wireless connectivity and smart sensing technologies for a ......mar 12, 2020 · cellular 5g...

CEVA Proprietary Information 1CEVA Proprietary InformationCopyright © 2019 CEVA, Inc.

Wireless Connectivity and

Smart Sensing Technologies

for a Smarter Connected World

March 2020

CEVA Proprietary Information 2CEVA Proprietary Information

Forward Looking Statements

This presentation contains forward-looking statements that involve risks and uncertainties, as well asassumptions that if they materialize or prove incorrect, could cause the results of CEVA to differ materially fromthose expressed or implied by such forward-looking statements and assumptions. Forward-looking statementsinclude our assessment of the overall licensing market in the first quarter of 2020, our annual 2020 and firstquarter 2020 guidance, our anticipated pillars of growth and optimism about achieving such growth objectivities,reaffirmation of our 2022 royalty goals, higher R&D expenses in 2020 and market data by Dell’Oro. Forinformation on the factors that could cause a difference in our results, please refer to our filings with theSecurities and Exchange Commission. These include the ability of CEVA’s IPs for smarter, connected devices tocontinue to be strong growth drivers for us; our success in penetrating new markets and maintaining our marketposition in existing markets; the ability of new products incorporating our technologies to achieve marketacceptance; the speed and extent of the expansion of the 5G, Wi-Fi, contextual awareness and IoT markets; ourability to execute more non-handset baseband license agreements; the effect of trade tariffs and politicaltensions; the effect of intense industry competition and consolidation; and global chip market trends. CEVAassumes no obligation to update any forward-looking statements or information, which speak as of theirrespective dates.


Corporate Introduction

NASDAQ:CEVA

Worldwide Operations

Global Reach Through Local Presence; All direct CEVA employees

>380 employees

Strong, profitable ~$150m cash, no debt

R&D centersIsrael, France, U.S. & U.K.

Licensing IP since 1991Powering ~1bn devices annually


IP Portfolio

Poweredby

Cellular5G DSP-based platforms for

smartphones, RAN and cellular IoT

IoT ConnectivityComprehensive platforms for

Bluetooth and Wi-Fi

Microphone sensors DSPs, algorithms and voice AI software for smart devices

Camera sensorsDSPs, computer vision & imaging

software, AI processors & inferencing software (CDNN)

IMU sensors Hillcrest Labs sensor fusion software

Wireless Connectivity Smart Sensing


Licensing and Royalty Business Model

Investment Phase Licensing Phase Royalty Phase

Define architectures, develop core technologies in tandem with lead customers. R&D intensive process.

3-4 R&D projects concurrently at any time

License and support customers to integrate IP into their SoC designs.

40-50 licensing agreements per year

Long-tail royalty streams generated across multiple customers, products and markets

50+ royalty payers today, 60+ potential royalty payers in development

R&D1-2 years

Product deploymentranging from 1-3 years

End products ship for up to 10+ years


Annual Financial Performance

28.3 32.1 31.942.9 40.5

47.9

22.527.4

40.8

44.637.4

39.3

0

10

20

30

40

50

60

70

80

90

100

2014 2015 2016 2017 2018 2019 2020

Rev

en

ue

s, $

mill

ion

s

Royalties

Licensing

$50.8m

$59.5m

$72.7m

$87.5m

$77.9m

$87.2m

*CEVA updated guidance range post Q4’19

estimated

$94-96m*


Licensing – The Foundation for Royalty Growth

195 deals signed in past 4 years, the majority of which are non-handset baseband applications – the basis for more than 2X royalty growth by 2022*

2016 2017 2018 2019

Wir

ele

ss

Conn

ectivity Cellular 5 10 6 8

Bluetooth, Wi-Fi 21 18 24 24

Other (incl. portfolio deals) 5 2 5 8

Sm

art

Sensin

g Imaging / Vision / AI 14 11 8 8

Audio / Voice / Sound / AI 4 4 6 4

Sensor Fusion - - - 3

Total Deals 49 45 49 52

*>2X growth based on 2018 royalties of $37.4m


>1 Billion CEVA-powered Devices Annually

U.S. Flagship Smartphone


Outline

Financials


Q4 and Full Year 2019 Financial Highlights

*Denotes all-time record high


Q4 and Year End 2019 Highlights


*


Q4 and Year End 2019 Shipment Highlights



Outline

Markets & Technologies


Everything Cellular

Smartphones / Mobile broadband

~30 years experience in handset modem design

Comprehensive 5G platform for smartphones and cellular IoT (e.g. automotive, industrial, fixed wireless)

