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  • 1. MIPS Technologies Investor Presentation May 2010 © 2010 MIPS Technologies, Inc. All rights reserved
  • 2. ® At the core of the user experience. Safe Harbor for Forward-Looking Statements This presentation contains forward-looking statements; such statements are indicated by forward-looking language such as “plans”, “anticipates”, “expects”, “will”, and other words or phrases contemplating future activities including statements about future technology and growth. These forward-looking statements include MIPS’ expectation regarding improvements in financial results. Actual events or results may differ materially from those anticipated in these forward-looking statements as a result of a number of different risks and uncertainties, including but not limited to: the fact that there can be no assurance that our products will achieve market acceptance, changes in our research and development expenses, the anticipated benefits of our partnering relationships may be more difficult to achieve than expected, the timing of or delays in customer orders, delays in the design process, the length of MIPS Technologies’ sales cycle, MIPS’ ability to develop, introduce and market new products and product enhancements, and the level of demand for semiconductors and end-user products that incorporate semiconductors, in particular the level of demand in these markets during the recessionary period currently affecting global economies. For a further discussion of risk factors affecting our business, we refer you to the risk factors section in the documents we file from time to time with the Securities and Exchange Commission. © 2010 MIPS Technologies, Inc. All rights reserved 2
  • 3. Business Update Sandeep Vij President and CEO © 2010 MIPS Technologies, Inc. All rights reserved
  • 4. Business Highlights ® At the core of the user experience. New CEO; new vision for growth and expansion Highly leveraged business model: royalty annuity stream + license revenue Record unit shipments: shipment run rate projected ½ billion units/year Operating margin target >30% > $51 million cash in the bank as of FYQ3 #1 in digital home markets; aggressively expanding into new markets & building ecosystem © 2010 MIPS Technologies, Inc. All rights reserved 4
  • 5. ® At the core of the user experience. Success Drivers Aggressive roadmap  Compelling with industry’s  Offerings for only multi‐core &  Current Markets multi‐threaded IP  New Management = New MIPS Customer and  solutions focused Mobile, storage… “Team MIPS” Expanding Into New Compelling offerings  Segments with Android © 2010 MIPS Technologies, Inc. All rights reserved 5
  • 6. Number One in Digital Home CPUs ® At the core of the user experience. Number One Market Share Digital TV Cable, Satellite & IPTV Set-top Boxes Blu-ray Disc Players DVD; DVR Digital Cameras Broadband CPE WiFi Access Points and Routers *IDC Research, 2008 embedded processor share © 2010 MIPS Technologies, Inc. All rights reserved 6
  • 7. Networking Applications Leadership: Outpacing the Competition ® At the core of the user experience. Wired + Wireless Networking Equipment 12% 9.9% 10% CAGR 2006-2008 8% 6% 4% 2.4% 2% 0% MIPS PPC Source: IDC 2009 © 2010 MIPS Technologies, Inc. All rights reserved 7
  • 8. Storage: A Growth Market ® At the core of the user experience. “PMC’s growth and revenue upside was largely driven by storage, which set a new revenue record and doubled vs. Q1 levels…” –January 29, 2010 HP Smart Array “PMC should continue to benefit from P410 controller a number of identifiable drivers in its storage business in 2010. A full year of revenue from the HP RAID-on-chip win should provide an incremental $35M in revenue vs. 2009.” – March 25, 2020 © 2010 MIPS Technologies, Inc. All rights reserved 8
  • 9. ® At the core of the user experience. Driving Delivery and User Experience of Content © 2010 MIPS Technologies, Inc. All rights reserved 9
  • 10. MIPS Goes Mobile! ® At the core of the user experience. + = 100 100 mbps – 1GBps Android + 4G = opportunity for MIPS to enter the mobile market 4G (LTE / WiMAX) protocols more similar to WiFi than 3G; MIPS can directly leverage proven WiFi expertise First MIPS-Based™ cell phones to hit the market—2011 © 2010 MIPS Technologies, Inc. All rights reserved 10
