mediatek 2011 analyst day - emops.twse.com.tw

March 1, 2011

MediaTek 2011 Analyst Day

2011/3/15Copyright © MediaTek Inc. All rights reserved. 1

Safe Harbor Statement

Except for historical information contained herein, the matters set forth in this

presentation are forward-looking statements that are subject to risks and

uncertainties that could cause actual results to differ materially, including the

impact of competitive products and pricing, timely design acceptance by our

customers, timely introduction of new technologies, ability to ramp new

products into volume, industry wide shifts in supply and demand for

semiconductor products, industry overcapacity, availability of manufacturing

capacity, financial stability in end markets, and other risks.

A Look Back at 2010

- C. J. Hsieh, President

MediaTek Growth Drivers


HOME

3DTV

Blu-RayDVD

Mobile

Smartphone

WiMaxLTE

IPSharing

http://detail.zol.com.cn/cell_phone_index/subcate57_599_list_1.html

Outperforming Shipment Growth in Key Markets


20%

40%

0%

10%

20%

30%

40%

50%

Market MediaTek

Baseband

144%

500%

0%

100%

200%

300%

400%

500%

600%

Market MediaTek

BD Player

13%

64%

0%

10%

20%

30%

40%

50%

60%

70%

Market MediaTek

Flat Panel TV

Volume

Growth

‟10 vs „09

▪ 2.5/2.75G chipset shipment >500 million, +40% YoY

▪ BD player IC global market share over 40%

▪ Flat panel TV IC shipment +64% YoY

Source: Company data

Key Product Initiatives in 2010


Feature Phone SoC3DTV SoC

Touch Phone SoCInternet TV SoC

Tier-1 Account

LTE

BD Player SoC Smartphone

Ranked Global Top 20 Semiconductor Companies


Source: iSupply, www.fabtech.org / Dec. 17, 2010

Company Name 2010 Rev.

1 Intel 40,020

2 Samsung 28,137

3 Toshiba 13,081

4 Texas Instruments 12,966

5 Renesas 11,840

6 Hynix 10,577

7 STMicroelectronics 10,280

8 Micron Technology 8,853

9 Qualcomm 7,200

10 Elpida 5,676

11 Broadcom 6,506

12 AMD 6,355

13 Infineon 6,226

14 SONY 5,336

15 Panasonic 5,128

16 Freescale 4,329

17 NXP 4,021

18 Marvell 3,680

19 MediaTek 3,595

20 Nvidia 3,189

Strong Presence in EM

Right Product Strategies

Superior Execution

IP Coverage & Synergy

Turn-key Solution

http://www.fabtech.org/

ODD / BD / FPTV- C. J. Hsieh, President

0

50

100

150

2008 2009 2010 2011 2012 2013

BD ODD Market Price

(USD)


Blu-ray is About to Trigger Growth of Optical Storage

Source: TSR. 2010 Dec

Note: Combination of BD-ROM, BD-Combo, BD Writer Source : MediaTek 2010, Nov

Note: Others include CD-ROM, CD-RW, DVD-ROM

Price Erosion of Blu-ray

Leads to ODD Growth

0

100

200

300

400

2010 2011 2012 2013

BD ODD DVD-RW Others*

Million Units

Prominent BD DVD Market Share and Technology

Development

2010 2011

Process

OS

Application

MTK Has Achieved Over 40%

WW BD DVD Market Share!!


$223

$390

$476

$510

25

50

70

85

2010 2011 2012 2013

Million Units

Unit: Million pcs

Source: Display Search/ TSR / MTK

FPTV/MTV Demand Boom


Mobile TV

Market Forecast

0

50

100

150

200

250

300

350

2010 2011 2012 2013

Analog

CMMB

Others

Note: Others include FLO, ATSC-MH, DVB-T, DVB-H,

S-DMB, T-DMB- Tmm, Full Seg, lseg

Million UnitsFPTV

Market Forecast

0

50

100

150

200

250

2010 2011 2012 2013

3D

Connected

Others

ConnectivityHDMI 1.4a /

100M Ethernet

PCI-e /

Wi-Fi

2D to 3D /

3D MEMC

Interactive TV Smart TV

Rich 3D

Multimedia 3D

Software

Mobile TV MATV 2nd Gen MATV

Full-Range FPTV Solutions Roadmap


2010 2011

Universal

Platform

▪ Leverage MediaTek core technology in BD&Handset

▪ Multi-Devices with “MediaTek inside”

Feature Phone- C. J. Hsieh, President

Copyright © MediaTek Inc. All rights reserved.

