PLX Technology. Investor Presentation March Silicon without Software is Just Sand

Transcription

1 PLX Technology Investor Presentation March 2014 Silicon without Software is Just Sand 1

2 Safe Harbor Provision Certain statements in this presentation which are not historical facts may constitute "forwardlooking statements that involve risks and uncertainties. Forward-looking statements in this document may include statements about the company s estimated net revenues, estimated operating expenses and estimated gross margins and our expectations for data center, cloud services and storage solution markets and the growth in solid-state storage solutions that use our PCI Express Gen3 products. Such statements involve risks and uncertainties, which may cause actual results to differ materially from those set forth in the statements. Factors that could cause actual results to differ materially include risks and uncertainties, such as reduced demand for products of electronic equipment manufacturers that use the company s products, adverse economic conditions in general or those specifically affecting the company s markets, technical difficulties and delays in the development process, errors in the products, reduced backlog for the company s customers and unexpected expenses, the ability to retain key employees, the failure of PLX to protect its intellectual property rights as well as other factors discussed in Risk Factors of PLX s Annual Report on Form 10-K and its other filings from time to time with the SEC, which are available at All forward-looking statements in this presentation are qualified in their entirety by this cautionary statement, and no person undertakes any obligation to update publicly any forward-looking statement for any reason, except as required by law, even as new information becomes available or other events occur in the future. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. During the course of this presentation, we may refer to historical and forward looking non-gaap financial measures. A reconciliation of historical non-gaap financial measures with the most directly comparable GAAP financial measures can be found in our quarterly earnings releases. 2

3 PLX at a Glance Public Company NASDAQ: PLXT, $100M+ Revenue, ~57% GM, Profitable Efficient Global Enterprise ~155 Employees, Headquartered in USA & Design Center in India Revenues of over $650K per Employee The Market Leader Over 70% Market Share & Growing Market Leading Customers IBM, Dell, HP, Oracle, Cisco, EMC, NEC NetApp, Fujitsu, Huawei, ZTE, Asus Fabless Model TSMC Partner with Designs and Production at 40nm 3

4 Product Family Revenue ($M) $120 $100 $80 $60 $40 $20 $0 Consumer Storage Connectivity PCI Express Overall Top line growth vs. decrease past two years PCIe Express Now 70-75% of Business Strong design pipe should fuel continued growth Unlike several years ago, PCIe is now the majority of the business. The 2013 value is up 13% vs The growth of PCIe moving forward is expected to outpace the decline in Connectivity & Consumer Storage. Other Products Continued decline 4

5 Market Leader Switch Market Share Now over 70% and growing Industry s only broad Gen3 switch portfolio Limited Gen 3 Competition Market Share Leader All Others ~ 10% IDTI ~20% PLX ~70% Gen3 Switches - Design Wins and Business Growing While Gen 2 business/wins remains strong. Over 3/4 th of the new designs are Gen 3 Barriers of Entry are High $50-$100M requiring dominant market share to get ROI 5

6 Experienced PLX Management Team Seasoned, Stable Lean Management Team Over 140 years of semiconductor experience Average experience at senior exec level: 12+ years Average time with PLX: 8+ years No exec with less than 4 years with PLX David Raun President & CEO Art Whipple CFO Vijay Meduri EVP Engineering Gene Schaeffer EVP Worldwide Sales Mike Grubisich EVP Operations 6

7 PLX PCI Express Solutions Proven Shipments ~$350M ~100M Ports All top Enterprise accounts New Gen3 Switches Storage 12 to 96 Lanes Networking 19 in production More in Development Long Product Life Server Embedded PC/ Consumer 8+ years 7

8 Growing Data Center/Cloud PLX s Largest Market ~75% of PCI Express Sales Fast Growing Market Spend Over $450B Cloud Traffic 66% CAGR Storage 42% CAGR Data Center/Cloud Trends Driving New PLX Opportunities Virtualization & Convergence PCIe SSD Adoption Mega Data Centers Being Built Sources: Intel, Cisco, IDC, Linley, PLX Estimates Growing TAM 8

9 Customers Serving Cloud/Data Center Servers First Market that Developed for Switches Storage Largest Market Growth & Attach Rate All Market Leaders Using PLX PCIe Products Switches & Routers Control Plane Standard Other Cloud Leaders requested not to be listed 9

