CEVA, Inc. (CEVA)

Investor & Analyst Day 2019

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Jan 14, 2019

Hello. Great. Good morning, everyone. Welcome to CEVA's first ever Analyst and Investor Day. Deliza, I have you all here. Before we start, I just have a quick video. We're going to show you we made just to celebrate the 10,000,000,000 CEVA powered devices to date and give you a little bit of information about some of the markets that we power. So would I further ado? Here's the video. Dream of designing a device, a device that will change our lives. Now imagine you can make it happen. Make it real. Make it fast and powerful. Make it intelligent and make it learn Make it analyze and predict. Make it fun and creative. Make it look sharp and gorgeous. Make it friendly, user friendly. Make it efficient, and productive. Make it smart and connected. Make it and protected. Make it sound clear and pure. Make it speak. And understand. Make it free. Make it grow and make it nourishing. Make it all happen with CEVA Siva licenses Ultra Low Power, signal processing platforms, and AI Processors. Siva's IP powers more than 10,000,000,000 devices worldwide. Dream it and make it with CEVA. All right. There we go. So good morning, everybody. For those who don't know me, my name is Richard Kingston. I run-in Market Intelligence, investor and public relation for the company. And I'm delighted to have you all here today. Hopefully, learn a little bit more about CEVA. For those of you who know us a bit longer, we've been around for about Since 2002, Steve was spun out of a semiconductor company as a DSP licensing division or what the DSP licensing division within a semiconductor is now a standalone company. And I think over the last few years, we've showed some tremendous growth. The company has diversified into a lot of new spaces and market opportunities. And I look forward today to showing you some of these new markets and areas that we are licensing into. Before we start, just make you aware, we have legal notice for forward looking statements in the presentation. And the first thing we did today, we announced there's a milestone here for CEVA and that we shipped our 10,000,000,000 CEVA powered device during Q4, which is a pretty phenomenal achievement for company of about 350 people today. Over the last few years, we've shifted about 1,000,000,000 devices annually. We're in many of the products you guys are probably holding in your hands or in your pockets today. And I think in the next few years, you're going to see CEVA's extensive devices and millions and billions of units continue to increase as we see more smart and connected devices in the world, which is the area that we try to power. So just before I look at this slide, I just want to say that the purpose of the day is not about 2019. It's and help you guys see further out down the road and where Steve was going. So most of the time frame we're talking about today will be towards 2022 or so. And each of our presenters will give the market opportunities towards that timeframe, what sort of products we're developing aiming for that. And Yaniv at the end of the day, we'll wrap everything up and give you sort of the forecasts and expectations where we believe that CEVA can be if the market drivers that we predict are happening, we'll go that direction. So we're in our quiet period right now. And as a result of that, we won't be talking about Q4 or 2019, but we will be happy to do that. When we report our earnings on February 13th, I believe. So we were at CES last week. We made some new product announcements, new customer enhancements, even today, we had a new press release. We've opened up a new R And D Design Center in Bristol in the U. K. Bristol is very well known for digital signal processing technologies. And there's a lot of semiconductor companies based there like ST, Broadcom, Infineon, imagination, and so on. And it's a great new opportunity for us to tap into the R and D base that's based in the UK and hope to accelerate the development of our signal processing cores and also our AI processors by leveraging the expertise that's there. Some of the other products that we announced with customers in the CES timeframe, new Narrowband IoT and CAT M chip powered by our DSP with Nordic. Sonova, who's the world's leading developer of hearables, are using our Bluetooth and all of their new hearable product range, the sword chip set, and many new design wins with the likes of at Mosaic and BES Technic who are using our technologies to get into new markets and some very exciting opportunities and products there. On CEVA itself, we announced 2 new products as well at the CES. The first was WISPRO, which is a new neural network based voice trigger technology. Meaning in addition to licensing DSPs from CEVA, we now offer you the ability to license software from us as well. So this is part of our strategy to verticalize in some of the key markets so we can generate more licensing and royalty revenues. And the second announcement we made was around a new DSP we call a multi purpose DSP for doing digital signal processing and digital signal control. And this is an area that Moche Hier, we'll talk a little bit more about when we have the sound presentation later on in the afternoon. So what's on the agenda for today? At 10 am, which is in a few minutes from now, Gideon Verthalizer, our CEO, will give you an introduction to the company and some of his strategy and thoughts different markets we address. We'll follow that with a session on cellular. And following that, we'll have computer vision AI and automotive. I should say that we're not going to do a Q and A after each session because it will just take too long. So what we've decided to do is have a morning Q and A session after the 2, the first two business units present. And then we'll have an afternoon Q and A after the second two business units present. So if you can hold your questions until the right time. It'll help us keep on time for the day and get through everything we need to get through. After lunch, we'll do the connectivity and our sound business units. And then after that, we'll have, as I said, the second Q and A followed by a presentation about China, some insights into the market there and where CEVA is playing and what the opportunities are. It's a pretty interesting look at things from our perspective. And finally, Yaniv will wrap up today talking about our the implications of the growth strategy and the different knock on effects from what we're going to discuss within the business unit presentations today. And then hopefully, if we're all on time, we'll be able to hear by 2:30 and hopefully have learned a lot more about CEVA that you didn't know in the past. So with that said, I'm just going to give you a quick intro to each of the presenters today. So you're a bit more familiar when they come up. Gidi Invertiser, our CEO, has been in charge of CEVA since 2000 and 5. But as part of DSP group previously, where CEVA spone out of. He's been there since the 90s, and Skidion and Ithaca, Ojana, who's our head of sales here, were the 2 people responsible for developing the DSP licensing the business within DSP group. So they've been with the company a very, very long time. And you need very early, of course, along history within DFP Group and joined CEVA in 2005 when Gideon took over as CEO. From the business units, Michael Bukarya is here. He heads up the wireless business units. Again, long time CEVA employee from the DSP group days as well for a long time as a chief architect of many of the DSPs that are in production today and generate a lot of the royalties. Aviv Malinovich, who heads up our connectivity business unit. Aviv joined about 10 years ago now and took over the the Riviera Waste business and the connectivity business in 2014 when we acquired Riviera Waste before that he was the VP of Operations for the company. We have Elan Yona, who's the general manager of the division business units. Elon joined in 2011, was looking after the Imaging of Vision algorithms and products until we develop the vision business unit. We saw the opportunity there, and he's been running that since we set that up. And we have Mahesh Shahir here, who's going to be they're presenting the sound strategy for the company. Moshe today is the vice president of marketing at the company and also runs sound. Once he has a long history with CEVA and DSP group, he asked me not to say, but he did leave for a while, came back again. So he's on his 2nd round here with the company, but very lucky to have him. He's a very strategic and great asset to the company. And finally, the last three presenters we'll have Emmanuel Grasey, he works within the wireless business units. He's going to cover the markets and trends within wireless covering base stations, handsets and cellular IoT. We have Jeff Van Wash Nova. Jeff looks after automotive marketing for CEVA, and today you'll not just be presenting the automotive strategy, but you'll also do the imaging and vision markets and trends for you. And finally, we have Franz Dugan, who is head of sales marketing at the connectivity business unit working under Aviv. And Frans will take you through the Bluetooth and Wi Fi businesses. France was one of the founders of Riviera waves back in 2010, I believe. And we acquired Riviera waves in 2014 and obviously have built a very nice business a result of having Riviera waves for connectivity. So with that said, I'll pass it over to Gideon to begin today and, good luck and hope you get something good out today. Okay. Good morning. Let me start by welcoming you here to to visit us. For me, it's a historical moment. I recall when I joined this digital signal processing back in 1990. And I spent the whole 1st week of carrying desks and setting up computers to the point that we are here in NASDAQ and opening in an opening bag. So with that said, that's put aside the nostalgia. And let me take you to 2013, where we, Siva was one of the rising star in the cellular market. We were a leader in this space took over sockets by them and Nokia and other. And even in these good days and high days, we decided to embark a new strategy. And the strategy was to diversify and to take advantage of our DNA digital signal processor to a new area. And today, objective is to give you the insight of all this strategy, how it turned out after 6 years from now. And to explain all those markets. And for this purpose, we brought all the executives and the marketeers that lead this effort. I'll take the next few minutes and give you a more overview of what you're going to hear today in more detailed levels. So what this strategy that I just mentioned, it's all about. Basically, we are we have developed a technologies and Siva is an IP company that process and connect data that cut for IOT purposes. And the underneath this process and connect data, there are underlying technologies that it's the profession of this one is scarce. So think like modem Technologies and wireless local area network like Wi Fi and Bluetooth and AI and hardware and software. These are professions that you don't find that many around the world. It's not commoditized like CPU programming or C programming. And with this skill set, we decided to focus on the key markets. The first one is cellular. And I mentioned that back in 2013, we were just in the handset. And we continue to be in the handset market today as well because people may not be aware of, but the area of mobile internet, meaning, things that we have LTE smartphone that allows you to connect to the internet. Is not that fully deployed. There are 300,000,000 to 3,300,000,000 LTE subscribers today. It will go up to 5.4 in the next few years. So And this on top of it, and these are on top of this mobile broadband, if you're going to see it in India and emerging market, there is the cycle or 5G that is coming by itself. And that's a good thing about cellular technology. Every few years, There is a new standard, a new class of services that come out, and it recreate this 1,000,000,000 of units again coming. Another element that we another area that we decided to embark and to work is to go into the base station market. This turned out to be a very successful strategy because we found an area that our special organization to build processor. And we will elaborate furthermore what this specialization is. It's something that you cannot find everywhere. And we become a dominant player in this huge space. And the third area that we are targeting the relatively new, I would say, about 2 years. And this is what it's called cellular IoT or other people maybe help the name narrowband IoT. And this is the area that you're going to connect billions of sensors. It's going to be a camera, it could be your smart meter at home, it could be your health care monitor, and you're going to connect it to the cellular and take advantage of it. This is by itself, it's about 4.1 1,000,000,000 units. So you take the Siva as a handset company and you use the same skill or reuse the same skill and to grow huge other segment in the market. And without the need to do any acquisition or a dramatic move, that put the company in an uncertainty for a while. Let me move to the other area and this is a collect of what we call smart sensor. I started by saying that we are basically processing sensors And the terms of sensor shaped type completely in the last few years Camera to date is not just for the purpose of taking photos. If you try to understand what is the video, detects phase, detect the dust running when there is autonomous driving. This is a sensor. And you need to deploy technologies in the area of computer vision AI. People speak about AI, but the first implementation of AI is camera as a sensor. And we decided to address this space early on and become one of the pioneers in this space. Another area and that's people knows about Amazon Echo and Alexa and smart speakers underneath the It means that your microphone is just not not just to speak. It's about making your microphone essential because if you want to recognize voice, if you want to interpret and learn something that you speak, before you go to the cloud, then it's essential. And we decided also to approach this market. To our technology and we will elaborate how we're going to address the opportunities there. And the 3rd area again, relate to connectivity. So we have the cellular. Our cellular is a long range connectivity. What about local area What about things that you do at home? What about your smartwatch that is connected to your phone? And this is area of Wi Fi and Bluetooth. And for these purposes, we decided to acquire a company, which turned out to be very successful. We acquired back in 2014, a company named Riviera Williams. It turned out to be very successful because the market is huge. And you can see those billions of Bluetooth devices $5,300,000,000 $4,000,000,000 about Wi Fi devices. It ought to be successful because the team will that we acquired is a team that had a reputation technology wise. And they need us for business, they need us for making a one stop shop of connectivity technologies and sensing technologies. So with this set of technologies that we develop, and it's not long time ago, we just started all those development back in 2013. What we want to do, we look our customers are the chip companies, the semis. And they are under extreme pressure, time to market life cycle. So show they are extreme pressure in operation. And what we want them to do is to provide them all those different blocks different computation engines that they can use it, whether it's a voice whether it's a computer vision, whether it's the connectivity, whether it's an AI engine that they can mix and match between what we are offering them and what they have in house. So we let them focus on their excellence and we take the rest of the building. And all those blue blocks that we can withdraw, these are areas that This is how we expanded. This is how we diversified. We created by this bigger market to address and higher ASP because when you start providing to customer higher value, you can have a higher ASP. So one of the things that we are being asked, people are stand the diversification strategy. You see it in our numbers in terms of the licensing line. The licensing revenue is going up and we will elaborate the amount of license deals that we signed, the quarter went from 1 5 to 6, deals a quarter to north of 10. Deals a quarter. So you get this 1. And then let's say the proof of the pudding is the royalties. So where the royalties is coming will come from and when So I want to explain to you the practices in this business. So when we embarked in 2010 this strategy, we had to develop IP. Developing IP that is will turn out to be lucrative IP takes time. This could take time between 2 to 3 years to develop a process or a DSP process of computer vision or DSP process for base station. It could take more. And that's CEVA investment. Here we put our R and D, here we put our talent here, we put our accelerators. And then this is the phase that we are today. Once you have this technology, it's a qualified and fully tested and something that customer can license, we go into the licensing and the deployment. So we license this technology. We get some license revenue out of it. But then our customers start working in building the chips with our technology, developing the software without technology. This could take 1 to 5 years. If you have a Bluetooth, a wristband, that could take a year But if you have a base station, Chip, that could take 5 years. And the and of intensive work and then our sites the gain is not over by licensing. It's we need to support and increase our resources and work with this customer. But what we have, we have this 40, 50 licensing agreement that we are signing to the NDC of 40 to 50 deserves that are embarked starting from this phase. And then we have the phase that we are all waiting for, and that's the royalties because royalties is what make IP company a successful company. And then from that point on, you go into a continuous way. So we have today 40 royalty pairs. But through this strategy that we developed starting from 2013, we are now about 60 companies that will add to this one, royalty. So from where we are today, we basically more than double the amount of new royalty sources into our revenue stream. But not just that, I mean, this the market that we're targeting is 10,000,000,000 units today. And it is growing. You see that we are expecting 70% of all those markets that we are addressing this product. By 2022. So we speak of a total available market of 17,000,000,000 units a year. And we have, as I said, we have the customer, those 60 new customers that are actively developing these new chips into this Another element that we considered when we built our strategy going forward is the life cycle, the lifetime product. And we wanted to have a mix. We don't want to have to be in even it could be in a multiple market but be in a short term market. And what is short term market? Short term market is that the lifecycle of a product, it's 1 to 2 years. And it means that the good news is that every 1, 2 years you have a new cycle, you have a new cycle of licensing, you build relationships with customer and you keep going going forward. On the other hand, the requirement is not just give them the same start every 2 years. You need to go up in the value chain. You need to give a more complete solution in order to shorten their time to market. And that's, as you can see in the presentation from all the business you you'd see how we went up in the value chain for those short tail markets. And another component that we want to address is the long tail market. The long tail market is a market that can be like innovation. Whenever you win an agreement and whenever you get into production, it's a 10 years business that you get to run this. And, but on the other hand, when you develop such a technology, you have to have a foresight. You have to think what will be still relevant in 10 years which means higher development, more complicated processes and more understanding of where is 5G and next 5G. We are developing technology today that takes us beyond the 5G. So To summarize the strategy and you're going to get more into this in more details So first, our objective, strategic objective in cellular is to, 1st of all, go to the handset handset is a big market. And there are 2 opportunities there. 