 FY 11Q4 Q1 Q2 Q3 Q4 FY 10 Q1

Gross profit - GAAP basis 21753$ 27712$ 35543$ 45034$ 44688$ 152923$ 51795$ Stock-based compensation 531 550 904 (342) 281 1394 782 Amortization of intangible assets 1022 1112 1058 941 1140 4304 1078 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Gross profit - non-GAAP basis 23306$ 29374$ 39204$ 47866$ 45087$ 161531$ 53700$

Income (loss) from operations ndash GAAP basis (78752)$ (14597)$ (10056)$ 9439$ 1227$ (13987)$ 1802$

Non-GAAP adjustments

Stock-based compensation included in Costs of Goods Sold 531 550 904 (342) 281 1394 782 Research amp Development 1558 1482 2384 (559) 968 4274 2224 Selling general and administrative 2954 3393 5698 (1889) 1717 8918 4639

5043 5425 8986 (2790) 2966 14586 7645 Amortization of intangible assets included in Costs of Goods Sold 1022 1112 1058 941 1140 4304 1078 Selling general and administrative 484 395 496 478 691 2007 687

1506 1507 1554 1419 1831 6311 1765 Other non-GAAP adjustments Restructuring charges 5197 221 649 393 860 2123 821 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Impairment of goodwill 52300 - - - - - - Settlement charge - 2050 - (31) - 2019 -

Transaction costs - mergers and acquisitions - - - 141 339 480 182 Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Executive transition costs - - - - - - 429 Income (loss) from operations ndash non-GAAP basis (14706)$ (5394)$ 2832$ 10804$ 6201$ 14442$ 12689$

Net (loss) income ndash GAAP basis (71643) (9196) (6534) 6806 946 (7978) 627

Non-GAAP adjustments (as scheduled above) 64046 9203 12888 1365 4974 28429 10887

Tax effect of non-GAAP adjustments (4229) (3313) (4640) (491) (1791) (10234) (3919) Net income (loss) ndash non-GAAP basis (11826)$ (3306)$ 1714$ 7680$ 4129$ 10217$ 7595$

Net income (loss) per share ndash diluted GAAP (330)$ (042)$ (030)$ 030$ 004$ (036)$ 003$

Non-GAAP (054)$ (015)$ 008$ 034$ 018$ 046$ 033$

Weighted average common shares outstanding - diluted GAAP 21742 21901 22054 22442 22579 22133 22787 Non-GAAP 21742 21901 22191 22442 22579 22310 22787

• Slide Number 1
• Safe Harbor Statement
• Agenda
• Smart Mixed-Signal Connectivitytrade
• Whats Happened in the Last Year
• Strong Semiconductor Recovery in 1HCY10
• Executing on Financial Objectives
• Connectivity Is Everywhere amp Converging
• SMSC Is A Player
• An Expanding Ecosystem
• Investing In Our Future
• Wireless Audio Systems A High Growth Opportunity
• The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio
• Kleer and STS are complementary and positioned for fast growth
• Wireless Audio Systems ndash A Compelling Growth Opportunity
• New Market Opportunities are Driven by a Changing Landscape
• The Wireless Audio Growth Opportunity
• SMSC Continued Commitment to Growth
• 5 Product Lines Driving Growth Opportunities
• Content Value Provides Growth Opportunities
• Growth Driven by Market Recovery amp Share Gains
• Expanding the Value Chain
• Strong Market Share Positions in Our Target Markets
• A Diverse Company with an Evolving Mix
• World Class Customers and Partners
• Our Growing Worldwide RampD Presence
• Continuing to Deliver Expanding Earnings
• SMSC A Compelling Company
• Slide Number 29
• Computing amp Connectivity Now a Growth Business
• Whats Happened in the Last Year
• PC Market Forecast Indicates Robust Growth in 2010
• Successfully Expanding Our Global PC Related Customer Base
• Strong Revenue Growth from Core + New Initiatives
• New Market Opportunities Driven by a Changing Landscape
• Slide Number 36
• What We Do and Where We Are
• Green USB High Speed Inter-Chip (HSIC)
• USB ndash The Evolution Continues
• Slide Number 40
• SMSC USB Graphics Solution
• USB Graphics Futures
• Slide Number 43
• Partnering to Provide Natural Human Interface Solutions
• 3D The Future of Human Interaction
• Security Evolution Creates Unique Opportunities
• Computing amp Connectivity Core Business Growth Opportunity
• Automotive Information Systems Expanding Automotive Content
• Automotive Information Systems ndash A Compelling Business Model
• Whats Happened in the Last Year
• Multiple Vectors for Growth
• Synergistic Technology Standards
• K2L ndash Connecting Networks Through Software
• Kleer Technology ndash Best-In-Class RF Audio
• Working Out of a Deep Automotive Recession
• MOST Is The Base of Our Business
• Slide Number 57
• Winning Ground ndash 23 New Models in Past Year
• Success at VWAudi ndash Next Gen MOST In All Car Models
• SMSC Holds An Impressive Market Share
• New Products Poised for Growth
• Multiplying The Size Of The Opportunity
• Outlook Driver Assist ndash A System without a Network
• SMSC Automotive ndash Sustainable Growth Opportunity
• Slide Number 65
• A Successful Analog Business Model
• An Expanding Product Portfolio
• Whats Happened in the Last Year
• Thermal Management - Our Core Business
• RightTouchtrade - Our Growth Business in 2010 amp 2011
• RightTouchtrade is Replacing Mechanical Buttons
• Buttons Waiting to be Replaced
• Focusing on Changing the Human Interface
• Energy Conservation is Driving New Opportunities
• Monitoring Power for Better System Management
• USB Port Power - A New Standard and Opportunity
• USB ndash The Charging Port of Choice
• A Solid SMSC Revenue Growth Opportunity
• Slide Number 79
• SMSC Portable Products A Growth Business
• Whats Happened in the Last Year
• The Components of SMSC Success
• SMSC Has Achieved USB Transceiver Market Leadership for Portable Devices
• Acquiring Customers Through Design Wins
• Demonstrated Success through gt100 CAGR
• Expanding Our Market
• Added Content USB Port Protection amp Detection
• Battery Charging Opportunity Portable Power
• Whatrsquos Happening with Smartphones
• Portable Connectivity Solves Portable Interface Challenges
• Driving SAM Growth
• Portable Connectivity ndash An Exciting Growth Opportunity
• Slide Number 93
• Whats Happened in the Last Year
• A Growing Customer Base
• A Growing amp Diversified Customer Base
• How Did We Get There
• Design Win Success ndash Growing SMSC Market Share
• Design Win Success ndash Entering New Markets
• Design Win Momentum Is Broad Based
• We Continue To Hit The Bulls Eye
• Sales Structure
• SMSC Worldwide Sales Model
• SMSC ndash A Differentiated Sales Model
• Slide Number 105
• A Results Oriented Manufacturing Philosophy
• Driving Non-GAAP Gross Margin to 56
• Success in 2010
• Gross Margin Improvement Strategy in 2011
• Summary ndash Driving for 56 Gross Margin
• Slide Number 111
• Slide Number 112
• Last Yearrsquos Model
• Strong Top-line Growth Since Q4FY09 Bottom
• Operational Excellence Gross Margin
• Opex Keep spending in line with model
• Focus on Profitable Growth Approaching 16 in Q2FY11
• 20 Operating Margin Target Model
• Balance Sheet Remains Strong
• Reached Our Inventory Turns Target
• Drive for Profitable Growth
• Slide Number 122
• Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures(in thousands except per share amounts)

