Investor & Analyst Day

Transcription

1 Investor & Analyst Day October 31, 2013 The Westin New York at Times Square

2 Agenda Welcome / Safe Harbor Grant Brown 8:00 am Overview Ralph Quinsey 8:05 am Financials Steve Buhaly 8:30 am Infrastructure & Defense James Klein 8:45 am Q&A James Klein 9:30 am Break :45 am Mobile Devices Tim Dunn 10:00 am Q&A Tim Dunn 10:45 am Close Ralph Quinsey 11:05 am Q&A* All 11:25 am * Each presenter will move to a corner of the room to take questions 2

3 Safe Harbor This presentation contains forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of These forward-looking statements include any comments, projections, or information relating to future events which include, but are not limited to, the following: anticipated revenues, gross margin, diluted earnings or losses per share, bookings, and expectations regarding growth and improved financial performance. These forward-looking statements represent management's opinion and are subject to various assumptions, risks, uncertainties and changes in circumstances. Actual results may vary materially from those expressed or implied in the statements herein or from historical results, due to changes in economic, business, competitive, technological and/or regulatory factors. More detailed information about risk factors that may affect actual results are set forth in TriQuint's reports on Form 10-K and 10-Q and other filings with the Securities and Exchange Commission. These reports can be accessed at the SEC web site, Except as required by law, TriQuint undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements. It is not possible to predict or identify all risk factors and should not consider the risk factors described in TriQuint's filings with the Securities and Exchange Commission to be a complete statement of all potential risks and uncertainties. Where non-gaap financial data is noted, please see for a GAAP to non-gaap reconciliation. 3

4 Overview Ralph Quinsey President and CEO

5 Key Messages + Return to Growth + Strategic Positioning + Leveraged Profitability 5

6 Focused on Key Markets Mobile devices Smartphones Tablets Machine-to-machine LTM Revenue by Market Network infrastructure Base station Optical Point-to-point radio Defense and aerospace Radar Communications Electronic warfare Mobile Devices 65% Network Infrastructure 22% Defense and Aerospace 13% 6

7 Crowded Spectrum 7

8 TriQuint: Driving the Next Generation of RF $8 Billion Market Growing at 10-15% Differentiation Diversification Innovation Profitability Predictability Growth 8

9 TriQuint Focus Markets TriQuint Focus Markets ($100m reference scale) Higher Value 3G/4G Basestation Optical Small Cells Premium Filters Radar WLAN Connectivity 2G Basestation WLAN Mobility MMPA Lower Value GSM Tx Modules Commodity SAW Filters -20% -10% 0% 10% 20% 30% 40% 50% Growth Source: TriQuint; estimated market size in

10 Virtuous Cycle Drives Growth Mobile Devices Drives volume scale, lower costs & speed of innovation Accelerating the Next Generation of RF Defense Drives technology research & product solutions Network Infrastructure Drives high-performance product portfolio 10

11 BAW Market Opportunity The World s Largest Smartphone Market Chinese population of 1.4 billion, 50% live in urban areas, urban income 3x rural Subscribers: China Mobile (755m), China Unicom (269m), China Telecom (179m) > 200k LTE base stations currently being deployed and LTE handsets are shipping LTE bands expanding globally and Wi-Fi coexistence requires BAW filters Targeting premium sockets within high, mid and low tier phones Premium filters drive higher revenue and increased profitability 11

12 BAW Filters: An Investment in Innovation Photo of Richardson plant 2004 TriQuint acquires IP from TFR First BAW produced in Texas factory Filters ship in mobile devices TriQuint doubles BAW capacity B Shipped; capacity doubled Volume surges with LTE demand 12

13 TriQuint Revenue ($M) Renewed Growth Cycle $1,600 $1,400 $1,200 $1,000 $800 4G drivers Smartphone penetration LTE band count TD-LTE Carrier aggregation Wi-Fi coexistence Base station investment Backhaul infrastructure 3G ramp From 2005 to % revenue CAGR $600 $400 $200 $- NOTE: Adoption curves for 3G (green) and 4G (blue) are for illustrative purposes only. 13

14 TriQuint Product Line Strategy Mobile Devices Focus on LTE Premium Filters & High Efficiency, Broadband Amplifiers Only Supplier with Actives and Premium Passives Infrastructure & Defense Multi-market Focus on High Value Products Best in Class GaN, GaAs, & Filter Technology Across Full Spectrum Unmatched Technology Breadth and Strong Customer Relationships 14

15 Executive Team CFO / Finance & Administration Steve Buhaly Mobile Devices Tim Dunn Infrastructure & Defense Products James Klein President & CEO Ralph Quinsey Worldwide Operations Steve Grant Global Sales & Strategic Development Todd DeBonis Human Resources Deborah Burke 15

