St microelectronics investor day 2012
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St microelectronics investor day 2012 St microelectronics investor day 2012 Presentation Transcript

  • Forward Looking Statements 1 Some of the statements contained in this release that are not historical facts are statements of future expectations and other forward-looking statements (within the meaning ofSection 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended) that are ba sed on management’s current views and assumptions,and are conditioned upon and also involve known and unknown risks and uncertainties that could cause actual results, performa nce or events to differ materially from those in suchstatements due to, among other factors:• the possible impact of an impairment charge on the carrying value of the ST-Ericsson investment in our books of approximately $1.7 billion as well as on our consolidated results of the successful execution of ST-Ericssons new strategic direction plan and its related savings announced on April 23rd 2012;• changes in demand in the key application markets and/or from key customers served by our products, including demand for products where we have achieved design wins and/or demand for applications where we are targeting growth, all of which make it extremely difficult to accurately forecast and plan our future business activities;• our ability in periods of reduced demand or visibility on orders to reduce our expenses as required, as well as our ability t o operate our manufacturing facilities at sufficient levels with existing process technologies to cover our fixed operating costs;• our ability, in an intensively competitive environment, to identify and allocate necessary design resources to successfully d evelop and secure customer acceptance for new products meeting their expectations as well as our ability to achieve our pricing expectations for high-volume supplies of new products in whose development we have been, or are currently, investing;• the financial impact of obsolete or excess inventories if actual demand differs from our expectations as well as the ability of our customers to successfully compete in the markets they serve using our products;• our ability to maintain or improve our competiveness when a high percentage of our costs are fixed and are incurred in Euros and currencies other than U.S. dollars, especially in light of the increasing volatility in the foreign exchange markets and, more particularly, in the U.S. dollar exchange rate as compared to the Euro and the other major currencies we use for our operations;• the outcome of ongoing litigation as well as any new litigation to which we may become a defendant;• changes in our overall tax position as a result of changes in tax laws, expected income or the outcome of tax audits, changes in international tax treaties which may impact our results of operations as well as our ability to accurately estimate tax credits, benefits, deductions and provisions and to r ealize deferred tax assets;• the impact of intellectual property (“IP”) claims by our competitors or other third parties, and our ability to obtain requir ed licenses on reasonable terms and conditions;• product warranty or liability claims based on epidemic or delivery failures or recalls by our customers for a product containing one of our parts;• availability and costs of raw materials, utilities, third-party manufacturing services, or other supplies required by our operations; and• current economic uncertainties involving the possibility during 2012 of limited growth or recession in global or important regions of the world economy, sovereign default, changes in the political, social, economic or infrastructure environment, including as a result of military conflict, social unrest and/or terrorist activities, economic turmoil, as well as natural events such as severe weather, health risks, epidemics, earthquakes, tsunami, volcano eruptions or other acts of nature in, or affecting, the countries in which we, our key customers or our suppliers, operate and causing unplanned disruptions in our supply chain and reduced or delayed demand from our customers.Such forward-looking statements are subject to various risks and uncertainties, which may cause actual results and performance of our business to differ materially and adversely fromthe forward-looking statements. Certain forward-looking statements can be identified by the use of forward-looking terminology, such as “believes,” “expects,” “may,” “are expected to,”“should,” “would be,” “seeks” or “anticipates” or similar expressions or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy, plans orintentions.Some of these risk factors are set forth and are discussed in more detail in “Item 3. Key Information — Risk Factors” included in our Annual Report on Form 20-F for the year endedDecember 31, 2011, as filed with the SEC on March 5, 2012. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actualresults may vary materially from those described in this release as anticipated, believed or expected. We do not intend, and do not assume any obligation, to update any industryinformation or forward-looking statements set forth in this release to reflect subsequent events or circumstances. 1
  • Agenda 2 Presentation SpeakerTime9:00 Introduction T. Sorensen9:05 Company Strategy & Vision C. Bozotti9:25 ST Business & Financial Roadmap P. Lambinet9:55 ST-Ericsson D. Lamouche10:20 Manufacturing & Technology R&D J.M. Chery10:50 Break11:05 PANEL: Digital & Multimedia Convergence G.L. Bertino, M. Cetto, R. Krysiak, P. Lambinet,11:35 PANEL: Power P. Grimme , F. Guibert, M. Monti, C. Papa12:05 PANEL: Sense E. Aussedat, M. Cassis, C. Dardanne, B. Vigna12:35 Q & A Panel C. Bozotti, J.M. Chery, C. Ferro, P. Lambinet, D. Lamouche, C. Papa1:30 Lunch2:30 Breakout Sessions5:00 to 6:30 Reception
  • Agenda – Breakout Sessions 3 New Pearl Plymouth Minskoff Nederlander Palace Amsterdam Imaging, BiCMOS Digital Analog, MEMS &2:30 – 3:00 ST-Ericsson Convergence ASIC & Silicon Automotive Sensors Photonics Industrial & Power Analog, MEMS &3:00 – 3:30 Discretes Automotive Microcontrollers Sensors Imaging, BiCMOS Digital Industrial & Power3:30 – 4:00 ST-Ericsson Convergence ASIC & Silicon Discretes Photonics Digital Industrial & Power4:00 – 4:30 Convergence Automotive Microcontrollers Discretes Imaging, BiCMOS Analog, MEMS &4:30 – 5:00 ST-Ericsson ASIC & Silicon Microcontrollers Sensors Photonics5:00 – 6:30 Reception – MAJESTIC Ballroom Foyer (5th Floor) • Automotive Marco Monti, Paul Grimme • Analog, MEMS & Sensors Benedetto Vigna, Marco Cassis • Digital Convergence Gian Luca Bertino, Robert Krysiak • Imaging, BiCMOS ASIC & Silicon Photonics Eric Aussedat, Flavio Benetti • Industrial & Power Discretes Carmelo Papa, Matteo Lo Presti • Microcontrollers Claude Dardanne, Francois Guibert • ST-Ericsson Carlo Ferro, Ronen Ben-Hamou
  • ST Business & Financial RoadmapPhilippe LambinetExecutive Vice PresidentCorporate Strategy OfficerGeneral Manager, Digital Sector
  • About ST 2• A global semiconductor leader• The largest European semiconductor company• 2011 revenues of $9.73B(1)• Approx. 50,000 employees worldwide(1)• 12,000 people working in R&D• 12 manufacturing sites• Listed on New York Stock Exchange, Euronext Paris and Borsa Italiana, Milano (1) Including ST-Ericsson, a 50:50 joint venture with Ericsson
  • Partners of our Customers Worldwide 3with 78 sales offices in 36 countries
  • Focused Product Segments 450/50 JV with Ericsson Analog & Power Wireless Digital Automotive Microcontrollers Discrete Digital Imaging, BiCMOS ASIC Automotive Analog, Micro, Industrial & Convergence & Silicon Photonics Products MEMS & Memory & Power Group Group Group Sensors Security Discrete (DCG) (IBP) (APG) (AMS) (MMS) (IPD) 4
  • FY11 Revenues by Product Segments 5 Wireless ST-Ericsson Automotive (APG) • #1 in China • #1 ASIC 16% 17% • #1 Smart Power • #3 WorldwideDigital• #1 in Set-top Box outside US• #2 in Set-top Box Worldwide 19% Analog, MEMS & 35% Microcontrollers (AMM) • #1 in MEMS 13% Sensors and MicroactuatorsPower Discrete (PDP)• #1 in Thyristor• #1 HV>400V PowerMOS ST’s exposure to the Wireless segment* at the earnings level *See appendix is 9% Source: IHS iSuppli 2011 rankings
  • Our Vision 6
  • 7
  • 1987 8One Device = One Function
  • 2012 9Connecting Users to Content and Services
  • Technology Adoption Rates Acceleration 10 Source: Charlie Catlett, Argonne Natl Laboratory
  • Convergence of Functionalities 11 Camera Battery life Parental control GPS Camcorder Home sharing Social Networks Web browsing Apps stores Gaming Picture stabilization Content sharing Email Content personalization SMS MP3 player Data security
  • 40% Application Drivers towards 2015 12 35% SSD 30% Tablets 25% Smartphones 20% (4G CAGR > 100%) Building & Home Automation2011 - 2015 CAGR 15% Energy Generation & Distribution Fiber Appliances 10% Broadband Ebooks WLAN Acess/Routers Medical Fab Automation HDD STB Game Consoles 5% Infotainment Automotive Body TV 0% Computer Systems Printer -5% Flat Panel Monitor -10% -15% Mobile Phone 1G/2G -20% 100 1,000 10,000 100,000 Market Size in 2015 ($M) Automotive Electronics Categories Consumer Electronics Categories Data Processing Categories Industrial Electronics Categories Wired Communications Categories Wireless Communications Categories Source : IHS iSuppli (SAM, excl. DRAM, Flash, MPUs, Opto)
  • Key Attributes 13Display Interact Connect Power
  • Key Requirements 14 Performance Interface Smart World Power SecurityMultimedia Convergence + Sense & Power
  • Leading Sense & Power 15 Analog MCUs Key EnablersMEMS/Sensors ● Leading position in key products Power Management ● Rich portfolio of technologies ● Broad system know-how Supporting our target markets Automotive Communications Computer Consumer Industrial & Peripherals & Other
  • Growth Drivers for Sense & Power 16 Healthcare• Aging/growing population & Security • Increasing threats Wellness Energy Automotive Growth • Rising global car • Finite natural resources production and silicon content drive market • New opportunities (HEV/EV)
  • New Sense & Power Products in 2012 17 • Analog & MEMS • Automotive • Motion MEMS Combo • Power Amplifier • Altimeter • ABS, Air Bag, Powertrain, Smart Power • Microphone • PowerTM MCU • Touch screen controllers • Operational amplifiers • Smart Sensors (RF, MCU, Sensor)• Memory, Microcontrollers & Security • Industrial & Power Discrete • MCU Cortex - M0/M4 families • IGBT for motor control, solar and UPS • 32-bit F0 series • Amoled power management • 32-bit F3/F4 Series • Power MOSFET MDmesh V • Secure MCU (ST31 on ARM SC000 core) • Smart Grid: • NFC for mobile handsets • Power Line Modem • Android, Windows 8 and other • Photovoltaic ICs • EEprom dual interface
  • Driving Multimedia Convergence 18 Digital TV Digital & Monitor Set-Top Box Automotive Infotainment Network Infrastructure (ASIC) Key Enablers SmartphonesImaging ● Low-power and high performance CMOS & Tablets process roadmap ● Leading position in all converging markets ● Broad system know-how
  • Growth Drivers for Multimedia Convergence 19 Secure, ubiquitous, personalized services Explosion of Emerging digital markets content Growth
  • New Multimedia Convergence Products in 2012 20• Digital Convergence Platform • Imaging • Digital TV: Newman • Imaging diversification • Set-top Box: Orly • DisplayPort • Consumer, computer, • Premium monitors: Athena automotive, medical • DisplayPort based Smart Connectivity: • Expanding customer base Pegasus • Networking ASICs
