• Arteris is like ARM Holdings (whose designs power most smartphones and tablets) but for the crucial internal communication systems and data highways *within* complex semiconductor chips.
• Think of Arteris as providing the internal "traffic control system" or "data network" *inside* advanced computer chips, much like Cisco Systems builds and manages networks for computers and servers to communicate *with each other*.

• FlexNoC: A silicon-proven interconnect IP product used for System-on-Chip (SoC) designs.
• FlexNoC Resilience Package: An on-chip data protection package that complements FlexNoC interconnect IP.
• Ncore: A silicon-proven and cache coherent interconnect IP product offering scalable, configurable, and area-efficient characteristics.
• CodaCache: A last-level cache semiconductor IP product.
• Physical interconnect aware NoC optimizer: A software tool that estimates physical layout effects during the architecture and logic development stages of an SoC interconnect design.
• FlexWay: An IP product designed for IP subsystem interconnect.
• FlexPSI: An IP product for establishing all-digital inter-chip links.
• FlexNoC Physical: A product that facilitates linking physical placement and routing tools.
• IP deployment software solutions: A suite of software solutions including specification, design, documentation, AI package, design data intelligence, and harmony trace.

Arteris (AIP) sells primarily to other companies. The provided background information does not explicitly list the names of its major customer companies. However, it does specify the markets in which its customers operate, indicating that its customers are companies involved in the following sectors:

• Automotive: Companies manufacturing vehicles or developing automotive electronics and systems.
• AI/Machine Learning: Companies creating hardware or software solutions for artificial intelligence and machine learning applications.
• 5G and Wireless Communications: Companies involved in developing and deploying 5G and other wireless communication technologies and devices.
• Data Centers: Companies providing infrastructure, hardware, or services for data centers.
• Consumer Electronics: Companies designing and manufacturing various consumer electronic devices.

Arteris, Inc. (AIP) faces several key risks to its business, primarily stemming from its financial performance, its business model's reliance on customer success, and geopolitical factors.

Key Risks to Arteris (AIP)

1. Challenges in Achieving and Sustaining Profitability: Arteris has consistently reported operating and net losses despite increasing revenues, driven by substantial investments in research and development to remain competitive. The company's financial health indicators, such as a negative operating margin and a low Altman Z-Score, highlight the challenge of transitioning to sustained profitability and managing its cash burn.
2. Dependence on Customer Product Success and Royalty Revenue Lag: A significant portion of Arteris's potential revenue, particularly its highly profitable royalty streams, is directly tied to the success of its customers' products in the market and their subsequent volume sales. There is a considerable time delay between the initial licensing of its intellectual property (IP) and the realization of meaningful royalty income. Delays in customer product launches or their failure to achieve market adoption can significantly impact Arteris's revenue. Additionally, the company exhibits reliance on a limited number of key licensees.
3. Geopolitical Risks and Exposure to the Chinese Market: Arteris operates globally, with a notable portion of its revenue originating from the Asia Pacific region, including China. This international exposure makes the company vulnerable to various geopolitical risks, such as military conflicts, changes in U.S. trade policies, tariffs, and export restrictions. Specifically, its significant reliance on the Chinese market, which constitutes a notable percentage of its revenues, makes it susceptible to trade disputes and regulatory changes that could adversely affect its revenue and market access.

Arteris (AIP) operates within several significant addressable markets related to semiconductor intellectual property (IP) and System-on-Chip (SoC) design.

• Network-on-Chip (NoC) Interconnect IP: Arteris's core NoC interconnect IP products, such as FlexNoC, address the global Network-on-Chip market. This market was valued at approximately $3.73 billion globally in 2025 and is projected to grow to $7.89 billion by 2033, exhibiting a Compound Annual Growth Rate (CAGR) of 10.5% from 2025 to 2033. Another estimate places the global NoC market at $5 billion in 2025, with a projection to reach $15 billion by 2033 at a CAGR of 15%. A third source indicates the market was valued at USD 1.2 billion in 2023 and is projected to reach USD 4.5 billion by 2031, growing at a CAGR of 18%. Arteris is recognized as a key player in this market. The increasing complexity of System-on-Chip (SoC) designs drives the adoption of NoC interconnects.

• Semiconductor Interconnect Market (Broader Category): This market, which includes Arteris's interconnect solutions, was valued at approximately USD 12.3 billion globally in 2024 and is projected to reach USD 20.5 billion by 2030, growing at a CAGR of 8.5%. The Asia Pacific region holds the largest share, with North America also being a dominant player.