1 is what is called LTE mobile broadband. So there are still lots of places in the world starting from India going to Africa, going to Latin America, going to Eastern Europe that they still use either 2G or 3G. Healthy, it's a game changer. Them. And they will go to 'twenty and you see the investment in that operator and semis are going into this way. This is going to be a low cost, high volume market. This is the essence of Siva. In the feature phone, if you take the history, features on CEVA has 70% of the market. It's not growing market anymore. It's still sizable, but you do have 70, but this gives you an example of where the strengths of CEVA and its customer when there is a high volume market, every penny counts, then our technology makes But on top of it, we are coming to the 5G. We are, and our wireless people will show you what we are doing in 5G in terms of building platforms to our customer. That's one element. The other element is the base station here with a lot of room to grow. 1st of all, in terms of existing customer that will go into production. And we have 2 of them. 1 is already in production. The other one is about to go to production. We because we are ahead of any available technologies that could be in this space, we can go and expand further our customer base and the benefit for a very lucrative market and a long tail market. By the way, when you go, when you speak about 5G, 5G is not just Sense, 5G is also automotive, 5G is about robotics in industrial, 5G is about edgecloud, I mean, there are so many new opportunities and these new opportunities, you're going to see newcomers and newcomers are an untapped space for us to come and benefit from the IP model. And the 3rd element in the cellular market is the cellular IoT, a new area 1,000,000,000 units and our wireless people will show you the strategy that we develop, which is unique in the in the IP space. And set the stage for many, let's call non cellular people that wants to go into the space, but they are under a trauma that this market will be again dominated by Mediatech and Qualcomm. And this is not the case in the cellular IoT space. Another objective is in the connectivity. We mentioned things that happen in an enterprise thing that happened at the local area. So then in the Bluetooth side, This is a growing space all the time. 1,000,000,000 of years. I don't recall any space today that can show you 30% CAGR, the next few years. And then it's a very dynamic area. It's, you know, there are changes in start ups and we are actively running and offering to our customer this state of the art. Another area in the Bluetooth that it was old, but the airport of Apple created this understanding, and I would say airport at the context of our assisted services. Now these are the headsets like the airport. So these are not just something that you wear when you want to hear music or something that you wear because you want to speak with somebody. It's something that you wear throughout the day because this hook you to the cloud. This allows you to say to us queries to the cloud, all those services that Siri is providing and things like this. This is by itself, it can be 1,000,000,000 units And when it comes by the way, because it's stereo, it's 2,000,000 units because you have 2 Bluetooth in each of the year. And the third component is the Wi Fi. Wi Fi is a huge market. It used to be only residential gateway that you hook you to the internet at home, but it's all over the place now. Every smart speaker is a Wi Fi. In smart home, you're going to have tons of Wi Fi. Every smart TV as Wi Fi connect. So these are areas, new areas that we can come out with our vertically value added solution, not just give them a piece of it. We are giving for wife and Bluetooth a full solution. And last, but not least, it's all related to the sensors in the form of cameras or microphone. And here, we take advantage of early on expertise in AI that we bundle this expertise with our camera offering and with our voice or microphone offering. So with that said, that's in a high level. I let our people go and more deeper into this, these technologies. Yes. Can you hear me? Yes. Okay. Good morning, Emmanuel. And I'll go on with my looking at the cellular market and it's opportunities for Siva. So and certainly the biggest one is 5G. So why is that? Because it it opens up new, a whole lot of new, wireless services and use cases that could not be addressed by a LT. The most common one is the enhanced mobile broadband or EMBD, which is basically a healthy on steroid with a higher data rates. Now there are many other use cases. So let's look at a couple of them. The, certainly, automonos autonomous driving is a big one immersive cloud based virtual reality, which are using some of the key features of a 5G, which are new, which are low latency and reliability. On the 3rd type of use cases, there is massive IoT, which includes industrial robotics, smart cities, smart homes, and wearables. Now such such services need a new infrastructure. And what that means is that we the network needs to be expanded with what's called heterogeneous network, meaning a combination of cloud ran, macro cell and small cell, which and femtosel, whether it's indoor or outdoor. And a new type of small cell, we'll look at that in details, but a new type of small cell would be required for a wireless local loop or fixed wireless access, which is called the FWA. And we'll look at this, but you need dedicated small cells for this. And all of these are very promising opportunities for CEVA. So now let's look at the handset, which is the the big, the big part of it. So you can see here on the left diagram, the, the significant well, okay, we reached Elvinion overall subscribers today. And by 2022, we'll get to 1,000,000,000. And what's interesting is to see the shift from overall voice and data to primarily data because by 2022, this will be represent 90% of a mobile broadband. And that's explained on the diagram on the right, by showing that there will be a net addition that's because of the replacement and the new subscriptions of smartphones in the emerging market, which would shift from feature phone to a smartphone. Now, primarily, you know, it's about half and half between, LTE, LTE Advanced which offers gigabit, throughput and, 5G. Let's now look at the cellular modem and the baseband shipments by technology. Well, we'll reach by 2022, 2.7000000000 cellular modems shipped yearly And but 30% of these will be 5G, as you can see on the diagram here. It is said that every new cellular technology has been deployed faster than the previous one. And apparently, that's what we're seeing that 5G will be no different. It will be even faster than the pickup of LTE. I think what should be noted here is that the huge shipment all the way to still growing until 2022 of LTE, a basement, LTE and LTE Advanced, and then being not being added with, 5G starting in 2021 and beyond. 30% in 4 years is very significant. Okay. Let's look at one of these new services enabled by 5G. And This little picture here shows that it's very interesting. There are two sides, obviously, it's while it's a loop. So you're delivering high data rate to the home wirelessly with a CP that's, connected that's on the outside of the home. But you need a special base stations, that actually use a millimeter wave to serve these homes. And what's interesting to see here is that the growth is very very large, exceeding 100,000,000 by 2022, but the SAM is even larger. I mean, it's up to 1,000,000,000 just due to the number of households without fixed broadband and some replacement of wireline technologies that are better addressed with them with this. So 1,000,000,000 SAM by 2022 is an extremely attractive market and we'll definitely be addressing those, both on the CP side and on the small cell side. Before we get into the size of the opportunity for infrastructure, let me explain a few things here they are macro cells being used today by 3g LTE networks, but for 5g and LTE advance to to be successful, you need a lot more than macro cell. You need the small cell, which are composed of Pico cell and the micro cell, micro cell are the ones we just described for fixed wireless access and then center cell indoor. Think what's interesting to note here is that, Verizon on October 1st last year launched the its first 5G wireless to the home service with a 300 megabit service for about $40 a month in 4 major U. S. Cities. So let's look now on the size of the opportunity, on the infrastructure side. There are two things. If you look at the top diagram here, the, there is already this right now over 13,000,000 base station being installed. And operation in operation. And they also are using legacy technology up to LTE. Now they need to be upgraded to LTE Advanced and 5G. So that's one big opportunity. It means the hardware and software upgrades but to serve again, to serve LTE Advanced and 5G, there will be another 13,000,000 as many a doubling of base stations and small cell by 2023. Now to look at the bottom diagram here, And because of the reasons we mentioned for the heterogeneous network and the wireless access. So in essence, for 5G to succeed, we need to deploy a small cell And actually the growth here is huge of small sales, 36% until 2022, and they will actually exceed by 2023 the number of base state macro cell base stations. So about $2,000,000 a year for each of them. The last cellular market will look at is, IoT, cellular IoT. What is that? Well, how do you connect all these devices to the network well, it's through a new types of network, which I call the LPWA. So low power wide area networks. Which are designed to connect devices for many, many years on a single AA battery. With so very low power, very low end, but also very low cost because endpoints, the complete bill of internal of an endpoint should be less than $5 and that's what we're already seeing today. So a whole lot of integration into single chips needs to be performed here. There are 2 standards that are being defined by 3 GPP for these. 1 is CAT M which is the higher end of these LPWA networks for connecting images and cameras. With some mobility support and then the very low cost, very low power NB IoT. For 10 year battery life at a very low cost. And let's look at the opportunity of these networks, the forecast here is of starting at 1,000,000,000 today is that it will reach 2,800,000,000 by 2022, which represents a 29% growth. Now the market is very segmented here. There are a number of use cases that we saw late at the beginning, but ranging from industrial, smart cities, Of course, metering smart grid management has been the legacy cellular IoT technology started with a 2G, but 5G and, CATs NB IoT will enable as well, industrial and transport and logistics 6. That's a combination of asset tracking with GPS and NB IoT to offer tracking assets cars, people and containers, for example. Okay. So let me now hand the presentation to Michael who will go over the strategy. Hello. Hear me? Okay. So Good morning. My name is, Michael Bukayar, and I'm running the wireless business unit for CEVA. And I will try in the next couple of minutes to share with you our strategy for wireless. All right. Let's start with our position today. 7,000,000,000 handsets powered by CEVA today across multiple cellular technology from 2G to 5G. It's a great milestone for our company. And it's a result of very focused strategy and introduction of key technology by working very closely with our 6 years ago, we have made a strategic decision. We have identified a new growth opportunity in infrastructure segment, in base station segments. And we have made a very important decision to focus on specialized with very consistent strategy and very innovative technology, we have managed today to equip 3 of the top 5 vendors in this industry in base station industry, which is also a very, very good milestone for us. Like base station, we also identified last year. Let's say, 2 years ago, a new growth opportunity, which is called cellular IoT. As Emmanuel referred previously in his slide, it's one of important mission of 5G. This mission targets to connect 1,000,000,000 of devices to the internet. And for that, we have identified a case for CEVA to introduce a solution to address this smart market. And we introduced last year, the first IP for Nevroband IoT, which is the dominant technology for cellular IoT. So if you look to this slide, we can say today, that Civa is the only IP company that is able to connect point to point well as devices from sensor via mobile handsets up to base station. Let's go over our global strategy. And in the next slide, I will go over more details about each one of the segments. Our strategy is based on 3 pillars: number 1 is mobile broadband. Mobile broadband is a very, very big market. This market is growing. As Emmanuel introduced, we expect 8,600,000,000 of subscriptions in the next couple of years. This is volume. CEVA is here, and clearly continue to invest in this segment. And the way that we see this market, in terms of strategy, you will see a transformation of our proposal from being a DSP provider, DSP only provider, and transformed to be a mobile IP platform provider for 5G. Which is much more comprehensive than just DSP only. So we move from DSP to mobile platform. And we'll go in more details in the next couple of slides. This will enable us to increase our value add with higher ASP. Number 2 is base station. Base station will lead the market. As I said, our presence is an evidence in a big player in this segment, but we intend to expand our leadership for the rest of the customers. But also to expand our leadership to the new segments infrastructure and we will see that due to the nature of the deployments, we already identified newcomers in this market. That will need our technology. This segment is very lucrative in term of license and royalties. Number 3 is in the last, let's say, 20 years We have accumulated a lot of experience in wireless. We also recruited talent teams, and we want to use these expertise in order to address new markets. One example is cellularity market. And we have a know how today to go to the market and I will show you our strategy. But more than that, As we saw in 5G, 5G introduces new non handset use cases, new business opportunities. And we definitely target these segments like Automotive And Industrial. Let's start with mobile broadband and a bit more detail. So In one sentence, we want to streamline the path to 5G And for us, there are 3 opportunities. Number 1 is we power 1,000,000,000 of devices And we are very well, I mean, very good relationship with our customers. And we have the privilege to work with these guys in order to migrate from 1 generation to the other. We made it for from 2g to 3g. We made it from 3g to 4g. And we are now making this transition and migration with our partners from 4g to 5g. The second opportunity and it's a very interesting trend is OEM internalization. OEM are looking to internalize their modern technology. And there are a couple of reasons for that. One of the reasons is to get better margin. The second reason is to reduce the risk to be dependent on one single source in terms of ecosystem. And the third reason can be also to differentiate the solution. Now these guys make modern architecture. In modern architecture, you need DSP Processors. You need Processors. Now the natural choice for them is to license IP technology versus recreating an overseas company internally. And if Riverprefer to focus on other aspects in terms of productization. And therefore, for us, it's a great opportunity. The 3rd opportunity is China. Ithaca in the afternoon will elaborate on China will give you very interesting insights about what happened in this region, but I can say very quickly that China strongly pushes 5G with a lot of budgets. And encourage local player to develop 5g devices. And this means that newcomers are entering this market And when these new cars are entering this market in China, they need technology. And for us, it's a great opportunity because we can bring the right IP portfolio to reduce the entry barrier for modem architecture. As we say, 5G is not only a handset opportunity. Is also new lucrative non handset devices and use cases. 5G introduced key technology assets that open new markets. For example, 5g UR LLC, ultra low latency communication. It means that you have a link connectivity with ultra low latency. This characteristic opened the market, for example, for automotive, autonomous car connected cars, where you need ultra low latency between vehicle to vehicle vehicle to pedestrian or vehicle to network, 5G opened this opportunity. Same for industrial critical control with ultra low latency. That's just two examples. Another nice example is 5G also sustained very high bit rate. We talk about gigabit per second And as Emmanuel introduced in a market presentation, this gives the opportunity to replace cable modem DSL We've fixed wireless access with wireless connection, and this is possible due to the very high bandwidth and very high throughput. These are just three examples. And these examples means that We see rather than taking models from Qualcomm or MediaTek. And when these newcomers are entering this market, they lack In some cases, some aspects for wireless expertise to productize products. And for us, it's a great opportunity because licensing IP from CEVA will reduce the time to market and reduce the risks. Let's have a look the technology and why Civa is the right player to address 5D challenges. Hello, we like software. We are a processor company, so we like software. The question is, why 5G and R modems will also like software. Revervant fully hard wired solution. So I will give you just few arguments without giving too in the technology. One reason is multimode architecture. Even we'll see during this year new chipsets that will be announced. And you will see that these modems will be not 5g only, but 5g with LTE. 5G will with AT Advanced. Remember that LT and AT Advanced still very dominant in terms of technology, in terms of cellular radio access. Therefore, there is a need in your modem to support 5G, LTE, LTE Advanced, and let's say also 3G, 3G does not disappear. And this means that in one single device, you have to to support multiple modes. So a programmable engine, a programmable solution software solution makes sense rather than gluing a lot of hardware by supporting hardware for 5G, hardware for LTE, hardware for 3G, it will not be cost effective. The second reason why software is so important is very simple the evolution of 5G. We are just at the beginning now, and the standard is evaluating. We are today on Release 15, Next year, we will see release 16 and so on. This means that you need to have a flexible solution not to close now the solution. And a fully hardware approach is not upgradable. So In few words, we see and I can tell you we've confidence by knowing this market very well in terms of modem architecture. All 5G modem will be software based with hardware also, but software based, what we call software defined radio. And when it comes to software and processes, Siva is a natural choice. So when we look, different opportunities. We introduced Pentagie. Pentagie is a mobile platform. It's not a DSP. It's a platform. That contains specialized engine, specialized processor, scalar processor, vector processor, and AI Processors. We are proud to say that CEVA was the first in the industry to introduce AI technology for wireless modem enhanced in IP landscape. We were the first just to give you an indication of the innovation we put investment we put in this field. So as I said in my introduction, we are moving from delivering 1 single DSP, rather we see here a mobile platform that includes multiple elements to give the right answer to the most sophisticated use case in 5G and R. As a result, the Pentagon G reduces enormous complexity in designing 5G and our devices and reduce the entry barriers for the newcomers. But only newcomers, we talk about OEM. OEM likes this approach because the Pentagon is like a Lego. You can select whatever you need and whatever you lack in your modem if it comes to a scalar processor vector processor, an AI processor and just connect to the legacy solution of its OEMs. So by design, we made sure that each of the IP components is a very designed, a very standard way for a smooth integration for into legacy solution. Last point and very important point is the architecture and the platform is very modular and which enable us to address different use cases, not only mobile broadband use case, which is the most important one, but over use cases new use cases introduced by 5G. Here we see an example. We see here 2 derivatives of our Pantages. On the left side, we see a derivative of the platform for mobile broadband handsets. And here you can understand what I said you see is not at 1 DSP, it contains a platform of different components. DSP co vector processor, scale out processor of the BX2 that we recently announced, other accelerators, AI processor, etcetera. On the right side, on the left side, sorry, you see here a configuration for cellular V2X. V2X stands for vehicle to vehicle or vehicle to network of vehicle to pedestrian, which is for automotive. So you can see that you can reuse our design. We can reuse the IP that we designed for addressing different use cases. Let's move to 5G is not revolution. 