Tuesday, September, 11, 2018 New York, New York
Public NXP and the NXP logo are trademarks of NXP B.V. All other product or service names are the property of their respective owners. © 2018 NXP N.V. Welcome Jeff Palmer VP of Investor Relations Agenda 8:00 – 8:10am IR Introduction Jeff Palmer 8:10 – 8:40am NXP Overview Rick Clemmer 8:40 – 9:10am Financial Overview Peter Kelly 9:10 – 9:25am Q&A Rick Clemmer and Peter Kelly 9:25 – 9:45am Mobile Rafael Sotomayor 9:45 – 10:40am Industrial Geoff Lees 10:40 – 10:55am Q&A Rafael Sotomayor and Geoff Lees 10:55 – 11:10am Break 11:10 – 12:40pm Automotive Kurt Sievers, Torsten Lehmann and Jens Hinrichsen 12:40 – 12:55pm Q&A Kurt Sievers, Torsten Lehmann and Jens Hinrichsen 12:55 – 1:10pm Go-to-Market Steve Owen 1:10 – 1:30pm Summary and Q&A Rick Clemmer and NXP Management Team 1:30 – 2:30pm Lunch
2 Legal Notice
Forward-Looking Statement
This presentation or the subsequent discussion period includes forward-looking statements which include statements regarding our business strategy, financial condition, results of operations, market data and expectations, outlooks, projections, estimates, goals and targets, as well as any other statements which are not historical facts. By their nature, forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. These factors, risks and uncertainties include the following: market demand and semiconductor industry conditions, our ability to successfully introduce new technologies and products, the demand for the goods into which our products are incorporated, our ability to generate sufficient cash, raise sufficient capital or refinance our debt at or before maturity to meet both our debt service and research and development and capital investment requirements, our ability to accurately estimate demand and match our production capacity accordingly or obtain supplies from third-party producers, our access to production from third- party outsourcing partners, and any events that might affect their business or our relationship with them, our ability to secure adequate and timely supply of equipment and materials from suppliers, our ability to avoid operational problems and product defects and, if such issues were to arise, to rectify them quickly, our ability to form strategic partnerships and joint ventures and successfully cooperate with our alliance partners, our ability to win competitive bid selection processes to develop products for use in our customers’ equipment and products, our ability to successfully hire and retain key management and senior product architects; and, our ability to maintain good relationships with our suppliers. In addition, this presentation contains information concerning the semiconductor industry and our business which is forward-looking in nature and is based on a variety of assumptions regarding the ways in which the semiconductor industry, our market segments and product areas will develop. We have based these assumptions on information currently available to us, if any one or more of these assumptions turn out to be incorrect, actual market results may differ from those predicted. While we do not know what impact any such differences may have on our business, if there are such differences, our future results of operations and financial condition, and the market price of the notes, could be materially adversely affected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak to results only as of the date the statements were made. The forward-looking statements in this presentation are based on management’s plans, objectives and information available as of the September 11, 2018 date of this presentation. Except for any ongoing obligation to disclose material information as required by the United States federal securities laws, NXP does not have any intention or obligation to publicly update or revise any forward-looking statements, whether to reflect any future events or circumstances or otherwise. Neither future distribution of this material nor the continued availability of this material in archive form on our website should be deemed to constitute an update or re-affirmation of these forward-looking statements as of any future date. For a discussion of potential risks and uncertainties, please refer to the risk factors listed in our SEC filings. Copies of our filings are available from our Investor Relations department or from the SEC website, www.sec.gov
No Offer or Solicitation
The Presentation does not constitute or form part of, and should not be construed as, an offer to sell or issue, or the solicitation of an offer to purchase, subscribe to or acquire, securities of NXP, or an inducement to enter into investment activity in the United States or in any other jurisdiction in which such offer, solicitation, inducement or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of such jurisdiction. No part of this Presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever.
The Presentation is not for publication, release or distribution in any jurisdiction where such publication, release or distribution would constitute a violation of the relevant laws of such jurisdiction, nor should it be taken or transmitted into such jurisdiction.
3 NXP Overview Rick Clemmer Chief Executive Officer Secure Connections for the Smarter World… has Evolved
Pre/processing Cloud IoT Edge Focus Verticals Enabling Infrastructure Technologies Automotive Home Industrial Machine Gateway Controller Learning Authentication
Auto Smart Industrial & IoT Processing Gateway City
Mobile Connectivity Services Data Analytics Smart Smart Smart Wearables Home Health Retail
Comm. Infra.
Security Smart Voice Robotics Media Actuating Buildings Assistant Streaming
5 HPMS Market Leader with Sharp Focus, Broad Reach1,2,3,4,5
NXP 3Q18TTM Revenue by Operating Segment NXP: the HPMS leader • #5 global non-memory semi supplier 4% Corporate & Other • #1 global auto semi supplier 42% • Focused IoT processing: MCU–CrossOver–AP Auto 6% - #2 MCU supplier SIS • #1 secure identification
19% SI&I Goal: deliver >1.5x market growth Strategic 29% • HPMS Complementary portfolios and customers SCD Business • Opportunities to cross sell • Ability to deliver complete solutions
1. 3Q18TTM assuming Q3 mid guidance 2. Based on 2017 estimated revenue ranking of non-memory semiconductor suppliers 3. Market positions based on IHS market “competitive-landscaping-tool-clt-annual-Q2-2018” 4. Growth relative to focused addressable market 6 5. ABI Research Secure Smart Card & Embedded Security IC Technologies, 1Q18 Addressing 4 Major End Markets
Automotive Industrial & IoT ADAS + Electrification Fragmented customer base System solutions innovation with OEMs Processing needs are transforming markets Increased content drives growth Scalable solutions as a differentiator
Mobile Communication, ~2B mobile phone and adjacent Infrastructure & Other device market Capex-driven wireless infrastructure market Ongoing feature innovation & attach Secular growth driven by new cellular standard
7 Focused Leadership – End Markets1
NXP 3Q18TTM HPMS Revenue by End-market Exposure Broad end market exposure • Long product life cycles • High barriers to entry 49% • Application expertise Automotive Recognized leadership in • Automotive 21% • MCU and application processors 13% Industrial & • Mobile transactions Mobile 17% IoT • RF Power amplifiers. mMIMO Comm. Infra. • Secure identification, mobility, RFID & Other
8 1. 3Q18 TTM financial data based on 4Q17-3Q18E (mid-point guide) Growth Opportunity Driven by Focus End Markets1,2 Growth by End Market Percent 2018E – 2021E $10.9B - $11.6B End Market 3Q18TTM 3-yr. CAGR Revenue 5-7% 3-Yr CAGR $9.4B Automotive 47% Up 7 to 10%
Industrial & IoT 20% Up 8 to 11%
Mobile 12% Up 4 to 6%
Comm. Infra. & Other 17% 0 to up 2%
Corporate & Other 4% (3%)
Total 100% Up 5 - 7% 2018 2021E Street Est.
