ARM Holdings plc 2012 Analyst & Investor Day

23 May 2012 London

Cautionary Statement Concerning Forward-Looking Statements

This presentation contains forward-looking statements as defined in section 102 of the Private Securities Litigation Reform Act of 1995. These statements are subject to risk factors associated with the semiconductor and intellectual property businesses. When used in this document, the words anticipates, may, can, believes, expects, projects, intends, likely, similar expressions and any other statements that are not historical facts, in each case as they relate to ARM, its management or its businesses and financial performance and condition are intended to identify those assertions as forward-looking statements. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a variety of variables, many of which are beyond our control. These variables could cause actual results or trends to differ materially and include, but are not limited to: failure to realize the benefits of our recent acquisitions, unforeseen liabilities arising from our recent acquisitions, price fluctuations, actual demand, the availability of software and operating systems compatible with our intellectual property, the continued demand for products including ARMs intellectual property, delays in the design process or delays in a customers project that uses ARMs technology, the success of our semiconductor partners, loss of market and industry competition, exchange and currency fluctuations, any future strategic investments or acquisitions, rapid technological change, regulatory developments, ARMs ability to negotiate, structure, monitor and enforce agreements for the determination and payment of royalties, actual or potential litigation, changes in tax laws, interest rates and access to capital markets, political, economic and financial market conditions in various countries and regions, including the commercial credit environment and uncertainties arising out of the financial market and liquidity crises, and capital expenditure requirements. ARM does not intend or assume any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated. More information about potential factors that could affect ARMs business and financial results is included in ARMs Annual Report on Form 20-F for the fiscal year ended December 31, 2011 including (without limitation) under the captions, Risk Factors and Operating and Financial Review and Prospects, which is on file with the Securities and Exchange Commission (the SEC) and available at the SECs website at www.sec.gov.
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Agenda
Timing 10:00 10:35 10:35 11:00 11:00 11:20 11:20 11:40 11:40 12:00 12:00 12:15 12:15 12:45 12:45 13:30
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Topic Partnering for Success Simon Segars, EVP & GM Product Divisions ARMs Low Power DNA Tom Cronk, Deputy GM Processor Division Break Foundations for Leadership in Graphics Pete Hutton, GM Media Processing Division Transforming the Data Center Ian Ferguson, Director of Server Development Long-Term Growth Opportunity Tim Score, CFO Q&A Chaired by Warren East, CEO Buffet Lunch

Partnering for Success

Simon Segars EVP & GM Physical IP and Processor Divisions

21 Years of Rapid Transformation

>5 Billion connected people

$10 - Price of worlds cheapest phone

Mobile devices outsell PCs

2012
Always on, always connected

1991

Collaborating to Reduce Costs

Vertical Suppliers ASIC Vendors Fabless Semis IP Driven Design Design System Manufacturer Fully Vertically Integrated ASIC Vendor Design & Distribution EDA IP EDA Manufacture Manufacture Fab Equipment Fab Equipment Manufacture EDA Design For Manufacturing Design Design & Verification IP

1970s Relative Increase Logarithmic Scale*

1980s

1990s

2000s

Transistor Count Design Cost

Industry disaggregating into

specialist players lowers cost

Close collaboration required

to align goals and roadmaps
1970 1980 1990 2000 Today

*ARM estimates

Partnering for Success

ARMs business model enables an ecosystem of companies to succeed

Business Development

ARM ARM
License

ARM ARM Chip Designer

Efficient Scalable
OEM Customer

royalty

Resilient

ARM is at the nexus of an ecosystem of 100s of companies

Choice Innovation Differentiation

7

Increasing Capability, Low Cost

Partnership approach enables innovation and increased
capability at very low cost
Main Chip Cost Main Chip Cost CPU $250

1991

Analog baseband

$n/a

2001

Apps Processor
2.5G Baseband

$10
$10

CPU

$200

Integrated Apps/BB $15

2011

Integrated WiFi/BT Touchscreen, camera, etc.