  • Next Step in Multimedia Convergence 21• We will offer a unified processing platform to serve all markets• We will leverage our broad system knowledge and customer relationships Mu Specific 3,000 IPs by Mobile PCs Market 2,500 E-book Readers HW/SW Handheld Video Game Players Video Game Consoles 2,000 Digital Picture Frames Digital Still Cameras 1,500 Camcorders ST Portable navigation Residential Gateways Unified 1,000 Tablets Processing Smart Phones Platform Car Infotainment 500 Smart TVs Digital Set Top Boxes 0 2010 2016 Source: IHS iSuppli
  • Our Strengths 22• Expertise in leading edge  • CPU and graphics  platform • Power consumption • Ecosystems  • Video quality  • Google, Windows, Adobe, … • Security • Customer relationships  • Reliability 
  • ST Unique Offer 23 Process Key IPs Functions Packages Products Markets CPU cores Display QFP 32 nm Multimedia ConvergenceMore Moore Video composition BGA Platforms & display Industrial & Others 28 nm User CMOS Logic LOC A/V decode Interf ace Transport LGA ASICs Sense & 28 nm FDSOI GPU Communications power Position Sensors Security CMOS Analog 55/40 nm SOP Mixed Signal/RF DDR i/f More Than Moore Microcontrollers Motion (MCUs) USB SiP Computer CMOS Embedded 80/55 nm & Peripherals Non Volatile Memory SATA WLCSP HDMI Multimedia Audio Bipolar CMOS / Analog ICs & convergence 160/110 nm DMOS PCIe DIP MEMS MCU TO2xxx Consumer 22 um/AR 1:25 MEMS Video Analog Discrete & SMDP Integrated Gyroscope Power 0.4 mm Power & Discrete Devices Accelerometer Networking TSSOP Automotive
  • ST Total Revenues 24  FY11 total revenues = $9.73B  Wholly-Owned Businesses +1% year-over-year  Wireless down 30% 12000 10000US$M 8000 6000 4000 2000 0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 ST ex Flash Wholly-Owned Wireless 24
  • Billings Bottomed in Q112 25  ST Q112 Revenues = $2.02B  Sequentially, Separate Revenue Dynamics Again  Wholly-Owned Businesses down 3%  Wireless down 29%  Q212 Revenue Guidance: +7.5%; +/- 3 percentage points 3000 2500US$M 2000 1500 1000 500 0 Wholly-Owned Wireless Guidance
  • Wholly-Owned Business Performance 26ST’s Wholly-Owned Businesses outgrew ...expanding its market share toits SAM by +220bps during 2011... 5.8% from 5.7% 1.5% 10.0 6.0% 1.0% Revenues (USD bn) Market ShareGrowth (%) 0.5% 5.0 5.0% 0.0% -0.5% -1.0% 0.0 4.0% -1.5% 2010 2011 SAM excl. WLS ST-WO Revenues Market Share • SAM = Serviceable Available Market • SAM Wholly-Owned Businesses = SAM excluding Wireless SAM • ST Wholly-Owned Businesses are comprised of Automotive, Digital, Analog, MEMS & Microcontrollers and Power Discrete Source: WSTS, STMicroelectronics
  • Wholly-Owned Business vs. Wireless 27 Wholly-Owned* Wireless **In US$M FY10 FY11 Q112 FY10 FY11 Q112Revenues 8,127 8,183 1,727 2,219 1,552 290Operating Income (Loss) before impairment, 1,063 933 13 (483) (812) (293)restructuring & one-time itemsOperating Margin 13.1% 11.4% 0.8% na na naMinority Interests na na na 297 413*** 168 * ST Wholly-Owned Businesses are comprised of Automotive, Digital, Analog, MEMS & Microcontrollers, Power Discrete and Others ** 100% of ST-Ericsson’s results (out of which 50% from the competence of ST) as consolidated by ST plus other margins of ST rel ated to ST- Ericsson’s business *** Q411 Wireless Minority Interests exclude the impact of $92M related to ST-Ericsson valuation allowance
  • ST Gross Margin & Opex Evolution 2840% Gross Margin Evolution35%30% Progressive Recovering from low disappearance of25% volumes recorded unused capacity from mid-2011 and charges and20% one-time arbitration improvement in Q111 Q211 Q311 Q411 Q112 Q212 award manufacturing Gross Margin - Reported Unused Capacity efficiencies Arbitration Award Guidance1,000 800 Operating Expenses Evolution 600 US$M 400 Opex expected to be: Key program:  Stable in $ in Q212 ST-Ericsson 200  Down in $ in H212 restructuring 0 Q111 Q211 Q311 Q411 Q112 Q212 R&D SG&A
  • Net Financial Position* 29US$M Reported Attributable to ST Expect net financial1,400 $1.27B position attributable to ST1,000 to be stable to slightly up at the end of 600 December 2012 200-200 12/31/08 12/31/09 12/31/10 12/31/11 3/31/2012 12/31/12e-600 Maintained strong net cash position throughout FY11 and Q112 despite weak market conditions from mid-2011 as well as a specific situation at a major customer  While funding $1.38B of capex…  …and absorbing our portion of ST-Ericsson investment…  …redeemed $764M in debt and paid $415M in dividends *See appendix **Includes ST-Ericsson short-term debt to Ericsson of $489M as of Mar. 31, 2012, $400M as Dec. 31, 2011, and $75M as of Dec. 31, 2010.
  • Dividend Evolution 30$0.40 9% • STM dividend yield of >8%$0.35 8% among the highest in the semiconductor industry 7%$0.30 6% • ST cumulative dividends over$0.25 the past 6 years (including the 5% $0.40 per share submitted to$0.20 the 2011 AGM for approval) 4% have been > $1.5B$0.15 3% • Quarterly dividend offers a$0.10 steady income to 2% shareholders and also$0.05 1% potential stock price revaluation$0.00 0% Dividend Yield *Source: Bloomberg (May 21, 2012) **2011 annualized dividend as submitted to the Annual General Meeting 30
  • Wireless 312011 Revenues: $1.55B; -30% Y/Y  ST-Ericsson to lower breakeven point • 50% Minority Interest  Revised, more flexible business model  ST expects a significant reduction in losses at ST-Ericsson in 2012 ST-Ericsson Operating Profitability Improvement 16% 500 35% 0 0% -500 -35% -1,000 -70% 2009 2010 2011 Mid term Operating Profit Operating Profit Margin
  • Digital 32 Operating Margin Mid-Term Drivers2011 Revenues: $1.84B; -15% Y/Y  Realize synergies related to unified processing platform  Capitalize on recovery in STB market  Ramp new products  TV, monitors, Smart Connectivity products  Communication infrastructure ASICs  Market/product diversification in Imaging  New applications – proximity sensing, user detection, etc. 19%  New markets – auto, gaming, medical, security, sports Operating Margin Expansion: Mid-term Target: Mid-Single Digit % 10% 5% 0% Q111 FY11 Q112 -5% -10% -15%
  • Power Discrete Products (PDP) 33 Operating Margin Mid-Term Drivers2011 Revenues: $1.24B; -6% Y/Y  Capitalize on market megatrends  Energy saving, automations green & renewable energy  Improve product mix  IGBT & Power Modules drive motor control applications  Breakthrough low voltage Power MOSFET technology (OFT)  Manufacturing flexibility 13%  Efficient front/back-end capabilities  Singapore conversion to 200mm Operating Margin Expansion: Mid-term Target: Mid-Teens % 20% 15% 10% 5% 0% Q111 FY11 Q112 -5%
  • Automotive Product Group (APG) 34 Operating Margin Mid-Term Drivers2011 Revenues: $1.68B; +18% Y/Y  Capitalize on solid growth in Auto market  Increasing pervasion of electronics in the car  Volume opportunities in emerging markets  New and innovative products  32-bit Power MCU in eFlash, RF for Active Safety  Leader in BCD technologies; introducing new generation 17%  Complete system offer in emerging markets Operating Margin Expansion: Mid-Term Target: Mid-Teens % 15% 10% 5% 0% Q111 FY11 Q112 34
  • Analog, MEMS & MCUs (AMM)* 35 Operating Margin Mid-Term Drivers2011 Revenues: $3.38B; +7% Y/Y  Rapid growth in Motion MEMS / expanding product portfolio  Microphone, pressure sensor, compass, etc.  Enlargement of 32-bit MCU portfolio (GP & Secure)  Ramping new BCD technologies for motor control  New products for SmartGrid and OLED display drivers  New wave of advanced analog products  Expansion of customer base and targeted applications 35% Operating Margin Expansion: Mid-Term Target: Low-Twenties % 25% 20% 15% 10% 5% 0% Q111 FY11 Q112 *New AMM perimeter starting January 1, 2012
  • ST Financial Model 36ST remains committed to delivering on a fully consolidated basis:9% to 12% operating margin12% to 18% return on net assets (RONA) target16% to 22% RONA attributable to ST
  • Key Programs to Increase Value 37Increase Shareholder Value Expand ST- Boost Cost Customer EricssonInnovation Reduction Base Turnaround
  • Appendix 38 2012 Trends2011
  • Financial Performance 39In US$M, except EPS FY10 Q111 Q211 Q311 Q411 FY11 Q112Net Revenues 10,346 2,535 2,567 2,442 2,191 9,735 2,017Gross Margin 38.8% 39.1% 38.1% 35.8% 33.4% 36.7% 29.6%Operating Income (Loss) before impairment, 580 142 114 (13) (123) 121 (280)restructuring & one-time items*Operating Margin before impairment, restructuring & one- 9.2% 9.9% 9.1% 4.3% (0.2%) 6.0% (6.5%)time items attributable to ST*Net Income – Reported 830 170 420 71 (11) 650 (176)EPS Diluted 0.92 0.19 0.46 0.08 (0.01) 0.72 (0.20)Adjusted EPS Diluted* 0.75 0.20 0.14 0.09 (0.01) 0.41 (0.14)Free Cash Flow* 961 51 (250) (136) 47 (288) 98Net Financial Position, adjusted for 50% investment in 1,227 1,255 1,293 1,134 1,167 1,167 1,267ST-Ericsson*Effective Exchange Rate €/$ 1.36 1.33 1.37 1.40 1.36 1.37 1.33
  • Glossary 40• Free cash flow is defined as net cash from operating activities minus net cash from (used in) investing activities, excluding payment for pu rchases of and proceeds from the sale of marketable securities (both current and non-current), short-term deposits and restricted cash. We believe free cash flow provides useful information for investors and management because it measures our capacity to generate cash from our operating and investing activities to sustain our operating activi ies. Free cash flow is not a U.S. GAAP measure and does t not represent total cash flow since it does not include the cash flows generated by or used in financing activities. In addit ion, our definition of free cash flow may differ from definitions used by other companies.• Net financial position: resources (debt), represents the balance between our total financial resources and our total financial debt. Our total financ resources include cash and cash ial equivalents, net of bank overdrafts, if any, current and non-current marketable securities excluding Micron shares received in connection with the sales of Numonyx, short-term deposits and non-current restricted cash, and our total financial debt includes short term borrowings, current portion of long-term debt and long-term debt, all as reported in our consolidated balance sheet. We believe our net financial position provides useful information for investors because it givesevidence of our global position either in terms of net indebtedness or net cash position by measuring our capital resources based on cash, cash equivalents and marketable securities and the total level of our financial indebtedness. Net financial position is not a U.S. GAAP measure.• Return on Net Assets (RONA) is the ratio of operating income before impairment and restructuring charges divided by average net assets used during the pe riod. ST defines average net assets as average total assets net of total liabilities as reported in our consolidated balance sheet excluding all itemsrelated to our financial position such as cash and cash equivalents, marketable securities, short term deposits, restricted cash, bank overdrafts, current portion of long term debt and long term debt.• Operating income before impairment, restructuring and one time item excludes impairment, restructuring charges and other related closure costsand NXP Arbitration award.• Operating income before impairment, restructuring and one-time item attributable to ST is calculated as operating income before impairment, restructuring and one time item excluding 50% of ST-Ericsson operating loss before impairment and restructuring as consolidated by ST.Operating margin before impairment, restructuring and one time item attributable to ST is calculated as operating income before impairment, restructuring and one time item attributable to ST divided by reported r evenues excluding 50% of ST-Ericsson revenues as consolidated by ST. Return on Net Assets (RONA) attributable to ST is calculated as annualized operating income before impairment, restructuring and one time item attributable to ST divided by reported net assets excluding 50% of ST-Ericsson net assets as consolidated by ST.• Adjusted net earnings and earnings per share (EPS) are used by our management to help enhance an understanding of ongoing operations and to communicate the impact of the excluded items. Adjusted earnings excludes impairment, restructuring charges and other related closure costs attributable toST, the impact of equity investment divestiture and subsequent sale of Micron shares, other-than-temporary impairment (OTTI) charges and realized gain on financial assets, NXP Arbitration award net of the relevant tax impact.• Consolidation of ST-Ericsson: ST-Ericsson, a joint venture owned 50% by ST, began operations on February 3, 2009 and is consolidated into ST’s operating resul s as of that date. ST- t Ericsson is led by a development and marketing company consolidated by ST. A separate platform design company providing platf orm designs mostly to the development and marketing company is accounted for by ST using the equity method.• Wireless Segment: As of February 3, 2009, “Wireless” includes the portion of sales and operating results of the 50/50 ST-Ericsson joint venture as consolidated in the Company’s revenues and operating results, as well as other items affecting operating results related to the wireless business.• Sales recorded by ST-Ericsson and consolidated by ST are included in Telecom and Distribution 40
