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@ 2011 RDA Microelectronics, Inc. The information contained herein is subject to change without notice RDA Microelectronics Oct 2012

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Page 1: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

@ 2011 RDA Microelectronics, Inc.The information contained herein is subject to change without notice

RDA Microelectronics

Oct 2012

Page 2: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

DisclaimerThe information contained in our presentation is intended solely for your personal

reference and is not an offer to buy or sell or a solicitation of an offer to buy or sell

any security or instrument or to participate in any trading strategy. We make no

representation or warranty (express or implied) as to the correctness or

completeness of the presentation. The presentation may contain projections and

forward-looking statements that reflect our current views with respect to future events

and financial performance. These views are based on assumptions subject to various

risks. No assurance can be given that future events will occur, that projections will be

achieved, or that our assumptions are correct. Actual results may differ materially

from those projected. We undertake no obligation to update or revise any forward-

looking statements to reflect subsequent events or circumstances. These materials

are highly confidential, are being given solely for your personal use and may not be

copied, reproduced, redistributed or passed on, directly or indirectly, to any other

person in any manner.

2

Page 3: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

RDA Overview

3

Q2 2012 Financial Highlights

Corporate Overview Global End Markets

2007 2008 2009 2010 2011

114% CAGR 2007-2011RDA Revenue ($MM)

$13.7

$55.5

$118.4

$191.2

$288.9

• Founded in 2004 - IPO Nov 2010

• Broadest handset product offering ranging from baseband to PA

• Market share leader of China handset manufacturer market

• 1,000+ Chinese and international customers

• RF and mixed-signal wireless SoC semiconductors for cellular, connectivity and broadcast

• Gaining share, penetrating Tier 1 OEMs

• Targeting 2G, 3G, smartphone, satellite and consumer electronics applications

• Baseband market entry expands TAM

• Revenue $94.4 million, up 40% YoY

• Margins: 31% gross, 16.8% operating

• Non-GAAP net income $15.2 million, EPS $0.32 per diluted ADS

• $159 million cash; no debt

Page 4: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Investment Highlights

4

Proven Capability to Become Market Share Leader Across All Key Products • #1 provider of Power Amplifier, Bluetooth, FM Tuner, DVB-S Tuner in China • Strong track record of share gains against competitors in multiple markets• Applying same successful strategy to baseband market

World-Class Technology • Broad technology capabilities and IP portfolio• Best-in-class die size• Advanced process technology migration and rapid design cycles

Efficient and Profitable Operating Model• Highest revenue per employee among fabless IC companies• Strong revenue growth and operating leverage drive profits and cash flow

Strong Growth Platform• Expanding TAM with large growth opportunities in emerging markets• Increasing addressable silicon content per handset• Expanding penetration of global Tier 1 OEMs• Ability to extend into new markets successfully

Page 5: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

8080

812 812 812

655

157

664

148

601

9655

60

Chinese Manufacturers-The largest handset provider in the world

Source: iSuppli

810+MM Handsets By Chinese Manufacturers

(Units in MM)

5

Developed Markets ~26%

Other Emerging Markets ~29%

2012E Global Mobile Handset Shipments

Chinese Manufacturers ~45%Export

Domestic

TD-SCDMA

WCDMA

CDMA

GSM/GPRS/EDGE

Feature Phone

Smart Phone

Page 6: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Increasing Silicon Content

6 Note: ASP as of today

$2.00 - $2.30 per unit $9.00 - $11.00 per unit

Smartphone

Baseband

RF Front End Module

+WiFi/Bluetooth/FM

+CMMB

+Transceiver

2G Feature Phone

Baseband

RF Front End Module

+Bluetooth

+FM+

Transceiver

Page 7: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

# 1 in DVB–S Tuner

Entered: 2007

# 1 in Power Amplifier

Entered: 2007

China Market Share Leader

7

Share of China Branded and White Label MarketShare of China Branded and White Label Handset Market