$5 $2

CPU
Integrated WiFi/BT HDD

$100
$5 $5

Application Processor $20

Application Processor $20

LTE Modem $10 Integrated WiFi/BT $3 Touchscreen, camera, NFC, etc. $5

2016

LTE Modem $10 Integrated WiFi/BT $3 Touchscreen, camera, NFC, etc. $5

Driving the Next Five Years of Transformation

Servers Mobile Computing

Connectivity

The Internet of Things

2012-2016 Mobile Computing Trends

Great user experience across segments Right-sized computing More pixels, more screens Securing your mobile device LTE redefining connectivity Approximately 1 server for every 600 phones

10

Increasing Performance, Low Power

20 18 16

Tablets Superphone Mass Market Smartphones Entry Level Smartphones

1,200 1,200
2x Cortex-A15/ Cortex-A7 4 x Mali-T658

1,000 1,000

Relative Performance

14 12 10 8 6 4 2 ARM 11 0 2008 Cortex-A8 Cortex-A8 1x Cortex-A5 Mali-300 2x Cortex-A9 2 x Mali-400 1x Cortex-A9 Mali-400 2x Cortex-A7 2 x Mali-400 4x Cortex-A9 4 x Mali-400 2x Cortex-A15 2 x Mali-T604 4x Cortex-A7 4 x Mali-400

800 800

600 600

400 400

2x Cortex-A5 2 x Mali-400

200 200

0
2009 2010 2011 2012 2013 2014
Source: Gartner Q3 2011 Forecast

11

Volume (Mu)

Smart Connected Device Opportunity

SIM
SecureCore (Cortex-M)

Camera
Cortex-M 65/45nm

Function
ARM Processor ARM Physical IP

WiFi/ Bluetooth
Cortex-M 65/45nm

Cellular Modem
Cortex-R 65/45nm

GPS
Cortex-M 65/45nm

Apps Processor
Cortex-A Cortex-A Cortex-M Mali 32 14nm

Flash Controller
Cortex-M 130nm

Power Management
Cortex-M 180nm

Touchscreen Controller
Cortex-M 90nm

12

Advancing Windows 8 on ARM

Windows 8 continues our long history of collaboration with Microsoft. This year so far Microsoft: Detailed the features of WOA on the Building Windows 8 blog, plus details on WOA for enterprise BYOD scenarios Confirmed dedication to bringing Windows RT to market as a unique part of the Windows 8 family ARM processor based devices combined with Windows RT will deliver a compelling and productive, no compromise experience for consumers and enterprises who want a PC that is designed to be: Ready and connected Thin and light Great battery life Integrated quality with consistent performance

13

2012-2016 Cloud Computing Trends

IT is the business Density, power and cost over raw perf.

One size no longer fits all

Optimized highly integrated SoCs Open source and end user S/W
Estimated 20x increase in network traffic

14

2012-2016 Internet of Things

Always connected, always on All about sensors and user control

Smart appliances everywhere

Personal information at your fingertips Representing data in a meaningful way
1 trillion internet connected devices by 2025

15

2012-2016 Mobile Infrastructure Trends

Heterogeneous form factors
Macro

4G 2016

Rapid deployment of new services Server capacity at edge Scalable processing

Micro

Open software platforms

3G
Small cell

3m small cells forecast (2016)

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Organising For Success

Collaboration is the Key

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Future of Building Chips

SoC design has become more costly at more advanced nodes Partnerships by leading IP, EDA, foundry and fabless companies accelerates time to Increasing investments in OS, apps, content, services and security
Fab Construction Costs Rising
Leading edge costs increasing

volume for pioneers, and reduces costs for followers Functional integration is reducing BOM cost to OEM, but increasing design cost

Increasing Design Complexity and Costs

Functional integration drives design complexity and costs

More Functionality in Software

Software content increasing supporting services and security

6.0 Average Cost of Fabs ($billions)

Software Development Costs ($m)

SoC Software Development Costs ($m)

$100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 90nm 65nm 45nm 32nm 22nm

5.0 4.0 3.0 2.0 1.0 0.0 65nm 45nm 32nm 22nm
Source: Gartner, Nov 2011

Source: Semi: FabFutures Report - Feb 2010

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Organising for Multi-core Chip Design

Advanced system-on-chip designs
1-2GHz multi-core ARM processors 1-2 additional specialist processors 100-200mW when running typical applications $10-$20 price range ARM develops processors, physical IP and system components to work together Partners with EDA and foundry to ensure
manufacturability

Partners with OS and applications/games developers to ensure optimised content available for OEMs

Semiconductor companies create value

through differentiation around ARM technology subsystem
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Organising for 20nm and 14nm

ARM and Partners work with leading
foundries to enable high yields on advanced manufacturing processes Process development provides multi-Vt and
strain for performance
Leakage Dynamic 20nm Power power Reduction Techniques power
Area optimization Multi-Vt optimization Clock gating Multi-supply voltage Power shut-off Dynamic and Adaptive Voltage Frequency Scaling (DVFS and AVS) Multi-channel standard cells 1.1X 6X 0X 2X 10-50X 10% 0% 20% 40-50% ~0%

