Investor Presentation - Canaccord/Genuity Growth Conference · Actel Corporation Investor...

Actel Corporation

Investor PresentationCanaccord/Genuity Growth ConferenceAugust 12, 2010Maurice CarsonCFO

Actel Corporation © 2010 2

Safe Harbor Statement

All forward-looking statements are made pursuant to the safe harbor provisions of the Public Securities Litigation Reform Act of 1995. All forward-looking statements relatingto Actel’s operating results are based on current expectations and projections about the semiconductor industry and programmable logic market, and assumptions made by he Company’s management that reflect its best judgment based on other factors currently known by management, but they are not guarantees of future performance. Actual events and results may differ materially from those expressed or forecast in the forward-looking statements due to a multitude of factors, including the “Risk Factors” discussed in Actel’s most recent Forms 10-K and 10-Q, which will be provided to you free of charge upon request.

Unless the context otherwise requires, all statements are made as of the date indicated. The Company undertakes no obligation to update any statement, including all forward-looking statements.


FinanciallyStable

Actel Defined

$190M Revenue in 2009$149M Cash & Investments No Debt

Leader25 Years of FPGA Success

Leader in radiation-tolerant FPGAsLeader in low-power FPGAsCore competence in non-volatile technologies

Profitable 81 Consecutive Quartersof Pro-Forma Profitability

Global Global Company500+ employees3500+ customers


Corporate Objectives

Commitmentto

Profitability

ConsistentGrowth

SignificantEarnings

PROFITGROWTH EARNINGS


Our Capabilities

Leaders in serving the space marketTop FPGA vendor in Space

Deep knowledge of radiation tolerance & space qualification combined with a long history of excellent service

Lowest power FPGAsTechnology, design and software all drive lowest power FPGA in industry

Mixed signal FPGA leadershipOnly Mixed Signal FPGA

Only FPGA with hard ARM processor

Architecture, design, software, tools, hard/soft micro processors

Only embedded flash FPGA in marketHave taped out industry leading 65nm embedded flash part


$3.3bn

$5.9bn

2009 2014

Semiconductor Market Size

FPGA’s Expected to Grow at 13% CAGR vs. 7% Overall Semiconductor Market

FPGA / PLD2 Market Size Growth

Source: Gartner, February 2010

12.6% CAGR


$0

$20

$40

$60$80

$100

$120

$140

$160

180-nm 130-nm 90-nm 65-nm 45-nm 32-nmDesign Cost Mask CostEmbedded Software Yield Ramp-up Cost

ASIC Business Model Struggling

New global market dynamics stress ASIC model:

$50-$100mm per designFewer markets support ROI

Market requirements shifting:Fast time to marketIncreased design flexibility

Cost of Design Increases at Smaller Nodes

FPGA’s Solve These Problems

Internal study by Sony: “… in 2005 for applications that require under 3 million units, an integration level of under 300K gates, and an operating frequency of under 300 MHz, it will be more efficient to use an FPGA than an ASIC, and the FPGA will prove to have more advantages overall.”

– Tsugio Makimoto, Corporate Advisor

Source: Gartner, October 2009

# Design Starts Decreasing as Shift to Smaller Nodes

0

1,000

2,000

3,000

4,000

2004 2009 2013>0.5 0.5 0.35 0.25 0.18

0.13 0.09 0.065 0.045/040 <=0.032


FPGA TAM (Gartner) and Actel SAM ($K)

Significant TAM growthSAM as a percentage of TAM increasing

More designs focused on Actel strengthsProduct roadmap serves greater proportion of TAM

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

2009 2012 2014

$3,272

$4,980

$5,920

$790 $1,335

$1,741

TAM SAM

24%27%

29%


Today’s Changing Face of Design

Low Power

Security

Reliability



Low Power

Security

Reliability


High Reliability: Immunity to Radiation Configuration Loss

Radiation Sources

Neutrons – generated in earth’satmosphere by radiation from space

Alpha particles – generated by radioactive isotopes in package materials

Heavy Ions – background radiation in space


100%

Reliability Concerns are Growing

Increased concern around firm errors

SpaceNumber one design requirement

Avionics Important design requirement, growing over the years

Ground basedMore system designers recognize the impact of firm error upsets and the cost of mitigationConcern growing at an increasing pace

