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SagePoint Semis 50Q2 2009 Performance Review

An Analysis of Public Communications Semiconductor Companies from a Valuation and M&A Perspective

August 31, 2009

Prepared By:Prepared By:

For more information contact David Michaels at (858) 926‐5950 or [email protected]

Table of Contents

Section

• SagePoint Semis 50 Universe

Page

3

• SagePoint’s Viewpoint – Key Takeaways

• Stock Performance

• Q2 Performance Versus Estimates

4‐5

6‐7

8‐9Q2 Performance Versus Estimates

• Revenue & EPS Growth

• Margin Analysis

8 9

10‐13

14‐18

• Revenue Multiples

• EBITDA Multiples

• P/E Multiples

19‐20

21‐22

23‐24• P/E Multiples

• Balance Sheet Strength

• Detailed Financial Metrics By Company

23 24

25

26‐29

• Introduction to SagePoint

2

30

SagePoint Semis 50 – Q2 2009

SagePoint Communications Semiconductor 50 Universe

Market Segment Market Segment

Diversified

Wireline

Wireless

Media

Diversified

Wireline

Wireless

Media

1 Advanced Micro Devices Inc. X 26 Mellanox Technologies, Ltd. X

g g

Company Company

2 Alcor Micro Corp. X 27 Micron Technology Inc. X3 Ali Corp. 28 NetLogic Microsystems Inc. X4 Analog Devices Inc. X 29 Novatek Microelectronics Corp. X5 Applied Micro Circuits Corp. X 30 NVIDIA Corporation X6 Atheros Communications Inc. X 31 OmniVision Technologies Inc. X7 Broadcom Corp. X 32 Orise Technology Co., Ltd. X8 Cavium Networks, Inc. X 33 Pericom Semiconductor Corp. X9 C‐Media X 34 PixArt Imaging Inc. X

10 Conexant Systems Inc. 35 PMC‐Sierra Inc.11 CSR plc X 36 Qlogic X12 E l X 37 QUALCOMM I X12 Emulex X 37 QUALCOMM Inc. X13 Entropic Communications, Inc. X 38 Ralink Technology, Corp. X14 EZchip Semiconductor Ltd. X 39 Raydium Semiconductor Corporation X15 Gennum 40 Realtek Semiconductor Corp. X16 Himax Technologies, Inc. X 41 RF Micro Devices Inc. X17 Hittite Microwave Corporation X 42 Sigma Designs Inc X17 Hittite Microwave Corporation X 42 Sigma Designs Inc. X18 Infineon Technologies AG X 43 Skyworks Solutions Inc. X19 Integrated Device Technology Inc. X 44 Spreadtrum Communications Inc. X20 ITE Tech., Inc. X 45 STMicroelectronics NV X21 LSI Corporation 46 Sunplus Technology Co. Ltd. 22 Macroblock Inc X 47 Techwell X

SagePoint Semis 50 – Q2 2009 3

22 Macroblock, Inc. X 47 Techwell X23 Marvell Technology Group Ltd. X 48 Texas Instruments Inc. X24 Maxim Integrated Products Inc. X 49 TriQuint Semiconductor, Inc. X25 MediaTek Inc. X 50 Zoran Corp. X

SagePoint’s Viewpoint ‐ Key Takeaways

• Stock price recovery is well underway in the communications semiconductor segment− The SagePoint Semis 50 recovered strongly since beginning of Q2 with a median gain of 50%− The Wireless segment was particularly oversold with a median recovery of 89%

• Expectations have been reset and companies are now delivering on those expectations− 89% of the Semis 50 met or beat Q2 revenue targets while 88% met or beat EPS targets− Most surprises are positive with 63% beating EPS targets by 20% or more

• Revenue contraction remains acute but appears to have peaked− Median revenue contraction was 19% versus Q2’08 but is no longer accelerating− Revenue growth is expected to return with a median growth rate of 7% over the next twelve months

h l f d h d l % h l l d f d− The Wireless segment outperformed with revenues down only 11% while Wireline underperformed with a 25% revenue decline

• EPS contraction remained acute with the Semis 50 posting a median profit reduction of 50% in Q2’09 versus Q2’08 i Q e u Q− The Wireless segment outperformed other segments with median profit reduction of only 19%− EPS growth is expected to return in a big way with a median growth rate of over 100% predicted over the next twelve monthsThi th i b i d i b t tti hi h h bl d t d t t t t

4SagePoint Semis 50 – Q2 2009

− This growth is being driven by cost cutting which has enabled most vendors to return to stronger profitability in Q2

SagePoint’s Viewpoint ‐ Key Takeaways Continued

• Most of the Semis 50 have rapidly adjusted their operating models to return to profitability• Most of the Semis 50 have rapidly adjusted their operating models to return to profitability− Median gross margins appear to be returning to historical levels of 46‐48%− Median R&D spending as a % of revenues was 23% for Q2 which remains above historical levels of 19‐21% as R&D has not been cut as much as revenue has declined

− Median SG&A as a % of revenues is returning to historical levels following deep spending cuts− Median net margins are back near historical levels at 8% but below their peak of 16% in Q2 08− Diversified vendors deliver higher median net margins of 11% versus only 5% for Wireline vendors, many of whom suffer from a lack of scale y

• Valuation multiples remain significantly off 2007 highs based on revenue but P/E multiples are much closer to historical levels− Median LTM revenue multiple of 1.8x for Q2 remains about 50% off the 2007 peak − Large, diversified vendors are trading at a 50% premium to other segments based on revenue but only a 14% premium based on LTM EPS

− Median P/E multiples are returning to the mid 20s but are applied to much lower earnings

S P i M&A i i i k i H2 2009 d 2010 k i i• SagePoint expects M&A activity to pick up in H2 2009 and 2010 as stock prices continue to recover, revenues and earnings stabilize and buyers leverage their strong cash positions− Balance sheet strength remains very high and several active buyers have cash war chests− Consolidation will continue across all segments because scale drives profitability and


g p ycommunications equipment OEMs would prefer to rely on just a few strategic vendors

− The Media and Wireline market segments remain fragmented with most of the specialty vendors’ market caps below $500 million which should be a catalyst for further consolidation

SagePoint Semis 50 Index Performance

• After leading the market downturn the Semis 50 is now returning• After leading the market downturn the Semis 50 is now returning− The Semis 50 is up 41% since the beginning of Q2, outperforming the SagePoint Comm Index as well as the Nasdaq and Dow

− The Semis 50 has still underperformed since beginning of Q3’06 but is closing the gap

160.0%

Stock Performance

120.0%

140.0%

80.0%

100.0%

40.0%

60.0%


Semiconductor 50 SagePoint Comm Index NASDAQ DJIA

Stock Performance Since Beginning of Q2

• The SagePoint Semis 50 rebounded strongly from March lows with a median gain of 50%• The SagePoint Semis 50 rebounded strongly from March lows with a median gain of 50%• Wireless led the rally with median gain of 88.5% while Media underperformed slightly• Big winners included Infineon, Conexant, Entropic, RF Micro and TriQuint which were up

200% or more after being pummeled in 2008• Macroblock, EZchip and Ralink were the only companies down while Hittite Micro and

Sigma Designs also missed out on much of the rally

Stock Performance ‐ Since 3/31/09

354.5320.0 312.2

253.4250%

300%

350%

400%88.5

70%

80%

90%

100%

o e o a e i e / /

196.4

49.513.6 10 350%

100%

150%

200%49.5 51.8 50.1

44.6

30%

40%

50%

60%

13.6 10.3

(2.3) (4.5) (11.8)(50)%

0%

0%

10%

20%

Since 3/31/09

7

Source: SagePoint Advisors & Capital IQ Source: SagePoint Advisors & Capital IQ


Semi Top 50 Diversified Wireline Wireless Media

Q2 Performance Versus Analyst Estimates ‐ Revenue

• The vast majority (89%) of the Semis 50 met or beat revenue estimates• The vast majority (89%) of the Semis 50 met or beat revenue estimates• Spreadtrum beat estimates by more than 30% while Zoran, TriQuint and RFMD beat by

over 10%• Conexant agreed to sell off its Broadband Access business during Q2 and no longer reports

that revenue. Revenue from continuing operations actually exceeded estimates.

