Monolithic Power Systems_2016-11-02 E Motion Analog power systems and positioning breakthroughs
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This presentation by Michael Hsing, CEO of Monolithic Power Systems, includes forward-looking statements about continued growth across their product lines and markets. It provides an overview of MPS's strong historical revenue growth, current financial position with $264M in cash, and opportunities in new markets like automotive, battery management, and servers that could represent over $12B in total addressable market. Charts show MPS's technology leadership and market share gains across analog power solutions. The presentation closes by emphasizing MPS's proven analog business model and strong financial position to capture expanding opportunities through their superior process technologies and new product lines.
Monolithic Power Systems_2016-11-02 E Motion Analog power systems and positioning breakthroughs
- 1. November 2, 2016 Michael Hsing, CEO
- 2. Forward-Looking Statements Simple, Easy Solutions This presentation includes forward-looking statements that involve risks and uncertainties, including our belief in continued expansion of our product lines, advances in our technology, anticipated market opportunities, gross margin targets, net & operating margin targets, inventory targets, continuing business diversification, growth and opportunities in China and Taiwan, and increasing sales penetration in Japan, Korea, the U.S., Singapore and Europe. Other forward-looking statements can be identified by terms such as “would,” “could,” “may,” “will,” “should,” “expect,” “Wall Street estimates,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “targets,” “target ranges”, “seek,” or “continue,” the negative of these terms or other variations of such terms. These statements are only predictions based on our current expectations and projections about future events. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. In this regard, you should specifically consider the risks identified in our most recent 10-K in the section entitled “Risk Factors,” including the risks, uncertainties and cost of litigation and risks related to fluctuations in our operating results. Page 2
- 3. Outstanding Organic Revenue Growth ($M) $5 $8 $12 $24 $48 $99 $105 $134 $161 $165 $192 $197 $214 $238 $283 $333 Korean TV Biz 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $219 15.9% Analog 3 Yr CAGR 8.3% (SIA) 2015: MPS 17.9% vs. Analog 1.9% MPS 3 Yr CAGR Simple, Easy Solutions Page 3
- 4. TXN ONNN ADI VSH MXIM FCS LLTC ISIL SLAB SMTC IXYS POWI OIIM MPWR Organic Growth AOSL DIOD -15% -10% -5% 0% 5% 10% 15% 20% 25% 10% 20% 30% 40% 50% 60% 70% 80% CY2014-CY2015RevenueGrowth 2015 Gross Margin% 2015 Analog Industry Landscape Simple, Easy Solutions Page 4
- 5. Growth Strategy % of Revenue 2011 2012 2013 2014 2015 16Q3 LTModel Consumer 55.0% 44.8% 42.0% 43.4% 43.6% 41.0% * Communications 22.8% 23.8% 23.5% 22.9% 19.5% 15.2% Storage / Computing 15.5% 19.4% 20.1% 16.3% 17.0% 22.0% Industrial / Other 6.7% 12.0% 14.4% 17.4% 19.9% 21.8% * Revenue from newer high value consumer markets expected to grow as % of revenue Simple, Easy Solutions Page 5
- 6. Market New Market SAM Server $500M Networking / Telecom $600M Battery Management $750M Modules $1B SSD $100M ACDC $1B Automotive $6B Motion Control $2B Total New Market SAM $12B Simple, Easy Solutions SAM Expansion 2010 – September 2015 Page 6
- 7. % 2012 2013 2014 2015 16Q3 Long Term Model Revenue, YoY 8.8% 11.4% 18.7% 17.9% 16.7% 20-25% Rev $ $213.8M $238.1M $282.5M $333.1M $106.5M Gross Margin ** 53.2% 54.0% 54.6% 55.0% 55.3% 53-58% R&D ** 19.6% 18.3% 17.6% 16.5% 15.3% 14-16% SG&A ** 18.1% 17.1% 15.0% 13.7% 12.2% 13-15% Op. Margin ** 16.8% 18.7% 21.5%┼ 24.5% 27.7% 25-30% Net Margin ** 15.8% 17.3% 20.2%┼ 23.2% 25.8% 22-27% ┼ Excluding the $9.5m payment received from O2 Micro in Q1 2014 ** Non GAAP Long Term Model (Non-GAAP) – 2013 Simple, Easy Solutions Page 7
- 8. Long Term Model (Non-GAAP) September 2015 % L-T Model September 2015 Revenue, YoY 20+% Gross Margin ** Mid to High 50’s% Operating Expenses ** Increase 50 – 60% of revenue growth% % L-T Model September 2015 Revenue, YoY 20+% Gross Margin ** Mid to High 50’s% R&D & SG&A ** 50 – 60% of revenue growth% Simple, Easy Solutions Page 8
- 9. Why is MPS Winning?
