Analyst Day 2020 · 3/12/2020 · •We hire, foster and empower great talent •We create customer value and commercial success through innovation and simplicity •We meet our

Analyst Day 2020

Tyson Tuttle12 March 2020

Legal Notice

This presentation has been prepared by Silicon Laboratories Inc. (“Silicon Labs”) solely for

informational purposes. This presentation includes the following slides, the

oral presentation of the slides by Silicon Labs or any person on its behalf, any question-

and-answer session that follows the oral presentation, hardcopies of this presentation and

any materials distributed at, or in connection with the presentation (collectively, the

“Presentation”). By attending the meeting at which the Presentation is made, or by

reading the Presentation, you will be deemed to have (i) agreed to all of the following

restrictions and made the following undertakings and (ii) acknowledged that you

understand the legal and regulatory sanctions attached to the misuse, disclosure or

improper circulation of the Presentation. Information relating to markets, market size,

market share, market position, growth rates and other industry data contained in the

Presentation relating to our industry and business is partly based on our estimates and is

provided solely for illustrative purposes. We have also compiled, extracted and

reproduced market or other industry data from external sources, including third parties or

industry or general publications. Any such information contained in the Presentation has

not been independently verified and no representation or warranty, express or implied, is

made as to, and no reliance should be placed on, the fairness, accuracy, completeness or

correctness of the information or opinions expressed herein. Neither Silicon Labs nor any

of its respective directors, officers, employees, agents or any other person shall have any

liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any

use of the Presentation or otherwise arising in connection with the Presentation. The

information and opinions contained in this Presentation do not purport to be

comprehensive, are provided as of the first date of the Presentation and are subject to

change without notice. While we believe our internal estimates to be reasonable, they

have not been verified by any independent sources, and we cannot assure you as to their

accuracy or that other persons would agree with our calculations and estimates. The

industry and market data included in the Presentation may be subject to significant

uncertainty due to differing definitions of the relevant markets described, as well as the

other uncertainties. Silicon Labs disclaims any obligation to update or keep current the

information contained in the Presentation.

Non-GAAP Financial Measures

The non-GAAP financial measurements provided in the Presentation do not replace the

presentation of Silicon Labs’ GAAP financial results. These additional measurements

merely provide supplemental information to assist investors in analyzing Silicon Labs’

financial position and results of operations; however, these measures are not in

accordance with, or an alternative to, GAAP and may be different from non-GAAP

measures used by other companies. Silicon Labs has chosen to provide this information to

investors because it believes that such supplemental information enables them to perform

meaningful comparisons of past, present and future operating results, and to highlight the

results of core ongoing operations. This non-GAAP information excludes stock

compensation, amortization of acquired intangible assets, and certain other adjustments

as detailed in the reconciliation tables. Reconciliations of these non-GAAP measures to the

most comparable measures calculated in accordance with GAAP are provided in the

financial statements portion of the quarterly earnings releases in a schedule entitled

“Unaudited Reconciliation of GAAP to non-GAAP Financial Measures.”

The Presentation provides anticipated accretion and operating expenses on a non-GAAP

basis. Silicon Labs is not readily able to reconcile the projected accretion information

provided herein to a GAAP calculation thereof because the information needed to

complete a reconciliation is unavailable at this time without unreasonable effort.

Forward-Looking Statement

This Presentation contains forward-looking statements based on Silicon Labs’ current

expectations. These forward-looking statements involve risks and uncertainties. A number

of important factors could cause actual results to differ materially from those in the

forward-looking statements. Silicon Labs believes that it is important to communicate the

company’s future expectations to investors. However, there may be events in the future

that Silicon Labs is not able to accurately predict or control. For a discussion of these and

other factors which could impact Silicon Labs’ financial results and cause actual results to

differ materially from those in the forward-looking statements, please refer to Silicon

Labs’ recent filings with the SEC.

This Presentation contains forward-looking statements (including within the meaning of

Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section

27A of the United States Securities Act of 1933, as amended) concerning Silicon Labs

("Silicon Labs") and its proposed acquisition (the "Acquisition") of the Wi-Fi® and

Bluetooth® business (the “Business”) from Redpine Signals and related matters. These

statements include, but are not limited to, statements that address Silicon Labs' expected

future business and financial performance and statements about (i) the timing, completion

and expected benefits of the Acquisition, (ii) plans, objectives and intentions with respect

to future operations and products, (iii) competitive position and opportunities, (iv) the

impact of the Acquisition on the market for Silicon Labs products, (vi) the impact of the

Acquisition on non-GAAP EPS and operating expenses , (vi) other information relating to

the Acquisition and (vii) other statements identified by words such as "will", "expect",

"intends", "believe", "anticipate", "estimate", "should", "intend", "plan", "potential",

"predict" "project", "aim", and similar words, phrases or expressions. These forward-

looking statements are based on current expectations and beliefs of the management of

Silicon Labs, as well as assumptions made by, and information currently available to,

management, current market trends and market conditions and involve risks and

uncertainties, many of which are outside the management's control, and which may cause

actual results to differ materially from those contained in forward-looking statements.