Increasing Importance of Reliability Over Time

0%

Past Present Future

Space


Actel’s Products are Used in System Critical Applications

AvionicsCommercial Military

Cockpit DisplaysFlight ComputersPower Management

Weapons ControlMission ComputersPower Management

SpaceBus Payload

Command and Data HandlingTelemetry Tracking & ControlPower ManagementCentral ComputerAttitude and Orbit Control

Communications SwitchesCamerasHyperspectral ImagersRadar

CommunicationsCarrier-Class Secure

Power ManagementSystem SupervisorThermal Control

Power ManagementCryptography

WeaponsMissiles Smart Munitions

Navigation and GuidanceFuzesFlight ControlMotor Control

Navigation and GuidanceFlight Control



Low Power

Security

Reliability


Security

No bitstream required every time you power up

Flash FPGAs are non-volatile

FlashLock protects against tampering, reprogramming, overbuilding

Device locked by 128-bitpass key128 bit AES-encrypted bitstream for in-system programmingAbility to permanently lock device

In SmartFusion, the microcontroller and FPGA interface is not exposed

Bitstream



Low Power

Security

Reliability


Bit Line Vdd Vdd Bit Line

Word Line

Typical Competitors SRAM Cell

Flash FPGAs – Inherently Low Power

Substantial Leakage per CellMillions of Configuration CellsHigh Static Current

1000x lower leakage per cellUltra Low Static Current

Flash Cell


Actel’s Low-Power Advantage

33.6 uW

35,210.0 uW

57,930.0 uW

0

10,000

20,000

30,000

40,000

50,000

60,000

Actel IGLOO(AGL600)

Altera®Cyclone® III

Xilinx®Spartan® -3AN

Larger DensityIGLOO 1000x – 1700x lower

power consumption than competition

Small DensityIGLOO 15x – 25x lower

power consumption than competition

500,000 System Gates

10,000 System Gates

2.0 uW

31.0 uW

47.0 uW

52.0 uW

0

10

20

30

40

50

60

Actel IGLOOnano

Xilinx®CoolRunner™ -11

Lattice®ispMACH®

400ZE

Altera®MAX®

IIZ

Stat

ic P

ower

(mic

roW

atts

)

Stat

ic P

ower

(mic

roW

atts

)


“Power is the new performance”

-- EETimes 2/16/10



Low Power

Security

Reliability


SmartFusion: Innovative, Intelligent, Integration

Proven FPGA

ARM® Cortex™-M3

Programmable Analog

$5B

$15B$8B

>$1.5B

Significant TAM and SAM Increase; From New Socket Sales at existing Customers and New Customers

Gartner 2012


Motor Control: Co-processing Benefit

Efficient co-processing performance between FPGA and MCU


Motor Control: Integration Benefit

Discrete Analog Components

SmartFusion

SmartFusion replaces:- ARM9- SRAM FPGA- Analog acquisition device array

SRAM FPGA

ARM9


Key Statistics

Dozens of customers part of our Lead Customer Program

Silicon and Software available since October of 2009

First revenue achieved in February of 2010

Announced publically on March 2, 2010


What Editors Are Saying About

“It’s an interesting new class of FPGA, really a multicore device with complete gate programmability, that should allow designers who can’t afford to tackle a custom SoC design to do many things not possible before.” – Don Dingee, Embedded Computing Design

“It’s basically drag-and-drop analog design, no advanced degree required. And for a great swath of the embedded-design community, that’s a welcome relief.”– Jim Turley, Embedded Technology Journal

“I think the guys and gals at Actel have got something really cool here – not the least that the SmartFusion Design Environment will allow lots of folks from small to large design houses implement some very innovative designs quickly, easily, and affordably – an attractive proposition whichever way you cut the pie!”– Clive “Max” Maxfield, Techbites.com