1. 2018 Street Estimate based on FactSet 9 2. 3Q18 TTM financial data based on 4Q17-3Q18E (mid-point guide) Automotive – NXP Leads, Accelerates in New Areas1,2
Revenue 7-10% 3-Yr CAGR Growth drivers $4.4B • New business – above market growth − ADAS / radar, vehicle networks, electrification • Core business – at market growth − Connected infotainment, powertrain, 3Q18TTM 2021E secure car access
Market 5-7% 3-Yr CAGR $27B Value proposition • Solution portfolio • Innovation power • Automotive safety & reliability 2018E 2021E
1. TAM-F = Semiconductor TAM – Memory, Optoelectronics, Discretes 10 2. Source: Strategy Analytics Industrial & IoT – Highly Diversified1,2,3,4
Revenue 8-11% 3-Yr CAGR Growth drivers $1.9B • Processing − 32bit microcontrollers & cross-overs − IoT application processors
3Q18TTM 2021E − Analog mixed-signal & connectivity
Market 3-5% $127B 3-Yr CAGR Value proposition • Broad, scalable solutions • Common S/W tool environment • Deep application insights • Channel reach 2018E 2021E
1. Charts/graphics created by NXP based on Gartner research. Source: Gartner Semiconductor Forecast Database, Worldwide, 2Q18 Update (Calculations performed by NXP) 2. TAM-F = Semiconductor TAM excluding Memory, Optoelectronics and Discretes 3. Industrial/IoT includes Industrial, Consumer and Computing, excludes Ultramobile, Wearables and Smartcards 4. The Gartner Report(s) described herein, (the “Gartner Report(s)”) represent(s) research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. (“Gartner”), and are not representations of fact. Each Gartner Report speaks as of its original 11 publication date (and not as of the date of this Investor Presentation) and the opinions expressed in the Gartner Report(s) are subject to change without notice Mobile – Specialty Supplier with High Moats1,2,3,4
Revenue 4-6% 3-Yr CAGR $1.2B Growth drivers • Mobile payment adoption • New use cases (transit, access, etc.) • High-speed mixed-signal interface
3Q18TTM 2021E Value proposition Market 4-7% $71B 3-Yr CAGR • Technology innovator and leadership • Recognized ecosystem leader • Deep application insights
2018E 2021E
1. Charts/graphics created by NXP based on Gartner research. Source: Gartner Semiconductor Forecast Database, Worldwide, 2Q18 Update(Calculations performed by NXP) 2. TAM-F = Semiconductor TAM excluding Memory, Optoelectronics and Discretes 3. Mobile Includes Smartphones, Feature phones, Wearables and Ultramobile 4. The Gartner Report(s) described herein, (the “Gartner Report(s)”) represent(s) research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. (“Gartner”), and are not representations of fact. Each Gartner Report speaks as of its original 12 publication date (and not as of the date of this Investor Presentation) and the opinions expressed in the Gartner Report(s) are subject to change without notice Comm. Infra. & Other – Cyclical and Project Oriented1,2
0-2% Revenue $1.6B 3-Yr CAGR Growth drivers • 5G basestation deployment will result in − Adoption of mMIMO − Continued leadership in LDMOS − Transition to GaN 3Q18TTM 2021E • Leadership in transit, access and retail − MIFARE and RFID Market 3-5% $28B 3-Yr CAGR Value proposition • Broadest portfolio • Technology leadership • Deep application insights 2018E 2021E
1. Charts/graphics created by NXP based on Gartner research. Source: Gartner Semiconductor Forecast Database, Worldwide, 2Q18 Update (Calculations performed by NXP) TAM-F = Semiconductor TAM excluding Memory, Optoelectronics and Discrete 2. Comm/Infra Includes Comm/Infra and Smartcards 3. The Gartner Report(s) described herein, (the “Gartner Report(s)) represent(s) research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. (“Gartner”), and are not representations of fact. Each Gartner Report speaks as of its original 13 publication date (and not as of the date of this Investor Presentation) and the opinions expressed in the Gartner Report(s) are subject to change without notice Summary 1
NXP 3Q18TTM HPMS Revenue 2018E – 2021E by End-market Exposure End Market 3-yr. CAGR
Automotive 7 – 10% 49% Industrial 8 – 11% Automotive Mobile 4 – 6% Comm. Infrastructure & Other 0 – 2%
21% Corporate and Others (3%) 13% Industrial & Mobile 17% IoT Comm. Infra. NXP 5 – 7% & Other
14 1. 3Q18 TTM financial data based on 4Q17-3Q18E (mid-point guide) Value Proposition
Driving RMS Multiple High Solutions World-class Leadership Growth Markets Core Competency Expertise & Team
Focused on RMS Profitable growth Resolving customer Customer focused > 1.5X pain-points passion to win
Maximize Shareholder Value Strong cash flow generation
15 Communications Infrastructure & Others Rick Clemmer Chief Executive Officer RF Infrastructure Leader1 NXP’s RF Infrastructure SAM • Market leader in RF technology and systems solutions Basestation • Multi-year cyclical market dynamics $2B Market • Expect 3-4x content increase versus 4G build-outs $1.6B $1.6B • Leader in LDMOS – continued usage for $1.4B <3GHz bands − NXP continues to deliver performance leadership • Highly integrated mMIMO solutions Technology deliver 8x throughput & − Significant content increase over existing architectures Innovation Leadership • Industry’s highest linearity GaN IP, optimized for 5G − GaN - Strong customer engagements & qualification • Highest performance SiGe mmWave solutions for 2015 2017 2019 2021 20-40Ghz 4G Multi-Market − SiGe mmWave shipping to US wireless carriers 5G mm-Wave 5G mMIMO
17 1. Source: Market size, historic and future growth rates based on NXP CMI internal research of applicable peers Regained Technology Leadership in SIS 1
Personal ID • Payments on steady path since 1Q17 ePP, eID #1 ~$0.9B SAM • Performance in line with market • Leading technology Payment #2 − 40nm Flash P71 & JCOP 4
− Unique full solution: HW / OS / Applet / MW
• leadership in transit & access with MIFARE®
Smart Cities − 750+ cities world-wide & growing
~$0.5B SAM • Global leader in RFID tag with UCODE, ICODE, NTAG
− Broadest product portfolio, 20% less power consumption
− Tag units expected to double by 2021 Transit & Access #1 RMS 5 • Drive convergence of cards and mobile with MIFARE2GO
Logistics & Retail #1 − Transit solution of choice in Google Pay RMS1.3
18 1. Source: ABI Research, IDTechex, NXP CMI Maximizing Market Impact of NXP Networking Assets
• Differentiated technology and complex SoC execution capabilities S32 Automotive gateways ADAS platform • Continued focus on core Outstanding SoC networking markets: 5G & Execution, Accelerators enterprise deployments, CPE/SMB & security, datacenter offload CORE Layerscape • Harmonize SW platform with i.MX Service provider NETWORKING Enterprise & CPE to accelerate IoT infrastructure Cloud & storage opportunity World-class IP, System know-how and Software • Shared HW platform with S32 i.MX Automotive portfolio to capture full Home gateways potential of domain architecture Edge-computing for factory & building automation
19 NXP Evolves its Structure to Support Profitable Growth
• Simplified organization − Drive execution of our stated strategy − Deliver platform & solutions at scale − Collaborative growth − Strengthened focus, speed, efficiency
• Kurt Sievers is named president − Oversees all NXP business lines − Builds on outstanding track record of success, leading NXP to #1 position in Automotive − Will lead our business to broader leadership in Secure Connections for the Smarter World
20 21 NXP and the NXP logo are trademarks of NXP B.V. All other product or service names are the property of their respective owners. © 2018 NXP N.V. Financial Overview Peter Kelly Chief Financial Officer Agenda
FINANCIAL OVERVIEW
NXP investment thesis Our focus is operating profit Progress since our last analyst day? Financial model Why invest in NXPI
23 NXP Investment Thesis
Market Leader in Focused on Strong Growing Markets Profitable Growth
Shareholder All Excess Cash Friendly Returned to Shareholders
24 Agenda
FINANCIAL OVERVIEW
NXP investment thesis Our focus is operating profit Progress since our last analyst day? Financial model Why invest in NXPI
25 Consistent Non-GAAP Operating Profit Growth1
STDP $9.3B Revenue Divestment
FSL Merger
RF Power Divestment $4.4B IPO Sound Solutions Non-GAAP Divestment 26.6% 29.4% Operating Margin
27.6% $2.5B $2.7B 23.3% 25.0% 19.9% 19.1% $1.7B Non-GAAP 16.0% $1.4B Operating Income $1.1B $0.7B $0.8B $0.8B 2010 2011 2012 2013 2014 2015 2016 2017 3.5x 2.7x 2.6x 1.9x 1.7x 3.9x 2.5x 1.0x Financial Leverage
1. Reconciliations of non-GAAP measures throughout this presentation to the most comparable measures calculated in accordance with GAAP can be found in the “NXP Historic Financial Model” file in the 26 Financial Information page of the NXP Investor Relations section of our website at www.nxp.com/investor. Financial leverage, defined as net debt divided by trailing twelve months adjusted EBITDA NXP Focus is the Growth in Operating Profit1,2
Operating Profit ($) Growth 4.5x 4.3x NXP focus 4.1x 4.0x • High RMS 3.5x
3.0x • Employee engagement
2.5x 2.6x • Customer satisfaction 2.1x (net promoter scores)
1.5x
1.0x
0.5x
2011 2014 2017 2020E -0.5x Broad-based Peers Analog-MCU Peers Mobile Peers NXP (Street) NXP (5% CAGR) NXP (7% CAGR)
1. For Peer Groups, data reflects market capitalization weighted averaged operating profit growth; for periods 2011-2017 values are reported actuals; 2018E-2020E Wall Street sell-side estimates, including NXP, Broad-based Peers = CY, IDTI, LSCC, MPWR, ON, SLAB, XLNX; Analog-MCU Peers = ADI,IFX, MCHP,MXIM,STM,TXN; Mobile Peers = AVGO, CRUS, DLG, QCOM, QVRO, SWKS, SYNA 27 2. Source: all data sourced from FactSet Growth Opportunity Driven by Focus End Markets1,2 Growth by End Market Percent 2018E – 2021E $10.9B – $11.6B End Market 3Q18TTM 3-yr. CAGR Revenue 5 – 7% 3 – Yr. CAGR $9.4B Automotive 47% Up 7 to 10%
Industrial & IoT 20% Up 8 to 11%
Mobile 12% Up 4 to 6%
Comm. Infra. & Other 17% 0 to up 2%
Corporate & Other 4% (3%)
Total 100% Up 5 – 7% 2018 2021E Street Est.