Solid Execution Record

Top Up Market Share Among Global Handset Brands

2006 2007 2008 2009 2010 E


Over 500m

Broad Portfolio from Low-End, Mid-Range to

High-End Phones


4 G LTEUnder

DevelopmentUnder

Development

3.5 G HSPA

3 GWCDMA

TD-SCDMA -

2.75 G EDGE

2.5 G GPRS

UltraLow Cost

(no camera)

Entry-LevelCameraPhone

1.3Mega-Pixel

Camera

2~3Mega-Pixel

Camera

5+Mega-Pixel

Camera

Smart Phone(Android)

Hig

he

r B

an

dw

idth

Richer Multimedia & Functionality

Mobile TVFM Radio

SmartPhones

Low-CostPhones

Mid-to-High EndPhones

Bluetooth

Multiple Long-Term Growth Drivers


Base

Band

RF

TransceiverRF

PA

Memory

Dual

SIM

Cont-

roller

PMUSOC

Memory SIM

#1 #2SIM

#1 #2

Touch

Panel

Cont-

roller

World‟s Leading 2.5G Baseband/RF SOC


Unparallel

SOC

▪ 6253: 1st Gen. 2.5G SOC launched in 2010

▪ 6252: 2nd Gen. 2.5G SOC (with Serial flash)

▪ 6251: 2.5G Ultra-low-cost SOC

RF

PA


Smart Touch UI

0% 20% 40%

1000~

1001~2000

2001~3000

3001~5000

5000+

2009 2010

Surging Mobile Data Demand Drives Easier Content

Access

Source: 中國戶聯網信息聯絡中心 (CNNIC report, Jan. 2011)

Income of Mobile Internet

Users, 2009/2010

Major Mobile

Internet Usage

234

303

2009 2010

Users access Mobile Internet

(million)

30%+ in 2010, representing 66% of China’s Internet users

60%+ of China’s internet users’ income below RMB2,000 p.m.

Mobile internet usage mostly text-centric, no need of high bandwidth

2011/3/15Copyright © MediaTek Inc. All rights reserved 19

0% 20% 40% 60%

Shopping

Payment

Blogging

Video

Emails

Gaming

BBS

Social Network

E-Books

Music

Searching

News

SMS

Copyright © MediaTek Inc. All rights reserved. 20

Talented Software Provides Key Differentiators

Intuitive and Easy-to-use Smart Touch

HVGA Live wall paper, 3D Main Menu, Cap. touch, strong CPU computing

power as customized 3rd party app carrier (312 MHz).

Powerful Internet Browser and Widget

Full-HTML Browser, Wi-Fi with super UE, Opera mobile browser, Widget

applications: SNS, Finance, Search, Information

Stunning Multimedia Entertainment

Digital music, MPEG-4, AAC, H.264, ATV/DTV

,RMVB, True Color Display

Location Aware

Know where you are and where you

are going

Downloadable Applications

TrueColor

2011/02

3D Menu & App. Store

State-of-Art 3D Graphics User Interface

2011/02 21Copyright © MediaTek Inc. All rights reserved.

3D Live Wallpaper Shell App & Widget

2011/

3/15

Copyright © MediaTek Inc. All

rights reserved.

Full HTML Web Browser With Leading Standards


▪ Top-class UI to enjoy web pages for PC on handset

▪ Webkit level browser same as Google and iPhone

▪ Market-proven UI/UE experience with 80M+

worldwide users’ recognition

▪ Enabled on 2.75G/3G/3.5G/WiFi

▪ Opera mobile browser integrated

▪ Stable, secure, standard compliant


Q & A

Smart Phone- CJ Hsieh, President


Source: DIGITIMES，2010/12

Smartphone Penetration Reaches 40-50% in 2013

179

281

441

620

805

13.6%

19.3%

28.4%

37.4%

45.5%

0%

10%

20%

30%

40%

50%

0

200

400

600

800

1000

2009 2010(F) 2011(F) 2012(F) 2013(F)

Shipment

Penetration Ratio

Shipment

Unit (million)

Smartphone

Penetration


48 69 100 133 1634064

101

145179

61

96

150

207

274

9

21

36

53

69

9

14

27

41

60

12

17

27

41

60

170

281

441

620

805

2009 2010 2011 2012 2013

Global Smartphone Sales(Millions of Units)

North America

Western Europe

Asia Pacific

Central & Latin America

Central & Eastern Europe

Africa Middle East

Total

Emerging Market Drives Smart Phone Growth

(Asia Pac. - China, S. Korea ,India, Jap., Australia…etc )

▪ Entry level phones in China and Emerging Markets

▪ Mobile broadband for Internet Access

Driver of

Demand


SP (Mu) Q1 Q2 Q3 Q4 2010

Nokia 21.5 23.8 26.5 28.3 100.1

Apple 8.8 8.4 14.1 16.2 47.8

RIM 10.6 11.2 12.4 14.6 48.8

Samsung 2.7 3.1 7.5 11.3 24.6

HTC 3.0 5.2 6.7 9.1 24

Motorola 2.4 2.7 3.8 4.9 13.8

Sony Erics. 0.3 1.7 4.0 4.5 10.5

LG 0.3 0.9 1.1 2.5 4.8

Others 5.9 5.4 4.9 2.7 18.9

Total 55.4 62.4 81.0 94.1 293.3

Source: company data

Global Smart Phone Shipment in 2010


Leading-Edge SW/HW Features in Smart Phones

High Integration

Dual SIM / Dual Mode

PMU Integrated

8/5MP Camera

3D Graphics

Face detection

Smile shot

WVGA Display

3D HW Support

3D Game

Live Wallpaper

One Stop Wireless

BT, FM, WiFi, AGPS,

Mobile TV, USB 2.0

Stay Connected

Email, IM,SNS Turn-Key Solutions

CTS pass 100%

Full HTML

Browser

Tier 1 Performance

Audio, Speech, Low power, Modem

Android

+

Applications &

User Experience:

• Camera AP

• Photo Album

• Voice/Sound Recorder

• Contact Search

• Call Filter

• Phone Experience

Camera:

• 8x Zoom

• Auto Focus

• Burst Shot

• Anti-handshaking

• Best Sharpness Shot


Q & A

Thank you.