5G is a revolution in term of technical challenges. If you look to the deployment today, you will see on base station, on the towers, 2 antennas, 4 antennas, 8 antennas for LTE Advanced. In 5G, we talk about up to 266 antennas, 2 106 antennas, 108 until we have customer, WorldView customer, but targets our device now with 128 antennas. It's enormous. And this imposes new technology challenges in terms of basement technology like massive MIMO, how to treat signals for all these antennas, much higher bit rate 10 gigabit per second under ultra low latency as we discussed before. So the challenge here is not a simple evolution, but a very big revolution. On the other hand, You see that. And I can tell you that all base station architecture, all base station architecture are VSP based. Or why? Because these products are has a very long lifespan. Is not like an handset, but you can change every 2 years, every 3 years, but something that stayed for a long time. This means that you need the ability to software upgrade the platform from one standard to the over from run release to the over from one feature to the to add more features and you need a software approach. Now let's have a look to what's available or what are the challenges in terms of availability? Legacy ASIC platform but was based on TI, free scale or NXP today, or even FPGA based implementation are not that don't meet the costs. In terms of cost, but also on power consumption, and does not meet the performance and requirements imposed by 5G. As a result, OEM require state of the RDSP technology to address these challenges. So here is what we do, and this is our go to market strategy. And who is the path to our leadership in this market. As I said from 6 years ago, we have made a strategic decision to design state of the art vector processor architecture, especially for its market. We are today the only one that launched 4 DSP calls on for this market, 4 generations. From 3G up to 5G. And we have established very tight collaboration with 3 of the top 5 vendors in this industry. This collaboration enable us to really deliver and design and architects, very sophisticated DSP architectures. And as a result, we present the competition very high entry barrier. And as a result, we can say that we are today the undisputed number 1 vendor in this segment. Our technology and our DSP calls and vector processor address all run architecture from small cells, macro cells, CRAN, etcetera. The technologies in mass production, the 2 generation XC3023 and XC4500 are in production today. And our latest DSP core, the XC12 that we designed for 5G is already licensed by 3 of the top 5 vendors for 5G. And you can see here we are proud to power Nokia and city. Now an interesting point in terms of growth strategy. This market is evaluating. It will not be just a game of the big players. The nature of the deployment is now different. It's a Therogeneous deployment, meaning new type of cells will be deployed new small cells, femtose cells will be deployed in this market. And the reason is to sustain the the big data traffic and dense area with high download requirements. And this we see today new commerce, new small cell commerce in the market, and they all need DSP technology. In addition, we also observed new initiatives like Open Run Initiative, OpenRun Forum This forum is driven by operators. And the objective of this operator is to reduce the cost. So what they do instead of having a black box from Huawei or Ericsson, they decided to open the device to different components and each one can come with a different piece of the solution companies will be specialized in baseband only, over company with IRFIP, over with network processors, with standard interface and this is a disruption of the landscape. And we already see here new vendors and new commerce that require DSP Technology. As a result, we see a change in evolution with newcomers, not necessarily the big vendors, but need DSP technology. Here is my last, my last segment. Celority. This is a very exciting segment. And as I said, one of the important mission of 5G to connect 1,000,000,000 of devices. With characteristic of very few bit rates like sensors, like, geofencing devices, asset trackers, smart cities, smart meters, lot of use cases, And even if it's something new and growing, it's taking off now. And we see that we have today 69 commercial launches worldwide, but deploy either narrowband IoT or LCM, CAT M. But the interesting thing here that we see that 80% of the deployments is for narrowband IoT, and that's the reason we focused on narrowband IoT. But why do we have an opportunity here? As an IP company, Let's have a In this value chain, you have on the top, the mobile network operators, then you have the endpoint OEM, the model OEM, like Gemalto, TELIT, UBLOCS, and the tier 1 Silversea new commerce, cellular IC and Tier 1 MCU IC Companies. What we observe here is a transformation of the value chain when it comes to cellular IoT. We see that to get better margin and also the target to have to like different use cases in this market since the market is very fragmented in terms of use cases. Even operators wants to make their own SOC. Through for model OEMs, true for, of course, the classical seller IC, but also newcomers like MCU companies to make their own SOC and to integrate narrowband IoT modem integrate APN sensors and GNSS technology for location. However, discuss our newcomers. For cellular. And the way to reduce the risk and to have a good time to market is to license technology. And we see that these guys talk to us, and it opens for us many news licensing opportunities. Therefore, we identify this transformation and value chain. And we have put a very clear go to market strategy to go for cellular IoT, which is a mass market First, we need to reduce the entry barriers and to reduce the entry barriers in cellular, you need to go to deliver a complete solution, not a DSP only, but a full solution, including baseband, RF technology, protocol stack, all the interfaces, support for light application for IoT. Here is another example of our transformation in our global strategy to move from DSP vendor to platform vendor. The second point is if you want to address different use cases, we need holistic IoT endpoint with GNSS integrated, always on voice command and combination of connectivity like BLE, but we have in house. And the third point is the solution should be very modular. And why West seems we want to accommodate the various type of customers, some customers would like to get. Like the big solar vendors, DSP only, and newcomers, for example, for industrial, license a full solution. So the solution should be very modular. And this what encouraged us to invest a lot of R and D to utilize our expertise in cellular and introduce a full NB IoT solution, we call it Dragonfly solution, which is silicon proven today. It's a fully integrated solution, compliant with free GPP. Release 14, integrate RF Design, which is today available in 2 different processes in 14 nanometer and 55 nanometer very smart power management because these devices should be ultra low power. And the good news, and we understood that we also introduced a part of the solution GNSS integrated in the same solution. So here we have a block diagram of the platform. Again, you see here a platform and not just a DSP, Of course, our DSP is in the center. Here are CEVA X1. We specialize the DSP with dedicated instructions to be power efficient for cellular but also for GPS. You can see our RS here, which is a dual mode RS for cellular and GNSS. And over peripherals like smart power management for ultra low power. As a result, I think it was unbelievable for me for a new market. We managed to have big players, but a doctoral solution, Nordic adopted our solution for NB IoT and CAT M1 ZTE also adopted Siva Technology for Neuroban IoT and an incredible milestone. We have just last year 10 new licensing of our full solution for Dragonfly for an emerging market. So all the indications are very good. I think we have very strong strategy here. And when you look to the competition, And the landscape, I can tell you with high confidence that we are the only IP player that can supply such comprehensive solution for this new mass market. As a result, some key takeaways. During the last 30 years, we have developed a unique expertise in cellular for different fronts, for cellular handsets, for base station, for cellular IoT. We are very well positioned to address the upcoming 5G cycles. We are already making it with handset and base station. We continue to do that. And we are in a very good position with very sophisticated technologies in different segments. And last, we utilize our knowledge and know how in order to enable newcomers in this industry and to reduce the entry barriers for these guys who'll partner with us. Thank you very much. All right. Good morning and welcome. My name is, Jeff Van Wash Nova, and I'm the director of the Automotive segment marketing, at CEVA. So today, I'm going to talk about some of the most exciting and most promising technology within electronics today. And that's computer vision, artificial intelligence and automotive. So at CEVA, my role is, I work within the larger automotive ecosystem, I work directly with OEMs and the car makers. I work with Tier 1s. I work with Silicon Providers. And what I do is, is really work with these with these companies and communicate the value of generation vehicles and ensure that CEVA's IP is aligned to help them deliver, these next generation features and functions. So I'm going to talk about automotive in the second half of my presentation. But the first half, I want to spend time about talking about the broader computer vision and kit. Then I'm going to hand it over to Ilan Yona, who's the Vice President of the Vision BU, and Ilan's going to talk about CEVA's technology and strategy going forward to be successful in these markets. So last week, I was at the Consumer Electronic Show in Las Vegas and there were many, many announcements about artificial intelligence and computer vision. But the thing I want to talk about is maybe a little bit more subtle. I was in a casino, and I look up to the sky, and there's cameras everywhere you look. So I found out that the Bellagio alone has 2000 cameras in the Bellagio. But it doesn't stop within the casino. I'm walking down the strip. Every hundred yards or 100 feet, there's a camera shooting both ways. I get up to the intersection, the intersection has anywhere from 4 to 8 cameras monitoring traffic So how do I escape this? I'm going to get into a cab. The cab has 3 cameras. There's one monitoring traffic. There's a camera that's recording the driver. A camera that's recording me. So if I learned anything last week in Las Vegas is what happens in Vegas is probably getting recorded. But that is a trend that we see today. So cameras are becoming ubiquitous. They're everywhere. In this room, there is 3 cameras, 3 security cameras in this room. So really everywhere that we go, we're being recorded. And this is a trend. So during the vehicles we drive. So today, to help us keep us safe, to make sure that we're paying attention, we're doing things like slam for 3d viewing and 3d reconstruction. Augmented and virtual reality are opening new markets, first starting in the gaming industry and moving really into everyday lives. We have object tracking with drones. Drones have multiple cameras to do things like, collision avoidance, object tracking, seen recognition. So cameras are not only recording what's happening, they're doing real time analytics to tell us what's happening. And then of course, facial recognition, these are being used today in our cell phones and security and safety systems. By 2022, we expect to see 44,000,000,000 cameras in the market. Now these cameras aren't just recording what we're doing. They're actually doing real time analytics real time applications, and these require computer vision and artificial intelligence. Today, much of that artificial intelligence is being done in the cloud. But if you want real time applications, we cannot depend on the cloud to do our artificial intelligence. So the trend is to move these intelligence and analytics towards edge devices, devices like cars, drones, security cameras, and phones. A perfect example of this is automotive. So automotive, it's a safety critical device. You have to do the analytics and the AI to the local to the car. We can't wait for the algorithm to be done in the cloud. It's too late. That could be the difference between life and death and automotive. So some of the benefits is obviously low latency. So just like the automotive use case, we look at power. So in our cell phones with face authentication, We need to have local processing there, in local to the device. Privacy is a big issue. Having edge processing in these devices helps to alleviate some of these problems. Within the greater computer vision and AI market, CEVA's focusing on some key verticals. So these verticals are smartphones, surveillance, consumer, automotive, and industrial. And the one thing that all of these have in common is they all require smart, efficient, local processing, and that's where CEVA's taking a leadership position is in these areas. So I'm going to talk about a little bit these in more detail. Smartphone. So within the smartphone, the cameras becoming a very important key differentiating feature. So I think about today, a big moment for myself, big moment for CEVA, and we all want to have a picture of it. So if you look down downstairs, everybody had their cameras taking pictures of everything, but I just don't want a picture. I want a moment. So that moment could be, I just don't want my face. I want it in portrait mode with a really cool filter, and that's what computer vision and AI bring to the cell phone market. So if you look at cell phones today, we have a standard of 2 lenses. Now that's moving up to 3 lenses. This is not only in just the high end phones, but it's also migrating into the mid to low end phones as well. So these things that we can use as computer vision and AI are things like intelligent zoom, improving selfies and low light performance, and soon, augmented reality. So within augmented reality, in virtual reality, today it's used mostly for gaming, but in the future, it's going to help us to inform us about the world around us. Surveillance and security. The surveillance market is very large opportunity for CEVA. So if I look at China today, so China has the SkyNet program and it's used to monitor the population today in China, they have 175,000,000 cameras. That's growing to 300,000,000 cameras by 2020. In fact, Beijing today, there is 100% coverage of the entire city of Beijing. So wherever you go in Beijing, you're being recorded 100% coverage. So these cameras are being used for things like government. So good examples are airports. So doing things like facial recognition, municipal governments, police and transportation, so able to monitor traffic and real time change traffic flow and help congestion. Police is a very good example. So before, if you have a security camera, you need a person to monitor that camera with 44,000,000,000 cameras, you're obviously not going to have 44,000,000,000 people or over 20,000,000,000 people monitoring these cameras. So you can actually use computer vision and AI to do time analytics. In police cameras or securities cameras, they have things like scene recognition that's happening via AI. So if a guy is running down the street, is he running or is somebody chasing him? And with artificial intelligence, in the camera, these are the types of things that we can do. Consumer within consumer, there's a variety of devices. These are some of the most important ones, but what I think is even more interesting is within the consumer space, there are areas that we don't even know about today. So if you went to consumer electronics show, a guy had a suitcase and he put a camera and a sensor in it, and now the suitcase follows the guy. So within the consumer area, there's a lot of potential for applications that we're not even aware of. So drones today are doing things like image stabilization, object tracking, the follow me function. So if I'm skiing down a mountain that drone is able to follow me, smart home. So within smart home, we have smart home devices today. We're using voice. These are now being enhanced with computer vision to do things such as personalization, safety and security, augmented reality and virtual reality. Today, it's used mostly for gaming. And that's the reason because we have these really large headsets. And no one's going to walk down the street with a very large headset, but there are a lot of companies that are really focusing on making smaller, stylish ARVR wearables. And then of course, the old standby photography, Obviously, we're utilizing computer vision and artificial intelligence and photography and also in action cameras, but this is also expanding. So things like 360 degree cameras and also cameras that are able to shoot video enhanced for all meant and virtual reality. So if you go on a vacation, you know, a 360 degree camera, camera, you can basically relive that moment in real time with the aid of, AR and VR. And then of course Industrial. So We're on the brink of the next industrial revolution and it's called Industry 4.0. So these factories will be smart and connected they will be powered by AI based processes. They'll have a lot of computer vision. So anything from AI powered robots to inspection inspection and computer vision systems. And what's interesting about Industry 4.0 is that we are doing basically real time analytics and able to change things on the fly. So if we have AI built into robots, we get input from a machine that has computer vision, it knows how to make the changes to do things like streamline efficiencies and making things more efficient in Industry 4.0. And that's largely based on AI and computer vision. And finally, I'm home, automotive. So, I guess I want to tell a little story about automotive. So I was at the Consumer Electronic Show. I said that earlier, but I was at the Consumer Electronic Show, this year. The first time I went was 10 years ago. I was working for NXP. We had a booth and we had we were allowed one table in the corner, and we had one demo, and everybody wanted to know why the automotive guys were even at the Consumer Electronics Show. And you fast forward today, I would say that it's almost an automotive show. I mean, the north haul is completely filled. You have the parking lot that's filled. It's spilling into the Westgate. And the reason why is because automotive technology is so impactful and there's such a tremendous amount of opportunity there. The semiconductor content market for automotive is to be a $67,000,000,000 market by 2023. And this is being driven predominantly by a number of growth factors is one of course, everybody's talking about autonomous, and I'll talk about that in a little more detail, But before that, there's things like Encap. So Encap is called the new car assessment program. And what Encap is is before, you used to get a safety crash rating. So 5 stars, everybody wants a 5 star rating. Before, it was how well a car would survive a crash. And that's changed because of active safety. Now it's how well does your car avoid the crash altogether? And so because they're increasing, what it takes to get that 5 star, there's a tremendous amount of growth into active safety. Of course, autonomous driving as well. We're all aware of the major impacts that autonomous driving will have. And all of these require artificial intelligence on the edge, and artificial intelligence within the vehicle. So in order to achieve these things, we need more sensors, more processing, and more intelligence. So what has CEVA's strategy been in automotive? Well, of course, there's the prize out there, which is a fully fully autonomous vehicles, but really there's a lot of opportunity before you and get to full autonomous vehicles. So if you look at this chart here, You really only see introduction of level 4 and level 5 driving. So that's basically fully autonomous or highly automated driving. You only start to see that in 2024 2025. Prior to that, there's a tremendous amount of opportunity with a number of applications such as rear backup camera, surround view, driver monitoring, and all of these require AI at the edge. So what CEVA is specializing in. And the reason why we took this approach is obviously we can have a quicker time to revenue. There's the market is much more stable for the lower levels of driving and also for active safety. And then also, we're waiting for 22, 24 or 25. So what we're doing is we're taking our relationships in the business that we've won in some of these lower levels of lower levels of driving and positioning ourselves to develop the IP for next generation. So we have time. So I talked about MCAP and I talked about active safety, but there's another thing that happening is a lot of growth is being caused by government regulation. So in the United States, last year's in 2018, they required every vehicle to have a rear backup camera. So it's an ultra competitive landscape. So everybody wants to add differentiation how they're doing that is by adding additional functionality, additional functionality that can be created through the use of computer vision and artificial intelligence. Forward monitoring. So forward camera, that's basically what got everything started in ADAS. This is being required in 2021 in Europe. So Europe actually just announced 11 specific safety devices that they are requiring in 2021 to have a level 5 crash rating. Those are things like in cabin monitoring. So in level 3 driving, the car can drive itself or it has to hand control back to the driver. And so they're using cameras in the vehicle to monitor the driver to be able to do that. In addition, the number one cause of accidents is distracted driving. And so these cameras are also being mandatory in Europe in 2021 as well. So this is another growth market. Japan just gave the green light for a mirror replacements. So you don't even need a mirror in your car. You can use a camera, strictly a camera. So these are big opportunities for for CEVA. And these are the types of devices that we are we see ourselves in, in this 1st phase of our strategy. So I've spoken a bit about automotive artificial intelligence. And obviously, we're focusing on the vision side of it for object detection, free space detection, but there's also uses elsewhere in the car. So virtual assistance, gesture recognition, speech recognition. The reason why, artificial intelligence is so important is number 1, if you look at levels of high economy, they require highly accurate systems. So you're looking at very challenging environments in automotive like weather, occlusion. I'll talk about occlusion in a second. Going into bright lights, dark lights. These are very challenging things for automotive. Artificial intelligence can handle these robust use cases. So for a fully autonomous vehicle, we need to have 99% accuracy, okay. So in order to get 99% accuracy, you have to have very reliable and high performing systems. Normally, with traditional computer vision, we can get to 80% to 90%. So really artificial intelligence is going to get us to the next level to be able to do the rest of the 10%. This is an example that I wanted to show. So this is actually one of CEVA's customers next ship. They're a semiconductor company based out of Korea and they are utilizing CEVAXM4 to run small efficient networks. And so the number one growth opportunity, in my opinion, in automotive, is of course, we talk about fully autonomous vehicles, but it's really the particular use cases that will need artificial intelligence to get to the next level. So an example is traditional computer vision has