118

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

20 Operating Margin Target Model

Revenuequarter

Gross Margin

RampD

SGampA

Operating Income Margin

$120M

56

19

17

20

MarketContinued PC recovery in line with analyst expectationsOngoing auto recovery ndash

no double dip

Design Wins

Automotive system wins

New USB product wins

ExecutionUSB RoadmapRightTouchtrade

rampsPort Power launchesWireless Audio

Non-GAAP measures

Model at$120MQ

Milestones to Meet $120MQuarter

119

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

CashST Investments

Balance Sheet Remains Strong

~$85 in cashinvestments per share hellip and no debt$40M net cash provided by operating activities in FY10Low capex model $86M capex in FY10 down from $178M in FY09Cash-out of $196M in FY 10 for acquisitions and investments

Auction Rate Securities

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

$0

120

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Reached Our Inventory Turns Target

Inventory turns at 42 beating target of 4X

$60

$50

$40

$30

$20

$10

$0

121

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Drive for Profitable Growth

Productmarket strategy drives organic top-line growth

Accelerated top-line growth through acquisitions

Focus on PROFITABLE growthContinue gross margin improvementsOpex control

Deliver on the 20 non-GAAP operating margin model

122

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

123

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (in thousands except per share amounts)

FY09 FY 10 FY 11Q4 Q1 Q2 Q3 Q4 FY 10 Q1

Gross profit - GAAP basis 21753$ 27712$ 35543$ 45034$ 44688$ 152923$ 51795$ Stock-based compensation 531 550 904 (342) 281 1394 782 Amortization of intangible assets 1022 1112 1058 941 1140 4304 1078 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Gross profit - non-GAAP basis 23306$ 29374$ 39204$ 47866$ 45087$ 161531$ 53700$

Income (loss) from operations ndash GAAP basis (78752)$ (14597)$ (10056)$ 9439$ 1227$ (13987)$ 1802$

Non-GAAP adjustments

Stock-based compensation included in Costs of Goods Sold 531 550 904 (342) 281 1394 782 Research amp Development 1558 1482 2384 (559) 968 4274 2224 Selling general and administrative 2954 3393 5698 (1889) 1717 8918 4639

5043 5425 8986 (2790) 2966 14586 7645 Amortization of intangible assets included in Costs of Goods Sold 1022 1112 1058 941 1140 4304 1078 Selling general and administrative 484 395 496 478 691 2007 687

1506 1507 1554 1419 1831 6311 1765 Other non-GAAP adjustments Restructuring charges 5197 221 649 393 860 2123 821 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Impairment of goodwill 52300 - - - - - - Settlement charge - 2050 - (31) - 2019 -

Transaction costs - mergers and acquisitions - - - 141 339 480 182 Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Executive transition costs - - - - - - 429 Income (loss) from operations ndash non-GAAP basis (14706)$ (5394)$ 2832$ 10804$ 6201$ 14442$ 12689$

Net (loss) income ndash GAAP basis (71643) (9196) (6534) 6806 946 (7978) 627

Non-GAAP adjustments (as scheduled above) 64046 9203 12888 1365 4974 28429 10887

Tax effect of non-GAAP adjustments (4229) (3313) (4640) (491) (1791) (10234) (3919) Net income (loss) ndash non-GAAP basis (11826)$ (3306)$ 1714$ 7680$ 4129$ 10217$ 7595$

Net income (loss) per share ndash diluted GAAP (330)$ (042)$ (030)$ 030$ 004$ (036)$ 003$

Non-GAAP (054)$ (015)$ 008$ 034$ 018$ 046$ 033$

Weighted average common shares outstanding - diluted GAAP 21742 21901 22054 22442 22579 22133 22787 Non-GAAP 21742 21901 22191 22442 22579 22310 22787

• Slide Number 1
• Safe Harbor Statement
• Agenda
• Smart Mixed-Signal Connectivitytrade
• Whats Happened in the Last Year
• Strong Semiconductor Recovery in 1HCY10
• Executing on Financial Objectives
• Connectivity Is Everywhere amp Converging
• SMSC Is A Player
• An Expanding Ecosystem
• Investing In Our Future
• Wireless Audio Systems A High Growth Opportunity
• The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio
• Kleer and STS are complementary and positioned for fast growth
• Wireless Audio Systems ndash A Compelling Growth Opportunity
• New Market Opportunities are Driven by a Changing Landscape
• The Wireless Audio Growth Opportunity
• SMSC Continued Commitment to Growth
• 5 Product Lines Driving Growth Opportunities
• Content Value Provides Growth Opportunities
• Growth Driven by Market Recovery amp Share Gains
• Expanding the Value Chain
• Strong Market Share Positions in Our Target Markets
• A Diverse Company with an Evolving Mix
• World Class Customers and Partners
• Our Growing Worldwide RampD Presence
• Continuing to Deliver Expanding Earnings
• SMSC A Compelling Company
• Slide Number 29
• Computing amp Connectivity Now a Growth Business
• Whats Happened in the Last Year
• PC Market Forecast Indicates Robust Growth in 2010
• Successfully Expanding Our Global PC Related Customer Base
• Strong Revenue Growth from Core + New Initiatives
• New Market Opportunities Driven by a Changing Landscape
• Slide Number 36
• What We Do and Where We Are
• Green USB High Speed Inter-Chip (HSIC)
• USB ndash The Evolution Continues
• Slide Number 40
• SMSC USB Graphics Solution
• USB Graphics Futures
• Slide Number 43
• Partnering to Provide Natural Human Interface Solutions
• 3D The Future of Human Interaction
• Security Evolution Creates Unique Opportunities
• Computing amp Connectivity Core Business Growth Opportunity
• Automotive Information Systems Expanding Automotive Content
• Automotive Information Systems ndash A Compelling Business Model
• Whats Happened in the Last Year
• Multiple Vectors for Growth
• Synergistic Technology Standards
• K2L ndash Connecting Networks Through Software
• Kleer Technology ndash Best-In-Class RF Audio
• Working Out of a Deep Automotive Recession
• MOST Is The Base of Our Business
• Slide Number 57
• Winning Ground ndash 23 New Models in Past Year
• Success at VWAudi ndash Next Gen MOST In All Car Models
• SMSC Holds An Impressive Market Share
• New Products Poised for Growth
• Multiplying The Size Of The Opportunity
• Outlook Driver Assist ndash A System without a Network
• SMSC Automotive ndash Sustainable Growth Opportunity
• Slide Number 65
• A Successful Analog Business Model
• An Expanding Product Portfolio
• Whats Happened in the Last Year
• Thermal Management - Our Core Business
• RightTouchtrade - Our Growth Business in 2010 amp 2011
• RightTouchtrade is Replacing Mechanical Buttons
• Buttons Waiting to be Replaced
• Focusing on Changing the Human Interface
• Energy Conservation is Driving New Opportunities
• Monitoring Power for Better System Management
• USB Port Power - A New Standard and Opportunity
• USB ndash The Charging Port of Choice
• A Solid SMSC Revenue Growth Opportunity
• Slide Number 79
• SMSC Portable Products A Growth Business
• Whats Happened in the Last Year
• The Components of SMSC Success
• SMSC Has Achieved USB Transceiver Market Leadership for Portable Devices
• Acquiring Customers Through Design Wins
• Demonstrated Success through gt100 CAGR
• Expanding Our Market
• Added Content USB Port Protection amp Detection
• Battery Charging Opportunity Portable Power
• Whatrsquos Happening with Smartphones
• Portable Connectivity Solves Portable Interface Challenges
• Driving SAM Growth
• Portable Connectivity ndash An Exciting Growth Opportunity
• Slide Number 93
• Whats Happened in the Last Year
• A Growing Customer Base
• A Growing amp Diversified Customer Base
• How Did We Get There
• Design Win Success ndash Growing SMSC Market Share
• Design Win Success ndash Entering New Markets
• Design Win Momentum Is Broad Based
• We Continue To Hit The Bulls Eye
• Sales Structure
• SMSC Worldwide Sales Model
• SMSC ndash A Differentiated Sales Model
• Slide Number 105
• A Results Oriented Manufacturing Philosophy
• Driving Non-GAAP Gross Margin to 56
• Success in 2010
• Gross Margin Improvement Strategy in 2011
• Summary ndash Driving for 56 Gross Margin
• Slide Number 111
• Slide Number 112
• Last Yearrsquos Model
• Strong Top-line Growth Since Q4FY09 Bottom
• Operational Excellence Gross Margin
• Opex Keep spending in line with model
• Focus on Profitable Growth Approaching 16 in Q2FY11
• 20 Operating Margin Target Model
• Balance Sheet Remains Strong
• Reached Our Inventory Turns Target
• Drive for Profitable Growth
• Slide Number 122
• Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures(in thousands except per share amounts)

