Exar Corporation

Company OverviewMay 2015

Safe Harbor Statement and Notice to Investors Forward-Looking StatementsExcept for historical information contained herein and matters discussed in relation to this presentation contain forward-looking statements within themeaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's currentexpectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those describedin the forward-looking statements. In particular, the statements regarding the demand for our products and the anticipated trends in our sales and profits,future opportunities that are available to the Company, existence of any viable strategic alternatives and whether any future decisions by the Company willenhance stockholder value, are forward-looking statements. The forward-looking statements are dependent on certain risks and uncertainties. Therefore,actual outcomes and results may differ materially from what is expressed herein. For a discussion of these risks and uncertainties, the Company urgesinvestors to review in detail the risks and uncertainties and other factors described in its Securities and Exchange Commission, or SEC, filings, including,but not limited to, the “Risk Factors”, “Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results ofOperations” sections of our public reports filed with the SEC, including our Annual Report on Form 10-K for the fiscal year ended March 30, 2014 and theQuarterly Reports on Form 10-Q for the quarters ended June 29, 2014, September 28, 2014 and December 28, 2014 which are on file with the SEC andare available on our Investor webpage and on the SEC website at www.sec.gov, and the risks and uncertainties of whether any strategic alternative will beidentified by the Board of Directors, whether it will be pursued, whether it will receive Board of Directors and stockholder approval if necessary, whether itwill be consummated and, if consummated, whether it will enhance value for all stockholders of Exar. The Company assumes no obligation to update anyforward-looking statements or information, which speak as of their respective dates.

There can be no assurance that Exar’s review of strategic alternatives will result in any specific action. Exar does not currently intend to disclose furtherdevelopments with respect to this process unless and until its Board of Directors approves a specific action or otherwise concludes the review of strategicalternatives.

Generally Accepted Accounting Principles

The Company’s non-GAAP measures exclude charges related to stock-based compensation, amortization of acquired intangible assets and inventorystep-up, impairment charges, technology licenses, restructuring charges and exit costs, provisions for dispute resolutions, merger and acquisition andrelated integration costs, certain income tax benefits and credits, certain warranty charges, net change in the fair value of contingent consideration, thewrite-down of deferred revenue under business combination accounting, and related income tax effects on certain excluded items. The Company excludesthese items primarily because they are significant special expense and gain estimates, which management separates for consideration when evaluatingand managing business operations. The Company’s management uses non-GAAP net income and non-GAAP earnings per share to evaluate its currentoperating results and financial results and to compare them against historical financial results. Additionally, we disclose below the non-GAAP measure offree cash flow, which is derived from our net cash provided (used) by operations, less purchases of fixed assets and IP, plus proceeds from the sale of IP.Management believes these non-GAAP measures are useful to investors because they are frequently used by securities analysts, investors and otherinterested parties in evaluating the Company and provides further clarity on its profitability.

In addition, the Company believes that providing investors with these non-GAAP measurements enhances their ability to compare the Company’sbusiness against that of its many competitors who employ and disclose similar non-GAAP measures. This financial measure may be different from non-GAAP methods of accounting and reporting used by the Company’s competitors to the extent their non-GAAP measures include or exclude other items.The presentation of this additional information should not be considered a substitute for net income or net income per diluted share or other measuresprepared in accordance with GAAP.

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Company Overview

Founded: 1971; Headquarters: Fremont, California Design Centers: Silicon Valley, California; Hangzhou, China; Taipei,

Taiwan; Hsinchu, Taiwan; Eatontown, New Jersey Markets Served (25,000 Customers)

– Industrial, High-End Consumer, Infrastructure Products (3,500 Part Numbers; Advanced, Value and Standard)

– Power Management– Connectivity– High Performance Analog– Application Specific Standard Products (ASSP)

Employees: ~350 Balance Sheet: $55M* Cash, No Debt, Silicon Valley Headquarters (Estimated Value $25M) Minimal Tax Rate with >$300M NOLs