- 10. BCDHVBCDH Input Supply Voltage OutputCurrent 5V 100V30V 10A 200V 1200V 20A 40A 80A 60A 500V BCDH: 800kHz Integrated Sync Driver and Controller with up to 95% Efficiency BCDHV: Fast Slew Sync Gate Driver and Controller 0.8V to 3.5V Operation BCD4: 8MHz Integrated Sync Driver and Controller with up to 96% Efficiency BCD3: 5MHz Integrated Sync Driver and Controller with up to 96% Efficiency BCDLV BCD4: 20% to 50% Reduction of BCD3. BCD3: 20% Smaller Than the Best in Industrial. + Memory + Digital = BCD5 Best-in-Class Performance: Single Chip Solution Simple, Easy Solutions Page 10
- 11. MPS is Growing in Automotive
- 12. The Semiconductor Value in a Vehicle Simple, Easy Solutions Page 12
- 13. End Customers MPS Customers and Deeply Engaged Auto Suppliers Simple, Easy Solutions Page 13
- 14. Where MPS Can Win Infotainment • Dashboard • Car Audio • Connectivity Audio • Entertainment • ITS/GPS2 • Car Navigation Display Powertrain • Engine Control -Engine -Fuel Injection -Knock Control • HEV/EV motor • Entertainment • Transmission Safety • Steering/EPS • Brake/ABS • Transaction Control • Transmission Safety • Airbag • TPMS • Collision Warning • Parking Assistant • Back Monitor • Night Vision Networking • CAN • LIN • FlexRay • SAFE-BY-WIRE • MOST • Bluetooth Body • Power Door • Power Window • Climate Control • Seat Controls • Mirror and Wiper Control • Lighting • Diagnostics • Alternator, Battery, and Starter Body Infotainment Powertrain Safety Safety Networking Simple, Easy Solutions Page 14
- 15. Where MPS Has Won Puddle light Fog light Radio & navigation USB hub/charger Trunk light Camera module Telematics module Gateway module Keyless access Wireless charger Day run light Audio system Body control module Simple, Easy Solutions Page 15
- 16. How MPS wins in Battery Management
- 17. Drawbacks of using this solution • Battery pack configuration not very flexible for space • Need three IC’s high cost, large footprint, low performance • Battery life Optimization Very Poor battery life Advantages of MPS Solution • Single IC for complete battery management solution Low BOM Cost • Battery Pack Configuration Optimized for space saving and flexibility • Battery Life Optimization Excellent with prolonged battery life Existing Solution MPS Solution Simple, Easy Solutions Battery Management System Solution Page 17
- 18. Electric Vehicles/Battery Bank • Battery Management content in EV is increasing rapidly • Employment of many lithium ion batteries cells that are stacked together to provide the required power output • Cells need to be properly monitored, balanced and measured for safe operation and optimal performance Simple, Easy Solutions New Market Opportunities Page 18
- 19. e.Motion Two Billions $ Expansion
- 20. Where is e.Motion Applicable Typical Conventional Solution Gears Motor 3 Hall Sensors Optical Encoder DSP and Discrete Power Driver Motor < 20W Servo Motor < 200W Servo Motor (Seat Position Control) < 2000W Servo Motor Industrial < 2000W Servo Motor (Assembly Line) Simple, Easy Solutions Page 20
- 21. Traditional Solution… How it works Optical Encoder $1 Encoder $100 Encoder 3 Hall Sensors Digital Signal Processor + Communication Discrete Power Driver Simple, Easy Solutions Page 21
