From its infancy 20 years ago, the semiconductor IP industry has evolved into the major driving force of today’s semiconductor landscape. This talk will take a historical view of the changes in the industry over the past twenty years, looking at how the landscape (environment) has changed and how individual companies either adapted or simply went away. What will the IP industry and players in the future look like?

1. IP’s 20 Year Evolution
Adaptation or Extinction…
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© Copyright 2011 Infinitedge LLC
STRATEGY t PERSPECTIVE t EXECUTION

2. Evolution
Evolution is any change across successive generations in the heritable
characteristics of Semiconductor IP populations.
Adaptation in Semiconductor IP is a trait with a current functional role in
the life history of a company that is maintained and evolved by means
of natural selection.
Definitions Adapted from Wikipedia
Dec 2011 IP / SoC 2011 - Grenoble, France 1

3. Electronics and IP Over the Ages…
Custom Early Enriched Age of
Pre-IP “Historic” Age Design Mobility Multimedia Modern IP
Age Age Age
GigaFlops
iOS
LINUX IP
SoC
Android Sub
Tools
Systems
EDA
Wireless
MegaFlops
Drives Mixed-
Multi-
EDA Enables signal Design Analog IP
Cores
IC Design
Proprietary Discrete
Multi-core
Digital IP Drives
Tools RF
SoC Design Req.
IP Industry
Fabless Semi FPGA
Evolves
RTOS Drives
KiloFlops
Discrete
Innovation ASSP
Analog
MPU’s ASIC
CPU’s
1980 1985 1990 1995 2000 2005 2010
Dec 2011 IP / SoC 2011 - Grenoble, France 2

4. 1980 – 1990 “Pre-IP Historic”
 Dominated by major diversified semiconductor companies
 ASIC companies create EDA industry
 Programmability drives need for FPGA and fuels memory growth
30.0%
Bubble Size Represents Total EV/Revenues
25.0% 1990
SEMICONDUCTOR DESIGN AND IP
20.0%
AUTOMOTIVE
15.0% CONSUMER MULTIMEDIA
10.0% COMMS INFRASTRUCTURE
ANALOG/RF
5.0%
MEMORY PROGRAMMABLE
0.0%
(1.0%) (0.5%) 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% DIVERSIFIED SEMICONDUCTOR
(5.0%)
1980 1985 1990 1995 2000 2005 2010
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5. 1990 - 1995 “Custom Design Age”
 ASIC companies create “content” leading to early IP companies
 FPGA continues to grow
 Market rewards targeted providers (automotive, consumer multimedia)
30.0%
1995
Bubble Size Represents Total EV/Revenues
25.0% 24.8%
SEMICONDUCTOR DESIGN AND IP
20.0%
AUTOMOTIVE
15.0% CONSUMER MULTIMEDIA
10.0% COMMS INFRASTRUCTURE
ANALOG/RF
5.0%
MEMORY PROGRAMMABLE
0.0%
(10.0%) (5.0%) 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% DIVERSIFIED SEMICONDUCTOR
(5.0%)
1980 1985 1990 1995 2000 2005 2010
Dec 2011 IP / SoC 2011 - Grenoble, France 4