Accordingly, you should not place undue reliance on such statements.

Particular uncertainties that could materially affect future results include any risks

associated with the Acquisition such as: (1) the risk that the conditions to the closing of

the transaction are not satisfied; (2) litigation relating to the transaction; (3) uncertainties

as to the timing of the consummation of the transaction and the ability of each party to

consummate the transaction; (4) risks that the proposed transaction disrupts the current

plans and operations of the Business and Silicon Labs; (5) the ability of the Business and

Silicon Labs to retain and hire key personnel; (6) competitive responses to the proposed

transaction; (7) unexpected costs, charges or expenses resulting from the transaction; (8)

potential adverse reactions or changes to business relationships resulting from the

announcement or completion of the transaction; (9) Silicon Labs' ability to achieve the

growth prospects and synergies expected from the transaction, as well as delays,

challenges and expenses associated with integrating the Business into Silicon Labs' existing

businesses; and (10) legislative, regulatory and economic developments.

Unless otherwise required by law, Silicon Labs expressly disclaims any obligation to release

publicly any updates or revisions to any forward-looking statements to reflect any result

or change in expectations.

No Offer or Solicitation

The Presentation does not constitute or form part of, and should not be construed as, an

offer to sell or issue, or the solicitation of an offer to purchase, subscribe to or acquire,

securities of Silicon Labs, or an inducement to enter into investment activity in the United

States or in any other jurisdiction in which such offer, solicitation, inducement or sale

would be unlawful prior to registration, exemption from registration or qualification under

the securities laws of such jurisdiction. No part of this Presentation, nor the fact of its

distribution, should form the basis of, or be relied on in connection with, any contract or

commitment or investment decision whatsoever. The Presentation is not for publication,

release or distribution in any jurisdiction where such publication, release or distribution

would constitute a violation of the relevant laws of such jurisdiction, nor should it be

taken or transmitted into such jurisdiction.

2

9:00a IntroductionTyson Tuttle | Chief Executive Officer & President

9:20a Internet of ThingsQ&AMatt Johnson | SVP & GM IoT

10:20a Infrastructure & AutomotiveQ&AMark Thompson | SVP & GM Infrastructure & Automotive

11:20a Financial OverviewJohn Hollister | SVP & Chief Financial Officer

11:40a Summary, Q&ATyson Tuttle | Chief Executive Officer & President

12:30p CloseAll

Agenda

March 12, 2020

Tyson Tuttle Chief Executive Officer &

President

4

Management Team

Matt JohnsonSVP & GM IoT

Mark ThompsonSVP & GM Infrastructure

& Automotive

John HollisterChief Financial Officer

Daniel CooleyChief Strategy Officer

Brandon TolanySVP Worldwide

Sales & Marketing

Sharon HagiChief Security Officer

Lori KnowltonChief People Officer

Nestor Ho Chief Legal Counsel

Sandeep KumarSVP Worldwide Operations

Megan LuedersChief Marketing Officer

Alessandro PiovaccariChief Technology Officer

698769

868 838

2016 2017 2018 2019

Revenue($M)

About Silicon Labs

▪ Core competencies in mixed-signal and RF integration

▪ A track record of industry firsts, transforming and disrupting large markets

▪ High-quality, large and diverse end markets offering a long runway for growth

▪ Focused on simplicity and scale to accelerate growth

▪ Scalable, fabless manufacturing model

Founded 1996

Nasdaq Listed SLAB

~35K Customers

>1,700 Patents

We are the leading provider of silicon, software and solutions for a smarter, more connected world

5

Headcount Distribution

APAC

EMEA

AMER

A Global Company

6

InternationalHQ

Singapore

European Design and

Sales

Global HQAustin, TX

Our Vision and Values

▪ Vision

• Be the leading provider of silicon, software and solutions for a smarter, more connected world

▪ Values

• We hire, foster and empower great talent

• We create customer value and commercial success through innovation and simplicity

• We meet our commitments and hold ourselves accountable

• We do the right thing!