  • 11. Enabling Full Range of Mobile Technologies ® At the core of the user experience. Mobile Applications Complementary IP and Processing Enabling Technologies Graphics Video WLAN Audio VoIP Uls 4G Baseband: LTE and WiMAX Security SoC IP 3.5G Baseband/ Femtocell Tools © 2010 MIPS Technologies, Inc. All rights reserved 11
  • 12. MIPS Taking the Lead in Driving Android into Connected Consumer Devices ® At the core of the user experience. Bringing innovative technologies to customers in established markets Multi-million $$ sales pipeline related to Android Enabling new business models for service & content providers; OEMs Complementing efforts with Adobe Flash Player 10, Yahoo! TV Widgets & other platforms Android on MIPS code publicly available; 5,000+ downloads Achieved first significant revenues directly attributable to Android © 2010 MIPS Technologies, Inc. All rights reserved 12
  • 13. First Android on MIPS Devices ® At the core of the user experience. World’s First Android-Based Set-top Boxes MIPS-Based™ chips from Sigma Designs MIPS-Based Android Netbook MIPS-Based chips from ICT World’s First Android Social Media Center ConnecTV software on Sigma platform MIPS-Based Personal Navigation Device MIPS-Based WiMAX chip from Altair Android on MIPS Partners © 2010 MIPS Technologies, Inc. All rights reserved 13
  • 14. ® At the core of the user experience. Greater China Opportunity Rapid adoption of MIPS architecture and cores; rapid adoption of Android Over 35 customers in Greater China MIPS in almost every major IC company in Taiwan Dedicated Shanghai-based MIPS Engineering Center Only leading processor company developing cores in China ICT proliferating MIPS in non-traditional applications: netbooks, MIDs, miniPCs, desktops, supercomputing... Shenzhen IC Design Industrial Center © 2010 MIPS Technologies, Inc. All rights reserved 14
  • 15. ® At the core of the user experience. The Heritage of the MIPS Architecture Pioneered by Stanford President John Hennessy in the 1980s Pure, fast, efficient, elegant RISC architecture designed for performance Now the architecture of choice for multimedia, home networking & beyond Innovation continues by MIPS and licensees— Altera, Broadcom, Cavium, ICT, NEC, NetLogic, Toshiba, others Widely used, widely taught architecture with millions of lines of code written for it Photo: In 1984, Stanford computer scientists John Shott, John Hennessy and © 2010 MIPS Technologies, Inc. All rights reserved James D. Meindl brainstorm about the MIPS project (Photo: Chuck Painter) 15
  • 16. Industry’s Most Scalable Processor Architecture ® At the core of the user experience. 32-bit 64-bit Chips for Microcontrollers Advanced Networking And everything in between © 2010 MIPS Technologies, Inc. All rights reserved 16
  • 17. ® At the core of the user experience. Performance—MIPS versus ARM Total Higher the Better Coremark 10,000 1004K Performance Advantage in Threaded Apps 8,000 450mW 6,000 3 Cores 500mW 2 4,000 <4 Cores mm2 4.6 mm2 2,000 MIPS32 1004K ARM Cortex-A9 MP Worst Case SS Corner Frequencies, Production Margins ARM = 12T power opt, MIPS = 9T freq opt © 2010 MIPS Technologies, Inc. All rights reserved 17
  • 18. ® At the core of the user experience. Silicon Area Advantage Two ARM Cortex-A9s MIPS32 1004K MIPS32 1004K MIPS32 1004K Three MIPS32 1004K Cores = <4mm2* Two ARM Cortex-A9 Cores = 4.6mm2* A 3-core MIPS 1004K occupies less die area than a 2-core ARM Cortex-A9—and consumes less power! *Source: MIPS and ARM public data © 2010 MIPS Technologies, Inc. All rights reserved ARM = 12T power opt, MIPS = 9T freq opt 18
  • 19. Why MIPS? Why Now? ® At the core of the user experience. Record royalty unit shipments Number one position in the digital home MIPS broadly replacing PowerPC in networking Expanding into new segments— storage and high-growth mobile market Customer and solutions focused © 2010 MIPS Technologies, Inc. All rights reserved 19
  • 20. Financials Maury Austin Chief Financial Officer © 2010 MIPS Technologies, Inc. All rights reserved