  • Didier LamouchePresident and Chief Executive OfficerST-Ericsson
  • The new strategic direction
  • Our roadmap to success 2014 Success 2013 Growth 2012 Stabilization3
  • What it takes to transform our company Culture • From technology focus to customer focus Company Organization • Sustainable • Execution profitability • Simplicity • From brilliant ideas to Customers products delivered on • Speed • Engage with market time • Focus shapers Products • Diversification • Clear market strategy • Focused portfolio approach • Differentiation Repositioning our business model4
  • Our strategic objective and direction Become a sustainable and profitable technology leader in the wireless industry, by repositioning our whole business model and by leveraging our strength in system integration5
  • The value is in system integration System ModAp+ Connectivity System Solution System + service integration Apps ModemModAP RF, Power Processor AMS System integration Integration Platform Connectivity RF, Power AMS Modem Processor Chipset SW System integration RF, Power Modem Processor Connectivity AMS SW Complexity RF, Power Connectivity AMS Time6
  • ModAp systems as a key strategic differentiating offering through partnerships ∙ Focusing the R&D portfolio to deliver highly competitive complete system solutions in the form of integrated ModAp platforms ∙ Repositioning whole business model to develop key building blocks either directly or through partnerships ModAp system integration RF Application Modem Connectivity Power Processor Analog mixed signal • Continue to develop • Partnership with ST • Build on current • Build on current modem IP for ModAp • Transfer of R&D capabilities capabilities integration and to activities and offer thin modems to • Develop either directly headcount or through customers • Jointly promote partnerships and • Possibly license standalone APEs and alliances modem IP to 3rd thin modems parties ∙ Full continuity of ST-Ericsson committed roadmap and current customer engagements7
  • Application processor partnership with ST Combining ST and ST-Ericsson Market-specific competencies in one Team Complete platforms Development of common core APE Common Common Core APE Core APE Common Core APE Development CPU Graphics organization Video Imaging Common Display Security IPs Application Specific IPs8
  • Partnership value for ST-Ericsson Value for ST-Ericsson ST 3rd Party Standalone Roadmap continuity = - = Addressable market + + = R&D cost reduction & ++ + = synergies Fixed cost to variable ++ ++ = Royalties - (long term) -- = Cash savings ++ + = ST Partnership has the highest value for ST-Ericsson9
  • Roadmap continuity a key decision factor With a 3rd party ∙ Timing for our next generation ModAp platform significantly delayed In Production/Sampling 2012 2013/2014 2015 IMG 2xA9 Next Gen L8540 1.85G Partner A 100 42 Next Gen Partner B ARM ARM IMG 2xA9 2xA9 To be 2xA9 U8500 1G U8520 1.2G Announced 1.2G 100 14 14 4210
  • Roadmap continuity a key decision factor With ST ∙ Roadmap and revenue continuity ∙ Full continuity for customers investment in our platforms today ∙ Timing for next generation shorter In Production/Sampling 2012 2013/2014 2015 IMG IMG IMG Rogue 2xA9 To be 2xA9 Next Gen 2xA15 L8540 1.85G Announced 2+G ST 2+G 100 100 150 42 42 84 ARM ARM IMG 2xA9 2xA9 To be 2xA9 U8500 1G U8520 1.2G Announced 1.2G 100 14 14 4211
  • Execution efficiency as a revenue lever Product definition SW Development IC Development System Development Customer Engineering Manufacturing For Illustrative purposes only ∙ Improve R&D execution & accelerate time-to-market, while reducing operating expenses ∙ Consolidation into a significantly smaller number of sites, specialized by technology ∙ Develop integrated excellence centers delivering larger portion of system value chain ∙ Increase revenues through faster R&D execution12
  • Lower the breakeven point ∙ Global workforce reduction of about 1,700 Operating Profitability employees worldwide*, including the headcount that would be transferred to ST Improvement 500 35% ∙ Reducing R&D costs through partnership and site consolidation ∙ Reduction of SG&A expenses by about 25 % versus 2011, streamlining the general and administrative activities 0 0% ∙ Discussions with employee representatives ongoing and on track ∙ Partnership for application processors with ST -500 -35% ∙ Transfer fixed cost to variable ∙ Achieve scale to support sustainable execution ∙ On track for closing July 1st -1,000 -70% ∙ Target annualized net savings of $320M from new 2009 2010 2011 Mid and on-going restructuring plans on completion end term of 2013 Operating Profit Operating Profit Margin ∙ Restructuring charges $130-150M (including remaining charges related to ongoing restructuring plan to be completed at 2012-end) through completion ∙ Bring breakeven point just below $600M per quarter13
  • Addressing the right market
  • Wireless industry (r)evolution • From component to platforms • Rapid disruption in mobile OS 100% 80% Other ∙ Open source (Android + Linux) taking 60% Blackberry OS over 50% market share in 3 years 40% Symbian Windows Phone ∙ In the PC industry open source (Linux) 20% iOS has only gone from 2% to 5% in the 0% Android last 10 years 2009 2010 2011 Q1 2012 Source: Strategy Analytics, May 2012, ABI, March 2012 2Q 2009 Volume 4Q 2011 Volume Share Share • Drastically altered smartphone Nokia RIM 41% 19% Apple Samsung 24% 23% device maker landscape Apple 13% Nokia 13% HTC 6% RIM 9% Samsung 3% HTC 6% Source: Strategy Analytics, May 201215
  • Highest smartphone volumes in mainstream 1000 900 800 Premium 700 600Units Mn High 500 Will be addressed by integrated 400 Mid ModAp application 300 processor and 200 modem solutions 100 Entry 0 2012 2013 2014 2015 Source: Strategy Analytics, Dec 2011 Targeting above 10% market share in volume by 2014 16
  • ST-Ericsson executing on Android Android volume market share Android volume market share Q3 2011 Q1 2012 Others Others 2% 2% Chinese 16% Chinese 22% Sams ung Japanese 38% 5% Samsung Motorola Japanese 46% 7% 4% Motorola LG 6% 6% Sony LG 9% H TC 6% Sony 17% 7% HTC 7% Source: Strategy Analytics, May 2012 NovaThor ModAp platforms now in 10 devices already launched with four top tier Android OEMs and multiple regional players17
  • CPU 2012 2013DMIPS Q1 Q2 Q3 Q4 Q1 Q2 ST-Ericsson well Premium positioned in the LTE ModAp High platforms NovaThor landscape (NovaThor NovaThor L9540) L8540 Mid NovaThor Entry Competitor products18
  • Product Roadmap
  • Our approach Integrated ModAp solutions for industry-leading bill of material and size Leading thin modems for any device Full complement of connectivity and enhancements20
  • HSPA Roadmap LTE In Production/Sampling 2012 2013/2014 ARM ARM Partnership with ST for future A9500 A9540 application processors 2xA9 2xA9 1.2G 1.85G U9500 L9540 M5730/80 21 M7400/ 100 150 M7300 42 M74XX 84 IMG IMG IMG FD-SOI FD-SOI Rogue ModAps L8540 2xA9 1.85G To be Announced 2xA9 2+G To be Announced 2xA15 2+G 100 100 150 42 42 84 ARM ARM IMG U8500 2xA9 2xA9 To be 2xA9 1G U8520 1.2G Announced 1.2G 100 14 14 42 GPU IP & speed (MHz) ARM Processor & Speed (GHz) Modem DL Speed (Mbps) CG2900 CW1100 CG2905 CW1250 To beConnectivity GBF W LAN GBF W LAN announced21
  • A disruptive innovation in modem technology Thor™ M7400 • Groundbreaking architecture • SW Modem • Mass market LTE • Mid to premium devices Future architecture investment – scalability and stability LTE 100+50Mbps >60% size 1st generation reduction compared Modem PCB area: to solutions ~1400 mm2 on the market Chipset area: 2nd today 530 mm2 generation Same board as to the left with picture edited to show Thor M7400 size Power consumption S ource: UBM TechInsigths & S T-Ericsson. M emory excluded/C2C.22
  • Need to master the whole chain ST- Competitor Competitor Competitor Competitor Ericsson A B C D Application Processor LTE Modem Integration capabilities (ModAp) Multiple OS support Advanced silicon technology Mastering the supply chain Strong Good Developing23
  • Differentiation with FD-SOI Technology ∙ FD-SOI technology offers: ∙ NovaThor L8540 in FD-SOI would have ∙ More GHz and less power ∙ Operation up to 2.5Ghz ∙ Reuse of existing design ∙ 2x the performance possible at 0.6V ∙ At comparable cost ∙ 35% less power operating at max performance of NovaThor L8540 ∙ Working with ST ∙ For a typical smartphone this translates to: ∙ 4 hours more high-speed browsing ∙ 2.5 hours more HD video playback ∙ 2 hours more HD video recording ∙ Or an additional full waking day of use24
  • Customer traction continues
  • Latest NovaThor™ phones Samsung Galaxy Beam Motorola XT760 Dual core 1GHz HD camcorder Dual core 1GHz HD camcorder 5 Mpixel camera 8 Mpixel camera Integrated projector Samsung Galaxy Xperia™ sola Ace 2 by Sony Dual core 800MHz Dual core 1GHz HD camcorder HD camcorder 5 Mpixel camera 5 Mpixel camera26
  • Continuing to build momentum Samsung Sony Samsung Samsung Samsung Motorola Via Samsung Galaxy S Advanced X peria P Galaxy S 4G Exhibit 4G Infuse 4G X T760 U8500 Sidekick 4G At rix 2 Sharp Panasonic Nokia Samsung Sony HTC Sensation Ont im Motorola Aquos Eluga T7 Galaxy Beam X peria sola Z710t WP8500 Tablet Sony Nokia Samsung Sony Panasonic Lenovo 702T Tablet P/S Galaxy Ace2 X peria U Toughbook ThinkPad27
  • Conclusion ∙ The wireless industry has gone through dramatic changes 2014 ∙ adapted our strategy to cope with new landscape Success ∙ Clear path to success defined ∙ execution of product delivery is priority one focus ∙ major re-positioning and actions in 5 months ∙ major organization re-alignment toward accountability and 2013 execution focus Growth ∙ strategy re-definition and main steps taken ∙ cost reduction roadmap defined ∙ Early signs of recovery visible ∙ successful bring-up of 6 smartphones from market leaders in 2012 last 3 months Stabilization ∙ Q2 sequential growth over 10% ∙ Confident on future success despite challenges28
  • Thank you
  • Manufacturingand Technology R&DJean-Marc CheryExecutive Vice PresidentChief Manufacturing and Technology Officer