7

1996 – 2006

SLAB 1.0Founding

2007 – 2011

SLAB 2.0Diversify

2012 – 2019

SLAB 3.0Focus

8

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

SLAB1.0:Access,Mobile

▪ Developed breakthrough products for PC and mobile markets

▪ Highly successful startup to profitability to IPO (March 24, 2000)

▪ Established Singapore as international HQ

1996 – 2006

SLAB 1.0Founding

Revenue ($)

9

SLAB1.0: access

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Mobile

SLAB1.0:Access

▪ Developed breakthrough products for PC and mobile markets

▪ Highly successful startup to profitability to IPO (March 24, 2000)

▪ Established Singapore as international HQ

▪ Divested mobile business in 2007

1996 – 2006

SLAB 1.0Founding

Revenue ($)

10

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

SLAB2.0:Sensors, PoE,

MCU, Broadcast

SLAB1.0:Access

Revenue ($)

▪ Mixed-signal and RF technology solving complex engineering challenges

▪ Grew sales channel and distribution

▪ Diversified into multiple markets and products

▪ Established technology roots for I&A and IoT

2007 – 2011

SLAB 2.0Diversify

11

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

SLAB3.0:Wireless,Isolation,

Timing, Auto

SLAB2.0:Sensors, PoE,

MCU, Broadcast

SLAB1.0:Access

Revenue ($)

▪ Focus on high quality, sustainable growth markets in IoT, Infrastructure and Automotive

▪ Massive IoT wireless opportunity

▪ Highly differentiated I&A business

▪ M&A to accelerate IoT roadmap and software capabilities

▪ Shift toward systems and solutions2012 – 2019

SLAB 3.0Focus

12

Access

Broadcast

InfrastructureIoT

22%

6%

14%

Existing Product Categories

13

2019 Revenue

58%

New Product Categories

14

Infrastructure & Automotive

42%IoT

58%

2019 Revenue

Market Opportunity

▪ 9% CAGR in SAM 2019-2023

▪ Massive, high-quality growth opportunity

▪ Infrastructure bandwidth expansion and IoT driving market growth

▪ Leading solutions in target markets

▪ Positioned well to capture share

▪ ~8% market share today

15

2023e

$31BTAM

$14BSAM

Source: IHS Markit 2019 and Silicon Labs estimates

Redpine Acquisition

▪ Enhances IoT strategy

▪ Accelerates Wi-Fi 6 + Bluetooth combo SoC roadmap

▪ Class-leading integration and energy consumption

▪ At-scale team in Hyderabad with ~200 employees

▪ Adds ~$20M/year run-rate to 2020 revenue

▪ $100M revenue opportunity by 2023

▪ Expected to increase IoT growth rate

▪ Consistent with corporate gross margins

▪ Expected to be accretive in 2H 2021 (non-GAAP)

+

16

SLAB 4.0 Simplify and Scale

▪ Markets are large and set to grow for decades

▪ Leveraging platforms to support diverse customer application requirements

▪ Simplicity is key to profitable growth

▪ Well-positioned to scale in IoT / I&A

17

Internet of Things

Matt Johnson SVP IoT

The Leader in IoT Wireless

▪ #1 market share and growth

▪ Unmatched breadth and depth of technology

▪ Diverse customer and application base

▪ Scalable platform driving simplicity

▪ Strong and unique culture

→ Continued leadership and growth

19

What We Do

Smartphones

Wireless Software Stacks / Advanced Tools

Sense / Control

Compute / Memory

Connect

Security

Power Management

Customer Applications

Cloud

IoT Wireless Combo SoC

20

What We Do

Smartphones

Wireless Software Stacks / Advanced Tools

Sense / Control

Compute / Memory

Connect

Security

Power Management

Customer ApplicationsUp to 10

kilometer range

Secure Vault

Cloud

As small as 4x4mm

Up to 10 year coin cell battery life

IoT Wireless Combo SoC

+ -

21

It Takes More than a Great Product to Succeed in the IoT

Support & Tools

Wireless Technologies

Ecosystems and Partners

Products Platform

1000’s of Applications10,000’s of Customers

Hardware

Platform Software

Connectivity Software

DeveloperTools

Comcast Amazon

Xiaomi Samsung

AMER

APAC

EMEA

Home & Consumer

Industrial & Commercial

MCU/Sensor

Wireless

Highly Diversified

Technologies Markets Geographies Customers

~30KCustomers

% of 2019 Revenue

23

IoT Wireless: An Unprecedented Growth Opportunity

Devices per Person Globally

Today Next Decade+

Mobile Handsets

1.2Personal Computers

0.3IoT Connected Devices

>6

IoT Connected Devices

>50

24

Major Market Trends

▪ Global IoT adoption accelerating

• Improves lives, helps the environment, and strong ROI

• Cloud and AI need more connected devices

25

▪ Technology evolving

• Multiple wireless technologies required and growing

• Thread and SubGHz wireless technology going mainstream

• Convergence at the App and data model layers (CHIP)