# 1 in FM Tuner

Entered: 2007

7Source: iSuppli, Q2012; percentages are approximate

# 1 in Bluetooth Chipset

Entered: 2009

20%

44%

#3#1

24%

#2#1

40%

Q2 ‘121H ‘10 Q2 ’121H ‘10

Page 8: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

RDA BRCM MRVL SPRD MTK SWKS RFMD

Why RDA Wins

8

• Geographic proximity

• Rapid product cycles

• Quick design response

• Optimized performance and cost balance

Vs. US/EU competitors

• Geographic proximity

• Stronger RF R&D

• Best RF integration

Vs. Taiwan competitors

• Economies of scale

• Superior RF performance

• Best RF integration

• 55nm technology

• Strong balance sheet

Vs. Chinese Local

Strong Operating Performance

•$1.1 million revenue per employee vs average $530,000

•Solid profit and cash flows fund R&D and process technology advancements

Revenue Per Employee

Page 9: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Baseband Product Roadmap

92012 2013

RDA8853Single Chip260MHzGSM/GPRS3-SIM with PSRAM andBT/FM Built-In

RDA8852 Single Chip260MHzGSM/GPRS3-SIM with PRAM Built-In

RDA8851Single Chip260MHzGSM/GPRS3-SIM withPSRAMand BT/FM on same die

3G

2G/2.5G

40nm55nm

RDA8810EDGESmart Phone

RDA8850WCDMA / EDGE Smart Phone

RDA8860WCDMA/TD-SCDMA/EDGESmart Phone

2.75G

2014

28nmRDA8880Quad core AP/ High performance

40nm

Page 10: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Product Roadmap (Ex. Baseband)

Cellular2012

BroadcastConnectivity

Wi-Fi + BT + FM + GPS Combo

Wi-Fi + BT + FM Combo

2013

RF Front Module (TD-SCDMA)

RF Front End Module (GSM)

Multi Mode Multi Band Front End Module

QFN5*5

QFN1*1.5

5*5 GSM/EDGE 1st

55nm/QFN 6*6/802.11.b/g

Bluetooth Earphone

WCDMA PA

55nm,802.11.b/g/n

CMMB SOCQFN5*5/tuner+demod

LNB Down Converter QFN4*4/3rd generation

DVB-S Tuner + Demodulator + Decoder

Walkie-Talkie55nm/digital and analog interface

10 Sample date

LGA5*5

800MHz/Band 5

GPS LNA

Wi-Fi/BT Front End Module3*3/GaAs HBT

55nm/BT3.0/Wi-Fi direct/802.11.b/g/n

0.11um

Hybrid Tuner

40nm/1st 40nm/2nd

QFN5*5/cost down

2100MHz/Band 1

6*6;GSM/EDGE PA+TD PA+ Switch SP7T/cost down

5*5 GSM/EDGE 2nd

3*3/SOI

LTE TransceiverTDD/FDD

55nm,BT4.0

GSM/EDGE PA+SP7T,GSM+EDGA/WCDMA

Switch QFN 2*2 QFN 1.6*1.6

1900MHz/Band2900MHz/Band8

Filter integrated

QFN 1.5*1.5

55nm,BT2.1

Wi-Fi40nm/802.11ac 40/28nm/802.11ad

3rd/3D capability

2014

DTV SOC55nm/2nd 55nm/3rd

Page 11: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Most Advanced IntegrationCompany RDA Company A Company B

Platform 8851 653X 6250

Size 10mm 16.5mm 19.1mm

Integration

Integrate TRx + BB + PMIC + BT + FM SOC

+ Class-K Audio Amp, Save Saw

BB+

SIP TRx

BB+BT+FM+

SIP TRx+

Save Saw

Chipset Single chip SIP, 2 dies SIP, 2 dies

BOM Integrated 32k crystal External 32k crystal Integrated 32k crystal

Process 55nm SOC 40nmBB +152nm TRx

55nmBB +110nm TRx

CPU 260MHz 240MHz ~200MHz

11

Page 12: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Motorola

Samsung

ZTE

Tianyu

TCL/Alcatel

Oppo

Lenovo

Konka

Huawei

Guohong

Goinee

BBK

Wingtech

TINNO

SIM

Diwave

Huaqin

Longcheer

Huiyue

Hexing

Eidolan

CKT

Strong Customer Base

Source: Company Data, iSuppli, 1H 201012

With more than 1,000+ customers, RDA works with every major handset manufacturer in China

Top Chinese Handset Brands Top Chinese Independent Design Houses Global Tier-1 OEMs

TD Smartphone Brands

ZTE

Samsung

RIMM

Sony

Huawei

Lenovo

Page 13: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Tier One Expansion+ + + =

