Inphi Moves Big Data Faster - Inphi Corporate Update November 1, 2016 - Inphi Corporation

 
Inphi Moves Big Data Faster - Inphi Corporate Update November 1, 2016 - Inphi Corporation
Inphi Moves Big Data Faster

Inphi Corporate Update
November 1, 2016
Inphi Moves Big Data Faster - Inphi Corporate Update November 1, 2016 - Inphi Corporation
Safe Harbor Summary

This presentation is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not
constitute an offer, solicitation, or sale in any jurisdiction in which such offer, solicitation, or sale is unlawful. The notes and
the shares of Inphi Corporation common stock issuable upon conversion of the notes, if any, will not be registered under
the Securities Act of 1933, as amended (the “Act”) or any state securities laws, and unless so registered, may not be
offered or sold in the United States except pursuant to an exemption from the registration requirements of the Act and
applicable state laws. Any purchaser of such securities will be deemed to have made certain representations and
acknowledgments, including, without limitation, that the purchaser is a “qualified institutional buyer” as defined in Rule
144A under the Act.
This presentation includes forward-looking statements relating to matters that are not historical facts, including, without
limitation, statements regarding the expected terms of the notes, the timing and expected use of the net proceeds of the
proposed offering, Inphi’s short and long term growth strategies, trends in IP traffic and technology adoption, the future
sizes and anticipated growth of the networking infrastructure, cloud computing and data center markets, and the scaling of
memory capacity with CPU cores. In some cases, such forward-looking statements are identified by words such as
“anticipate,” “believe,” “plan,” “estimate,” “expect,” “strive,” “future,” “intend” and similar expressions. Although Inphi’s
management believes that the expectations reflected in the forward-looking statements are reasonable, such statements
involve known and unknown risks, uncertainties and other factors that may cause Inphi’s actual results to be different from
any future results expressed or implied by these statements, including the risks and uncertainties described in the
preliminary offering memorandum relating to the proposed offering report, and other filings with the U.S. Securities and
Exchange Commission made from time to time. We caution you that no forward-looking statement is a guarantee of future
performance, and you should not place undue reliance on these forward-looking statements which reflect the view of
Inphi’s management only as of the date of this presentation. We assume no obligation to, and expressly disclaim any
obligation to, update any forward-looking statements contained in this presentation as a result of new information or future
events or developments.
In addition to U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. These non-GAAP
financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in
accordance with U.S. GAAP. See the Appendix for a reconciliation between each non-GAAP measure and the most
comparable U.S. GAAP measure.

                                                              Inphi Proprietary                                                        2
Inphi Moves Big Data Faster - Inphi Corporate Update November 1, 2016 - Inphi Corporation
Inphi Leads in Optical and Networking Physical Layer

                                                                                                             Non-GAAP Revenue ($M)*
  Focus on high-speed data movement interconnects
                                                                                                                                      $193       $185

  Serve cloud, enterprise and service provider markets                                                                  $100

                                                                                                           $43

   Differentiate with broadband linear amplification and higher
   modulation opto-electronic solutions                                                                    2013         2014          2015     YTD Q3'16

                                                                                                                    Non-GAAP EPS
   Core competence in high speed analog, DSP and optics
                                                                                                                                             $1.04
                                                                                                                           $0.93

   439 patents: high-speed analog and package design
                                                                                                              $0.23

  Invest for growth with 75% engineering
                                                                                                                 2014          2015     YTD Q3'16

Notes: Company data per human resources & finance reports 9/30/16 and legal reports 10/25/16
       *Pro-forma, Non-GAAP revenue adjusted for continued operations of the sale of the memory business

                                                                            Inphi Proprietary                                                           3
Inphi Moves Big Data Faster - Inphi Corporate Update November 1, 2016 - Inphi Corporation
Inphi Global Locations
 Support Customers and Attract Talent
Worldwide Offices in North America, Asia-Pacific, Europe

  Inphi HQ:
Santa Clara, CA

       Design Centers                 Sales & Support                          Operations
      USA: Irvine, Santa Clara,     USA: Austin, Chicago, Folsom,      USA: Santa Clara, Westlake Village
           Westlake Village              Kansas City, Raleigh               Asia-Pacific: Malaysia,
     Canada: Ottawa, Vancouver       Santa Clara, Westlake Village            Singapore, Taiwan
    United Kingdom: Northampton         Europe: Milan, Munich
          Europe: Hanover           Asia-Pacific: Beijing, Hsin-Chu,
       Asia-Pacific: Singapore    Shanghai, Shenzhen, Wuhan, Tokyo