Processor, system design, physical IP, tools and manufacturing process enables power-reduction design techniques

2-3X 5X

40-70% -

20nm progressing at leading foundries Multiple test chips already taped out,
including dual-core Cortex-A15

Production expected in 2013 ready for big.LITTLE and ARM v8-A processors

14nm first tape outs in 2013

20

Organising for Ecosystems

300 Semiconductor Partners with a middleware Delivering on all the benefits of differentiation200 OS andcommon 150 Development board vendors 20 Foundries 150 Design services architecture and a software tool chain scaling from servers to 100 Apps developers 75 Tools providers sensors

21

Partnering for Success

Disaggregated partnership model has demonstrated
efficiency and scalability through industry cycles No one can do it all best technology needs team work Everyone benefits from being a part of a rich ecosystem Leaving space for all companies to make a profit
Entry-level and Super Smartphones Mobile Computing: Windows 8 Servers: Data Center Applications Microcontrollers: IoT and Sensors Networking Infrastructure and Clients Smarter Consumer Electronics

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ARMs Low Power DNA

Tom Cronk Deputy GM Processor Division

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Low Power DNA

ARM processors have always been designed
to be energy efficient Each generation required more computing, but
battery density wasnt improving quickly

Focus of the company has been on compute efficiency, balancing Performance, Power and Area

Foundations of low-power design

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Instruction set architecture Processor micro-architecture System design Implementation Operating systems and software Partnership and ecosystem

Scalability of the ARM Architecture

Low power foundation enables ARM processor
technology to scale from sensors to servers Software compatibility makes it easier to scale up Lower power processors enables a more integrated
system-on-chip
infrastructure

consumer

Power efficiency is important for all applications

More attractive system design thinner and lighter Lower cost plastic chip packaging, no heat sink or fan, cheaper components Lower energy use reduced running costs and carbon footprint New product categories wireless sensors with 15 year battery life
sensors microcontrollers mobile

25

Cortex-A15 Low Power Computing

Cortex-A15 is ARMs highest performance
applications processor to date Delivers 2x performance of a current super
smartphone in same low-power envelope
2.0 GHz Quad Cortex-A15 Seahawk

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Relative Performance

Can deliver up to 8x performance for mobile computing applications

1.5 GHz Dual Cortex-A15

15

Wide range of end markets

Consumer electronics digital TVs, mobile computers Enterprise computing servers, cloud, networking

10

1.5 GHz Single Cortex-A15

16 leading semiconductor companies licensed

Note: Relative performance based on estimates and targets for Cortex-A15 in mobile and tethered implementations

1.2 GHz Dual Cortex-A9

Current smartphones

Cortex-A8 1

26

Cortex-A7 Low Power Mobile

Cortex-A7 is ARMs most power-efficient
applications processor to date Up to 1/5th the size and 5x energy-efficiency of
Cortex-A processors in todays smartphones
Outpacing Moores law with micro-architectural innovation

5mm2
2009 High-end Smartphone Cortex-A8, 65 nm, 600 MHz

Multi-core capable delivering higher performance than majority of todays smartphones

Small size enables cheaper chips for low cost

consumer electronics $5-10 apps processor for sub $100 smartphone
2mm2
2011, Mainstream Smartphone Cortex-A9, 40 nm, 1 GHz

14 leading semiconductor companies licensed

<0.5mm2
2013, Entry-Level Smartphone Cortex-A7, 28 nm, 1.2 GHz

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Low Power Mobile Computing

Cortex-A15 and Cortex-A7 are functionally identical
Same programmers view, looks the same to OS and applications big.LITTLE processing high-performance and low power Automatically selects the right processor for the right job Redefines the efficiency/performance trade-off 11 leading semiconductor companies licensed both
Demanding tasks >2x Performance Always on, always connected tasks 20% of the Power

Current big.LITTLE smartphone

big

LITTLE

Current big.LITTLE smartphone

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Performance and Energy Efficiency

Right processor doing the right job Transparent to operating systems and applications

Compatible with current OS power management mechanisms 100,000s applications already optimised for Cortex-A
Energy saved versus todays high-end multicore phones LITTLE cluster activity 80% Big cluster activity

