Welcome to Maxim s Investor Day 2016

Transcription

1 Welcome to Maxim s Investor Day 2016

2 Safe Harbor This presentation contains forward-looking statements within the meaning of Section 27A of the Securities act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, without limitation, the Company s projections and statements regarding strategy, revenue, gross margin, earnings per share, capital expenditures and other financial and business metrics. These statements involve risks and uncertainties that could cause actual results to differ materially from expectations. Please refer to the Company s Annual Report on Form 10-K for the fiscal year ended June 27, 2015 for a description of some of the risk factors that could cause actual results to differ materially from such forward-looking statements. All forward-looking statements included in this presentation are made as of the date hereof, based on the information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement. 2

3 Welcome to Maxim s Investor Day 2016 Kathy Ta, Managing Director Investor Relations

4 Investor Day Agenda Wednesday, February 10, 3:00 5:30 pm 3:00 3:05 pm 5 min. Welcome Remarks - Kathy Ta, Investor Relations 3:05 3:30 pm 25 min. Tunç Doluca, President and CEO 3:30 3:55 pm 25 min. Tony Stratakos, CTO 3:55 4:30 pm 35 min. Matt Murphy, EVP, Business Units, Sales and Marketing 4:30 5:00 pm 30 min. Bruce Kiddoo, CFO 5:00 5:30 pm 30 min. Questions & Answers 5:30 6:30 pm 60 min. Reception 4

5 Maxim s Strategy and Focus Tunç Doluca CEO

6 3 Takeaways 1) Focusing on power and markets where we add value 2) Diversifying our business 3) Improving cash flow 6

7 Industry View Maturing Industry: 4% analog growth projected Common themes: Consolidation and margin improvements Power of incumbency clear Source: WSTS 7

8 Industry View Maturing Industry: 4% analog growth projected Common themes: Consolidation and margin improvements Power of incumbency clear Electronics everywhere = new opportunities for growth Maxim in position to leverage incumbency Product performance matters Great engineering team at Maxim Source: WSTS 8

9 Our Strategy Lead high-performance power Differentiate in targeted growth markets Grow core products Drive operational excellence 9

10 Our Strategy Lead high-performance power Differentiate in targeted growth markets Grow core products Drive operational excellence 10

11 Power is ~40% of the Analog TAM 2015 Analog revenue = $45B ASSP GP Interface GP Amplifiers $2.0 $2.8 $2.9 GP Signal Conversion GP Total Power ~40% ($17B) $26.6 $11.0 General Purpose Power ASSP Source: WSTS, Maxim 11

12 Power Grew 2.5X Analog Market Power 4.7% GP Analog Signal Converters 1.4% 2.1% Amplifiers -1.8% Interface -3.1% TOTAL ANALOG 1.7% Source: WSTS 4 Year CAGR ( ) 12

13 History in Power GENERAL PURPOSE POWER LAPTOP BATTERY MANAGEMENT SUPERVISORY POWER 1990s Now 13

14 History in Power GENERAL PURPOSE POWER LAPTOP BATTERY MANAGEMENT CAMERA PMICs SMARTPHONE PMICs CLOUD / DATA CENTER POWER WEARABLES PMICs SUPERVISORY POWER LCD TV POWER AUTOMOTIVE POWER 1990s Now 14

15 Power is Central to Everything Energy efficiency Industry 4.0 Smaller form factors Longer battery life Integration for performance & reliability 15

16 Power is Central to Everything Energy efficiency Industry 4.0 Smaller form factors Longer battery life Integration for performance & reliability 16

17 Diversifying Maxim s Power Revenue % Consumer + Computing Automotive 56% 63% Industrial Comms & Data Center Source: Maxim 17

18 Maxim Has Robust Power Franchise Beyond Mobility $303M 18% CAGR $500M Automotive Power 43% CAGR Comms & Data Center Power 11% CAGR Strong Growth Automotive Comms & Data Center Industrial Industrial Power 5% CAGR Source: Maxim 18

19 Our Strategy Lead high-performance power Differentiate in targeted growth markets Grow core products Drive operational excellence 19

20 Targeted Applications in Key Markets Automotive Industrial Data Center Mobility Power Power Power Power Interface Signal Chain Optical Audio RF Interface Sensors Micros Security Sensors 20

21 Our Strategy Lead high-performance power Differentiate in targeted growth markets Grow core products Drive operational excellence 21