Strong Growth Drivers

2011 Revenue

New Products

Market Share Gain

Global Tier One

> $1 Billion

US$MM

$110

$289

• BT: 36% to >50%• PA: 39% to >50%

• Baseband• WiFi+BT+FM+GPS• WCDMA PA+GSM Edge PA+Switch• Mobile TV• Transceivers• 218MM 3G units in

China by 2015 based on iSuppli

• Korea TAM• 300MM units/year

Profitable Core Business

New Product Introductions

Continued Share Gains

Revenue Growth Opportunity

13

$150-$200

$50-$80 > $1 Billion

$550-$600

Page 14: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Financial Performance

Page 15: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

High Revenue Growth

Annual Revenue

CAGR 114%

15

Page 16: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Quarterly Revenue

Robust Quarterly Growth

($MM)

16

Page 17: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Q2 2012Revenues - Applications

Product and Customer Diversity

Cellular

Broadcast Connectivity

Q2 2012Revenues - Customers

Top 1038%

All Others62%

17

Page 18: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

(%)

Temporarily Drag by Addition of Baseband Business

Quarterly Gross Margin

18

(*) As a result of the consolidation of the lower margin baseband revenue from our acquisition of Coolsand baseband

Page 19: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Healthy Balance SheetAs of June 30, 2012

19

June 30 2012 March 31 2012

Cash and Investment ($MMs) $159.0 $142.9

Total Debt ($MMs) -- --

Net Cash ($MMs) $159.0 $142.9

Net Cash / ADR ($) $3.49 $3.31

Accounts Receivable ($MMs) $21.5 $24.1

Receivable Days 22 42

Inventory ($MMs) $44.6 $29.3

Inventory Days 51 64

Accounts Payable Days 61 65

Cash Conversion Cycle 12 41

Shareholder Equity ($MMs) $223.5 $210.9

Book Value / ADR ($) $4.91 $4.89

Page 20: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Q1 2012 Q2 2012 Q3 2012 Guidance

Revenue ($MMs) $72.0 $94.4 $100- $110

Gross Margin 35.9% 31.0% (2) 30.8%-31.2%

R&D % of Revenue (1) 9.8% 10.5%

SG&A % of Revenue (1) 3.4% 3.8%

Operating Margin (1) 21.2% 16.8%

Net Income ($MMs) (1) $15.1 $15.2

2012 Results and GuidanceAs of Aug 7, 2012

20

(1) R&D% of Revenue, SG&A % of Revenue, Operating Margin and Net Income are Non-GAAP number(2) As a result of the consolidation of the lower margin baseband revenue from our acquisition of Coolsand baseband

Page 21: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Summary

21

China’s Market Share Leader Across Multiple Products • #1 provider of Power Amplifier, Bluetooth, FM Tuner, DVB-S Tuner products• Diverse products sold to more than 600 customers• World-class technology driving share gains

Large and Growing Markets • Increasing TAM through rapid product family expansion• Significant growth opportunities in 3G and smartphones• Increasing addressable silicon content per handset• Expanding penetration of global Tier 1 OEMs

Proven Profitable Growth Model• Highest revenue per employee among fabless IC companies• Strong revenue growth• Highly efficient operating model • GAAP profitable since 2008, strong cash flows• $159 million cash position to support R&D and growth initiatives

Page 22: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Appendix

Page 23: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Appendix 1

Misconceptions = RDA Advantage

23

China technology not world-class

• The most highly integrated BB in the world• Leading RF and mixed signal designers• Advanced process migration ahead of competition• Proven single chip solutions• Working with market leaders across all products

• China handsets taking share from tier ones• 3 out of 4 phones ship to emerging markets• Mobile utilization in these regions driving volume

• Government supporting transition to 3G• TD is China 3G standard adopted by China Mobile• Increased sales driven by features (WiFi, Mobile TV)• Smartphone will double market again