Applications and Middleware

Cortex-A7

Cortex-A15

OS
Power Management Software

Energy saved

60% 40% 20% 0%

Internet radio OS/UI activity Casual Gaming HD gaming Rich web services

Firmware
Shared Resources
Cortex-A15 MPCore Cortex-A7 MPCore

CPU

CPU

CPU CPU L2 Cache

L2 Cache

Coherent Memory and System

* Dual Cortex-A15 + Dual Cortex-A7 big.LITTLE system estimate in 32/28nm compared with a dual-Cortex-A9 system estimate in 40nm

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Energy Efficient Chip Design

Designing systems-on-chip for low-power Transferring data to/from external memory takes 10x more
power than moving internally ARMs smart interconnect and system components balance the demands of multiple asymmetric processors with widely differing memory requirements
control processor Comms Apps control processor Apps

CPU CPU Comms control CPU Comms control CPU AppsComms

processor Apps processor

Geometry Geometry processor Geometry processor Geometry Renderer processor Renderer processor Tiling Renderer Tiling Renderer Tiling Tiling

GPU GPU GPU GPU

Network interface Display Controller

DMA Controller Audio CODEC Image Transform

Interconnect

peripheral peripheral peripheral peripheral

Video

Motion Estimation Motion Compensate Dynamic Memory Ctrl

Static Memory Ctrl

Building the most energy efficient chips ARM partners with leading foundries to develop advanced
physical IP for desired balance of power, area, size and yield
Standard Cells

buffer Primitives Frame buffer

Texture Primitives Application Memory

buffer Tile lists Media source

Code Mass Media

Processor Optimization Pack

Multi-Voltage and multi-channel cell libraries Optimized cells

Optimized physical IP Specific for processor and foundry process

Power Management

Memories

Comprehensive components for low power implementation Multi-voltage characterization

Low power or high speed Multiple power modes Multi-Vt construction

Interface
Integrated DDR PHY Low power operating modes Architected for low power

30

Energy Efficient Ecosystem

A low power partnership - 100s of companies specialising in
low-cost and energy-efficient technology Best of breed comes from combining different DNA
Fabless designer EDA vendor Foundry manufacture Application software Operating systems Software tools

Low-power foundation delivers high performance and

maximum battery life Software engineers can take advantage of a system designed for lowpower from processor architecture to manufactured chip

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Right Performance at the Right Power

Cortex-M0+ is >2x energy efficient as any other processor

Mobile technology know-how applied to microcontrollers New markets: connected sensors, internet of things, medical devices, etc.

Cortex-M0+
at <10uA per MHz will last

15 years
on a single button cell in a typical sensor application

ARM v8-A next generation for servers and computing

Computing, consumer and enterprise applications all need 64-bit support. 64-bit Support Brings >4GB virtual memory and IO support, higher performance with more registers

Cryptography Support

and also double-precision floating point support Ubiquitous connectivity and content consumption requires security leading to most transactions being encrypted Acceleration gives 10x performance improvement for authentication/encryption algorithms

Multi-core, multi-GHz ARM processors suitable for highly integrated system-on-chips reducing complexity, cost and power in data centers, networking infrastructure and computers

32

ARMs Low Power DNA

For over 20 years ARM has developed the foundations
for energy-efficient chip design From architecture to system design to operating systems Close collaboration with Partners

big.LITTLE brings higher performance and lower

power to smartphones and mobile computers

Right performance at the right power level is scaling

ARM technology from sensors to servers

33

Foundations for Leadership in Graphics

Pete Hutton General Manager, Media Processing Division

34

The Importance of Graphics

Graphics capability becoming a key
factor in consumer purchasing decisions

Rich graphics a priority for anything

with a screen Smartphones, DTVs, STBs, Tablets,
hand-held games consoles, In-Car entertainment

Large and growing market for GPUs

4 billion internet connected screens in 2016, most with embedded graphics

35

Foundations for Graphics Leadership

Mali is the most widely licensed graphics processor

Malis leadership position

60 licenses; 48 partners 32 licenses for Mali-400, 7 Mali-T600

#1 in Digital TVs (>70%) #1 in Android tablets (>50%) >20% Android smartphones

High volume design wins

High-end & entry-level smartphones Tablets and mobile computers Digital TV and set-top-boxes
+2
+19 +11 +14 +8 +4

Mali share gains continue as multiple Partners ramp to volume

Mali Processor Licenses

12 partners shipped 48m units in 2011 Expecting 25 partners to ship total of over 100m units in CY2012