a really difficult time knowing that that is a car. So we're using AI to handle this one particular use case. In addition to things like this, we also can do, free space detection. So free space detection is very, very important for autonomous driving and these are all being enhanced by CEVA Technology. So the strategy for CEVA for XS is we have products that have a combination and it's not going away. So AI complements that of the performance of CV. And CEVA products are well positioned because we have tightly coupled products for both computer vision and AI. We've had good success in the smart sensor area. So guys like ON Semiconductor and next shift for using CEVA products. And then finally, I want to talk about the autonomous processing landscape. So if you look at, really the amount of opportunity for CEVA, a full autonomous driving has, one car has $1200 of Semiconductor content. And this is a combination of centralized processors and edge processors. So we're looking at vehicles that have anywhere from 6 to 12 cameras, very large processors, Today, a lot of people are using these very large and inefficient compute platforms, and there's a need to find replacements for these for mass market. So within CEVA, there's very low volumes for some of the first vehicles. When those volumes start to become higher, they're going to be looking for solutions that are very low power and efficient. A majority of the volumes, within automotive autonomy of everybody talks about the full autonomous driving, but L2 and L3, which means there's some autonomy there's tremendous amount of opportunity for that. That's a good combination of smart sensors with smart intelligent processing. And this is really the area that CEVA is in. So in regards to CEVA's opportunity in autonomous driving is We have broad engagement with OEMs, Tier 1s, some of the disruptors. And if you look at, this is a market that's really changing quickly. So even from an algorithm standpoint. So in Neural Networks, there's new algorithms that are coming out every day. There's the processing requirements are increasing We need more sensors. And so how we can position ourselves for this market is working directly with these companies. We have very good relationships that we can help develop the next generation systems. So that's what I have to add. And so I'm going to hand it over to Elon Yona. So he's the vice president of the Vision Business Unit. So thank you. Okay. Hello everyone. So you've been heard from Gideon and from Jeff that cameras today are everywhere. Actually, you cannot hang around without seeing a camera. And it used to be in the past that we were using cameras in order to do digital photography, but these days, we are talking about much more than digital photography. Actually, we are talking about 4 underlying technologies that drive the advanced cameras. So I believe, again, you heard about it. We are talking about digital imaging, computer vision, of course, 3 d scaling that I will elaborate later on, and of course, the AI. By the way, when we are saying AI, you can hear that as machine learning neural works, CNN deep learning, it's all covers the same area in some kind of computer vision. To let you understand when we are seeing today digital photography or digital imaging, what we are talking about. So in this image, you can see that there is a nice picture. You can see the road. You can see the cars. There's the building, the tree And you can't say that it's not a blurred image. It's a nice image. But as you can see above the building, there is the sky. And you can see the sky, but you actually We shouldn't lie because we don't see the sky. And what we are doing today with the HDR This is a technology that by open the sensor to several exposures and we have several images and we have complicated and complex algorithm to mix all these images, we can actually bring the sky back to the image. How the eye see it. And if you can see deeply, you can see the trees much more vivid and you can see the resolution inside the tree. So this technology of HDR, keep in mind that if I'm talking about, let's say, 5 years ago, if you were using HDR in your smartphone, no one used this because when you push HDR, it took between 3 to 5 seconds to the smartphone to bring the HDR image. Now in the technology nowadays, you can do it in less than a second. So HDR is a common use in digital imaging. This is another example. Here, I'm talking about computer vision, not on AI, on the AI, yes, But this is traditional computer vision. And as you can see, there are a lot of algorithms for computer vision. And when we say computer vision, we mean not just to get the picture to understand this is the what computer vision is about to understand what's in the image, not just to take the picture. So in this simple example, you can see pedestrian detection. By the way, we are talking about an algorithm called history of Gaussian to detect pedestrians. But in general, when we are talking about computer vision, we are talking about detecting objects, all kinds of objects and so on. The 3 d scanning, These days, again, we are talking about multiple sensors within the camera and you need 3 d abilities, meaning in this particular example, you can see that we are having 3 d model of an image. But when we are talking about 3 d, it's not just modeling the object. By the way, modeling the objects is very good and a must for AR, for VR Technologies. But we will see later on that we are talking about simultaneous and mapping, which is very, very important area these days for the 3 d in order for the robots of for the autonomous car to know where they are relatively to the environment. So this is the Swedish scanning. And of course, we have the crazy area of AI. Everybody today is talking about AI. And the main difference in this as you can see in this image we still have detecting objects. But as you can see in the AI, in 1 trained network, you can detect much more than one category of objects. In this example, you can see that we can detect a car, bicycle, and pedestrian. Actually, you can detect 100 of different objects within one image when you have the right trained network. So AI is growing and you heard it from Jeff earlier and we will see what CEVA can bring to this AI market. Keep in mind that, again, the AI is very important. Everyone is shifting to AI. But we know from our customers that AI is not enough, meaning when talking about AI, they would like to have traditional computer vision aside in order to back up the AI in order for them to work together. So currently when we are providing our solutions to the market, we insist to have AI and computer vision sitting side by side. The problem is that when we are talking about computer vision and AI we are talking about the competencies are scarce in this image in this area. Mainly when we are talking about AI. AI is different expertise from traditional computer vision, By the way, these days when we are talking about Google and VDI, Amazon, they know what to do in AI. But they are doing it mainly on the cloud. In on the edge devices, this is another story, meaning you have to take care of resources, memory, restricted memory, power efficiency, and more. So the what we are doing in the cloud is not a similar to what you need to do on the edge devices. More than that, We've been in this area of AI for something like 4, 5 years already. And we see that the complexity and the required performance is growing by 2 to 4x by every year. It's crazy. 4 years ago, we had a solution with 64 processing unit per cycle These days, we are providing to the market solutions with 4000 max per cycles. 4 years from 64 processing unit to 4000 processing unit and it's still growing. We know that next year and the coming years will need much more processing units in order to meet the market requirements. So with this regard classical CPUs and GPUs are not relevant. They cannot meet the requirement of low power consumption together with high performance. We need specialized processor in order to do this work in order to deliver what the market is really needs. So we in CEVA, we build a holistic solution combining software and hardware together because we believe and I will talk about it that hardware only, hardware solution only for AI is not enough. Because you cannot actually bring all the solution with only with hardware. So combining the software and the hard work that we are bringing to the industry, we can get good trade off between power efficiency and high performance and most important short time to market to our customers. So when we are talking about the holistic philosophy or holistic strategy of CEVA, we are talking mainly about this diagram, meaning the 4 pillars that we have in our solution. As you can see here, by the way, on the upper side, you can see our hardware platforms that we are bringing on the lower side is the software. On the left side, you can see the AI and on the right side, you can see the computer vision. But again, it's all connected together. We have the new Pro, which is the engine and which is our solution for the We have the CEVA XM that we are I'm going to talk about the CEVA XM, which is again, it's family of course. The CVAXM is a family of DSP calls for computer vision. We have this family of course and we keep evolving it for 4, 5 years now. We have the well known CDNN, which is already a benchmark trend in the market of the software that we have for the XM, the DSP processor with a lack of software because we believe that without these SDKs, we out SDK for slang, without SDK for three d, without optimized, optimized library for imaging and computer vision, You cannot get the solution that the OEM that our customer will really need. So the way that we see it, you have here the in the upper level, the OEM application level, which has many applications, many needs that he would like to address to the market. We could say to the OEM or to our customer, okay, go with the CEVA XM, go with the new Pro, you have the Huddl platform, but we know that once he has the application level and we are sorry. Bringing the hardware platform is not enough. So we believe in tightly coupled between the hardware and the software and we believe that we and Ziva know exactly what this a new product with XM and we can bring the fully optimized SDK for him to use in order to bring his applications. So there are 2 levels here, the level of the hardware and the level behind that above the hardware, which is CEVA optimized software And again, every customer of us, beside the hardware, beside the platform, beside the IP licensing, is getting from us also the software that related to these products. So what's the new pro? You heard already that when we are talking about NewPro, we are talking about that everybody wants AI. Everybody would like to have its neural network. Every market would like to have its neural network. So and by the way, each market has its own constraints its own needs. So what we have in the new Pro is portfolio. We are not bringing one solution. We are bringing portfolio solutions according to the market and the market needs. So here you can see that in this portfolio of processors. We are growing from 500 processing units to 4000 processing units Again, in the IoT market, which is the low end, you can use 500 processing units and on the high end, meaning automotive surveillance, they need really high end processors and we can deliver to them new pro solution with 4000 processing units. CVAXM. CVAXM from our point of view is the middle of everything regarding computer vision and AI in the a vision business unit. See by XM, as I said, as I told you, we have this, we started with the development of this call. We have several calls from them 5 years ago. We are talking about very powerful multipurpose DSP. We know that we have to always keep developing this family, of course, because the requirement from the CV in terms of resolution, in terms of complex of algorithm always keep growing and we have to be updated with our XM family. So nowadays, when we are talking about the CEVA XM, it displaces GPU or proprietary with open platform that we are bringing to the industry. And what we can tell is that it's a big success. Currently we have dozens of design wins and the OEM are very happy with our solution for computer vision. And you can find you can find the CVAXM in many, many markets like the ADAS advanced camera are drones, surveillance, action cameras and more. For the software, The question is, why do we need this piece of software? So when we are talking about AI, we are talking about currently, we are talking about neural network. And each OEM, each developer has its own network, he designed the work. He has the network. It's what we call here, the trained neural network. It's already there. On the other side, on the other side, we have the optimized engine insurance engine, something like the The problem is that when the developer design, its product, he doesn't think about embedded solution. It doesn't think about the fact that there are no floating point. It doesn't care about memory restrictions. So there are so many things to do with the trained network that just taking the network and put it on the embedded device will not help. It won't work. So in many cases, it can say that you need months of optimization in for making it to work on your embedded device. What we have in CEVA, the CDNN compiler is taking the network. And start working on it offline. We are optimizing the network. We are taking care of the bandwidth bandwidth is a real issue in embedded devices. In many cases, it's the bottlenecks of the process. So we are taking care of bandwidth optimization. We are taking care of quantization of the weights of the network. We are putting the network in another way, optimizing it. And when it's done, by the way, this offline process can take 1 minutes up to 15 minutes When it's done, we have a network that is ready to run. So in this case, we can save months of optimization for the customer. He can do it in 15 minutes using our tool and then immediately he can send the optimized network to our neupro engine and run it immediately. So by this approach, we can take care for the accuracy for the performance and save time to our customers. Slam, As I said, SLAM stands for simultaneous localization and mapping, meaning when you have robots And as I said, autonomous cars is also some kind of robot. So when we have this robot and he would like to know to map the environment and to know exactly where he is related to the environment. This is what SLAM is about. And in order to do it, of course, you have to do a lot of 3 d processing, 3 d, 3 d, 3 d, all the SLAM SDK that we are developing to our customer it goes around the 3 d. And all the AR applications, VR applications, autonomous cars, they need slum, and SLAM is very is heavy process. And you can run the SLAM on the CPU, but you will not get the frame rate. What we are doing in CEVA, again, we are developing the SLAM SDK and we can tell our customer all the heavy processing of the of your application of the SLAM, you can run it on CEVA XM. And by that, again, get much higher performance from your application. And again, in order to make it very easy to the customer, we are talking about plug and play SDK. Again, very easy integration for them to use. And just to show you what SLAM is, you can see here There is the environment. There is this room. There is the camera is moving. And while the camera is moving, by on the left side, you can see that the algorithm actually map all the points in the room. And know exactly where the robots of the camera is inside the room. So to summarize, As we said, the requirements from imaging computer vision, AI is keep growing. It never stops. You cannot blink. We are very happy with our solutions. Currently, the vision solutions containing, of course, the XM and the AI solutions, we have more than 50 design wins over the years. And again, the success comes from our holistic philosophy. Meaning, we are talking about incorporating DSP, AI Processors and broad range of software technologies together. That's what our customers love about our solutions. And As you heard from Gideon presentation at the beginning, when talking about royalties, it takes time. So this now we expect in coming 2 years to get a lot of royalties from the Vision business unit. We are talking about this year, this coming year and the year after, we expect a lot of royalties coming from the surveillance ADAS and drones customers. Thank you. So we're going to have a Q and A session now with the 2 business unit heads on this morning on Gideon as well. If you have any questions, I have a microphone here to ask and the guys will be happy to help you with whatever is needed. First question comes from Mr. Gary Mobley. Thanks, Richard. I wanted to ask about NewPro. It's been about a year since you launched it. And I think it's correct me if I'm wrong, but it's generally available for licensing now. Has it lived up to your expectations? No, he's speaking loud. It's coming this way. You're asking about new Pro? I'm asking about new Pro. And so it's been a year since it's been licensed It's generally available today. Has it lived up to your licensing expectations? And if not, what has been the impediment to driving more licensing activity? Let me let me start and maybe Elon can jump in. AI and the usage of AI and Edge is relatively new area. So when we started the debts, we started on a DSP first before we announced the new The first wave of customers are those guys that I would call them fully integrated, meaning, they know to develop the AI application in addition to this one. So there are camera guys, drones guys that they know what the application they need to do and they know to were to do what is called training the network and then they could took advantage of our CDNN technology and get it running on the drawn or counterintuitive. What do you see today is the 2nd wave of AI users. And these are less knowledgeable persons. Their mindset is let's put an AI engine in our chip and let our customer our OEMs to do it. So We are now dealing with the 2nd wave. These are customer less knowledgeable. They need our education. They need our support. And they are, also need our guidance about what's what the next things in in AI. So that's what we do. This process, it's slower than the first way. We still have first wave of customers that licensing. But as Elon said, you know, this area is still in early days. There are not that many people, a lot of people speaking about it, but there are not that many that knows how to build the edge side of it. The edge is challenging, has changed the right I got Suji to Silver Roth Capital. So, one of the end markets I saw that I hadn't seen before was the home router market. It's kind of extreme mobile broadband as you called it. So I know you guys are very strong in the battery powered and then you have now the base station, which is high performance. What's the advantage there? And what are the customers demanding? And who you compete with? How do you compete there? What's the opportunity for you guys? Fixed wireless. You want to answer about what's this? I was going to get from the fixed one. The question was what are the our advantage in fixed wireless is not the battery operated, right? So it will answer. So fixed wireless is a 5G use case. And The challenge is building a modem for 5G and high speed modem So, the fact that it's not mobile still has its own set of challenges and how to make it how to deal with sensitivities and been forming and and and antennas and stuff like this that our challenges in in places like home and and or enterprise. So modem itself is not the challenges in modem is not just in the battery side of it or the low power. It's also in terms of getting performance and the performance that you're going on the bandwidth or the bit rate that you expect in 5G is even faster than in mobile. Just want to elaborate a bit. So, as you saw, we are able today with our portfolio to really help our customers to reduce their entry barriers. And our biggest advantage is the holistic delivery what we give today. It's not just not DSP, but as you saw in my presentation, with the Pentogy presentation, We are giving much more than DSP. We are giving different kinds of DSPs, but also software. On top of that, and this can expedite the development of such a complex modem. Yeah, question on the Penta, Pentagie you spoke about, you talked about that opening up new opportunities in and mentioned like V2X and new types of semi customers coming up the classic cellular baseband guys how are those questions going today and how long before we start seeing these new types of non baseband customers sort of non cellular guys coming for things like B2X? So I believe you mean in the context of 5G. I would say the following, there are a lot of talks but it's very early days. If you, you know, take a CS, the operators literally said come back next year to discuss about this additional 5G use cases. No doubt. This will be cellular V2X it's or V2X in general. It's a it's additional sense of that people will need to do in order to get to safety because you cannot rely on one sense for that purpose. Since wireless is another area that will become a key point because it's much easier to install high bandwidth with wireless then to install a fiber, for example. So these are the things that will happen, but For now, the first use case for 5G would be mobile broadband. The first use case for 5G would be handsets. Okay. Maybe just one follow on as well on the appendage moving to more of a platform solution. How does that change the licensing or the royalty? Or the potential value that you can extract? Yes. That's a good question about the PentaG, because what as Michael explained, the Penta G is not at ESP. It's a modern platform. And the thinking was that into the 5G, you'll have several category of