1. 2018 Street Estimate based on FactSet 28 2. 3Q18TTM financial data based on 4Q17-3Q18E (mid-point guide). Drivers of Product Revenue Growth
Growth: 7 – 10% 3–yr. CAGR • ADAS/Radar, vehicle networks, electrification Automotive • #1 Global auto semi supplier • Connected infotainment, powertrain, • Leadership in all focus areas secure car access
Growth: 8 – 11% 3–yr. CAGR • Broad based industrial Industrial & IoT • Leader in GP MCU & AP • High Performance edge & media processing • Driving analog attach to MCU • Low-power edge & node processing
Growth: 4 – 6% 3–yr. CAGR • Specialty mobile supplier • Mobile wallet use-cases expansion Mobile • Leader in mobile payments • Custom interfaces, voice & audio and charging • Specialty analog & interface
Growth: 0 – 2% 3–yr. CAGR • mMIMO & 5G build-out to drive RF power Comm. Infra. & Other • Leader in secure identity-access • Recognized security leadership & expertise • Leader in RF power • Repurposing network processor IP & expertise
29 Source: End-markets as defined by the NXP Strategy Office End-market to Operating Segment Map (aka Jeff’s “Decoder Ring”)1
Auto SCD SI&I SIS 7 – 10% CAGR 8 – 11% CAGR 0 – 2% CAGR 0 – 2% CAGR
SCD Automotive • Entire Auto • Infotainment AP Auto 7 – 10% CAGR
• Industrial & IoT MCU SII Industrial • High perf. analog • Industrial & IoT AP • AC-DC power & IoT • Low power connectivity • Specialty ASSPs
SCD 8 – 11% CAGR • NFC readers Market - • Custom interfaces
SII Mobile • Mobile wallet • Power management End SCD 4 – 6% CAGR • Voice & audio
Comm. Infra. • Specialty RF SIS • Entire SIS SII & Other • Digital networking 0 – 2% CAGR
Auto Ind & IoT Mobile Comm & Auto Mobile Ind & IoT Infra Comm & Infra
Business Lines 30 1. 3Q18 TTM financial data based on 4Q17-3Q18E (mid-point guide). Agenda
FINANCIAL OVERVIEW
NXP investment thesis Our focus is operating profit Progress since our last analyst day? Financial model Why invest in NXPI
31 Performance Versus the NXP Analyst Day 20161,2,3
Business Lines (% ’17 Revenue) Analyst Day 2016 2017 Y-Y 3Q18TTM Y-Y Comment vs. Expectations at Analyst Day 2016
Auto (41%) Up 6 to 9% 11% 9% Performance at high-end of range
SCD (30%) Up 10 to 15% 21% 14% Momentum above plan
SI&I (21%) Up 5 to 9% 3% (5%) Legacy DN products decline
SIS (6%) Up 2 to 5% (29%) 3% Bank-card market saturation
Total NXP Revenue Growth 5 – 7% 10% 7%
Non-GAAP Gross Margin 53 – 57% 53.4% 53.3% Mix and input costs
Non-GAAP R&D % 14 – 16% 15.7% 16.7% Investing for future growth
Non-GAAP SG&A % 6 – 8% 8.3% 8.0% Non-GAAP Operating Margin 31 – 34% 29.5% 28.6%
1. Reconciliations of non-GAAP measures throughout this presentation to the most comparable measures calculated in accordance with GAAP can be found in the “NXP Historic Financial Model” file in the Financial Information page of the NXP Investor Relations section of our website at www.nxp.com/investor. 2. 2017 Y-Y and 3Q18TTM Y-Y, excludes Standard Products 32 3. 3Q18 TTM financial data based on 4Q17-3Q18E (mid-point guide). Track Record of Non-GAAP Gross Margin Expansion1
230bps 53.4% 120bps (80bps) 50.4% (200bps) 130bps 100bps
2016 ASP Erosion Volume SP FSL Input Cost Operational Q2’18 TTM Divestment Synergy Headwinds Execution
33 1. All values are either actual non-GAAP results or NXP Finance estimates Path to Mid-Point of Model Non-GAAP Gross Margin Exiting 20191
260bps 55.0% 53.4% (160bps) 60bps
Q2’18 TTM ASP Erosion Mix-Volume Operational Mid-point of Model Execution
34 1. Source: NXP Finance, All values non-GAAP estimates Focused R&D Investments to Drive Future Growth1,2
Non-GAAP R&D Investment Major R&D Investments
Corp & Other • Automotive: up 15% CAGR − Processing & Networking: S32, auto gateway, i.MX-auto, Ethernet − ADAS: radar, vision, V2X − Power: power management, battery management systems
Comm. Infra. & • Industrial: up 15% CAGR Other − Processing: i.MX – Hi-perf edge, i.MX RT – Ultra-low power, GP MCU
• Mobile: 3% CAGR Automotive − Security: eSE, RF, new applications Mobile − High-speed interfaces − Wireless charging
• Comm. Infra. & Other: down 6% CAGR Industrial & IoT − RF: GaN & LDMOS Pwr Amp., mmWave, mMIMO, new applications − Networking: 64-bit Layerscape − Consumer security solutions
1. Reconciliations of non-GAAP measures throughout this presentation to the most comparable measures calculated in accordance with GAAP can be found in the “NXP Historic Financial Model” file in the Financial Information page of the NXP Investor Relations section of our website at www.nxp.com/investor. 35 2. 2016 – 2018E CAGR Agenda
FINANCIAL OVERVIEW
NXP investment thesis Our focus is operating profit Progress since our last analyst day? Financial model Why invest in NXPI
36 Financial Model1 2018E – 2021E
Focused Market Growth(1) 3 - 5%
NXP Growth(1) 5 - 7%
Non-GAAP Gross Margin 53 - 57%
Non-GAAP R&D 14 - 16%
Non-GAAP SG&A 6 - 8%
Non-GAAP Operating Margin 31 - 34%
Non-GAAP Operating Income Growth ~8 - 14%
37 1. 3 Year CAGR from 2018 Wall Street estimates, sourced from FactSet, through 2021E internal NXP estimates Modeling Housekeeping Issues1
2019E 2020E 2021E
Non-GAAP Cash Taxes 8% 11% 12%
Incidental Taxes $166M $26M -
Stock Based Compensation $365M $365M $350M
Non-Controlling Interest $50M $45M $45M
38 1. Incidental taxes associated with the gain on various disposals and the breakup fee from Qualcomm Agenda
FINANCIAL OVERVIEW
NXP investment thesis Our focus is operating profit Progress since our last analyst day? Financial model Why invest in NXPI
39 Shareholder Friendly
Strong focus on cash Strong financial alignment management, and who of management and the cash belongs to shareholders
Experienced management team who are committed to Always ready to listen the company and focused on to our shareholders driving value for shareholders
40 Illustrative Sensitivities to Revenue Growth1
Estimated Non-GAAP Operating Income ($B) in 2021 ~$3.9B ~$3.7B 14% CAGR ~$3.4B 11% CAGR 8% CAGR
$2.7B
3Q18TTM 5% 6% 7% Model Revenue CAGR
1. Reconciliations of non-GAAP measures throughout this presentation to the most comparable measures calculated in accordance with GAAP can be found in the “NXP Historic 41 Financial Model” file in the Financial Information page of the NXP Investor Relations section of our website at www.nxp.com/investor. 2019 – 2021 We Will Generate Significant Non-GAAP FCF1,2
• Capital Generation − Potential to generate $7B – $8B of cumulative non-GAAP free cash flow − Business supports additional debt capacity of up to 2x – adding $2B – $4B of cash − Results in $9B – $12B to invest in the business and/or return to our owners