60

2007
36

2008

2009 2010 2011 Q1 2012

Mali: Leadership in DTV

Cortex-A9 and Mali-400 chosen by majority
of consumer electronic OEMs Samsung and LG building chips for own DTVs Strong adoption with China DTV OEMs

Multiple DTV/STB silicon partners driving

design wins and volume for Mali Samsung, LG, Mediatek, Mstar, ST, Amlogic

Leadership for Mali in DTV through

Performance density leadership in graphics Maturity and quality of software and support

Next generation Tyr designed to extend

leadership position
37

Mali: Roadmap to Leadership In Mobile

#1 graphics in Android tablets Android, the fastest growing mobile OS Mali-400 shipping in volume today Momentum in smartphones with Samsung, Mediatek, Spreadtrum, Mstar, Rockchip Right technology roadmap for the right markets Best graphics for fast growing entry-level smartphones market Best graphics and GPU compute for high-value apps processors in smartphones
Tablets Superphone Mass Market Smartphones Entry Level Smartphones 1,200 1,200
2x Cortex-A15/ Cortex-A7 4 x Mali-T658

20 18 16

1,000 1,000

Relative Performance

14 12 10 8 6 4 2 ARM 11 0 2008 Cortex-A8 Cortex-A8 1x Cortex-A5 Mali-300 2x Cortex-A9 2 x Mali-400 1x Cortex-A9 Mali-400 2x Cortex-A7 2 x Mali-400 4x Cortex-A9 4 x Mali-400 2x Cortex-A15 2 x Mali-T604 4x Cortex-A7 4 x Mali-400

800 800

600 600

400 400

2x Cortex-A5 2 x Mali-400

200 200

0
2009 2010 2011 2012 2013 2014

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Volume (Mu)

One Size Does Not Fit All

Performance Graphics and GPU Computing Market requirements are bifurcating Advanced graphics for CE and mobile

Higher screen resolutions Richer, more complex user interfaces,

applications and games

Graphics and GPU Compute for mobile computing

Enabling next generation use cases Combine ARM and Mali processors
Graphics
into a unified computing sub-system

Roadmap aligned with market to give uncompromised choice balancing

Die area (cost and yield) Compute capability Software requirements

2009
39

2010

2011

2012

2013

Extend Mali leadership in graphics performance, power and cost

Best for Graphics

Performance Best balance of graphics performance, power and cost

Emerging graphics in DTV/STB

Date of production chips market Fastest growing entry-level and mid-range smartphone markets

Tyr

Protecting partner investments

Common software platform reduces Mali-400 MP

First OpenGL ES 2.0 multicore GPU Scalable from 1 to 4 cores Low cost solution with Mali-300

costs and TTM Multicore delivers performance scalability over multiple form factors

Mali-200
OpenGL ES 2.0 compliant

Roadmap for further share gains

Tyr will drive volume in next

generation products in CE and mobile markets

2009
40

2010

2011

2012

2013

Best for Graphics and for GPU Compute

Performance Designed for GPU Compute

Uncompromised support for OS / API

choice

Skrymir

Closer CPU-GPU links

Efficient use of all device resources Maximize performance and battery

life

Protecting partner investments

Mali-T658
High end solution Maximum compute capability

Common software platform reduces

costs and TTM Multicore delivers performance scalability over multiple form factors

Mali-T604
First Midgard architecture product Scalable to 4 cores

Roadmap for further share gains

Mali-T600 silicon shipping in

Date of production chips

2012
41

2013

2014

consumer products H2 2012 Skrymir driving design wins in next generation super-smartphones and mobile computers

Comprehensive GPU Compute Support

ARMs best-in-class CPU know-how combined with expertise
in graphics technology is enabling complex use-cases Computational photography: eg, Panorama stitching Image recognition: Face, smile, landmark, context Image improvement, stabilization, editing, filtering

Extensive application developer support for Mali

42

Full range of GPU Compute OS & programming interfaces supported Ease of programmability key to application developers being able to utilize advanced technology

Leading on Lowering System Power

Mali GPUs are industry leading in balancing
power, area and functionality ARM focuses on system wide power efficiency not just individual IP components Coherency between ARM and Mali processors System components to minimise contention and
off-chip memory access

System-wide power management policies to slow down or shut down components when not needed

Additional power reduction from optimised

Physical IP (Graphics POPs) and system modelling in development systems tools

43

Mali Ecosystem Strength

Focus on software ecosystem Gaming and User Interface Games developers build on top of
common engines