119

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

CashST Investments

Balance Sheet Remains Strong

~$85 in cashinvestments per share hellip and no debt$40M net cash provided by operating activities in FY10Low capex model $86M capex in FY10 down from $178M in FY09Cash-out of $196M in FY 10 for acquisitions and investments

Auction Rate Securities

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

$0

120

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Reached Our Inventory Turns Target

Inventory turns at 42 beating target of 4X

$60

$50

$40

$30

$20

$10

$0

121

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Drive for Profitable Growth

Productmarket strategy drives organic top-line growth

Accelerated top-line growth through acquisitions

Focus on PROFITABLE growthContinue gross margin improvementsOpex control

Deliver on the 20 non-GAAP operating margin model

122

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

123

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (in thousands except per share amounts)

FY09 FY 10 FY 11Q4 Q1 Q2 Q3 Q4 FY 10 Q1

Gross profit - GAAP basis 21753$ 27712$ 35543$ 45034$ 44688$ 152923$ 51795$ Stock-based compensation 531 550 904 (342) 281 1394 782 Amortization of intangible assets 1022 1112 1058 941 1140 4304 1078 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Gross profit - non-GAAP basis 23306$ 29374$ 39204$ 47866$ 45087$ 161531$ 53700$

Income (loss) from operations ndash GAAP basis (78752)$ (14597)$ (10056)$ 9439$ 1227$ (13987)$ 1802$

Non-GAAP adjustments

Stock-based compensation included in Costs of Goods Sold 531 550 904 (342) 281 1394 782 Research amp Development 1558 1482 2384 (559) 968 4274 2224 Selling general and administrative 2954 3393 5698 (1889) 1717 8918 4639

5043 5425 8986 (2790) 2966 14586 7645 Amortization of intangible assets included in Costs of Goods Sold 1022 1112 1058 941 1140 4304 1078 Selling general and administrative 484 395 496 478 691 2007 687

1506 1507 1554 1419 1831 6311 1765 Other non-GAAP adjustments Restructuring charges 5197 221 649 393 860 2123 821 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Impairment of goodwill 52300 - - - - - - Settlement charge - 2050 - (31) - 2019 -

Transaction costs - mergers and acquisitions - - - 141 339 480 182 Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Executive transition costs - - - - - - 429 Income (loss) from operations ndash non-GAAP basis (14706)$ (5394)$ 2832$ 10804$ 6201$ 14442$ 12689$

Net (loss) income ndash GAAP basis (71643) (9196) (6534) 6806 946 (7978) 627

Non-GAAP adjustments (as scheduled above) 64046 9203 12888 1365 4974 28429 10887

Tax effect of non-GAAP adjustments (4229) (3313) (4640) (491) (1791) (10234) (3919) Net income (loss) ndash non-GAAP basis (11826)$ (3306)$ 1714$ 7680$ 4129$ 10217$ 7595$

Net income (loss) per share ndash diluted GAAP (330)$ (042)$ (030)$ 030$ 004$ (036)$ 003$

Non-GAAP (054)$ (015)$ 008$ 034$ 018$ 046$ 033$

Weighted average common shares outstanding - diluted GAAP 21742 21901 22054 22442 22579 22133 22787 Non-GAAP 21742 21901 22191 22442 22579 22310 22787