• Use PriceWaterHouse for US GAAP audited financials since 2005

• No material weakness on internal controls• Compliance with SOX Section 404

2G is a dying market

White label market won’t transition to 3G or smartphone successfully

Lack of financial controls in China

Page 24: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

24

130nm

Bluetooth Example

Time

Bluetooth

Bluetooth + FM

Sampling

130nm

110nm

110nm

130nm

Development Time

110nm

20112010200920082007

RDA 5868

RDA 5868+

RDA 5868E

RDA 5868H

55nmRDA 5875

55nm

RDA 5870

RDA 5870E

RDA 5876

Appendix 2

Rapid Product Development Cycles

24

Page 25: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Sampling

130nm

Mass Production

Example: Bluetooth

2009 2010 2011

110nm

55nm

RDA 5868RDA 5868+RDA 5888S

RDA 5868E 2nd GenRDA 5868H 2nd Gen cost downRDA 5872 3rd GenRDA 5888E

RDA 5876RDA 5888H

Appendix 3

Accelerating Process Technology Migration

25

Page 26: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Rapid Product Family Ramp Expands TAM

5 9 18 26

300M Units Over 3B UnitsTAM

Connectivity

• Bluetooth• Bluetooth + FM• WiFi + Bluetooth + FM• Walkie Talkie

Cellular Broadcast

• FM Radio• Analog TV / CMMB• DVB-S Tuner• LNB Down Converter

• Front-end Module(PA + Switch)

• Transceiver• Baseband

Appendix 4

Diverse Product Portfolio

26

36 48

Page 27: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Appendix 5

Diverse Product Portfolio Detail

27

2006 2007 2008 2009 2010 2011 2012&2013

SCDMA Transceiver GSM power amplifier Module

GSM power amplifier Module with high power

output

GSM/EDGE power amplifier module

GSM power amplifier and switch

module(IPD)

TD-SCDMA/EDGE Transceiver WCDMA PA

PHS Transceiver GSM Transceiver 3G switch module TD-SCDMA/GSM amplifier module TD PA Module

Multi Mode Multi Band Front end

Module

FM radio receiverFM radio receiver with radio data

system

Radio frequency switch

TD-SCDMA transceiver CDMA transceiver RF Frone end

module(TD-SCDMA)

DVB-S satellite tuner

DVB-S2 satellite tuner

TD-SCDMA/GSM dual-mode transceiver

EDGE transceiver WCDMA/EDGE/GSM transceiver Wifi+BT+FM combo

AM/FM receiverAnalog mobile

television receiver system-on-chip

SOI switch BT earphone

FM radio receiver and teansmitter DVB-T tuner PA for

Bluetooth/Wifi BT 4.0

LNB satellite downconverter

Buletooth+FM system-on-chip for

mobile handsetsPA for CDMA LTE transceiver

Buletooth system-on-chip for mobile

handsets

Walkie-talkie transceiver for professional application

DAB Wifi+BT+FM+GPS combo

Walkie-talkie transceiver for

family radio service application

CMMB GSM BB

Digital Walkie-talkie Edge BB

WCDMA BB

TD-SCDMA BB

Page 28: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

IPD for RF Front End Module

Multi Discretes Single Chip

Appendix 6

World-Class Technology Innovation

28

• World’s first IPD solution, 2-year technology lead over competition

• Superior integration roadmap

• Reduced size and cost

• Leverage standard packaging technology

• Improved yields and reliability

• High frequency 10GHz single-chip solution

• Reduced size and cost

• Improved yields and reliability

LNB Down Converter

Multi Discretes Single Chip

Page 29: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Appendix 7

Partner with Best-in-Class Semi Peers

29

TD-SCDMA Transceiver

• Marvell PXA920 Platform with RDA 8207 TD transceiver for Samsung TD-SCDMA Smartphone

DVB-S Tuner

• Silicon Lab Si 2167 with RDA 5812 for Samsung DTV selling Europe

Page 30: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Past Experience

Vincent Tai

Shuran Wei

Lily Dong

Over 28 years

Over 20 years

Over 20 years

Years of ExperienceManagement Position

Co-FounderCEO, Chairman

Co-FounderCTO

CFO

Appendix 8

Seasoned Management Team

Liang Zhang Over 14 years SVP, Engineering

Jun Chen Over 14 years SVP, Engineering

30

Page 31: RDA Microelectronics -   · PDF file@ 2011 RDA Microelectronics, Inc. ... China’s Market Share Leader Across Multiple Products ... • WiFi + Bluetooth + FM • Walkie Talkie

Appendix 9

RDA Partners

31

Foundry

Packaging and Testing