Focus on developers Free tools, content, demos, white

papers, low cost board programs

Optimizing these engines for Mali ensures quicker, easier development

Enabled through web portal Tools to optimize the whole system

44

Software Partnerships
ARM GPU roadmap
enables partner choice and flexibility on software

Partnerships in place to
enable a leadership position

45

Foundations for Leadership in Graphics

Any consumer product with a screen represents a
Mali opportunity Mali-based devices are in a leadership position #1 in DTV and Android tablets Over 100M units of Mali-based chips expected to
ship in CY2012

Right technology roadmap for the right markets

Best graphics for fast growing markets such as entry-level smartphones and DTV Best graphics and GPU compute for high-value apps processors in smartphones and mobile computing

Next generation Mali-T600 ships

in high volume CE products in 2012
46

Transforming the Data Center

Ian Ferguson Director of Server Systems

47

Data Centers Are Energy Constrained

Server infrastructure is primary
generator of profit for social networking and hosting companies
Social Networking Cloud Hosting

Server optimization is critical

to maximize revenue and minimize running costs Power budget cannot be
increased limiting throughput

Open source software can be adopted to save cost

Facebook Data Center: North Carolina, USA
Note: Logos and photo denote representative data center companies. No specific commitment of companies to adopting ARM technology should be inferred

48

Data Center Workloads for ARM Platforms Today

Data center workloads differ from

traditional servers Less CPU intensive Dedicated to small number of
tasks running sporadically

Advantageous for ARM Microservers

Cost Power Space

Light scale-out

49

Appropriate for ARMs current Cortex processor technology 64-bit extends the opportunity

Mainstream Workloads

Light scale-out examples

Static web servers Content delivery, i.e. video, music Large distributed memory caching Simple search systems (Hadoop, offline data analytics etc)
-100% -50% 0% 50%

Compute Intensive

100%

Source: HP, Project Moonshot Launch, November 2011

ARM Technology in the Data Center

Data center applications consist of compute, networking and
storage functionality Partnership business model enables efficient integration of
multiple subsystems
Compute Content delivery
Content delivery networks serve content to end users with high availability. Power down when inactive Many-core Cortex-A15 or v8-A

Networking

Storage
Integrated:

Increasing Performance

Video coprocessors Encryption engines Multi-core Cortex-A9 or A15 V8-A for latency sensitive systems Multi-core Cortex-A9 or A15

Hadoop
Management and search of unstructured data. Scalable across many processors nodes

Integrated: - 1Gbit Ethernet interface - USB interface - Processor node interconnect

Same

- Access to Infiniband, SAS - DDR3 interface

Webserver
Platforms that serve up Web pages. Maintain data security between URLs

Integrated: - SATA interface - DDR3 interface

Same

50

ARM Partnership in the Data Center

Calxeda Server Node
4 GB DRAM

Quadcore Cortex-A9 1.2GHz 5W power including 4GB

DRAM Integrated server fabric PCIe GbE USB 2.0

Quadcore Cortex-A15 Integrated DSPs SRIO PCIe 4 x 1GbE

Up to 32, 64-bit cores per

SoC. 128 coherent processors per system 3GHz Network processors PCIe SATA 10GbE

51

A New Ecosystem From 2011

To gain share in servers ARM is partnering and investing with
thought leaders to create a new ecosystem
Exploratory ARM and Marvell server R&D demonstrate and marketing ARM based server team set up Cortex-A15 Validating launched TCO benefits Key strategic Server Enterprise OSs applications Virtualisation and runtimes software optimised for ARM

2008
Start dialogue with semis OEMs and S/W

2009
Invest in start-up

2010
OEMs and S/W experimenting

YTD

Future
ARM based chips developed for servers ARM based servers initially into niche applications

Ecosystems are built and evolve over many years

52

Identify, educate, and create relationships with enterprise S/W cos Invest in the s/w components not covered by existing ecosystem Reuse our existing ecosystem to expand our software reach

A New Ecosystem Today

To gain share in servers ARM is partnering and investing with
thought leaders to create a new ecosystem
Exploratory ARM and Marvell server R&D demonstrate and marketing ARM based server team set up Cortex-A15 Validating launched TCO benefits Key strategic Server Enterprise OSs applications Virtualisation and runtimes software optimised for ARM

2008
Start dialogue with semis OEMs and S/W

2009
Invest in start-up

2010
OEMs and S/W experimenting

2011

YTD
ARM based server chips demonstrated

Future
ARM based server shipments

Critical software pieces now in place to enable initial platform shipments

Commercial grade server Linux Performance optimized Java compiler, including offline data analytics

