LSI Corporate OverviewMay 2012
The New LSI     LSI has completed a vast strategic transformation in almost every dimension     Centered within persiste...
Executive Leadership Team                                  President & CEO                                  Abhi Talwalkar...
Key Takeaways from Q1’12 Earnings Call     Financials          Financials       Revenues: $622M from continuing operation...
Focused on Storage and Networking    Businesses   End Markets          Product Lines         2011 Revenue                 ...
LSI Benefiting from Numerous Inflections               Social    The new consumer portal (shopping, email, entertainment) ...
The Result: The “Data Deluge” Gap                                              2011-2015                                  ...
LSI’s Competitive Foundation                                    Silicon and          Broad multi-segment offerings        ...
Our Software and Firmware Advantage    Advanced Software Options     Advanced Software Options                            ...
Broad Product Offerings: Silicon and Software Solutions                                 Server & Storage             Netwo...
Networking Product Categories                   Network                    Aggregation &                Service           ...
FlashGrowing Gap between System Requirements and FlashFilled by Flash Storage Processors                                  ...
Why LSI in Flash Storage Processors     Industry Recognized        Leader in Flash     Only vendor supporting flash from ...
FlashWhy LSI in Enterprise PCIe Flash Adapters     Uniquely Positioned    Fully offloaded architecture does not tax serve...
FlashWell-Positioned to Lead in Flash                                                                   Complete Portfolio...
LSI is a Solid Business with New Growth Drivers     Core Business                      HDD: Leading the technology migrat...
LSI Corporate Presentation
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LSI Corporate Presentation

  1. 1. LSI Corporate OverviewMay 2012
  2. 2. The New LSI  LSI has completed a vast strategic transformation in almost every dimension  Centered within persistent secular trends: Data & Traffic Growth  Focused on bringing acceleration and intelligence to storage and networking for datacenters, mobile networks and client computing  LSI’s Flash and Mobile Network opportunities add to exciting growth  Strong financial performance, zero debt and focused on driving outstanding growth and expansion of operating performance2
  3. 3. Executive Leadership Team President & CEO Abhi Talwalkar Chief Operating Officer Jeff Richardson CFO & Chief Human General Resources & Counsel & Administrative Corp. Marketing Secretary Officer Gautam Jean Rankin Bryon Look Srivastava3
  4. 4. Key Takeaways from Q1’12 Earnings Call Financials Financials  Revenues: $622M from continuing operations Q1 2012 Product Revenue  Non-GAAP Gross Margins: 52.4%  Non-GAAP Operating Expenses: $224M IP  Non-GAAP EPS from continuing operations: $0.20 5%  Cash & Short-term Investments: $623M Networking 17%  No Debt Business Highlights Server & Storage 78%  Networking: Secured Axxia multi-core processor wins at two top base station OEMs and in a Datacenter Switch application  Flash: FSP wins in Intel 520 & 330 series of SSDs  Flash: PCIe Flash Adapter wins with Oracle & IBM  SAS: Awarded the industry’s first 12Gb SAS RoC design wins with 2 top tier server OEMs  HDD: Set a new record in Q1 for SoCs shipped to our largest customer4
  5. 5. Focused on Storage and Networking Businesses End Markets Product Lines 2011 Revenue $2.044B HDD: SoC & Preamps 37% HDD/Flash $751M Flash Storage Processors Storage Semi RAID Adapters Server & Server 36% Storage SAS External Storage $736M Connectivity SAN Fabric Invest- Standard Products ment Networking areas Custom Products 22% Networking Semi PC Connectivity $454M Networking Legacy 5% IP IP IP Licensing $103M5
  6. 6. LSI Benefiting from Numerous Inflections Social The new consumer portal (shopping, email, entertainment) Platforms Enterprise increasingly adapting for e-collaboration Smart Clients & Rise of smart phones, tablets and other intelligent clients Mobile Internet Connectivity explosion reshaping the network Rapid proliferation across consumer and enterprise platforms Video Massive increase in storage capacity and network bandwidth Collection & real time analysis of massive amounts of data Big Data Datacenter architecture evolving to support Big Data analytics Rapid evolution of DCs for TCO, agility & growing demand Cloud Clouds of all shapes, sizes, and business models6
  7. 7. The Result: The “Data Deluge” Gap 2011-2015 Network Traffic CAGR ~ 32% Storage Capacity Needs CAGR ~50% Source: Cisco VNI 2011, IDC 2011 “Bridging the Gap” Growth Technology Scaling e.g., Moore’s law “Acceleration Through Intelligence” But…IT Spending CAGR ~ 5% Telecom Equipment Spending CAGR ~ 7% Source: Gartner Dec 20117 Time
  8. 8. LSI’s Competitive Foundation Silicon and Broad multi-segment offerings Software Solutions Complete and hardened FW and SW solutions How We Sustain Our Leadership Time-to-Market Accelerating product cadence Advantage Leading on critical industry transitions Broad IP Comprehensive storage and networking IP Portfolio Accelerating process technology Silicon Continuing to drive greater integration Integration Unique and flexible engagement model8