- CJ Hsieh, President

Financial Highlights

- David Ku, GM of Finance

Summary

▪ Track records of superior growth, profitability,

and operating efficiencies

▪ Long-term records of being shareholder friendly

▪ Proven records of riding the tide of major industry transition; Well

positioned for promising fields

▪ Sufficient resource to invest for the future


Track Records of Superior Revenue and Profitability

Growth


(Note) Before 2007 is pro forma NI

Unit: NT$M

0

10,000

20,000

30,000

40,000

2006 2007 2008 2009 2010

Net Income

CAGR

27.0%

0

50,000

100,000

150,000

2006 2007 2008 2009 2010

Rev

CAGR 21.0%

Outstanding Operation Efficiency:

Revenue Growth Outpaced OPEX Increase


-

5

10

15

20

25

- 5 10 15 20 25

Revenue Growth CAGR (%)

OPEX

Increase

CAGR

(%)NVDA

QCOMBRCM

MTK

MRVL

% % % % %

%

%

%

%

%

Note: (1) Bubble size represents relative size of 2010 chip revenue

(2) QCOM: CAGR of Chip + License Revenue & OPEX

Source: company data,

2006-2010

Comparative Surpassing Profitability


Note: (1) Bubble size represents relative size of 2006~2010 MTK accumulative revenue

(2) NI% =Accumulative net income / Accumulative revenue(2006~2010)

MTK, 1.0 X QCOM, 3.6 X

BRCM, 0.5 X

NVDA, 0.4 X

MRVL, 0.3 X

0%

5%

10%

15%

20%

25%

30%

35%

- 1.0 2.0 3.0 4.0 5.0

NI %

Revenue (x to MTK)

5 Year Accumulative Profit & Loss

Summary

▪ Track records of superior growth, profitability, and operating

efficiencies







Constantly Reduced Employee Bonus Dilution

(註) 2007年(含)以前係proforma資料。

0%

10%

20%

30%

40%

50%

2006 2007 2008 2009 2010

Profit sharing to NI

-

5,000

10,000

15,000

20,000

25,000

0%

1%

2%

3%

2006 2007 2008 2009 2010

K Shares

share dilution% Profit sharing shares

Profit sharing shares dilution


Committed to High Cash Payout Ratio

5,165 10,618 18,311 27,816 42,340

62,117 77,141

105,484 30%

39%

53% 52%

64%58%

78% 77%

2002 2003 2004 2005 2006 2007 2008 2009

Accumulative Cash Dividend from Y2000 (NT$M)

Cash Dividend Payout Ratio(% of GAAP net income)

Summary


efficiencies


▪ Proven records of riding the tide of major industry transition;

Well positioned for promising fields



MediaTek Has The Broadest Product Portfolio;

Best Positioned For The Device Convergence Trend

MediaTek SPRD Mstar RDA BRCMQCOM+ATHR

MRVLST-

Ericsson

4G: LTE

WiMax

3G/3.75G: WCDMA/HSPA

3G: TD-SCDMA

2.5G / 2.75G

Smartphone AP

Multimedia AP

Bluetooth

WiFi

GPS

Mobile TV / FM

Digital TV

Analog TV

Blu-ray Player

Mass Storage


Meaningful presence Little presence or has announced entry / exit.

Product Perspectives Summary

Comprehensive product roadmap

Technology advantage in 2.5G/2.75G SoC

Value-added offering for feature phone:

Smart Touch UI for 2G/3G

Open MAUI platform

Proven track record in serving emerging market customers with

turnkey business solution


Summary


efficiencies






Solid Financial Position for Future R&D Investments

and for Returning Capital to Shareholders


3,196 2,675 2,658 2,491

885

168 93 68

Cash & S/T Inv.

Note: (1) Taiwanese companies use exchange rate 1:29.3 for calculation(2) Each companies’ latest quarter cash & equivalent result, as of Feb. 21, 2011. Doesn’t include L/T marketable securities.(3) Mstar didn’t disclose post-IPO cash position in its 4Q10 result conference. Assumes 3Q10 cash position + NT$100E.(4) ST-Ericsson’s cash position included US$50m ad include 50m short-term credit facilities from parent companies.(5) Qualcomm cash & S/T investment position: US$10.5 bn (doesn’t show on this chart).

US$ million


Q & A

Financial Highlights

- David Ku, GM of Finance

March 1, 2011

MediaTek 2011 Analyst Day

mediatek 2011 analyst day - emops.twse.com.tw

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