Biggest Revenue Estimate Beats/MissesRevenue Estimates

31.7

16.3 16.213.4

9.420%

30%

40%

igge e e ue E i a e ea / i e

43%

e e ue E i a e

9.42.8

(1.8) (3.6)(6.4) (6.5)

(20)%

(10)%

0%

10%34%

(35.7)(40)%

(30)%

3%9% 9%3%Beat 20%+ Beat 10 20% Beat 2 10% Hit +/ 2%



Beat 20%+ Beat 10‐20% Beat 2‐10% Hit +/‐2%

Miss 2‐10% Miss 10‐20% Miss 20%+

Q2 Performance Versus Analyst Estimates ‐ EPS

• 88% of the Semis 50 beat or met estimates with 63% beating by more than 20%• 88% of the Semis 50 beat or met estimates with 63% beating by more than 20%• NVIDIA showed strong profits (excluding a $120M charge off) and raised guidance for Q3• AMCC, Emulex, LSI and TriQuint all beat EPS estimates by more than 100%• Gennum, Spreadtrum, AMD and Sigma Designs were the only companies to underperform p g g y p p

expectations− Gennum posted weak broadcast video equipment revenues and announced a 10% layoff

Biggest EPS Estimate Beats/MissesEPS Estimates537.5

300%

400%

500%

600%

Biggest EPS Estimate Beats/Misses

63% 11%

E E i a e

171.4 157.1 150.0 135.3

39.41.2

(4.8) (17.0)(77 9)

(100)%

0%

100%

200%63% 11%

11%(77.9)

(200.0)(300)%

(200)%

3%3%3%6%

Beat 20%+ Beat 10 20% Beat 2 10% Hit +/ 2%


Source: SagePoint Advisors & Capital IQ Source: SagePoint Advisors & Capital IQNote: Excludes companies projected to have a net margin below 1%

Beat 20%+ Beat 10‐20% Beat 2‐10% Hit +/‐2%

Miss 2‐10% Miss 10‐20% Miss 20%+

Operating Metrics – Revenue Growth

• Median revenue contraction reached 19 3% in Q2 a poignant reversal from its recent peak• Median revenue contraction reached 19.3% in Q2, a poignant reversal from its recent peak of 20% growth in Q1 2008

• However, the good news is that it appears we have hit bottom and revenues are stabilizing• Only ITE, TriQuint, MediaTek and Cavium achieved Y/Y revenue growth in Q2’09• Spreadtrum, Gennum, Pericom, PixArt and CSR all experienced revenue declines of more

than 40%

MRQ / PYQ Revenue Growth Highest/Lowest Revenue Growth

22.2

12.316.9

12.314.9

20.9 20.6 18.8

12.520%

30%

Q / YQ e e ue o

36.2 33.2

16.75.8

20%

40%

60%

ig e / o e e e ue o

(10)%

0%

10%(0.2)

(19.3)

(40.1) (40.7) (40.8) (41.3)(40)%

(20)%

0%

(16.8)

(27.1)

(19.3)

(30)%

(20)%(59.7)

(80)%

(60)%



Operating Metrics – Revenue Growth by Segment

• Wireline Semis experienced median revenue contraction of around 25%• Wireline Semis experienced median revenue contraction of around 25% • Wireless outperformed other segments considerably with revenue contraction of only 11%• Revenues are expected to stabilize over the next 12 months posting median growth of 7%• Media is expected to post double digit revenue growth while Diversified’s growth will be p p g g g

more modest

MRQ / PYQ Revenue Growth NTM/LTM Revenue Growth Projection

(10)%

(5)%

0%

Q / YQ e e ue o

10.3

8%

10%

12%

/ e e ue o oje io

(19.3) (19.0)

(11.2)

(20 2)(20)%

(15)%

(10)% 7.0

3.3

5.96.8

4%

6%

8%

(24.8)

(20.2)

(30)%

(25)%

Q2ʹ09

0%

2%

NTM/LTM Revenue Growth Projection



Semi Top 50 Diversified Wireline Wireless Media Semi Top 50 Diversified Wireline Wireless Media

Operating Metrics – EPS Growth

• Median EPS for the Semis Top 50 has contracted over 45% in each of the last three quarters• Median EPS for the Semis Top 50 has contracted over 45% in each of the last three quarters after posting double digit EPS growth in most of 2006 and 2007

• Only about 15% of Semis companies posted EPS growth for Q2’09 over Q2’08 with Realtek, RFMD, ALI Corp., Orise and MediaTek all bucking the trend− Realtek had a large patent infringement settlement in the PYQ which resulted in negative EPS

• Spreadtrum, EZchip, Zoran, CSR and STMicro all experienced EPS declines of over 200%

MRQ / PYQ EPS Growth High/Low EPS Growth

13.7 14.29.2 7.5

17.3

34.7

8.4

27.5

9.310%

20%

30%

40%

Q / YQ E o

486.0

133.3 115.967.1 58 1

200%

400%

600%

ig / o E o

(30)%

(20)%

(10)%

0%67.1 58.1

(50.0)

(255.6)(258.0)(366.7)

(400)%

(200)%

0%

(55.8)(47.4)(50.0)

(70)%

(60)%

(50)%

(40)%(366.7)

(426.3)

(583.3)

(800)%

(600)%


Source: SagePoint Advisors & Capital IQNote: Excludes companies with a net margin below 1% in the PYQ


Operating Metrics – EPS Growth by Segment

• Wireless median EPS contracted only 19% compared to 40‐70% for the other segments• Wireless median EPS contracted only 19% compared to 40‐70% for the other segments• The Semis 50 is expected to deliver median EPS growth of over 100% in the next 12 months

with Wireless showing the strongest growth at 117.8%− This EPS Growth is driven primarily by cost cutting rather than revenue growth

MRQ / PYQ EPS Growth NTM / LTM EPS Growth Projection

(18.6)(20)%

(10)%

0%

Q / YQ E o

104.7

85 7

104.8

117.8110.7

100%

120%

140%

/ E o oje io

(50.0)

(43.2)

( )%

(50)%

(40)%

(30)%85.7

40%

60%

80%

(70.6)

(56.4)

(80)%

(70)%

(60)%

Q2ʹ09

0%

20%

40%

NTM/LTM EPS Growth Projection





Operating Metrics – Gross Margins

• Median gross margin appears to be returning to the upper 40s after dipping below 45% in• Median gross margin appears to be returning to the upper 40s after dipping below 45% in Q4’08 and Q1’09

• The Media and Wireless segments tend to face greater margin pressure because they are targeting high volume, consumer‐driven markets

Quarterly Gross Margin MRQ Gross Margin

48.2 47.1 47.4 47.1 47.4 47.7 46.6 45.2 45.4 43.9 44.8 45.550%

60%

Qua e y o a gi

45.547.9

50.8

40.236 940%

50%

60%

Q o a gi

20%

30%

40% 36.9

20%

30%

40%

0%

10%

0%

10%

Q2ʹ09




Operating Metrics – R&D as a % of Revenues

• Median R&D as a percent of revenues rose sharply as revenues plummeted in Q4’08 and• Median R&D as a percent of revenues rose sharply as revenues plummeted in Q4 08 and remain above historical levels as revenues are just beginning to stabilize

• Wireline shows the highest median R&D as a percent of revenues, investing 10% more than the Semi 50 median

R&D % Spend R&D % Spend

19.9 19 4 18 9 19 5 19 2 19 621.0 21.4 20.7

25.624.3

22.625%

30%

% pe

25.8

34.0

30%

35%

40%

% pe

19.4 18.9 19.5 19.2 19.6

10%

15%

20% 22.619.7

18.3

%

15%

20%

25%

0%

5%

0%

5%

10%

Q2ʹ09




Operating Metrics – SG&A as a % of Revenues

• Median SG&A as a percent of revenues rose sharply as revenues plummeted in Q4’08 but• Median SG&A as a percent of revenues rose sharply as revenues plummeted in Q4 08 but agressive cost cutting is rapidly bringing SG&A in line with historical levels

