ARM Holdings plc 1H 2001 Investor Update

Robin Saxby - Chairman & CEO Warren East - COO Jonathan Brooks - CFO

THE ARCHITECTURE FOR THE DIGITAL WORLD TM Vision ARM Technology for Everyone

THE ARCHITECTURE FOR THE DIGITAL WORLD TM Semiconductor Trends

Global Monthly North American Semiconductor Semiconductor Sales Equipment Book-to-Bill Ratio

20 1.6 18 1.4 16 1.2

$ 14

s 12 1 n o i 10 0.8 l l i 8

B 0.6 6 4 0.4 2 0.2 0 0 9 0 0 0 0 1 9 0 0 0 9 0 0 0 0 1 0 0 9 0 0 0 0 0 ' ' ' ' ' ' ' ' ' ' ' ' r r c c c r n c r n p

p a a

a a e e e e u e e u M M

J M M D S D J D S D Source: Semiconductor Source: Semiconductor Equipment Industry Association (SIA) and Materials International (SEMI)

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 3 Royalty Revenue –Segment Trends

7 6 $

s

n 5 o i l l

i 4 m Wireless y 3 t l Networking a

y 2 Consumer o Storage R 1 Imaging Automotive 0 Q1'00 Q2'00 Q3'00 Q4'00 Q1'01 ARM estimates

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 4 ARM Powered Design Activity

10,000 Core Based SoC Designs in 2000

Legacy 8 bit designs Most ARM designs 25% are using

47% ARM MIPS PPC Other 12%

16% Source: Gartner Group, November 2000

“ARM is the leading core architecture and expected to remain number one” Semico, January 2001

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 5 ARM Activity

 4000+ SoC design starts –3x nearest competitor  123% yr/yr growth in ARM Development Systems  120+ Process ports per year for multiple use  0.75 Bn units cumulative shipments –end Q1 01

Development Systems Revenue Multi-Level Licensing Model 16 , Motorola m 14 £ 12 e Architecture u 10 n e

v 8 Traditional Si Vendors e

R 6 4 Implementation 2 0 Fabless Si Vendors 1997 1998 1999 2000 2001H1 Per-use

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 6 ARM Partnership Meeting

 Brings together ARM partners in an informal environment  Last year over 220 attendees including Silicon partners OEMs RTOS vendors Tools vendors  This year we have record attendance

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 7 2Q’01 Highlights –Partner Activity

 Agilent introduces ARM920T based for PDAs  Motorola announces ARM920T based DragonBall MX1  Microsoft optimizes Windows Media for Xscale  announces ARM Powered MSM5100 for  TI introduces ARM Powered OMAP chipset for GPRS  ST announces ARM7TDMI based chip for Voice over IP  Agere announces 5 OEM customers for VoIP solution  Intel launches in-car software platform using Xscale  TI announces ARM7TDMI based chip for imaging

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 8 Warren East –COO

THE ARCHITECTURE FOR THE DIGITAL WORLD TM Architecture Licensees

 Intel Compaq shipped one millionth iPAQ in June New StrongARM PDAS from Sharp, Toshiba,Mitac, Symbol, LynkUs

Xscale program is on track Compaq Sharp LynkUs ‘Intel StrongARM has rapidly built momentum in 2001 and is now the market leader for handheld ’ Peter Green, GM Handheld & Wireless Computing, Intel Toshiba Symbol MiTAC  Motorola  Motorola announced ARM920T based DragonBall MX1 featuring Memory Stick and Bluetooth support

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 10 2Q’01 –Implementation Licensing

licenses ARM9 and ARM10 cores  Agere licenses ARM920 wireless application platform  Epson licenses ARM720T for mobile applications  Yamaha licenses ARM7TDMI core for audio products  Marvell licenses ARM946E-S & ARM966E-S for storage  Kawasaki Steel licenses ARM7TDMI core for imaging  Intersil licenses ARM946E for wireless LAN  ADMTek licenses ARM7TDMI & ARM922T