• Capital Return Options − Dividends: Target payout ratio of 20% to 25% of CFO − Buybacks: We have the capacity to continue to do substantial buybacks ▪ NXP will still be subject to a deemed dividend on buy backs in 2019
Strong Business Model, Balance Sheet, and Cash Flow! Significant opportunity to create shareholder value!
1. CFO = Cash flow from operations ;FCF = Non-GAAP free cash flow, defined as cash flow from operations, less net capital expenditures on property, plant and equipment 42 2. Assumes mid-point of long-term model 43 NXP and the NXP logo are trademarks of NXP B.V. All other product or service names are the property of their respective owners. © 2018 NXP N.V. Mobile Rafael Sotomayor Senior VP & General Manager Agenda
MOBILE
Market & Outlook Analog Mobile Wallet Beyond Mobile
45 $1.2B Mobile Business Expected to Grow 4-6%1,2
Phone Volume Revenue & Growth Drivers Revenue Outlook
4 - 6% 0 - 1% 3-Yr CAGR 3-Yr CAGR
Analog Portfolio Custom interfaces voice & audio, charging
2018E 2021E Secure Mobile Wallet 2018E 2021E eSE/NFC attach-rate increase through use-cases expansions
1. Strategy Analytics, NXP CMI 46 2. 3Q18TTM financial data based on 4Q17-3Q18E (mid-point guide) Selectively Leveraging Our Analog Portfolio in Mobile1
Interfaces Voice and Audio Charging High Performance Smart Haptic & Stereo Amp Certified QC4.0 Charging Custom ICs Leader in Voice Enhancement Fast Charging with Type-C PD
Custom high-performance interfaces Voice, audio & haptic solutions End-to-end USB-C, PD3.0 Smart amp, haptic driver, algorithms Direct charger, AC-DC, OVP,… Connector and cable interfaces Switches, authentication, protection… Hi-Fi audio with speaker protection 2X faster, 2X cooler charging Highest dynamic range, bass sounds 2:1 direct charging Multi-generation stickiness In-depth system knowledge Best voice calling experience SAM CAGR 40% Noise, echo, wind suppression >6B >1B >3B Interface ICs shipped Smart amps Phones with NXP shipped voice software
47 1. Source: NXP CMI Mobile Wallet Growth Driven Enabling OEMs and Services 2014 ONE OEM,
ONE USE CASE Service Service Providers
Service by OEM OEM Mobile Payment
48 Growth Driven Enabling OEMs and Services
Tier 1 Mobile Payment NEW Services NEW Secure Transit
Next Tier Services 2GO Mobile
Government NEW NEW Customers
Wearables Reduce barriers for technology adoption Reduce time-to-market Enterprise & Hospitality Enable more use cases into mobile wallet platform
49 Mobile Wallet Use-Cases Expansion Drives Growth1
Expanding Use-cases
Attach Rate: Opportunity
NFC/SE AR % Payment Transit Access eID eUICC 50% Continued leadership in mobile payment From high-end smart phone to feature phones & wearables 30% Driving mobile transit From China to other regions
Deploying mobile access use-cases Car, building, university access… 2018E 2021E
50 Soure: NXP CMI NFC-Based Mobile Payment Reaches Scale1
Payment Transit Access eID eUICC
Healthy KPIs Large OEM Adoption Payment Evolution New Form Factors
250M Flagship mobile Users In-store Mid-tier penetration 4000 First feature phone (Jio) Banks In-app Smartwatch 1B Monitors/Trackers Transactions/Q Online Tablets >30 PCs Countries Peer to Peer
51 1. Source: Juniper, Apple, Samsung Transit: A Catalyst for Increased NFC Wallet Adoption1
Payment Transit Access eID eUICC
China RoW
China Cities Deployment NFC-based Mobile Transit Japan 100 US (4 cities)
• 1M NFC transactions/day UK 50 in Beijing Russia (3 cities) • > 500M of population More to come in 2019 10 covered in 2018
2015 2016 2017 2018
52 1. Source: NXP CMI Reliance Jio Phone Partnered with NXP to drive innovative secure services in India
• Driving secure mobile payment to the masses • JioPhone and JioPhone2: Two feature phones enabled with secure services
• Secure services − Closed loop P2P payment − UPI payment initiative − Mobile point of sale (mPOS) support − Mobile transit services throughout India
• NXP Provides − Hardware components: SE/NFC − Secure OS and Applications <$25 <$45 − Service Enablement JioPhone JioPhone2
53 The Next Wave of Use Cases
Payment Transit Access eID eUICC
Things People Places
University ID Xiaomi Gov ID (coming)
54 Expanding Security Platform to IoT
Payment Tier 1 Mobile
Transit Services
OEMs Next Tier Mobile Secure Services 2GO Government
Wearables Enterprise & Hospitality
Secure
IoT Devices Onboarding New New OEMs
55 56 NXP and the NXP logo are trademarks of NXP B.V. All other product or service names are the property of their respective owners. © 2018 NXP N.V. Industrial & IoT Geoff Lees Senior VP & General Manager Agenda
INDUSTRIAL & IOT
The AI / IoT Disruption & NXP Growth Opportunity
Understanding Customer Pain Points
NXP Solutions:
• Unique Processing Continuum
• Simplifying Software & Systems Complexity
Summary
58 The AI / IoT Era Will Create New Industry Leaders1
“The 4th Tectonic Shift in Computing”
Mainframe Mini-Computer PCs Cell Phones AI / IoT 10,000 Edge
1000 Processing
100 Machine 10 Learning
1 Units Shipped (Millions)UnitsShipped 0.1 Security
0.01 Connected
------
- Data
1950 1950 1960 1970 1980 1990 2000 2010 2020E 2020E
59 1. Source: Jefferies AI / IoT Disruption is the … Changing the Rules of New Growth Engine1,2,3,4… Engagement with the Market
IoT Endpoints, Worldwide Less diverse end devices Concentrated customer base 31% CAGR Defined ecosystem
6.1 Bpcs
Industrial
2.7 Bpcs Smart 1.6 Bpcs Home & Very diverse end devices Wearables Fragmented customer base Wide range of applications & ecosystem 2016 2018E 2021E
1. Charts/graphics created by NXP based on Gartner research. Source: Gartner Forecast: Internet of Things — Endpoints and Associated Services, Worldwide, 2017 ( Calculations performed by NXP) 2. Excludes Automotive 3. The Gartner Report(s) described herein, (the “Gartner Report(s)”) represent(s) research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. (“Gartner”), and are not representations of fact. Each Gartner Report speaks as of its original publication date (and not as of the date of this Investor Presentation) and the opinions expressed in the Gartner Report(s) are subject to change without notice 60 4. Bpcs=B pieces NXP Industrial & IoT SAM Outgrowing Focused TAM1,2
3-5% Ind. & IoT TAM CAGR 5-7% Ind. & IoT SAM CAGR 50% Higher SAM Growth 4% CAGR 6% CAGR = $143B $33B $127B $28B Analog, Power Mgmt., $24B $106B Connectivity Portfolio Attach +
Focus on 2016 2018E 2021E 2016 2018E 2021E Embedded Processing