Prototype ARM Powered hardware demonstrated running server Linux OEMs expected to ship first ARM based server products H2 2012
53

Readying 64-bit Server Ecosystem

Initial software release of tools and Linux code into open
source community scheduled for mid 2012

ARM focused on enabling choice at all

stages of the ecosystem. Silicon partners Operating systems Hypervisors Optimized application stacks and tools

Partnering with semiconductor licensees to

accelerate availability of 64-bit ecosystem
ARM 64-bit S/W Development Board from Applied Micro

54

ARMs Server Opportunity

Energy constrained servers are driving innovative lowpower architectures/platforms

ARM is well placed to take advantage of this transition

Twenty+ year history of developing energy-sipping processors Business model that enables highly optimized SoC development Critical mass to deliver the software ecosystem

Market size ~50M servers deployed

55

Opportunity for ~4 ARM Powered SoCs per server system First ARM 32-bit servers ship in H2 2012 First ARM 64-bit servers ship in 2014 20% server market addressable by ARM in 2015 ASP range from $50-200 (one size does not fit all)

Long-Term Growth Opportunity

Tim Score Chief Financial Officer

56

Overview
Installed license base drives todays royalties Impact of incremental licensing on future royalties Assessing future market share gains Increasing royalty percentage per chip Decreasing effective tax rate Summary of long-term financial opportunity

57

Past Licensing Drives Todays Royalties

ARMs current royalty revenues are derived from licenses
signed many years ago 99.5% of 2011 royalties came from licenses signed 2008 or earlier Licenses signed 2009-2011 only just starting to contribute Cortex-A family and Mali in early days
320 most recent licenses are drivers of future royalty +22
$400m

~140 Licenses
2011
$350m $300m $250m

Processor Licenses
+87 +61 +62 +66

+121
+91

2006-10 2001-05 Pre-2001

~350 ~280 Licenses ~100 Licenses

~870

$200m $150m $100m $50m

2006

2007

2008 2009 2010 2011 Q1-12

$0m 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

58

Licensing Increases Market Opportunity

ARM gains share by winning designs at leading semiconductor companies
Application Smartphone Apps Mobile Computer Apps* Mobile Modems Mobile BT Mobile WiFi Digital Camera** Digital TV / Set-Top Box Networking Printers** Disk Drives (HDD & SSD) Automotive Smart Card Microcontrollers 3D Graphics
* Includes handheld computers, tablets, and laptops **Based on OEM market share rather than semiconductor vendor

Penetration of Key Companies Products

2011Share Shipments

Shipping mainly ARM-based chips Shipping some ARM-based chips

>95% 20% 100% 80% 70% 80% 40% 30% 65% 90% 7% 10% 15% 6%

Public ARM design wins, but not yet shipping No ARM design win or not yet public 9 companies re-equipped

2011

1 company re-equipped 1 company re-equipped 2 new design wins 2 companies re-equipped

Q1 2012

1 company re-equipped 1 new design win

Based on current market shares and ARMs view of how these markets may develop. ARM will update the chart on the left only as design wins become public

59

Todays Licensing Drives Future Royalties

ARM needs to win 108 major designs to gain an >80% share in all target markets. 49 Shipping mainly ARM-based chips 22 Shipping some ARM-based chips 12 Public ARM design wins, but not yet shipping 25 No ARM design win or not yet public Companies with multiple divisions may have multiple designs for ARM to win. There are 40 companies represented in this chart.

60

Todays Licensing Drives Future Royalties

ARM needs to win 108 major designs to gain an >80% share in all target markets. 49 Shipping mainly ARM-based chips 22 Shipping some ARM-based chips 12 Public ARM design wins, but not yet shipping 25 No ARM design win or not yet public Companies with multiple divisions may have multiple designs for ARM to win. There are 40 companies represented in this chart.

License status at the end of Q1 2012

61

2012-16 Licensing Drives Future Gains

ARM needs to win 108 major designs to gain an >80% share in all target markets. 62 Shipping mainly ARM-based chips 22 Shipping some ARM-based chips 18 Public ARM design wins, but not yet shipping 6 No ARM design win or not yet public Companies with multiple divisions may have multiple designs for ARM to win. There are 40 companies represented in this chart.

ARMs expectation of design wins over next five years, based on feedback from commercial teams. For the purpose of this analysis, no change in relative market share has been assumed.