• Software and simplicity driving differentiation

▪ Industry aligning

• Increased collaboration - Connected Home over IP (CHIP)

• Security and privacy foundational, regulation increasing

6.47.0

10.4

2016 2019 2023e

IoT Technology SAM($B)

MCU

Wireless

6.47.0

10.4

2016 2019 2023e

IoT Market SAM($B)


Home & Consumer

Large and Accelerating Market

Source: IHSM, WSTS Source: IHSM, WSTS

~4% CAGR~13%

CAGR

~8% CAGR ~18%

CAGR

Source: IHS Markit 2019 Q3, WSTS 2019 Q4, and Silicon Labs’ estimates

26

Be PresentSave 17% time on chores

Be SecureReduce break-ins by 60%Save up to 20% on insurance

Be GreenSave up to 20% energy

Be AwareSave 10% incident damages

Market leader uniquely positioned to accelerate the smart home

Smart Home and Consumer for Everyone

$4.7BOpportunity Funnel

48%2019 IoT Revenue

Time saved on chores

Key Relationships

Why We Win

Applications

3.8 3.8

5.3

2016 2019 2023e

Home & Consumer SAM($B)

Consumer

Home

Home & Consumer Leadership

▪ Cloud companies accelerating IoT connectivity

▪ #1 position in Smart Home IoT wireless solutions

▪ Driver of many underlying IoT wireless technologies

▪ Engaged in all key ecosystems

Home Security Home Automation

Small Appliances

Lighting Operator Services

Portable Medical

Source: IHSM, WSTSSource: IHSM, WSTS

~23% CAGR

~3% CAGR

28


S E P T E M B E R 9 - 1 1 , 2 0 2 0 | A U S T I N T E X A S

workswith.silabs.com

29

30

Utility Monitoring 18% reduction in CO2 emissions

Smart Water Monitoring Detect and recover up to 40% of water which is lost to leaks

Industrial Automation75% reduction of electricity used for motor control

Commercial Lighting30% reduction in energy used for commercial lighting

60% of global energy is used by industrial and commercial applications

Massive Economic Impact of Industrial and Commercial IoT Wireless

$4.0BOpportunity Funnel

52%2019 IoT Revenue

Key Relationships

Why We Win

Applications

2.6

3.2

5.2

2016 2019 2023e

Industrial & Commercial SAM($B)

Retail

Smart Cities

Industrial

Industrial & Commercial Market Leadership

▪ Significant application ROI accelerating adoption

▪ Established leader for 10+ years in key verticals

▪ Extensive wireless portfolio from PAN to LPWAN

▪ High performance, robust radio solutions

Industry 4.0 Smart Grid Retail

PredictiveMaintenance Street Lighting Building

Automation

Source: IHS

~9% CAGR

~17% CAGR

~23% CAGR

32


2.6

3.1

3.8

2016 2019 2023

Annual Wi-Fi Shipments (Bu)

Other

Networking

Media

PC/Tablet

Cellular

Total

Wi-Fi’s Next Big Trend: Internet of Things

▪ Wi-Fi 6 is well positioned for IoT devices

▪ Wi-Fi’s ubiquity and native IP addressability attractive to IoT applications

▪ Increasing demand for IoT tailored multiprotocol combo products combining Wi-Fi, Bluetooth, Thread/Zigbee, and Z-Wave/SubGhz

33

Source: ABI Wireless Connectivity Technology Segmentation Addressable Markets - 1Q 2019 (MD-WCMT-178)

16% CAGR

IoT End Devices

802.11n 802.11ac 802.11ax

Mobile

Accelerating Wi-Fi Leadership+

TechnologyLeader in IoT

wireless technologiesUltra-low power Wi-Fi 4 / Wi-Fi 6

and Bluetooth combo SoCs

MarketIoT wireless leadership and

broad customer channelNeed market access and scale

PeopleR&D centers in North America,

Europe, and SingaporeR&D center in Hyderabad, India

Take Wi-Fi and IoT combo capability to the broad market

+

Unparalleled portfolio of wireless IoT technologies and IoT combo SoCs

Enables faster and more efficient scaling

Strong track record of acquiring wireless capabilities

2015BT Smart Modules

2012Software ZigBee SoC

2015ZigBee/Thread Modules

2017Cloud Connected Wi-Fi

2013Low-power 32-bit MCUs

2016Software RTOS

2018Smart Home Protocol

34

▪ Founding member of Zigbee Alliance with two decades of experience in 802.15.4 / mesh

