Safe Harbor Summary
This presentation includes forward-looking statements relating to matters that are not historical facts, including, without limitation, statements regarding Inphi’s short and long term growth strategies, trends in IP traffic and technology adoption, the future sizes and anticipated growth of the networking infrastructure, cloud computing and data center markets, and the scaling of memory capacity with CPU cores. In some cases, such
forward-looking statements are identified by words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “strive,” “future,” “intend” and similar expressions. Although Inphi’s management believes that the expectations reflected in the forward-looking statements are reasonable, such statements involve known and unknown risks, uncertainties and other factors that may cause Inphi’s actual results to be different from any future results
expressed or implied by these statements, including the risks and uncertainties described in our annual report, and other filings with the U.S. Securities and Exchange Commission
made from time to time. We caution you that no forward-looking statement is a guarantee of future performance, and you should not place undue reliance on these forward-looking
statements which reflect the view of Inphi’s management only as of the date of this
presentation. We assume no obligation to, and expressly disclaim any obligation to, update any forward-looking statements contained in this presentation as a result of new information or future events or developments.
Inphi Moves Big Data Faster
Inphi Corporate Update
April 28, 2015
Inphi At A Glance
$160M fabless semiconductor company
Founded 2000, IPO 2010 (NYSE: IPHI)
Optical, networking, memory interconnect
leader, addressing multi-billion dollar TAM
448
employees worldwide, 75% engineering
Acquired Cortina Systems October 2014
Focused on service provider and data center
customer success
Inphi Global Locations
Support Customers and Attract Talent
Design Centers
USA: Folsom, Irvine, Raleigh,Santa Clara, Westlake Village
Canada: Ottawa, Vancouver
United Kingdom: Northampton
Asia-Pacific: Singapore
Sales & Support
USA: Austin, Folsom, Kansas City,Santa Clara, Westlake Village
Europe: Milan, Munich
Asia-Pacific: Beijing, Seoul, Shanghai, Shenzhen, Wuhan, Tokyo
Operations
USA: Santa Clara, Westlake Village
Asia-Pacific: Malaysia, Singapore, Taiwan
Inphi HQ:
Santa Clara, CA
Exponential Growth of Data/Bandwidth
10% of the World’s Energy Consumption
Hundreds of Millions of DC Square Feet
66% Cloud Traffic CAGR
44% Content CAGR
ZDNet, Pivotal, Digital Power Group
Cisco Cloud Index Report Micron Analyst Day
Accelerating Need for Data Center Interconnects
Big Data
Web 2.0
IoT
Cloud
e-Commerce
Wireless
Social Media
Inphi Leads in Data Movement Interconnects
Optical
3,000km
Networking
100s meters
Memory
Centimeters
Problem We Solve: Digital-Analog Divide
MOORE’S LAW
Digital
Analog, Mixed-Signal
Interconnects
100x in 10 Years
15x in 10 Years
Inphi Leads in Data Interconnects from Fiber to Memory
Fiber
Memory
Memory
Networking
Optical
High-Speed Data Transport and Signal Integrity
Register
Buffer
CDR/SerDes
Framer/Mapper
Amplifier
Driver
Inphi Has Multiple Growth Drivers
Memory
Networking
Optical
Multiple New Products Fuel Revenue Growth
100G
CFP
10G/40G
100G
QSFP
Amplifier,
Driver
Metro
Data
Center
2014
2016
2015
LRDIMM
DDR3
Haswell
DDR4
Broadwell
DDR4
Focus on Tier 1 OEM/Module Customer Success
1. Carrier and Service Providers
2. Data Centers
Long-Haul
Metro
Cloud
Enterprise
Interconnect Products, Target Markets & Customers
Memory
Networking
Optical
-
Amplifier