22 Foundation of Core Products 10,000 + products $800M + revenue 70 + % gross margin Generates highly profitable annuity revenue in long-lived products 22

23 Our Strategy Lead high-performance power Differentiate in targeted growth markets Grow core products Drive operational excellence 23

24 Transforming the Company Portfolio Management 24

25 Transforming the Company Portfolio Management Transform Manufacturing 25

26 Transformation Driving Cash Flow Free Cash Flow $M $703M $539M 9% CAGR Note: Free Cash Flow: Cash from Operations Net Capital Expenditures Net Capital Expenditures: Gross Capital Expenditures Asset Sales Calendar year 26

27 Our Strategy Lead high-performance power Differentiate in targeted growth markets Grow core products Drive operational excellence 27

28 Technology Development & Incubations Tony Stratakos CTO

29 Technology Development & Incubations Tony Stratakos CTO

30 Advanced R&D Roles Develop Platform Technologies Power & Sensors Incubations 30

31 Power

32 Technology Leadership in High-Performance Power High Functional Integration High Current Integration Small Size High Efficiency Low Standby Power 32

33 Technology Leadership in High-Performance Power High Functional Integration High Current Integration Small Size High Efficiency Low Standby Power High-Performance Power 33

34 Investing Where High-Performance Power is Valued Healthcare Wearables Data Center Battery Solar Lighting Integrated Infotainment Industrial 34

35 Investing Where High-Performance Power is Valued Healthcare Wearables Data Center Battery Solar Lighting Integrated Infotainment Industrial 35

36 Investing Where High-Performance Power is Valued Healthcare Wearables Data Center Battery Solar Lighting Integrated Infotainment Industrial 36

37 Investing Where High-Performance Power is Valued Healthcare Wearables Data Center Battery Solar Lighting Integrated Infotainment Industrial 37

38 Investing Where High-Performance Power is Valued Healthcare Wearables Data Center Battery Solar Lighting Integrated Infotainment Industrial 38

39 Integration & Low Power Drive Automotive Power Adoption Case 1: Maxim PMIC for NVIDIA processor Highest functional integration 14 power functions on one IC Smallest size for space-constrained module Integration provides reliability for Infotainment & ADAS 39

40 Integration & Low Power Drive Automotive Power Adoption Case 1: Maxim PMIC for NVIDIA processor Highest functional integration 14 power functions on one IC Smallest size for space-constrained module Integration provides reliability for Infotainment & ADAS Case 2: High-voltage automotive power IC Lowest off-state power 2mA standby current Always on for fast ECU wake-up 40

41 Power Efficiency & Small Size Drive Data Center Wins Data center integrated power ICs Highest current: CPU Only single-chip solution: Memory Smallest footprint 20% higher computational density Lowest total cost of ownership ~$1 in energy cost savings per $1 in Maxim revenue $20M in energy cost savings for 1M servers per year 41

42 Power Efficiency & Small Size Drive Data Center Wins Data center integrated power ICs Highest current: CPU Only single-chip solution: Memory Smallest footprint 20% higher computational density Lowest total cost of ownership ~$1 in energy cost savings per $1 in Maxim revenue $20M in energy cost savings for 1M servers per year 42

43 Technology Leadership in Power Requires a Platform Approach Power Technology Platform Process Advanced Packaging Architecture Power/Mixed-Signal Integration 43

44 Technology Leadership in Power Requires a Platform Approach Power Technology Platform Process Advanced Packaging Architecture Power/Mixed-Signal Integration 44

45 Benefits of Technology Scaling in Conventional Power Transistor Density Conventional Wisdom: Little scaling benefit Good scaling benefit >1µm 180nm 130nm Decreasing Linewidth 45

46 Unique Benefits of Technology Scaling for Maxim Transistor Density Maxim Roadmap >1µm 180nm 130nm Competitor tool limitations Decreasing Linewidth 46

47 Unleashing the Benefits of Deeper Submicron for Power Maxim Process & Device IP Advanced Foundry Tools Differentiated Power Devices on Proprietary Process 47

48 Unleashing the Benefits of Deeper Submicron for Power Maxim Process & Device IP Advanced Foundry Tools Differentiated Power Devices on Proprietary Process Power Technology Platform Process Advanced Packaging Architecture Power/Mixed-Signal Integration 48

