Q2 2021 Segmental overview Dialog is a fabless semiconductor company primarily focused on the development of highly integrated mixed-signal products for consumer electronics and other high-growth markets. Our highly skilled engineers, partnership approach, operational flexibility, and the quality of our products are sources of competitive advantage. Our primary end markets are consumer markets such as IoT, Computing, and Mobile. The increasing adoption of standard technologies, such

as Bluetooth(R) low energy or LED lighting, and the expansion of high-performance processors into infotainment systems, have contributed to the expansion of our presence in the automotive segment. The acquisitions of Creative Chips and Adesto have enabled our expansion in the growing Industrial IoT market. Our ambition is to build a vibrant mixed-signal business, with a balanced end market exposure, on innovative low power products which enable our customers to get to market fast.

Underlying results by segment

Revenue Operating profit/(loss) Operating margin 


                                                                 Restated*                 Restated*          Restated* 
US$ millions unless stated otherwise                          Q2   Q2 2020 Change       Q2   Q2 2020       Q2   Q2 2020 
                                                            2021                      2021               2021 
Custom Mixed Signal                                        141.4     181.6  (22)%     28.4      48.2    20.1%     26.6% 
Advanced Mixed Signal                                       79.8 63.1        +26%     13.7       5.4    17.2%      8.7% 
Connectivity & Audio                                        58.0      43.9   +32%     11.2       1.8    19.3%      4.1% 
Industrial IoT                                              29.2       4.8     nm      2.4       0.1     8.2%      2.1% 
Total Segments                                             308.4     293.4    +5%     55.7      55.5    18.1%     18.9% 
Corporate and other unallocated items                        9.4       8.9    +6%      7.2       6.9    76.6%     77.5% 
Total Group                                                317.8     302.3    +5%     62.9      62.4    19.8%     20.6% 
* Restated to reflect the segment reorganisation (see 
page 5). Custom Mixed Signal (CMS) In Q2 2021, underlying revenue was US$141.4 million, 22% below Q2 2020 due to the decline in legacy licensed main PMICs partially offset by growth in new mixed-signal products. Revenue in CMS from our largest customer's products excluding legacy licensed PMICs was up 11% year-on-year to US$85.0 million (Q2 2020: US$76.3 million). Underlying operating profit for CMS decreased 41% year-on-year to US$28.4million, mainly due to the lower revenue.

During the quarter, we continued to receive requests for quotations from a range of tier one customers, for new custom designs to be launched in 2022 and 2023 in diverse areas of power, battery management, display, and audio technologies.

There is a growing market opportunity for next generation battery management solutions, capable of supporting higher wattage chargers, safe and short charging times, as well as secondary charging from phones to other devices. Dialog is well positioned to capitalise on this opportunity, with a range of products built on our strong expertise in the design of mixed-signal and power-efficient ICs, meeting the requirements of a wide range of customers in mobile and consumer IoT end markets. We are currently engaged with the top mobile OEMs, with standard battery management products shipping since Q3 2020 and we expect revenue from high-volume contracts to begin with new smartphones in the second half of 2021.

In parallel, we continue to leverage our power management technology into new markets and geographies through the expansion of our platform reference designs. The collaborations with Renesas, Xilinx, and Telechips strengthen Dialog's presence in the automotive segment, in particular, Intelligent In-Vehicle Infotainment and ADAS. We have over 100 automotive customer engagements, most of which are expected to go into production over the next three years.

Advanced Mixed Signal (AMS) During Q2 2021, underlying revenue increased by 26% from Q2 2020 mainly due to a strong recovery in demand and design-in momentum for backlighting products. Underlying operating profit was US$13.7 million, 149% above Q2 2020, (Q2 2020: US$ 5.4 million) mainly driven by the higher revenue.

Dialog has successfully maintained a commanding share in the high power delivery rapid charge market through a combination of differentiated technology, speed of execution and wide support of rapid charge products, leading the industry in high power density AC/DC chargers. In Q2 2021 we introduced the innovative digital Zero Voltage Switching (ZVS) chipset to enable High Power Density power supply units. This chipset allows our customers to design higher power density chargers that are not only light-weight and ultra-small, but also cost-effective.