* As of Mar. 20153

Exar – Management

Louis DiNardo – President/CEO; Analog Devices, Linear Technology, Xicor, Intersil, Crosslink Partners, Exar

Ryan Benton – SVP/CFO; Arthur Andersen & Co., Pegasus Solutions, eFunds, ASMI, Exar

Dan Wark – VP Operations; Linear Technology, Pericom, Volterra, Amalfi, Exar James Lougheed – VP Component Products; Future Electronics, EDMI, Apexone

Microelectronics, Cirrus Logic, Exar Shuen Chang – President Display and Lighting Products; Texas Instruments,

Samsung, iML, Exar Dimitry Goder – VP Component Engineering; Linear Technology, ON Semi, Exar Ning Chang – VP Sales Greater China; iML, Exar Craig Lytle – VP System Products; Altera, Stretch, Exar Thomas Daniels – VP System Engineering; Synopsys, Exar

4

Fiscal 2015 Fourth Quarter Non-GAAP Results

Revenue of $43.9M – Revenue grew 57% Year-over-Year– Revenue declined 1% sequentially

Gross Profit of $21.3M and Gross Margin of 48.7% – Gross Profit Grew 66% Year-over-Year– Gross Margin Grew 280bps Year-over-Year

Operating Income of $5.9M – Highest level in 57 quarters– Up from $0.2M in Q4-14– Grew 5% Sequentially

EPS of $0.11 – Grew 740% Year-over-Year– Flat Sequentially

Note: Based on Non-GAAP financial data. 5

Industrial down 2.4% Sequentially– Power had strong Q/Q growth– Video surveillance declined Q/Q– Connectivity grew Q/Q

HeC declined 1% Sequentially– Display dropped modestly Q/Q as a result of

expected seasonality– LED lighting grew as design wins entered

production

Infrastructure Grew 2.1% Sequentially– Solid Q/Q growth in carrier class business

Fiscal 2015 Fourth Quarter Sales

$28mm

$44mm

Industrial46%

HeC36%

Infrastructure18%

Q4FY14

Q4FY15

Industrial70%

Infrastructure30%

Note: Based on Non-GAAP financial data. 6

Fiscal 2015 Fourth Quarter Sales

Asia74%

Europe16%Americas

10%

Sales by Geography

Note: Based on Non-GAAP financial data.

$44mm

POSC49%

POP24%

Direct27%

Sales by Channel

$44mm

7

Fiscal 2015 Full Year Non-GAAP Results

Revenue of $164.1M – Revenue grew 31% Year-over-Year

Gross Profit of $79.3M and Gross Margin of 48.3% – Gross Profit Grew 27% Year-over-Year– Gross Margin down from 49.9% in FY14.

Operating Income of $14.6M and EBITA of $21.2M – Operating Income Grew 29% Year-over-Year– EBITDA Grew 22% Year-over-Year

EPS of $0.29– Grew 16% Year-over-Year

Note: Based on Non-GAAP financial data. 8

Non-GAAP Revenue and Operating Income

FY09 FY10 FY11 FY12 FY13 FY14 FY15Oper. Income (Loss) ($k) -$8,587 -$10,450 -$11,716 -$6,924 $10,994 $11,331 $14,604Revenue ($k) $115,118 $134,878 $146,005 $130,560 $122,026 $125,322 $164,121

-$15,000

-$10,000

-$5,000

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

-$5,000

$15,000

$35,000

$55,000

$75,000

$95,000

$115,000

$135,000

$155,000

$175,000Revenu…

Oper. Inc. (Oper. Loss)

9 Note: Based on Non-GAAP financial data.

Review of Strategic Alternatives

Industry Consolidation– Mega Deals– Tuck-In Deals

Scarcity of Assets– Profitability– Scale– Innovation

Inbound Interest

Prudent Process– Comprehensive evaluation of Strategic Alternatives to enhance value for

stockholders– Business “as usual” to support customers and retain employees

10

Exar – Vertical Opportunities

Horizontal Components Represent a $1.5B SAM

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Key Growth Opportunity: XRP9710 – Fully Integrated Power Module with two programmable 6A outputs