• Slide Number 1
• Safe Harbor Statement
• Agenda
• Smart Mixed-Signal Connectivitytrade
• Whats Happened in the Last Year
• Strong Semiconductor Recovery in 1HCY10
• Executing on Financial Objectives
• Connectivity Is Everywhere amp Converging
• SMSC Is A Player
• An Expanding Ecosystem
• Investing In Our Future
• Wireless Audio Systems A High Growth Opportunity
• The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio
• Kleer and STS are complementary and positioned for fast growth
• Wireless Audio Systems ndash A Compelling Growth Opportunity
• New Market Opportunities are Driven by a Changing Landscape
• The Wireless Audio Growth Opportunity
• SMSC Continued Commitment to Growth
• 5 Product Lines Driving Growth Opportunities
• Content Value Provides Growth Opportunities
• Growth Driven by Market Recovery amp Share Gains
• Expanding the Value Chain
• Strong Market Share Positions in Our Target Markets
• A Diverse Company with an Evolving Mix
• World Class Customers and Partners
• Our Growing Worldwide RampD Presence
• Continuing to Deliver Expanding Earnings
• SMSC A Compelling Company
• Slide Number 29
• Computing amp Connectivity Now a Growth Business
• Whats Happened in the Last Year
• PC Market Forecast Indicates Robust Growth in 2010
• Successfully Expanding Our Global PC Related Customer Base
• Strong Revenue Growth from Core + New Initiatives
• New Market Opportunities Driven by a Changing Landscape
• Slide Number 36
• What We Do and Where We Are
• Green USB High Speed Inter-Chip (HSIC)
• USB ndash The Evolution Continues
• Slide Number 40
• SMSC USB Graphics Solution
• USB Graphics Futures
• Slide Number 43
• Partnering to Provide Natural Human Interface Solutions
• 3D The Future of Human Interaction
• Security Evolution Creates Unique Opportunities
• Computing amp Connectivity Core Business Growth Opportunity
• Automotive Information Systems Expanding Automotive Content
• Automotive Information Systems ndash A Compelling Business Model
• Whats Happened in the Last Year
• Multiple Vectors for Growth
• Synergistic Technology Standards
• K2L ndash Connecting Networks Through Software
• Kleer Technology ndash Best-In-Class RF Audio
• Working Out of a Deep Automotive Recession
• MOST Is The Base of Our Business
• Slide Number 57
• Winning Ground ndash 23 New Models in Past Year
• Success at VWAudi ndash Next Gen MOST In All Car Models
• SMSC Holds An Impressive Market Share
• New Products Poised for Growth
• Multiplying The Size Of The Opportunity
• Outlook Driver Assist ndash A System without a Network
• SMSC Automotive ndash Sustainable Growth Opportunity
• Slide Number 65
• A Successful Analog Business Model
• An Expanding Product Portfolio
• Whats Happened in the Last Year
• Thermal Management - Our Core Business
• RightTouchtrade - Our Growth Business in 2010 amp 2011
• RightTouchtrade is Replacing Mechanical Buttons
• Buttons Waiting to be Replaced
• Focusing on Changing the Human Interface
• Energy Conservation is Driving New Opportunities
• Monitoring Power for Better System Management
• USB Port Power - A New Standard and Opportunity
• USB ndash The Charging Port of Choice
• A Solid SMSC Revenue Growth Opportunity
• Slide Number 79
• SMSC Portable Products A Growth Business
• Whats Happened in the Last Year
• The Components of SMSC Success
• SMSC Has Achieved USB Transceiver Market Leadership for Portable Devices
• Acquiring Customers Through Design Wins
• Demonstrated Success through gt100 CAGR
• Expanding Our Market
• Added Content USB Port Protection amp Detection
• Battery Charging Opportunity Portable Power
• Whatrsquos Happening with Smartphones
• Portable Connectivity Solves Portable Interface Challenges
• Driving SAM Growth
• Portable Connectivity ndash An Exciting Growth Opportunity
• Slide Number 93
• Whats Happened in the Last Year
• A Growing Customer Base
• A Growing amp Diversified Customer Base
• How Did We Get There
• Design Win Success ndash Growing SMSC Market Share
• Design Win Success ndash Entering New Markets
• Design Win Momentum Is Broad Based
• We Continue To Hit The Bulls Eye
• Sales Structure
• SMSC Worldwide Sales Model
• SMSC ndash A Differentiated Sales Model
• Slide Number 105
• A Results Oriented Manufacturing Philosophy
• Driving Non-GAAP Gross Margin to 56
• Success in 2010
• Gross Margin Improvement Strategy in 2011
• Summary ndash Driving for 56 Gross Margin
• Slide Number 111
• Slide Number 112
• Last Yearrsquos Model
• Strong Top-line Growth Since Q4FY09 Bottom
• Operational Excellence Gross Margin
• Opex Keep spending in line with model
• Focus on Profitable Growth Approaching 16 in Q2FY11
• 20 Operating Margin Target Model
• Balance Sheet Remains Strong
• Reached Our Inventory Turns Target
• Drive for Profitable Growth
• Slide Number 122
• Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures(in thousands except per share amounts)

120

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Reached Our Inventory Turns Target

Inventory turns at 42 beating target of 4X

$60

$50

$40

$30

$20

$10

$0

121

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Drive for Profitable Growth

Productmarket strategy drives organic top-line growth

Accelerated top-line growth through acquisitions

Focus on PROFITABLE growthContinue gross margin improvementsOpex control

Deliver on the 20 non-GAAP operating margin model

122

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

123

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (in thousands except per share amounts)

FY09 FY 10 FY 11Q4 Q1 Q2 Q3 Q4 FY 10 Q1

Gross profit - GAAP basis 21753$ 27712$ 35543$ 45034$ 44688$ 152923$ 51795$ Stock-based compensation 531 550 904 (342) 281 1394 782 Amortization of intangible assets 1022 1112 1058 941 1140 4304 1078 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Gross profit - non-GAAP basis 23306$ 29374$ 39204$ 47866$ 45087$ 161531$ 53700$

Income (loss) from operations ndash GAAP basis (78752)$ (14597)$ (10056)$ 9439$ 1227$ (13987)$ 1802$

Non-GAAP adjustments

Stock-based compensation included in Costs of Goods Sold 531 550 904 (342) 281 1394 782 Research amp Development 1558 1482 2384 (559) 968 4274 2224 Selling general and administrative 2954 3393 5698 (1889) 1717 8918 4639

5043 5425 8986 (2790) 2966 14586 7645 Amortization of intangible assets included in Costs of Goods Sold 1022 1112 1058 941 1140 4304 1078 Selling general and administrative 484 395 496 478 691 2007 687

1506 1507 1554 1419 1831 6311 1765 Other non-GAAP adjustments Restructuring charges 5197 221 649 393 860 2123 821 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Impairment of goodwill 52300 - - - - - - Settlement charge - 2050 - (31) - 2019 -

Transaction costs - mergers and acquisitions - - - 141 339 480 182 Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Executive transition costs - - - - - - 429 Income (loss) from operations ndash non-GAAP basis (14706)$ (5394)$ 2832$ 10804$ 6201$ 14442$ 12689$

Net (loss) income ndash GAAP basis (71643) (9196) (6534) 6806 946 (7978) 627

Non-GAAP adjustments (as scheduled above) 64046 9203 12888 1365 4974 28429 10887

Tax effect of non-GAAP adjustments (4229) (3313) (4640) (491) (1791) (10234) (3919) Net income (loss) ndash non-GAAP basis (11826)$ (3306)$ 1714$ 7680$ 4129$ 10217$ 7595$

Net income (loss) per share ndash diluted GAAP (330)$ (042)$ (030)$ 030$ 004$ (036)$ 003$

Non-GAAP (054)$ (015)$ 008$ 034$ 018$ 046$ 033$

Weighted average common shares outstanding - diluted GAAP 21742 21901 22054 22442 22579 22133 22787 Non-GAAP 21742 21901 22191 22442 22579 22310 22787