  • 21. Introduction
  • Complete Products, IPs, 3 & Technologies Portfolio Power MEMS Smartphones TV & digital Analog MCUs / ASICS Automotive Imagingmanagement sensors and tablets set-top boxPower & Analog Mixed MEMS BCD eNVM Advanced CMOSDiscrete Signal/RFLeadframe package Leadframe package Laminated substrate Laminated substrate WLSP & 3D MEMS leaded / leadless leaded / leadless package wired package flipchip Integration
  • Technology R&D Model 4
  • Technology R&D Model 5
  • Manufacturing Model 6 Flexible and independentmanufacturing
  • 72. Technology R&D
  • Multimedia Convergence: 8 The Ideal TechnologyMultimedia convergence is about… Performance Design Power simplicity leakage Cost of Area scaling ownership
  • Multimedia Convergence: 9 28nm Bulk Weaknesses Peak performance vs. energy efficiency 500% 4.7x 100% Peak Performance (DMIPS/mW)Energy Efficiency (DMIPS) 400% 80% 300% 60% 200% 40% 100% 20% 7% 0% 0% 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 Vdd Transistor performance improvement Gain by traditional scaling Gain by innovation 100% Relative % Improvement 80% 60% 40% 20% 0% 180 nm 130 nm 90 nm 65 nm 45 nm 32 nm
  • Multimedia Convergence: Fully Depleted 10 Devices Enabling sub-20nm Technologies• Main candidates after bulk are fully depleted devices • For improved electrostatic control and device scalability FDSOI = 2D FinFET = 3D drain gate height gate source Thin Silicon film Thin Silicon f ilm
  • Multimedia Convergence: 11 28nm FDSOI Better Energy Efficiency 6x 1.3X 500% 100% 4.7xEnergy Efficiency Peak Performance (DMIPS/mW) 400% 80% (DMIPS) 300% 60% 200% 40% 100% 20% 20% 3x 7% 0% 0% 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 Vdd
  • Multimedia Convergence: 12 Value Proposition Planar Technology – 2D 3D Technology 28nm LP • Available for Design: Now!High-K/Metal 28nm Boost • Superior Power Performance gate FDSOI/UTBOX • Faster Design • Enable Product Cost / Power Reduction +30% 20nm LPM 20nm Boost Strained-Silicon FDSOI/UTBOX +20% 14nm Bulk-Trigate • High Logic/Memory Integration • More complexity added to the process • Available for Design: Q4 2012 • Enable New High Performance Product 2012 2013 2014 2015 2016
  • Other VLSI Key Differentiation Initiatives 13 • Embedded Flash PCM for future shrink nodes • Ultra Fast and Low Power Microcontrollers • Imaging sensor with BSI on bulk
  • Smart Power: The Ideal Technology 14 • Thick Cu metallization & bonding POWER DEVICES over active areas• Figures of merit: • Rsp = RonxA • Gate charge (Qg) – Fsw up ISOLATION to 5 Mhz • Safe operating area • Junction isolation • DTI (Deep Trench Isolation) • SOI• Trends: • Integration density saturating with LITHO scaling • Device architecture and drain engineering • Thick copper metallization for high current • LOGIC: from 100 K gates up to 500 K gates • e-Memories ST ROADMAP • BCD8sP best in class for Power devices integration capabilities • Customized solutions by application  Low Maks Count • BCD9s (110 nm) ready for prototype in Q113 and BCD10 (90 nm) process architectures in definition phase
  • Smart Power: BCD9S 15Full Copper Metallization Power areas comparison vs. BCD6s-DCu 1.4 1.25 1.2 1.0 1.0 0.84 0.7 0.8 0.59 0.5 0.6 Power Areas from Rdson 0.4 (BCD6s-Dcu=1) 0.2 Power Areas from energy 0.0 pulsing BCD6s-DCu BCD8sAuto BCD9s
  • POWER: Top Priority Technology Platforms 16 IGBT SiC MD6 GaN OFT
  • SENSE: Technology Coverage 17SENSORS ACTUATORS• Accelerometers • Thermal• Gyroscopes• Compasses• iNEMOTM• Pressure • Piezoelectric• MicroPhone • Electrostatic
  • Packaging Technology R&D 18SenseMEMS and microphones (LGAs), Optical modules and Imagers towards BSIPower & BCDHigh dissipation, miniaturized packages (PSSO, QFNs)Multimedia Convergence with advanced CMOSIntegration and miniaturization based on BGAs. Towards Flip Chip & WLP
  • 193. Manufacturing
  • Front-End Manufacturing: 20 Flexibility/Efficiency Manufacturing flexibility across market cycle• Minimize unused capacity in the downturns and lean investment to support upsides: • Model deployment by technology cluster better balancing internal vs. external with new major initiatives: • Start new generation of BCD (Smart Power) outsourcing • Start CMOS 28/20 nm FDSOI outsourcing • Start advanced CMOS Imaging Sensor with BSI• Guarantee in-out flexible sourcing at product level 200mm ? 300mm ?• Make fixed cost variable wherever possible
  • Front–End Manufacturing: 21 Outsourcing Map First: Technology / Source Second Alternative Time to Market CMOS 45LP Crolles 300 Foundry* No CMOS 40LP Crolles 300 Foundry* Foundry** CMOS 32LP Foundry* Crolles 300 No CMOS 28LP Foundry* Crolles 300 Foundry** CMOS 28 FDSOI Crolles 300 Foundry* No First : Technology / Source Second Alternative Time to Market HCMOS9A Crolles 200 / 300 Rousset 8 Foundry* CMOS65 / 55RF Crolles 300 Foundry* No CMOS Imaging Sensor Crolles 300 Foundry* No CMOS55 Crolles 300 Foundry* No eFlash CMOS M10 / F10 Rousset 8 Foundry* No eFlash / eEEPROM BCD8 Agrate 8 Catania 8 Foundry* Adv PMOS / VIP / Catania 8 Singapore 8 Foundry* MDMESH MEMS Agrate 8 Catania 8 No * One out of multi-foundry sources ** Another one of multi-foundry sources
  • Front-End Manufacturing-Internal Fabs Value: 22 Responsiveness, Differentiation, Efficiency • Fast Time to Volume, to catch new business opportunities: • i.e. MEMS Gyroscope ramp-up within our 8” Fab • Timely internal ramp-up of Crolles 12” ramp-up for Digital, Analog CMOS and Microcontroller (embedded Flash). • Low cost & timely 8” conversion of the Singapore fab for discretes and mature BCD
  • Packaging & Test Manufacturing: 23 Flexibility/Efficiency• Re-profile and balance some internal capacity• Outsource proprietary packages growing volumes• Complete Dual Source qualifications Internal vs. OSAT (subcontractors)• Accelerate gold to copper wire conversion toward World Wide leadership• Speed-up conversion to high density lead-frames• Packaging & Test Manufacturing Hub for economy of scale, to call for alliance is a possible option we are working on to accelerate
  • Packaging & Test Manufacturing: 24 Outsourcing Map Technology (Adv Logic) / First: Second Alternative Source Time to Market BGA - FC POP OSAT* Muar Shenzhen BGA - FC singulated OSAT* Malta No WLCSP OSAT* OSAT** No Technology (Others) / First : Time to Second Alternative Source Market BGA/ BGA-FC Muar Shenzhen OSAT MEMS Malta Calamba No Shenzhen/ Power Automotive Muar Bouskoura Calamba Shenzhen/ Power Discrete Longgang Bouskoura OSAT** QFN Calamba OSAT* OSAT** Imaging Shenzhen No No QFP small/Large Muar/Malta OSAT* OSAT** SOIC Bouskoura Shenzhen OSAT* Leadframe misc OSAT* OSAT** No * One out of multi-OSAT sources ** Another one of multi-OSAT sources
  • Manufacturing and Technology R&D: 25 2012 Capital Spending• Front-end manufacturing / R&D • 20 nm FDSOI capability • Crolles 300 mm 40 nm mix capacity increase • Imaging sensor BSI capability • Manufacturing and Engineering System Plan: $0.7B to $0.8B• Back-end manufacturing • Capacity increase and mix evolution at Asian plants • MEMS capacity increase • Manufacturing & Engineering System • Copper wire conversion Investments focused on:• Others • Strategic growth businesses and key • Testing, IT, quality & safety product ramps • Proprietary manufacturing
  • 265. Conclusion
  • Automotive Product GroupMarco MontiExecutive Vice PresidentGeneral Manager, Automotive Product GroupPaul GrimmeExecutive Vice PresidentGeneral Manager, Sales & Marketing, Europe, Middle East and Africa
  • Focused Product Segments 2 2 50/50 JV with Ericsson Analog & Power Wireless Digital Automotive Microcontrollers Discrete Digital Imaging, BiCMOS ASIC Automotive Analog, Micro, Industrial & Convergence & Silicon Photonics Products MEMS & Memory & Power Group Group Group Sensors Security Discrete (DCG) (IBP) (APG) (AMS) (MMS) (IPD)© STMicroelectronics, 2012
  • ST: A Winning Player in the Automotive Market 3 180 0 12.6% 160 0 APG revenue 1674 2011 market position 140 0 APG Market Share 1420 1386 1331 1269 120 0 1065 1153 Total ST APG SAM 100 0 1004 3 ST 2 ST 80 0 5.0% 855 717 60 0 615 40 0 Smart Power VI Power 20 0 1 ST 1 ST 0 200 1 200 2 200 3 200 4 200 5 200 6 200 7 200 8 200 9 201 0 201 1Geographical position Partnership with the market leaders #2 Europe #3 Japan #2 USA #1 China % of 2011 Production % of 2011 Production shipped in shipped to German Germany($) Customers ($) Source: IHS iSuppli, STMicroelectronics
  • Main ST Enablers 4 Market Technology & Manufacturing IPsStrong position with market Technologyleaders Products •Market leader in Smart Power•Leadership position in : technologies confirmed with the 110nm node •30 years of history in Smart Power •ASIC product design •40nm embedded Flash for •Power architecture for 32-bit •Intelligent power microcontroller microcontrollers with strong market•Market leader in: success with market leaders •Leader in Power Technologies • Infotainment •40 years of experience in Audio and •Extending product offer thanks to RF, Infotainment •Advanced Safety Camera, IGBT, MEMS… •Full product offer in Power •Complete system offer for most of the Automotive systemsFocused on emerging markets Automotive-Committed•Market leader in China Internal Manufacturing•Two design centers in China to serve •In-house manufacturing driven by the local players Leader in innovation Automotive•A major design center in India •Full product offer in high margin •Multiple internal sources to offer a market unique supply chain Active Safety protection •Radio Frequency for safety andPartnership Infotainment •Second source availabilities in •Prepare to serve the need of the car•Long history of partnership with foundries to guaranty flexibility during electrificationcustomers (including COT), 3rd parties market cyclesand competitors Source: Strategy Analytics, January 2012
  • Automotive Semiconductor Growth Drivers 5 1. Pervasion 2. Volumes Semiconductor contents per car ($) Production car forecast (Units) 60 43240 0 350 340 5030 0 274 238 4020 0 16810 0 30 2011 2012 2013 2014 2015 2016 2017 2011 2012 2013 2014 2015 2016 2017 Average Eur/USA/Jap China Europe-US-Japan Emerging Ignition Electronic gearbox Cruise Ctrl Night vision Pedestrian detection Door locking Air conditioning Airbags Start Stop Driver assist maps Seat heating ABS Hybrids Car 2 car Automatic mirror Gearbox LED lighting Brake by wire Electric vehicles Electronics 1980 1990 2000 2010 2020 Year (% Car 5% 15% 22% 30% 50% Cost) 30 35 40 70 >110 Mil Car Source: Strategy Analytics, January 2012, JD Powers, March 2012
  • Pervasion Driving Growth in Automotive 6 1. Pervasion Semiconductor contents per car ($) 43240 0 350 34030 0 274 23820 0 16810 0 2011 2012 2013 2014 2015 2016 2017 Average Eur/USA/Jap China Ignition Electronic gearbox Cruise Ctrl Night vision Pedestrian detection Door locking Air conditioning Airbags Start Stop Driver assist maps Seat heating ABS Hybrids Car 2 car Automatic mirror Gearbox LED lighting Brake by wire Electric vehicles Electronics 1980 1990 2000 2010 2020 Year (% Car 5% 15% 22% 30% 50% Cost) 30 35 40 70 >110 Mil Car Source: Strategy Analytics, January 2012, JD Powers, March 2012
  • Pervasion Driven by Innovation 7 The concept of transportation system is changing• Driven by performance • Engine almost invisible• Driven by engine Cars represent 8% of total • Mechanics almost invisible• Dangerous petrol consumption • Safe• High consumption • Green• High pollution Car emissions represent • Family oriented/Easy-to-use• For experts • Zero maintenance/Reliable 10% of the total CO2• High maintenance • Comfortable generated by humans • Entertaining Source: IHS iSuppli, STMicroelectronics