  • 21. Q3 FY2010 Financial Results (Qtr Ending March 31, 2010) ® At the core of the user experience. Revenue: $17.5M (+15% Qtr to Qtr) $60m trailing 12 months Revenue Pro-Forma Net Income: $3.9M or 8 cents per share 35 cents trailing 12 months Proforma Net Income EOQ Cash and Investments: > $51M $16m in cash generated from Operations in the last 12 months Paid off all debt as of April 7, 2010 Units: 135 Million Units reported by licensees as shipped in the December quarter (+7% sequentially) + 26% from year ago quarter >2 Billion Unit installed base since 2000 © 2010 MIPS Technologies, Inc. All rights reserved 21
  • 22. ® At the core of the user experience. MIPS Q3’10 P&L statement Q2'10 Q3'10 Q2'10 Q3'10 Adj Non-GAAP Adj Non- GAAP GAAP GAAP Total revenue $15.2 $0.0 $15.2 $17.5 $0.0 $17.5 Gross margin $15.1 $0.0 $15.1 $17.4 $0.0 $17.4 Total opex $13.0 $1.4 $11.5 $13.5 $0.8 $12.7 Operating income (loss) $2.1 ($1.4) $3.6 $3.9 ($0.8) $4.7 Other Inc (expense) $0.5 $0.6 ($0.1) ($0.1) $0.0 ($0.1) Inc (loss) before taxes $2.6 ($0.8) $3.4 $3.8 ($0.8) $4.6 Prov for (benefit) income taxes ($0.7) $0.0 ($0.7) $0.8 $0.0 $0.8 Net income (loss) $3.3 ($0.8) $4.1 $3.1 ($0.8) $3.9 Net inc (loss) / share - diluted $0.07 ($0.02) $0.09 $0.07 ($0.02) $0.08 Shares - diluted 46.2 46.5 Operating inc/(loss) % 14% 23% 22% 27% © 2010 MIPS Technologies, Inc. All rights reserved 22
  • 23. MIPS Q3‘10 Balance Sheet ($ in m’s) ® At the core of the user experience. Vs. Prior Vs. Prior Q110 Q210 Q310 Qtr Year Assets Cash $43.5 $32.3 $28.0 ($4.2) $8.0 Short Term Investments $0.0 $15.7 $23.2 $7.4 $23.2 Accounts Receivable, net $3.7 $1.9 $3.6 $1.7 ($1.6) Other Assets $1.0 $1.1 $1.0 ($0.1) ($0.2) Total Current Assets $48.2 $51.0 $55.8 $4.8 $29.5 Intangible Assets $0.4 $0.3 $0.3 ($0.0) ($0.1) Other Assets $13.4 $12.2 $10.9 ($1.3) ($4.5) Assets of Disc. Ops $0.0 $0.0 $0.0 $0.0 ($79.9) Total Assets $ 62.0 $ 63.6 $ 67.0 $3.4 ($55.0) Liabilities and Stockholder's Equity (Deficit) Debt - ST $3.8 $3.8 $8.8 $5.0 $3.8 Accrued Compensation $2.7 $3.1 $3.9 $0.8 $0.1 Deferred Revenue $2.2 $1.9 $1.9 ($0.0) ($0.0) Other Current Liabilities $8.7 $6.8 $7.2 $0.4 ($9.2) Total Current Liabilities $17.4 $15.6 $21.8 $6.2 ($5.3) Debt - LT $6.9 $5.9 $0.0 ($5.9) ($8.8) Other LT Liabilities $9.2 $8.2 $7.3 ($1.0) ($1.0) Liabilities of Disc. Ops $0.1 $0.0 $0.0 $0.0 ($36.2) Total Liabilities $33.6 $29.8 $29.1 ($0.6) ($51.3) Stockholder's Equity (Deficit) $28.4 $33.8 $37.9 $4.1 ($3.7) Total Liabilities & Equity $62.0 $63.6 $67.0 $3.5 ($55.0) © 2010 MIPS Technologies, Inc. All rights reserved 23
  • 24. ® At the core of the user experience. Royalty Units Have Rebounded Strongly! Note: One quarter lag in royalty reports. Q3FY10 quarterly results reflect shipments in the December 2009 quarter. Royalty Quantity 140 135 120 126 124 115 112 100 107 107 106 99 Munits 80 82 60 40 20 0 Q2FY08 Q3FY08 Q4FY08 Q1FY09 Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10 All Time Record! 135MU © 2010 MIPS Technologies, Inc. All rights reserved 24
  • 25. ® At the core of the user experience. Calendar 2009 Royalty Revenue by Segment MCUs and Storage Controllers Digital Home Mobile/Portable (DTV, STB, DVD) (DSC, MID, games) Networking (WLAN, BB CPE, VoIP, Enterprise) © 2010 MIPS Technologies, Inc. All rights reserved 25
  • 26. ® At the core of the user experience. Digital Home Market Summary MIPS Market Share > 50% in STB & DTV; ~ 30% in DVD Blue Laser DVDs Red Laser DVDs Digital TVs All STBs Digital Media Adapter TAM [Mu], CAGR 65.4% TAM [Mu], CAGR -9.9% TAM [Mu], CAGR 12.9% TAM [Mu], CAGR 5.4% TAM [Mu], CAGR 72.7% 60.0 160.0 160.0 180.0 60.0 140.0 140.0 160.0 50.0 50.0 140.0 120.0 120.0 40.0 120.0 40.0 100.0 100.0 100.0 30.0 80.0 80.0 30.0 80.0 60.0 60.0 20.0 60.0 20.0 40.0 40.0 40.0 10.0 10.0 20.0 20.0 20.0 0.0 0.0 0.0 0.0 0.0 2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 2013 © 2010 MIPS Technologies, Inc. All rights reserved IDC 2009 IMS2010 26
  • 27. ® At the core of the user experience. At the core of the user experience® Thank You! MIPS, MIPS32, MIPS64, MIPS-Based, MIPS-Verified, MIPS Technologies logo are trademarks of MIPS Technologies, Inc. and registered in the U.S. Patent and Trademark Office. MIPS, MIPS32, MIPS64, MIPS-Based, MIPS Logo, MIPS Technologies Logo, CorExtend, Pro Series, microMIPS, M14K, M4K, 4KE, 4KEc, 24K, 24KE, 34K, 74K, 1004K, MIPS Navigator, and FS2 are trademarks or registered trademarks of MIPS Technologies, Inc. in the United States and other countries. © 2010 MIPS Technologies, Inc. All rights reserved 27