• Slide Number 1
• Safe Harbor Statement
• Agenda
• Smart Mixed-Signal Connectivitytrade
• Whats Happened in the Last Year
• Strong Semiconductor Recovery in 1HCY10
• Executing on Financial Objectives
• Connectivity Is Everywhere amp Converging
• SMSC Is A Player
• An Expanding Ecosystem
• Investing In Our Future
• Wireless Audio Systems A High Growth Opportunity
• The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio
• Kleer and STS are complementary and positioned for fast growth
• Wireless Audio Systems ndash A Compelling Growth Opportunity
• New Market Opportunities are Driven by a Changing Landscape
• The Wireless Audio Growth Opportunity
• SMSC Continued Commitment to Growth
• 5 Product Lines Driving Growth Opportunities
• Content Value Provides Growth Opportunities
• Growth Driven by Market Recovery amp Share Gains
• Expanding the Value Chain
• Strong Market Share Positions in Our Target Markets
• A Diverse Company with an Evolving Mix
• World Class Customers and Partners
• Our Growing Worldwide RampD Presence
• Continuing to Deliver Expanding Earnings
• SMSC A Compelling Company
• Slide Number 29
• Computing amp Connectivity Now a Growth Business
• Whats Happened in the Last Year
• PC Market Forecast Indicates Robust Growth in 2010
• Successfully Expanding Our Global PC Related Customer Base
• Strong Revenue Growth from Core + New Initiatives
• New Market Opportunities Driven by a Changing Landscape
• Slide Number 36
• What We Do and Where We Are
• Green USB High Speed Inter-Chip (HSIC)
• USB ndash The Evolution Continues
• Slide Number 40
• SMSC USB Graphics Solution
• USB Graphics Futures
• Slide Number 43
• Partnering to Provide Natural Human Interface Solutions
• 3D The Future of Human Interaction
• Security Evolution Creates Unique Opportunities
• Computing amp Connectivity Core Business Growth Opportunity
• Automotive Information Systems Expanding Automotive Content
• Automotive Information Systems ndash A Compelling Business Model
• Whats Happened in the Last Year
• Multiple Vectors for Growth
• Synergistic Technology Standards
• K2L ndash Connecting Networks Through Software
• Kleer Technology ndash Best-In-Class RF Audio
• Working Out of a Deep Automotive Recession
• MOST Is The Base of Our Business
• Slide Number 57
• Winning Ground ndash 23 New Models in Past Year
• Success at VWAudi ndash Next Gen MOST In All Car Models
• SMSC Holds An Impressive Market Share
• New Products Poised for Growth
• Multiplying The Size Of The Opportunity
• Outlook Driver Assist ndash A System without a Network
• SMSC Automotive ndash Sustainable Growth Opportunity
• Slide Number 65
• A Successful Analog Business Model
• An Expanding Product Portfolio
• Whats Happened in the Last Year
• Thermal Management - Our Core Business
• RightTouchtrade - Our Growth Business in 2010 amp 2011
• RightTouchtrade is Replacing Mechanical Buttons
• Buttons Waiting to be Replaced
• Focusing on Changing the Human Interface
• Energy Conservation is Driving New Opportunities
• Monitoring Power for Better System Management
• USB Port Power - A New Standard and Opportunity
• USB ndash The Charging Port of Choice
• A Solid SMSC Revenue Growth Opportunity
• Slide Number 79
• SMSC Portable Products A Growth Business
• Whats Happened in the Last Year
• The Components of SMSC Success
• SMSC Has Achieved USB Transceiver Market Leadership for Portable Devices
• Acquiring Customers Through Design Wins
• Demonstrated Success through gt100 CAGR
• Expanding Our Market
• Added Content USB Port Protection amp Detection
• Battery Charging Opportunity Portable Power
• Whatrsquos Happening with Smartphones
• Portable Connectivity Solves Portable Interface Challenges
• Driving SAM Growth
• Portable Connectivity ndash An Exciting Growth Opportunity
• Slide Number 93
• Whats Happened in the Last Year
• A Growing Customer Base
• A Growing amp Diversified Customer Base
• How Did We Get There
• Design Win Success ndash Growing SMSC Market Share
• Design Win Success ndash Entering New Markets
• Design Win Momentum Is Broad Based
• We Continue To Hit The Bulls Eye
• Sales Structure
• SMSC Worldwide Sales Model
• SMSC ndash A Differentiated Sales Model
• Slide Number 105
• A Results Oriented Manufacturing Philosophy
• Driving Non-GAAP Gross Margin to 56
• Success in 2010
• Gross Margin Improvement Strategy in 2011
• Summary ndash Driving for 56 Gross Margin
• Slide Number 111
• Slide Number 112
• Last Yearrsquos Model
• Strong Top-line Growth Since Q4FY09 Bottom
• Operational Excellence Gross Margin
• Opex Keep spending in line with model
• Focus on Profitable Growth Approaching 16 in Q2FY11
• 20 Operating Margin Target Model
• Balance Sheet Remains Strong
• Reached Our Inventory Turns Target
• Drive for Profitable Growth
• Slide Number 122
• Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures(in thousands except per share amounts)

121

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Drive for Profitable Growth

Productmarket strategy drives organic top-line growth

Accelerated top-line growth through acquisitions

Focus on PROFITABLE growthContinue gross margin improvementsOpex control

Deliver on the 20 non-GAAP operating margin model

122

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

123

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (in thousands except per share amounts)

FY09 FY 10 FY 11Q4 Q1 Q2 Q3 Q4 FY 10 Q1

Gross profit - GAAP basis 21753$ 27712$ 35543$ 45034$ 44688$ 152923$ 51795$ Stock-based compensation 531 550 904 (342) 281 1394 782 Amortization of intangible assets 1022 1112 1058 941 1140 4304 1078 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Gross profit - non-GAAP basis 23306$ 29374$ 39204$ 47866$ 45087$ 161531$ 53700$

Income (loss) from operations ndash GAAP basis (78752)$ (14597)$ (10056)$ 9439$ 1227$ (13987)$ 1802$

Non-GAAP adjustments

Stock-based compensation included in Costs of Goods Sold 531 550 904 (342) 281 1394 782 Research amp Development 1558 1482 2384 (559) 968 4274 2224 Selling general and administrative 2954 3393 5698 (1889) 1717 8918 4639

5043 5425 8986 (2790) 2966 14586 7645 Amortization of intangible assets included in Costs of Goods Sold 1022 1112 1058 941 1140 4304 1078 Selling general and administrative 484 395 496 478 691 2007 687

1506 1507 1554 1419 1831 6311 1765 Other non-GAAP adjustments Restructuring charges 5197 221 649 393 860 2123 821 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Impairment of goodwill 52300 - - - - - - Settlement charge - 2050 - (31) - 2019 -

Transaction costs - mergers and acquisitions - - - 141 339 480 182 Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Executive transition costs - - - - - - 429 Income (loss) from operations ndash non-GAAP basis (14706)$ (5394)$ 2832$ 10804$ 6201$ 14442$ 12689$

Net (loss) income ndash GAAP basis (71643) (9196) (6534) 6806 946 (7978) 627

Non-GAAP adjustments (as scheduled above) 64046 9203 12888 1365 4974 28429 10887

Tax effect of non-GAAP adjustments (4229) (3313) (4640) (491) (1791) (10234) (3919) Net income (loss) ndash non-GAAP basis (11826)$ (3306)$ 1714$ 7680$ 4129$ 10217$ 7595$