1. Charts/graphics created by NXP based on Gartner research. Source: Gartner Semiconductor Forecast Database, Worldwide, 2Q18 Update*, ** ( Calculations performed by NXP) 2. TAM-F = Semiconductor TAM excluding Memory, Opto, Discretes 3. Industrial/IoT includes Industrial, Consumer and Computing, excludes Ultramobile, Wearables and Smartcards 4. The Gartner Report(s) described herein, (the “Gartner Report(s)”) represent(s) research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. (“Gartner”), and are not representations of fact. Each Gartner Report speaks as of its 61 original publication date (and not as of the date of this Investor Presentation) and the opinions expressed in the Gartner Report(s) are subject to change without notice NXP Industrial & IoT Applications
Industrial Control & PLCs Industrial Drive & Robotics Smart Energy
Appliances Smart Home and Building Control Handheld Scanners, Printers, POS
Medical PC Peripheral & Gaming High End Audio
62 Customer Products
63 NXP $1.9B Industrial & IoT Business with Track Record1
Embedded Processing Analog, Power & Connectivity Attach Portfolio + 7% CAGR
+9% CAGR
2015 2018E 2015 2018E Market 9% 11% 3% 4% Share
64 1. 3Q18 TTM financial data based on 4Q17-3Q18E (mid-point guide) Accelerating Industrial & IoT Revenue Growth
Low-power Edge & End Nodes
High Perf. Edge & Media Processing
Industrial
≈≈≈≈≈≈≈ ≈≈≈≈≈≈≈
2018E 2021E
65 Agenda
INDUSTRIAL & IOT
The AI / IoT Disruption & NXP Growth Opportunity
Understanding Customer Pain Points
NXP Solutions:
• Unique Processing Continuum
• Simplifying Software & Systems Complexity
Summary
66 Customer Pain-Point: Rising Cost of IoT Solutions1
Rising Cost Very High Data Privacy & of IoT Solutions System Complexity Security Concerns
Network cost, data charges, latency and privacy
Customer software resource constraint “SW engineering costs now represent 60-70% of total OpEx” (EETimes)
Mobile & desktop processors over sized for Industrial & IoT
67 1. Source: AspenCore Study 2017 Customer Pain-points: System Complexity & Security1
Very High Data Privacy & System Complexity Security Concerns
Data Breach Examples Retail / Healthcare Diverse cloud & Jun 2018, Feb 2015, May 2014, AI solutions Sep 2014 , Dec 2013 “70% of embedded Social Media / Search developers decide June 2016, Aug 2013 on the processor’s Banking / Credit Rating ecosystem first” Fragmented July 2017, June 2014 connectivity Airlines 2017 Embedded protocols Sep 2018 Developers Survey
Government regulations Operating system & software Amazon portability freeRTOS China Cyberspace Adm.
68 1. Source: AspenCore Study 2017 Agenda
INDUSTRIAL & IOT
The AI / IoT Disruption & NXP Growth Opportunity
Understanding Customer Pain Points
NXP Solutions:
• Unique Processing Continuum
• Simplifying Software & Systems Complexity
Summary
69 Consistent Broad Based Growth Accelerated by high impact growth portfolio
CAGR Enabling Portfolio ‘18- ‘21
Industrial & IoT NXP Revenue 8–11% • Crossover processors New 45–60% • Ultra-low power processing • Connected MCUs 2,000
• High performance processing Core 9–11% • 32-bit Arm MCUs • High performance analog
Legacy 0-1% • 8/16/32-bit non-Arm MCUs
- 2016 2017 2018E 2019E 2020E 2021E
70 Industrial & IoT Processing Requirements1
End nodes Edge processing Industrial & Home Control
Single core, low-power, cost-sensitive Multi-core, high-performance
Limited storage, Local data management & decision making, short range communication wide Area & cloud connectivity
Embedded security + Logical & Network security
Microcontrollers (MCUs) Applications Processors (APs)
~$13B Embedded Processing SAM
71 1. Source WSTS 2018 estimated embedded processing SAM NXP Scalable Industrial & IoT Processing Continuum
Software compatibility & ease-of-use Performance
i.MX RT
Purpose-built, dedicated SoC platforms
Functional Integration 72 Dramatic Increase in Complexity of Embedded Processing i.MX RT i.MX MCU 32-bit core(s) On-chip SRAM 64-bit On-chip 3D + 2D cores SRAM graphics Wired 8/16/32- On-chip Connectivity Next-gen Embedded 2D bit core SRAM non-volatile secure (USB 1.0/2.0, graphics Embedded 4K HDR UART, SDIO) memory sub-system 32-bit secure Display cores High performance Mixed sub-system Audio Mixed Signal Analog Embedded flash signal Codec Audio / Video Codec analog Wired Connectivity Machine Mixed Signal (USB 2.0, QuadSPI, …) Embedded learning Analog Bluetooth, ZigBee … DSP Embedded High-speed connectivity DSP (USB 3.0, TSN, QuadSPI, …) “Not your father’s MCU anymore”
• Millions of transistors • Billions of transistors • Older technology nodes • 40nm & below technology nodes • Bulk silicon • High-K Metal Gate, FD-SOI, FinFET
73 For representation only; Blocks not drawn to scale Crossover Processing Market Opportunity1,2,3
% of SAM (‘21) 15
40%
10 10%
5 26%
Embedded Processing SAM ($B) 24% - 2016 2017 2018E 2019E 2020E 2021E 8/16-bit MCUs 32-bit MCU Crossover Processors Industrial & IoT AP
1. Source: WSTS, NXP 2. Definition: Embedded Processing = Applications Processors (AP) + MCU 74 3. Embedded processing SAM excludes Automotive, Comms. Infrastructure & Smartcard Winning the Industrial Embedding Processing Challenge
Revenue Growth Key Applications Key Capabilities Key Portfolio Solutions
100% Factory Scalability i.MX 6, 7, 8, 8M Automation with Common High performance, 3D graphics Low-power Software Edge & End Industrial Nodes Gateways Layerscape High-speed Ethernet, TSN High Perf. Security Edge & Media Human-Machine Interface i.MX RT Machine Highest performing MCUs in the market Industrial Wired Vision Connectivity Kinetis & LPC Expected Robotics Low cost to high integration 2018 – 2021 Revenue Growth Drivers Industrial Scanners
75 Industrial Processing Needs Addressed by NXP
Security Reliability Longevity Software
76 Industrial Processing Needs Addressed by NXP
Security Reliability Longevity Software
Applications Processors
MCUs Crossover Processors
77 Growing in the High Performance Edge & Media Processing
Revenue Growth Key Applications Key Capabilities Key Portfolio Solutions
100% Media Audio / Streaming Video i.MX 8 & 8M Low-power Codec High perf., 4K HDR, 3D Graphics Edge & End Nodes Smart Home 4K HDR & i.MX 7 High Perf. Balanced Power - Performance Edge & Media Video 3D Graphics Surveillance Voice & i.MX RT Crossover Game Industrial Natural Highest performing MCUs in the market Streaming Language
Expected Video OTT Kinetis & LPC 2018 – 2021 High performance & Analog Mixed Signal Revenue Growth Drivers Video Conference
78 Enabling Audio & Voice Processing at the Edge1 “Voice control front end to grow at 29% CAGR (‘17-’22) in the Smart Home”
Voice Speech Music
Low-cost addition of voice Wake-word, natural language Dolby ATMOS & DTS X: recognition (e.g. Alexa voice processing & ML applications advanced codecs for high-fidelity services) for end nodes on integrated DSP streaming on Cortex-A
Low-power i.MX, MCUs Performance i.MX, RT Crossover High Performance i.MX