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 11 The ARM –SUN Agreement

 The first major processor vendor to license Java

“ARM’s Jazelle technology provides a highly-optimized implementation of the Java Virtual Machine (JVM), speeding up execution times and providing consumers with an enriched user experience on their mobile devices.” Richard Green, VP Java Software, Sun Microsystems

 ARM - Sun collaboration on Java Technologies  ARM now offers Sun compliant Java components  Joint development of Java for wireless devices  Alignment of future Java roadmaps

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 12 2Q’01 –ARM Foundry Program

 Foundries: Fabless Vendors by Application  UMC, TSMC, & AMI 8%  ARM cores in program: 8% 20% Networking AR7TDMI™, ARM922T™ Wireless Consumer  Fabless vendors: 13% Computing  15 licensees 20% Industrial 1st Chinese: ZTEIC Automotive 13%  Designs driven by growth Other 18% in new comms markets:  Bluetooth ~450 Fabless Vendors Worldwide Source: Gartner Group, December 2000  Wi-Fi (802.11 LAN)  VoIP

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 13 ARM Platform Strategy

 Working in partnership, ARM is developing application focused platform solutions  Openly available system building blocks, bringing together a wide range of ARM systems IP  An integrated platform solution, SoC Kernel, OS Ports, Device drivers, Integrated development environments, System model tools, Multimedia extensions  A framework for partners to create differentiated platform solutions Working towards seamless media support across different vendors

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 14 Architectural Directions 64 bit VLIW 64 bit bandwidth Variable length 64+ bit datapath Simple decode 64 bit addressing Smart compiler

Increase throughput AMBA™ Minimise MPEG4 and 3D complexity Accelerators Maximise Multi-core Debug power efficiency Modular Superscalar

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 15 ARM Developments

 Next generation CPU - ‘Jaguar’ Architectural details to be presented at Forum - October 2001

 MOVE™ Co-processor for MPEG4 video Optimal solution for mobile video together with ARM926EJ-S Jazelle CPU core

 Secure Data (SD) Card Interface New secure memory card format set to replace SmartMedia, CompactFlash

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 16 ARM Intellectual Property Protection

 1998 e picoTurbo Inc. market CPU cores claiming n

i compatibility with ARM V4T Architecture l e ARM sends ‘cease and desist’letters m i

T ARM reluctantly decides to file suit in Santa Clara County citing violation of 3 patents ARM widens the lawsuit to include 7 patents June 2000 Markman ruling by Judge Claudia Wilken June 2001 Adopts ARM’s construction on the vast majority of claims relating to the 7 patents in the suit ARM encouraged by progress Expect case to go to Jury trial in Q1’02

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 17 Jonathan Brooks –CFO

THE ARCHITECTURE FOR THE DIGITAL WORLD TM Results Q2 and Half Year 2001

Q201 Q101 6M 01 6M 00 6M/6M £'000 £'000 £'000 £'000 % Total Revenues 36,002 32,504 68,506 44,507 54%

Operating Profit 11,223 10,446 21,669 14,358 51% Mgn 31.2% 32.1% 31.6% 32.3%

PBT-US GAAP 12,178 11,387 23,565 16,495 43%

Net -US GAAP 8,250 7,729 15,979 13,389 19%

EPS - US GAAP 0.8 0.8 1.6 1.3 23% Supplementary EPS 1.6 1.1 45%

Exchange rate $1.4064

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 19 Geographical Analysis

100%

 Revenues Q2 2001 80%  58% USA (61% Q200)  23% Far East (21% Q200)  19% Europe (18% Q200) 60% 40%

20%

0% 8 0 0 1 9 0 0 0 1 3 1 Q Q Q Far East Europe USA

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 20 Royalty Revenues 2001 Q2

Q1 01 Q2 01 140000 120000 Roy.Revs £8.3M £6.4M 100000 % 26% 18% 80000 Units 123M 98M 60000 No.shipping 23 26 40000 20000 Wireless 54% 52% 0