49 Maxim s Evolution of Technology & Manufacturing Transistor Density With Scaling Power Density Power Efficiency Integration Standby Current µm 0.35µm 180nm 90nm Mobile 90nm Platform 49

50 Maxim s Evolution of Technology & Manufacturing Transistor Density ~2000: 0.8mm Platform Process 6 Wafers Internal Development Internal Manufacturing µm 0.35µm 180nm 90nm Mobile 90nm Platform 50

51 Maxim s Evolution of Technology & Manufacturing Transistor Density ~2004: 0.35mm Platform Process 8 Wafers Internal Development Internal & External Manufacturing µm 0.35µm 180nm 90nm Mobile 90nm Platform 51

52 Maxim s Evolution of Technology & Manufacturing Transistor Density ~2007: 180nm Platform Process 8 & 12 Wafers Internal Development Internal & External Manufacturing 2010: First 12 wafers 30% cost savings µm 0.35µm 180nm 90nm Mobile 90nm Platform 52

53 Maxim s Evolution of Technology & Manufacturing Transistor Density ~2015: 90nm Mobile Only 12 Wafers Internal Development External Manufacturing 30% cost savings 30% performance gains µm 0.35µm 180nm 90nm Mobile 90nm Platform 53

54 Maxim s Evolution of Technology & Manufacturing Transistor Density ~2017: 90nm Platform Platform Process 12 Wafers External Development External Manufacturing µm 0.35µm 180nm 90nm Mobile 90nm Platform 54

55 Maxim s Evolution of Technology & Manufacturing Transistor Density nm Platform Benefits Extended Voltage Range Improved Performance & Cost Low Development Cost Low CapEx Exceeds benchmarks for performance & cost µm 0.35µm 180nm 90nm Mobile 90nm Platform 55

56 Maxim s Evolution of Technology & Manufacturing Transistor Density Solution Benefits 15x Functional Integration Density 20x Higher Current Density More Efficient: 7x Lower Power Loss 10x Lower Standby Power Loss >70x density in 5 generations 0 0.8µm 0.35µm 180nm 90nm Mobile 90nm Platform 56

57 Maxim s Evolution of Technology & Manufacturing Continued improvements forecast in deeper submicron technologies Transistor Density Future: <90nm Platform Process 12 Wafers External Development External Manufacturing Low CapEx 0 0.8µm 0.35µm 180nm 90nm Mobile 90nm Platform < 90nm 57

58 Sensors

59 Global Wellbeing Enabled by Maxim Sensors Bio Sensing 59

60 Global Wellbeing Enabled by Maxim Sensors Bio Sensing Environmental Sensing 60

61 Global Wellbeing Enabled by Maxim Sensors Bio Sensing Environmental Sensing Food & Water Quality 61

62 Incubations

63 Sharp Decline in Semiconductor Startups Number of Semi Startups Created Source: Gartner

64 Advanced R&D Semiconductor Incubations SOC Integrated Voltage Regulators (IVR) 64

65 Advanced R&D Semiconductor Incubations SOC Integrated Voltage Regulators (IVR) Software Defined Battery 65

66 Advanced R&D Semiconductor Incubations SOC Integrated Voltage Regulators (IVR) Software Defined Battery Future Projects Sensors Power 66

67 Summary Leading in High-Performance Power > Technology leadership > Holistic platform approach Maxim uniquely positioned to leverage technology scaling Incubating new businesses for our future 67

68 Driving Sustainable Growth Matt Murphy Business Units, Sales & Marketing

69 Our Strategy Lead high-performance power Differentiate in targeted growth markets Grow core products 69

70 Playing to Our Strengths in High-Performance Power Lead high-performance power 1 2 Leverage core competency Focus on growth markets 3 Increased R&D 70

71 Targeting High Growth with Disruptive Technology R&D organized by end markets and core products where we are winning Automotive Industrial Data Center Mobility Core Products (General Purpose, Micros, Security) 71

72 Automotive 17% of company revenue 10 + year history building the business Diversified product and customer base 72

73 Accelerating Growth in Automotive Maxim Revenue [$M] $350 $300 $250 26% CAGR ( ) $200 $150 $100 $50 $0 Source: Maxim Calendar Year 73

74 Automotive Surpassed Smartphones in Market Size & Growth Analog Market TAM [$B] $8.6 $8.7 $8.9 Smartphones $10.2 Automotive Automotive market growing to $10B, 5% CAGR Source: IHS F 74

