Silicon Labs(SLAB) equity presentation for the Student Managed Investment Fund.

1. Silicon Labs
NASDAQ:SLAB
Evan and Mitchell Lowery
Robert Gwydir
Brant ‘the real’ MacQuoid
Tim Barnes

2. Silicon Laboratories
• Incorporated 1996, now based in Austin, Texas
• Design and develop analog-intensive, mixed-signal
integrated circuits (ICs) for a range of applications
• Mixed-signal ICs convert analog signals(sound & radio
waves) into digital signals electronic products can
process
– Portable Devices
– Satellite set top boxes
– Amplitude/frequency modulation radios
– Networking Equipment
– Test & Measurement Equipment

3. Product Groups
• Broad-based products
– Microcontrollers
– Timing products (clocks and oscillators)
– Wireless receivers
– Isolation devices
– Human interface sensors
• Broadcast products
– Broadcast audio and video products
• Access products
– Embedded modems
– Voice over IP (VoIP) products
– Power over Ethernet devices
• Mature products
– Devices that are at the end of their respective life cycles
• Receive minimal or no continued research and development investment
– DSL analog front end ICs
– IRDA devices

4. Basic Profile
Market Cap 1.79 Billion
Fiscal Year End January 1
Last Earnings October 26
Next Earnings January 26
Institutional Ownership 110.66%
Insider Ownership 14.25%
# of Analysts 16
S&P Quality Ranking

5. Competitors
• Analog Devices, Inc.
– designs, manufactures and markets analog, mixed-
signal and digital signal processing integrated circuits
– $10.57 Billion
• Broadcom Corporation
– Provider of semiconductors for wired and wireless
communications
– $17.66 Billion
• Texas Instruments Incorporated
– Designing and making of semiconductors
– $34.34 Billion

6. Risk Factors
• Unable to develop or acquire new and enhanced products that achieve market acceptance in a
timely manner
• R&D efforts are focused on a limited number of new technologies and products
• Limited number of customers for a substantial portion of revenues
– 10 customers: 36% of revenues
• Significant litigation over intellectual property
• Inventory risks and costs
– Build products based on forecasts provided by customers before receiving purchase orders for the products
• Products are complex and may contain errors which could lead to product liability
• Customers require our products to undergo a lengthy and expensive qualification process without
any assurance of product sales
• Increased international activities significantly and plan to continue such efforts
• Rely on third parties to manufacture, assemble and test products
• Risks relating to product concentration
• Most current manufacturers, assemblers, test service providers, distributors and customers are
concentrated in the same geographic region
• Semiconductor manufacturing process is highly complex and, from time to time, manufacturing
yields may fall below expectations

7. Mergers and Acquisitions
• Silicon Clocks – April 2010 for $21 million
– Designed and developed microelectromechanical system
(MEMS) technology to enable the manufacture of silicon
resonators and sensors directly on standard CMOS wafers
– Effort to leverage CMOS-based timing products into high-
volume applications such as consumer electronics
– Accelerate entry into the low end timing market while
further scaling the Company’s engineering team
• ChipSensors Ltd – October 2010 for $11.7 million
– Created innovative single-chip CMOS sensors designed to
detect temperature, humidity and gases

8. Mergers and Acquisitions
• SpectraLinear Inc – January 2011 for $28.6m
– Low-power, highly programmable and small-
footprint silicon clocking solutions
– Optimized for consumer electronics and
embedded applications
– Adds a broad family of timing ICs, accelerating
penetration into high-volume applications

9. Capital Structure

10. Management Discussion
• Mixed-signal ICs are critical components in a broad
range of applications in a variety of markets
– communications, consumer, industrial, automotive,
medical and power management
• Third-party fabrication, assembly, packaging, testing
and shipping
– Faster delivery
– Shorter production cycle
– Lower inventory
– Lower costs
– Increased flexibility of test capacity