62

Licensing is a Precursor to Share Gain

Increasing design and ecosystem costs encourage
semiconductor companies to continue to outsource IP ARM exposed to multiple growth markets Expect to retain share in markets that are well penetrated ARMs market share expected to increase in growth markets
Market Smartphone Applications Processor Mobile Computer Applications Processor Servers Digital TVs / STBs Microcontrollers TOTAL* 2016 Share >90% 40-60% 5-10% 70-80% 30-40% 40-50% * Share excludes new markets 2016 Market 2020 Share 2020 Market

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2016 - New Market Opportunities

+200 Major design opportunities 62 Shipping mainly ARM-based chips 22 Shipping some ARM-based chips 18 Public ARM design wins, but not yet shipping +100 No ARM design win or not yet public ARM technology is becoming relevant to new customers and in more markets including:

Internet of Things Medical applications Mesh networks Sensors Smart memory More ....
Analog: 100 billion chips shipped each year. Analog with ARM processor delivers intelligent sensor for Internet of Things Memory: 35 billion memory chips shipped each year Memory with ARM processor improves reliability at smaller geometries
64

Delivering More Value Per Chip

ARM is developing more advanced technology, delivering a greater benefit to customers and generating a higher royalty percentage per chip: More capable processor Cortex-A family in early days of penetration Multiple processors per chip Mali started shipping recently, big.LITTLE shipping 2013 Physical IP penetration more design wins at smaller geometries Higher royalty for v8 architecture production ramp starting in 2014
wafer royalty

Potential ~3x increase in royalty percentage

wafer royalty

Mali

v8
ARM 7/9/11 Cortex-A Multiple Multiple Processors Processors & Mali Multiple Processors & Mali & Physical IP Next Generation

Relative Royalty Percentage per Chip

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Effective Tax Rate Decreasing

ARMs effective normalised tax rate is expected to decrease

UK Corporation Tax rate reducing to 23% from April 2013 and to 22% from April 2014 Patent box introducing 10% tax rate from April 2013

Patent box applies to qualifying profits

Phased introduction: 60% of the benefit applying to qualifying profits from April 1 2013, increasing in 10% increments per annum Covers patents granted by UK IPO and European Patent Office Applies to existing as well as new IP, and to acquired IP
28%
Tax rate could decline 1-2% per year from 2013*

27%

25%

25%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

* Before potential reclassification of R&D tax credits

66

Long-Term Growth Opportunity

ARMs opportunity to increase revenue and profitability
2003-2011 PD Licensing CAGR PD Royalty CAGR* Revenue CAGR Operating Margin Earnings Per Share CAGR 14% 22% 18% 20% to 45% 27%
Operating leverage continues** Revenue growth, margin expansion and decreasing tax rate driving EPS growth***

Route from 2012 to 2020

High single digits Continue to outperform industry by 10-15%

* 7% semiconductor revenue CAGR 2003 to 2011. SIA data excluding memory and analog, March 2012 ** Before potential reclassification of R&D tax credits *** Assuming Q1 2012 exchange rate of 1.58 and expecting a <1% share dilution

67

Summary
Reach of ARM technology broadening rapidly Growing installed license base drives long-term royalty
opportunity

Royalty percentage per chip increasing over time Effective tax rate decreasing Revenue growth and operating leverage drives margin
expansion and earnings growth

68

Concluding Remarks
Warren East Chief Executive Officer

69

The Architecture for the Digital World

Partnering for Success

ARMs business model enables an ecosystem of companies to succeed

Business Development

2012-2016 Internet of Things

Efficient Scalable
Always connected, always on All about sensors and user control

Low Power Mobile Computing

Cortex-A15 and Cortex-A7 are functionally identical

Same programmers view, looks the same to OS and applications Automatically selects the right processor for the right job Redefines the efficiency/performance trade-off

ARM ARM
License

ARM ARM Chip Designer

big.LITTLE processing high-performance and low power

Smart appliances everywhere
Personal information at your fingertips
>2x Performance

royalty

OEM Customer

Resilient

11 leading semiconductor companies licensed both

Demanding tasks Always on, always connected tasks 20% of the Power

ARM is at the nexus of an ecosystem of 100s of companies

Choice Innovation Differentiation

4
11

Representing data in a meaningful way

1 trillion internet connected devices by 2025
Current big.LITTLE smartphone

big

LITTLE

Current big.LITTLE smartphone

Partnering For Success

New Customers New Markets

Greater Benefits Delivers Higher Royalty

Growing Opportunity

70

Q&A

71