Key Growth Opportunity: HDCVI– Key Partnership signed with Dahua Technology– Next Generation Camera Chip expected to be

released in Q3-16

Market Overview: Industrial and Embedded

Industrial and Embedded

Process Control / AutomationIndustrial IoTMedical Diagnostics / ImagingVideo SurveillanceLED Lighting

12

Market Overview: High-End Consumer

Key Growth Opportunity: Discrete and Integrated PMIC and Industry Leading P-GAMMA

Key Growth Opportunity: LED Lighting

High-End Consumer

Display Products for LCD TVsDisplay Products for MonitorsDisplay Products for TabletsCable Modem/Set Top BoxesLED Lighting

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China Panel / TV Makers are Expanding

⊙

⊙

⊙

⊙

★Beijing

Shanghai

Shenzhen

KunShan

⊙

⊙

⊙

Hefei

GuangzhouHuizhou

⊙Chengdu NanJing

⊙

Qingdao

China / Tablet

⊙WuHan

Chongqing⊙

G5

OTG5

DTG8.5

-XSG8.5

HF G6

G5

G6

G4.5, Tablet, SFCD G4.5

-CQ G8.5G8.5, TV, NB, TPC

MP: June ,’15

China Star G8.5

China Star G8.5 Fab2 (G8.5,OLED) MP: June,’15

-TMT

Market Overview: Infrastructure

Infrastructure

Enterprise Networking Enterprise ServersCarrier Class Hardware

Key Growth Opportunity: Point-of-Load Regulator for Next Generation Server

– Working with one of the world’s largest Server Manufacturers

– Key New Product to be released within a month

Key Growth Opportunity: XRP7724 – Quad Output, Fully Programmable Universal PMIC

– World’s first Digital PFM/PWM– World’s Best GUI - Power Architect– Designed into Intel Grantley Platform;

Working with Intel on Next Generation

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Advanced Product Mix Drives GM PerformanceGM%%

Sales

40.0%

42.0%

44.0%

46.0%

48.0%

50.0%

52.0%

54.0%

56.0%

58.0%

60.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Advanced Value Standard Gross Margin

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Exar Financial Summary

Q4FY14(Mar-14)

Q1FY15(Jun-14)

Q2FY15(Sep-14)

Q3FY15(Dec-14)

Q4FY15(Mar-14) FY14 FY15

Revenue $28.0M $32.6M $43.3M $44.3M $43.9M $125M $164M

Gross Profit $12.8M $15.7M $20.3M $22.0M $21.3M $63M $79M

Opex. $12.7M $15.0M $17.8M $16.4M $15.5M $51M $65M

Oper. Income $0.2M $0.7M $2.5M $5.6M $5.9M $11M $15M

EBITDA $1.7M $2.3M $4.1M $7.1M $7.7M $17M $21M

EPS $0.01 $0.02 $0.05 $0.11 $0.11 $0.25 $0.29

Gross Margin % 45.7% 48.2% 46.9% 49.7% 48.5% 50.4% 48.2%

Oper. Inc. % 0.7% 2.1% 5.8% 12.6% 13.4% 8.8% 9.1%

EBITDA % 6.1% 7.1% 9.5% 16.0% 17.5% 13.6% 12.8%

Note: Based on Non-GAAP financial data. 17

Fiscal 2016 First Quarter Non-GAAP Guidance

Revenue of $40M to $43M – Soft Infrastructure Quarter– Concerted effort to reduce channel inventory– Normalize weeks of inventory on hand– Prepare shelf space for ramp of new products

Gross Margin of 48% to 50%– Advanced Product Contribution to Revenue with Higher ASP and GM– Continued Focus on Reducing Cost and Manufacturing Overhead

EPS $0.10 to $0.12– Cost Reduction– Operating Expense Control

Note: Based on Non-GAAP financial data. 18

Q & A

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