• Wireline shows the highest median SG&A as a percent of revenues, with about 10% higher costs than other segments due primarily to the fact that most wireline vendors lack scale

SG&A % Spend SG&A % Spend

13.912.6 13.0 13.0 12.5 12.4

14.0 13.8 13.4

16.0 16.5

14.114%

16%

18%

A % pe

22.7

20%

25%

A % pe

6%

8%

10%

12% 14.112.8

13.7

11.0

10%

15%

0%

2%

4%

0%

5%

Q2ʹ09




Operating Metrics – EBITDA Margins

• Median EBITDAmargins remain well off their historical range of 17‐20% as companies• Median EBITDA margins remain well off their historical range of 17‐20% as companies continue to struggle to bring expenses in line with lower revenues

• The good news is that EBITDA has recovered in Q2 and appears to be heading back in the right direction

• Large Diversified vendors are outperforming other segments proving that scale is king• Many Wireline vendors are operating with little scale and EBITDA suffers accordingly

Quarterly EBITDA Margin MRQ EBITDA Margin

16.417.9

16.918.1

19.520.6

17.5 16.7 17.320%

25%

Qua e y E I A a gi

18.3

14%

16%

18%

20%

Q E I A a gi

16.4

9.1

6.9

10.610%

15% 10.6 11.0 11.6

6%

8%

10%

12%

6 9

0%

5%3.1

0%

2%

4%

Q2ʹ09




Operating Metrics – Net Margins

• Median net margins rose significantly in Q2 though still below recent highs of 15%• Median net margins rose significantly in Q2 though still below recent highs of 15%• Diversified vendors outperformed, posting median net margins of 10.6%• The Wireline segment continued to struggle from lack of scale

Quarterly Net Margin MRQ Net Margin

13.5

15.8 15.6

14%

16%

18%

Qua e y e a gi

8.3

10.6

8.9

8%

10%

12%

Q e a gi

8.47.7

8.7 9.2 9.210.8

7.2

4 4

8.3

6%

8%

10%

12%

5.2

7.1

4%

6%

8%

4.4

0%

2%

4%

0%

2%

Q2ʹ09




Valuation Metrics – LTM Revenue Multiples

• Median revenue multiples have doubled from their Q4 lows but remain 50% off their highs• Median revenue multiples have doubled from their Q4 lows but remain 50% off their highs− Lower valuations make it difficult for buyers to stretch on acquisition valuations as evidenced by Broadcom abandoning its bid for Emulex

• Cavium, NetLogic, PixArt, EZchip and Qualcomm trade at premium multiples due to stronger re enue growth and/or higher marginsstronger revenue growth and/or higher margins

• Several struggling vendors are trading at less than 1x revenues

LTM Enterprise Value / Revenue High/Low LTM EV/Rev Multiples

2.8 2.7

3.3

3.73.5

2.8

2 5

3.0x

3.5x

4.0x

E e p i e a ue / e e ue

8.7

6.7 6.4 6.4 6.17.0x8.0x9.0x10.0x

ig / o E / e u ip e

2.0 2.0

1.20.9

1.1

1.7 1.8

1.0x

1.5x

2.0x

2.5x

1.82.0x3.0x4.0x5.0x6.0x

0.0x

0.5x 0.9 0.8 0.8 0.6 0.6

0.0x1.0x2.0x



Semi Top 50

Valuation Metrics – Revenue Multiples By Segment

• Large Diversified vendors trade at a 50% premium to the Semis 50 median multiple• Large Diversified vendors trade at a 50% premium to the Semis 50 median multiple• Wireless vendors are also trading at a slight premium• NTM revenue multiples are mostly in line with LTM as analysts expect only single digit

revenue growth for most of the Semis 50− The higher NTM median multiple for the wireless segment is due to low valued companies not having analyst coverage and therefore no NTM data. Revenues are expected to increase for nearly all Wireless companies with projections.

LTM Enterprise Value / Revenue NTM Enterprise Value / Revenue

2.7

1 92 0

2.5 x

3.0 x


1 9

2.7

2.2

2 0

2.5 x

3.0 x


1.81.6

1.9

1.5

1.0 x

1.5 x

2.0 x 1.9

1.61.4

1.0 x

1.5 x

2.0 x

0.0 x

0.5 x

Current

0.0 x

0.5 x

Current




Valuation Metrics – LTM EBITDA Multiples

• Median EBITDAmultiples have more than doubled from their Q4 lows and are returning• Median EBITDA multiples have more than doubled from their Q4 lows and are returning to historical levels− These multiples have contracted less than revenue multiples because profits are getting squeezed

• Of the companies with EBITDA margins of 7.5% or higher, only NetLogic and EZChipt d t EBITDA lti l b 30 b th f hi h t d t idltrade at EBITDA multiples above 30x, both of which are expected to grow rapidly

• Several vendors with low growth expectations are trading at 6‐8 times EBITDA

LTM Enterprise Value / EBITDA High/Low LTM EV/EBITDA Multiples

13.1 13.114.0

15.514.7

13.0

10 211.1

13.3

12.0x

14.0x

16.0x

18.0x

E e p i e a ue / E I A

87.4

57 970.0x80.0x90.0x100.0x

ig / o E /E I A u ip e

9.8 10.2

6.95.8

7.4

4.0x

6.0x

8.0x

10.0x57.9

29.3 26.521.9

13 320.0x30.0x40.0x50.0x60.0x

0.0x

2.0x13.3

8.1 7.8 7.2 6.6 5.9

0.0x10.0x20.0x


Source: SagePoint Advisors & Capital IQNote: Excludes companies with an LTM EBITDA margin below 7.5%


Semi Top 50

Valuation Metrics – EBITDA Multiples By Segment

• All of the semis segments are trading at median LTM EBITDAmultiples of 12‐13 5x with• All of the semis segments are trading at median LTM EBITDA multiples of 12‐13.5x with Wireline and Wireless outperforming slightly

• On a forward‐looking basis, Media trades at a discount to other semis companies, perhaps not getting full credit for higher projected EBITDA growth

• The high NTM multiples for the Diversified segment are partially due to a few companies that trade at high NTM multiples but are excluded from LTM due to margins below 7.5%

LTM Enterprise Value / EBITDA NTM Enterprise Value / EBITDA

13.312.1

13.4 13.412.8

12.0 x

14.0 x

16.0 x


11.1

12.411.6

10.6

10.0 x

12.0 x

14.0 x


6.0 x

8.0 x

10.0 x 8.2

4.0 x

6.0 x

8.0 x

0.0 x

2.0 x

4.0 x

Current

0.0 x

2.0 x

4.0 x

Current


Source: SagePoint Advisors & Capital IQNote: Excludes companies with a projected NTM EBITDA margin below 7.5%



Valuation Metrics – LTM P/E Multiples

• Median P/E multiples have recovered from their H2‘08 lows returning to historical levels• Median P/E multiples have recovered from their H2 08 lows, returning to historical levels− However, the multiples are being applied to much lower profits

• Of companies with a net margin of 2.5% or greater, only EZchip, PMC‐Sierra, Techwell and Ali trade at P/Es greater than 50, all of which are expected to generate strong earnings

th th t 12 thgrowth over the next 12 months• Vendors that are not expected to grow rapidly trade at P/Es below 20

LTM P/E Top/Bottom LTM P/E Multiples

27.325.0

28.932.0

23.8

20 0

24.5 24.525.0x

30.0x

35.0x

/E

109.6

89.6

80.0x

100.0x

120.0x

op/ o o /E u ip e

17.7 17.5

13.5

9.9

15.0

20.0

10.0x

15.0x

20.0x 66.058.2

46.5

24.519.9 19.8 17 0 15 1

40.0x

60.0x

0.0x

5.0x17.0 15.1 11.9

0.0x

20.0x


Source: SagePoint Advisors & Capital IQNote: Excludes companies with an LTM net margin below 2.5%