• Semiconductor IP Market (Overall): Arteris's offerings fall under the broader semiconductor IP market. This global market was valued at approximately USD 5.9 billion in 2024 and is poised to grow to USD 11.56 billion by 2033, at a CAGR of 8.6%. Other reports indicate the global semiconductor IP market size was valued at USD 6.25 billion in 2025 and is estimated to increase to USD 12.60 billion by 2034, with a CAGR of 8.10%. Another projection values the market at approximately USD 8.8 billion in 2024 and forecasts it to reach around USD 35.7 billion by 2034, with a CAGR of 15.1%. The Asia Pacific region dominated this market with a 52.63% share in 2025.

• System-on-Chip (SoC) Market: Arteris's IP products are crucial for the design and deployment of SoCs. The global System-on-Chip market was valued at USD 173.91 billion in 2026 and is expected to grow at a CAGR of 7.46% to reach USD 249.19 billion by 2031. Other analyses show the global SoC market size was valued at USD 228.06 billion in 2025 and is projected to reach nearly USD 391.61 billion by 2032, growing at a CAGR of 8.03%. The Asia Pacific SoC market held a 37.6% revenue share in 2024, while North America accounted for nearly 22% of the global revenue share in 2023.

• Chiplet Market: Arteris's technologies, particularly FlexNoC and NCore, are positioned to address the complexity of chiplet architectures. The chiplet market is expected to reach $157 billion by 2030.

Arteris (AIP) is expected to drive future revenue growth over the next 2-3 years through several key factors:

1. Accelerated adoption in AI-enabled systems and advanced computing: The increasing demand for high-performance computing in artificial intelligence (AI) applications, including data centers and edge computing, is a significant growth driver. Arteris's Network-on-Chip (NoC) interconnect technology is crucial for managing the complex data movement in these AI-driven chips and chiplets, leading to accelerating adoption and rising production volumes.
2. Expansion into chiplet and multi-die architectures: The semiconductor industry's shift towards more complex, multi-die architectures and chiplet-based designs is creating a greater need for Arteris's interconnect solutions. Its technology is proven to address the associated interconnect challenges, leading to new design wins and volume deployments in this rapidly growing market segment.
3. Strategic acquisition of Cycuity and expansion into semiconductor cybersecurity: The acquisition of Cycuity in January 2026 broadens Arteris's product portfolio to include semiconductor cybersecurity assurance technology. This addresses a critical and growing industry concern regarding silicon security vulnerabilities, enhancing Arteris's market reach and product value.
4. Growth in variable royalty revenue and expanding customer base: Arteris anticipates continued growth in its variable royalty revenue stream, driven by increasing production volumes from its licensees across diverse markets such as automotive, enterprise computing, and consumer electronics. The company is also actively expanding its clientele and strengthening partnerships with major clients like AMD and NXP Semiconductors, translating into increased licensing activity and a broader customer base.
5. Innovation and new product launches, particularly FlexGen and Armv9 solutions: Arteris continues to introduce innovative products and expand its solutions. The FlexGen AI-driven Smart NoC IP, which uses AI-driven heuristics to optimize chip design and reduce power consumption, has seen strong adoption. Additionally, expanded solutions tailored for the Armv9 architecture are accelerating the development of cutting-edge automotive technologies, supporting new possibilities in autonomous driving and advanced driver-assistance systems.

Share Issuance

• Arteris completed its Initial Public Offering (IPO) on October 27, 2021, selling 5,000,000 shares at $14.00 per share, which generated gross proceeds of $70.0 million. The underwriters were also granted a 30-day option to purchase up to an additional 750,000 shares.
• As of December 31, 2025, Arteris filed a Registration Statement on Form S-3 to offer up to $200 million in securities and entered into an Open Market Sales Agreement for the sale of common stock totaling up to $75 million, aimed at ensuring liquidity and financial flexibility.
• The number of issued and outstanding common shares has progressively increased, from 34,625,875 as of December 31, 2022, to 40,724,936 as of December 31, 2024, and further to 44,268,816 by December 31, 2025.

Outbound Investments

• In January 2023, Arteris acquired Semifore, Inc., a provider of hardware/software interface (HSI) development tools.
• Arteris entered into a definitive agreement on December 11, 2025, to acquire Cycuity, Inc. for $45 million, with the aim of enhancing its semiconductor cybersecurity assurance product portfolio.
• The acquisition of Cycuity officially closed on January 14, 2026, integrating semiconductor cybersecurity assurance technology into Arteris' product offerings.

Capital Expenditures

• Capital expenditures for the twelve months ending December 31, 2023, were approximately $1.310 million, primarily allocated to purchases of property and equipment.
• For the twelve months ending December 31, 2024, capital expenditures were approximately $1.326 million, also mainly for purchases of property and equipment.
• The company projects capital expenditures of approximately $1 million for 2025, increasing to an estimated $2 million for 2026.