                                              Inphi Proprietary                                             4
Inphi Moves Big Data Faster - Inphi Corporate Update November 1, 2016 - Inphi Corporation
Data and Traffic Growing Exponentially

                  Cloud Services                                                                         IoT
                                     ▲44%                     ▲107%
                                     Cisco Global                  Cisco IoT
                                     Cloud Index                  White Paper

                                   Data and Traffic
                                   Explosion
 Wireless                                                                                                                                       Video
  7.3Bn                                                                                                                                         ▲33%
                                                                                                                                                   Cisco Visual
 Subscriptions                                                                                                                                   Networking Index
     Ovum

     Big Data                                                                                                                         Social
     ▲23%                                                                                                                            2.0Bn Users
            IDC                                                                                                                                 IDC
                                   e-Commerce
                                      ▲10%
                                          IDC

                                                                                Notes
                                                                                1. Wireless subscriptions and social media users are as of 2015
                                                    Inphi Proprietary           2. CAGR calculated from 2014 – 2019, for sources refer the references section       5
Inphi Moves Big Data Faster - Inphi Corporate Update November 1, 2016 - Inphi Corporation
Data and Traffic Explosion Drives Data Center Growth

           Cloud Services                                           IoT

Growing 10K to                                                             Long Distance =
100K Servers                                                               Single Mode Fiber
Need: Massive                                                              Need: Cost
Interconnects                                                              Effective 100G
                                      Data Center

                                        Cloud Hardware
                                       and SoftwareNetwork
                                       Aggregation  Layer

   Wireless                                                                          Video

    Big Data                                                                       Social

                                       e-Commerce
                 ▲   Higher Density     ▼        Lower Power    ▼     Lower Cost

                                            Inphi Proprietary                                6
Inphi Moves Big Data Faster - Inphi Corporate Update November 1, 2016 - Inphi Corporation
Inphi Leads in Data Movement Interconnect

       Data Manipulation                                 Data Movement

   Processor, GPU, NIC, Switch                          Optical, Networking

             Digital                                 Analog, Mixed Signal, DSP
                                 Inphi Proprietary                               7
Inphi Moves Big Data Faster - Inphi Corporate Update November 1, 2016 - Inphi Corporation
Inphi Solves Data Movement Between & Inside Data Centers

                                 “The Data Center is the Computer™”

                                                                                   Inside DC
                                                                                   500m-2km
                                            Cloud Hardware
                                          and SoftwareNetwork
                                          Aggregation  Layer

                                                                      DCI Long Haul >600km
                                            Connecting                DCI Metro 100km-600km
   “The Cloud is the Network™”              Data Centers               DCI Edge 2km-100km

                                            Cloud Hardware
                                           and SoftwareNetwork
                                          Aggregation   Layer

                                 “The Data Center is the Computer™”

                                                 Inphi Proprietary                             8
Inphi Moves Big Data Faster - Inphi Corporate Update November 1, 2016 - Inphi Corporation
Leader in Data Movement Interconnect

  Long Haul / Metro               Between Data Centers                     Inside Data Centers
Data Movement Around the Globe   Data Movement Between Data Centers       Data Movement Inside Data Centers

    Optical           Optical                               DWDM
                                      Silicon                             CDR/PHY      Gearbox
   Amplifier          Driver                            Optical Module                                PAM
                                     Photonics
                                                       Reference Design

                                                 Inphi Proprietary                                      9
Inphi Moves Big Data Faster - Inphi Corporate Update November 1, 2016 - Inphi Corporation
Provide Complete Component Solution for Optical Platform

             Long Haul / Metro                               Data Center
                                                                        Partner
              Partner Optics                         SiPho
                                                                        Optics

                   TiA                                           TiA

                  Driver                                       Driver

             High Performance
               Coherent DSP                           Low Power PAM DSP

                 Inphi           ClariPhy*               Partners
                                                                                  *Planned
                                 Inphi Proprietary                                           10
Complete Platform to Enable Customer Success
                                                        Best Quality
                                                                                   Low Power
                     High Performance

                                                                                                                          Fast Time-to-market

                                            Optical Platform
                                                            SiPho
                                                              or
                                        Coherent DSP*   Partner Optics    Driver