10 Storage in the Cloud/Data Center I/O Fan-out, Redundancy & Backplane Large Switches with PLX added features used throughout Enterprise Storage Systems. Represents most of the storage revenue today in the pie chart below. Total Storage Doubling Every Two Years Standard Bus for Market Leaders Storage Systems & HBAs/CNAs Storage Largest Market Growth & Attach Rate Storage Networking Server Embedded PC/ Consumer 10

11 SSD Storage in the Cloud/Data Center Solid State Storage (SSD) PCIe is interface of choice for the Fast Growing Enterprise Flash SSDs Market. Replacing Hard Drives.driving a need for many PCIe Switch Ports. Growth Opportunity. Switches used to create connectivity for SSD drives & cards.need lots of ports. Switches used in multiple controller card designs 2-3X per year Growth PLX adding features to support Sources: IDC, Gartner Phase 1: Switch used as Expander like SAS Expander. Phase 2: Adds ExpressFabric IO Sharing allowing SSD Sharing. 11

12 Networking in the Cloud Control Plane High Port Count PCI Express Switches used to control the Network Fabric Standard Method for Market Leaders Many Designs Still to Ramp 7-10 Year Life Spans New Designs Gen 2 & Gen 3 Network Interface Cards and Host Bus Adapters Used to support multiple fabric controllers or as a bridge to PCIe Gen3 (in 2 port mode) 10G Ethernet NICs Fibre Channel & InfiniBand Used by Market Leaders 12

13 Servers in the Cloud/Data Center I/O Fan-out/Expansion Increases I/O slots & end points One of the first markets for Switches All Top Servers Suppliers PCIe SSDs driving need for more slots/ports Storage Servers Backplanes Large switches replacing proprietary costly legacy backplanes. Leverage PCIe Performance & Low Cost Structure High-End & Blades GPGPU Computing Large switches connecting to multiple PCIe GPUs Leverages PCIe Switch ability to connect many GPUs together 13

14 PCI Express in Embedded Multi-Function Printers & Set Top Boxes Switches for fan-out and bridges for USB 3.0 Connectivity Japan, Korea and USA Mid to High End Models Gen2 & Gen 3 Switches USB 3.0 to PCIe Device Bridges Instrumentation Multiple switches used for backplane and cards Market Leader Use Feature-Packed Switches Gen2 and Gen3 Industrial Appliances CPU and DSP based platforms using Switches & Bridges TI DSP Cards Gen2 & Gen3 14

15 PCI Express in Consumer Desktops, Notebooks, All in Ones Fan-out to additional peripherals/storage (TB, SSD), multiple GPU slots, lower power by shifting CPU type and ease of data transfer. Not a focus area but can produce revenue opportunity at times. Market Leaders Feature differentiation Gen2 and Gen3 Dual Graphic Cards Supports two GPUs on Single Card Market Leaders High End Gaming Market Lower Cost, Basic Switch Used Ramping in Gen3 Replaced Switches previously built by AMD & Nvidia 15

16 PCI Express Revenue ($M) $80 $70 $60 $50 $40 $30 $20 $10 $

17 Fuel for Growth Standard Switches Growing In the box PCI Express business Leverage Market Position and Record Design Win Pipe with Market Leaders Key: Gen 3 Designs Into Production Most have not gone into production yet $80 $60 $40 $20 3X+ Design Pipe (Future Revenue Potential) $ PCIe Revenue now over 70% of PLX Total Today s Design Win Pipe = 3X+ the 2009 Level with Gen 2 The smaller Gen 2 design activity pipe resulted in revenues more than doubling over the following 3 years ( ) 17

18 Plus.Expanding Opportunity & TAM Outside the Box ExpressFabric - PCIe as the Fabric - Double PLX TAM - Lowest Power - Lowest Cost $80 $60 $40 $20 $ Inside the Box Switches - Solid Growth - Limited Competition - Gen3 into Production - Storage including SSD & Communications Growth - Record Design Pipe 18

19 ExpressFabric Quick Overview Outside the Box ExpressFabric - PCIe as the Fabric within the Rack - Rack Scale Integration TAM EXPANSION* OPPORTUNITY * For PCI Fabric devices as well as standard devices 19

20 Today s Data Center Rack Storage Multiple Fabrics 1-3 Switches Networking CPU/Host CPU/Host CPU/Host LOM/NIC LOM/NIC HBA LOM/NIC HBA Ethernet Bridging Devices NICs, HBAs, HCAs, etc. $50 to $500 Each 5-8+ Watts Each CPU/Host CPU/Host CPU/Host PCI Express LOM/NIC HBA LOM/NIC HBA HBA LOM = LAN on Motherboard (Ethernet) NIC = Network Interface Card (Ethernet) HBA = Host Bus Adapter (Fibre Channel) HCA = Host Channel Adapter (Infiniband) Fibre Channel PCI Express Already available in Every Box 20