Semi Top 50

Valuation Metrics – P/E Multiples By Segment

• Diversified vendors are trading at a premium median LTM P/E multiple while Wireless• Diversified vendors are trading at a premium median LTM P/E multiple while Wireless vendors trade at a slight discount

• On a forward looking basis, Wireline vendors may appear to be trading at a premium but the reality is that several of those players are expected to return to profitability and their P/E hi h d t l ti l ll EPSP/Es are high due to relatively small EPS

LTM P/E NTM P/E

24.5

28.0

24.6

21.423.5

20 0

25.0 x

30.0 x

/E

24.022.7

31.0

22 025.0 x

30.0 x

35.0 x

/E

10.0 x

15.0 x

20.0 x 20.622.0

10.0 x

15.0 x

20.0 x

0.0 x

5.0 x

Current

0.0 x

5.0 x

10.0 x

Current


Source: SagePoint Advisors & Capital IQNote: Excludes companies with a projected NTM net margin below 2.5%



Balance Sheet Strength – Net Cash Position

• Median cash position relative to market cap remains above historical averages• Median cash position relative to market cap remains above historical averages • These healthy cash levels suggest that many of the Semis Top 50 are in a position to make

acquisitions as the markets recover and the economy stabilizes• Qualcomm, MediaTek, TI, Broadcom and NVIDIA have large war chests at their disposal

while AMD, Micron and ST are already quite leveraged

Net Cash / Market Value High/Low Net Cash

20.1

25.2 24.4

19.4%

25%

30%

e a / a e a ue

9,709

$6,000

$8,000

$10,000

$12,000

ig / o e a

11.6 12.1 11.0 10.0 10.012.0

14.7 15.7

19.417.8

10%

15%

20%2,618 2,557 2,207

1,441145

(250) (299)(1 536)

$(2,000)

$0

$2,000

$4,000

$6,000

0%

5%

(1,536)

(3,948)(4,192)$(6,000)

$(4,000)

$( , )



Financial Metrics

($ in millions except per share data)($ in millions, except per share data)Sto ck P rice M arket Enterprise % C hange Ent . Value/ R ev. Ent . Value/ EB IT D A P rice/ EP S Estimate Surprise N et C ash / N et D ebt / SG&A / R &D /

C o mpany N ame 8/ 31/ 09 C ap Value C ash D ebt 3/ 31/ 09 LT M N T M LT M N T M LT M N T M R evenue EP S M kt C ap EB IT D A R evenue R evenue

Semiconductor Top 50Semis 50 M ean 4,390 4,039 749 398 73.0% 2.5 x 2 .1 x 17.4 x 11.5 x 33.1 x 25.4 x 3.2 % 53.7 % 11.3 % (5.1) x 16.9 % 25.3 %Semis 50 M edian 883 768 223 2 49.5% 1.8 x 1.9 x 13.3 x 11.1 x 24.5 x 23.7 x 2.8 % 36.4 % 17.8 % (3.2) x 14.1 % 22.6 %

D iversif iedAdvanced Micro Devices Inc. 4.36 2,911 7,103 2,514 6,706 43.0% 1.3 x 1.4 x NM 15.5 x NM NM 4.9 % (17.0)% (144.0)% 19.9 x 20.9 % 35.9 %Analog Devices Inc. 28.25 8,236 6,887 1,724 375 46.6% 3.3 x 3.2 x 13.3 x 12.8 x 28.9 x 23.6 x 2.6 % 11.1 % 16.4 % (2.6) x 16.2 % 21.9 %g , , , ( )Broadcom Corp. 28.45 14,108 11,901 2,207 0 42.4% 2.8 x 2.6 x NM 15.4 x NM 22.7 x 8.9 % 72.7 % 15.6 % (12.0) x 12.7 % 36.0 %Infineon Technologies AG 5.26 3,940 4,190 1,262 1,511 354.5% 0.8 x 0.9 x 10.5 x NA NM NM 0.7 % 31.8 % (6.3)% 0.6 x 12.8 % 14.8 %Marvell Technology Group Ltd. 15.25 9,442 8,166 1,279 3 66.5% 3.3 x 2.9 x 29.3 x 12.0 x NM 17.7 x 3.4 % 24.1 % 13.5 % (4.6) x 9.5 % 30.1 %Maxim Integrated Products Inc. 18.78 5,748 4,835 913 0 42.2% 2.9 x 2.7 x 13.4 x 10.1 x NM 29.5 x 6.6 % 80.3 % 15.9 % (2.5) x 12.8 % 29.8 %MediaTek Inc. 14.52 15,504 12,886 2,619 1 54.7% 4.2 x NA 14.1 x NA 20.1 x NA NA NA 16.9 % (2.9) x 5.6 % 20.5 %Realtek Semiconductor Corp. 2.11 835 553 284 1 62.5% 1.1 x NA 9.7 x NA 27.0 x NA NA NA 33.8 % (4.9) x 9.6 % 19.6 %STMicroelectronics NV 8.66 7,603 9,139 2,444 3,980 71.9% 1.1 x 1.0 x 8.7 x NM NM NM 5.4 % 7.0 % (20.2)% 1.5 x 14.4 % 30.6 %Texas Instruments Inc. 24.59 31,018 28,461 2,557 0 48.9% 2.7 x 2.7 x 10.9 x 8.9 x 33.5 x 18.0 x 1.7 % 6.8 % 8.2 % (1.0) x 13.3 % 15.0 %

M ean 9,935 9,412 1,780 1,258 83.3% 2.4 x 2 .2 x 13.7 x 12.5 x 27.4 x 22.3 x 4.3 % 27.1 % (5.0)% (0.9) x 12.8 % 25.4 %M edian 7,920 7,634 1,966 2 51.8% 2.7 x 2 .7 x 12.1 x 12.4 x 28.0 x 22.7 x 4.1 % 17.6 % 14.6 % (2.6) x 12.8 % 25.8 %

($ in millions, except per share data)R evenue EB IT D A EP S M R Q/ P YQ Gro wth N T M / LT M Gro wth LQ M argin

C o mpany N ame M R Q LT M N T M M R Q LT M N T M M R Q LT M N T M R evenue EB IT D A EP S R evenue EB IT D A EP S Gro ss EB IT D A N et

Semiconductor Top 50Semis 50 M ean 363 1,505 2,105 69 267 478 0.05 (0.58) 0 .50 (17.6)% (54.8)% (68.6)% 11.4 % 78.6 % 189.1 % 45.3 % 9.7 % 3.9 %Semis 50 M edian 109 438 589 8 35 128 0.04 0.05 0.38 (19.3)% (53.9)% (50.0)% 7.0 % 48.0 % 104.7 % 45.5 % 10.6 % 8.3 %

D iversif iedAdvanced Micro Devices Inc 1 184 5 320 0 5 050 6 34 211 0 457 6 (0 62) (3 39) (1 55) (13 1)% NM (3 3)% (5 1)% NM 54 1 % 37 2 % 2 9 % (34 9)%Advanced Micro Devices Inc. 1,184 5,320.0 5,050.6 34 211.0 457.6 (0.62) (3.39) (1.55) (13.1)% NM (3.3)% (5.1)% NM 54.1 % 37.2 % 2.9 % (34.9)%Analog Devices Inc. 492 2,104.0 2,167.7 111 519.6 537.6 0.22 0.98 1.20 (25.3)% (44.5)% (50.0)% 3.0 % 3.5 % 22.5 % 54.1 % 22.5 % 13.1 %Broadcom Corp. 1,040 4,318.4 4,627.7 32 184.5 771.7 0.24 (0.15) 1.25 (13.4)% (77.8)% (48.9)% 7.2 % NM 956.9 % 50.1 % 3.1 % 11.7 %Inf ineon Technologies AG 1,185 5,011.6 4,815.4 203 398.1 NA (0.04) (2.10) 0.05 (26.8)% (29.8)% NM (3.9)% NA 102.2 % 27.8 % 17.2 % (2.7)%Marvell Technology Group Ltd. 641 2,466.0 2,850.9 124 278.8 680.8 0.18 (0.08) 0.86 (24.0)% (12.8)% (25.0)% 15.6 % 144.2 % 1,228.9 % 55.0 % 19.4 % 18.2 %Maxim Integrated Products Inc. 394 1,646.0 1,765.3 87 360.6 479.8 0.11 0.03 0.64 (21.3)% (33.1)% (60.7)% 7.2 % 33.0 % NM 55.0 % 22.0 % 8.6 %MediaTek Inc. 858 3,072.3 NA 301 911.1 NA 0.25 0.72 NA 16.7 % 44.5 % 58.1 % NA NA NA 59.1 % 35.1 % 32.5 %Realtek Semiconductor Corp. 152 505.7 NA 22 57.0 NA 0.03 0.08 NA (1.6)% 145.9 % 486.0 % NA NA NA 40.4 % 14.5 % 9.5 %STMicroelectronics NV 1,993 8,626.0 8,941.9 3 1,056.0 352.0 (0.28) (1.42) (0.24) (16.6)% (99.4)% (255.6)% 3.7 % (66.7)% 83.4 % 26.1 % 0.2 % (12.3)%Texas Instruments Inc. 2,457 10,420.0 10,399.1 661 2,620.0 3,191.7 0.25 0.73 1.36 (26.7)% (39.2)% (43.2)% (0.2)% 21.8 % 85.7 % 45.7 % 26.9 % 12.9 %