75 Investing in High Growth Areas of Automotive Automotive Analog ASSP SAM [$B] $1.5 9% CAGR $2.0 EV Battery 14% CAGR Serial Link 25% CAGR LED Lighting 8% CAGR Growing 2x faster than overall Auto market Power 6% CAGR F Source: IHS, Strategy Analytics, Maxim 75

76 Electronics Create Differentiation in Cars Opportunity for Maxim: $100+ per car Infotainment Safety Access Powertrain 76

77 Electronics Create Differentiation in Cars Opportunity for Maxim: $100+ per car Power Management USB Charging Serial Link Hybrid Radio Active Antenna Infotainment Safety Access Powertrain 77

78 Electronics Create Differentiation in Cars Opportunity for Maxim: $100+ per car Power Management USB Charging Serial Link Hybrid Radio Active Antenna Infotainment Safety Access Smart Key Powertrain 78

79 Electronics Create Differentiation in Cars Opportunity for Maxim: $100+ per car Power Management USB Charging Serial Link Hybrid Radio Active Antenna Infotainment Safety Access Smart Key Powertrain Battery Management (EV/Hybrids) 79

80 Electronics Create Differentiation in Cars Opportunity for Maxim: $100+ per car Serial Link Power Management USB Charging Serial Link Hybrid Radio Active Antenna Infotainment Exterior LED Lighting Safety Access Smart Key Advanced Driver Assistance Powertrain Battery Management (EV/Hybrids) 80

81 New Features Require Efficient Power Management Automotive IC Units [M] 14% CAGR 220Mu 85Mu Mu USB Ports Application Processors More ports More processors More power Source: Strategy Analytics 81

82 High Speed Serial Link Enables Evolution of Driver Assistance Before Single function, low-res display Now Rear-facing camera, high-res displays Next 6 + cameras, 19 links, ADAS, UHD displays New 6 GB serial link products this year enable ADAS 82

83 Lots of Geographic Headroom for Growth High Maxim s Business Traction Emerging Europe Japan Korea Americas China & Taiwan Note: Logos are the property of their respective trademark owners 83

84 Industrial Fastest growing market in analog $600M + of Maxim s revenue Diversified product and customer base 84

85 Industrial is the Fastest Growing Analog Market Industrial Analog TAM [$B] $8.4 7% CAGR $10.4 Other 11% CAGR Test & Security 2% CAGR Building & Home 10% CAGR Mil & Aero 7% CAGR Power & Energy 9% CAGR Factory Automation: 25% of Industrial TAM Medical 8% CAGR Factory Automation 6% CAGR Source: IHS E 85

86 Maxim Technologies for Factory Automation Factory Automation Analog TAM [$B] $2.1 6% CAGR $2.5 ASSP 8% CAGR 40% of Maxim Industrial Signal Chain 5% CAGR Focused investment since 2012 Interface 3% CAGR Power 5% CAGR New products ramping Source: IHS E 86

87 Key Technologies for Factory Automation Power High-voltage power Power modules Supervisory Protection Interface RS485 IO link Isolation products Digital input/output 87

88 Miniaturizing Factory Automation : Standard Micro PLC 2014: Micro PLC Reference Design More functionality 10x smaller ½ the power 88

89 to Fit in Your Pocket 2014: Micro 2014: PLC Maxim Reference uplc Design 2016: Pocket IO Reference Design chips $125 Maxim content 89

90 Winning in Industrial Power with Cooler Chips Designed differently from the ground up Competitor Solution Maxim Solution Note: Example uses V IN = 24V, V OUT = 5V, I OUT = 500KHz 50% lower heat generation than competition 90

91 Data Center Focused on the Cloud Highest power density 91

92 Data Centers Transitioning to the Needs of the Cloud Server Unit Market Share % 100% 75% 50% Enterprise Cloud servers to overtake enterprise 25% Cloud 0% 2008 Source: Morgan Stanley Calendar Year 2016F 2018F 92

93 Server Power Management Leads in Power Density Conventional Solution Maxim Solution 33% smaller footprint than conventional 93

94 Optical Solutions Improve Data Center Density Data increasing Data centers store & process Users access real time 94

95 Optical Solutions Improve Data Center Density Data increasing Data centers store & process Users access real time Maxim s 25G, 40G, 100G Optical Solutions Higher density Lower power consumption 95