21 PCI Express ExpressFabric Rack Scale Integration CPU/Host CPU/Host CPU/Host CPU/Host CPU/Host Shared I/O to Drop Costs & Power Pushes the Network to Top of Rack with PCie..Removing Costly NICs/HBAs Each Host believes they still have a dedicated NIC as before HBA NIC PCI Express ExpressFabric Switch CPU/Host* PCI Express Retimer Switch Retimer Retimer Retimer LOM = LAN on Motherboard (Ethernet) NIC = Network Interface Card (Ethernet) HBA = Host Bus Adapter (Fibre Channel) HCA = Host Channel Adapter (Infiniband) Converged Fabric PCI Express High Performance Low Latency 32Gbs Links (x4) Scalable to - 64G (x8) - 128G (x16) Copper & Optical Simple ~ $5 & ~ 1 Watt PCIe Retimers Fraction of the Cost & Power of NICs, LOMs, HBAs Summary ~½ the Cost ~½ the Power * Placement of the CPU may eliminate need for retimer in some designs dropping costs and power further 21

22 PLX ExpressFabric Demo PLX ExpressFabric Top of Rack Switch PLX ExpressFabric Top of Rack Switch connected to multiple servers via PCI Express Shown at IDF, Sept 2013 and Super Computing, Dec

23 Infiniband Ethernet Comparison Chart 10GE & IB QDR Cost/Gbps ($) Power/Gbps (w) $ $16.0 $14.0 $12.0 $ $8.0 $6.0 $4.0 $ $- ExpressFabric 10GE SPF+ 10GE LOM 0.00 ExpressFabric 10GE SPF+ 10GE LOM Cost/Gbps ($) Power/Gbps (w) $ $10.0 $8.0 $6.0 $4.0 $ $- ExpressFabric IB QDR 0.00 ExpressFabric IB QDR SFP+ = Small Form Factor Pluggable Connector (Direct Attached) IB QDR = Infiniband Quad Data Rate LOM = LAN on Motherboard (Ethernet) 23

24 ExpressFabric Rack Scale Integration HBA NIC Flash Flash Flash Flash Flash Flash Flash Flash GPU GPU GPU GPU GPU GPU us us us us us us CPU/Host SSD Controller SSD Controller GPU GPU GPU us us us PCI Express Shared I/O Box No longer needs to have Switch at Top of Rack ExpressFabric Switch Switch Switch us Switch Retimer PCIe Switch Box Serving the Rack Can be in any location Enables Shared SSD Storage PCIe offers the Highest Performance & Low Latency GPGPU Computing PCIe is Standard for GPUs Microservers PCIe as Future Fabric GPGPU = General Purpose Graphic Processing Unit (non graphics application) Microserver = Use of multiple smaller & lower power CPUs (like ARM) in a server rather than Intel Xeon x86 type SSD = Solid State Drive = Flash Memory 24

25 Infiniband Infiniband PCI Express PCI Express PCI Express ExpressFabric Co-Exists ExpressFabric Rack Scale Deployment will co-exist with other interconnects Infiniband in High Performance Computing (HPC) Ethernet as Backbone Ethernet Ethernet 25

26 PCI Express Addressable Market ExpressFabric Outside the Box Systems & Switches PCI Express Inside the Box Switches & Bridges Shown as SAM. Actual TAM is in the $B s for total PCI Express Switching and Bridging (on CPUs/Chip Sets) and ExpressFabric (outside the box in data center/cloud) with silicon and systems. PLX Estimates. Based on customer feedback, the ExpressFabric silicon will be used in many applications beyond the Top of Rack example and will drive demand for other standard switches. 26

27 Profitability & Balance Sheet 2013: Increased Sales & Reduced Spending Record profits Increased cash by 22% Reduced bank debt by 38% Increased shareholder equity by 24% 2014: Growth Expected from Gen 3 Production Ramps Controlled Spending 27

28 Focus: PCIe ~70%+ PCI Express Switches & Bridges Summary Market Leading Customers Market Leader PLX ~70% Improving Financials Profits & Cash Up, Bank Debt Down, High Output per Employee Growing Revenues Expanding Market Record Design Pipe PCIe Revenue now over 70% of PLX Total Standard PCIe & ExpressFabric 3X Larger Design Pipe than

29 Thank You PLX Technology Silicon without Software is Just Sand 29