  • Electronics & Semiconductors Makes the Difference 8The mechanics is evolving It is the evolution of the • Power Trainbut the speed is slow and electronics that makesmostly driven by the weight the interaction with thereduction mechanic more efficient • Safety ABS ESP TCS • Infotainment, connectivity, active safety
  • The Hybrid Car 9 First Prius First hybrid car In the marketFirst electric car F. Porsche R. Anderson 1839 1869 1997 Only the availability of a reliable, low cost, high voltage power Integrated technology makes high volume production of hybrid cars possible
  • Why ST in Innovation 10 More than 25 year presence and commitment in Automotive Partnership Dedicated attitude with the market leaders in Automotive Europe, Japan, organization Korea, USA and China $1.7B billing Proprietary (FY11) with technologystrong cash flow portfolio able toand profitability cover all the financing R&D Automotive applications Internal Broad range offer manufacturing (leader in ASIC, strategy: better power & intelligent power, radar, cost & flexibility investing in 32-bit with a unique MCUs to support supply chain system solutions) security
  • A Sample of ST’s Innovative Products 11 40nm eFlash 32-bit 110nm Smart Power multicore micro based More than $2B for Engine, Dual on Power architecture design-wins clutch gearbox, already achieved for Power Train and Safety and Body Safety Intelligent power for Li-ion batteryXenon and LED lamp management for controllers electrification Full system offer in Infotainment (from car & satellite radio to Navigation to car to car solutions) RF modules and dedicated processor X by wire systems for active safety (Micro + Smart Power) with safety on board
  • ST Presence in Car Electrification 12 Aux power supply Current sensor HEV Main Inverter ST ST-A1 Gate driver Power Module Battery Management Inverter, DC/DC, Power module … Ready for new urban mobility concept in partnership with key customers“Low voltage” electric car
  • Evolution Towards Active Safety 13 77 GHz 48 GHz 24 GHz ST Sales Growth 2011 +42% 2010Long range Video Short range Ultrasonic Video radar 0 to 80m radar 0.2 to 3m 0 to 80m 1 to 150m 0.2 to 20m Through sensors (RF, Camera, Gyro) the car recognizes a possible dangerous event and autonomously takes action. The car is more and more becoming a node of an intelligent distributed network
  • Car Volumes Driving Growth 14 2. Volumes Production car forecast (Units) 60 50 40 30 2011 2012 2013 2014 2015 2016 2017 Europe-US-Japan EmergingIgnition Electronic gearbox Cruise Ctrl Night vision Pedestrian detectionDoor locking Air conditioning Airbags Start Stop Driver assist maps Seat heating ABS Hybrids Car 2 car Automatic mirror Gearbox LED lighting Brake by wire Electric vehiclesElectronics 1980 1990 2000 2010 2020 Year (% Car 5% 15% 22% 30% 50% Cost) 30 35 40 70 >110 Mil Car Source: Strategy Analytics, January 2012, JD Powers, March 2012
  • Volumes Driven by Emerging Countries 15The Chinese market Semiconductor demand by Region ($B) ROW 8.6 4.3 China 8 3.2 Eur. 10.3 7.3 Japan 4.9 2020 3.4 2002 2018 Vehicles per 1000 USA 7.9 inhabitants 5.3 2011 Source: Bosch, April 2012 Source: Strategy Analytics, January 2012 A completely different market • No time for a standard development cycle time • Fast, accurate, reliable, low cost • Full system approach • No local IC makers are available
  • Why ST in the Emerging Markets 16Full system offer in all car applications Deep connections with market leaders in China, India on top of European and Japanese More than 30 years of IPs ready for Automotive Internal manufacturing to Strong local presence with drive cost reduction two dedicated local design teams in China (SH, SZ) and one in India (Noida) Broad offer to support all product line up (from small motorcycle to premium vehicles) Strong support function including SW / HW specific automotive validation
  • ST Product Offer for Emerging Markets 17 1 / 2 / 4 Cyl Engine Traditional and Low cost control for Gasoline & Dual Clutch transmission Diesel Direct Injection Air Bag modules Single chip Body modules (door, Junction box, ligh, Car Connectivity and air conditioning ,,,) Protocol Low cost Navigation including OEM and After Market multi constellation GPS car entertainment (Glonass, Compass, Galileo)
  • ST Full Kit for GDI Engine Control* 18 Engine control in China +53%20112010 U-chip 32-bit micro * GDI: Gasoline Direct Injection
  • ST Leadership in Car Infotainment 19 Leveraging the new role of Multimedia phones to enhance Infotainment experience Reinforcing leadership in Audio Power Bringing to market the FirstPhone + Position + User Interface + Sound Multi-Constellation Positioning IC Leading the Terrestrial Radio digitalization (DAB-DRM-HD) Maintaining leadership in Positioning Navigation & (GPS-Glonass- Audio Terrestrial & Digital Audio Satellite Tuners Satellite Tuners AmplifierGalileo-Compass) Controllers
  • APG Business Priorities 20• Grow faster than the market • Keep Smart Power / intelligent power leadership • Gain share in 32-bit MCUs (Power Architecture) on top of $2B already design won • Extend the penetration of Power devices driven by Electrification • Maintain leadership in Body and Infotainment while expanding penetration in Emerging markets• Focus on innovation to increase profitability • New 110nm BCD generation • 40nm eFlash to support microcontroller growth • Complete system offer in emerging markets • Lead high margin Advanced Safety with strong innovation contents
  • Analog, MEMS & SensorsBenedetto VignaExecutive Vice President,General Manager, Analog, MEMS & Sensors GroupMarco CassisExecutive Vice President,President, Japan-Korea Region
  • 2011 MEMS Top Players Ranking 2 900 Thermal Inkjet Printhead 800 Merchant 700 Captive FoundryUS$M 600 500 400 300 200 100 0 Accelerometer and Gyroscope Source: IHS iSuppli Leading the MEMS world of Micro-Actuators and Sensors
  • Growing Faster Than the Market 3 ST MEMS Revenue Gyroscope Market Share $650M 60% $30M 2006 2011•ST #1: MEMS Motion Sensors for consumer •ST #1: Gyroscopeelectronics & mobile handset market •Market Share ~60%•ST #1: Accelerometers, Market Share ~50% •Achieved in only two years Strong and large IP portfolio Source: IHS iSuppli, January 2012; Yole Developpement
  • Leading Fast Growing Android Ecosystem 4• China Rapid Disruption in Mobile OS 100% 90% 80% Other 70%• Japan 60% Blackberry OS 50% Symbian 40% Windows Phone 30% iOS 20% Android 10% 0%• Korea 2009 2010 2011 Q1 2012 Source: Strategy Analytics, May 2012, ABI, March 2012 ∙ Open source (Android + Linux) taking over 50% market share in 3 years• USA ∙ In the PC industry open source (Linux) has only gone from 2% to 5% in the last 10 years Source: Samsung Website
  • 5 Billion MEMS in the Market 5Outstanding Global Manufacturing Capability with Dual Sourcing Accelerometers, Gyroscopes, Compasses Microphone and Pressure Sensors 2006 2011 2 Billion units of Motion MEMS + 3 Billion units of Thermal Inkjet Printheads
  • A Modular & Complete Platform for iNEMO™ 6 Standalone Gyroscope Accelerometer + Gyroscope Accelerometer + Gyroscope + Compass
  • 2012: Year of the Environmental Sensors 7 High Performance Microphone Altimeter for Indoor Navigation
  • ST Masters Extreme Analog & MCUs 8 SENSORS + MICROCONTROLLER + RADIO
  • ST Leading the Motion Sense Revolution 9 6-Axis 32-bit Microcontroller Geomagnetic Module 32-bit Microcontroller 3-Axis Magnetometer3-Axis DigitalGyroscope 3-Axis Accelerometer 3-Axis System-on-Board System-in-Package Gyroscope iNEMO-M1 iNEMO® System-on-Board System-in-Package 9-Axis plus 32-Bit MCU 9-Axis plus 32-Bit MCU in 13x13 mm in a Board small footprint
  • Dawn of MEMS Consumerization Wave 10 GyroscopesAccelerometers Compasses Intuitive Interface Nintendo 3DS Smart Phone Accelerometer Gyroscope
  • Intuitive Touch Screen Interface 11 Multi-Touch + Hovering forEnhanced User Interface in Tablets and Smartphones
  • New Applications Enabled by MEMS 12 Image Stabilization Image Stabilization Fitness/Wellness and In-House Tele-health Remote Monitoring Navigation & LBSAugmented Reality Indoor Navigation and Dead Reckoning 3-Dim Tagging Location Based Services (LBS)
  • MEMS for Indoor Navigation 14 ST is the only supplier able to supply all of the MEMS sensors necessary for geo-localization MEMS + GPS + WI-FI enable Indoor NavigationAccelerometer, Gyroscope, Magnetometer, Pressure Sensors
  • Paving the Way to a New Acoustic Era 15 Voice CapturingAcousticOverload Point Beam Forming Increased Intelligibility Signal to Noise performances Conferencing Smart Accessories Source Localization Unidirectional Beam Forming Microphones Sensitivity Matching Headphone
  • Entering Automotive with Innovative Products 16 World First Automotive Grade 3-Axis Gyroscope
  • Analog and MEMS Around the Body 17 Insuline Nano pumpsGlaucoma Lens (MEMS) (MEMS) ECG(Analog) 3D Ultrasound (Analog)
  • Remote Monitoring 18ST Analog Front-EndUltra low power Small form factor Blue NRG Radio • BLE Controller • BLE Stack for external Host Processor • BLE profiles offer (proximity, watches, Health & Fitness)
  • Analog & MEMS for an Intelligent World 19 Smart Sensors + On-Board Radio Sensors Analog Wireless (MEMS) (ASSP) (RF)MEMS Sensors & Radio in Smart System RFASSP Sensors Analog Wireless MCU (MEMS) (ASSP) (RF)Sport & Factory Healthcare Building LogisticsWellness Automation
  • Conclusions 20• # 1 in MEMS Market and growing fast: • Wide product portfolio and extended customer base • Nimble product development • Timely investment in fully-owned state-of-the-art manufacturing• Expanding our presence in Automotive• Enlarging our customer base entering in small and medium size customers with new applications• Well positioned to become undisputed leader in Smart Sensors for emerging applications in Consumer, Automotive, Industrial and Healthcare Markets• Leverage leading MEMS position, our nimbleness and investments to increase presence in analog world of General Purpose Analog and ASSP
  • Digital ConvergenceGian Luca BertinoExecutive Vice President,General Manager, Digital Convergence GroupRobert KrysiakExecutive Vice President,President, Americas Region
  • Focused Product Segments 2 2 50/50 JV with Ericsson Analog & Power Wireless Digital Automotive Microcontrollers Discrete Digital Imaging, BiCMOS ASIC Automotive Analog, Micro, Industrial & Convergence & Silicon Photonics Products MEMS & Memory & Power Group Group Group Sensors Security Discrete (DCG) (IBP) (APG) (AMS) (MMS) (IPD)© STMicroelectronics, 2012
  • Digital Convergence Group: 3 A Complete and Flexible Offer Digital TV Digital & Monitor Set-Top Box Network AutomotiveInfrastructure Infotainment (ASIC) Smartphones & Tablets ● ASIC for network infrastructure & legacy markets (i.e. printers) ● ASSP for Digital TV, Monitor, STB, car infotainment
  • Q1 2012 Highlights 4• Earned seven major design wins in China, Europe and the US for the new 40nm-IC mainstream STB family.• Continued strong momentum in India cable and satellite markets leading to a doubling of sales volume by earning multiple design wins.• Collected several design wins in Europe and Asia for the ARM Cortex A9-based, “Orly” high-performance Home Application processor manufactured in 32nm process technology.• Earned design-in of Freeman family of products with a Tier1 OEM customer serving the European market.• Won multiple design-ins at Tier1 OEMs with the “Athena” multimedia monitor system-on- a-chip family into a diverse range of products, including high-performance monitors, TVs, and digital signage.• Earned two ASIC designs in 32nm process technology for networking applications from a leading player in the market.