Our broad product portfolio, which includes LED backlighting and LED driver ICs, and proprietary digital control technology for power conversion, enables high quality solutions at a low cost. We are engaged with tier one customers in the high-end TV market and we are seeing a gradual expansion of our customer base in mobile and automotive display markets with medium term opportunities.

Dialog's configurable technology, including the highly successful GreenPAK(TM) product family, has become established as the leading choice in the market. Low power consumption and in-system programming enables customers to rapidly customise and integrate multiple analog, logic, and discrete components into a single chip. The expansion of the GreenPAK(TM) product range will further accelerate its adoption across a wider range of applications, such as automotive as well as smartphone cameras. Our portfolio of configurable products gives our customers the flexibility to keep pace with rapidly changing market needs. The CMIC, along with other members of the GreenPAK(TM) family, replaces dozens of components in a wide range of applications to optimize flexibility, footprint, and a reduction of the bill of materials.

Connectivity and Audio (C&A) During Q2 2021, underlying revenue grew 32% from Q2 2020 mainly due to higher revenue from BLE and audio products. Underlying operating profit in the quarter was US$11.2 million, more than six times higher than Q2 2020 (Q2 2020:

US$1.8 million) and operating margin was 19.3% (Q2 2020: 4.1%). We continue to invest in the development of new BLE and audio products to take advantage of market opportunities and position the segment for higher revenue growth and profitability over the coming years.

Revenue from our SmartBond(TM) BLE System-on-Chip ("SoC") was 40% above Q2 2020, as a result of increased demand from customers in Asia. Following the launch of SmartBond TINY(TM) and the SmartBond TINY(TM) module, we launched

our first combo Wi-Fi and BLE module, the DA16200 SoC. This offering was purpose built for battery-powered IoT applications, including connected door locks, thermostats, security cameras and other devices that require an "always on" Wi-Fi connection. Its VirtualZero(TM) technology enables the industry's lowest level of power consumption for Wi-Fi connectivity, so that even continuously connected devices can achieve up to five years of battery life in many use cases. Highly integrated, the SmartBond(TM) SoC family delivers the smallest, most power efficient BLE solutions available - and enables the lowest system costs.

In Q2 2021, the combined revenue from new audio products and Codecs was 20% up year-on-year. The C&A Segment is targeting the rapidly-growing consumer wireless headset market with our SmartBeat(TM) wireless audio IC. This technology enables a new immersive headset experience and supports both wired USB 3.0 Type-C(TM) and Bluetooth(R) based consumer headsets. Our product portfolio targeting the headset market also includes a family of highly-integrated audio codec chips that deliver best-in-class active noise cancellation, providing optimal audio performance in any environment.

Industrial IoT In Q4 2020, we reorganised the Group's structure bringing together the businesses from Adesto and Creative Chips into a new segment named Industrial IoT.

In Q2 2021, underlying revenue was US$29.2 million and underlying operating profit was US$2.4 million. During the quarter we continued to make good progress on the integration of Adesto and we expect it to be completed by the end of 2021.

Our technology enables seamless connectivity of heterogenous systems in an industrial environment to the cloud for building and industrial automation. Non-volatile memory ("NVM") is a key component of many system designs and our wide range of NVM products offer an array of features designed to help tune and optimize our customers' systems.

Together with its mixed-signal and RF design team, as well as world-class technology and intellectual property, we bring an innovative product portfolio to thousands of customers worldwide across the industrial, consumer, medical, and communications markets.

Our SmartServer IoT Partner Program gives Systems Integrators and OEM Solutions Providers access to Dialog's SmartServer IoT edge server and open software suite, including freely available integration tools and APIs, certified training, and premium support. This accelerates secure, scalable integration of IoT edge devices and networks with cloud platforms and Operational Technologies (OT) found in smart factories, buildings and cities.

On 26 April 2021, we launched the AT25EU family of SPI NOR Flash devices, to support the development of power- conscious, size-constrained connected devices. The AT25EU focuses on achieving the lowest power consumption and the fastest operation in order to achieve the lowest energy.

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