M ean 1,040 4,349 5,077 158 660 924 0.03 (0.46) 0 .45 (15.2)% (16.2)% 6.4 % 3.4 % 27.2 % 361.9 % 45.1 % 16.4 % 5.7 %M edian 949 3,695 4,722 99 379 538 0.15 (0.02) 0 .75 (19.0)% (33.1)% (43.2)% 3.3 % 21.8 % 85.7 % 47.9 % 18.3 % 10.6 %

Financial Metrics

($ in millions except per share data)($ in millions, except per share data)Sto ck P rice M arket Enterprise % C hange Ent . Value/ R ev. Ent . Value/ EB IT D A P rice/ EP S Estimate Surprise N et C ash / N et D ebt / SG&A / R &D /


WirelineAlcor Micro Corp. 1.61 119 82 37 0 21.0% 1.4 x NA NA NA 24.5 x NA NA NA 31.0 % NA 8.0 % 18.8 %Applied Micro Circuits Corp. 7.94 526 325 201 0 63.4% 1.6 x 1.5 x NM NM NM 42.7 x 0.8 % 171.4 % 38.2 % NA 23.3 % 43.1 %Cavium Netw orks, Inc. 20.31 842 779 67 3 76.0% 8.7 x NA NM NA NM NA 3.5 % 9.1 % 7.5 % (72.0) x 28.6 % 44.2 %Emulex Corp. 9.69 784 482 302 0 92.6% 1.3 x 1.4 x 8.1 x 9.2 x NM 26.8 x 2.0 % 157.1 % 38.6 % (5.1) x 24.6 % 38.6 %Entropic Communications, Inc. 3.05 215 183 32 0 312.2% 1.6 x 1.4 x NM NM NM 31.1 x 2.0 % 50.0 % 15.0 % NA 23.4 % 38.6 %EZchip Semiconductor Ltd. 11.85 277 225 55 3 (4.5)% 6.4 x 5.0 x 57.9 x 17.4 x 109.6 x 40.2 x (0.3)% 40.0 % 18.9 % (13.5) x 30.4 % 48.5 %Gennum Corporation 4.04 143 107 37 0 22.4% 1.0 x NA 5.9 x 7.6 x 19.9 x NM (6.5)% (200.0)% 25.6 % (2.0) x 38.2 % 34.0 %Integrated Device Technology Inc. 6.83 1,131 825 306 0 50.1% 1.4 x 1.6 x 14.0 x 5.7 x NM 44.9 x 1.0 % 100.0 % 27.1 % (5.2) x 21.8 % 31.3 %ITE Tech., Inc. 1.92 386 304 83 0 31.3% 3.4 x NA NA NA 24.6 x NA NA NA 21.4 % NA 11.1 % 17.4 %LSI Corporation 5.21 3,396 2,873 874 350 71.4% 1.2 x 1.3 x NM 15.5 x NM 34.5 x 2.8 % 150.0 % 15.4 % (3.4) x 15.7 % 28.6 %Mellanox Technologies, Ltd. 13.65 437 247 191 1 63.9% 2.4 x 2.0 x 13.4 x 12.5 x 26.4 x 25.5 x 3.6 % 118.8 % 43.4 % (10.3) x 23.7 % 40.0 %NetLogic Microsystems Inc. 43.91 974 890 88 5 59.8% 6.7 x 3.7 x 87.4 x NM NM 31.0 x 1.3 % 39.4 % 8.6 % (8.2) x 22.7 % 43.5 %Pericom Semiconductor Corp. 8.61 219 123 99 3 17.8% 0.9 x 1.0 x 6.6 x NA 21.3 x 32.4 x NA NA 43.9 % (5.2) x 21.1 % 16.4 %PMC-Sierra Inc. 9.08 2,048 1,868 237 57 42.5% 3.8 x 3.5 x 20.5 x 11.1 x 89.6 x 17.6 x 3.1 % 31.3 % 8.8 % (2.0) x 18.0 % 29.5 %QLogic Corp. 15.81 1,867 1,541 326 0 42.2% 2.6 x 3.0 x 8.3 x 12.1 x 21.5 x 19.7 x (1.8)% 14.3 % 17.4 % (1.8) x 22.6 % 27.8 %

M 891 724 196 28 64 1% 3 0 2 3 24 7 11 4 42 2 31 5 1 0 % 56 8 % 24 0 % (11 7) 22 2 % 33 4 %M ean 891 724 196 28 64.1% 3.0 x 2 .3 x 24.7 x 11.4 x 42.2 x 31.5 x 1.0 % 56.8 % 24.0 % (11.7) x 22.2 % 33.4 %M edian 526 325 99 0 50.1% 1.6 x 1.6 x 13.4 x 11.6 x 24.6 x 31.1 x 1.6 % 45.0 % 21.4 % (5.2) x 22.7 % 34.0 %



WirelineAlcor Micro Corp. 14 59.8 NA NA NA NA 0.02 0.07 NA (19.9)% NA (37.3)% NA NA NA 36.7 % NA 9.2 %Applied Micro Circuits Corp. 45 198.1 209.7 (2) (2.8) (28.0) 0.01 (3.96) 0.19 (26.4)% (137.5)% (91.7)% 5.9 % NM 104.7 % 50.8 % (4.3)% 1.5 %Cavium Netw orks, Inc. 23 89.9 NA (3) 0.9 NA (0.02) (0.37) NA 5.8 % (160.3)% (122.2)% NA NM NA 46.8 % (11.3)% (3.6)%Emulex Corp. 79 378.2 342.3 9 59.8 52.4 0.09 0.09 0.36 (29.7)% (58.5)% (59.1)% (9.5)% (12.3)% 292.9 % 61.8 % 11.5 % 9.2 %Entropic Communications, Inc. 26 111.5 132.4 (2) (15.7) 8.7 (0.01) (2.02) 0.10 (39.0)% (6.7)% (150.0)% 18.8 % 155.5 % 104.8 % 49.5 % (9.2)% (2.7)%p , ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( )EZchip Semiconductor Ltd. 7 35.1 44.9 (0) 3.9 12.9 (0.03) 0.11 0.30 (16.7)% NM (426.3)% 27.7 % 232.8 % 172.7 % 72.1 % (3.8)% (10.5)%Gennum Corporation 19 102.6 NA 0 18.0 14.0 (0.03) 0.20 0.16 (41.3)% (95.9)% (117.9)% NA (22.4)% (19.9)% 70.0 % 2.1 % (5.4)%Integrated Device Technology Inc. 116 591.0 528.5 (1) 58.7 145.8 0.02 (6.41) 0.15 (38.4)% (103.1)% (91.3)% (10.6)% 148.3 % 102.4 % 42.4 % (0.9)% 2.9 %ITE Tech., Inc. 30 89.9 NA NA NA NA 0.02 0.08 NA 36.2 % NA (43.4)% NA NA NA 40.6 % NA 11.0 %LSI Corporation 521 2,327.2 2,240.8 16 153.9 185.3 0.01 (1.17) 0.15 (24.8)% (79.6)% (90.0)% (3.7)% 20.4 % 112.9 % 34.7 % 3.1 % 1.2 %Mellanox Technologies, Ltd. 25 102.2 122.5 4 18.5 19.8 0.07 0.52 0.54 (10.3)% (49.7)% (69.6)% 19.8 % 6.9 % 3.7 % 74.1 % 14.6 % 9.2 %NetLogic Microsystems Inc. 32 132.1 242.5 1 10.2 16.6 0.35 (0.27) 1.42 (11.1)% (78.8)% (12.5)% 83.7 % 63.0 % 618.5 % 56.9 % 4.0 % 23.7 %Pericom Semiconductor Corp. 24 142.4 129.3 2 18.6 NA 0.05 0.41 0.27 (40.8)% (76.5)% (70.6)% (9.2)% NA (34.3)% 35.5 % 6.5 % 5.2 %PMC-Sierra Inc. 123 486.0 536.2 30 91.0 168.5 0.13 0.10 0.52 (11.9)% (6.0)% 30.0 % 10.3 % 85.1 % 408.4 % 68.0 % 24.0 % 24.0 %QL i C 123 588 2 519 2 27 185 8 127 9 0 20 0 74 0 80 (27 1)% (55 2)% (35 5)% (11 7)% (31 2)% 9 2 % 63 8 % 21 7 % 19 5 %