customers. The first category of customers are newcomers, people that are coming into the space could be from cell or V2X fixed wireless are not the incumbent there. And we've probably heard about OEM internalization. So there are OEMs that wants to control the supply chain and doing more than by modem development by themselves. And the sale development in the Penta G platform, Penta G, it's a modular platform. So it's if you are incumbent, there are incumbents that are not using DSP, but when you go to 5G, You have to go to a much broader multi core or many core architecture. And we go to those incumbents that don't use us. And tell them, you don't have to adopt the whole platform. Why don't you, if you need pick if you need this specific ODSP or you need this AI engine that you provide, please license just this one. And in this approach, we want to expand not just the new use cases, not just to the new class or new entrance into the market like OEMs. And we also want to go to the incumbents and convince them to license, even part of the technology, as long as there is a royalty arrangement in this respect, will be an appreciative to do business system. Hi, Josh Buck Alter from Cowen. Thank you for the informative presentations. I was hoping you could talk about the the differences in the economics between the small cell and macro cell base stations. How different is that customer base and also how different are the DSP cores that you're licensing to those customers versus the larger ZTEs and Nokia's? Thank you. So, you know, Mike, feel free to jump in there. The macro cell is the landscape there is those big names that we are all familiar, Nokia, ZTE, Huawei, Ericsson, it's you need to have to have a scale to being a player on this one. And those guys also going, and that's where we are stepping in, there are that's an example of internalization. They want to control they need to control their chip inside the base station because that's their secret sauce. And they find a good match with strategic mix with us because we provide them the technology and can tailor made it to their specific needs. But when you expand further into small cells, that work on the work even in a millimeter wave. Here, the chips, it's still a complicated stuff. But there's going to be a lot of small cells. It opens up opportunity for standard port, SSP port. So there will be semis that coming from network, semis that coming from, the handsets, right? That will go into this space, but they cannot redeploy or reuse if you have a handset maker or a basement in handset, you cannot redeploy it in small cells. It's not as complicated as, or performing demanding as the macro, but it requires guys like us to provide the enabling technology and the experience to go into the small cell. Yes. Thanks for taking the question. On the PENSEG platform, are you internally developing the RF section or are you partnering for that? And if you're partnering, who who are you working with? So in that case, we are not interfering with this market, meaning that our customers are going directly to RF IP vendors. So we don't play in RF in that case. We just focus on baseband. Yeah. Is this different than it's a good question because it's different than cellular IoT? In cellular IoT, we made a strategic decision to deliver RF technology. For Pentigy, our customers are for either our own solution to Ares or working with, over partners. Anybody else? Suji? Just a quick one as well. On automotive, I think to date mobile has done well. A closed system. Can you talk about the opportunity for you guys like you and what the customers are asking from you that gives you an opportunity into the market as the customers evolve the development of neural nets and how they want deploy them into ADAS onto automotive. We know what's kind of happened to date, but curious kind of what the customer is saying about what they want going forward and how you participate there. Automotive. Sorry. What was the question? I could hardly because Oh, sure. Automotive opinion, you know, what are the customers saying about what they want in terms of, in terms of, the AI models themselves. Today, we've had slow systems like Mobileye doing well. But what is the opportunity for folks like Steve are going forward? Yeah. That's a good question, Suji. You know, what customer are looking is, how do I make it smart? And they are they know how to take the camera. By the way, we have customers that ask us the same question about radars, rider company. So they have this radar or camera that they know how to deal with the signals coming there, clean it, understanding transferring it to digital. But then it comes to processing. What is there? Do I see a person Do I see a traffic light? Do I see this? Here you get to the the area that we are specialized could be to AI engine because AI network. So, Deep Neural Network can detect this one. And when the DSP processing can help in cleaning up. Keep in mind that today in radar, there is what is called vision radar. Radar can see today did not just measure distance. So, we are coming to those people and basically enable them to make their sense of smarter. Smart at all. I mean, it's not smart. It's going to be. And we see this is a very collaborative relationship because for them, it's the first step into this area. Anybody else before we break for lunch? No? Okay. Thanks guys. There's lunch outside and we'll reconvene at 12:30 back here for the next set of presentations. Time here. Careful now. To type this? Yep. If you want to do the highlight. Thank you. Yeah. So we're trying to adapt to lunch. Yeah. Beautiful. Okay. Welcome back, everybody. Next stop is our Connectivity business unit, starting with France, Du Gon, and then Aviv Melindavich will we'll cover the strategy for the technology group or sorry for the connectivity group. Can you hear me? Yes, okay. Okay. So I hope you had a great lunch. I know it's not the best slot now. Everybody may follow slip. So we are going to present you what we do in our connectivity business unit. We talk about the market overview and then the strategy for our product line. Okay. So when we talk about connectivity, actually in our view, we focus only on Bluetooth and Wi Fi. Why? Because actually these are 2 huge markets. Bluetooth and Wi Fi are by far leading the connectivity wireless communication market. You can see that the numbers by 2022 there will be 5,000,000,000 device shipping with Bluetooth and 3.7 with Wi Fi. So it's a huge market. So which means that for us for CEVA, it's a lot of opportunities for royalty revenue. Bluetooth and Wi Fi are everywhere, for sure, in smartphone and tablets, but these markets are huge, but pretty stable, not growing anymore. Fortunately, they are also integrated in many other type of devices, like smart home, wearable, wireless speakers, etcetera. So many different kinds of markets. So these markets are actually very fragmented. There are a lot of opportunities for new company to design new chips with their secret sauce, so differentiated solution. So this is for us for Sibal again, a lot of opportunities for business and for our license fees actually. So I'm going now to discuss a bit further about each of the technology, Bluetooth and Wi Fi. So Bluetooth first, Bluetooth is a quite mature technology more than twenty years old now, but still going a lot. So it's surprisingly slow. So not for sure on the smartphone and the tablet markets, which are huge, but not growing anymore. But there are many other market segments, like, IoT, consumer electronic, etcetera, which are showing some good CAGR like IoT is 35%, which is good. And actually this is where most of our customers are playing. They are in those markets. So that's why we see a lot of growth in the next in the next few years. In terms of shipments, if you look at the details, So you may not be familiar with the Bluetooth technologies, but there are actually several flavors. There is all Bluetooth classics, which is there since the the creation of the Bluetooth standard. And then I've been introduced in 2010, Bluetooth low energy. Or BLE, which is extremely low power and which has been created to actually be integrated into extremely low power devices. Like activity trackers, other sensors, becomes, etcetera. And then there is the dual mode. So dual mode, Bluetooth dual mode is actually a combination of Bluetooth low energy and Bluetooth classic. What we see actually is that the Bluetooth market is growing mainly thanks to the dynamic of the BLE market. So BLE market is re driving the Bluetooth market exactly what you see here. And we've actually 24% CAGR for the next 5 years. So I'm going to talk a bit further about Bluetooth low energy. Actually, Bluetooth low energy is the standard for data and in information use cases. We can split all these markets into 3 different categories First one is location services. A quite decent market, more than 260,000,000 units expected this year. So this includes a point of interest, indoor navigation, asset tracking, etcetera. Actually, maybe not many people knows, but Bluetooth and particularly Bluetooth low energy is actually used in many, kinds of application on this market for indoor navigation asset packing. The standard has evolved a lot and still evolving actually very soon a new version of the Bluetooth standard will be ratified and will be announced and with new features actually to optimize even further this kind of application. It's actually a great alternative to GPS and also wireless technologies which are used for navigation. The second category is data transfer. That's the biggest one, which is for sport and fitness, health and wellness, PC peripherals, or mouse keyboards, etcetera. Most of our customers actually see big shipments in these markets. The last one is about device networks which include a control monitoring and automation systems. That's also a very interesting category. Actually, we see growth, particularly since the the Bluetooth mesh has been introduced or lately, mesh has been introduced, which was a key feature, which was missing in the Bluetooth standard. And this is a very key contributor to the growth of this market. Now let's talk about Bluetooth dual mode. So Bluetooth dual mode is really the technology for audio. When you need audio, you need Bluetooth dual mode. So for Bluetooth audio, the 3 main markets. First one is a Bluetooth headset and earbuds. So they now use Bluetooth dual mode. And the good thing is that, so we see growth for this market, steady growth. And the good thing as Gideon, our CEO said this morning, is that when moving from headset to earbuds, you basically move from 1 chip solution is a headset to 2 chips, So which is twice royalty, the potential for us, which is very good on top of the fact that the overall volume are growing. What we see also longer term is that, this solution will move to once actually the audio over a ble will be ratified. So this is something which is undercooking and will be ratified anytime soon. And which is good for us. We have this technology, so we can address this market. 2nd market is smart speaker. Smart speaker is actually growing three times faster than the wool smartphone segment. And we see here also a lot of opportunities, not only for Bluetooth, but also for Wi Fi and also audio because this device includes all three technologies, so which is very good for CEVA. And the last one is about automotive. So Bluetooth is really a default features now in automotive. Now let's talk about Wi Fi. So Wi Fi is also a pretty mature on all technology, almost 20 years. But still growing and showing a good CAGR. And again, so the smartphone and tablet market are big, but pretty stable, while some of the market segments are booming. You can see, for instance, IoT, which 35% CGR for the next 5 years. So which is pretty good. If you look at the shipments per, Wi Fi generation, Wi Fi Flavors, So you may or may not be familiar with all this terminology 802.silo and NAC ax, which is the next generation. Actually, the Wi Fi Alliance made a good job recently to simplify the naming of those generation and will be called Wi Fi Four. AC will be Wi Fi 5 and the next generation is Wi Fi 6. And one thing to mention here is that Wi Fi 802.11ax will actually take off very quickly and this is a major contributor to the growth of for the next 5 years. And that's what I'm going to elaborate now So Wi Fi Six, will be ratified, this year actually, in August. So this is really a new technology. And which will be deployed extremely fast. Actually we already start to see some products on the market which are compliant with this A22.11ax. Like for instance, you see a picture of the latest AASIS access point. And at CEVA, we already see some, a lot of traction actually. We already signed some customers for ax. And what is interesting is that people are moving to X for IoT applications, not only for smartphone and tablets or access points, etcetera. And that's really a game changer. A X actually is known for high throughput high efficiency. So high efficiency, we mean high spectrum efficiency, meaning that on a given access point, you can connect tends, 100,000 or even 1000 of devices together to the access point. So that's the main benefit of 11ax. But not only that, there are some great features to improve significantly the power consumption. And that's why we see also a tremendous demand for 11x in IoT application in variable as well. And actually, 11ax will not only replace 11ac, but we see a strong demand for 11ax to replace 11n, which was known to be a low cost, low power favor of Wi Fi. Okay. So I'm leaving to Aviv for the strategy of our products. Okay. My name is Avi Malinovic, and I'm the GM of Connectivity business unit. In the next 15 minutes, I will walk you through our strategy in our unit. First, I would like to start with our current status. Today, we are by far the market leader for Bluetooth and Wi Fi IP. And I would like to share with you some data related to that. So so far, more than 1,500,000,000 devices have been shipped with our technology inside. This is our contribution to the 10,000,000,000 milestone, which was announced earlier today. The compound annual growth rate of our shipment is, was during the last 4 years more than 50% more than 50%. We have more than 150 customers and every year, we sign more than 25 deals. Now whenever the Wi Fi Alliance or the Bluetooth sync come or make an announcement of a new standard, we are the 1st to introduce NIP, which support the new standard. And for that, I would like to give you two examples. The first example is related to the Bluetooth. Tomorrow, January 15, the Bluetooth sync is going to make an announcement of a new Bluetooth standard. Bluetooth 5.1. Our Bluetooth 5.1 IPs for low energy and dual mode both are already available off the shelf. And during the last few months, we have signed few deals with this to both IPs. The next example is related to the Wi Fi. So as Frans just mentioned, the next thing in Wi Fi is the 11ax and our 11ax 1 by 1 IP is already available of the shares. And as Frans mentioned, we have already signed few deal related to this IP and more deals are just behind the corner. So why we are so successful? The first bullet is very important. As you know, most of the IoT devices are battery powered. In light of that, power consumption is a critical factor. We know that when our customers search the market for a new IP and when they evaluate the different IP options they have, the main selection criteria is power consumption. In light of that at CEVA, we give a special attention to power consumption. Our design methodology includes special stages, special action to assure the final product is attractive in terms of power consumption. As a result of this design methodology, some of our customers When they make an announcement of the new Bluetooth low energy chip without technology inside, each one of them make the statement that their design, their chip, our best in class, best in the world in terms of power consumption. The second bullet related to the integration aspect of the issue. We offer our customer the option to license a fully integrated platform. By fully integrated platform, I mean, to our IP already integrated with some subsystem element and with a microprocessor. As you understand, We save a lot by that in the integration work that the customer need to be done. And by that, we reduced significantly. The risk involved with integration, reduce the integration effort and the time to the market. Bluetooth and Wi Fi combination is a very interesting combination. As you may know, there are a few chips in the market that already offer this kind of combo. For example, chips that come from Broadcom. Today, we are the only IP company to offer such a combination. And if you continue in this line of thought, CVS are very wide portfolio of IP. And a cross selling of the Bluetooth and or the Wi Fi with some other Siva IP can be very attractive to our customer. Now I would like to focus a bit on Bluetooth, I will get back to the Wi Fi in few slides. So, we are by far the market leader. We have been licensing Bluetooth since the year 2000, just during the last 2, 3 years, we have more than 50 design wins. Now for Bluetooth low energy, there are few options in the market. That is there are few licensing company that offer this IP. But for Bluetooth dual mode, we are the only option. That is we are the only IP company that offer that offer Bluetooth dual mode IP. If a customer is interested only in Bluetooth dual mode or in Bluetooth low energy and Bluetooth dual mode, we are the only options they have. Now the one of the critical factor in our success is the acquisition of Riviera with that was done in back in 2014. Gidonna say a few words about that earlier today in the morning, but this was really a critical factor in our success. The market respond to the acquisition was outstanding, and this was translated very fast to a high number of new deals. Now the graph that you see here represents shipment of devices, receive Bluetooth IP inside. The first results of the acquisition can be seen in the number related to the year 2015. If the number for related to the 2014, actually represent shipment of devices with Siva, all Siva before the acquisition, Bluetooth IP, then the number 2015 represent both shipment of devices with CEVA, Bluetooth IP and shipment of devices with Riviera waste, Bluetooth safety. As then you can see, it was a significant step, something like 3x, just between 2014 2015. The next implication, the next result of the acquisition can be seen in the numbers related to 201720 team. As I mentioned earlier, there was a significant, positive impact of the acquisition and the number of deals went up significantly before the acquisition, each company signed something like 5, 6 Bluetooth deals per year Then after the acquisition, this number went up to something between 15 to 20 new deals. Now for a company from design start from the point they licensed IP till they reach mass production till we see royalties It takes 2, 3, 4 years, something like that. It depends on the application. So we start in 2017, we start seeing the results of the high number of deals, which were signed after the acquisition. And as you can see in the graph, it is more significantly can be seen in the year 2018, and this will continue forward. I would like to say a few words about some of our customers. Dialogue. Dialogue is one of the Bluetooth low energy market leader. Sometimes they are number 2, sometimes they are number 3. They use our Bluetooth low energy IP. Beacon. Beacon is less known. They are Chinese company. They are one of the Chinese Bluetooth market leaders. The production volume is just used. We have been working with Beacon very closely during the last 10 years. I think they licensed all our Bluetooth IP. Whenever we come with a new IP, it takes a while. They licensed it. They put it in 1 of their design. And after a while, they start shipping like like hell. So they are very, very successful. Sonova. Sonova mentioned, it was mentioned earlier in the morning, they are the hearing aid market leader. They have a very high end product, which include our Bluetooth. And the last, it's on semiconductor, the license of Bluetooth low energy IP. This guy, the first target was hearing it, but once they realized that their chip is one of the best in the world in terms of power consumption. They changed the target and now they target the general market. And most likely, they will join dialogue as one of the BLE market leader. So what is our strategy related to, the Bluetooth. I mentioned earlier that whenever the Bluetooth come with a new standard, we are the first to introduce IP, which support this standard. It's not a coincidence. This is exactly our strategy. We have 2 guys from our team who participate in the Bluetooth SIG working group community. In this way, on one end, we have the chance to influence about the content of the next generation. And on the other, we have full visibility We know the content and we know the timing. So we know exactly when is the right time to start a new design. We know exactly what to design. So we are ready few months before the ratification. On top of that, we focus on audio over Bluetooth. And by that, we are trying to take advantage of CEVA leadership position, both in Bluetooth and in audio market segment. Cross selling, we're trying to promote cross selling of Bluetooth and other and some others of CIVA IPs. And last, we are trying to provide more value to our customer I mentioned earlier, the fully integrated platform, we offer also Bluetooth smash, we offer Bluetooth modem, and we offer Bluetooth RF. Now getting back to the Wi Fi. So we start dealing with Wi Fi after the acquisition of Riviera with Rivera Wave start licensing Wi Fi back in 2002. So far, we have many licensing, many customer from all around the world. Our Wi Fi IP portfolio is quite wide. We have many IPs starting