  • Growth Drivers: 5Cloud Infrastructure & Multi-Screen Clients
  • Tremendous Business Opportunity 6 Tablets, E-Readers Smart TVs 90M155M 120M200M Set top boxes 245M285M  > 2 Billion Smart Consumer Devices by 2015Smartphones  Global internet traffic to quadruple by 2015645M1010M Residential Mobile PCs Car Gateways 225M300M Infotainment 4M13M 80M100M 2012-2015 Units Source: ABI Research, HIS iSuppli, IMS Research Display Search, Strategy Analytics, Cisco, STMicroelectronics
  • ASIC 7 Up to 100 Mgates 200-400 mm2 Best In Class • Technology • Methodology • IP Blocks Up to 50 Mgates 50-200 mm2 First ARM based First 28nm ASIC > 10 new ASIC rampingUp to 20 Mgates Up to 50 mm2 Networking ASIC Award Award in Q1 2011 up in 2012/2013 in Q2 2012 65nm 55nm 40nm 32nm 28nm 2008 2009 2010 2011 2012 First Tape Out (Full Product)
  • DisplayPort-based Product 8 3D Monitor/WQXGA DDR 2 Flash MFM AIO PC / Net Monitor VGA Component DP, iDP, eDP Athena TTL HS Dual/ Public Display Quad LVDSAudio L/R, SPDIF, I2S DAC Audio L/R, SPDIF, I2S Daisy Chaining
  • Set-Top Box and TV 9 DCTS All these and much more,already implemented & certified
  • World Class IP Portfolio 10 Full range of Codec Advanced Security and DRM Supporting All Connectivity Best in Class Video IP DSP •Sata, PCIe, USB3, MultiPHY MiPhy •65/55nm shipping, 40nm ramping, 32/28nm sampling Input Sourc Processor D e TNR/SNR MUX Input Video Inp ut Input CCS R Scalin AFM Captu re 3x 3 g DNR Frame Buffer A MADi/MCDi Controller M •1 GB/sec: 40nm available, 32/28nm sampling Output (DMA Control)Ethernet •10 Gb/sec: 32/28nm in development (silicon in 2013) Color ACC Scaling LTI/CTI Sharpnes VPI Controls ACM s SuperRe s •65nm shipping,10 Gb/sec 2D->3D MVE SerDes •32/28nm in silicon, 14 Gbit/sec •25 Gb/sec for 20nm in development RGB444 Composito Graphics r Pre Gamma LED Over Post Gamm •DP 1.2, 55nm shipping (picture blender) Gamma LUT Map 3x3 BKLT DRV Driv e a LUT DitherConsumer •HDMI 1.4, 55/40nm shipping, 32/28nm in development •MoCA, Docsis
  • Leading Convergence: Next Step 11To offer a unified processing platform to serve all markets• Creation of a dedicated unified processing platform team• Combining strengths between ST and ST-Ericsson • Skills, IP, Ecosystems, IP, R&D Critical Mass• ST will develop a unified processing platform for a wide range of applications• ST-Ericsson will license ST Application Processor• ST will sell • Stand alone application processor for smartphones and tablets applications through ST-Ericsson’s sale channel (when existing sales coverage is in place) • Directly stand alone application processor for all cases and/or applications not covered above
  • Unified Processing Platform 12 Next Step Converging on Converging on ARM Cores Unified Processing M/P 2012 -> Platform
  • The Benefits of a Unified Platform 13 Software Framework Benefits for ST • Development synergies • Take the best in each domain Service Operators • Unique position on multi segment Unified Platform• Multi device• Multi screen New Markets• Multi market Benefits for the industry Secure services provider • Better TTM for multi segment services • Less effort for 3rd parties / manufacturers • Multi-device & services vision Manufacturers
  • Summary & Key Opportunities for DCG 14 ST Growth in 2012 • Ramp of new ASICs • Ramp of Athena and other DisplayPort products • Ramp of Orly and other STB products Market Trends ST Assets • Entertainment • STB Market Leader • Cloud Services • Performance Leader • Multi Interface and Screen • Environment Commitment
  • Imaging,BiCMOS ASIC & Silicon PhotonicsEric AussedatCorporate Vice PresidentGeneral Manager, Imaging, BiCMOS ASIC & Silicon Photonics GroupFlavio BenettiGroup Vice PresidentGeneral Manager, Mixed Processes Division
  • Focused Product Segments 2 2 50/50 JV with Ericsson Analog & Power Wireless Digital Automotive Microcontrollers Discrete Digital Imaging, BiCMOS ASIC Automotive Analog, Micro, Industrial & Convergence & Silicon Photonics Products MEMS & Memory & Power Group Group Group Sensors Security Discrete (DCG) (IBP) (APG) (AMS) (MMS) (IPD)© STMicroelectronics, 2012
  • BiCMOS ASIC &Silicon Photonics
  • BiCMOS in Communication Infrastructure 4 BiCMOS process family RF ICs for ICs for Base Stations Optical Interconnect© STMicroelectronics, 2012
  • Market Trends 5• Internet traffic growth drives fiber optics pervasiveness CAGR• Mobile data traffic push Wireless Network US$M 2011 2016 Y16/11 evolution from Macro Base Station to Heterogeneous Network based on Small Cells Optical Modules ICs 325 570 11% (Micro/Pico / Femto BS) driving RF market (include Photonics) demand increase Infrastructure RF 160 360 16%• BiCMOS demand is driven by higher Mixed Processes Div frequency and integration 485 930 13% TAM• Miniaturization, growth in speed and strong demand for reduced power consumption will be driving factors for Silicon Photonics Internet traffic Mobile network Parallel optics SI-photonics
  • Our Pillars 6 ICs for Wireless ICs for Telecom & Optical Module RF Base Station Datacom Optical Infrastructure Transceivers Technology : BiCMOS7RF Technology : BiCMOS9/MW 2012 Packages QFP etc. 2016 Packages QFP etc. Products : Synthesizer, Products : Trans-Impedance Mixers. Down-Converter Amplifiers, Clock Data Recovery, Photo Detector Components for Silicon Photonics Optical Connections (Transceivers etc.) Technologies : PIC25 Photonic, Advanced Copper Pillar, Coming Optical Packaging Products : Integrated Transceivers, HS Data Link ASSP/COT© STMicroelectronics, 2012
  • Silicon Photonics and Luxtera Licensing 7• ST and Luxtera, a world leader in Silicon Photonics, signed a partnership contract in December 2011• ST has acquired Luxtera technology license, and is setting up the process in ST CMOS 65nm 12” Crolles line (PIC25G)• Solutions will be based on Hybrid integration with CMOS die through copper pillar technology• ST will design, manufacture and sell products based on PIC25G. • PIC25G process will be available in Q1 2014. ECL Modulator Filter Multiple Silicon Photonics is a technology that allows to process Channels Drivers and manipulate light signals on silicon and that can be CMOS produced using existing semiconductor fabrication Circuitry TIA Passive Alignment techniques. TIA Photodetector Silicon Photonics allows dramatic increase in processing speed and outstanding power consumption reduction.
  • Silicon Photonics Application Areas 8 MARKET SEGMENTS PRODUCTS Transport Transceivers WAN Metro Access LAN Active optical cable Data Center Enterprise Routers Rack to Rack Switches Board to Board HPC Chip to chip ASICs Parallel processing On Chip Multicore interconnection Photonics ICs© STMicroelectronics, 2012
  • BiCMOS Strategy 9 • RF • Develop RF ASSP Roadmap RF • Address HetNet topology evolution • Optical Modules ICs • Consolidate leadership with Optical ICs key customers • Develop Optical ICs for open market • Silicon Photonics • Set up process in Crolles 12” Silicon Photonics • Address key customers • Master full supply chain© STMicroelectronics, 2012
  • Imaging
  • Imaging Division at a Glance 11 More than 20 years experience inCore technologies CMOS image sensor technology,• FSI & BSI CMOS imaging process• Pixel & sensor design & integration camera system expertise & mass• Camera module design & automation volume manufacturing.• Image improvement algorithms & integration• Innovative system development & industrialization A Unique Value Chain: From internal manufactured sensors to Cameras and System Processing.A long standing commitment Imaging teams• VLSI Vision, a pioneer of CMOS imaging, acquired by ST in 1999 • R&D in UK, France, Singapore & India• 1st imaging products started in ST in 1995 • Operations & manufacturing in France,• Internal sensor manufacturing since 2000 Singapore & China• >700M sensors & camera modules delivered to mobile phone makers• >900M sensors delivered to industry players• >700M ISP delivered to the industry
  • Imaging Market Trends 12 CMOS sensors Other sensors Modules ISPs• Continuous & important TAM growth, 25000 and a rising everyday use of image capture & sharing 20000 15000• Increasing camera attach rate in mobile handsets and tablets 10000 • Primary & secondary camera (avg. 4.7Mp in 2016) • Growing ASP due to resolution evolution & camera 5000 module 0 2011E 2012E 2013E 2014E 2015E 2016E• CMOS eliminating CCD in Digital Still Camera, migrating from high-end to whole TAM (M$) range 4% 6% Phone cameras 2% Tablet cameras 3% 4% 4%• New applications fueling growth: 3% 2% PC cameras 38% TV cameras • Proximity sensing, user detection, optical HMI 39% DSC/DSLR 2012 Camcorders• New market segments growing: $8.4B Gaming • Automotive, gaming, medical, security, sports 2016 42% Security $13.3B 3% Automotive 34% 2% Medical 6% 2% Others Source: IHS iSuppli, TSR, STMicroelectronics
  • Imaging Strategy: Diversification… 13• Deploy products diversification and innovation across various segments and lead new applications • Proximity sensors • Man machine interface, gesture recognition • Automotive, gaming, medical, security • Partnership with leaders in defined segments• Support diversified business models • Image sensors, sensors, modules, ISPs, wafers• Expand on higher value segments in mobile imaging products • New Products expansion: new moving optics camera / BSI image sensors & modules / Prime camera & video modules / Generic, Customer Driven ISP’s • Extending Customer BaseNewapplications New Mobile Markets Digital Imaging camera
  • …keeping the 4 Pillars of ST Imaging 14 Image Signal Processing Image Sensor Sensor Coprocessor Module Semi-conductor Imaging Semi-conductor Packaged Lens & Sensor • Stand alone ISP • Production from • User detection • Full ST video pipe • Fixed focus camera 1.4um to 5.6um • Proximity module IP • Wafer Level pixel • Optical navigation • Integration of third reflowable camera • 1.1um party IP on demand • Man machine • EDOF camera development interface • CMOS40nm ST & • Auto-focus camera • From VGA to foundries in 24Mpix • Automotive production • Innovative optics, • Medical assembly & test • Developing IC’s technologies in12” CMOS28nm • ST manufacturing • ST internal BGA assembly line • Key optics & supply chain partners 12’’ manufacturing capabilities both In-House and at Foundries© STMicroelectronics, 2012
  • Recent Achievements 15 Mobile Phone  Design win and production volumes of a new improved low light sensor in some Windows smart- phones. Phones shipping on the market now.  Design win and production volumes of a new ISP for an Android smart-phone market leader, several phone models shipping on the market now.  3rd generation of fully integrated (ISP + image sensor), camera module in customer ramp-up. Smart phones available now.  4th generation of reflowable camera module, with enhanced image quality in customer ramp-up New applications  Security: Design win / business award at a leading security camera manufacturer  Medical: Business award of a new generation of CMOS X-Ray sensors for medical applications with a leader in the industry  Digital still camera: Design win, business award in samples stage of a high performance large image sensor for a leading brand  Proximity sensor: Technology hitting the market. Excellent customer feed-back based on proprietary time of flight technology  Automotive: Won major safety system camera and processor for a key European Tier 1 and OEM
  • Industrial & Power Discrete (IPD)Carmelo PapaExecutive Vice PresidentGeneral Manager, Industrial and Multisegment SectorMatteo Lo PrestiGroup Vice PresidentGeneral Manager, Industrial and Power Conversion Division
