© 2019 Arm Limited

Arm LimitedRoadshow Slides

Q2 2020

v1 Arm Limited is a subsidiary of

2 © 2019 Arm Limited

Security and Privacy

Autonomousmachines

Technology trends that will redefine all industries

Hyperscale cloud and connectivity

Artificial Intelligence in every device

Augmentedreality

3 © 2019 Arm Limited

Arm defines the technology that will redefine all industries

Mobile and Consumer

Networkingand Servers

Automotiveand Robotics

Internet of Things

Artificial Intelligencein every device

Autonomous machines

Augmented reality

Hyperscale cloud and connectivity

Security and Privacy

4 © 2019 Arm Limited

Arm introduction

• Global leader in technology licensing• R&D outsourcing for semiconductor

companies

• Innovative business model• Upfront licence fee – flexible licensing

models• Ongoing royalties on customer sales• Technology can be reused across multiple

applications

• Long-term, secular growth markets

5 © 2019 Arm Limited

Chip shipment

Arm’s business model• Arm develops technology that is licensed to semiconductor companies

• Arm receives an upfront license fee and a royalty on every chip that contains its technology

Business Development

1) Arm licenses technology to chip Partners

2) Partners developchips and shipthem to OEMs

3) OEMs sell productscontaining Arm-based chips

Per chip royalty

License Fee

TechnologyArm SemiCo

Partner

OEMCustomer

Chip payment

6 © 2019 Arm Limited

Arm’s strategy

• Maintain or gain share in long-term growth markets• From mobile phones to networking infrastructure and servers

to embedded smart devices and automotive

• Increase value of Arm technology per smart device• Invest in developing more advanced processors with higher royalty rates• Physical IP and multimedia IP further increase Arm's value per chip

• Explore and exploit new opportunities in emerging applicationssuch as machine learning

• Invest to create a sustainable business, fit for the long term• Create superior returns by developing new technology that

will deliver increased profits and cash generation in the future

7 © 2019 Arm Limited

Networking & Servers

Base stations, routers, switches, and servers for cloud and data centres

Networks evolve to cope with increased data at lower latency: virtualisation, integration and programmability

Most major chip vendors haveannounced Arm-based products

Smartphones, tablets and laptops Apps processor, modem, connectivity,

touchscreen and image sensors Growth coming from higher-value Arm

technology such as Arm v8-A, more cores per chip, multimedia

Mobile and Consumer

Arm’s main growth markets

Embedded Markets

Automotive, white-goods, wearables, smart devices in industrial and utilities

Microcontrollers, smartcards, embedded connectivity chips

Over 300 companies have licenced Arm processors for use in embedded computing devices

$89bnTAM 2029

$76bnTAM 2029

$67bnTAM 2029

8 © 2019 Arm Limited

History of ArmJoint venture between

Acorn Computers and Apple

1990

Designed into first mobile phones and then smartphones

1993 onwards

Now all electronic devices canuse smart Arm technology

Today

9 © 2019 Arm Limited

Arm-based chip shipments

0

5

10

15

20

25

1991 2019

Arm

-pow

ered

chi

ps sh

ippe

d (b

illio

ns) 22.8bn34%

Market share in 2019

~178bnArm-based chips shipped to date

22.5bn

Calendar Years

10 © 2019 Arm Limited

$0m

$100m

$200m

$300m

$400m

$500m

$600m

$700m

H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

1994-2010 2011-2015 2016 to Present

Licensing enables future royalties• Arm signed 97 processor licences in H1 2020

• Arm’s current royalty revenues are derived from licences signed many years ago

• Growing base yields royalty revenues over long period

>30% of Arm’s most recent licences are drivers of future royalty revenue

+113

+141+141

+125+147

Financial Years

2016 2017 2018 2019 YTD’20

+97

Financial Years

1994-2010

2011-2015

Significant Royalty Potential from Recent Licences

~600 licences signed since Q1 2016

11 © 2019 Arm Limited

Arm’s expanding opportunity

Mobile

Automotive

Infrastructure

Market Share Market Value Market Value

40% $30bn

$20bn

2019

Other mobile chips

Applicationsprocessor

75%

32%

90%

$10bn

$17bn

$20bn

$3bn

$7bn

5%

10%

2029

$36bn

Other automotivechips

IVI and ADAS

Data Center/Cloud

Networking

$43bn

$13bn

$32bn

$12bn

$10bn

$41bn

12 © 2019 Arm Limited

Arm’s expanding opportunity

Embedded

Total Market

OtherMarkets

Market Share Market Value Market Value

2019

Microcontrollers/SIM Cards

25% $10bn

$15bn

$11bn38%

2029

All chips withprocessors

Other chips

ConsumerElectronics $33bn

$15bn

$30bnController in IoT Devices $4bn90%

$16bn

$23bn

$138bn34%$232bn

42%

13 © 2019 Arm Limited

Arm's current business

Arm primary business is the development of intellectual property (IP) blocks which are used in silicon chips

Our partners combine Arm IP with their own IP to create complete chip designs

We earn license fees when we deliver Arm IP to our partners and royalties when our partners ship chips that contain Arm IP

Highly profitable and cash generative enabling Arm to reinvest into new products

14 © 2019 Arm Limited

Return on Investments – Arm v8-A case study • Arm incurs R&D costs many years before revenue starts

Research into64-bit computing

started in 2000

Multiple processorsin development

Arm v8-ADevelopment starts

First generationof processors

Architecturedevelopment andprocessor design

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

15 © 2019 Arm Limited

Revenues, investments and profits• Until 2016 revenues grew faster

than costs as Arm constrained investment in R&D to enable increasing profits

• For FY2017 to FY2018 Arm grew investment faster than revenues

• From FY2019 Arm is matching investment to revenue growth and expects revenue to grow faster than investments in the future leading to greater profitability

Fiscal years

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

$0m

$200m

$400m

$600m

$800m

$1,000m

$1,200m

$1,400m

$1,600m

$1,800m

$2,000m

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Revenue

Total Costs

Adjusted EBITDA

Headcount

16 © 2019 Arm Limited

Arm Investor Relations Contact

Contact Title Contact

Ian Thornton Head of Investor Relations +44 776 885 6503ian.thornton@arm.com

More content available on • Arm’s website: arm.com• SoftBank Group’s website: group.softbank/en/ir