▪ Market leader

▪ Founding member of Thread Group with two decades of experience in 802.15.4 / mesh

▪ Technology leader and well positioned for CHIP

▪ Decade+ of experience in Sub-GHz; support >100 different wireless protocols

▪ Market leader

▪ Leading Sub-GHz mesh technology for the smart home

▪ Market leader; opening Z-Wave Alliance

▪ Significant focus and opportunity for us

▪ Growth of BLE, mesh, and direction finding play to our strengths

▪ Accelerate Wi-Fi 6 (802.11ax) to IoT

▪ Integrate with our leading wireless platform

Unmatched Breadth and Depth of IoT Wireless Technologies

35

Toolchains, Documentation, Certifications, Network Testing, Example Code, etc.

Radio Abstraction Layer

Real Time OS, Drivers, Middleware, Utilities

Combo SoCs, Modules, Development Boards

Hardware

Platform Software

Connectivity Software

DeveloperTools

Platform Enables Scale and Simplicity

10,000’s of Customers

1000’s of Applications

IoT PlatformMarket

36

Security is Essential for IoT Devices

Secure Identity

Secure Crypto Key Storage

Differential Power Analysis Prevention

Cryptographic Acceleration

Certificate Based

Fixed Memory Size Logical Access Only Fixed Memory Size

Better

Certificate Based

Best Good

No

Not Available Not Available

No No NoNo

No NoNo

Configurable Memory Size

Yes

Board Member

Secure Vault is the most secure & highest performance solution in the market; launched March 2020

37

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

2015 2016 2017 2018 2019 2020

IoT Revenue YoY Growth relative to WSTS Short Range Wireless

13%

27%

11%

-16%

34%

43%

28%

14%

Market (Y-Y) Silicon Labs (Y-Y)

We Have Consistently Outperformed the Market

Silicon Labs Wireless vs WSTS Short Range Wireless Y-Y Publicly Reported Revenue Growth vs WSTS Short Range Wireless YoY Growth

Source: WSTS, Public Silicon Labs – IoT, Nordic Semi – Total , NXP – Industrial & IoT, TI – Embedded Processing, ST – MCU and Digital IC

38

2016 2017 2018 2019

Industrial &Commercial

Home &Consumer

Home & Consumer


2016 2017 2018 2019

MCU/Sensor

Wireless

MCU/Sensor

Wireless

We will Continue to Outperform the Market

Strong Design Win Momentum

Increasing strength in Wireless

Momentum across markets

Massive Opportunity Funnel

>$8B

>$8B ~43% CAGR

~44% CAGR

~15% CAGR

~24% CAGR

39


Silicon Labs is The Leader in IoT Wireless▪ Focus and commitment extending our

competitive advantage

▪ Consistently outperforming the market

▪ Decades of growth ahead

▪ Silicon Labs is best positioned to maximize the opportunity

Q&A

Internet of Things


Mark ThompsonSVP & GM Infrastructure & Automotive

Infrastructure & Automotive Market Opportunity

▪ Industrial, communications, automotive markets

▪ Making the world more connected, safe, and green

▪ Roadmap targets key growth drivers of 5G and EVs

▪ >10% market share

▪ Growing above WSTS market growth

▪ Design win value grew 20% overall in 2019 over 2018

2023e

$6.5BTAM

$3.3BSAM

Source: IHS Markit 2019 and Silicon Labs’ estimates

43

APAC

AMR

EMEA

2019 Revenue by Design in Location

Industrial

Automotive

Communications

Consumer

2019 Revenue by End Market

Key End Markets & Geographical Distribution

Communications Includes timing data center and isolation computing power supplies

44

2.3

2.7

3.3

2016 2019 2023e

I&A Technology SAM ($B)

Access

Broadcast Consumer

Auto Radio

Timing

Power

2.3

2.7

3.3

2016 2019 2023e

I&A Market SAM ($B)

Consumer

Automotive

Communications

Industrial

Diverse Market & Technology Portfolio


45

5% CAGR 2019 to 2023

Key Relationships

Why We Win

Applications

559

735

1,011

2016 2019 2023e

Communications SAM($M)