from the low end, from the 1 by 1, which target the IoT application, going through 2 by 2 for smart home and handset smartphone up to 4 by 4 and more targeting the high end access point application. Talking about some of our customers, so we can hear again, they license our Wi Fi IP after the acquisition and beacon like beacon. You know, when they start production, it's huge volume, huge volume also, in Wi Fi. ASR is a Chinese startup company. They licensed the 11ac 1 by 1 and also Bluetooth Duormont, a kind of a combo, and their target application is smartphone. Selena, Israeli company, Target, High End Access Point, they licensed our 11ac 4x4 and CEVA DSP. They already started production. And last, with this nice, especially Lego logo that this is a Chinese startup company called Seaflower, they license the 11, I see 1 by 1 targeting the low end access point. They are already in production and already started the next generation. So in Wi Fi, our strategy is as follow. We focus on the 11ax. This is a game changer and we want to be a market leader in this area. We are trying to promote CEVA DSP in order to enable a soft application, a soft implementation, which is better fit for access point. The cross selling of Wi Fi with other C VIP is very compelling and we also here trying to provide more value to our customer with the fully integrated platform and with additional layer in the Wi Fi solutions such as TCP IP security and crypto agent. We do that in hardware. And also we provide integration with Alibaba. Operating system and with Amazon cloud service software. So our key takeaways for connectivity activity, we are the Bluetooth and the Wi Fi. The Bluetooth and the Wi Fi a very large market segment. Our offering include a very unique IP portfolio that enable our customer to integrate the Bluetooth and the Wi Fi with other C VIP and to gain advantage because of that. We expect our customer base and our market share to increase. And in one sentence, we are the world's leader of the Bluetooth and the Wi Fi market segment. We expect our customer base to grow and to increase our market. Thank you very much. Hi, everyone. So my name is Moshe Shaya, and I'll be talking about the very exciting topic for CEVA of sound processing and sound wherever you look, you see statements like this When it comes to consumer audio, we're back in boom time. Everybody says that from different angles, it's very exciting times. For audio. For us at CEVA, it's a huge addressable market with very diverse applications and it's divided into 3 main segment. First one is voice enabled IoT. Everybody wants the Alexa experience today. Voice user interface in smart home, automotive, wearables, that's the thing. That's what everybody wants. That's a major market for us. Second one is headphones, aftermarket headphones, headsets, earbuds, everybody wants the in ear truly wireless earbuds. That's the 2nd, a huge market. And the third one is mobile, of course. And in mobile, more and more AI or sound AI, is getting important and people want to include that. So that's where we see our main addressable market for sound processing. Now why is it so exciting? Have a look at what happened in the last decade. What we call mobile convergence. We started to use our smartphones and deitched our MP3 players, our fancy audio equipment, and just moved on to use our smartphones. Then came the time of the mobile accessory. So we all bought the aftermarket headsets. We bought Bluetooth speaker, to enhance our mobile audio experience. And then in the last 3, 4 years, and still going on now smart audio. And smart audio is all about consuming, streaming audio together with voice activation wherever we are. And this is what causing this boom time with 15% annual growth rate for the last few years and going into the next few years. So that's why sound is so exciting. For us and in general. Have a look at the volumes. So going from the modest automotive car volume, 30,000,000 units of voice enabled IoT, more than 1,000,000,000 headphones. We're talking here about active and wireless headphones. And 2,200,000,000 mobile phones. That's the addressable market. There is 4,000,000,000 devices here. And this is what we are targeting with our sound technologies in a 3 years' time. So voice enabled IoT, the first market, let's go through them. Voice is certainly the new user interface. Everybody wants it, but why voice? So first of all, it's natural, it's intuitive, it's personalized, it can recognize you, and not allow other people to use whatever system you're using. It is hands free, eyes free. You can use it wherever you are. No touch needed, a device free anywhere and a very cost and small, very cost efficient and small form factor. All you need really is a microphone and a low power voice activation chip. And there you go, voice enabled IoT. And that's what we're good at. And that's the 1st main target market for us in sound. Now smart home, when we look at that specifically under voice enabled IoT. Look at the volume here that's showing the growth rates of different home segments. The biggest one by far is the smart speaker, 32% growth rate for smart speaker in the home annually. Everybody wants that. It's not just the Amazon and Google devices. It's 3rd party devices that are looking for the Alexa experience and are looking to integrate that voice enabled capability. So that's our first a huge addressable market. Second thing is headphones and headphones are heading a very clear way they are going wireless and they are going in ear. We see that every day. When we look at the volumes, we're talking about 1,000,000,000 devices. We're talking here about the wireless segment and the active wired segment. These 2 a higher ones. About 1,000,000,000, some say a bit more than 1,000,000,000 devices in 2, 3 years time just for the aftermarket, a headphone market. When we try to dissect that by form factor, what we see is that the in year, these 2 elements over year the in ear experience and specifically the in ear through wireless, the one we see here in the middle, that's having the fastest growth. That is the experience that users are looking for today. They want to go wireless, they want to go in here, and they want to have voice activation from the previous segment. And that's a major market. Again, 1,000,000,000 plus devices are out there looking for sound and wireless technologies. And the third one, mobile. Mobile has always been huge, but Sound AI is getting very, very important for mobile. Close to 1,000,000,000 devices are expected to be enabled in the new breed of smartphones that will come in 2, 3 years' time. And some people have started to use this term sound processing unit That's a new term that it can either be a standalone chip or it can be an embedded process, so within a larger chip. That sound processing unit and that's the new sound AI capabilities, not just voice activation, but biometrics. And standing your environment where are you all according to sound. Now the sound target markets when we look at what's happening in them, our speakers have become smart speakers, all the Bluetooth speakers have become voice enabled, they have voice assistance in them. When we look at headphones, like I said, they are becoming truly wireless voice control. Everybody wants active noise control today. Everybody wants the Airports experience. So changing as well and mobile, the 3rd market, voice assistant, sound sensing, all the changes that we're seeing and will accelerate in the next few years. The message here is that everything is getting smarter. All these segments are going through rapid growth and are all getting smarter. And this requires a lot of DSP Technologies, which I'll talk about in the second section. Just look at this big shopping list of a software technologies or DSP technologies that are required, multi microphone, beamforming, echo cancellation, voice biometric, voice activation, positional audio, and so on and so on, many, many things which need to run on a any low power DSP for voice activation or high performance DSP for multi channel and multi microphone, a sound processing So many things which are needed, which leads us into the next session, our strategy. So how are we handling all that huge 4,000,000,000 devices of addressable market in the next 2, 3 years? We look at that by seeing what we have today. We have more than 30 active sound customers across diverse markets. And that's all part of the royalty streams that we are seeing. It's Eva today. And it goes from the mobile and headphone side of things, the smartphones, the smartwatches, the earbuds, of course, into devices like these, these are real devices. Some of them, you can see out here. Which are enabled by CEVA DST and the voice enabled IoT, the more recent domain with smart speakers, with action cameras, which we are in all these types of devices. From speakers to action cans, all powered by CEVA already today. Now when we look forward, what we offer our customers in terms of the value proposition for sound. So this is built around 3 elements. The first one is the DSP, the traditional, the legacy, the things we've been doing for many years ranging from low power DSPs over here down to a more high performance and the recently announced CEVA BX Architecture that's a hybrid architectural that handles DSP control and AI. That's the first element of the strategy. Then we have software. There is a lot of software technologies needed as we've seen before. We offer 2 main software packages today named Clearvox and WISPR. That's the noise reduction capability. That's the voice activation capability. These two software packages, which enhance and allow voice activation to be a successful from far field, the noisy environment, they are mandatory in all these markets and segments that I mentioned. And the 3rd element is the AI. We started with NewPro, but we are supporting AI within our sound product line as well. We do that by providing the necessary infrastructure as in neural network compute libraries, as in neural network frameworks, to allow our customers to map, to infer neural networks on the edge on our sound BSPs. That's our three legs strategy and value proposition for our sound customers. And it's very unique. No other provider, IP provider is offering these 3 elements in the property in the value proposition. Now breaking down quickly to few technologies, CEVA BX, our latest DS architecture for sound processing and general control and AI was just announced, just released last week, The message here is that we really provide much higher a DSP performance for X more performance compared to our own, a previous generation, CVIX Architecture. Everybody talks to you today about the requirements and performance that needs to go high all the time. We did a 4 egg jump with this family. And we were also able to reduce the code size, meaning the memory size required, because today's applications, never mind where you look, you need both, what we call, a signal processing, as well as a real time control. That means a lot of code. That means people want to map a lot of code, generic code into the machine, whether it sound or other general purpose workloads, and we enable that with that architecture, which is provided, using 2 versions, 2 variants, a smaller one, a larger, more powerful one, over DSP. That's our most modern, latest architecture, very high level programmable, very easy to use, which helps us to establish ourselves in the first element of the strategy, the DSP. Moving on to the software, 2 main elements here: the ClearVoice, which is the front end voice processing software solution. This is your far field voice pick up in noisy environments for noise reduction handles echo cancellation if the device is play in music. This is mandatory for any voice activated device, whether it's a wearable or whether it's a fancy smart speaker with 7 channels, they all need voice activation, and they all need these noise reduction, echo cancellation technologies. We offer that package as a 2 versions, what we call ClearVoice universal for many IoT devices and a specialized version for headset. A smaller form factor is needed to grow in the very size and power constraint in ear earbuds applications. And the second software element just announced, we thought that's a speech recognition. That's the second critical software element in the voice activation ecosystem. Everybody needs voice activation. Always listening trigger phrase, identifying the key word of your choice, we provided in house today. It is based on a neural network speech recognition technology, and we allow our customers to select and customize their own triggers Not everybody wants Amazon and Google, which by the way, you can get those figures from these vendors, but people want the high Samsung or the high something else, and they can get that from us, using the withdraw packet. So second element of the strategy, the software. Then we have the AI, Sound AI on the edge. I showed you the almost 1,000,000,000 devices sound processing units that will be needed for mobile phones. And sound AI at the edge is mandatory today. People want privacy. They want reliability. They don't want to rely on the cloud. They want low latency. And they want very low power and cost. And they achieve that with Neural Networks. And Neural Networks involve two sections We have the deep learning, the offline training, what we call, and we have the edge inference. And neural network on the edge to classify, to filter different sound events. That's what we enable on our DSPs. And we do that with the infrastructure the compute libraries, the framework and this allows speech recognition, this allows sound sensing, And it allows our customers to develop their own neural networks for whatever application it is. So DSP plus software plus AI at the edge, that's what we're offering to our customers. So this is what we go to the market. The one stop shop for all sound processing elements We leverage our 25 years of experience and expertise in low power DSPs. That's the first critical element We have the value added software. Everybody who wants the Amazon experience or the in earbuds in ear earbuds experience needs that kind of software for noise reduction for speech recognition and the sound AI. The infrastructure to allow people to easily implement sound AI at the edge. Coupled all that with the high synergy we have with our connectivity portfolio, which France and Aviv just described Bluetooth for the hedge fund market and Wi Fi for the smart home market. So that is what we go to into the expanding growing very exciting sound market today. Thank you very much. We've been on Q And A now for connectivity on the Sam. So, the U. S. Is a voice user interface that's denominated by the Amgen Parts' seat approval and maybe the year has to make sense. 1, are you seeing outside the U. S. In terms of timing for example in the market? How do you observe things being deployed in fashion at home? I would say the following, if you look on China, it's application of what's going on in the U. S, they have the Alibaba, JD, all those guys to do it. But that I mean, for their standpoint, I think going forward it will be the rest. It doesn't make sense that you have in your home 3 types of smart speaker, one for Google, smartphone, Amazon, 1, whatever to do. So they'll try to unify it in a way. And all of them Google, Amazon, they have a third party programs that allows them, a bunch of Sonos, for example, is supporting multiple. And then, and that's what we are giving because most represented our AI network WISPO is basically, it's a network that supports vocabulary. It's not just Alexa, okay, Google, it's Alexa, okay, Google or a series or whatever. Because from our standpoint, we have the technology base to support multiple. And we are going to take the same technology to the next level and this is what is called ASR, automatic speech recognition. Meaning, think about your car Okay. And then you want to do multiple things to control the air condition to control the radio, the control is very much bigger vocabulary. That's where we are going with our neural network. That's what's giving us the neural network. Neural network is allow ourselves to unify and to support multiple keywords vocabulary And then that's part of the trend of moving the smart, the voice recognition the NLP, the natural language processing into the devices for privacy for sophistication. With all last week at CES or the CSP group winning, point activated designs in garbage cans and all of its So there's lots of stuff where it's not connected to a cloud at all, but just to open up the the hospital. 1, 2, 3, 10 minutes? Thank you. What is it? The knowledge with the neural network that's developed is no limitation to support. What in the area of the neural network This is the area what is called data science. So meaning, we need you need to build the database for that purposes. So when I said, we move from 1, 2, 3 keywords to develop vocabulary that means to building a bigger database. And this takes time, it depends the use case. I mean, we can decide to go to this area or the other But for newer network capability of the company, we can support a much bigger vocabulary level. I think if I may add to that, if I may add to that, we see the sweet spot today between 1 or 2 keywords up to maybe dozens, 2030 comments in a certain context, whether it's a smart home, or an audio player or an action camera. After 2030 commands, you stop remembering them. So that's the sweet spot and we can handle that. It goes beyond that like Gideon said, large vocabulary and the speech to intent as in NLP at the edge natural language processing that's higher. It just requires more computing and more memory, but we can handle that. Questions. So I can see the traction of the new power to the space to place the chair. That was more for sure. What we'll get you a covenant too that you can crack the Tier 1 chip acreage possibly dated some. So it wasn't very important. It's very difficult to understand. You said what can you repeat the question? Yes. So what gives you confidence you can crack? Big chip makers for some versus 3 to 3. They always did it themselves. No, I don't think they did it by themselves in the past. The area of voice, it's an area that is scales. You don't have that many people that understand voice. Keep in mind that it's not just the neural network voice recognition. This is the area of noise cancellation, echo cancellation, You need to do it at the front of the voice recognition in order to get good recognition. And there are not that many companies that do it, not in the semiconductor. There was few in the past, but not anymore area. We we went into this space because this specialty is skills. The algorithms are not open source, are all proprietary, and you need people and the DNA to do it. I mean, when you do things in the cloud like Amazon and Alexa, you don't have the the restrictions in terms of performance. So you can take very high level algorithms and let the cloud does it. When you move to the edge, And then then you have to make a lot of traders. And that's something that requires not just software work. It's a new type of algorithms because what you have in the device has the condition, the environment around devices what's difficult in the cloud. It was, I mean, maybe a follow-up was the value added software to your pocket and go, she has the ability to charge for that for her. No, no, that's we do it in order to charge to get ASP, to get higher ASP a value add to our offering and the deals that we signed are all included in component for the software. Royalty component for the software. 