16 Financial Highlights Steve Buhaly CFO 16

17 Leveraged to Revenue Growth CAGR from 2006 to 2010 (3G Ramp) 60% 50% 40% 30% 20% 10% 0% Revenue 22% EBITDA 38% Earnings 45% Cash Flow 54% Source: FactSet and TriQuint 17

18 ROE Improvement Return On Equity = Net Margin x Asset Turnover x Financial Leverage Net Income Rises Faster than Sales Sales Increase and Cap Ex < Depreciation = Relatively Flat 18

19 Improving Operating Model Non-GAAP $ in millions 1 st Half nd Half (1) 2013 Mid-Term Targets Basis Revenue $374.3 $515.8 Above Industry Average Growth Filter Growth Gross Margin % Revenue $ % $ % 50% Incr. Margin Accretive Filter Margins Operating Expense % Revenue $ % $ % < 25% Sales > OpEx Growth Op. Income / (Loss) % Revenue ($36.1) (9.6%) $ % > 15% Leverage EPS ($0.24) $0.29 EPS > Sales Growth Share Buyback (2) Low Tax Rate (1) 2 nd Half 2013 represents the combination of Q actuals and the midpoint of Q4 guidance as of 10/23/13. (2) 17.5M shares repurchased at $5.61 since Q

20 Rapid Financial Improvement + Revenue Growth + Accretive Mix + Leverage = Financial Improvement Increased Shareholder Value 20

21 Infrastructure & Defense Products (IDP) James Klein Vice President and General Manager 21

22 IDP Overview Financials > $3B SAM ~ 5-10% revenue growth ~ 5-30% share Key Customers Partnered with the best Top Markets Radar Optical drivers Base stations 22

23 IDP Strategy Maintain technology leadership Leverage DoD funding to seed innovation Support commercial markets with superior GaN and BAW solutions Partner with the best in the industry Radar, optical and base stations Increase pace of product development Market shaping, differentiated products Small acquisitions to supplement growth New Products * Estimated 23

24 Defense 24

25 Advancing the Defense & Aerospace Market Market Needs High performance products and semiconductor processes to address a broad range of challenges Intelligence, surveillance & reconnaissance Cost-effective radar retrofits Coordinated communications Next-generation electronic warfare systems Space-based systems 25

26 GaN: A New Enabling Technology Wider Bandwidth More Power Higher Efficiency Higher Temp Advanced R&D Electronic Warfare Next-Generation Radars Communication Systems New Sensors New Missions 500 GHz / 500V per ns Manufacturing yields and reliability that equal or exceed more conventional semiconductor technologies Amplifier cost and efficiency that support overall best value Numerous products to support both defense and commercial markets Broad range of processes that support 0-94 GHz applications 26

27 GaN Technology Powers World Class Products Greater power Smaller size, fewer parts Higher efficiency 6.5W Ku-Band GaAs Power Amplifier 20W Ku-Band GaN Power Amplifier Examples of High-Performance GaN Products 40W GaN Switch 55W Power Transistor 30W Wideband GaN PA 20W Ku-Band GaN PA Next: 27

28 TriQuint GaN: The Next Level of Integration Solid State Power Amplifiers (SSPAs) Acquired in August 2013 Spatium SSPAs displace TWTAs in defense and commercial applications TWTA market opportunity ~$600 million by 2015* Flight-qualified for airborne electronic warfare systems TriQuint GaN will enable more innovation *TriQuint estimate 28

29 Supporting the Full Range of Defense Applications Defense & Commercial Satellites Space AESA Radar Navigation Electronic Warfare Communications 29

30 Defense & Space Products: What s New in 2013 GaN Discrete Industry leading gain and efficiency from DC to 2GHz, 4GHz and 6GHz Comm Introducing industry first 0.15um GaN power amplifiers Radar HPA High efficiency, high power GaN HPAs Radar Electronic Warfare GaN drivers, industry first GaN LNAs, GaN switches, GaAs phase shifters, high power limiters and LNAs High efficiency, high power broadband amplifiers 30

31 Defense & Aerospace Key Programs EA-18G Growler F-22 Raptor F-16 Falcon F-35 Lightning WGS Wideband Global SATCOM AN / TPQ-53 Quick Reaction Capability Radar 2,000 4,000 radars estimated for new and retrofitted tactical fighters Ground, ship and space-based radars offer similar market size opportunity 31

32 Network Infrastructure 32

33 High-Performance Network Infrastructure TriQuint technology is moving data around the world China LTE network is a great growth opportunity China Mobile Issues Tender Suppliers to build its 4G TD-LTE network, including 207,000 base stations TQNT content opportunities $180 per base station $50-$100 per small cell $600-$800 per 100G optical transceiver $10 per consumer VSAT terminal 33