Base Stations RAN

Industry’s most advanced DSPs

Growing adoption by tier-1 OEMs for 5G

From handsets to infrastructure

5bnunits

25mbase stations

CEVA’s TAM for mobile broadband,

cellular IoT and base stations to exceed 5bn units 2022*


CEVA in Smartphones

► 1 in 3 handsets worldwide powered by CEVA in 2019

► One of largest smartphone OEMs signed license agreement in Q4

► Growing LTE penetration in emerging markets, significant royalty opportunity for CEVA for next 5 years

► PentaG 5G mobile platform is most advanced IP in industry today

Mu

Global mobile connections by network generation

LTE subs grows until ’22-’23

5G subs only surpass 2G in ‘22


CEVA in Cellular IoT

► CEVA is the only IP vendor with the ability to deliver a complete cellular IoT offering

► CEVA offers modular solution including DSP, software and RF for NB-IoTcompliant with 3GPP Rel. 14

► More than 15 customers to date, ramping production, in ‘19/’20

2.8Bn Cellular IoT

Connections by 2022

Cellular IoT connections per region (billion)

Source: Ericsson Mobility Report, June 2019

Cat-M includes both Cat-M1 and Cat-M2. Only Cat-M1 is being supported today


CEVA in Base Stations

► Strategic investment from 2012 to design state-of-the-art vector processor for the infrastructure market from LTE to 5G-NR

► CEVA’s technology applies to all 5G RAN architectures, OpenRAN

Base station, AAU, small cells, backhaul

► CEVA technology in mass-production, powering millions of LTE base stations

Rolling out 5G production in 2020

► Latest generation CEVA-XC16, is the most advanced DSP for next generation of 5G NR RAN base stations and edge computing

>25m base stations to be installed & upgraded for 5G

Powering 5G network build-out for next decade


IoT Connectivity

Wi-Fi

The only viable and credible IP provider

Range of architectures SDM, HDM

Solutions for client devices and AP

Bluetooth

Large market share, premier customer base

Standard body (SIG) contributor

Strong competitive edge in audio over BT

Bringing leading edge IP to the masses

Source: ABI Research, Bluetooth SIG

4bnunits

5.4bnunits

CEVA’s TAM for IoTconnectivity

approaching 10bn units annually by

2022*


CEVA Dominates Bluetooth and Wi-Fi IP

► >65 different customers in Bluetooth, >15 different customers in Wi-Fi

► 14 Bluetooth customers shipping today, another 5 received SIG certification

► Wi-Fi in early stages, IoT set to grow volumes rapidly in 2020 4

0

12

1 13

8

20

1

30

3

36

1

0

50

100

150

200

250

300

350

400

2014 2015 2016 2017 2018 2019

Un

its,

mill

ion

s

Shipments of devices with CEVA Bluetooth IP

Major CEVA Growth Markets Licensees include:

Streaming

Audio

Data Transfer

& Beacons

General IoT

AP, STB and

gateways


Smart SensingMaking devices contextually perceptive

Camera Sensor

Pioneer in vision DSP and software algorithms

Strong foothold in consumer and IoT

Microphone Sensor

DSPs, comprehensive algorithms & software for speech recognition

IMU Sensor

Hillcrest Labs IMUs and sensor fusion technology

1.5bnunits

1bnunits

5bnunits

CEVA’s TAM for smart sensing to exceed

7.5bn units annually by 2022*

Sources: Tractica, Yole, IHS, M&M, ABI Research, Internal estimations


CEVA in Camera Sensors

► CEVA invented the category of multi-purpose processor for imaging, computer vision & AI

► Holistic offerings includes tools to streamline development of AI applications

► Value-add software including wide-angle camera distortion SW also available

► 50+ design wins to date, including:

CEVA powering imaging/vision in millions of devices, including:

Mirrorless/DSLR/Action

Cleaning RobotsDrones

Surveillance

Biometric Security

DMS & Dash cams

360 cams and smart glasses


CEVA in Microphone Sensors

► Voice Assistant - The New Digital Frontier Voice as a primary user interface for many

product categories is now mainstream

TAM is billions of devices

► Comprehensive offering composed of:

CEVA DSPs for voice trigger, sound processing, AI

ClearVox package for front-end voice pickup

WhisPro speech recognition SDKit

► HW+SW content offering for higher ASP

► Customers include:

CEVA powering audio/voice in millions of devices, including:

Smartphones Earbuds

Speakers Security

Wearables

Remotes General IoT


CEVA in IMU Sensors

► Acquisition of Hillcrest Labs in July ’19

leading global supplier of software and components for sensor processing in consumer and IoT devices

Powered more than 100m devices to date

► Provide motion and specialty algorithms for range of applications

► Licensed directly to OEMs

Higher royalties than tradition semi business

► Customers include:

CEVA powering audio/voice in millions of devices, including:

Smart TVs and remotes

AR/VR ConvertiblesRobot Cleaners

Digital Pens


Enabling Contextually-Aware DevicesLinking different sensor processing elements (algorithms) to enable context-aware user applications

CEVA SenslinQ creates context enablers e.g. activity type, intent, proximity, location

Processors can be powered by CEVA DSPs, processing SW from Hillcrest Labs

Context-Aware Devices

Inertial Sensors

Time-of-Flight Sensors

Camera Sensors

PCs / Smart TVs

Smartphones

Wearables / AR

Robots Microphone Sensors

Radar Sensors

CPU

Processor Sensor


Our rich portfolio of smart sensing and connectivity IP complements consumer, robotic & IoT device trends, capable of enabling multiple functions in each device

Bringing it All Together - CEVA’s Strategy

TWS Earbuds & Speakers

►Bluetooth

►Audio DSP

►Voice trigger & front-end SW

►Motion Sensor

►SenslinQ

Wearables & Smartwatches

►Bluetooth & Wi-Fi


►Motion Sensor

►SenslinQ

Action & 360 Cameras

►Vision / AI DSP & software

►Audio DSP & software


►Bluetooth & Wi-Fi

►Motion Sensor

►SenslinQ

As devices become more intelligent, the opportunities for CEVA grow

Above are examples of devices, not all actual CEVA design wins


5G - base stations, small cells, backhaul

Cellular IoT – NB-IoT, Cat-M

Comms - satellite, smartgrid, v2x,

Bluetooth – TWS earbuds, wireless speakers, wearables

Wi-Fi – IoT, access points

Non-Handset Baseband – Strong Momentum

Royalties ($millions)

Vision – automotive, surveillance, consumer, drone

Sound – voice assistants, TWS earbuds, wireless speakers, wearables

Sensor Fusion – robots, smart TVs, laptops, digital pens etc

Shipments (units)

$4

$8 $9

$13

$0

$5

$10

$15

$20

2016 2017 2018 2019 2020*

210264

374469

0

200

400

600

2016 2017 2018 2019 2020*estimated estimated

Non-handset baseband royalties gaining strong momentum, with many growth drivers and licensees


Building Long Term Stockholder Value

► Cash returned to stockholders

More than $116 million returned to stockholders since 2008 via Share Repurchase Program

NEW 700k shares approved

► Long-term incentive plans

Introducing long-term PSUs in place of RSUs for management

► ESG best practices

Increasing diversity on the board and in the workplace

Greater focus on disclosure of policies and information relating to ESG

Creating a better working environment and career path for all of our employees


2022 TargetsPresented at CEVA Investor & Analyst day in January 2019

► Revenue: Licensing: 50-60 agreement per year

Licensing revenue: ~10%-20% growth

Royalty: ~2x over existing levels of ~$40m/$45m

Unit shipments: ~3bn CEVA-powered chips annually

► Operating margins: ~30%+; ~2x over existing levels

► EPS leverage: ~3x from existing levels

► Continued positive cash flows, opportunistic stock repurchase program and review of M&A opportunities


Thank YouCEVA IP powers the world’s leading semiconductors and OEMs

Trademarks, trade names and logos

(“Licensee Marks”) are the property of

the respective Licensee

wireless connectivity and smart sensing technologies for a ......mar 12, 2020 · cellular 5g...

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