                                        Optical PHY                       TiA

  Competitive Cost

                                                                                               Long Reach
                                             Dedicated Customer Support                   Note:
                                                                                          1. Wireless subscriptions and social media users are as of 2015
                                                                                          2. CAGR calculated from 2014 – 2019, for sources refer the
                                                                                             references section
                                                          Inphi Proprietary               * Planned
                                                                                                                                                            11
Large Total Addressable Market (TAM)

  Long Haul / Metro           Between Data Centers               Inside Data Centers

                              90 Million 10G/40G/100G Ports

     Service Providers            Data Centers          Cloud                        Enterprise

                         $3 Billion Interconnect TAM in 2019

                                                                Note: 2016 data from Cignal AI, Crehan Research, LightCounting,
                                         Inphi Proprietary      HIS and Inphi Estimates
                                                                                                                                  12
Building an “Annuity” Infrastructure Business

       Transimpedence Amplifier (TiA)

                      Optical PHY: Gearbox, CDR, PAM

                                     Driver

                                                     ColorZ

                                                                          Coherent DSP          *

  2013         2014           2015            2016                 2017          2018    2019

*Planned

                                               Inphi Proprietary                                    13
Long Haul / Metro:

The Cloud is the NetworkTM
100G/200G Adoption is Accelerating in Long-Haul & Metro

                                                                                                   737
Forecast Improving over Time
                                                                                          619

                                                                                  539
                                                                                    520
                                                                   436              463
                                                                                   415
                                                                       369
                                                                                   362
                                                 321                    360

                                                   255                  298
                                  208                                    258
                                                  251
                                   167            210
 August 2016        120                           182
                                   170
     October 2015                 138                       100G & 200G Long-Haul & Metro TAM (KU Ports)
        July 2015                 124
   November 2014
        May 2014    2014         2015           2016              2017            2018    2019    2020
                      Source: IHS (Infonetics), August 2016 and prior forecasts

                                                   Inphi Proprietary                                       15
Inphi Leads Transition from Limiting to Linear

           10G          40G            100G                 200G      400G         1T

  TIA            Limiting                                      Linear

  Driver             Limiting                                      Linear

  100%
                                                       Estimated market share of
   80%                                                Linear Drivers for 100G – 1T

   60%                                                                        Prior Estimate
                                                                                    July 2015
   40%

   20%
             Limiting
    0%
      2012       2013           2014          2015             2016         2017         2018
                                        Inphi Proprietary                                       16
Industry Leading Linear Coherent Solutions

    100G/200G                           400G

                                                                  4 Top 4 Tier 1
                                                                    OEMs use Inphi
   32GBaud Linear Driver           45GBaud Linear Driver
                                                                    linear amplifiers
                                                                  3 out of 4 Tier 1
                                                                    OEMs use Inphi
                                                                    linear drivers
                                                                  Inphi is first to
                                                                    market with
                                                                    45GBaud linear
                                                                    amplifier and driver
                                                                    solution for 400G
  32GBaud Linear Amplifier   Next-Gen 45GBaud Linear Amplifier

                                        Inphi Proprietary                               17
World’s First 45Gbaud Driver

   10,000 km subsea transmission, 8QAM, 300Gbit/sec
                         Inphi Proprietary            18
1M Coherent Units Shipped, > all competitors combined

                                0.6                                                             Industry Smallest SMT          1.2
                                                                                                  100G Linear Driver

                                0.5                                                                                            1.0

                                                                                                                                     Cumulative Shipments (Millions)
Shipments per Year (Millions)

                                0.4                                                                                            0.8

                                                                   Industry First 100G
                                0.3                                   Linear Driver                                            0.6

                                0.2                                                                                            0.4
                                      Industry First 100G
                                        Linear Amplifier

                                0.1                                                                                            0.2

                                0.0                                                                                            0.0
                                          2010              2011             2012                2013          2014     2015

                                                                                    Inphi Proprietary                            19
Growing Optical Interconnects Between Data Centers

 Ports grow 50%

 Enter Metro

 Take share with Linear

 Ramp new 45 Gbaud products

 Grow with both module and line card customers

 Support partner products: SiPho, CFP DCO, CFP2 ACO

 Ramp new modulations: 8QAM and 16QAM

                           Inphi Proprietary          20
Between Data Centers:

DCI Edge Solutions
100G Adoption Ramping Between Data Centers

                                                                                                 DCI Edge
                                                                                                  100G
                                                                                        312