11. Management Discussion
• Expertise in analog-intensive, high-
performance, mixed-signal ICs
– Enable highly differentiated solutions that address
multiple markets
• Through acquisitions and internal
development, diversifying product portfolio
– Next generation ICs with added functionality and
further integration

12. Management Discussion Q3
• Sales cycle for ICs can be 12 months or more
– 3-6 months more before customers ship significant volume
of devices incorporating our ICs
– Experience significant delay between incurring R&D and
SG&A expenses and corresponding sales
– If sales do not occur in quarter expected, expenses &
inventory could be disproportionately high
• Many ICs are designed for use in consumer products
– Demand for our products subject to seasonality
– Rapid change in our markets & across product areas make
it difficult to accurately estimate impact of seasonal factors

13. Q3 Conference Call
• TV tuner & demodulator shipments declined
– TV makers working off inventory
– Strong tier-one TV maker penetration
– Introduced tuner to Tier-two TV makers in high
volume emerging markets
• FM tuner better seasonal lift than anticipated
– Audio products continue strong design win activity

14. S-LABS
• The company develops mixed-signal
integrated circuits (ICs), which translate real-
world analog signals (such as sound) into
digital signals that can be processed by
electronic products. Silicon Labs
provides ICs used in set-top boxes, game
consoles, portable electronics, industrial
monitoring and control devices, and wireless
handsets.

16. Power
• “Top customers include Apple, Cisco, Huawei,
Nokia, Pace, Samsung, Technicolor, and Varian
Medical Systems. Most of Silicon Labs' sales
come from customers outside the US.”

17. Industry Structure

18. Industry Structure
• “The company's 10 largest OEM customers
account for 36% of sales”

19. http://files.shareholder.com/downloads/ABEA-39NRLI/1522740570x0x448278/CD564960-9F11-464B-A6D9-
0ABA6DF2C8E5/Silicon_Labs_2010_Annual_Report.pdf

20. Competitive Advantages
• What sets them apart from other
semiconductor markers?
• The Sauce… “innovated mixed signal circuit
design, there are very few companies that
have the discipline and technical talent to
create the mixed signal ICs they do.”
• “Has both analog circuits and digital circuits
on a single semiconductor die”
http://files.shareholder.com/downloads/ABEA-39NRLI/1522740570x0x448278/CD564960-
9F11-464B-A6D9-0ABA6DF2C8E5/Silicon_Labs_2010_Annual_Report.pdf

21. Competitive Advantages
• IP – They have “strategic blocks”, patents
around patents
• SLAB must continue to put money toward
good researchers, but also continue to achieve
good returns on R&D
– Consistent R&D pipeline

22. Competitive Advantages
• Forward looking, and good at it.
• “The market for energy harvesting devices is
poised to grow exponentially this decade.
IDTechEx forecasts that more than ten billion
energy harvesting devices will ship by 2019 – a
20x increase over the roughly 500 million units
that shipped in 2009.”
• “Silicon Labs has met this design challenge by
creating a wireless energy harvesting system
based on its Si10xx wireless microcontroller
(MCU) family.”
http://m2mworldnews.com/2011/05/25/56866-silicon-labs-powers-wireless-networking/

23. Competitive Advantages
• “Diversification is important because it has allowed
[them] to ride out cycles in the industry better than
many of [Silicon Labs] peers, and it has given them
insight into a broader set of markets and
applications, fueling the new product ideas that
ultimately end up in our R&D pipeline.