96 Winning in Optical Maxim s Differentiation 1. Proprietary IP cores for low power 2. Unique architecture lowers heat and cost 3. Digital tuning optimizes performance, improves module yields 96

97 Aligned with the Right Optical Customers to Win in Cloud Maxim s Module Customers End Customers Note: Logos are the property of their respective trademark owners 97

98 Mobility and Wearables More than smartphones $12B market opportunity Wearables market growing ~30% per year Investing in power, audio, and sensors 98

99 Diversifying Mobility Revenue % Smartphones Wearables 27% Tablets Growing in tablets and wearables 99

100 Diversifying Mobility Revenue by Technology % Sensors Power 47% Audio 100

101 Wearables Growing to 380M Units by 2018 Fitness & Wellness Fitness and activity monitors Smart clothing Sports watches Chest straps Patches Source: Gartner, IHS, Maxim 2018 Analog TAM $1.2B 140M units 120M units 120M units Medical Heart rate ECG Body temperature Cuff-less blood pressure Consumer Wearables Smart watches Smart glasses Wearable cameras Bluetooth headsets 101

102 Maxim Enables Longer Battery Life in Wearables Active Battery Runtime 60% increase 10 hrs 16 hrs 5 hrs Gen 1 Gen 2 Gen 3 Fitness Wearable Generation 102

103 Grow Core Products 10,000 + products $800M + revenue 70 + % gross margin Generates highly profitable annuity revenue in long-lived products 103

104 Growth Strategy for Core Products Grow core products 1 Sell what we have 2 Grow distribution partnerships 3 Selective R&D 104

105 Broad Traction in Core Products: Building Block Parts Power Interface #1 in supervisory products #1 in RS interface Invented RS232 Signal Chain Strong temperature sensor portfolio Amp #2 in comparators Strong precision amp portfolio 105

106 Sell What We Have Star Products Promotion Online Simulation Tools Improved Sales Collateral Catalog Distribution Enhanced Website 106

107 Improved Distribution Engagement Maxim revenue FY12 FY15 Direct Distribution 29% Direct Distribution 36% 10,000+ customers Leading Avnet supplier Specialty distributors to reach long tail 107

108 Driving Sustainable Growth Automotive Industrial Data Center Mobility Growing in Diversified Market Industry 4.0 Transition to the Cloud Growing in Wearables Core Products (General Purpose, Micros, Security) Positioned to Grow in the Broad Market 108

109 Creating Value in a Maturing Industry Bruce Kiddoo CFO

110 Maturing Industry Really? SoC TSMC wafer starts IPOs fabs 45% growth Moore s law 55% tuck-in acquisitions semi cycle leverage 110

111 Still Able to Create Significant Value FCF yield muted cyclicality low capex consolidation slow growth 45% dividends capital return synergies margin expansion scale matters 55% cash general purpose 111

112 Creating Value in A Maturing Industry Lead high-performance power Drive operational excellence Selective M&A Maximize cash flow 112

113 Power Franchise 1 Incumbent market position 2 Technology leadership in multiple markets 3 Highly profitable 113

114 Power Franchise 1 Incumbent market position 2 Technology leadership in multiple markets 3 Highly profitable Wide Moat 114

115 Creating Value in A Maturing Industry Lead high-performance power Drive operational excellence Selective M&A Maximize cash flow 115

116 Operational Excellence 1 Transforming manufacturing 2 Improving return on R&D 3 Execution expertise 116

117 Operational Excellence 1 Transforming manufacturing 2 Improving return on R&D 3 Execution expertise 117

118 Manufacturing Transformation San Jose fab closure & sale San Antonio fab sale Dallas Bump fab transition Philippines consolidation Strategic foundry partnerships 118

119 Manufacturing Transformation San Jose fab closure & sale San Antonio fab sale Dallas Bump fab transition Philippines consolidation Strategic foundry partnerships Improve internal fab loading Flexible cost structure Retain proprietary process technology Access deep submicron foundry capacity 119

120 Manufacturing Transformation Plan On Track Exit 61% GM 63% GM 64% GM 65% GM Actions completed 1. Closed and sold San Jose fab 2. Sold San Antonio fab to foundry partner 3. Consolidated Philippines facilities Remaining actions 1. Close Dallas wafer level packaging fab 2. Realize full savings from San Antonio fab transition 3. Depreciation CapEx convergence 120