2018. As that percentage of the model. Same, same model. All fixed. Yes. I remember we talked with 4 aware $0.40 worth of goods sold. So now we're at the top end of the software, it was a bit as well. Agreement at a lower price than the fair market opportunity there. So you still have Tier 1s and so on. It's so many customers looking for voice right now, the top market. So we do have some experts out there, but it's very limited amount to money. Love emerging companies who need voice. The 1st line does not money off the business. Sure. On the connectivity side, historically Wi Fi has not been the connectivity choice for IMT devices. What is the way we think changing now that are going to allow Wi Fi to come in where they've been delayed Bluetooth has dominated, hopefully get to the IoT gateway. But Wi Fi are going to be fine. I mean, I think what enabled the Wi Fi is the smart home. So smart speaker, smart TV, they're all will be enabled with Wi Fi because whenever you want to have a longer range and stream video, you need to have the Wi Fi. So that's one area that the smart home that we're going to do. I think when it comes that we get from either buying in electronics store or we buy it in a or get it from telecom. So today with the smart home, you're going to get to have a gateway that are different than just data. It's going to you mentioned Zigbee, you mentioned Bluetooth. So it's part of the all, connectivity connection, connected devices in the home. And this will be provided by other vendors that will get into this market because it could be connected to 5G to the to the internet or start release. So we're going to see new devices offered by new guys like Amazon or others that will try to get the service out of it and they will need this kind of a technology like Wi Fi and others. So, overall, we, on top of the movement to AEs and the natural things that happen in the Wi Fi, the evolution, there are new devices that are led by the smart home. Do you see Wi Fi setting the battery operated devices both in the wall devices? So, yes, surveillance camera in the home We see more and more opportunities there for Wi Fi because it can connect directly to your box at home. And it's getting lower and lower power and there are some products in the market today. We've just a battery and which are quite good. We have a few months that realize 6 months something like that, which is decent, but that will be improving over the over the time. So, you think about as opposed to Bluetooth, which is peer to peer, also it's changing now also, but the Wi Fi is It could be much longer range. We had the customer in the past. I don't know the exact status of it now, but it used it for medical. So things are changing and there's no any obligation from the starter set point. Okay. So there's no more questions, without each car going to present, some insights into the China market then. My name is Israel O'Hannah. I'm the EVP Worldwide Sales. Etcetera. So China is the biggest market for us, biggest region in terms of revenues. And we decided to give you some insight into China. The way we see it, the way it affects our business. I'll talk about the semiconductor markets in China and derives from that, some market opportunities, give you some insight into customers in China, some of which you may have never heard of. In a quick summary. So China in the past was disregarded as a market follower. And it's no more the case. We see a lot of innovation today in China. Starting with the Semiconductor, So people like to look at the market in four segments, IDM, fabless, foundry and assembly and testing. If you look at percentage of revenues in 2015, So basically, China was not anywhere close to our IDM activity. Only 10% in fabless activity, 7% in foundries, 12% in packaging and testing, bigger than others, but still small in term of the worldwide market. On the other hand, China was the driver in the last two decades in the semiconductor industry. China was the largest customer for those devices in the worldwide market. So this created imbalance between the supply and demand in China when you look at the domestic market. Also, those activities of manufacturing and packaging are considered lowtech in Semiconductor Industry. In the last two decades, or 10 years, China has been growing in where the sophistication is in design. So they have made tremendous increase of about 30% annually and increasing their capability in design. And this is where we see them. When they are designing. MiIC 2025, I'm sure everyone heard about it made in China 2025, was it's a strategic plan by the government that was it's a very aggressive plan that would like to move from $67,000,000,000 of semiconductors in 2017 to 305,000,000,000 by 2030. They are also going or would like to go from 33% of domestic supply that they are meeting today to 80%. Basically, the aim is to close the gap. Between the supply and demand and to reduce dependency on other. And this is creating opportunities for us because we are here to help people do their own products, do their own design. And I'll go and talk about 5 segments of the market that's affecting us. There are many more, but those are big and, correlating with what we have seen today. So, for example, if we talk about 5G, In mid of last year, there were 1,100,000,000 mobile subscribers of 4g LTE. More than the population of U. S, Indonesia, Russia, Japan, Germany combined. However, the technology to for those products, for those for LTE was mostly made and developed outside of China. In 5G, China is planning to get out of it. They see it as a chance since that there is it's a completely different approach to wireless communication So they would like to invest and they are investing heavily to get in front and change their position in the worldwide market. When it comes to 5G, given this plan and as part of the MiIC 2025, they are actually pushing it and see it as a way, one, to meet the target of reaching 82% of the population connected to broadband internet. This is related to things like what we've seen before, a fixed wireless that allows them to get to more homes. They would like to close the gap and get 40% of the domestic mobile phone. I see supply to those industries. And they would like even to export and become a world leading maker of telecom equipment. This is also going to help them with other markets, like IoT, self driving car, industrial automation, etcetera. And as part of this, if in 4G they had 7% of the IPR, Then here, they are investing heavily and would like to be more independent, have some more power in IPR So by early 2017, they had 10% IPR of 5G. I guess that now early 2019, they have more than that. So they invested also in IPR, not just in the when you look at the deployment, China has 14 sites for every 10,000 people compared to 4.7 in the U. S. And as you have seen earlier today, 5G by definition needs more towers, more base station. So this will grow. China towers added approximately 4.60 sites per day. And they recently raised close to $7,000,000,000 in 1 of the largest IPO in the last two years. Most of it is going for 5G deployment. It's a huge power that is being put into this. They added more, towers in the last 3 months than what U. S. Added in the last 3 years. Just to give you an idea, 350 sites in China versus 300,000 in U. S, which is considered a big market. Again, just to give you a comparison, it's about $24,000,000,000 more invested. So they are taking it seriously. Another market, AI. We talked today about AI. So China government here as well, everyone knows about it. They are planning to lead the world in AI. I'd like to quote Google Eric Schmidt. He said it's pretty simple. By 2020, they will have caught up by 2025, they'll be better than us by 2030. They will dominate the industry for AI. And this is coming from U. S. Executive. So they are very aggressive. You can see by in 20 in July 2017, the government has put together a plan and committed USD 150,000,000,000 And within a year, Chinese VC has been pouring money. Some of this probably coming from government. And there are already investing more than anyone else, 48 percent of the global funding for AI is in China. There are 168 unicorn in this field as of April 2018. And there are projects like Smart Cities. One of them is close to Beijing, Fiona, and everything is based on AI, autonomous shutters, autonomous driving. So again, those projects elephant are attracting a lot of funding, a lot of investment. Another third market surveillance China is expected to reach $24,000,000,000 in 20.20, growing at pace of 15%. Again, there are some big plans such as road infrastructure, safe cities or smart cities, and and other rural areas that they will start covering that are driving the growth. And you can see the market as a whole, we are here to benefit from all of it, but if you look at the market, about 45% is in China alone. Compared to the other part of the world. Each of this camera need technologies that we have in the form of analysis, AI, as you have seen earlier today. So it's a big market. Automotive is also a big market. They are already more than US, Japan and India combined. Big market. They are expected to reach $37,000,000 by 2025, 25 percent of which will be level 2 and level 3, and they'll start having Level 4 and 5 entering the market. If you look at all the big telcos or big companies like Baidu JD.com, Alibaba, they're all investing in autonomous cars. And China is likely to become the world's largest market for autonomous vehicles and mobility service. The last market that I will be covering today is IoT. IoT is heavily backed by the government as well, and China is vetting big on IoT. They are already a major supplier of components worldwide, by 2020, there will be 200,000,000,000 IoT connected components in the world. And China according to the forecast that I've been reading, we'll probably supply 95% of all of it. The market for IoT in China is growing today at the pace of 25% per annum. All of these very impressive and a lot of opportunities for Siva. I'll go to the next part of my presentation and give you some insights about some of our customers. I couldn't cover in the time given all of them, but try to go through some of them. First is UniSOC. UNISOC is the leading fabless semiconductors for mobile communication and IoT, covering all the way from 2G to 5G. It's a subsidiary of Chinguwa Group, Chinguwa Unigroup, with more than 4500 staff 14 design centers worldwide. And it was created as a combination of spread through and RDA both used to be traded in NASDAQ RDA was acquired for close to $1,000,000,000 spectrum for about $1,700,000,000 later intel in 2014 invested $1,500,000,000 in this company just to give you a sense of the value created. There are at the mid range of the market, they're forecasting 20% growth in India in 2019 alone. They're also focusing in other third world. They're strong in Africa, South America and China. There were some changes recently and new CEO was appointed in November 2018. So I expect to see some changes. Zeti, a leader in communication and IT, publicly traded with customers in 160 countries around the world. Tier 1 cellular infrastructure, 1 out of five that we mentioned today, CEVA is powering their cellular base station. I can say exclusively powering solar base station, Siva is also powering their IoT. You probably all wonder what's going on the ban was lifted. So they are back to your business today. As of today, they get to the same level as before the shutdown. And they were completely shut down. So they, resumed operation to the same level. And they are a key contributor for 5G standard values. DGI, a world leader in commercial and civilian drones, a 70% market share and other companies that chose amazing innovation and creating a new segment. They're using CEVA for the proprietary communication from the drone, from the remote control to the drone. And getting, by the way, amazing range and quality, and they are also using CEVA, computer vision, and artificial intelligence for collision avoidance. And they are getting recognition worldwide, some of which is the Emmy award. Artocin. I'm not sure anyone heard about them. We have demo here, from Artocin. They are using CEVA for AI and computer vision, high performance intelligence vision, located in Shanghai. Using SIVA for object detection, classification, tracking, targeting robotics, drones, VR surveillance, ADAS and they are already deployed in multiple products, robots, home robots, unmanned, retail, face an object detection. This is the how they call it, autonomous attendants or whatever. They replace a receptionist over there in many companies. And you can see the logos, their customer. Another company that is impressive funded only in 2015, the RDF product, best techniques, excellent low power ultra low power RF powered by CEVA Bluetooth, they are in wireless speakers, wireless stereo, wireless earpods, one of which was is here, they were Huawei FreeBot. Apple deserved the credit for the product innovation, but they took it to the next level. With voice ID for e commerce, Alipay, WeChat, etcetera, voice assistant, very advanced technology. Just recently, they won another Tier 1 company in United States, I cannot disclose the name, but you all know this company, and we'll be able to publish it probably soon. Beacon, IC solution company for wireless application using CEVA DSP Wi Fi, Bluetooth, just approved for IPO in China. They'll go public soon. Low power Bluetooth devices, low power Bluetooth audio, low power IoT and more around those things. Espresso. I'm not sure if anyone heard about them. They present themselves as multinational. They are exported in China. They have offices in India and Europe, and they present themselves as multinational. They would like to go globally low power IoT, Wi Fi and Bluetooth using CEVA Bluetooth. They were getting some recognition by Gartner partnering with the big names in the industry, Baidu, Huawei, Air, Microsoft, Amazon, Xiaomi, Alibaba, JD dot com, Apple, and recently got investment from Intel Capital. So just I mean, this is about the companies that I cover. There are more, as I said, but we had to squeeze everything to short time. Summary or to summarize, we have an excellent fit for what's happening now in China in terms of technology. We are enabling companies around the world and China is certainly an opportunity. And I believe we are well positioned to enjoy from this drive toward homegrown products that they would like to achieve. We have deployed team in Shanghai, Beijing Shenzhen, From there, we cover the whole country. We have localized business development, marketing, application engineers, and the team in China is actually quite independent with the help of the R and D. We pretty much cover all what we need over there. Okay. Good afternoon, everyone. Thanks for staying this long. For the last presentation of the day. It's exciting. It's something that we've talked about for the last couple of years. And finally, we get together and spend enough time to understand Siva's businesses and product lines, much more in-depth than we've ever had done. And the nice thing about it is that it gives us the opportunity to talk a little bit further, longer term and not a short quarter what's this announcement all about? How does that impact you? But really to look at CEVA in a more A lot of people use to hear a holistic way and what do we do exactly and where do we want to go? So I'll try to summarize the many different presentations that you got today and see how we build and now add a little bit more numbers, flavors and understanding how all this could work together. So as you realize, we have a potential for revenue growth type of business with many, many different products this diversification strategy that you've heard of throughout the day is really paid off in different aspects of of us winning design wins, increasing market shares and building a business all in all the different aspects that we talked about, which is pretty much identical. It's an upfront license fee and then a royalty scheme as part of the success of our company as soon as they go into production. And that does not change throughout any of the business lines and any of the different metrics that we talk today. What also makes sense is still when we look historically and analyze the business and try to forecast, few years out, is that the licensing activity and the dollars that are semi conductor customers or OEMs have put to to play in licensing technologies from us is a precursor to a royalty stream. Yes, it could take time. Not all markets have same lead time until we see those royalty streams. Sometimes you lose a little bit hair on the way, waiting for those royalties stream, but that's all part of the game. And the margin expansion happens, and we've seen it again in prior cycles at CEVA when the royalties kick in. And to what extent the world is kicking. And if we look on the other side of not money coming in, but money being spent and the capital allocation of the company for the last couple of years A lot of it, I would say the biggest chunk of it is R&D Investments. M and A, which we heard about, and I'll cover it in a second and stock buyback. So eventually, we're trying to build a model and to build a business case around the small which is focused on delivering long term shareholder value. If I summarize all the different markets, all the different product lines, step back a few years, how it's part of you guys knew us back in 2013, dealing mainly with modem CRM, a little bit more communication DSPs and multimedia. In a very short period of time, when we enter stood that we need to diversify and we want to diversify because this is the right thing to do, especially in the technology world, we managed to increase our TAM 3x. From 3000000000 to 10000000000 units. This is our addressable market today. And when I talk about 2022, it few more slides, you'll see that that number even further increases when we summarize all the different parts you've seen in the presentations today. And for every one of these green circles today, we have discussed in length the market opportunities, our technologies. And I think you've realized quite well that CEVA is really a very detailed oriented technology company. Our DNA is technology. It's technology centric, all the presenters today, whether it's the BU managers, whether it's the marketing guys, whether it's Is Sahar from sales or Gideon as CEO, maybe I'm the only one that, have to step aside, is all coming from an engineering background. And this is the depths of understanding of technology and how we manage to build all these nice, different markets. It's almost a company or multiple different companies, from all of different angles, but type together with the same IP model and the same concept and the same idea to grow and succeed there. If I focus a little bit more in R&D, and this is these are questions that we've been asked over the years mean, what is the R and D all about? Are you giving services as the business model changed a bit from licensing and getting royalties there's not a single deal that you've heard about or customer that we have discussed today that in their business model with us do not need to pay royalties at the end of the day. If they are successful, we'll see the royalty stream. And the R and D dollars that we have spent and these are big amounts $250,000,000 in the past decade was really to grow our markets to get into new markets and to be able to present you all these new technologies that maybe a decade ago, if we would have an Analyst Day and only talk about 2G and 3G modems, we probably within 2 hours could wrap up and get back to the office. You've seen how diversified, how different each market is. And even in some markets, it's not enough to have one product. You need to come up with a portfolio of or it's not enough to have a hardware solution, but you need to add a softer piece on top of that in order to have a real offering in winning market. R and D personnel, which is the bulk of their R and D investments and really the bulk of the essence of CEVA is doubled when we start this diversification. End of 2013, just before year away, 125 to close to 280 people, engineers, all doing different designs, hardware, software, AI, Bluetooth, Wi Fi all over all the different as spec sound that we have discussed today. We've managed to grow the licensing revenue. We've managed to grow the royalties, not to the maximum extent that we think they could grow for now, but this is how those R and D dollars were put to place and to work. On top of that, this M and A strategy that we've been doing it small, but with the 2 interesting small acquisitions or investments, Bluetooth and Wi Fi was, as Aviv said, a huge success story for us. And as you heard from Michael, the narrowband IoT investment that we did with RF and the full solution, of being not just the modem company, but the whole solution really enables us to get 10 deals in the last year just on that. So small, very strategic investments. The idea is that this technology could be cross sold to other customers of ours or taking into new markets and new customers and expand our offering. Usually, we try to find a look for mature technologies that we're not going to start some new concept and see if it works or not. We want to have something of absence or maturity. And Part of you know us for many years, we are very bottom line oriented. And if we do an acquisition down the road like we have done before, we would like to see a very nice ROI or quick ROI and try to build something accretive in a very short period of time. We haven't finished the year yet. So I'm showing you the 1st 9 quarters of 2018. A few weeks from now, we'll have the full picture here. And if we compare it to the minute before the diversification versus where we are today, throughout the diversification. We talked about the time increase, but also the revenue and the breakdown of our overall revenues 34%, few years ago, 56% or higher, even when we look at it today, and the idea is to be able to grow both segments. There are cycles in the industry. We are aware of that. Handsets were not a strong 2018 driver for us in royalties. But overall, if we keep both of them and nourished both of them and deal with a non baseband, the diversification strategy, that will continue to work out for us on the longer term model. And here are some few different data points that we've gathered part of the presentation today, to try to show and see for ourselves how CEVA was before this diversified portfolio that you've heard about and very detailed today. And how we were before and to summarize that 10 year anniversary. So from a licensing perspective, before 2014, it was about flat, mainly dealing with modems as we've discussed before. Much higher step function higher when we added all the new markets year after year, every year something new came out when it was added to our portfolio and over a 10 year period of time, we generated $280,000,000 of licensing revenue. 