                                                                            195

                                                                   117

                                                  68

                                        26
                     1           10                                100G DCI Edge Port Forecast (KU Ports)
July 2016
                  2014           2015   2016    2017               2018      2019       2020
  Source: Cignal AI, July 2016

                                               Inphi Proprietary                                            22
ColorZTM Delivers 100G QSFP28 for 80km Data Center Interconnect

                          “The Data Center is the Computer™”

                                     Cloud Hardware
                                    and SoftwareNetwork
                                    Aggregation  Layer

“The Cloud is the Network™”
                                                               100Gb/s
               Connecting
               Data Centers
                                                                80km
                                                                4.5W

                                      Cloud Hardware
                                     and SoftwareNetwork
                                    Aggregation   Layer

                         “The Data Center is the Computer™”
                                         Inphi Proprietary               23
Metro Datacenter Interconnect (DCI) Gap

                                No Cost Effective 100Gb/s
                                 DWDM Solutions Today
                 Point to Point Links                     ROADM Networks

                                              10G
 Standards

                   IEEE 802.3ba /                          OIF / Coherent
                                             DWDM                                      OIF / Coherent QPSK/8QAM
                   CR4,SR4, LR4                            QPSK/16-QAM
                                             SFP+
                                                            100G/200G                         100G/200G/400G
                       100G
                                                              DWDM                                DWDM

             0             2            10          100                     600                                     10,000
                                                                   Distance (km)

                                                                    80km

                                                    40x                                 40x

                                                                      4Tb/s
                       100G Switch                                                                    100G Switch

 ColorZ delivers a cost effective approach to resolve these DCI bottlenecks

                                                                   Inphi Proprietary                                         24
ColorZ Delivers Complete Solution for Time-to-Market

                        Linear                          PAM:
    SiPho
                         TiA,                           DSP,
    Optics
                        Driver                          ADC

                                               100G,
              Validated
                                              QSFP28,
               Design
                                               80km

        Lower                 Lower                      100G
        Power                  Cost                      Speed

                          Inphi Proprietary                      25
ColorZ Moves the Library of Congress in
ColorZ Platform Enables Virtual Mega-Cloud in 2H’16

 Offers compelling value proposition in terms of power,
  faceplate density, and cost per bit for 80km reach
 Provides a cost effective upgrade path from 10G DWDM in
  SFP+ to 100G DWDM in QSFP28
 Complements coherent technology for end-to-end 100G
  DWDM connectivity for Inter-DCI for Cloud customers
 Expands market opportunity for the optical industry and
  Inphi, with strong benefits for cloud customers
 Industry firsts 100G PAM Silicon Photonics, 80 km PAM4
  ASIC, and DWDM Reference Design for QSFP28

                             Inphi Proprietary              27
Inside Data Centers:

The Data Center is the ComputerTM
“Fiber PHY” Growing Rapidly in Data Center, SMF

   Source: “Mega Data Center Optics Report,” LightCounting, March 2016

                                                       Inphi Proprietary   29
“Fiber PHY” Growing Rapidly in Data Center, SMF

   Source: “Mega Data Center Optics Report,” LightCounting, March 2016

                                                       Inphi Proprietary   30
“Fiber PHY” Growing Rapidly in Data Center, MMF

   Source: “Mega Data Center Optics Report,” LightCounting, March 2016

                                                       Inphi Proprietary   31
Datacenter Transition to Fiber, DAC PHYs
                     1G             10G            25G               40G        50G      100G       400G
 Fiber / DAC
    BASE-T
 100%

                                           Estimated Capture Rate by Fiber/DAC
                                                 into BASE-T PHY Share

                       BASE-T PHY

  0%
    2010          2011         2012        2013         2014          2015     2016   2017   2018     2019

        Source: Inphi Estimates, Crehan Research, February 2015

                                                           Inphi Proprietary                                 32
Distances, Speeds Drive Optics/Electrical Transition

                    Mega Data Center

                       500m-2km
                       distances

                                               Source:
                                               Corning

         Longer Distances = Single Mode Fiber
  Cost Effective DSP-based PAM Optical Interconnects
                         Inphi Proprietary               33
Industry Leading NRZ and PAM Optical PHY Solutions

               Enterprise    Service Provider                   Data Center
               Server Line   CFP        CFP2/8           QSFP      SFP        OSFP and
                  Card                                                        QSFP-DD

 nx10G PHY

100G Gearbox

 nx25G CDR

 nx50G PAM

nx100G PAM

                                     Inphi Proprietary                              34
Roadmap to Lower Cost, Higher Density