One unified audio software framework to meet any customer need
79 1. Source: ABI Research 1Q18 Enabling Audio & Voice Processing at the Edge 1,2,3 “Voice control front end to grow at 29% CAGR (‘17-’22) in the Smart Home”
NXP Enabled Smart Speakers
Google Voice Assist Alexa Voice Services Voice Solutions for China
NXP i.MX7D NXP i.MX8M 2-Mic Dev Kit for Amazon AVS Largest Voice Solution provider for Mandarin
1. Source: Google Android Things developer website 2. Amazon AVS developer website 80 3. Source: ABI Research Growing in Low-Power Edge & End Node Processing
Revenue Growth Key Applications Key Capabilities Key Portfolio Solutions
100% Smart Home Ultra-low i.MX 6 High performance, 3D graphics Low-power Power Edge & End Nodes Connected Me i.MX 7ULP Wireless Industry’s best ultra-low power High Perf. Connectivity Edge & Media Smart Retail i.MX RT Highest performing MCU & DSP platform Industrial Wearables Voice Control Kinetis & LPC Low cost to high integration Smart Expected Buildings 2018 – 2021 Connected MCUs Revenue Growth Drivers Multi-protocol (BLE, Zigbee, Thread) Voice Assistant
81 Leading Low-Power Edge & End Node Solutions
Bringing Cloud to the Low-cost Voice Enablement End Node with with i.MX RT Low-cost MCUs NXP BoM • i.MX RT1050 MCU • Analog Amplifier • Authentication Secure Element
Ultra-low power wearables NXP MCUXpresso with Low-power i.MX Software • Industry’s best power efficiency (15uW in deep sleep mode) Amazon • Low power GPUs for wearables and IoT freeRTOS • Industry’s 1st Embedded Processor based on FD-SOI Technology
82 NXP Solutions for Industrial & IoT More customer projects to production, faster Lead with the Processor Basis for all intelligent systems Bring the Software Glue that holds the system together, delivers pricing power Increased More NXP customer content/per unit intimacy/design Attach Peripheral Devices revenue Pull through incremental NXP content stickiness
Systems-level Attach Analog & Power Mgmt. MCU & IoT Prototyping Kit IoT Modules Wireless Power Apps Processors Connectivity
IoT Edge Compute Voice Solutions Gateway 83 Agenda
INDUSTRIAL & IOT
The AI / IoT Disruption & NXP Growth Opportunity
Understanding Customer Pain Points
NXP Solutions:
• Unique Processing Continuum
• Simplifying Software & Systems Complexity
Summary
84 Network Edge Cloud Infrastructure
Provisioning & Data Analytics Authentication Services
Machine Scalable Security Applications Learning Compute Diversity
85 Processing + Software ‘Glue’ Connects Network Edge to the Cloud
Home Ethernet Cloud Gateway Switch Infrastructure
Wireless Industrial Router Controller
Customer Solutions Application Application Application
EdgeScale Device Mgmt. platform Provisioning & Data Analytics Security, Connectivity, Authentication Services Machine Learning, Audio/Video freeRTOS
NXP Software Platform Machine Learning
86 The Future of Developer Experience
Azure On-boarding & Device App Lifecycle Edge Cloud Board Industrial & IoT Cloud SDK Google Cloud Enrollment Management Management Services Farm Services Platform
AWS Cloud EdgeScale Solution Service Infrastructure Infrastructure Alibaba Cloud
Setup Develop Build Access Comprehensive Developer Experience Local and Cloud Local and Cloud Automated Remote Device
Industrial IoT & Edge Computing IoT Security Gateway Solutions
Open Industrial Linux Android Free RTOS QNX Operating LSDK – Common Linux Platform Systems
Connectivity Multimedia System Networking Crypto Virtualization Enablement
Embedded Embedded Device LPC Kinetis i.MX Layerscape SoC
87 End-to-End Security in an Insecure World Scalable security for different threat profiles
MCU / AP with Embedded Security
Trusted Execution User Application Space Embedded Security Software MCU / AP with Isolated Secure Sub-System + Enablement Secure Sub-system NXP Secure Service 2GO User Application Space Secure OS
Isolation
Security with machine learning Device lifecycle management
Trusted execution and authentication Over-the air updates
Tamper resistant storage Provisioning & authentication
Hardware Root of Trust Secure encrypted communication
88 NXP Local Area Connectivity Solutions Leadership
BLE 5.0 Zigbee 3.0 Thread 1.1
Ultra-low power BLE for Hearables 2018 Industry Leading Wireless MCU launch • Dual-core, multi-protocol connectivity Single-protocol MCUs with leading edge security (BLE-only or Zigbee/Thread – only) • Highest on-chip memory for expanded Multi-protocol MCUs secure mesh networks (BLE + Zigbee/Thread) • All in a single chip
89 Wide Area Connectivity Solutions
Current Focus with 2018 – 2021 Revenue Impact Future Solution
Turn-key Solutions NXP + Wi-Fi module/boards Integrated Wi-Fi chipset
‘IoT-on-a-Chip’ • Internally developed i.MX + Wi-Fi/BT 802.11ac/ax for top-tier enterprise customer
• Industrial & IoT 802.11ac + BLE scaled down solution in development - sampling at end of 2019 • Modular design • Scalable to customer need
Pre-certified for faster time-to-market 90 NXP Enabling Machine Learning Revolution
Voice Smart Sense Gesture Active Object Personal / Home Multi-camera Augmented Processing & Control Control Recognition Property Environment Observation Reality
Low-end Edge Mid-end Edge High-end Edge Compute Compute Compute
i.MX 6 i.MX 7, 8 i.MX 8, Trained Models 1-2x Arm 32-bit 1-4x Arm 32/64-bit Layerscape Inference Engines Crossover & Performance GPUs Multi-core Arm 64-bit Integrated DSP High performance High. Perf. MCUs Training in • GPUs Arm 32-bit MCU • DSP the cloud +ML DSP and others • Vector processing
Scalable & optimized inference engines across Embedded Processing continuum
91 Edge Compute Enabler – Scalable Inference1 Balancing cost vs. end-user experience
Partnering with Google to NXP Software Enablement for seamless ML deployment bring ML Accelerator (TPU) to the edge Gen. Purpose MCU 5-10x reduction (e.g. Cortex® - Mx) High Compute MCU 5-10x reduction (e.g. Cortex® - M7)
Multi-core 5x reduction Applications Processor GPU / DSP (GHz +) complexes in (e.g. Cortex® - Ax) Applications Processors i.MX RT i.MX & Decision Making (Inference) Time (Inference) Making Decision Kinetis, LPC Crossover Layerscape i.MX Bringing intelligence to the edge with Cloud IoT Introducing the Edge TPU Performance vs. Cost trade-off Development Kit
92 1. Source: NXP & Google TPU developer website Industrial & IoT – NXP Value Proposition
Industrial IoT Edge IoT Automation and AI / ML Security