25. Bull Say…
• “Silicon Labs has a talented R&D staff that has
allowed the firm to develop innovative mixed-
signal chips over time.
• The company took the bold step of shedding its
wireless business line, even though it was
profitable, because the firm saw increased
competition and lower profitability down the
road.
• Silicon Labs is not overly exposed to a single
customer or end market.”
http://subscriber.hoovers.com/H/company360/overview.html?companyId=59229
000000000

26. Summary
• Strong, high value, high volume, customers
– Require a lot from SLAB
• Diversification to weather highs and lows
better than competition
• Industry Growth
• Forward looking, and good at it
• “Silicon Laboratories keeps cooking up new
chips in its labs”

27. SLAB Income Statement
FQ3 2011 FQ3 2010 FQ3 2009 FQ3 2008 FQ3 2007 FQ3 2011 FQ3 2010 FQ3 2009 FQ3 2008 FQ3 2007
10/1/2011 10/2/2010 10/3/2009 10/4/2008 9/29/2007 10/1/2011 10/2/2010 10/3/2009 10/4/2008 9/29/2007
Revenue 476.82 508.64 413.18 416.39 311.96
- Cost of Revenue 184.47 172.23 150.58 157.16 122.89 38.69% 33.86% 36.44% 37.74% 39.39%
Gross Profit 292.36 336.41 262.60 259.23 189.07 61.31% 66.14% 63.56% 62.26% 60.61%
- Operating Expenses 246.49 234.68 208.26 197.95 179.43 51.69% 46.14% 50.40% 47.54% 57.52%
Operating Income 45.87 101.74 54.34 61.29 9.64 9.62% 20.00% 13.15% 14.72% 3.09%
- Interest Expense 0.03 0.09 0.26 0.43 0.76 0.01% 0.02% 0.06% 0.10% 0.24%
- Net Non-Operating Losses (Gains) (2.23) (0.81) 3.28 (4.92) (21.41) -0.47% -0.16% 0.79% -1.18% -6.86%
Pretax Income 48.07 102.46 50.80 65.79 30.29 10.08% 20.14% 12.29% 15.80% 9.71%
- Income Tax Expense 12.52 1.85 11.63 23.26 2.17 2.63% 0.36% 2.81% 5.59% 0.70%
Income Before XO Items 35.55 100.61 39.16 42.53 28.12 7.46% 19.78% 9.48% 10.21% 9.01%
- Extraordinary Loss Net of Tax 0.00 0.00 0.00 (5.40) (160.62) 0.00% 0.00% 0.00% -1.30% -51.49%
Net Income 35.55 100.61 39.16 47.93 188.74 7.46% 19.78% 9.48% 11.51% 60.50%