Net income (loss) per share ndash diluted GAAP (330)$ (042)$ (030)$ 030$ 004$ (036)$ 003$

Non-GAAP (054)$ (015)$ 008$ 034$ 018$ 046$ 033$

Weighted average common shares outstanding - diluted GAAP 21742 21901 22054 22442 22579 22133 22787 Non-GAAP 21742 21901 22191 22442 22579 22310 22787

• Slide Number 1
• Safe Harbor Statement
• Agenda
• Smart Mixed-Signal Connectivitytrade
• Whats Happened in the Last Year
• Strong Semiconductor Recovery in 1HCY10
• Executing on Financial Objectives
• Connectivity Is Everywhere amp Converging
• SMSC Is A Player
• An Expanding Ecosystem
• Investing In Our Future
• Wireless Audio Systems A High Growth Opportunity
• The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio
• Kleer and STS are complementary and positioned for fast growth
• Wireless Audio Systems ndash A Compelling Growth Opportunity
• New Market Opportunities are Driven by a Changing Landscape
• The Wireless Audio Growth Opportunity
• SMSC Continued Commitment to Growth
• 5 Product Lines Driving Growth Opportunities
• Content Value Provides Growth Opportunities
• Growth Driven by Market Recovery amp Share Gains
• Expanding the Value Chain
• Strong Market Share Positions in Our Target Markets
• A Diverse Company with an Evolving Mix
• World Class Customers and Partners
• Our Growing Worldwide RampD Presence
• Continuing to Deliver Expanding Earnings
• SMSC A Compelling Company
• Slide Number 29
• Computing amp Connectivity Now a Growth Business
• Whats Happened in the Last Year
• PC Market Forecast Indicates Robust Growth in 2010
• Successfully Expanding Our Global PC Related Customer Base
• Strong Revenue Growth from Core + New Initiatives
• New Market Opportunities Driven by a Changing Landscape
• Slide Number 36
• What We Do and Where We Are
• Green USB High Speed Inter-Chip (HSIC)
• USB ndash The Evolution Continues
• Slide Number 40
• SMSC USB Graphics Solution
• USB Graphics Futures
• Slide Number 43
• Partnering to Provide Natural Human Interface Solutions
• 3D The Future of Human Interaction
• Security Evolution Creates Unique Opportunities
• Computing amp Connectivity Core Business Growth Opportunity
• Automotive Information Systems Expanding Automotive Content
• Automotive Information Systems ndash A Compelling Business Model
• Whats Happened in the Last Year
• Multiple Vectors for Growth
• Synergistic Technology Standards
• K2L ndash Connecting Networks Through Software
• Kleer Technology ndash Best-In-Class RF Audio
• Working Out of a Deep Automotive Recession
• MOST Is The Base of Our Business
• Slide Number 57
• Winning Ground ndash 23 New Models in Past Year
• Success at VWAudi ndash Next Gen MOST In All Car Models
• SMSC Holds An Impressive Market Share
• New Products Poised for Growth
• Multiplying The Size Of The Opportunity
• Outlook Driver Assist ndash A System without a Network
• SMSC Automotive ndash Sustainable Growth Opportunity
• Slide Number 65
• A Successful Analog Business Model
• An Expanding Product Portfolio
• Whats Happened in the Last Year
• Thermal Management - Our Core Business
• RightTouchtrade - Our Growth Business in 2010 amp 2011
• RightTouchtrade is Replacing Mechanical Buttons
• Buttons Waiting to be Replaced
• Focusing on Changing the Human Interface
• Energy Conservation is Driving New Opportunities
• Monitoring Power for Better System Management
• USB Port Power - A New Standard and Opportunity
• USB ndash The Charging Port of Choice
• A Solid SMSC Revenue Growth Opportunity
• Slide Number 79
• SMSC Portable Products A Growth Business
• Whats Happened in the Last Year
• The Components of SMSC Success
• SMSC Has Achieved USB Transceiver Market Leadership for Portable Devices
• Acquiring Customers Through Design Wins
• Demonstrated Success through gt100 CAGR
• Expanding Our Market
• Added Content USB Port Protection amp Detection
• Battery Charging Opportunity Portable Power
• Whatrsquos Happening with Smartphones
• Portable Connectivity Solves Portable Interface Challenges
• Driving SAM Growth
• Portable Connectivity ndash An Exciting Growth Opportunity
• Slide Number 93
• Whats Happened in the Last Year
• A Growing Customer Base
• A Growing amp Diversified Customer Base
• How Did We Get There
• Design Win Success ndash Growing SMSC Market Share
• Design Win Success ndash Entering New Markets
• Design Win Momentum Is Broad Based
• We Continue To Hit The Bulls Eye
• Sales Structure
• SMSC Worldwide Sales Model
• SMSC ndash A Differentiated Sales Model
• Slide Number 105
• A Results Oriented Manufacturing Philosophy
• Driving Non-GAAP Gross Margin to 56
• Success in 2010
• Gross Margin Improvement Strategy in 2011
• Summary ndash Driving for 56 Gross Margin
• Slide Number 111
• Slide Number 112
• Last Yearrsquos Model
• Strong Top-line Growth Since Q4FY09 Bottom
• Operational Excellence Gross Margin
• Opex Keep spending in line with model
• Focus on Profitable Growth Approaching 16 in Q2FY11
• 20 Operating Margin Target Model
• Balance Sheet Remains Strong
• Reached Our Inventory Turns Target
• Drive for Profitable Growth
• Slide Number 122
• Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures(in thousands except per share amounts)

122

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

123

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (in thousands except per share amounts)

FY09 FY 10 FY 11Q4 Q1 Q2 Q3 Q4 FY 10 Q1

Gross profit - GAAP basis 21753$ 27712$ 35543$ 45034$ 44688$ 152923$ 51795$ Stock-based compensation 531 550 904 (342) 281 1394 782 Amortization of intangible assets 1022 1112 1058 941 1140 4304 1078 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Gross profit - non-GAAP basis 23306$ 29374$ 39204$ 47866$ 45087$ 161531$ 53700$

Income (loss) from operations ndash GAAP basis (78752)$ (14597)$ (10056)$ 9439$ 1227$ (13987)$ 1802$

Non-GAAP adjustments

Stock-based compensation included in Costs of Goods Sold 531 550 904 (342) 281 1394 782 Research amp Development 1558 1482 2384 (559) 968 4274 2224 Selling general and administrative 2954 3393 5698 (1889) 1717 8918 4639

5043 5425 8986 (2790) 2966 14586 7645 Amortization of intangible assets included in Costs of Goods Sold 1022 1112 1058 941 1140 4304 1078 Selling general and administrative 484 395 496 478 691 2007 687

1506 1507 1554 1419 1831 6311 1765 Other non-GAAP adjustments Restructuring charges 5197 221 649 393 860 2123 821 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Impairment of goodwill 52300 - - - - - - Settlement charge - 2050 - (31) - 2019 -

Transaction costs - mergers and acquisitions - - - 141 339 480 182 Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Executive transition costs - - - - - - 429 Income (loss) from operations ndash non-GAAP basis (14706)$ (5394)$ 2832$ 10804$ 6201$ 14442$ 12689$