• Open Industrial Linux (OpenIL) • Edge AI / ML solutions • Secure manufacturing • OT and IT convergence solution • Edge computing orchestration • Secure device on-boarding and provisioning • TSN scheduling service • End-to-end dataflow construction and customization • Secure enrollment and re-enrollment • Zero-touch provisioning and replacement • Digital device “shadow” • Cloud integration • Zero down-time operation • Virtual function aggregation and • Independent secure identity virtual device management management
93 Agenda
INDUSTRIAL & IOT
The AI / IoT Disruption & NXP Growth Opportunity
Understanding Customer Pain Points
NXP Solutions:
• Unique Processing Continuum
• Simplifying Software & Systems Complexity
Summary
94 Industrial & IoT Growth Expectations Summary1,2
2018 – 2021 3-Year CAGR Broad-based growth + select high impact growth drivers
NXP Industrial & IoT Revenues 8-11% 1 Industrial
High Performance Edge Industrial & IoT SAM 5-7% 2 & Media Processing
3 Low-power Edge & End Nodes Industrial & IoT TAM 3-5%
1. Source: WSTS; Gartner; NXP 95 2. Definition: Ind. & IoT TAM is total semi excluding memory, optoelectronics and discretes, excluding Auto, Mobile & Comms. Infra. Semi TAM Uniquely Positioned for Industrial & IoT Edge Compute
Broadest Portfolio Complete Solutions Seamless MCU / Crossover / SDK / HW / SW Cloud Connectivity Application Processors & Ecosystem & Lifecycle Management Systems Level Integration
Comprehensive Software Environment Edge Compute Ecosystem
High-precision Security & Privacy Edge Processing Analog & Embedded & Audio/Video/Display Systems Level
96 97 NXP and the NXP logo are trademarks of NXP B.V. All other product or service names are the property of their respective owners. © 2018 NXP N.V. Automotive Kurt Sievers President Agenda
AUTOMOTIVE – SAFE, SECURE MOBILITY
Megatrends Tech Leadership: Domain Architecture Customer Leadership: System Solutions Growth • ADAS Autonomy • Connected Infotainment • Network Infrastructure • Electrification Summary
99 Megatrends Transform Automotive Industry
Connected Infotainment ADAS Autonomy Electrification
ZERO ZERO ZERO Time Wasted Accidents/Congestion Emissions
Safe and Secure Mobility
100 Megatrends Sustainably Boost Semi Car Content1,2
Connected Infotainment ADAS Autonomy Electrification
+$100 Premium +$150 Level 2 +$400 Hybrid Experience +$600 Level 3 +$450 Full Electric +$1200 Level 4&5
Safe and Secure Mobility … from $380 average semi value (TAM) per car in 2018 1. Source: Strategy Analytics, NXP 101 2. Semi content based on 2020 price levels Megatrends Drive Exponential Performance Requirement1
Data Generation Compute Performance Network Bandwidth (TeraByte per hour) (TFLOPS) (GigaBit per Second)
20 100 10
2 1 0.2 0.2 2 0.1
2015 2020 2025 2015 2020 2025 2015 2020 2025
• Dramatically more sensors • ADAS & autonomy • Loads of data (on & off board) • Higher precision • e-Cockpit • Real-time distributed applications
102 1. Source: NXP Megatrends Force Vehicle Architecture Transformation TODAY TOMORROW Connectivity
Powertrain & Vehicle Connected Dynamics Domain Controller Infotainment
Domain Controller Gateway Domain Controller
Domain Controller Domain Controller
Body & Comfort ADAS Autonomy
Distributed Flat Architecture Domain Architecture • Low bandwidth network • High performance domain MPUs • One MCU per application • Edge nodes & sensors • High bandwidth • Gateway • Safety & security 103 Agenda
AUTOMOTIVE – SAFE, SECURE MOBILITY
Megatrends Tech Leadership: Domain Architecture Customer Leadership: System Solutions Growth • ADAS Autonomy • Connected Infotainment • Network Infrastructure • Electrification Summary
104 SENSE THINK ACT Distributed Flat Architecture Connectivity Smart Car Access
ADAS Autonomy
Motion & Pressure Engine Steering Powertrain & Transmission Airbag Speed Vehicle Dynamics Brake Suspension Ultrasonic
Temp, Light, Humidity HVAC, Interior Lighting
Body & Comfort Doors, seats, steering wheel, Switch Panels mirrors, wipers, sunroof
Radio & Audio Connected Instrument Cluster Infotainment Amplifiers
105 SENSE THINK ACT
Domain Cellular Connectivity Connectivity Architecture WiFi, BT, GNSS, NFC Domain Controller Smart Car Access
• Domain MPUs V2X Sensor Fusion Radar ADAS Autonomy & Planning • Edge Nodes & Sensors Domain Camera Controller Lidar • High Bandwidth Motion & Pressure PowertrainPowertrain Engine Steering Powertrain & Transmission Airbag Speed DomainDomain • Gateway Vehicle Dynamics Brake Suspension ControllerController Battery Cell Management
Ultrasonic NetworkGateway • Safety & Security Temp, Light, Humidity BodyBody HVAC, Interior Lighting Body & Comfort DomainDomain ControllerController Doors, seats, steering wheel, Switch Panels mirrors, wipers, sunroof
Radio & Audio Connected eCockpitCockpit eCockpit Touch Displays DomainDomain Infotainment ControllerController Amplifiers Voice Recognition
106 NXP Leads Transformation to Domain Architecture1 Market requirement NXP unique differentiators
High Performance • Leveraging scalable embedded compute platforms across NXP Domain Computing • Deep domain specific applications know-how
Secure Network • Auto network processing / gateway #1 leadership Processing • Digital networking leadership
Scalable & Secure • CAN/ LIN/ FlexRay #1 leadership Network Architecture • Dedicated automotive Ethernet
• Industry leading functional safety (ASIL D) Safety and Security • Complete hardware & software security
107 1. Source: Strategy Analytics, IHS Markit, NXP Auto Processors Today – NXP Races Towards #1 Position1
2017 Auto Processor Market NXP Consistently Gaining Share Leadership
42.6% 28% 31% 31.2% Renesas 27.8% 5 years of continued 9% 21.1% market share gain TI
8% Infineon 9% 6% 2012 2013 2014 2015 2016 2017 Others 3% 5% Microchip ST Cypress Renesas NXP
108 1. Source: Strategy analytics Auto Processors Tomorrow – Domain Architecture Requirements
Performance Arm Safe Secure OTA SW Reuse
Optimized for Arm top to bottom ASIL D Powerful hardware Across most nodes Massive software domain control security engine Re-use within and Arm Cortex-A, -R, (HSE) Scalable encrypted across application Real-time and -M cores external NVM domains Firmware Scalable upgradable Wide memory range, public key encryption read while write
No side channel attacks
109 Auto Processors Tomorrow – NXP’s Unique S32 Platform
Body & General Purpose Network Processing Radar Vision Reduces SW R&D1 by 35% Arm Arm Arm Arm Memory Memory Memory Memory Cortex Cortex Cortex Cortex Unified HW with identical SW environment
Interconnect Interconnect Interconnect Interconnect
Specific IP Specific IP Specific IP Specific IP Specific
Application Application Application Application Application Common Chassis Common Chassis Common Chassis Common Chassis 10x the Performance2 Safety & Powertrain Common Chassis Autonomy – Safety Multiple real time OS ADAS AI accelerators Arm Arm Memory Memory Cortex Cortex Safety Peripherals