121 Historical CapEx, Long Asset Lives Kept Depreciation High Capital Expenditure [$ M] $500 $400 Increase foundry mix Add 180nm, test capacity Use foundry for 90nm $300 $200 $100 $0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16F % of Rev 20% 20% 11% 8% 6% 7% 11% 9% 5% 3% 3% Note: Measures exclude Special Items 121

122 2x Depreciation Decline Due to Manufacturing Transformation Depreciation [$ M] $160 $140 $120 $100 $80 $60 FY12 FY13 FY14 FY15 FY16F FY17F FY18F Note: Depreciation excludes accelerated depreciation Measures exclude Special Items 122

123 Depreciation CapEx Gap: Tailwind for Gross Margin % of Revenue 12% 10% CapEx Depreciation 8% 6% 4% Depreciation will decline to CapEx 2% 0% FY12 FY13 FY14 FY15 FY16F FY17 FY18 Note: Depreciation excludes accelerated depreciation Measures exclude Special Items 123

124 Shift to Flexible Manufacturing Cost Model 2007 External Internal External Internal External Internal Combine advanced foundry capabilities & Maxim s proprietary processes 124

125 Operational Excellence 1 Transforming manufacturing 2 Improving return on R&D 3 Execution expertise 125

126 Setting Operating Expense Target of 30% Operating Expenses [$ M] $230 $220 $210 $200 $190 $180 $170 As % of Revenue 38% 34% 30% 26% Actions completed 1. Consumer Touch divestiture 2. Energy Metering divestiture 3. Portfolio management 4. SG&A efficiencies Actions remaining 1. MEMS divestiture 2. Test offshoring 3. Dallas campus sale $160 FY15 Q1 FY15 Q2 FY15 Q3 Note: Measures exclude Special Items FY15 Q4 FY16 Q1 FY16 Q2 FY16 Q3F 22% 126

127 Industrial and Automotive Growth Diversifying Revenue FY12 FY16 Target All other markets 30% 45% 50% Automotive Industrial Note: Due to nature of our general purpose products, estimates by Major Markets are imprecise 127

128 Improving Customer Revenue Diversification FY12 Broad-based + Avnet FY16 Top 10 customers 59% 67% 128

129 Operational Excellence 1 Transforming manufacturing 2 Improving return on R&D 3 Execution expertise 129

130 Execution Expertise 1 2 Integrated acquisitions Sold businesses 3 Transitioned fabs 4 Restructured everything 130

131 Creating Value in A Maturing Industry Lead high-performance power Drive operational excellence Selective M&A Maximize cash flow 131

132 Creating Value In Any Scenario Organic value creation Buying other companies Acquired by others 132

133 M&A Strategy in a Consolidating Industry Scale matters R&D Efficiency Customer and distributor strategic relationships Volume benefits with suppliers Create value Synergies Price discipline Play to our strengths High-performance analog High profitability Strong cash flow 133

134 We Have the Capacity for M&A Selective M&A 1 2 Strong cash flow Increasing debt capacity through EBITDA growth 3 Integration expertise 134

135 Creating Value in A Maturing Industry Lead high-performance power Drive operational excellence Selective M&A Maximize cash flow 135

136 Capital Expenditures Reduced to 1 to 3% of Revenue Capital Expenditures [$ M] $300 Use foundry for 90nm $200 $100 $0 FY12 FY13 FY14 FY15 FY16F % of Rev 11% 9% 5% 3% 3% Note: Measures exclude Special Items 136

137 Inventory Reduction Drives Increased Free Cash Flow Net Inventory [$M] $350 $300 $250 $200 $150 $100 $50 Inventory days target Days of Inventory $0 Note: Measures exclude Special Items FY15 Q4 FY16 Q1 FY16 Q2 FY16 Q3F FY16 Q4F

138 Higher Profitability & Lower CapEx Drive Free Cash Flow Raising free cash flow target: 30 to 35% of revenue Free Cash Flow [$M] Free Cash Flow % of Revenue $800 $600 $400 $200 Free cash flow % target range 35% 30% 25% 20% 15% 10% 5% 138 $0 FY12 FY13 FY14 FY15 FY16 Note: Measures exclude Special Items Free Cash Flow: Cash Flow from Operations Net Capital Expenditures Net Capital Expenditures: Gross Capital Expenditures Asset Sales 0%