QLogic Corp. 123 588.2 519.2 27 185.8 127.9 0.20 0.74 0.80 (27.1)% (55.2)% (35.5)% (11.7)% (31.2)% 9.2 % 63.8 % 21.7 % 19.5 %

M ean 81 362 459 6 46 66 0.06 (0.79) 0 .41 (19.7)% (75.6)% (92.5)% 11.0 % 64.6 % 156.3 % 53.6 % 4.5 % 6.3 %M edian 30 132 243 1 18 20 0.02 0.08 0.28 (24.8)% (77.7)% (70.6)% 5.9 % 41.7 % 104.8 % 50.8 % 3.1 % 5.2 %

Financial Metrics

($ in millions, except per share data)Sto ck P rice M arket Enterprise % C hange Ent . Value/ R ev. Ent . Value/ EB IT D A P rice/ EP S Estimate Surprise N et C ash / N et D ebt / SG&A / R &D /


WirelessAtheros Communications Inc. 27.64 1,706 1,366 341 0 88.5% 3.1 x 2.6 x NM 19.1 x NM 24.5 x 8.2 % 46.0 % 20.0 % (19.6) x 18.9 % 27.2 %CSR plc 7.70 1,397 1,001 396 1 118.7% 1.9 x NA NM NA NM NA NA NA 28.3 % (10.8) x 16.8 % 32.0 %Hittite Microw ave Corporation 34.42 1,035 837 198 0 10.3% 4.9 x 4.9 x 10.5 x 11.1 x 21.6 x 22.9 x 1.5 % 1.2 % 19.1 % (2.5) x 16.4 % 13.2 %QUALCOMM Inc. 46.42 77,164 67,455 9,880 171 19.3% 6.1 x 5.9 x 15.7 x 13.6 x 46.5 x 20.6 x 0.3 % 4.9 % 12.6 % (2.3) x 13.7 % 22.4 %Ralink Technology, Corp. 2.44 296 160 136 0 (2.3)% 1.2 x NA 9.0 x NA 19.8 x NA NA NA 45.8 % (7.6) x 8.6 % 19.7 %RF Micro Devices Inc. 4.70 1,255 1,467 294 505 253.4% 1.7 x 1.6 x NM 7.6 x NM 14.2 x 13.4 % NM (16.8)% 3.3 x 11.7 % 16.8 %RF Micro Devices Inc. 4.70 1,255 1,467 294 505 253.4% 1.7 x 1.6 x NM 7.6 x NM 14.2 x 13.4 % NM (16.8)% 3.3 x 11.7 % 16.8 %Skyw orks Solutions Inc. 11.63 1,991 1,835 303 147 44.3% 2.3 x 2.2 x 13.4 x 10.2 x 21.2 x NA 4.3 % 11.9 % 7.8 % (1.1) x 12.7 % 15.5 %Spreadtrum Communications Inc. 3.12 138 86 96 45 108.0% 1.6 x 0.7 x NM NM NM NA 31.7 % (77.9)% 37.2 % NA 59.3 % 49.9 %TriQuint Semiconductor, Inc. 7.32 1,102 1,003 99 0 196.4% 1.6 x 1.4 x 20.8 x 9.9 x NM 17.6 x 16.2 % 135.3 % 9.0 % (2.1) x 11.7 % 16.2 %

M ean 9,565 8,357 1,305 97 93.0% 2.7 x 2 .8 x 13.9 x 11.9 x 27.3 x 20.0 x 10.8 % 20.2 % 18.1 % (5.3) x 18.9 % 23.7 %M edian 1,255 1,003 294 1 88.5% 1.9 x 2 .2 x 13.4 x 10.6 x 21.4 x 20.6 x 8.2 % 8.4 % 19.1 % (2.4) x 13.7 % 19.7 %



WirelessAtheros Communications Inc. 112 436.5 528.2 3 17.4 71.5 0.20 (0.04) 1.13 (7.6)% (78.3)% (35.5)% 21.0 % NM NM 47.3 % 2.8 % 10.9 %CSR plc 113 539.0 NA (3) 36.7 NA (0.21) (0.17) NA (40.1)% (111.5)% (258.0)% NA NA NA 41.2 % (3.1)% (25.7)%Hittite Microw ave Corporation 40 169.8 170.4 18 80.1 75.4 0.35 1.59 1.50 (11.9)% (17.7)% (18.6)% 0.4 % (5.9)% (5.6)% 70.4 % 44.9 % 26.3 %QUALCOMM Inc. 2,753 11,060.0 11,498.1 1,048 4,300.0 4,952.6 0.54 1.00 2.25 (0.3)% 9.9 % (1.8)% 4.0 % 15.2 % 125.4 % 68.6 % 38.1 % 32.9 %Ralink Technology, Corp. 36 128.9 NA 3 17.8 NA 0.02 0.12 NA (11.2)% (59.4)% (67.1)% NA NA NA 36.1 % 8.5 % 7.0 %gy, p ( ) ( ) ( )RF Micro Devices Inc. 213 858.6 917.1 38 63.6 193.6 0.07 (3.29) 0.33 (11.6)% 110.8 % 133.3 % 6.8 % 204.4 % 110.1 % 34.8 % 17.9 % 8.9 %Skyw orks Solutions Inc. 191 807.0 848.0 34 137.4 180.7 0.16 0.55 NA (11.2)% (3.9)% (11.1)% 5.1 % 31.5 % NA 40.2 % 17.9 % 14.2 %Spreadtrum Communications Inc. 16 54.6 119.9 (11) (41.1) (3.5) (0.29) (2.39) NA (59.7)% (464.0)% (583.3)% 119.4 % 91.5 % NA 23.6 % (70.3)% (79.8)%TriQuint Semiconductor, Inc. 169 623.3 711.5 19 48.3 101.7 0.08 (0.23) 0.42 33.2 % 63.4 % 14.3 % 14.1 % 110.7 % 278.0 % 32.3 % 11.0 % 7.1 %

M ean 405 1,631 2,113 128 518 796 0.10 (0.32) 1.13 (13.4)% (61.2)% (92.0)% 24.4 % 74.6 % 127.0 % 43.8 % 7.5 % 0.2 %M edian 113 539 712 18 48 102 0.08 (0.04) 1.13 (11.2)% (17.7)% (18.6)% 6.8 % 61.5 % 117.8 % 40.2 % 11.0 % 8.9 %