Data Center

Wireless

Metro/Core

Communications Market

▪ Lowest jitter clocks = highest performance

▪ Highest integration clocks for wireless market

▪ Shortest lead time oscillators for data center

▪ Isolators enable more efficient telco power supplies

Data center interconnect 5G RRU Ethernet Switch

Core Router 5G BBU AI/FPGA

Coherent Optics 5G Small Cell Optical Module

8% CAGR 2019 to 2023Excludes Access SAM


46

2019 2020 2021 2022 2023*

Global IP TrafficExabytes/Mo

▪ Bandwidth requirements more than doubling by 2023

▪ Networks upgrading for higher bandwidth

• 4G LTE -> 5G

• Metro/core 400G -> 800G

• Data Center 100G -> 400G

Key Trends in Communications

47

487

201

Source: 2018 Cisco VNI Forecast and Trends, 2017-2022 *2023 estimated

Lowest jitter products

Shipped over $1B timing chips

SLAB in all top 10 data center interconnect providers

Metro/Core

Integrate multiple technologies

Meets stringent performance requirements

Shipping in 4 of 5 top 5G suppliers

Wireless

Communications Focus Applications

200G/400G similar to metro/core

High precision now critical

Optical module needs small form factor

Data Center

48

Key Relationships

Why We Win

Applications

576

670

856

2016 2019 2023e

Automotive SAM($M)

Networking

EV/Hybrid

Infotainment

Automotive Market

▪ CMOS tuners reducing PCB space

▪ Designed with robust noise immunity

▪ Fast response time for new SiC FETs

▪ High precision clocks needed for fast data rates

AM/FM Radio Traction inverter 1G/10G Ethernet

Digital radio Battery charger ADAS

Remote tuner module (RTM)

Communication bus Infotainment

17% EV/Hybrid CAGR 2019 to 2023


49

0

5

10

15

20

25

BEV/PHEV Shipments (MU)

BEVs (MU) PHEV(MU)

▪ More focus on BEV over PHEV

▪ Both need charging, battery management, motors

▪ ADAS sensors generate 3-40Gb/s of data1

Key Trends in Automotive

50

2.5

22.520% CAGR

Source: IEA 2019, Bloomberg NEF 2019, Deloitte UK Battery Electric Vehicles Report 2019, Silicon Labs’ estimates1 Stephen Heinrich, Lucid Motors, 2017

Leader in EV digital isolators

SAM per EV $20-$50 per car

Superior lifetime for auto reliability

Electric/Hybrid Vehicles

Analog and digital radio solutions

1-4 tuner pin compatible options

Smallest solution for RTM

Infotainment

Automotive Market Focus Applications

Automotive qualified clocks/buffers

Tested to 105C

Low jitter reference for CPUs,LIDAR/Radar, 1G/10G Ethernet

In-car Networking

51

Key Relationships

Why We Win

Applications

690

938

1,120

2016 2019 2023e

Industrial SAM($M)