6. 1995 – 2000 “Early Mobility Age”
 Mobile telephony drives need for communications infrastructure
 ARM secures major telephony wins
 Internet starts to gain dominance in industry
 ESW fueled by increasing demand of IP to complete ecosystem
30.0%
Bubble Size Represents Total EV/Revenues
25.0% 2000
SEMICONDUCTOR DESIGN AND IP
20.0%
AUTOMOTIVE
15.0% CONSUMER MULTIMEDIA
10.0% COMMS INFRASTRUCTURE
ANALOG/RF
5.0%
MEMORY PROGRAMMABLE
0.0%
(10.0%) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% DIVERSIFIED SEMICONDUCTOR
(5.0%)
1980 1985 1990 1995 2000 2005 2010
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7. 2000 – 2005 “Enriched Multimedia Age”
 Mobile communications and multimedia converge into smart phones and
tablets
 Convergence of triple play in home (phone, television, computer)
 Apple, Google and ARM challenge traditional market leadership
30.0%
Bubble Size Represents Total EV/Revenues
25.0% 2005
SEMICONDUCTOR DESIGN AND IP
20.0%
AUTOMOTIVE
15.0% CONSUMER MULTIMEDIA
10.0% COMMS INFRASTRUCTURE
ANALOG/RF
5.0%
MEMORY PROGRAMMABLE
0.0%
(10.0%) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% DIVERSIFIED SEMICONDUCTOR
(5.0%)
1980 1985 1990 1995 2000 2005 2010
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8. 2005 – Present “Age of IP Sub-systems”
 Complexity of design drives need for IP and system solutions
 IP revenues continue to grow
 System value displacing semiconductor value
 Premium on integration in the form of digital IP, analog IP and ESW
30.0%
Bubble Size Represents Total EV/Revenues
25.0% 2011 SEMICONDUCTOR DESIGN AND IP
20.0%
AUTOMOTIVE
15.0% CONSUMER MULTIMEDIA
10.0% COMMS INFRASTRUCTURE
ANALOG/RF
5.0%
MEMORY PROGRAMMABLE
0.0%
(5.0%) 0.0% 5.0% 10.0% 15.0% 20.0% DIVERSIFIED SEMICONDUCTOR
(5.0%)
1980 1985 1990 1995 2000 2005 2010
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9. CPU & MCU Evolution
Custom Early Enriched Age of
Pre-IP “Historic” Age Design Mobility Multimedia Modern IP
Age Age Age
68K ARM6
Major
MCU
Adapt
Acorn
ARM Emerges
Motorola
becomes
PPC extinct
1980 1985 1990 1995 2000 2005 2010
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10. EDA (IP Related)
Custom Early Enriched Age of
Pre-IP “Historic” Age Design Mobility Multimedia Modern IP
Age Age Age
Logic Modeling
Ambit Design
Corporation
Systems
Redwood Design
Automation
1980 1985 1990 1995 2000 2005 2010
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11. Standards Based IP & Libraries
Custom Early Enriched Age of
Pre-IP “Historic” Age Design Mobility Multimedia Modern IP
Age Age Age
1980 1985 1990 1995 2000 2005 2010
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12. Embedded Software
Custom Early Enriched Age of
Pre-IP “Historic” Age Design Mobility Multimedia Modern IP
Age Age Age
Berkeley Real-Time
Software Innovations
Design
1980 1985 1990 1995 2000 2005 2010
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13. What Does the Future Bring?
Mobile Broadband
Global Coverage
Connectivity
Machine-to-Machine
Always-on
50 Billion Devices Connected by 2025 !
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14. Connectivity and Enriched Media Driving Growth
Wireless Networks
2G
Fixed Mobile
Convergence
GSM
CDMA 3G
UMTS
WCDMA
4G
LTE
Broadband Driving Growth
Broadband Networks
Broadband 768Kb
Copper Streaming Digital
Cable
Narrowband
Wireless 10Mbps Content
Subscribers
Satellite
Fiber Double play (STB)
1Gb
Triple play (APA)
Broadband Driving Growth
Home
Sensor Networks
Control
Broadband
Machine to
WPAN
Security/Tracking
Machine I/F
ZIGBEE
Narrowband Cellular
Subscribers
NFC Energy Management
RFID
Transactions
Source: The Dolcera Blog
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15. Relative Market Performance
Semiconductor IP
80.00%
60.00%
40.00%
20.00%
Indexed Prices
% Change in
0.00%
-20.00%
-40.00%
-60.00%
-80.00%
Embedded Software
NASDAQ Composite Index (^COMP) - Index Value PHLX Semiconductor Sector Index (^SOX) - Index Value SIP Index
IE SIP Index: ARM, Aware, Imagination Technologies, MIPS, MoSys, Rambus, CEVA, WiLan, Silicon Image, MOSAID
Semiconductor IP and Embedded Software
Consistently Outperform Electronics and Semiconductor Markets
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16. Semiconductor Market Momentum and Growth
Semiconductor IP Bubble Size Represents Total EV/Revenues
Video Embedded
Telecom / Software
SEMICONDUCTOR DESIGN AND IP
Datacom
Market Momentum
Wireless AUTOMOTIVE
Optical
EDA CONSUMER MULTIMEDIA
COMMUNICATIONS INFRASTRUCTURE
ANALOG/RF
MEMORY PROGRAMMABLE
Storage
Diversified DIVERSIFIED SEMICONDUCTOR
Semiconductor
Growth (3yr CAGR)
Bubble Size = EV/Revenues
Source: Infinitedge/CAPIQ Oct 2011
Fastest Growing Segments Focused on IP and Embedded Software
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17. Increased Activity in M&A Landscape
6 16
42 57+
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18. Summary
 Market Drivers
 People & Devices – Connected
 Enriched Multi-Media
 Semiconductor Forces for Change
 Design Starts continue to decline
 Complexity of design drives need for IP and System solutions
 IP revenues continue to grow
 No longer differentiate with silicon manufacturing
 System value displacing semiconductor value
 Premium on integration in the form of hardware and software IP
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