Netw orking 23% 17% 8 8 9 9 0 0 1 9 9 9 9 0 0 0 1 3 1 3 1 3 1

Other 23% 31% Q Q Q Q Q Q Q Total 100% 100%

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 21 Core Licensing

 Q2 01: V6  7 new partners in Q2 2001

incl. Marvell V5TEJ  4 ‘per use’  incl.Faraday 1 V5TE  3 upgrades 3 Xscale ARM926EJ  incl. Samsung ARM10 ARM1020E V4T  11 “derivatives” ARM9E 34 1  4 Jazelle related SecurCore ARM920T 1 V4  63 Partners in total at end 56 ARM7TDMI StrongARM Q2 ARM7  of which 15 ‘per use’ and 3 are foundries Excludes recent ST/Philips “broad”agreements

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 22 Development Systems 7000  Highlights in Q2: 6000  30% of sales through distribution vs 25% in Q1 5000

 MultiTrace launched in Q2 0 4000 0 0

 DevZone launched '

£ 3000

 Dev’t systems sales Q2 2001: 2000  38% USA 1000  34% Far East 0  28% Europe 9 9 0 0 1 9 9 0 0 0 1 3 1 3 1 Q Q Q Q Q  17% of revs Q2 01 19% Q1 01 Toolkits Boards

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 23 Service Revenues

 Consulting revenues 6000  Q201 £1.5m vs £1.0m Q101  14 ATAP partners 5000

4000  Design transfer - now offering 0

‘hardening’service for soft 0 0

' 3000 cores £  £0.9m Q201 vs £0.7m in 2000 Q101 1000  Support, Maint & Training 0  £2.6m Q201 vs £2.5m Q101 9 9 0 0 1 9 9 0 0 0 1 3 1 3 1 Q Q Q Q Q Supp/Trg Des Trfr Consulting

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 24 Revenue Breakdown Q1 2001 Q2 2001 7% 5% 7% 8%

42% 19% 17% 51%

26% 18% Licensing Royalties Dev Sys Support Consulting

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 25 Headcount

800  Headcount end Q2 687 vs 700 659 at end of Q101 600  29% outside UK; 71% in UK 500 400  R+D 60%; S+M 27%;G+A 300 13% 200  New office in Detroit Q2 Suite 600 100 0

7 9 0 0 1 9 9 0 0 0 2 4 2 Q Q Q UK Non-UK

ARM Detroit Office THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 26 Operating Margin Trend

40.0%

35.0% 30.0% Q101 Q2 01 25.0% G.Mgn 87.6% 88.5% 20.0% R+D 26.9% 25.6% 15.0% SG+A 27.1% 30.3% 10.0% Goodwill 1.5% 1.4% Op Mgn 32.1% 31.2% 5.0% Op mgn excl GW Royalties as % rev 0.0% Q199 Q299 Q399 Q499 Q100 Q200 Q300 Q400 Q101 Q201

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 27 Deferred Revenues

30  Deferred revenues: invoiced sales not yet 25 recognized  fluctuates from quarter 20 to quarter

m 15  Still v. high at end Q2, £ with much due to 10 ARM926EJ-S  Expected to drop by end 5 Q3 0

9 0 0 2 9 0 0 0 4 2 4 1 Q Q Q Q

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 28 Strong Cash Generation Q2

Q1 01 Q2 01 100 £MM £MM 90 80 70 Cash Gen. 8.1 19.4 60 Capex -4.1 -4.6 50 Invest. 1.0 40 30 Acquis'n -1.4 0 20 Other 0.5 0.6 10 Cash 30/06/2001 94.8 0

9 9 0 0 1 9 9 0 0 0 1 3 1 3 1 Q Q Q Q Q Accruals 5.8 7.0

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 29 Conclusion

 Strength of open architecture

 ARM ‘complete solution’ Cores Software Platforms Design environment

 Continued investment in future roadmap for benefit of our partners

THE ARCHITECTURE FOR THE DIGITAL WORLD TM CONFIDENTIAL 30