Ralink Technology (TAIEX:3534) Company Profile-Ralink Confidential-8 0 100,000 200,000 300,000...

Ralink Technology (TAIEX:3534) Company Profile

Fast. Far-reaching. Reliable

Ralink Technology Corp.

Ralink Technology

Founded in 2001 & shipping since 2003

Headquartered in Hsinchu, Taiwan

Branch Offices in US, Europe, Japan, China

600 employees worldwide

Top 4 WLAN IC-solution provider with 12~15% global market share; top 3 xDSL IC-solution provider with 22~25% global market share.

Taiwan IPO in April, 2008

– Stock Code: 3534 (TT)

– Capital: 58.6 million (USD)

– Market Cap: 620.9 million (USD)

Note: USD:NTD=1:29.8; stock quote at NTD 106 per share. (As of January 10 , 2011)

- Ralink Confidential -2

Global Wi-Fi Market

675.9M

945.4M

1,257.5M

1,607.5M

1,922.8M

Source: In-Stat, 2010

(Year)

(Unit)

Global ADSL MarketBroadband Subscribers (in millions)

Year

xDSL accounts for ~ 60% of the global broadband market.

Source: iSuppli, 2010

Wireless LandscapeRalink is focusing on Wi-Fi IC design

WPAN

Bluetooth 802.15.1 – 2.4Mbps

ZigBee802.15.4 – 20kbps

UWB802.15.43– 55Mbps

WMAN

WiMAX802.16 d.e 50 – 134 MbpsWLAN

Wi-Fi 802.11a – 54Mbps (5GHz)802.11b – 11Mbps (2.4GHz)802.11g – 54Mbps (2.4GHz)802.11n – 150~600Mbps (2.4GHz/5GHz)

3G 1~3.5 Mbps3.5G 3.6~7.2 Mbps

Cellular


Shipment Breakdown by Applications

Broadband

29%

PC/NB

20%

CE

9%

Retail

42 %

11n vs. 11a/g(1Q09 ~ 3Q10)

Product mix(3Q10)


1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10

11a/g 49% 38% 29% 27% 21% 14% 12%

11n 51% 62% 71% 73% 79% 86% 88%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Note : Consolidation with TrendChip since October. 2010.Prior to 4Q10, all graphs, charts were made based on pre-merger data

Ralink’s Shipment Record


22.4 M units shipped in 3Q10, representing a 2.6% QoQ shipment growth, and a 45% YoY shipment growth

Achieved 50% Wi-Fi shipment growth and 40% ADSL shipment growth respectively in 2010


Track records 2008-2010(NTD thousands)

NTD Thousands

Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec.

Net Sales 540,312 556,006 580,936 606,537 670,960 685,781 687,727 654,047 563,962 582,886 614,927 616,623

MoM 7.6% 2.9% 4.5% 4.4% 10.6% 2.2% 0.3% -4.9% -13.8% 3.4% 5.5% 0.3%

YoY 104.5% 102.0% 91.2% 72% 64.5% 68.0% 62.3% 30.5% 5.0% 5.8% 10.5% 23%


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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2008

2009

2010


NTD (Thousands) 3Q10 2Q10 QoQ

Net revenues 1,905,736 100.0% 1,963,279 100% -2.9%

Gross profit 843,955 44.3% 881,218 44.9% -4.2%

Operating expenses (602,050) (31.6%) (567,304) (28.9%) 6.1%

Operating income 241,905 12.7% 313,914 16.0% -22.9%

Non-operating income (loss) 26,646 1.4% 22,646 1.2% 17.7%

Pretax income 268,551 14.1% 336,560 17.1% -20.2%

Net income 262,372 13.8% 325,892 16.6% -19.5%

EPS (NT dollars) 2.04 2.50

Employee profit sharing 79,017 107,734

Ralink’s Income Statement

※Concise Consolidated Income Statement (pre-merger)


Ralink’s Balance Sheets(In NT thousands, except indicated otherwise) 3Q10 2Q10

Cash & Financial assets-current 5,224,076 5,361,868

Notes & Accounts receivable (net) 1,087,241 1,132,472

Inventory (net) 649,820 503,310

Total assets 7,512,249 7,495,349

Notes & Accounts payable 1,768,920 1,739,961

Long-term liabilities 933 1,244

Total liabilities 1,867,581 2,094,592

Paid-in capital 1,285,642 1,256,155

Total shareholders' equity 5,644,668 5,400,757

Key indices

Net value per share (NTD) 43.9 43.0

Current ratio 379% 338%

A/R turnover days 53 47

Inventory turnover days 50 39


※Concise Consolidated Balance Sheets (Pre-merger)


New Ralink’s Merger Progress

Previous Share Swap Ratio : TrendChip : Ralink = 0.8209 : 1

Final Share Swap Ratio : TrendChip : Ralink = 0.7939 : 1

New Ralink’s Capital : 174,562,423 shares

Consolidation Date : Oct. 1st , 2010

NTD (Thousands) 2Q10 1Q10 QoQ

Net revenues 733,240 100% 714,738 100% 2.6%

Gross profit 232,386 31.7% 228,827 32.0% 1.6%

Operating expenses 143,058 19.5% 151,597 21.2% (5.6%)

Operating income 89,328 12.2% 77,230 10.8% 15.7%

Non-operating income (loss) 1,446 0.2% 312 - 363.5%

Pretax income 90,774 12.4% 77,542 10.8% 17.1%

Net income 90,774 12.4% 77,542 10.8% 17.1%

EPS (NT dollars) 2.46 2.10

TrendChip’s Income Statement

※Concise Consolidated Income Statement


TrendChip’s Balance Sheets(In NT thousands, except indicated otherwise) 2Q10 1Q10

Cash & Financial assets-current 1,080,486 955,115

Notes & Accounts receivable (net) 347,555 325,865

Inventory (net) 107,227 137,793

Total assets 1,754,613 1,642,903

Notes & Accounts payable 297,038 271,582

Long-term liabilities 0 0

Total liabilities 723,704 592,396

Paid-in capital 370,408 369,732

Total shareholders' equity 1,030,909 1,050,507

Key indices

Net value per share (NTD) 27.8 28.4

Current ratio 220% 252%

A/R turnover days 41 41

Inventory turnover days 25 28


※Concise Consolidated Balance Sheets

New Ralink’s Product Mix

Ralink expects shipment volumes to grow more than 50% YoY in 2010.

Ralink is with 12% ~15% global market share for Wi-Fi chips.

Ralink is on track to be the #2 global xDSL CPE chip supplier in 2011 with

22~25% global market share.

3Q10 New Ralink’s Product Mix3Q10 Pre-merger Ralink’s Product Mix

Note : Based on combined unit shipments of Ralink and Trendchip in 3Q10

PC/NB,20%

CE, 9%

Retail, 42%

Broadband, 29%


We expect to continue gaining market share and be well positioned in the

broadband service provider segments with in-house xDSL and Wi-Fi

bundle solutions.

We have just launched a new product line in 2H10 for mobile consumer

electronics, and the first product targeting handset segments will be

launched in 2H11.

We have penetrated to 4 out of top 5 PC supply chains in 2010; PC/NB

segment will further improve in 2011.

Looking forward…


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