Financial Metrics

($ i illi h d )($ in millions, except per share data)Sto ck P rice M arket Enterprise % C hange Ent . Value/ R ev. Ent . Value/ EB IT D A P rice/ EP S Estimate Surprise N et C ash / N et D ebt / SG&A / R &D /


M ediaAli Corp. 1.84 556 457 98 0 101.9% 4.8 x NA NA NA 58.2 x NA NA NA 17.7 % NA 11.4 % 19.8 %C-Media Electronics Inc. 1.70 108 89 33 14 26.6% 4.6 x NA 14.3 x NA NM NA NA NA 17.8 % (3.1) x 28.8 % 22.4 %Conexant Systems Inc. 2.73 136 435 123 422 320.0% 1.1 x 2.0 x NM NA NM 20.2 x (35.7)% 71.4 % (219.2)% 18.1 x 29.1 % 24.5 %Himax Technologies, Inc. 3.49 646 512 139 5 24.6% 0.8 x 0.7 x NM 8.2 x 27.2 x 12.5 x (3.6)% 53.8 % 20.8 % (5.1) x 3.1 % 9.4 %Macroblock, Inc. 3.34 103 71 33 1 (11.8)% 1.9 x NA 12.8 x NA 17.0 x NA NA NA 30.6 % (5.6) x 17.2 % 15.8 %Micron Technology Inc. 7.37 6,241 10,189 1,306 5,254 81.5% 2.1 x 1.9 x 21.9 x 6.5 x NM NM (6.4)% 12.8 % (63.3)% 8.5 x 7.2 % 14.6 %gy ( ) ( )Novatek Microelectronics Corp. 2.35 1,375 1,062 430 117 55.7% 1.5 x NA 11.6 x NA 15.1 x NA NA NA 22.8 % (3.4) x 3.8 % 12.6 %NVIDIA Corporation 14.52 7,954 6,513 1,466 25 47.3% 2.3 x 1.9 x NM 17.7 x NM 32.6 x 9.0 % 537.5 % 18.1 % NA 9.5 % 24.8 %OmniVision Technologies Inc. 14.63 741 472 309 39 117.7% 1.1 x 0.7 x NM NA NM 24.4 x 9.4 % 39.4 % 36.4 % NA 13.4 % 17.5 %Orise Technology Co., Ltd. 1.45 193 151 42 0 30.2% 1.2 x NA NA NA 23.5 x NA NA NA 21.8 % NA 2.6 % 8.9 %PixArt Imaging Inc. 7.31 923 758 168 3 62.0% 6.4 x NA 26.5 x NA 32.1 x NA NA NA 17.9 % (5.8) x 10.5 % 14.3 %Raydium Semiconductor Corporation 6.19 282 257 28 4 64.4% 1.4 x NA 7.8 x NA 11.9 x NA NA NA 8.7 % (0.7) x 2.5 % 7.5 %Sigma Designs Inc. 14.13 376 184 192 0 13.6% 0.9 x 0.9 x 7.2 x 7.0 x 21.6 x 14.9 x (0.3)% (4.8)% 51.1 % (7.5) x 13.9 % 22.8 %Sunplus Technology Co. Ltd. 0.54 320 268 210 157 18.3% 0.6 x NA NM NA NM NA NA NA 16.3 % (1.9) x 5.3 % 19.1 %Techw ell, Inc. 8.96 193 130 63 0 42.0% 2.3 x 2.0 x NM 11.3 x 66.0 x 23.7 x 4.0 % 33.3 % 32.8 % (16.2) x 30.9 % 35.9 %Z C 11 05 571 221 350 0 25 6% 0 6 0 5 NM NM NM NM 16 3 % 63 5 % 61 3 % NA 25 2 % 26 7 %Zoran Corp. 11.05 571 221 350 0 25.6% 0.6 x 0.5 x NM NM NM NM 16.3 % 63.5 % 61.3 % NA 25.2 % 26.7 %

M ean 1,295 1,361 312 378 63.7% 2.1 x 1.3 x 14.6 x 10.2 x 30.3 x 21.4 x (0.9)% 100.9 % 5.7 % (2.1) x 13.4 % 18.5 %M edian 466 352 154 4 44.6% 1.5 x 1.4 x 12.8 x 8 .2 x 23.5 x 22.0 x 1.8 % 46.6 % 19.4 % (3.4) x 11.0 % 18.3 %



M ediaAli Corp. 21 96.2 NA NA NA NA 0.02 0.03 NA (3.6)% NA 115.9 % NA NA NA 53.0 % NA 22.4 %C-Media Electronics Inc. 5 19.5 NA 2 6.2 NA (0.04) (0.02) NA (19.3)% (37.6)% (247.3)% NA NA NA 81.9 % 34.3 % (56.3)%Conexant Systems Inc. 51 404.5 214.0 5 16.5 NA (0.02) (3.10) 0.14 (31.2)% (70.5)% (116.7)% (47.1)% NM 104.4 % 59.6 % 9.8 % (2.0)%Himax Technologies, Inc. 185 664.9 730.8 19 26.4 62.1 0.08 0.13 0.28 (25.1)% (50.8)% (60.0)% 9.9 % NM 117.1 % 20.8 % 10.2 % 8.1 %Macroblock, Inc. 9 37.9 NA 1 5.6 NA 0.03 0.20 NA (24.1)% (53.5)% (52.8)% NA NA NA 41.1 % 10.0 % 10.5 %Micron Technology Inc. 1,106 4,950.0 5,474.8 380 465.0 1,561.5 (0.36) (2.67) (0.48) (26.2)% 34.3 % (20.0)% 10.6 % 235.8 % 82.1 % 9.7 % 34.4 % (26.5)%Novatek Microelectronics Corp. 225 689.5 NA 37 91.5 NA 0.07 0.16 NA (5.5)% (1.7)% 5.3 % NA NA NA 31.0 % 16.3 % 18.6 %NVIDIA Corporation 777 2,819.5 3,374.1 (105) (241.9) 368.2 0.07 (0.72) 0.45 (13.0)% 3.5 % (46.2)% 19.7 % 252.3 % 161.6 % 14.5 % (13.6)% 4.9 %OmniVision Technologies Inc. 106 438.6 642.3 (4) (24.9) NA (0.08) (1.06) 0.60 (39.4)% (140.7)% (166.7)% 46.5 % NA 156.6 % 22.4 % (3.9)% (3.8)%Orise Technology Co., Ltd. 37 123.6 NA NA NA NA 0.02 0.06 NA (7.3)% NA 67.1 % NA NA NA 21.4 % NA 7.0 %PixArt Imaging Inc. 26 118.0 NA 6 28.6 NA 0.04 0.23 NA (40.7)% (56.4)% (60.0)% NA NA NA 46.3 % 21.7 % 20.1 %Raydium Semiconductor Corporation 46 184.2 NA 9 33.0 NA 0.15 0.52 NA NA NA NA NA NA NA 28.8 % 19.4 % 17.4 %Sigma Designs Inc. 51 196.6 200.5 7 25.5 26.2 0.28 0.66 0.95 (11.9)% (54.3)% (40.4)% 2.0 % 2.5 % 44.8 % 45.3 % 13.0 % 15.0 %Sunplus Technology Co. Ltd. 152 466.7 NA 21 27.2 NA 0.00 (0.03) NA (0.2)% NM NM NA NA NA 32.8 % 13.7 % 1.4 %Techw ell Inc 12 57 4 66 6 (1) 3 9 11 5 0 04 0 14 0 38 (29 2)% (124 4)% (76 5)% 16 0 % 195 0 % 178 3 % 59 8 % (5 5)% 7 1 %


Techw ell, Inc. 12 57.4 66.6 (1) 3.9 11.5 0.04 0.14 0.38 (29.2)% (124.4)% (76.5)% 16.0 % 195.0 % 178.3 % 59.8 % (5.5)% 7.1 %Zoran Corp. 103 372.0 405.5 (3) (27.9) 8.4 (0.08) (4.09) (0.02) (20.2)% (143.8)% (366.7)% 9.0 % 129.9 % 99.5 % 47.1 % (3.1)% (4.0)%

M ean 182 727 1,389 27 31 340 0.01 (0.60) 0 .29 (19.8)% (58.0)% (76.1)% 8.3 % 163.1 % 118.0 % 38.5 % 11.2 % 2.5 %M edian 51 284 524 5 21 44 0.03 0.05 0.33 (20.2)% (53.9)% (56.4)% 10.3 % 195.0 % 110.7 % 36.9 % 11.6 % 7.1 %

Introduction to SagePoint Advisors


Introduction to SagePoint Advisors

SagePoint Advisors is a boutique investment banking firm providing merger, acquisition and strategic advisory services to technology and telecom companies and their venture backers.