Net (loss) income ndash GAAP basis (71643) (9196) (6534) 6806 946 (7978) 627

Non-GAAP adjustments (as scheduled above) 64046 9203 12888 1365 4974 28429 10887

Tax effect of non-GAAP adjustments (4229) (3313) (4640) (491) (1791) (10234) (3919) Net income (loss) ndash non-GAAP basis (11826)$ (3306)$ 1714$ 7680$ 4129$ 10217$ 7595$

Net income (loss) per share ndash diluted GAAP (330)$ (042)$ (030)$ 030$ 004$ (036)$ 003$

Non-GAAP (054)$ (015)$ 008$ 034$ 018$ 046$ 033$

Weighted average common shares outstanding - diluted GAAP 21742 21901 22054 22442 22579 22133 22787 Non-GAAP 21742 21901 22191 22442 22579 22310 22787

• Slide Number 1
• Safe Harbor Statement
• Agenda
• Smart Mixed-Signal Connectivitytrade
• Whats Happened in the Last Year
• Strong Semiconductor Recovery in 1HCY10
• Executing on Financial Objectives
• Connectivity Is Everywhere amp Converging
• SMSC Is A Player
• An Expanding Ecosystem
• Investing In Our Future
• Wireless Audio Systems A High Growth Opportunity
• The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio
• Kleer and STS are complementary and positioned for fast growth
• Wireless Audio Systems ndash A Compelling Growth Opportunity
• New Market Opportunities are Driven by a Changing Landscape
• The Wireless Audio Growth Opportunity
• SMSC Continued Commitment to Growth
• 5 Product Lines Driving Growth Opportunities
• Content Value Provides Growth Opportunities
• Growth Driven by Market Recovery amp Share Gains
• Expanding the Value Chain
• Strong Market Share Positions in Our Target Markets
• A Diverse Company with an Evolving Mix
• World Class Customers and Partners
• Our Growing Worldwide RampD Presence
• Continuing to Deliver Expanding Earnings
• SMSC A Compelling Company
• Slide Number 29
• Computing amp Connectivity Now a Growth Business
• Whats Happened in the Last Year
• PC Market Forecast Indicates Robust Growth in 2010
• Successfully Expanding Our Global PC Related Customer Base
• Strong Revenue Growth from Core + New Initiatives
• New Market Opportunities Driven by a Changing Landscape
• Slide Number 36
• What We Do and Where We Are
• Green USB High Speed Inter-Chip (HSIC)
• USB ndash The Evolution Continues
• Slide Number 40
• SMSC USB Graphics Solution
• USB Graphics Futures
• Slide Number 43
• Partnering to Provide Natural Human Interface Solutions
• 3D The Future of Human Interaction
• Security Evolution Creates Unique Opportunities
• Computing amp Connectivity Core Business Growth Opportunity
• Automotive Information Systems Expanding Automotive Content
• Automotive Information Systems ndash A Compelling Business Model
• Whats Happened in the Last Year
• Multiple Vectors for Growth
• Synergistic Technology Standards
• K2L ndash Connecting Networks Through Software
• Kleer Technology ndash Best-In-Class RF Audio
• Working Out of a Deep Automotive Recession
• MOST Is The Base of Our Business
• Slide Number 57
• Winning Ground ndash 23 New Models in Past Year
• Success at VWAudi ndash Next Gen MOST In All Car Models
• SMSC Holds An Impressive Market Share
• New Products Poised for Growth
• Multiplying The Size Of The Opportunity
• Outlook Driver Assist ndash A System without a Network
• SMSC Automotive ndash Sustainable Growth Opportunity
• Slide Number 65
• A Successful Analog Business Model
• An Expanding Product Portfolio
• Whats Happened in the Last Year
• Thermal Management - Our Core Business
• RightTouchtrade - Our Growth Business in 2010 amp 2011
• RightTouchtrade is Replacing Mechanical Buttons
• Buttons Waiting to be Replaced
• Focusing on Changing the Human Interface
• Energy Conservation is Driving New Opportunities
• Monitoring Power for Better System Management
• USB Port Power - A New Standard and Opportunity
• USB ndash The Charging Port of Choice
• A Solid SMSC Revenue Growth Opportunity
• Slide Number 79
• SMSC Portable Products A Growth Business
• Whats Happened in the Last Year
• The Components of SMSC Success
• SMSC Has Achieved USB Transceiver Market Leadership for Portable Devices
• Acquiring Customers Through Design Wins
• Demonstrated Success through gt100 CAGR
• Expanding Our Market
• Added Content USB Port Protection amp Detection
• Battery Charging Opportunity Portable Power
• Whatrsquos Happening with Smartphones
• Portable Connectivity Solves Portable Interface Challenges
• Driving SAM Growth
• Portable Connectivity ndash An Exciting Growth Opportunity
• Slide Number 93
• Whats Happened in the Last Year
• A Growing Customer Base
• A Growing amp Diversified Customer Base
• How Did We Get There
• Design Win Success ndash Growing SMSC Market Share
• Design Win Success ndash Entering New Markets
• Design Win Momentum Is Broad Based
• We Continue To Hit The Bulls Eye
• Sales Structure
• SMSC Worldwide Sales Model
• SMSC ndash A Differentiated Sales Model
• Slide Number 105
• A Results Oriented Manufacturing Philosophy
• Driving Non-GAAP Gross Margin to 56
• Success in 2010
• Gross Margin Improvement Strategy in 2011
• Summary ndash Driving for 56 Gross Margin
• Slide Number 111
• Slide Number 112
• Last Yearrsquos Model
• Strong Top-line Growth Since Q4FY09 Bottom
• Operational Excellence Gross Margin
• Opex Keep spending in line with model
• Focus on Profitable Growth Approaching 16 in Q2FY11
• 20 Operating Margin Target Model
• Balance Sheet Remains Strong
• Reached Our Inventory Turns Target
• Drive for Profitable Growth
• Slide Number 122
• Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures(in thousands except per share amounts)

123

wwwsmsccomcopy2010 SMSC All rights reserved

SMSC 2010 Analyst Day

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (in thousands except per share amounts)

FY09 FY 10 FY 11Q4 Q1 Q2 Q3 Q4 FY 10 Q1

Gross profit - GAAP basis 21753$ 27712$ 35543$ 45034$ 44688$ 152923$ 51795$ Stock-based compensation 531 550 904 (342) 281 1394 782 Amortization of intangible assets 1022 1112 1058 941 1140 4304 1078 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Gross profit - non-GAAP basis 23306$ 29374$ 39204$ 47866$ 45087$ 161531$ 53700$

Income (loss) from operations ndash GAAP basis (78752)$ (14597)$ (10056)$ 9439$ 1227$ (13987)$ 1802$

Non-GAAP adjustments

Stock-based compensation included in Costs of Goods Sold 531 550 904 (342) 281 1394 782 Research amp Development 1558 1482 2384 (559) 968 4274 2224 Selling general and administrative 2954 3393 5698 (1889) 1717 8918 4639