-
Driver
-
CDR/SerDes
-
Framer/Mapper
-
Buffer
-
Register
Communications Between
and Within Data Centers
for
Service Provider, Data Center
Inside Server
and Storage
for
Large Total Available Market (TAM)
Carrier & Service Providers:
Long-Haul and Metro
Data Centers:
Enterprise & Cloud
Optical, Networking: 10s Million 10G/40G/100G Ports
Memory: 10s Million DRAM
Modules
$92 $103 $160 $23 $32 $60 2012 2013 2014 Q1'13 Q1'14 Q1'15
Quarterly Revenue
Consistently Growing Revenue
Non-GAAP
*Organic growth approximately 23% CAGR (2012-2014) *Organic growth approximately 32% CAGR (Q1’13-Q1’15)
Consistently Growing Profitability
Non-GAAP
Operating Margin
EPS
-0.7% 12.4% 18.6% $0.00 $0.09 $0.23 Q1’13 Q1’14 Q1’15 Q1’13 Q1’14 Q1’15
Strong Balance Sheet and Cash Flow
n
Cash Position $78M (as of 3/31/15)
n
No Debt
n
24 Consecutive Quarters of Profitability
(Non-GAAP Net Income before Taxes)
$(2.6) $(5.3)
$8.9
Q1'13 Q1'14 Q1'15
Committed to Strong Operating Margins
Q1 ‘13 Q1 ‘14
Q4 ‘14
Q1 ‘15
Long-Term
Model
Gross Margin
64.3%
65.3%
67.6%
66.6%
65-67%
R&D
42.6%
36.4%
33.4%
31.8%
27-29%
SG&A
22.4%
16.5%
14.6%
16.2%
12-14%
Op. Margin
(0.7%) 12.4%
19.6%
18.6%
20-22%
Effective Tax Rate
34.0%
28.2%
(3.0%)*
18.0%
18%
(or 14% with US R&D Tax Credit)
*Approval of Federal R&D Tax Credit included in Q4’14
Interconnects Between Data Centers:
The Cloud is the Network
2014:
1.4 Terabits per Second
per Super Channel
44 uncompressed HD movies
per Second
2015:
12.6 Terabits per Second
per Fiber Pair
17,500 km of HD streaming,
e-commerce, cloud
Inphi Leads Industry to 1 Terabit Per Second
10
40
100
200
400
500
1000
1995
2000
2005
2010
2015
2020
Inphi
Amplifier
& Driver
Bandwidth
(Gigabit
Per
Second)
Long-Haul
Metro
u
n
Inphi Supports Tier 1 Customers
with 100G with Linear TiA, Driver
10G
40G
100G
200G
400G
1T
TIA
Driver
Linear
Linear
Limiting Limiting0%
20%
40%
60%
80%
100%
2013
2014
2015
2016
2017
2018
Estimated market share of
Linear Drivers for 100G – 1T
89
138
210
298
415
2014
2015
2016
2017
2018
100G Adoption Is Accelerating in Long-Haul & Metro
100G
Source: Infonetics, November 2014
Industry Leading Linear Coherent Solutions
100G/200G (Now)
400G (2016)
Next-Gen 45GBaud Linear Amplifier 32Gbaud Linear Amplifier
32GBaud Linear Driver Next-Gen 45GBaud Linear Driver
n
4 out of 4 Tier 1
OEMs use Inphi
linear amplifiers
n
3 out of 4 Tier 1
OEMs use Inphi
linear drivers
n
Inphi is first to
market with
45GBaud linear
driver and amplifier
solution for 400G
Optical Transport Products
Key Products
Optical Transport Network (OTN)
n
OTN for DWDM and IPoDWDM
―
10G, 40G and 100G
applications
―
Inphi/Cortina 100G FEC
technology used globally by
carriers
―
Shipping in Tier 1 & 2 vendor
systems (>25)
n
OTN for Metro and Data Center
Transport
―
Working with Tier 1 OEM’s on
next generation platforms to
address Ethernet transport
Interconnects Inside Data Centers:
The Data Center is the Computer
Growing 10Ks to 100Ks Servers per DC
Transition to Fiber, Direct Attach Cable PHYs
Source: Inphi Estimates, Crehan Research, February 2015
1G
10G
25G
40G
50G
100G
400G
BASE-T
Fiber / DAC
0% 100% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Estimated Capture Rate by Fiber/DAC
into BASE-T PHY Share
Distances, Speeds Drive Optics/Electrical Transition
Longer Distances = Single Mode Fiber
Cost Effective 100G = DSP-based PAM Optics
Source:
Corning
Mega Data Center
500m-2km
distances
2012 CFP : 400G 1RU 12W-24W 2014 CFP2 : 800G 1RU 12W-14W 2015-2017 QSFP28 : 3.2T 1RU 3.5W
100G Roadmap to Lower Cost, Higher Density
100G QSFP Inflection
~1/4 Power
Lower
Cost
Inphi Provides Complete Solution
Partner
Optics
Linear