250 was put to work in R and D, That's the manufacturing plat, $280,000,000 of licensing deals. And when we look at the deal signed over those 10 years and look at the colors, the baseband, which was the dominant player historically has become a much shorter and smaller, this is the traditional handset. Just because it takes a lot of time for one generation to the other from 4G to 5G, it takes a few years. We did discuss the opportunity of getting that light blue darker over time or bigger slide, but the big advantage that we brought in and company's license, our technology came from the non baseband, 300 non baseband, non traditional baseband, deals in the last decade, the bulk of them in the last 5 years. After royalty, after licensing come the royalties. And here again, as I mentioned, some take more time, some haven't yet started. A lot of the markets, we have talked about initial step in licensing. So for sure, we're not seeing any royalties yet. But let's look again, start with the units and move to the dollars. If we look at the unit count, today we're celebrating 10,000,000,000 devices, the big driver still in from a unit perspective, from a unit end dollar perspective, are the traditional modems, 2g, 3g, and 4g. But when we look at the dark blue, both in units and in dollars, you realize that in units every single year from 2014, This is the start of the diversification, including 2018, for the last 5 years, the volume in our non handset business has increased. Not all of that is yet reflected in dollars. In dollars, some of the speeds are very high, like base station. Some are very high volumes, but Bluetooth are very low cost devices. That could be a dollar or less than a dollar. This is the market price when you implement some of these devices. So we still need more volume. And we still need some better, spread of diversification within that non handset business between vision and base stations and Wi Fi devices and alike, but we summarize everything in last decade, 10,000,000,000 units $300,000,000 of royalties. So if we invested 250, In the last 10 years, we managed to generate $580,000,000 from this business line and If I step again back, one slide, the opportunity really for us is the licensing of these new technologies, new products, new markets, that we've discussed about today. So we really don't think yet that we are we have utilized or got to the full extent of the royalty contribution that we hope to see over the next couple of years. With that said, licensing revenue, how this business model works, we are also trying to maximize and look from the shareholder perspective, whether it's existing shareholders and new ones and try to see how we build this small right. So we're penetrating new markets. We're growing and using our leveraging our expertise in different segments of the technologies to win significant portions of markets like the base station and You heard today from Michael, and from Isafar, some of our customers, we are the sole provider of that our technology into base station. Yes, when we look at few years from now and we could have a much more significant market share there, that will also show in dollars in the royalty line. We continue to invest and you've seen that over the years, either a small M and A or few $1,000,000 of increased R and D investments. We'll continue to do that. We think that we have a leading position in many of these markets and could offer the semiconductor space, very exotic and interesting technology, the usable technology with talented R and D teams. And last but not least, shareholder, buyback activity and return over that same decade we talked about the revenue, we talked about the investments. We also returned $107,000,000, under different buyback schemes. And then we did a little bit of an analysis to see how those buybacks and when they took place. You could see about 3 different time frames overall north of 6 1,000,000 shares. Average price was in the teens, went up to the 30 ish. And overall, average of the last 10 years, still lower than market price. So we don't do it with our hours close. We do it also from economic point of view. And if we also analyze the cash positions over the years and every time the cash position increased, we started to do a buyback you could see that over time, we try to keep our cash position in the $160,000,000, $170,000,000 more or less after the acquisitions and after buybacks. And this is something that we've been doing for the last couple of years. And no reason not to think that this will continue in the future. This is something that we have proven to do consistently over a relatively long period of time. With that said, we do need the equity to retain engineers. Seen in all of these presentations that it's these are resources that are not easy to get a hold of and you want to keep them and retain them, equity as part of the, tools that we have to when we compete with the Nvidia or Apple or any one of the big players today in the that aren't trying to do AI or exotic new technologies. And with that said, we have reduced significantly on burn rates. It's about 2% today. It was much higher in the past. And again, we believe that this is a healthy level to, to be in, and we don't have any plans to increase the dock to to 4% that we've had for a few years. So I think the ones of you that know us the last couple of years or that will know us in the next couple of years, the transparency is something that we have always believed in and try to share and work with you. We every quarter, whether it's earnings call and hopefully we'll have more of these types of events in the future. We try to give very detailed technology and market information, not just things will be great, but really to look for the sources to understand what the market is heading. And you understood from our presentation today that when we design a new product or a new core, it's probably about sometimes 5 to 7 years before the product actually makes it to market. So we need to get it right We need to get a definition right, the specs, how we want the product to work, how do we sell it, and then of course, hopefully it's successful. And it's a long, long a period of time. With that said, we have and we have always looked on the longer term business and technology basis and build the model this way. Always happy to get the feedback, analysts, investors, You guys meet, Richard, myself. Gideon, quite a lot. And any other feedback is something that we always take into cogeneration and will continue happily to do so. So where do we go from now? If you look at our licensing business and again, analyze it historically, it's pretty nice. It's easy to do it retrospectively a little bit tougher to do it going forward. We had 3 errors and we're about to start the 4th. First one was the traditional 2G, 3G, maybe a little bit 4G modems, 2G, 3G mainly. $20,000,000 a year. Then for the next couple of years, we started the diversification, started with Wi Fi and Bluetooth in 2014 was very successful, increased our licensing by 50% around $30,000,000 for a few years. Last two years, we are at the $40,000,000 level when we added narrowband IoT, very successful product line in 2018. It's a new product line. Sound, we added throughout this year, AI, we added throughout this year. Last 2 years, managed to grow from 30 to 40. And when we look from 2020, because Richard said we're not talking about this year, towards 2020 2, we could be seeing if everything works well and the products that we have discussed today will flourish we could see 20 to 10% to 20% growth from that $40,000,000 type of step function. We're adding now, this is something new, Moshe talked about this voice software. This is some a new add on to our offering with licensing and royalty aspect of it. And hopefully, we'll we have more plans, not hopefully. We have much more than we could do, plans to increase R and D in products and the licensing activity because as we said before, it's those $250,000,000 generate more licensing and of course generate much more royalties further down the road. So from a licensing perspective, this is our plan. Continue to work and increase and invest in R&D. Maybe finding here M and A add ons that we could add to our offering. And then that step function, of course, will be easier. What with the risk of any additional new IP that you buy, but this is something we're looking at. And we are seeing a new step function if all this works 2019, $10,000,000,000 is the time of all the presentations that we have started and heard today. If we step forward 3 years, and again, I'm not sure if this is the run rate of 2022 ending the year beginning of the year, let's see when we get closer, but we're looking at all the different markets that we've discussed today. Another 70% growth in town. These are some new markets that will involve, some use cases that we could be a significant player in, And if we did our own homework, look at the customer, looking at the design wins that we have today, looking at what potential markets and who are the players in each of these markets, whether it's our traditional handset to keep our 30% market share, whether it's the new market of of the base station stuff that we have excellent idea of how the design cycle is. And how the licensing activity, who are the players, we need to see all this in royalties, because this is translating into royalties as well. And the bottom line of looking at all these markets, Bluetooth Wi Fi, we, France and Aviv talk today, this is the fastest growing segments in the semiconductor space in the next couple of years, anywhere between 15% to 30% growth. This is huge. And although maybe lower ASPs for us, that will add a lot of volume and at the end of the day also dollars. If this all works well, our royalty could double from where we are today. And that will be also meaning that instead of 1 and change billion units that we've powered for the last 2 years, we will go up to about 3,000,000,000 devices from some of these new markets. So this is our 2nd step function of the business, licensing first royalties coming in later, some are mainly from the existing customer base. And of course, some will happen further down the road with a new licensing activity that we have added and plan to add over the next couple of years. Summarizing, goals, targets, from a financial perspective, If we were anywhere between 40, 45 deals a year in the last couple of years in this diversification age of 2014 to 2019, we want to go higher, 50, 60 deals, new customer, new markets, That, as we mentioned, will generate 10% to 20% growth in licensing starting in 2020. That will double royalties from the $40,000,000, $45,000,000 level, more or less, to, of course, a higher level. And that means also much higher volume in non handset baseband chips. Operating margin, if we put that to place and continue to invest in R&D, that's what we put in our models that we look for new markets. We We do the same Analyst Day 3 years from now. We'll talk about new things and not the existing ones, north of 30% operating margins. Which is again, this year's maybe 2018 is maybe not the best comparison, but it's 2X or north of 2X from where we are today. If things work well. And that's also from the 2018 leverage. It's 3x EPS opportunity, to get into the sockets, markets and mainly royalty contributions. Overall, no changes in the positive cash flows that we've always generated over the last couple of years, decade This will continue, buyback, M and A, as we mentioned. And if we find that on, components that we think that we could add to the business, And overall, that summarizes products, our R and D efforts, our some of the success stories that we talked about today with customers and how we see the business progressing few years from now. I want to take before the Q And A, the opportunity to thank you guys for spending quite a few hours a day with us. It's not not obvious. It's not simple. It's especially not in today's markets. And we really appreciate the efforts. I think the team, our team, that really, for the first time, took the day to day activity that they do and manage in R&D and sales and try to build it in a format that it's user friendly for others to understand and to understand better or even to learn. And that's part of the of our goals for this, for this day. And last but not least, Richard, without his help and guidance, we wouldn't have been here and really appreciate all the hard work and effort that, got us to the 1st Analyst Day we'll see where in the next one is, but I think it's a great platform really to share much more detailed information than we usually do in conferences. Or post earning calls and Q and As. And I'm really excited, as I said earlier, from this event and think it's a great use of time. So last Q and A session of the day, Sure. So, thanks for bringing up the share I can imagine that being a linear argument, or I can imagine that being a front end load argument because you already have 3 customers what's the shape of that share progression? I know it's hard to call exactly what I mean. Is it more appropriate to give us the front end loaded, getting that concern market or This is why you're a SmartAn list. And I'm just counting the beans and standing what's going on, getting the royalty reports and reporting to you, and not knowing if there's the, there are going to be any ZTE shutdowns or any Nokia delays from time to time. And I think your answer is good as mine. We have the we have the customers. We know where the designs are. And we need the patience. Sometimes we even don't have, but hopefully we get there fast. Zit is, as Zitin is in full scale, they're back. Now new questions arise, how do they divide the new markets? East versus west. You know, it's a whole new world out there. On the other hand, Nokia is ready. A lot of commercials, their CEO is very enthusiastic about reef shark, cost it's a big, gross margin improvement for them on their own financials with they need to go on and exchange and change, but it's all good questions that we'll see, as we always say, we'll see from quarter to quarter how things evolve. It could be very fast like a hockey stick. It could be linear. It could have few holes in the way. I think, going one quick down to unit maintenance fee. It talks about unit growth and royalty. You have developing versus current royalty people give us the business there. What is the ASP profile of the guys that are kind of in the pipeline that are going to come into royalties versus stage? Can we think of it as the same royalty? I'd say, because you have some that are lower than the higher or is there potential for the royalties per unit to go up because of what's coming online? So we've seen that in the past as well. Same. Depends of what products kick in faster and to what magnitude this year we saw an ASP increase in handset, you know, the traditional business Why? Because they were less not great answer, but we had less low power LTE devices from some of our key Chinese players. They had it a weaker year. And, we saw some high end devices that we got into with higher ASP. So every quarter, every year really depends on what is the key driver of Elon's group will do well and we'll have a lot of DGI and drones and a 44,000,000,000 cameras, you said, in a few years. If we get a small percentage, what did we use? 15, I think, here, computer vision, 15%. We'll be very happy with both the ASP story and the dollars for royalties. So it really a lot of moving pieces in this puzzle. It's not bad. It's better than to rely on only one product, but every quarter we'll need to see what comes to the market and who is successful and How does that drive the ASP for royalties? It's not that all these new products we bring to market and you see how we're going vertical or any more stores where bringing profiles into the lawn. These are all generating medical licensing on the wood's opportunity for them. So, you're right. If you go into the same market, it would be just like USB, if it was on the feedback and you add on some software for voice processing and so on. You're to charge more. So through the concerted effort with the company, make sure that every deal we sign and maximizing my request is to get my customer, like it's more of the speeches that they don't know what it's like from a third party or the development type of stuff. So there is concerted effort there. But if you need to when it comes to the mix, if we do share the 10,000,000,000 devices and we're getting a 1% of the dollar check, but then we'll begin with some of the role for A and B. So, we don't, we're trying to focus on the blended Yes, it's a good question. I think the first time we try to build a longer term story the unit unit wise in non handset based in, we got wrong. We talked about 800,000,000 units We're not that far out, but we haven't reached out. Bluetooth out of that 800 was 300, as you saw more or less So it's a nice chunk. When we started that model, it was just in 2014 when we started the diversification, and we had almost no volume back then. A non handset. So that, that's if you add a little bit vision and a little bit some of the sound that we talked about, We are off from 800, but the main reason is, and I think you heard that in some of the presentations today, especially around the vision or the AI, that we were too early, too early for the market. Everybody talked about meeting those technologies, but the use cases didn't go into production. The technology was ready. Some of our customers even had a chip ready to go. And then the last piece of where do you put that in the product? How do you get it to work? How do you how do the OEM itself say, okay, I have computer vision, but what do I do with it? Talked about so many different use cases, on computer vision. They, not all the OEMs knew how to deal with it, and that pushed out the royalty scheme, things that we haven't seen in the modem business because that business we know for 20 years, but in the newer businesses, we realized that it wasn't a technology fault. It was just that the market was not mature enough. And look at how fast drones, for example, how quick But it took a few years. You suddenly have not just, cameras improvement and the auto focus and lots of different features in the drones in the last 2 years that have improved significantly. And suddenly you see the the market moving because of that use case. So I think that that's part of the reason for the last miss of the 800 for 2018. This time, we have more moving parts. It's not an easy type of exercise, but we looked at the customer base. We looked at the market shares. We looked at who dominates today and who we think will be around 3 or 4 years from now. And this is how we have done the math. You know, hopefully maybe we are wrong with the units, but hopefully we're not wrong with dollars. It could be a combination It's not a model. It's not a crystal ball. This is just putting few of these moving pieces together and you're saying what could come out of it. In China? China, we have a big the power biggest sales team is in China today. It's 3 different offices. I think shy of twenty people. And all the R and D is done either in Israel or in France. France Bluetooth Wi Fi and Israel is the rest of the technologies that we've talked about. So don't have any local R and D presence today in China. It's all done in the regular manner. It's just a big market because of Because of what it is and then the investments there. You still remember numbers, sales in China 5 years ago, how many people probably shy of 10 think we more than doubled it, I would think. No, absolutely. From the 40 either anywhere between 44 or 48, something like the next step. Again, it's very hard to same question about the royalties. It's not that we know today that license is going to grow by $5,000,000 or $6,000,000 next year. It's just hoping that if we do the right things and we come up with the right products, like we've seen for so many years, we'll manage we'll manage to also license more to new markets and new customers. That's the basic case of it. I mean, you have to make sure that you know what you're talking about. You need to make sure that you know that you think at least that they have the right product roadmap. And so far, I think we have a good history that this did work for us and we have managed to decide where to go and what markets to tackle and done it quite successfully, at least on the licensing side, and royalties will follow. I think it's a bit maybe premature, but I would say the half of the growth at least should come from base station. The size of that as we saw today, the higher ASPs, that we have because these are very expensive type of, of chips, should contribute about half. And this is why we are we have more confidence in that jump of $40,000,000 because a big portion of it should come from base station. All the other parts Bluetooth, Wi Fi, computer vision, AI, sound, software sound, that is a bit more difficult, but we have the data. It's part of the rest of the 20,000,000. A vision. We hope that vision will kick in. We have the design win. We are have the automotive stuff we talked about. We have the sensor business that we should see volumes kicking in in the automotive space, And then Bluetooth and Wi Fi, I think we did discuss that this is the fastest growing market, grew last year, 50% in units, and we don't think that that should stop. So if we get that right, that's a nice, solid add on over the next couple of years. Gideon? Of the don't Yes, it's hard to say from the $3,000,000,000 because even today, if you ask us what exactly sold in China. We know. But what is, for example, a unique, a spread room, what portion of their chips or phones are actually sold in China versus India and the rest of the world or emerging colonies they don't give us that information. If we get reports from Intel about Apple sales, we don't know if that Apple Iphone sold in the U. S. In Mexico or in, in China. So you don't have really the end product in a way that goes. That's too complicated. We need to get that information from other reports and try to extrapolate. But today, China overall is 50% of our revenues. So I would believe that that will continue to be a big portion of our business. And China has been doing excellent for us. I think last quarter out of 13 deals, 9 deals, were signed in China. So we didn't see any slowdown. It's so hard to talk about huge investments. They want to do it on their own. We are great partner to do so. And for the time being, we're not also we don't have any issues with export control rules to the best of our knowledge because the technology is developed, as we mentioned earlier, Israel or France, it's not in the U. S. So for now, we, we could do business and we have been doing excellent business in China. Sale the same. If you have ink in your pen and it, and you could sign the licensing agreement, then it's all good. No, nothing has changed from a macro environment on the licensing front. Ladies and gentlemen, thank you very much and happy New Year's successful 2019.

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