Industrial Market

▪ Reduce many discretes to one IC

▪ Fast response time enables greater efficiency

▪ Optimized for new GaN FETs

▪ Highly integrated timing for FPGA designs

Electric meters PLCs Medical imaging

Induction motor Factory control Broadcast video

Servo drive Robotics Machine vision

5% CAGR 2019 to 2023


52

Solar Power

Medical, Security, Mil/Aero

Timing Industrial

Industrial Automation

Motor Drive, Metering

Broad Industrial

Key Trends in Industrial

▪ Conserve Energy

• Governments issuing efficiency standards

• Eliminate wasted energy in power supplies

• Smart electric meters help conserve

• Run a motor at half speed, save 75% electricity

1Elektrek Feb. 2020

53

▪ Reduce Greenhouse Emissions

• Climate change is a global issue

• CA mandating solar on new homes

• Tax subsidies on EVs, solar

• Texas leads the nation in wind energy (>25%)1

Low emissions

Enables fault monitoring

Robust noise immunity

Motor Drive / Metering

PLC I/O parts save PCB space

Patented, reliable technology

Over 1B channels shipped

Industrial Automation

Industrial Market Focus Applications

New clocks with integrated xtal

100% tested oscillators

FPGA reference designs

Timing Industrial

54

Competition averages clocks

Silicon Labs 1ppt control of edges

Eliminates clock averaging

Multisynth

Single analog PLL, multiple DSPLLs

Eliminates VCXO & loop filter

Avoids crosstalk

DSPLL

Patented, Highly Differentiated Technology

Isolation technology fundamental

Integrate on both sides of barrier

Superior value proposition

Integration

200MHz 200MHz 300MHz

233MHz 233MHz 233MHz

Competition: 233MHz Clock

Silicon Labs: 233MHz Clock

Competition: Multiple Analog PLLs

APLL APLLCrosstalk

DSPLL

DSPLL

No CrosstalkAPLL

Silicon Labs: Single Analog PLL

4xInputs

CM

OS Iso

lationDiagnostic

Logic

4xDrivers

ProtectionCircuits

Isolated PLC I/O devices

55

Jitter Attenuating Clocks

Oscillators

Clock Gen/Buffers

Wireless Clocks

SyncE/1588

Timing Competitive Landscape

Relative portfolio coverage

56

Digital Isolator

Isolated Driver

Isolated Analog

Isolated ADC

On-board Power

Isolation Competitive Landscape

57

Relative portfolio coverage

Key Takeaways

▪ Large, growing markets in industrial, communications, automotive

▪ Positioned for share gain in EVs, 5G

▪ Patented technology, superior performance, integration, and programmability/flexibility

▪ Healthy product roadmaps, strong revenue growth opportunity

Q&A


Finance

John HollisterSVP & CFO

$40

$50

$60

$70

$80

$90

$100

$110

$120

$130

03/2

017

03/2

018

03/2

019

03/2

020

SLABSince 3/6/17 Analyst Day

High: $121.92, Low: $ 66.90

Why Invest in Silicon Labs?

▪ High quality, large and diverse end markets offering a long runway for growth

▪ Differentiated technology, superior gross margins

▪ Attractive financial model

▪ Excellent track record of execution

▪ Strong cash flow and smart use of capital

61

Key Financial Metrics

- 2016 20171 2018 2019Historical

ModelNew

Model

Revenue $698M $769M $868M $838M 10-15% growth

>1.5x industry growth2

Y-Y 8.2% 10.2% 12.9% -3.5%

Gross Margin 60.8% 59.2% 60.9% 61.1% 58-60% 59-61%

R&D 22.9% 21.8% 21.6% 23.7% 20-22% 20-22%

SG&A 18.4% 16.9% 18.1% 18.6% 17-18% 16-17%

Total Operating Expenses 41.4% 38.7% 39.7% 42.4% 37-40% 36-39%

Operating Income 19.4% 20.5% 21.2% 18.7% 20-25% 20-25%

Gross margin, R&D, SG&A, total operating expenses, and operating income are non-GAAP and exclude stock compensation expense, amortization of intangible assets, restructuring charges, and certain other adjustments as detailed in the reconciliation tables.1Prior Analyst Day 3/6/172 Industry Growth reflects World Semiconductor Trade Statistics relevant product category data and Silicon Labs’ estimates

62

Automotive

Consumer

Communications

Industrial

2023 SAM

Automotive

Consumer

Communications

Industrial

2019 SAM

Attractive End Markets

$10B

9% Total CAGR

13% Industrial CAGR

$14B


63

$1

$10

$100

$1,000

$10,000

0

250

500

750

1,00

0

1,25

0

1,50

0

1,75

0

2,00

0

2,25

0

2,50

0

2,75

0

3,00

0

3,25

0

3,50

0

3,75

0

4,00

0

4,25

0

4,50

0

4,75

0

5,00

0

Rev

enu

e ($

k)

Customer Rank/Count

2019 Customer Ranking & Revenue

10%

20%

30%

40%

50%

60%

70%

80%

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19

Growing Channel & Diversification

Top Ten Customer Mix Distribution Mix

Diversified Customer Base

64

0%

1%

2%

3%

4%

5%

Highly Diversified Customer Base

Top 20 customers represent 31% of total 2019 revenue

Consumer Industrial Communications Automotive

65

-15%

-10%

-5%

0%

5%

10%

15%

20%

$-

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

2012 2013 2014 2015 2016 2017 2018 2019

Revenue($M)

I&A

IoT

SLAB Revenue Growth

WSTS Revenue Growth

Sustainable Growth Outpacing Industry

Note: World Semiconductor Trade Statistics (WSTS) revenue growth data is based on relevant product category data and Silicon Labs’ estimates.

66

15.0%

17.5%

20.0%

22.5%

25.0%

27.5%

30.0%

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

2012 2013 2014 2015 2016 2017 2018 2019

Non-GAAP Earningsper Share

Non-GAAP OperatingMargin

Improved Earnings & Profitability

Target Model Operating Range

Non-GAAP Operating Margin

Non-GAAPEPS

Gross margin, R&D, SG&A, total operating expenses, and operating income are non-GAAP and exclude stock compensation expense, amortization of intangible assets, restructuring charges, non-cash interest expense on convertible notes, and certain other adjustments as detailed in the reconciliation tables.