TiA,
Driver
PAM:
DSP,
ADC
Serdes
Optics
2.0
Lower
Power
Lower
Cost
100G
Speed
34
49
65
80
100
0.1
0.2
0.8
1.8
3.6
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2014
2015
2016
2017
2018
0
20
40
60
80
100
120
10G/40G, 100G Growing Rapidly in Data Center
100G
Source: Infonetics, November 2014, Crehan Research January 2015
10G/40G
10G, 40G DC TAM (MU Ports) 100G DC TAM (MU Ports)
32
Inphi Proprietary
Networking Interconnect Products
Key Products
Differentiators
NX100G NX100G 100G SERDES 100G SERDES 100G SERDES 100G SERDES 100G SERDES 100G SERDES 100G SERDES 100G SERDES 100G SERDES System ASICs 1.2 – 3.2 Tbps Capacity 100G SERDES 100G MODULE 100G MODULE 100G MODULE 100G MODULE 100G MODULE 100G MODULE 100G MODULE 100G MODULE 100G MODULE 100G MODULE
10G/40G Product Family (Cortina)
§ Unique Electronic Dispersion Compensation
(EDC) signal processing architecture
§ Best power, latency and performance trade-off
§ Flexible multi-function capability
§ Strong ecosystem; millions ports shipped
100G Product Family
§ Industry leading performance and power
§ High resolution iSCANTM signal integrity
§ Solid industry footprint across service provider
and Data Center
§ Roadmap to higher modulation DSP, FEC
1st Gen (Gearbox) 2nd Gen (Gearbox) 3rd Gen (CDR)
CP U + I/ O C on tr ol le r CDR EDC CDR Bac kp lan e O p9 cal Mo du le s or Cab le s
PHY
EDC CDR EDC CDRPHY
EDC 10G/40G Products (Cortina)Interconnects Inside Server and Storage:
Data Increasing Faster than Server Units
11.8
14.3
32
140
0
50
100
150
0
5
10
15
2012
2013
2014
2015
2016
Server Unit CAGR 5%
(2012-2016)
Content
(GB DRAM
/Server)
Server
Units
(M)
Content CAGR 44%
(2012-2016)
Memory Interconnect Products
Key Products
Differentiators
up to 18 cores & 36 threads per socket
up to 45 MB Shared Cache Memory Controller Link Controller RDIMM Solutions 2 DDR4 Channel 3 3 1 LRDIMM Solutions 2 DDR4 Channel 3 3 1
Memory Registers for DDR4 RDIMMs
§
Industry’s 1
st40nm solution
§
Lowest power consumption
§
Best-in-class signal integrity
Memory Buffers for DDR4 LRDIMMs
§
Industry’s 1
st40nm solution
§
Highly-programmable to optimize OEM
platform performance
§
Scalable architecture for future
persistent memory solutions
Memory Buffers
• Scales System Memory Capacity up to 4x • Increases System Memory Performance >15%
Memory Register 21 33 MT /s 21 33 MT /s 21 33 MT /s 21 33 MT /s 21 33 MT /s 21 33 MT /s 21 33 MT /s 21 33 MT /s
$-‐ $150 $300 $450 2013 2014 2015 2016 2017 2018
TAM Expansion from Increased ASPs & Unit Volumes
*CAGR 2014-2018 **Source: IHS, Micron, Inphi Estimates
Semiconductor TAM ($M)
CAGR 21% (2014-2018)
Non-Volatile DRAM CAGR 143% DDR4 CAGR 49% DDR3Inphi Strong Leadership from Comms/Server
Position Background
Dr. Ford Tamer President and CEO
John Edmunds CFO
Dr. Loi Nguyen Founder, Sr. VP, Optical Interconnect
Dr. Ron Torten Sr. VP of Operations and IT
Siddharth Sheth VP, Networking Interconnect
Vinod Lakhani VP, Memory Interconnect
Lawrence Tse VP of Engineering
Charlie Roach VP, Worldwide Sales
Hojjat Salemi VP, Optical Transport Networks
Sudeep Bhoja CTO, Networking Interconnect
Inphi Recognized for Supplier Excellence
2013 Samsung Best Quality Company 2010 Cisco New Emerging Technology Supplier 2015 ECN Impact Award 2014 NeoPhotonicsSupplier of the Year 2015
Sumitomo
Awards for Excellence 2014
Innovation Drives Customer Success
2001
40G Differential Drive Modulator Driver + 40G TIA
2004
DDR2 Register and PLL2008
DDR3 Register2009
LRDIMM Buffer + 28G Coherent TIA + 28 Gbps Differential Modulator Driver2012
28G CMOS SERDES +32G Linear Modulator Driver
2014
45G Linear Modulator Driver + Coherent TIA + PAM