“Actel Corp. today is launching one of the better embedded ARM architectures I’ve seen of late, in or out of the FPGA market.” –Loring Wirbel, FPGA Gurus (EDN)

Over 150 Editorial Briefings and 115 Press Articles Since Launch


Summary

Delivering ReliabilitySecurityLow Power

And… Innovating with Mixed Signal and MCU integration

Low Power

Security

Reliability

Q2 2010 Financial Update

June 2010


Quarterly Net Revenues

53.2 52.848.5

45.2 47.2 49.7 52.457.8

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10

Rev

enue

s ($

, in

Mill

ions

)


Flash FPGA Revenue

29% 28%

24%

29%26%

24% 24%

29%

0%

5%

10%

15%

20%

25%

30%

35%

Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10

% o

f Net

Rev

enue

s


Actel Revenue Breakdown

North America

46%

Europe33%

Asia Pac/ROW

21%

Revenue by Geography

Comms9%

Consumer12%

Industrial36%

Mil/Aero43%

Revenue by End Market

Second Quarter 2010


Quarterly Gross Margin Non-GAAP*

58.0%59.1%

57.1% 57.2%

60.3%

62.3% 62.2% 62.8%

Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10

% of Revenue


Quarterly EPS Non-GAAP*

$0.07

$0.13

$0.03$0.00

$0.09$0.12

$0.14

$0.25

Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10*Non-GAAP earnings per share excludes stock-based compensation charges, expenses associated with restructuring and other non-recurring items


Balance Sheet Quarterly Trend ($ in Millions)

Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10

Cash & Short-term Investments 133.4 138.8 131.1 135.3 142.5 152.0 148.6 160.0

Accounts Receivable 29.6 11.6 21.8 25.9 22.8 19.1 33.2 44.1

Inventory 56.2 60.6 56.0 40.5 38.4 37.3 38.4 36.4

Prepaid & Other Current Assets 27.1 18.2 19.2 7.2 7.7 9.9 8.8 6.2

Property & Equipment, net 35.4 34.7 33.6 26.4 24.8 23.0 22.0 20.7

Long term Investments 11.3 7.8 8.8 4.2 3.2 0.7 0.7 2.8

Other Assets 38.1 36.0 34.6 28.2 29.8 30.1 29.8 30.7

Goodwill 37.5 35.5 35.3 34.9 35.1 34.9 34.7 36.4

Total Assets 368.6 343.2 340.4 302.6 304.3 307.0 316.2 335.5

Current Liabilities 40.3 35.1 26.3 24.9 24.7 28.9 28.6 34.3

Deferred Income 36.0 24.3 30.5 30.3 30.1 22.9 30.2 40.0

Long Term Liabilities 14.9 15.5 14.7 20.6 19.3 21.8 21.1 20.4

Equity 277.4 268.3 268.9 226.8 230.2 233.4 236.3 240.8

Total Liabilities/Equity 368.6 343.2 340.4 302.6 304.3 307.0 316.2 335.5


Competitive Sequential Revenue Change

Q3’08 (8%) (1%) (1%) (1%)

Q4’08 (1%) (12%) (13%) (5%)

2008 11% 8% (3%) 5%

Q1’09 (8%) (16%) (13%) (14%)

Q2’09 (7%) 5% 8% (5%)

Q3’09 5% 3% 5% 10%

Q4’09 5% 27% 12% 24%2009 (13%) (13%) (13%) (11%)Q1’10 5% 10% 28% NAQ2 ’10 10.5% 16.7% 10% 12.4%


Financial Targets – Q3 2010

Revenue We expect that third quarter 2010 revenues will be up sequentially three percent to seven percent

Gross Margin Gross margin is expected to be around 65 percent

Operating Spending Non-GAAP operating expenses are anticipated to come in flat at $25.5 million

Other Income Other income is expected to be about $0.5 million

Tax Rate The non-GAAP tax rate for the quarter is expected to be about 30 percent

Outstanding Shares Outstanding fully diluted share count is expected to be about 26.3 millionshares

As of July 29, 2010

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