  9. 9. Our Software and Firmware Advantage Advanced Software Options Advanced Software Options Predictor Profiling SW Multiple generations of hardened and trusted firmware and Multi-Server Protection FastPath software stacks High Availability CacheCade Pro Networking Layer Data Protection Layer Direct Drive Firmware SSD Firmware Networking Stacks Enterprise Grade OEM Specific MegaRAID Stack Acceleration APIs Drivers Firmware Fusion MPT Firmware Fusion MPT Firmware DuraClass Enterprise Run Time & OS OS Drivers OS Drivers & Client Firmware Drivers SAS PCIe Flash Adapters SandForce Flash Axxia Platform MegaRAID Application Acceleration Storage Processors9
  10. 10. Broad Product Offerings: Silicon and Software Solutions Server & Storage Networking HDD Flash Connectivity Axxia™Standard Product Family SAS HBAs Custom Silicon PCIe® Flash MegaRAID HBAs Adapters Software Software Software 2015 SAM = $4.6B 2015 SAM = $2.4B 2015 SAM = $4B 2015 SAM = $2.8B ’11-’15 SAM CAGR = 12% ’11-’15 SAM CAGR = 8% ’11-’15 SAM CAGR = 10% ’11-’15 SAM CAGR = 31% Source: LSI estimates LSI 2015 SAM = $13.8B, ’11-’15 CAGR = 13%10
  11. 11. Networking Product Categories Network Aggregation & Service Access Control Gateways Axxia™ Processor Family Custom Silicon Solutions Mobile Networks Control and Data Plane Baseband Enterprise/ Datacenter Media Processing Switching and Routing Security and Content Ethernet Connectivity11
  12. 12. FlashGrowing Gap between System Requirements and FlashFilled by Flash Storage Processors  Increasing Writes  Higher Reliability  More Performance System Requirements Increasing Dependence on Flash Storage Processors  All flash is different and changes every 18 months! – Per bit cost dropping 30% YoY – Endurance, Reliability, Performance, Interface Program / Erase Cycles 100K Error Correction Requirements (per KB) 60-bit Flash 10K 40-bit  Fewer Writes 24-bit  Lower Reliability 3KCell Geometries Previous Current Next 12-bit Generation Generation Generation  30% Cost Reduction Y-Y 5x nm 3x nm 2x nm 3-bit per MLC MLC MLC cell Time12
  13. 13. Why LSI in Flash Storage Processors Industry Recognized Leader in Flash  Only vendor supporting flash from ALL 6 flash suppliers Storage Processors  Only vendor supplying custom FSPs to multiple flash suppliers Client  Best-in-class performance and reliability Enterprise Complete Product Portfolio Reference Manufacturing Designs Tools and Kits FW FW Client Enterprise  Standard through full-custom engagement models Flexible Engagement Model  Ability to customize to specific flash technology (per generation)  Only company that provides complete solution including firmware Strong Technology  Leading Intellectual Property (i.e. Interfaces, Processors, etc) base in Custom & Storage Silicon  Strong leadership in Industry Standards13
  14. 14. FlashWhy LSI in Enterprise PCIe Flash Adapters Uniquely Positioned  Fully offloaded architecture does not tax server CPU in PCIe Flash  Low-host memory footprint Solutions  Based on industry-leading SandForce Flash Storage Processor Complete PCIe PCIe Flash Solution Flash MegaRAID + Caching Portfolio Adapters CacheCade Software Proven Enterprise  Key supplier to all major OEMs for servers and storage Experience  Generations of successful validation in server ecosystem  9 of the top 10 server OEMs run on LSI’s MegaRAID software Technologies and  Nytro portfolio offers full range of flash capacity with seamless Capabilities for caching & acceleration software  Unique in the industry Sustained Advantage  Full portfolio for storage ecosystem (HDD, SSD, RAID, Flash)  Industry-leading LDPC error correction - key for future Flash14
  15. 15. FlashWell-Positioned to Lead in Flash Complete Portfolio Flash Storage Industry-Leading Technology Processors (FSPs) Manufacturing FW Tools and Kits Complete Portfolio of Products SSD Evaluation Units • Ultrabook/Notebook Flash Storage Processors • Enterprise Flash Storage Processors Flash Solutions Caching Reference Software Designs • Enterprise Flash Solutions Flexible Engagement Model Flexible Engagement Model • Standard Product Flash Storage Processors for quick TTM Flexible • Custom Flash Storage Processors for Engagement Firmware highly-tailored solutions Model Large and Growing Customer Base • Flash Suppliers All Customer Segments / All Product Segments • Server and System OEMs • Datacenter/Cloud • Ultrabook Notebook Manufacturers Fast Growing Market15
  16. 16. LSI is a Solid Business with New Growth Drivers Core Business  HDD: Leading the technology migration curve in HDD SoCs; #2 supplier Strength  SAS: Broadest portfolio of SAS silicon & RAID software in the industry; #1 supplier  Networking: Investment areas growing at a 28% CAGR over the past 5 years  Flexible business model: Able to provide standard or integrated custom products New Product  SandForce Flash Storage Processors in Computing and Enterprise Cycles  PCIe at Server and Web2.0 customers  Axxia Multi-core processors in Base Stations & Enterprise applications  Custom products in Wireless & Enterprise Share Gain  HDD SoC shipments to new customers and Preamp expansion Opportunities  Enterprise HDD SoC volume at existing customers  Romley and 12Gb SAS inflection points for Server silicon & software  Growth in the Channel for Server solutions16

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