5043 5425 8986 (2790) 2966 14586 7645 Amortization of intangible assets included in Costs of Goods Sold 1022 1112 1058 941 1140 4304 1078 Selling general and administrative 484 395 496 478 691 2007 687

1506 1507 1554 1419 1831 6311 1765 Other non-GAAP adjustments Restructuring charges 5197 221 649 393 860 2123 821 Accelerated depreciation on test equipment - - 1699 2233 - 3932 - Impairment of goodwill 52300 - - - - - - Settlement charge - 2050 - (31) - 2019 -

Transaction costs - mergers and acquisitions - - - 141 339 480 182 Release of goods received liability - - - - (1022) (1022) - Impact of inventory write-up on acquisition of Kleer - - - - - - 45 Executive transition costs - - - - - - 429 Income (loss) from operations ndash non-GAAP basis (14706)$ (5394)$ 2832$ 10804$ 6201$ 14442$ 12689$

Net (loss) income ndash GAAP basis (71643) (9196) (6534) 6806 946 (7978) 627

Non-GAAP adjustments (as scheduled above) 64046 9203 12888 1365 4974 28429 10887

Tax effect of non-GAAP adjustments (4229) (3313) (4640) (491) (1791) (10234) (3919) Net income (loss) ndash non-GAAP basis (11826)$ (3306)$ 1714$ 7680$ 4129$ 10217$ 7595$

Net income (loss) per share ndash diluted GAAP (330)$ (042)$ (030)$ 030$ 004$ (036)$ 003$

Non-GAAP (054)$ (015)$ 008$ 034$ 018$ 046$ 033$

Weighted average common shares outstanding - diluted GAAP 21742 21901 22054 22442 22579 22133 22787 Non-GAAP 21742 21901 22191 22442 22579 22310 22787

• Slide Number 1
• Safe Harbor Statement
• Agenda
• Smart Mixed-Signal Connectivitytrade
• Whats Happened in the Last Year
• Strong Semiconductor Recovery in 1HCY10
• Executing on Financial Objectives
• Connectivity Is Everywhere amp Converging
• SMSC Is A Player
• An Expanding Ecosystem
• Investing In Our Future
• Wireless Audio Systems A High Growth Opportunity
• The Acquisitions of Kleer amp STS Make SMSC a Leader in Wireless Audio
• Kleer and STS are complementary and positioned for fast growth
• Wireless Audio Systems ndash A Compelling Growth Opportunity
• New Market Opportunities are Driven by a Changing Landscape
• The Wireless Audio Growth Opportunity
• SMSC Continued Commitment to Growth
• 5 Product Lines Driving Growth Opportunities
• Content Value Provides Growth Opportunities
• Growth Driven by Market Recovery amp Share Gains
• Expanding the Value Chain
• Strong Market Share Positions in Our Target Markets
• A Diverse Company with an Evolving Mix
• World Class Customers and Partners
• Our Growing Worldwide RampD Presence
• Continuing to Deliver Expanding Earnings
• SMSC A Compelling Company
• Slide Number 29
• Computing amp Connectivity Now a Growth Business
• Whats Happened in the Last Year
• PC Market Forecast Indicates Robust Growth in 2010
• Successfully Expanding Our Global PC Related Customer Base
• Strong Revenue Growth from Core + New Initiatives
• New Market Opportunities Driven by a Changing Landscape
• Slide Number 36
• What We Do and Where We Are
• Green USB High Speed Inter-Chip (HSIC)
• USB ndash The Evolution Continues
• Slide Number 40
• SMSC USB Graphics Solution
• USB Graphics Futures
• Slide Number 43
• Partnering to Provide Natural Human Interface Solutions
• 3D The Future of Human Interaction
• Security Evolution Creates Unique Opportunities
• Computing amp Connectivity Core Business Growth Opportunity
• Automotive Information Systems Expanding Automotive Content
• Automotive Information Systems ndash A Compelling Business Model
• Whats Happened in the Last Year
• Multiple Vectors for Growth
• Synergistic Technology Standards
• K2L ndash Connecting Networks Through Software
• Kleer Technology ndash Best-In-Class RF Audio
• Working Out of a Deep Automotive Recession
• MOST Is The Base of Our Business
• Slide Number 57
• Winning Ground ndash 23 New Models in Past Year
• Success at VWAudi ndash Next Gen MOST In All Car Models
• SMSC Holds An Impressive Market Share
• New Products Poised for Growth
• Multiplying The Size Of The Opportunity
• Outlook Driver Assist ndash A System without a Network
• SMSC Automotive ndash Sustainable Growth Opportunity
• Slide Number 65
• A Successful Analog Business Model
• An Expanding Product Portfolio
• Whats Happened in the Last Year
• Thermal Management - Our Core Business
• RightTouchtrade - Our Growth Business in 2010 amp 2011
• RightTouchtrade is Replacing Mechanical Buttons
• Buttons Waiting to be Replaced
• Focusing on Changing the Human Interface
• Energy Conservation is Driving New Opportunities
• Monitoring Power for Better System Management
• USB Port Power - A New Standard and Opportunity
• USB ndash The Charging Port of Choice
• A Solid SMSC Revenue Growth Opportunity
• Slide Number 79
• SMSC Portable Products A Growth Business
• Whats Happened in the Last Year
• The Components of SMSC Success
• SMSC Has Achieved USB Transceiver Market Leadership for Portable Devices
• Acquiring Customers Through Design Wins
• Demonstrated Success through gt100 CAGR
• Expanding Our Market
• Added Content USB Port Protection amp Detection
• Battery Charging Opportunity Portable Power
• Whatrsquos Happening with Smartphones
• Portable Connectivity Solves Portable Interface Challenges
• Driving SAM Growth
• Portable Connectivity ndash An Exciting Growth Opportunity
• Slide Number 93
• Whats Happened in the Last Year
• A Growing Customer Base
• A Growing amp Diversified Customer Base
• How Did We Get There
• Design Win Success ndash Growing SMSC Market Share
• Design Win Success ndash Entering New Markets
• Design Win Momentum Is Broad Based
• We Continue To Hit The Bulls Eye
• Sales Structure
• SMSC Worldwide Sales Model
• SMSC ndash A Differentiated Sales Model
• Slide Number 105
• A Results Oriented Manufacturing Philosophy
• Driving Non-GAAP Gross Margin to 56
• Success in 2010
• Gross Margin Improvement Strategy in 2011
• Summary ndash Driving for 56 Gross Margin
• Slide Number 111
• Slide Number 112
• Last Yearrsquos Model
• Strong Top-line Growth Since Q4FY09 Bottom
• Operational Excellence Gross Margin
• Opex Keep spending in line with model
• Focus on Profitable Growth Approaching 16 in Q2FY11
• 20 Operating Margin Target Model
• Balance Sheet Remains Strong
• Reached Our Inventory Turns Target
• Drive for Profitable Growth
• Slide Number 122
• Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures(in thousands except per share amounts)