Router
                                                                                   N x 100G
                                                                                 QSFP Inflection
        2012              2014                             2015 onwards
    CFP 12W-24W       CFP2 12W-14W                          QSFP 3.5W

Switch

                                                                                     25/50G
                                                                                   SFP Inflection
                           2008                            2015 onwards
                       SFP 10G 1.5W                          SFP 1.5W

Server
                                                                                 Enterprise Server
                                                                                  SOC Inflection
                          2012                                 2015
                      N x 10G SFP                          N x 10G SFP

         Higher Density               Lower Power                         Lower Cost

                                       Inphi Proprietary                                      35
Growing Networking Interconnects
Inside Data Centers and for Service Providers

 Ports grow 35% for 10G/40G, 300% for 100G

 Ramp 10G/40G in servers with Broadwell generation

 Accelerate 100G ramp with CFP and CFP2

 Grow 100G NRZ CDR/TiA/Driver for QSFP28

 Ramp PAM for 40/100G first, 50/200/400G next

 Address both single- and multi-mode fiber

 Partner with VCSEL, DML, EML and SiPho optics

                           Inphi Proprietary         36
Inphi Strong Leadership from Comms/Server

Position           Background

 Ford Tamer        President and CEO

 John Edmunds      CFO

 Loi Nguyen        Founder, Sr. VP, Optical Interconnect

 Sudeep Bhoja      CTO, Networking Interconnect

 Radha Nagarajan   CTO, Optical Interconnect

 Charlie Roach     Sr. VP, Worldwide Sales

 Siddharth Sheth   VP, Networking Interconnect

 Ron Torten        Sr. VP of Operations and IT

 Lawrence Tse      VP of Engineering

                                             Inphi Proprietary   37
Inphi Recognized for Excellence
     Cisco             Huawei          FiberHome                   Sumitomo                      Sumitomo Electronics
   New Emerging        Best Quality     Core Partner            Awards of Excellence            Device Innovation (SEDI)
Technology Supplier     Company            2015                  2013              2015
      2015                2015                                                                    Best Partner
                                                                                                    Awards
                                                                                                      2013-2015

                Samsung
        Best Quality    Best Partner
                                       NeoPhotonics                                       ECN                        LightWave
         Company           2016                                                       Impact Awards
                                        Supplier of the Year                                                    Innovation Award for PAM4
            2010
                                               2015                                                                       2016

                                                                                                       Quad
                                                                       PAM4
                                                                                                       Linear
                                                                       2016                            Driver
                                                                                                       2014

                                                               Inphi Proprietary                                                      38
Innovation Drives Customer Success

                       2001                                                  2016
                  40G Differential Drive
                    Modulator Driver                                   ColorZ for 80km DWDM
                            +                                                      +
                                                                          SiPho Platform for
                       40G TIA
                                                       2015               100G Data Center
                                                  Smallest Form Factor             +
                                                            +             Shipped 1M 100G
                                2009                SMT Linear Driver    Coherent Amplifiers
                            28G Coherent TIA                +                 & Drivers
                                   +                     PAM 4                     +
                           28 Gbps Differential                           64G Coherent TIA
                            Modulator Driver                                       +
                                                                         Lowest Power CDR
                                                                                   +
                                                     2014               400G CFP8 Platform
                                                     45G Linear          (DSP / Driver / TIA)
                                                   Modulator Driver
                                                         +
                                                  45G Coherent TIA
                                                         +
                                                        PAM
                                     2012
                              28G CMOS SERDES
                                      +
                                  32G Linear
                                Modulator Driver

                              Inphi Proprietary                                           39
Deliver Consistent Revenue Growth

Non-GAAP Revenue $M

                                                                    $193
                                                                                          $185

                                        $100

                $43

               2013                     2014                        2015               YTD Q3'16

  *Pro forma. Non-GAAP revenue adjusted for discontinued operations of the sale of the Memory Business

                                                     Inphi Proprietary                                   40
Consistent and Growing Profitability

Non-GAAP
               Operating Margin                                                      EPS

                                         26.4%
                                                                                                    $1.04
                        22.4%
                                                                                     $0.93

        8.5%

                                                                          $0.23

        2014             2015         YTD Q3'16                           2014       2015         YTD Q3'16

  *Pro forma. Non-GAAP, adjusted for discontinued operations of the sale of the Memory Business

                                                      Inphi Proprietary                                       41
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