- 22. What e.Motion Does How does it work? DSP and Discrete Power Driver Gears Motor Optical Encoder 3 Hall sensors If Applicable e.Motion brings • Gearless drive • No Hall sensors • No Encoder • No DSP • 30% more efficient <150W Single Chip >150W Controller + Power Drive ? Simple, Easy Solutions Page 22
- 23. MPS Integrated Motor Drivers High Efficiency Low Heat High Current High Torque Compact Size e.Motion Platform Accurate Rotor Position Sensor Best Motor Control (FOC) Torque Speed Position (Power & Communication) Cable to System Simple, Easy Solutions Example of Complete Solution Page 23
- 24. e.Motion opportunities $2B+ SAM >$6 /Printers 3 to 15 Motors 3 to 7 Sensors >$30/Car >10 Motors >20 Sensors >$40/ Industrial Robot >10 Motors & Sensors >$5/Conveyor Belt >1 Motor & Sensor >1 Motors & Sensors >$3/Security Camera >$20/Robots >10 Motors & Sensors >$10/ Sewing Machine >2 to 8 Motors & Sensors $6-$30?/Drones 4 to 7 Motors 3 to 7 Sensors 78 Motors 180 Sensors >$20K/ Surgical Robot >1 Motors >2 Sensors >$5/Elevator Simple, Easy Solutions Page 24
- 25. How MPS wins with Modules
- 26. How MPS Is Winning in Modules Simple, Easy Solutions MPS Monolithic Power Modules are simple to build, demonstrate higher performance, and are easy to use Lead Frame Monolithic Regulator Passive Components Including InductorMold Compound One chip inside Using Standard IC package Highly reliable Low noise and EMI High efficiency Page 26
- 27. Market-Leading MPM Roadmap, $1B+ SAM 60V 35V 24V 12V 5V 1A 2A 5A 10A 15A 20A 30A Released Soon to be released Simple, Easy Solutions Page 27
- 28. 60V 35V 24V 12V 5V 0.5A 1A 2A 5A 10A 15A 20A 30A Field Programmable Power Module – The Next Leap Forward MPS Algorithm BCD 5 Technology Packaging Technology Every Design Customized! Programmability Simple, Easy Solutions • Digital • Memory • Power • Analog Page 28
- 29. How MPS wins in Servers
- 30. Connected Devices = High Computing Demand! Tablets Connected Devices Switch/Router Notebooks Smart TV’s Medical Devices Smart Phones In 2014, 16B IoT By 2020, 40.9B IoT *ABIresearch Cloud Servers Servers Simple, Easy Solutions Page 30
- 31. VR12.5 Grantley VR13 Purley Customers Tier 1 Tier 2 Tier 1 Tier 2 POL EFUSE CORE/DDR MPS Proves itself in Grantley and Wins in Purley MPS wins 100+ sockets and continues to grow Tier 1: Enterprise Server OEM Tier 2: All Others Simple, Easy Solutions VR12.5 Grantley VR13 Purley Configuration # of ICs Cost # of ICs Cost 1 CPU 18 $15 35 $28 2 CPU 41 $35 58 $49 4 CPU 61 $53 100 $85 Page 31
- 32. Well Positioned with Excellent Financial Strength
- 33. Q3 2016 Balance Sheet Metrics Total Metric Cash $264M $6.31 $/share A/R $33.3M 28 Days Inventory $70.7M 133 Days Debt $0 - $/share Equity $416M $9.94 $/share Simple, Easy Solutions Page 33
- 34. $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 $550 $600 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Actual Cash Cash adjusted for Stock Buybacks and Dividends 52% Cash returned to share- holders through stock buybacks and dividends Strong Cash Generation: History of Capital Allocation Simple, Easy Solutions Page 34
- 35. Closing Summary Simple, Easy Solutions • Proven Analog Model Focused on Power Management • Superior Technologies: Dramatic Increase in Process Technology and Product Breadth over the Past 2 Years • New Products Making Rapid Progress • Strong Balance Sheet - $264M in Cash, $6.3 per Share • Expanding Market Opportunities with New Product Lines! Page 35
- 36. Q&A