139 Highest Free Cash Flow Yield 8.0% 7.8% 6.7% 6.6% 6.5% 6.5% 6.5% 5.8% MXIM A B C D E F G Note: Data as of February 5, 2016, First Call consensus mean estimates FCF Yield = FCF (CY2016E) / Market Capitalization Competitors: ADI, ISIL, LLTC, NXPI, SLAB, SMTC, TXN Measures exclude Special Items 139

140 Return of Cash Through Consistent Dividend Increases Quarterly Cash Dividend Per Share $ % $ % $ % $ % $ % +5% $0.20 $0.30 $0.18 FY10 Q1 FY12 Q1 FY14 Q1 FY16 Q1 140

141 Industry-Leading Dividend Yield Dividend Yield % 4.4% 3.8% 3.4% 3.3% 3.2% 3.0% 2.9% 2.7% 2.6% 2.0% 1.7% 1.7% 1.7% Note: Data as of February 5, % 0.0% 0.0% 0.0% A MXIM B C D E F G H I J K L M N O P 141

142 Returned 94% of Free Cash Flow Over Last 4 Years Dividend + Buyback [$M] $800 $600 $400 Buyback Target: 80% Return as % of Free Cash Flow 120% 100% 80% 60% $200 DIVIDEND Dividend 40% 20% $0 Note: All measures exclude Special Items FY12 FY13 FY14 FY15 FY16F 0% 142

143 Summary

144 Stronger Long-Term Business Model Old Model New Model Revenue Growth 3 to 5 Points Above Industry 50% Above Industry Gross Margin 61% 64% ~65% Operating Expenses Grow < Revenue % Growth ~30% of revenue Operating Margin 30%+ by Q4 FY15 ~35% Tax Rate 20% 20% Inventory ~100 Days ~100 Days CapEx 3% 5% of Revenue 1% 3% of Revenue Free Cash Flow Margin 25% 30% of Revenue 30% 35% of Revenue Total Cash to Shareholders 80% of Free Cash Flow 80% of Free Cash Flow Note: All measures exclude Special Items Assumes full benefit of announced restructuring activities 144

145 Stronger Long-Term Business Model Old Model New Model Revenue Growth 3 to 5 Points Above Industry 50% Above Industry Gross Margin 61% 64% ~65% Operating Expenses Grow < Revenue % Growth ~30% of revenue Operating Margin 30%+ by Q4 FY15 ~35% Tax Rate 20% 20% Inventory ~100 Days ~100 Days CapEx 3% 5% of Revenue 1% 3% of Revenue Free Cash Flow Margin 25% 30% of Revenue 30% 35% of Revenue Total Cash to Shareholders 80% of Free Cash Flow 80% of Free Cash Flow Note: All measures exclude Special Items Assumes full benefit of announced restructuring activities Long-term target: $3 Free Cash Flow per share 145

146 Why Invest in Maxim? FCF Multiple at a Significant Discount to our Peers 14.9x 15.0x 15.5x 15.5x 15.5x 17.3x 12.4x 12.8x 1.05x FACTOR 1.2x 1.2x 1.25x 1.25x 1.25x 1.4x MXIM A B C D E F G Note: Data as of February 5, 2016, First Call consensus mean estimates FCF Yield = FCF (CY2016E) / Market Capitalization Competitors: ADI, ISIL, LLTC, NXPI, SLAB, SMTC, TXN Measures exclude Special Items 146

147 Thank you

148

149 3 Takeaways 1) Focusing on power and markets where we add value 2) Diversifying our business 3) Improving cash flow 149

150 Thank you

151

152 Free Cash Flow Non GAAP Reconciliation Free cash flow Free cash flow is calculated by subtracting net capital expenditures from cash flows from operating activities. The table below provides a reconciliation of free cash flow to the most directly comparable GAAP measure. For the Years Ended June 27, June 28, June 29, June 30, (in thousands) Cash flows from operating activities (GAAP) $ 693,706 $ 776,107 $ 817,935 $ 756,722 Payments for property, plant and equipment (75,816) (132,523) (216,672) (264,348) Proceeds from sales of property, plant and equipment 29,035 5,293 19,196 16,883 Free cash flow (Non-GAAP) $ 646,925 $ 648,877 $ 620,459 $ 509,257 Net revenues $ 2,306,864 $ 2,453,663 $ 2,441,459 $ 2,403,529 Cash flows from operating activities as a percentage of revenue (GAAP) 30% 32% 34% 31% Free cash flow as a percentage of revenue (Non-GAAP) 28% 26% 25% 21% 152