67

129

190174 167

2016 2017 2018 2019

Operating Cash Flow($M)

Healthy Cash Generation

▪ ~$1.6B in cumulative operating cash flow since 2007

▪ $1.8B of capital deployed since 2007

• ~$1.1B share repurchases at an average $37.20/share

• ~$0.7B strategic M&A

▪ ~$134M outstanding BoD authorized share repurchase program through the end of fiscal year 2020

▪ Opportunistic buyer as we return cash to shareholders

2015BT Smart Modules

2012Software ZigBee SoC

2015ZigBee/Thread Modules

2017Cloud Connected Wi-Fi

2013Low-power 32-bit MCUs

2016Software RTOS

2018Smart Home Protocol

PendingUltra Low Power Wi-Fi

68

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

$0.90

$1.00

$1.10

Non-GAAP EPS

High Low Actual

$150

$160

$170

$180

$190

$200

$210

$220

$230

$240

Revenue ($M)

High Low Actual

Performance Relative to Guidance

Gross margin, R&D, SG&A, total operating expenses, and operating income are non-GAAP and exclude stock compensation expense, amortization of intangible assets, restructuring charges, non-cash interest expense on convertible notes, and certain other adjustments as detailed in the reconciliation tables.

69

Q1 Guidance Update

Gross margin, R&D, SG&A, total operating expenses, and operating income are non-GAAP and exclude stock compensation expense, amortization of intangible assets, restructuring charges, non-cash interest expense on convertible notes, and certain other adjustments in the reconciliations above.

1/29/2020 Guide 3/12/2020 Update

GAAPNon-GAAP

Adjustments Non-GAAP GAAPNon-GAAP

Adjustments Non-GAAP

Revenue $209M - $219M - $209M - $219M $200M - $205M - $200M - $205M

Gross margin % 59.5% 0.0% - (0.5)% 59.5% – 60.0% 59.5% 0.0% - (0.5)% 59.5% – 60.0%

Operating expenses $127.0M $29.5M $97.5M $124M $28.0M $96M

Effective tax rate 0.0% (11.5)% 11.5% 0.0% (11.0)% 11.0%

Diluted earnings (loss) per share

$(0.03) - $0.07 $0.60 $0.57 - $0.67 $(0.16) - $(0.12) $(0.65) $0.49 - $0.53

70

Redpine Signals Transaction Summary

Price/Consideration/Assets / Location

▪ $308M all-cash definitive agreement to purchase Redpine Signals’ connectivity assets

▪ Approximately 200 employees

▪ Design center in Hyderabad, India

Technology/Markets

▪ Expands Silicon Labs’ ultra-low power wireless IoT portfolio for commercial, industrial and smart home applications

▪ Expected to increase IoT growth rate

▪ Accelerates Wi-Fi + Bluetooth combo SoC roadmap

Financial Impact

▪ Expected contribution of ~$20M in revenue during fiscal 2020 on a full year basis

▪ Silicon Labs expects the transaction to be accretive to non-GAAP1 EPS by 2H 2021

▪ Incremental non-GAAP opex of ~$15M during fiscal 2020 on a full year basis

Timing ▪ Targeted close within the second fiscal quarter of 2020

Gross margin, R&D, SG&A, total operating expenses, and operating income are non-GAAP and exclude stock compensation expense, amortization of intangible assets, restructuring charges, non-cash interest expense on convertible notes, and certain other adjustments. Silicon Labs is not readily able to reconcile the projected accretion information provided herein to a GAAP calculation thereof because the information needed to complete a reconciliation is unavailable at this time without unreasonable effort.

71

Key Takeaways

▪ Targeting high quality, large and diverse end markets offering a long runway for growth

▪ Gaining share in target markets

▪ Highly differentiated technology, superior gross margins

▪ Strong track record of execution

▪ Healthy cash flow and strong balance sheet

Summary

Welcome to SLAB 4.0

▪ Top-tier talent and award-winning culture

▪ Scalable, fabless business model

▪ Healthy cash flow and strong balance sheet

▪ Leadership in high quality, large and diverse end markets offering a long runway for growth

▪ Simplicity is key to profitable growth

▪ Well-positioned to scale and outperform the market

74

Final Q&A

Thank You

Supporting Documentation

Revenue by Product Category

78

Reconciliation of GAAP to Non-GAAP

79


80


81


82

Documents

Analyst Day 2020 · 3/12/2020 · •We hire, foster and empower great talent •We create customer value and commercial success through innovation and simplicity •We meet our