28. SLAB Balance Sheet
FQ3 2011 FQ3 2010 FQ3 2009 FQ3 2008 FQ3 2007 FQ3 2011 FQ3 2010 FQ3 2009 FQ3 2008 FQ3 2007
9/30/2011 9/30/2010 9/30/2009 9/30/2008 9/30/2007 10/1/2011 10/2/2010 10/3/2009 9/30/2008 9/30/2007
Assets
+ Cash & Near Cash Items 108.18 107.65 149.07 151.31 151.55 16.0% 15.2% 20.8% 22.9% 17.0%
+ Short-Term Investments 174.91 238.34 228.94 131.50 486.02 25.8% 33.6% 31.9% 19.9% 54.5%
+ Accounts & Notes Receivable 58.37 63.80 61.49 61.60 56.69 8.6% 9.0% 8.6% 9.3% 6.4%
+ Inventories 38.40 38.14 33.51 34.36 24.18 5.7% 5.4% 4.7% 5.2% 2.7%
+ Other Current Assets 46.90 40.28 25.31 17.45 33.79 6.9% 5.7% 3.5% 2.6% 3.8%
Total Current Assets 426.77 488.21 498.31 396.22 752.24 63.0% 68.7% 69.4% 60.0% 84.3%
+ LT Investments & LT Receivables 17.84 19.31 25.34 53.37 0.00 2.6% 2.7% 3.5% 8.1% 0.0%
+ Net Fixed Assets 27.37 25.91 28.70 29.37 28.70 4.0% 3.6% 4.0% 4.4% 3.2%
+ Other Long-Term Assets 205.36 176.71 165.81 181.40 111.03 30.3% 24.9% 23.1% 27.5% 12.4%
Total Long-Term Assets 250.58 221.93 219.85 264.13 139.73 37.0% 31.3% 30.6% 40.0% 15.7%
Total Assets 677.35 710.14 718.16 660.36 891.97 100.0% 100.0% 100.0% 100.0% 100.0%
Liabilities and Equity
+ Accounts Payable 25.72 26.84 26.84 32.41 35.23 3.8% 3.8% 3.7% 4.9% 3.9%
+ Short-Term Borrowings 0.00 0.00 0.00 0.00 0.00 0.0% 0.0% 0.0% 0.0% 0.0%
+ Other Short-Term Liabilities 61.02 61.24 62.14 57.24 43.56 9.0% 8.6% 8.7% 8.7% 4.9%
Total Current Liabilities 86.74 88.08 88.98 89.65 78.79 12.8% 12.4% 12.4% 13.6% 8.8%
+ Long-Term Borrowings 0.00 0.00 0.00 0.00 0.00 0.0% 0.0% 0.0% 0.0% 0.0%
+ Other Long-Term Liabilities 19.28 21.66 50.51 45.54 44.68 2.8% 3.1% 7.0% 6.9% 5.0%
Total Long-Term Liabilities 19.28 21.66 50.51 45.54 44.68 2.8% 3.1% 7.0% 6.9% 5.0%
Total Liabilities 106.02 109.74 139.50 135.18 123.46 15.7% 15.5% 19.4% 20.5% 13.8%
+ Total Prefered Equity 0.00 0.00 0.00 0.00 0.00 0.0% 0.0% 0.0% 0.0% 0.0%
+ Minority Interest 0.00 0.00 0.00 0.00 0.00 0.0% 0.0% 0.0% 0.0% 0.0%
+ Share Capital & APIC 0.00 37.18 117.56 102.74 389.97 0.0% 5.2% 16.4% 15.6% 43.7%
+ Retained Earnings 571.32 563.22 461.10 422.43 378.54 84.3% 79.3% 64.2% 64.0% 42.4%
Total Equity 571.32 600.40 578.66 525.17 768.51 84.3% 84.5% 80.6% 79.5% 86.2%
Total Liabilities & Equity 677.35 710.14 718.16 660.36 891.97

29. SLAB Cash Flows
FQ3 2011 FQ3 2010 FQ3 2009 FQ3 2008 FQ3 2007 FQ3 2011 FQ3 2010 FQ3 2009 FQ3 2008 FQ3 2007
10/1/2011 10/2/2010 10/3/2009 9/30/2008 9/30/2007 10/1/2011 10/2/2010 10/3/2009 9/30/2008 9/30/2007
Cash from Operating Activities
+ Net Income 35.55 100.61 39.16 47.93 188.74
+ Depreciation & Amortization 23.78 18.98 20.52 17.06 16.27 66.9% 18.9% 52.4% 35.6% 8.6%
+ Other Non-Cash Adjustments 39.62 43.82 45.23 56.71 (121.25) 111.4% 43.6% 115.5% 118.3% -64.2%
+ Changes in Non-Cash Capital 1.07 (37.14) 11.84 8.65 (67.28) 3.0% -36.9% 30.2% 18.0% -35.6%
Cash from Operations 100.02 126.27 116.75 130.35 16.49 281.4% 125.5% 298.1% 272.0% 8.7%
Cash from Investing Activities
+ Disposal of Fixed Assets 0.09 0.00 0.00 14.27 271.21 0.3% 0.0% 0.0% 29.8% 143.7%
+ Capital Expenditures (7.47) (15.89) (11.66) (9.84) (8.21) -21.0% -15.8% -29.8% -20.5% -4.3%
+ Increase in Investments (178.06) (349.43) (182.04) (428.19) (444.64) -500.9% -347.3% -464.9% -893.4% -235.6%
+ Decrease in Investments 241.50 347.90 116.02 716.46 276.72 679.3% 345.8% 296.3% 1494.8% 146.6%
+ Other Investing Activities (46.19) (23.50) (12.20) (82.86) (17.61) -129.9% -23.4% -31.2% -172.9% -9.3%
Cash from Investing Activities 9.86 (40.91) (89.88) 209.84 77.47 27.7% -40.7% -229.5% 437.8% 41.0%
Cash from Financing Activities
+ Dividends Paid 0.00 0.00 0.00 0.00 0.00 0.0% 0.0% 0.0% 0.0% 0.0%
+ Change in Short-Term Borrowings 0.00 0.00 0.00 0.00 0.00 0.0% 0.0% 0.0% 0.0% 0.0%
+ Increase in Long-Term Borrowings 0.00 0.00 0.00 0.00 0.00 0.0% 0.0% 0.0% 0.0% 0.0%
+ Decrease in Long-Term Borrowings (7.17) 0.00 0.00 0.00 0.00 -20.2% 0.0% 0.0% 0.0% 0.0%
+ Increase in Capital Stocks 0.00 0.00 29.35 16.03 19.27 0.0% 0.0% 33.4% 10.2% 10.2%
+ Decrease in Capital Stocks (110.04) (150.85) (52.43) (356.76) (61.25) -309.5% -149.9% -744.3% -32.5% -32.5%
+ Other Financing Activities 0.00 5.05 (6.03) 0.30 14.83 0.0% 5.0% 0.6% 7.9% 7.9%
Cash from Financing Activities (109.35) (126.78) (29.11) (340.44) (27.15) -307.6% -126.0% -710.3% -14.4% -14.4%
Net Changes in Cash 0.53 (41.42) (2.24) (0.24) 66.81 1.5% -41.2% -0.5% 35.4% 35.4%