MissionTo deliver the senior‐level attention, trusted relationships and market insight on $10‐100 million M&A transactions that other investment banks reserve only for much larger transactionsinvestment banks reserve only for much larger transactions.

Services Sell Side Advisory; Divestitures; Buy Side Advisory; Strategic Investments

IndustryFocus

Software, hardware and services in the Wireless, VoIP, IP Video, Networking, Internet, Telecom Equipment, IT Infrastructure and Enabling Technology sectorsg gy

Offices San Diego, CA


SagePoint Advisors Team

D id P Mi h l F d &M i DiDavid P. Michaels ‐ Founder & Managing DirectorPrior to founding SagePoint Advisors in 2008, David Michaels was a Co‐Founder, Partner and Managing Director atMontgomery & Co., a leading investment bank focused on serving emerging‐growth technology companies and their venturebackers. Mr. Michaels co‐founded Montgomery’s investment banking business in 1996 as the lead banker and played aninstrumental role in building the business to over $50 million in revenues and 80 employees. Mr. Michaels launchedMontgomery’s San Diego office in 2003 and established Montgomery as the dominant brand in the region. Mr. Michaels alsog y g g y gran the firm’s Communications and Digital Media Technology practice areas for several years prior to his departure. Duringhis 14 year tenure at Montgomery, Mr. Michaels advised CEOs and Boards on more than 75 corporate strategy, M&A and fundraising engagements.

Mr. Michaels has intimate knowledge of the strategic landscape, market dynamics and technology underpinnings of severalhigh technology market segments including wireless infrastructure, software and services, voice, video and datainfrastructure software and services storage infrastructure and software networking equipment Internet software andinfrastructure, software and services, storage infrastructure and software, networking equipment, Internet software andservices and semiconductors. Prior to co‐founding Montgomery’s investment banking business, Mr. Michaels managedstrategic consulting assignments for the firm including market entry analysis, acquisition search studies and strategic portfolioassessments.

Prior to joining the Montgomery in 1994, Mr. Michaels held various investment banking positions including a position withinBankers Trust Corporate Finance Department, where he helped execute merger and acquisition assignments such as salemandates and valuation analyses. Prior to that, Mr. Michaels worked as a structural engineer at General Dynamics, where heassisted on the Advanced Tactical Fighter program. Mr. Michaels received an M.B.A. with an emphasis in marketing andentrepreneurship from the Anderson School of Management at UCLA and holds a B.S. in Mechanical Engineering from theUniversity of Michigan.

Teak Murphy ‐ Senior AssociatePrior to joining SagePoint, Teak worked as a Senior Associate with Enterprise Partners Venture Capital, the largest SouthernCalifornia based VC firm, where he evaluated investment opportunities and worked closely with senior management andboard members to successfully grow portfolio companies. Prior to Enterprise Partners, Teak worked as an Associate intechnology investment banking at Montgomery & Co. where he spent three years working closely with SagePointʹs founderDavid Michaels on buy‐side and sell‐side M&A transactions. Prior to Montgomery, Teak worked at Cowen & Co. advisingtechnology companies on M&A and IPO transactions.

32

gy p

Teakʹs experience working on fund raising, mergers and acquisitions, and initial public offerings as both an advisor andinvestor provides unique insight into the needs of venture‐backed companies. Teak graduated from the University of SouthernCalifornia with honors, receiving a B.S. in Business Administration and Finance .


Primary Industry Focus – Communications & Networking

Value Chain Wireless VoIP Video Data

Mobile messaging, content search

VoIP serviceproviders voice

Cable & DBS, Internet video Internet access, web

Servicescontent, search, LBS, social networking, gaming, etc.

providers, voice search, website

voice enablement, etc.

Internet video, conferencing, video delivery networks,

etc.

hosting, co‐location, SaaS delivery networks, etc.

b l d f d I f h d d

SoftwareMobile and fixed

wireless application and infrastructuresoftware , etc.

VoIP softphoneclient and server software, FMC software, etc.

Video encoding, transcoding,

editing, sharing and player software, etc.

Networking &Internet client and server software, etc.

EquipmentHandsets and

modules, fixed and mobile wireless equipment, etc.

VoIP handsets,gateways, IP‐PBXs,

SBCs, media servers, etc.

Cable & IPTV equipment, video conferencing, VOD, DVRs, STBs, etc.

WAN, LAN and optical data

networking and telecom equipment,

etc.

Semiconductors3G/4G, WiMax,

WLAN, & WPAN RF & BB ICs, etc.

VoIP DSPs and ASICs

Video encode/decode,processing and

transport ICs etc

WAN, LAN, I/O storage and security networking ICs


transport ICs, etc. g

Transaction Experience

SagePoint’s Founder has led more than 75 M&A and fund raising engagements with deal experience across the entire communications and networking value chain.

Value Chain Wireless VoIP Video DataValue Chain Wireless VoIP Video Data

Services• Sale of Mobile Social Networking Vendor

• Capital Raise for

• Sale of AccessLine to Telanetix

• Strategic Advisory for Voice 2 0 Service

• Strategic Advisory for DirecTV Reseller

• Sale of Compute Intensive to Verio

• Sale of GeoNet to Level 3

InfoSonics Voice 2.0 Service Provider • Capital Raise for

Speakeasy

Software• Sale of Neven Vision to Google

• Sale of SKY

• Sale of CrystalVoice to Global IP Solutions

• Buyside Advisory for

• IPO for Divx• Strategic Advisory for Mobile Video SW

• Sale of LVL7 to Broadcom

Sale of SKYMobileMedia; VOIP Softphone

Vendor

Mobile Video SW Vendor • Sale of Netreon to CA

Equipment• Sale of Strix to Idream• Sale of Aiprime to

• Strategic Advisory for Unified Messaging Vendor

• Sale of Gyration to Philips

• Sale of Network Physics to OpNet

• Capital Raise for kSierra Wireless • Strategic Advisory for

IP‐PBX Vendor• Sale of TIR to Philips Raptor Networks

• Sale of Procom to Sun

Semis

• Sale of CommAsic to Freescale

• Peregrine Strategic • Strategic Advisory for Noise Cancellation IC

• Sale of Vativ to Entropic

• Strategic Advisory for • Strategic Advisory for Storage Networking IC


Investment• Sale of Synad to ST

Vendorg y

Video Processing IC Vendor

Vendor

Representative Buyer Relationships

Internet / Media Service Providers Communications Equipment

CommunicationsSemiconductors

CommunicationsSoftware / SaaS


Why Work With SagePoint?

• SagePoint delivers the senior‐level attention trusted relationships and market insight on• SagePoint delivers the senior‐level attention, trusted relationships and market insight on $10‐100M transactions that larger investment banks reserve only for much larger transactions

• SagePoint’s domain knowledge is world‐class across the entire communications and g gnetworking value chain

• SagePoint has developed trusted relationships with the most active strategic buyers across the communications value chain

• SagePoint has the M&A expertise that comes only from decades of experience focusing on strategic transactions

• SagePoint’s unwavering integrity and commitment to intellectual honesty ensures that we tell our clients what they need to hear to make sound business decisions

• At SagePoint, we offer sage advice that points our clients in the right direction to ensure an optimal outcome


Documents

50 Q2 2009 Performance Review - SagePoint Advisors LLCsagepointadvisors.com/files/Download/SagePoint Semis 50 Q2 09... · Q2 2009 Performance Review An Analysis of Public Communications