  • IPD at a Glance 2 Revenues 2011 Key Facts • TAM = $37.8 B • Billing = $2.1 B • Market share = 5.5%2009 2010 2011 Innovation • > 600 new products introduced in the last two years • 16% of sales with products less than 2 years old 6,200 Available Products • 160 new patents and patent applications 5,900 Supported Customers (filed or granted) in 2011 Source: WSTS, STMicroelectronics
  • IPD: 2011 Results & TAM 3Sales by region of shipment Sales by region of origin Sales by customer type AMERICASJAPAN & JAPAN & 11% KOREA KOREA 9% 10% AMERICAS 25% EMEA OEM Distribution 23% 47% 46% GC&SA GC&SA EMEA 57% 33% 32% EMS 7% IPD Total Available Market >5% CAGR 48 50 2012-17 41 44 45 39 US$B 2012 2013 2014 2015 2016 2017 Source: WSTS, STMicroelectronics
  • New Products: Key Contribution to IPD Sales 4 New Product Contribution (%) to IPD Sales Extremely competitive design and manufacturing process80 20.0% 18.0% > 16% 16.0% 16 new key power and smart60 > 14% 14.0% power technologies 11% introduced in the last 2 years 12.0% 10.5%40 10.0% 8.0% Large Power, Analog and20 6.0% Digital IPs portfolio for 4.0% developing Advanced Smart 2.0% Power products 0 0.0% Q111 Q211 Q311 Q411 Power packages enabling high power applications and power density 2014 Target: 22% optimization Complementary to IPD advanced portfolio Source: STMicroelectronics
  • IPD: Worldwide Leadership 5High Voltage Thyristors Schottky & EOS, ESD & Analog Power & Triacs Ultrafast IPAD™ Lighting ASSP MOSFETs ( < 55A) Diodes Protection (Industrial) ( > 400 V) #1 #1 #1 #1 #1 #2 Market Market Market Market Market Market Share Share Share Share Share Share 19% 24% 14% 23% 13% 11% Distinctive Capabilities • A wide range of power and smart power • System-on-chip and system-in-package technologies expertise • Innovative power packages enhancing • Innovative silicon structures and new power-density composite materials • Competitive manufacturing • Application know-how and experience Source: WSTS, IHS iSuppli, STMicroelectronics
  • Leading Positions in our Markets 6 Computer • #1 in Rectifiers for Server and Adapters Computer 19% • #1 in HV Resonant Converter ICs for Adapters • Key player in HDD Motor Control ICs Industrial Telecom Telecom 47% 15% • #1 in AMOLED Drivers • #1 in ESD & EOS Protections for Mobile/Tablets • #1 in IPADTM & RF IPD for Mobile/Tablets • #1 in Protection for Phones, xDSL & Ethernet Gateways • #1 in Rectifiers for Telecom Base Stations Automotive 10% Automotive Consumer • Key player in HV Power Transistors for HEV/EV 9% • Key player in Rectifiers • Key player in DC/DC for Car InfotainmentIndustrial • Key player in Overvoltage & ESD Protection• #1 in PLM for Smart Metering• #1 in Fluorescent Lighting ICs• #1 in PFC ICs & Diodes for SMPS Consumer• #1 in HV Smart Driver for BLDC Motors • Key player for HDMI-STB Protection• #1 in Thyristors & Triacs for Heaters, Motor • Key player in HV Power MOSFETs for LCD TV Control, Load Activation and Light Dimming • Key player in LNB Supply ICs for STB and DTV Source: WSTS (end 2011), STMicroelectronics
  • Key Market Trends 7Growing Energy Demand Integration & Connectivity Enhancing User Experience Smart Grid Automation PortableGreen, sustainable, energy Efficient, safe, comfortable, Ultra low power &management & distribution secure & private high efficiency 2015 IPD - TAM: $6.8B 2015 IPD - TAM: $7.6B 2015 IPD - TAM: $10B CAGR (2012-15): 23% CAGR (2012-15): 14% CAGR (2012-15): 7% Source: IHS iSuppli, Semicast
  • Focus Applications & IPD TAM 8 Energy Mobile, Hybrid & Generation, Factory Industrial Tablet & Consumer Electric Conversion & Automation Motor Drives Handheld Medical Vehicles Storage Consumer 2015 TAM: $3.5B 2015 TAM: $1.4B 2015 TAM: $2.2B 2015 TAM: $2.3B 2015 TAM: $6.4B 2015 TAM: $1B CAGR12-15: 21% CAGR12-15: 27% CAGR12-15: 7% CAGR12-15: 8% CAGR12-15: 13% CAGR12-15: 9% Smart Grid Automation Portable Key Enabling Products System Solution Approach• Power Management and Smart Power ICs • Microinverter and Power Optimizer for Photovoltaic• Industrial Analog ASSP and ASIC • Smart Metering with Power Line Communication• Rectifiers, Power Diodes & Protection • Plug-in Hybrid and Electric Vehicles Battery Charger• Thyristor & Triac • Power Modules for Industrial Automation• IPADTM and RF IPD • LED Lighting• LV Trench and HV Super Junction MOSFET • AMOLED Power Supplies• IGBTs and Intelligent Power Modules (IPM) Source: IHS iSuppli, Semicast, Yole Devéloppement, STMicroelectronics
  • Focusing on Growing Markets 9 Smart Grid $6.8B TAM in 2015 CAGR 12-15: 23%Power Line Modem 2011 Key Achievements • Unique System-on-Chip architecture with highest integration 80% Market Share in Smart for emerging SMART GRID applications Metering • Modular and flexible platforms allowing full application 110% Sales Growth 2011 vs 2010 coverage Several Design-wins in Europe and • Narrowband and Broadband complete portfolio China now in ramp-up phasePower Discrete • MDMeshTM V, the most innovative Super-junction technology 150% Sales Growth 2011 vs 2010 • Rectifier portfolio responding to all Inverter & µ-Inverter 76% Sales Growth 2011 vs 2010 topologies, output voltages and currents Tens of new Design-wins in key • Intelligent Power Modules, hosting IGBT and Smart Drivers customers on Appliances and Air Conditioning Source: IHS iSuppli, ABI Research 2011, STMicroelectronics
  • Focusing on Growing Markets 10 Automation $7.6B TAM in 2015 CAGR 12-15: 14%Motor Drivers ICs 2011 Key Achievements • Advanced Micro-Stepping and Multi-Motor Drivers (new easySPIN, dSPIN, FlexSPIN) 25% Sales Growth 2011 vs 2010 • Accurate and smooth motion with excellent position resolution 7% Market Share • Monolithic Motor Drivers (Power Spin) • Compact, simple to use, scalable platform including a wide range of devices to fit different design architecture More than 100 new worldwide Design-winsIGBT and Gate Drivers • IGBT, reducing power losses and improving power density; 3 44% Sales Growth 2011 vs 2010 new technologies introduced in the last two years • smartDRIVE, advanced IGBT/MOS driver • Embedding OpAmp, Comparator and bootstrap Diode, smart Shut-Down 25% Market Share Source: IHS iSuppli, WSTS, STMicroelectronics
  • Focusing on Growing Markets 11 Portable $10B TAM in 2015 CAGR 12-15: 7%Smart Power: Low Power AC-DC 2011 Key Achievements• High Voltage Converters VIPerPlus • Towards zero stand-by consumption and monolithic power up to 40W 23% Sales Growth 2011 vs 2010• Innovative Architecture for Mobile Phone ChargersAMOLED Display ICs• Complete system solution for mid-large size display • Full range portfolio including DC-DC supply, PMICs and Scan Driver ICs 62% Market Share*• State-of-the-art BCD SOI technology 64% Sales Growth 2011 vs 2010• Innovative miniaturized packageIntegrated Passive and Active Devices (IPAD) & Protection • Common mode filter + ESD protection • Deep attenuation ESD + EMI filters 23% Market Share** • RF IPD (Couplers, Diplexers, Baluns, Filters) & Antenna Tuner Source: IHS iSuppli, Semicast, * Barclays Capital, ** WSTS, STMicroelectronics
  • 12A Flavor on New Advanced Products
  • A Flavor on Advanced Power Discrete 13 Innovative Structure with respect to MDMeshTM VPower MOSFET MDMeshTM VI• Improving performance with respect to MDMeshTM V• 30% Lower Power Losses with respect to Best-In-Class• Suitable for High End PV, HEV and Auxiliary Power Supply 2015 SiC and GaN power device TAM: > $0.5BSiC and GaN Developments• 600/650V SiC Diode already available• 1200V SiC Diode available in Q412• 1200V SiC MOSFET (Planar Technology) available in Q412• 650V / 200A HEMT GaN Transistor available in Q3 2013 Source: Yole Développement, STMicroelectronics
  • A Flavor on Advanced Power Discrete 14IGBT• IGBT Trench Field Stop: the most advanced IGBT technology offering 50% better efficiency than planar technologies• IGBT 1200V Emitter Implant, 100 um Wafer thinning for better thermal characteristics and Power Module applications• IGBT Emitter Implant (100A and 200A) for HEV Motor Control Applications WW Growing TAM 2015: $5.6BPower Modules • High Power Modules for Industrial and Automotive applications • Proprietary ST packages, compact size and available in Solderable or PressFit Pins • Now available in Engineering Samples STA3G40K120P6S Source: WSTS, STMicroelectronics
  • A Flavor on Advanced Smart Power 15Galvanic Isolation: Key Benefits Galvanic Isolation: Target Applications • Space Saving New Edge Technology for a wide range of • High System Reliability SoC applications • Fast Communication Link • Industrial Drives & Motion Control • Strong Signal Integrity • Automotive EV & HEV Drive • Magnetic Field Immunity • Factory Automation • Easy Diagnostic • Industrial Networking • Improved Safety • Solar Inverters • Isolated Current Sensing • Energy Metering Smart Sensors • Anti-Tampering systemGap DRIVE platform • Isolated IPM Module WWIsolation voltage 6 kV Growing ST Patented TAM 2014: Technology $2B Source: IHS iSuppli, Strategy Analytics, STMicroelectronics
  • A Flavor on Advanced Power Line Modem 16COMET: Flexible PLM Solution Application Layer• Flexible DSP & Multi Digital Cores to address multiple standards• Comply with multiple worldwide regulations and frequency bands• Single chip solution for High End Energy Metering Metrology PLC ModemCOMET: Super Integration Advantages• Smart Meter system cost reduction • Bill of materials and cost reduction• Production costs reduction All Smart Meter functions • Supply chain simplification in a single chip!• Reliability and quality enhancement • Less number of parts and connections WW installed Smart Meters CAGR 2011-17: 34% from 97 Million to 561 Million Source: ABI Research, May 2012
  • A Flavor on Advanced Digital Power Conversion 17Digital Power Target Applications• Main Advantages: • High Power & High Efficiency • Topology independent solution Converters: Photovoltaic , Telecom, Cloud Computing and • Control, Communication and Server Monitoring functions • Thermal management • High End Professional Lighting • Easy to program, easy to use • Smartphone and Tablets • Very high efficiency with control law • CPU Power Supply adapted to load conditions• Improved reliability: Networking • Black Box Recorder • Faults Detector & Precursor Analog Sensors Front Computing Actuations End Connectivity Digital Power Management Smart Power Path Handling Battery Management DSP Automatic Load Detection Control Algorithm
  • A Flavor on Advanced Products 18 Antenna Tuners • Mobile Phone antenna is matched by design (GSM or 3G) and/or configuration (“in hand” or “free space”) • ST tunable solution adapts the antenna impedance to various modes and preset configurations in order to optimize signal reception and power efficiency WW Smartphone & Tablets CAGR 11-17: > 20% TAM: > 1 Billion units Antenna Tunability RF Tuner Fewer Faster Increased Longer battery life dropped / data-rate TRP & TIS HVDAC* missed calls (Total Radiated Power & Total Isotropic Sensitivity)Available in Module & Discrete *HVDAC: High Voltage Digital to Analog Converter
  • Summary 19• Focusing on High-End Growing Markets: Smart Grid, Automation and Portable• Enriching Power Discrete product families by introducing SiC, GaN, advanced IGBT and Power Modules• Combining efficient Power Technologies (IGBT, SiC, GaN) with Smart Power ICs in Advanced Modules (high temperature, high current, …) for Smart Grid and Automation markets• Entering Digital Power Conversion in High Performance and High Efficiency applications supporting new stringent energy regulations.