34 Exabytes per Month Thirst for Data is Accelerating Connecting Places People Things Mobile Data Traffic Exabyte~1 Billion Gigabytes Video >50% of mobile traffic in 2012 and will grow to 2/3 by 2017 Mobile connected devices will exceed the world s population in 2013 Average smartphone will generate 2.7 GB traffic each month in 2017, 8x 2012 Mobile connected tablets will generate more traffic in 2017 than the entire global mobile network in

35 Advancing Transport Infrastructure Market Direction Demand for network capacity Streaming video Data traffic Social networking 40G / 100G being deployed for metro and long-haul optical networks 200G sampling Mobile Data Traffic Growth Exabytes per Month % CAGR Source: Cisco Mobile Data Forecast, Feb 2013 TriQuint s performance leadership and broad product portfolio address key transport OEM needs 35

36 Optical Products: Differentiated Solutions Winning Attributes Smallest footprint Lowest power dissipation Highest channel-channel isolation Demonstrated environmental robustness Capabilities World class semiconductor processes Innovative low cost packaging Partnerships with the industry leaders 36

37 Transport Products: What s New in 2013 Optical Drivers Dual channel SMT linear drivers for next generation 100G systems Optical TIAs TQ now in the Rx side of transceiver Radio Converters New converter and VCO families covering major P2P radio bands Radio PAs TriQuint TGA4534SM 1201 MAL AC0753 New HPA family for 18 and 23 GHz radio bands CATV GaN and GaAs MMICs and hybrids for CATV infrastructure 37

38 Advancing the Base Station Market Market Direction LTE, small cells & commercial access points Multi-standard, multi-band radios RF integration with filtering GaN adoption for efficiency and bandwidth TriQuint s broad portfolio and multi-chip modules address operator needs for increased data capacity 38

39 Wireless Infrastructure Transformation Macro Small-Cell Outdoor Small-Cell Indoor Carrier Grade Wi-Fi System Drivers Bandwidth & Coverage Capacity & Size, Weight Capacity & Size, Power Cellular Integration Component Drivers Performance & Efficiency Size, Efficiency & Multi-Band Linearity & Multi-Band Power & Linearity TriQuint Value Proposition Technology leadership Broad product suite Superior integration Industry-leading packaging 39

40 Basestation Power Signal Bandwidth Base Station Market Dynamics Super Macro Multi-Standard Multi Band Macro MC-GSM W-CDMA Micro Multi-Standard Multi Mode Macro GSM CDMA Pico/Femto Multi-Standard Single Mode Developing products to support the inflection point High band and wideband macro power amps utilizing GaN Low power integrated small cell modules 40

41 Base Station Products: What s New in 2013 Product Family Base Station LNAs Product Description Integrated modules with industry-leading noise figure Small Cell PAs Integrated modules covering the spectrum of frequencies and power levels Base Station GaN Improved efficiency and bandwidth over conventional solutions Filter Modules Integrated BAW and SAW-based filter modules support a broad variety of applications 41

42 IDP Summary Great technology Partnered with the leaders Broad product portfolio and growing Positioned in strong growth markets High share 42

43 IDP Q & A

44 BREAK

45 Mobile Devices 45

46 Key Trends Driving Market Growth RF content is expanding Filters are increasingly important Higher levels of integration TriQuint ideally positioned for growth 46

47 More Smartphones, More Bands 2,500 M Smartphone Shipments (Devices in millions) 2,000 M Smartphones Total Worldphones with 4+ data bands Smartphones with < 4 data bands 1,500 M 1,000 M 500 M 0 M Source: Mobile Experts, June

48 Market Transitioning to LTE 1,400 1,200 1,000 Robust LTE Growth (Devices in millions) Number of LTE Devices Share of LTE Devices (in %) 25% 32% 39% 43% 45% 40% 35% 30% % 25% 20% % 3% 0% % 10% 5% 0% Sources: Mobile Experts and TriQuint 48

49 Complexity Solving 3G / 4G Filtering Challenges TC-SAW Wi-Fi / LTE Coexistence Challenges Band 20 LTE FDD Duplexer Band 28 LTE FDD Duplexer Band 17 LTE FDD Duplexer Band 27 LTE FDD Duplexer Band 26 Duplexer Band 13 LTE FDD Duplexer Band 5 LTE FDD Duplexer Band 8 WCDMA Duplexer Band 29 LTE FDD Filter GPS GSM Rx SAW Band 4 LTE FDD Duplexer Band 1 WCDMA Duplexer Band 3 LTE FDD Duplexer Band 25 LTE FDD Duplexer Band 2 WCDMA or LTE FDD Duplexer Band 40 LTE TDD Filter 2.4 GHz Wi-Fi Filter Band 41 LTE TDD Filter Band 7 LTE FDD Duplexer Band 42 LTE TDD Filter Band 38 LTE TDD Filter 5 GHz Wi-Fi Filter BAW Band 43 LTE TDD Filter Asia Europe The Americas RF Frequency 49