30. SLAB Enterprise Value
11/21/2011 10/1/2011 10/2/2010 10/3/2009 9/30/2008 9/30/2007
Market cap 1745.17 1403.28 1590.10 1965.74 11348.68 2302.19
+ Preferred Equity 0.00 0.00 0.00 0.00 0.00 0.00
+ Minority Interest 0.00 0.00 0.00 0.00 0.00 0.00
+ Total Debt 0.00 0.00 0.00 0.00 0.00 0.00
- Cash & Cash Equiv 283.10 283.10 345.99 378.01 282.81 637.58
Enterprise Value 1462.08 1120.18 1244.10 1587.73 1065.87 1664.61

31. Liquidity Ratios
Current Ratio
Quick Ratio

32. Activity Ratios
Asset Turnover
A/R Turnover

33. Leverage Ratios
Financial Leverage
Debt/Equity

34. Profitability Ratios
Gross Margin
Operating Margin
Profit Margin

35. ROA
ROE
ROC

36. Dupont Analysis

37. Silicon Labs- Piotroski Breakdown
Qualification Score
1. Positive Net Income 1
2. Positive Cash Flow from Operations 1
3. Increase of Return of Assets 0
4. Cash Flow from Operations > Net Income 1
5. Decrease in Long-Term Debt to Assets 1(No Debt)
6. Increase in Current Ratio 1
7. Decrease in Shares Outstanding 1
8. Increase in Gross Margin 1
9. Increase in Asset Turnover 1
Total Score 8/9

38. Price/Book Ratio
Price Multiples
Price/Earnings Ratio
Price/Sales Ratio
Price/ Operating Cash Flow

39. Analyst Coverage

40. Earning Surprise - Quarterly

41. Earning Surprise - Annually

42. Earning Surprise - Matrix

43. Revenue Surprise- Annually

44. Revenue Surprise - Matrix

45. Growth Rates
Revenue Growth
EPS Growth
Asset Growth

46. Silicon does not pay a dividend

47. 6-Month Comparative vs. Peers

48. 2-Year Comparative vs. Peers

49. 5-Year Comparative vs. Peers

50. 6-month Comparative vs. Index

51. 2-Year Comparative vs. Index

52. 5-Year Comparative vs. Index

53. Questions?