  • MicrocontrollersClaude DardanneExecutive Vice President,General Manager, Microcontrollers, Memory & Secure MCU GroupFrancois GuibertExecutive Vice President,President, Greater China and South Asia Region
  • 2Overview
  • Microcontrollers in MMS Group 3 Memories • Serial EEPROM Secure Microcontrollers • RF memories • Personal and embedded • #1 WW Supplier security • Secure Hardware platforms and turnkey solutionsGP Microcontrollers Key Enablers• General Purpose 8-bit • State-of-the-art embedded NVM technology and 32-bit MCUs• Automotive 8-bit • Advanced 8 & 32-bit CPU platforms MCUs • System & Security expertise • Market leadership in key products Supporting our target marketsSmartGrid / Industrial Healthcare Appliances Consumer Security
  • WW TAM Microcontrollers* 2008-14 4 12,000 From ~$9B in 2008 to ~$10B in 2014 10,000 8,000$M 6,000 4,000 2,000 0 2008 2011 2014 General Purpose MCUs Secure MCUs * WW TAM Microcontrollers excluding automotive, payphone memories & cards  Source WSTS February 2012
  • ST Microcontrollers Revenues 2007-11 5 1000 9% 900 8% 800 7% 700 6% 600 5% 500 US$M 4% 400 3% 300 200 2% 100 1% 0 0% 2007 2008 2009 2010 2011 GP MCUs Secure MCUs MCU share % MCUs Total revenues = General Purpose MCUs + Secure MCUs Market share for consolidated MCUs excluding automotive, payphone memories & cards  Source WSTS February 2012
  • GP Microcontrollers by Market Segment 6 2011 Revenues Smartcard, Industrial Automotive and Others Consumer 10% 6% 19% Computer 2% 63% Distribution
  • Secure Microcontrollers Market Segment 7 2011 Revenues Smartcard Automotive, Industrial and Others 1% 68% Consumer 6% 25% Computer
  • Microcontrollers Global Presence 8 20% 32% 37% 11% 32% 37% 20% 12% Greater China Japan &Americas EMEA & South Asia Korea % by location of order shipment (2011) % by customer origin 2011 revenue by geography
  • Microcontrollers Market Share 9• GP + Secure MCUs consolidated • TAM CAGR 07-11: +1.8% Market share 2007: 4.7% • $M Revenue CAGR 07-11: +16.8% Market share 2011: 8.1%• General Purpose MCUs • TAM CAGR 07-11: +1.8% Market share 2007: 2.9% • $M Revenue CAGR 07-11: +16.9% Market share 2011: 5.0%• Secure MCUs • TAM CAGR 07-11: +1.5% Market share 2007: 10.7% • $M Revenue CAGR 07-11: +16.7% Market share 2011: 18.8% Source: WSTS, February 2012
  • 2011 WW GP & Secure MCUs Revenues 10 2,500 2,000 ST #7 in 2009 #5 in 2011US$M 1,500 1,000 Secure General Purpose 500 0 Source: IHS iSuppli , March 2012
  • Microcontrollers Highlights 11• General Purpose Microcontrollers • Very fragmented multi-segments market  Tens of thousands customers WW. • Well established and profitable business model. • ST playing a leadership position in the migration to advanced 32-bit platforms. • With the STM32 family, ST is providing the broadest portfolio based on ARM Cortex-M CPU (> 300 P/N).• Secure Microcontrollers • Growth no longer driven only by the traditional “Smartcard” business. • Growth also driven by new applications/customers requiring more and more embedded security functionalities for: • Near Field Communication • Trusted Platforms • Smart Grid • Healthcare • Brand Protection …
  • 12Growth Drivers and MarketOpportunities
  • From Societal Needs to Solutions 13Societal trends IP & System Applications Solutions Integrated Controllers Smart Grid &  Smart Metering Energy • Ultra low power Industrial  Appliance Control efficiency • A/D Converter…  Sensors Network & saving Network and System • IP protocols Appliances • Harvested sensor nodes  Pay TV, Touch Control • Power management…  Brand protection Mobility RF Connectivity  M2M & • NFC, Contactless card Consumer • ZigBee, RF4CE, IPV6 & Audio Ease of Life • Bluetooth, BTLE, WiFi…  Home monitoring User interface  Therapy control • Touch sensing Healthcare  Drug traceability Trust • Smart Display… & Security • Trusted processing & SW  Mobile payment Security • Tamper resistance Security  ID, e-Passport • Cryptography…  Sport coaching
  • General Purpose MCUs Strategy Outlook 14 Market SmartGrid Healthcare Consumer focus Industrial AppliancesPriorities Advanced Ultra Low Power SW & Turn-key Technology Analog & Wireless platforms
  • Secure MCUs Strategy Outlook 15 Banking PayTV USIM, SE NFC, M2M Market Personal Security Embedded Security focus Brand Identity Transport Protection TPMPriorities Advanced Contactless SW & Turn-key Technology security performance solutions
  • 16New Products
  • e-NVM Technology Portfolio 17 2009-10 2011-12 2013-14e-Flash 90nm 80nm 55nme-EEPROM 130nm 90nm  Very high speed  Ultra low power  Advanced analog functions  In-house manufacturing
  • Product Families and Roadmaps 18 Ultra Low Power Continuum STM32 L0 STM32 L1 STM32 L4 GP MCUs 32-bit 32-bit 32-bit 32-bit Cortex - M0 Cortex - M3 Cortex - M4 Cortex - MxEntry level STM32 F0 STM32 F1, F2 STM32 F3,F4 STM32 F5 High performance ST promote the High computing Address Leading edge broadest portf olio power including 8 & 16-bit market computing power addressing a digital signal Low cost, low and digital signal very wide range processing power f ocus processing of applications capabilitiesSecureMCUs 32-bit 32-bit Cortex SC000 Cortex SC300Entry level High performance ST31 ST33 Cost & power Address high optimized to security market address the requiring high Contactless computing power market Based on ARM Cortex - M family
  • GP Microcontrollers – Features Trend 19 Analog & Data User Sense & Drive Conversion Interface Interact Peripherals Accurately ADC, DAC, LCD, TFT, Easily Comparators… Switches, Touch Timers System Wireless Synchronize Counters Connectivity Connect your Power Mgt, Reset, Precisely Hi-Resolution Regulator, RTC,Osc ZigBee, BTLE, ANT, Digital Life RF4CE, WiFi, NFC… Digital Signal CPU Wired Magnify Processing Connectivity TransferUser Experience Enhanced I²C, SPI, USART, Data instruction set CAN, USB… Security & Crypto Memory F/W Libraries Store SRAM EEPROM FLASH Powerful Increasingly Up to 256KB Up to 512KB Up to 2MB Computing …More integration to connect the world and intuitively interface with people securely
  • Secure Microcontrollers - Features Trend 20 Key & Secret Enhance Protect handling Family Custom Black Box Concept Semi-custom Application Secret Secure ST23/31/32/33 Security personalization Security Wired Protect against Connectivity Connect your Counterfeiting HW & SW CPU Countermeasures ISO 7816, USB, Digital Life I²C, SPI, SWP… Cryptography MIFARE Wireless Authenticate Classic & Plus, Connectivity HW crypto engine Pay Mobile Surely Crypto libraries DESFire NFC, ISO 14443 Flexible Memory EEPROM FLASH Powerful Up to 160KB MEMORY Up to 1.2MB Computing Concept ST Secure OS + Integration Secure and Personalization Customized = Card / OS vendors in Secure Software Ecosystem ST Turnkey Solution … More security to enable a trusted and connected digital world
  • 21Summary
  • Microcontrollers Summary 22 General Purpose Microcontrollers  Pursue market share gain capitalizing on 32-bit platform leadership.  Re-enforce STM32 family as the broadest WW portfolio based on ARM® Cortex TM-M cores, covering current and future needs for 8 to 32-bit markets  Bring added values around ARM® CortexTM-M cores  Enlarge portfolio with innovative IPs matching segmentation focus: Connectivity, Analog I/Os, specific FW libraries…  Capitalize on ST advanced e-NVM technologies enabling Ultra Low Power portfolio. Secure Microcontrollers  Deploy security concept to new applications :  Brand Protection, M2M, Healthcare, Trusted Platform, Smart Grid, High end Telecom…  Introduce ST31 based on ARM ® highly secure core SC000  Enlarge the contactless product portfolio  Migration to ST advanced e-Flash technology embedding very advanced security features
  • ST-Ericsson – breakout sessionCarlo FerroChief Operating OfficerRonen Ben-HamouSenior Vice President, Thin Modem Solutions, System SiliconDevelopment May 23 2012
  • Safe harbor statement This presentation contains forward-looking statements that involve inherent risks and uncertainties. We have identified certain important factors that may cause actual results to differ materially from those contained in such forward-looking statements. For a detailed description of risk factors see STMicroelectronics’ (NYSE:STM) and Ericssons (NASDAQ:ERIC) filings with the US Securities and Exchange Commission, particularly each companys latest published Annual Report on Form 20-F.2
  • Agenda ∙ Introduction ∙ Product Roadmap ∙ Q&A3
  • Strengthening the fundamentals ∙ Strategy ∙ Focus ∙ Flexibility ∙ Customer base ∙ Expand accessible applications through partnership ∙ Grow beyond the traditional customer ∙ Cost structure ∙ Lowering the breakeven point ∙ Distinctive competencies ∙ >5000 patents plus parents IPR umbrella ∙ Know-how of about 4000 skilled R&D resources after restructuring ∙ Products ∙ Compelling roadmap4
  • ModAp systems as a key strategic differentiating offering through partnerships ∙ Focusing the R&D portfolio to deliver highly competitive complete system solutions in the form of integrated ModAp platforms ∙ Repositioning whole business model to develop key building blocks either directly or through partnerships ModAp system integration RF Application Modem Connectivity Power Processor Analog mixed signal • Continue to develop • Partnership with ST • Build on current • Build on current modem IP for ModAp • Transfer of R&D capabilities capabilities integration and to activities and offer thin modems to • Develop either directly headcount or through customers • Jointly promote partnerships and • Possibly license standalone APEs and alliances modem IP to 3rd thin modems parties ∙ Full continuity of ST-Ericsson committed roadmap and current customer engagements5
  • Halving the breakeven point Opex reduction Opex breakdown at completion 400 SG&A Opex (M$) 200 R&D - 4Q11 4Q13 Revenue breakeven point R&D focus at completion Revenues (M$ ) ModAp Modem < 600M$ Connectivity 4Q11 Margin Opex at Completion & Entry Improvement Reductions6
  • HSPA Roadmap LTE In Production/Sampling 2012 2013/2014 ARM ARM Partnership with ST for future A9500 A9540 application processors 2xA9 2xA9 1.2G 1.85G U9500 L9540 M5730/80 21 M7400/ 100 150 M7300 42 M74XX 84 IMG IMG IMG FD-SOI FD-SOI Rogue ModAps L8540 2xA9 1.85G To be Announced 2xA9 2+G 100 To be Announced 2xA15 2+G 150 100 42 42 84 ARM ARM IMG U8500 2xA9 2xA9 To be 2xA9 1G U8520 1.2G Announced 1.2G 100 14 14 42 GPU IP & speed (MHz) ARM Processor & Speed (GHz) Modem DL Speed (Mbps) CG2900 CW1100 CG2905 CW1250 To beConnectivity GBF WLAN GBF WLAN announced7
  • Thor™ M7400 is the major step Traditional HW modem Thor M7400 transition SW/HW Modem Low synergy between RAT’s to the new architecture Flexibility of a soft modem Long time and high complexity to Power consumption of add new NS features a HW modem Inefficient silicon area usage Optimized silicon area Thor M5780 Thor next generation Thor M7400 and next generation will harvest the benefits of the new architecture8
  • A revolutionary modem architecture Thor™ M7400 Groundbreaking architecture Future architecture investment Stability, flexibility and scalability Common TD- GSM WCDMA LTE & inter-RAT SCDMA Common framework for inter- RAT NAS AS PHY Common framework for data processing HW Scalable common HW9
  • Platforms for LTE smartphones and tablets NovaThor U/L9540 NovaThor (A9540+M7400) L8540 10% power improvement 15 % size saving 20% less components Significantly lower cost NovaThor NovaThor L8540 3rd Generation Architectural continuity Dual core ARM Cortex-A15 Imagination Rogue GPU Next generation Thor modem FD-SOI technology10
  • NovaThor™ L8540 – Integrated LTE platform Complete integrated LTE platform • Dual ARM Cortex™ A9 @ 1.85GHz • Imagination PowerVR™ SGX544 GPU • LTE modem and full set of connectivity Best multimedia experience in an integrated platform • 1080p 3D and 1080p up to 60fps video recording and playback • State of the art 3D graphics Extreme power efficiency for real-life usage • Unique power management and low voltage operation delivers up to 30% more battery life Global 4G mobile broadband • LTE (FDD/TDD) 100/50Mbps, HSPA+ 42/11Mbps, TD-SCDMA • Worldwide coverage with up to 8 bands11
  • Differentiation with FD-SOI Technology ∙ FD-SOI technology offers: ∙ NovaThor L8540 in FD-SOI would have ∙ More GHz and less power ∙ Operation up to 2.5Ghz ∙ Reuse of existing design ∙ 2x the performance possible at 0.6V ∙ At comparable cost ∙ 35% less power operating at max performance of NovaThor L8540 ∙ Working with ST ∙ For a typical smartphone this translates to: ∙ 4 hours more high-speed browsing ∙ 2.5 hours more HD video playback ∙ 2 hours more HD video recording ∙ Or an additional full waking day of use12
  • Q&A