50 Crowded Cellular Spectrum 50

51 Carrier Aggregation Drives Filter Demand Allows service providers to combine spectrum for bigger data pipes Fuels demand for high-performance filters Band A Band E f Aggregated Data Pipe (Bands A & E) 51

52 3.5 GHz Spectrum Coming: More BAW Filters Source: GTI 52

53 Hypothetical RF Content in LTE Phones $1,800 Premium Filters SAM ($ in millions) Typical 3G Regional LTE Global Roaming LTE $1,600 $1,400 45% + CAGR $1,200 $1,000 $800 $600 $400 $200 $ Sources: Mobile Experts and TriQuint SAW Filters $1.25 $2.25 $3.00 BAW Filters $0.00 $1.25 $3.50 Power Amplifiers $1.25 $1.75 $2.00 Switches / ASMs $0.75 $0.75 $1.00 Wi-Fi $0.50 $1.00 $1.00 Total RF Content $3.75 $7.00 $

54 SAW & BAW Technology Comparison SAW (Surface Acoustic Wave) Acoustic wave propagates in a lateral direction BAW (Bulk Acoustic Wave) Acoustic wave propagates in a vertical direction Covers frequencies up to about 1.9GHz Suited for frequencies from 1.5GHz to 9GHz 54

55 What Makes BAW Filters So Desirable? BAW Characteristics Lower signal loss Better precision Noticeable Benefits Longer battery life Fewer dropped calls Optimizes crowded spectrum Barriers to Entry Considerable IP Engineering expertise Manufacturing scale 1700 MHz RF Spectrum MHz 55

56 Leveraging Technology for Performance & Size TC-SAW Filters with WLP & CuFlip Duplexer Bank with Bands 25 & 26 BAW Filters 56

57 Integrated MMPAs for More Bands, Smaller Size 5x7.5mm 5x7mm 5x7mm 5x5m Quad Band EDGE + Bands 1 / 2 & 5 / 8 Quad Band EDGE + Bands 3 / 4 + Bands 1, 2, 5 & 8 Quad Band EDGE + Band 34 / 39 + Band 20 + Bands 13 & 17 + Bands 3 & 4 + Bands 1, 2, 5 & 8 Quad Band EDGE Industry trend: convergence with greater complexity 57

58 Power-Added Efficiency MMPA 9050: Delivering Superior Performance 48% 46% 44% 42% TQ TQ TQ TQ TQ 40% 38% TriQuint Competitor A Competitor B 36% 34% 32% 30% Band 1 Band 2 Bands 3/4 Band 5 Band 8 Best power-added efficiency (PAE) across several popular data bands 58

59 MMPA with Blend of Best Technologies Low-band 3G / 4G PA (BiHEMT) Low-band SP5T switch (SOI) GSM / EDGE PA (BiHEMT) Controller with MIPI interface (CMOS) High-band SP5T switch (SOI) High-band 3G / 4G PA (BiHEMT) MMPA with QB EDGE + 10 Bands WCDMA & LTE 59

60 PA-Duplexer Module (PAD) PA+ Duplexer (PAD) PAD PAD Dual-Band PAD Broadband PAD 8x5mm Band 1 7x4mm Band 1 4x3mm Band 1 6x4.5mm Band 2 Band 5 7x4mm BB PA & up to 4 3G/4G Bands Premium technology pulls through additional content 60

61 Leading in Key Smartphone Technologies HBT phemt BiHEMT E/D phemt Modules CuFlip Wafer Level Pkg. SAW TC-SAW BAW TriQuint Anadigics Avago Murata Panasonic RFMD Skyworks Taiyo Yuden TDK / EPCOS RF Power Switch, Power, LNA On-Chip Integration Multi-Chip Integration Size & Performance Smaller Form Factor <2 GHz Filters <2 GHz Filters >2 GHz Filters Limited capacity; not available in production volume 61

62 Technology Advantages: BiHEMT, CuFlip & WLP BiHEMT Smaller, less complicated die Lower cost solution Provides path for higher integration VS Cu-Flip More efficient PA Cooler operation due to lower thermal impedance (30-50%) Less manufacturing variation VS WLP Encapsulation for integration Size / height reduction Cost reduction Maintain or improve electrical performance 62

63 Ideally Positioned for Growth As LTE and ac Wi-Fi proliferate, TriQuint is ideally positioned for growth Differentiated products that deliver value Size and performance driven by broad technology portfolio Aligned with major chipset partners High-performance RF solutions Driving Higher Performance & Smaller Size 63

64 Mobile Devices Q & A

65 Closing Comments

66 Key Messages + Return to Growth + Strategic Positioning + Leveraged Profitability 66

67 Informal Q&A