Interconnect Interconnect
Specific IP Specific IP Specific
Application Application Application Common Chassis Common Chassis Security Debug Safe and Secure 4 independent ASIL D paths HW security engine Ready for OTA The World’s First Fully Scalable Safe Auto Compute Platform Unprecedented Design Win Pipeline 1.5x of Previous Generations
1. Based on analysis of existing NXP Software code in existing customers’ applications 110 2. Based on publicly available competitor roadmap performance statements versus today’s best safe auto platform Agenda
AUTOMOTIVE – SAFE, SECURE MOBILITY
Megatrends Tech Leadership: Domain Architecture Customer Leadership: System Solutions Growth • ADAS Autonomy • Connected Infotainment • Network Infrastructure • Electrification Summary
111 Servicing Variety Of Customer Requirements
Established Tier-1s Established OEMs New Entrants System competence, scale, Vehicle level innovation, Speed, cost, competence quality, logistics consumer focus from other industries
Global support System level R&D Integration support Zero defect quality Cross-industry insights Auto domain knowledge Component innovation Architecture innovation System solutions & ref designs
112 Addressing Customer Requirements with System Solutions
Electric Vehicle Connected Infotainment Up to $180 NXP content per car Up to $50 NXP content per car for battery management premium infotainment system
ADASAutonomy Vehicle Infrastructure Up to $360 NXP content per car Up to $45 NXP content per car for L4-5 imaging radar network Infrastructure
113 Driving System Innovation with OEMs1
Strategic Innovation Alliance of Strong Partners Join innovation on system level tomorrow V2X and Platooning Connectivity Radar platforms for high res and short range Driver Replacement Battery management Powertrain & Vehicle Dynamics
Next generation car access Body & Comfort
Next generation car radio platform: AM robustness for e-vehicles In-vehicle Experience Central gateway 3.0, micro server, future car architectures Secure Gateways & Networks Tier 1
114 1. Source: Audi Agenda
AUTOMOTIVE – SAFE, SECURE MOBILITY
Megatrends Tech Leadership: Domain Architecture Customer Leadership: System Solutions Growth • ADAS Autonomy • Connected Infotainment • Network Infrastructure • Electrification Summary
115 NXP Auto Leadership1,2,3
Technology Leadership Domain & Market Leadership
11% 13% 18% Power Other 11% 15% 24% 51% IFX Sensors MCU/MPU Others 10% REN 33% 8% Analog 7% TI STM
#1 Auto Analog #1 Global Auto Semi 2017 #1 Auto RF / DSP (2017 NXP auto revenue excludes former standard products auto business) #1 Auto Application Processors #2 Auto Microcontrollers TAM 2017: $34.5B
1. Based on 2017 Auto TAM 2. Auto RF/DSP includes Secure Car Access, Radio/Audio, V2X and Radar Transceivers 116 3. Source: Strategy Analytics, IHS Markit, NXP Auto TAM-F Growth 5-7% – Driven By Semi Content1
Global Vehicle Production Semi Content (TAM-F) / Vehicle Auto Semi TAM-F (MU) ($) ($B)
5% 7% 2% 324 33 103 315 280 32 97 100 4% 27 82 1% 223 5% 18
2012 2015 2018 2021 2012 2015 2018 2021 2012 2015 2018 2021
Min% Max%
CAGR 2018E - 2021E
Source: Strategy Analytics, IHS Markit, NXP 117 1. TAM-F = Auto TAM – Memory, Opto, Discretes Leadership Across Vehicle Domains1,2,3
Radar Powertrain & Body & Connected Secure Networks Connectivity (ADAS Vehicle Dynamics Comfort Infotainment & Gateways Autonomy)
Focus Market Size, 2018 $0.6B $1.2B $4.8B $2.0B $3.2B $1.5B
Focus Market Growth 2018-2021 9% 19% 5% 5% 5% 16%
Focus Market NXP Rank, 2018E #1 #1 #1 #1 #1 #1
Focus Market Relative Market Share, 2018E ~2.5 >1 ~1.5 >1 ~2 >3
OEMs
Tier 1 Customers
Source: Strategy and Analytics, IHS Markit, NXP 1. Focus Market: TAM-F for Radar & Infotainment; NXP SAM for others 2. Includes Powertrain, Chassis & Safety MCUs, Airbag & Braking ASSP, BMS, (x)EV MCUs, Magnetic & MEMS Sensors 118 3. Connectivity focuses on secure car access Consistent Broad Based Growth1 Accelerated by select new high growth applications
Automotive Revenue CAGR Key ‘18- ’21 Applications 7-10% • Radar • Network Processing + Ethernet New 20-28% • Electrification $4.2Bn • ADAS Vision, Fusion, V2X
• Connected Infotainment • Powertrain & Vehicle Dynamics Core 6-8% • General Purpose MCU • Network Transceivers • Secure Car Access
• 8 bit MCU Legacy (7-8%) • Other
2014 2015 2016 2017 2018 2019 2020 2021 Legacy Core New
Source: NXP 119 1. Revenue outlook based on high end of the guidance range Agenda
AUTOMOTIVE – SAFE, SECURE MOBILITY
Megatrends Tech Leadership: Domain Architecture Customer Leadership: System Solutions Growth • ADAS Autonomy • Connected Infotainment • Network Infrastructure • Electrification Summary
120 ADAS Connectivity Domain
Powertrain & Vehicle Connected Infotainment Autonomy Dynamics Domain Gateway Domain
Body & Comfort ADAS Autonomy Torsten Lehmann Domain Senior Vice President & General Manager Increasing Autonomous Driving Levels Push ADAS $ Content
Semi Content Potential per Vehicle vs Level 0 in 2020
+$1200 Full Automation 5 New Entrants LEVEL Straight to Level 4/5 +$900 High • Mobility operators – Automation 4 LEVEL start autonomous services 2019 • 1% of semi opportunity ‘21 (~15% in ’25) +$600 Conditional Automation 3 LEVEL Traditional OEMs +$150 Partial Increasing ADAS value 2 Automation • Regional NCAP rating pushes Level 1/2 +$100 Driver • Further automation (L3/L4) as OEM differentiator 1 Assistance • In 2021 99% of semi opportunity in Level 1-3 No Automation
122 1. Source: Strategy Analytics, NXP CMI Automation Multiplies Sensors and Silicon Content In Production In Development New Entrants Level 1/2 Level 3 Level 4/5
$100-$150 $600 $900-$1200 Silicon Value Silicon Value Silicon Value units units units Radar 1-3 Radar 4-6 Radar 6-10 Camera 1 Camera ≥4 Camera 6-8 Lidar Lidar 0-1 Lidar 1-3 V2X V2X 0-1 V2X 1-2 Fusion Fusion 1 Fusion 1
24GHz Radar 77GHz Radar Lidar Camera Fusion V2X
123 1. Source: Strategy Analytics, NXP CMI Radar: Largest ADAS Segment With Top Value Growth1,2
$4.6B Market Other Radar V2X Fusion • Represents ~44% of ADAS TAM-F Lidar • NCAP safety ratings drive penetration Parking Camera • 360° view & imaging radar drive semi dollars $2.7B ADAS Vision Other ADAS 19% CAGR Radar • ADAS vision is NCAP driven • Parking cameras maturing • V2X: Volume car ramp starting 2019 with VW
2018 2021
1. Source: IHS Markit, Strategy Analytics, NXP 124 2. Market based on TAM-F NXP Strongly Positioned with Broad ADAS Play ADAS Expected to Exceed 10% of NXP Automotive Revenue by 2019 V2X • Leader: Modem, Processor, SW, Security ADAS Vision Radar • In production with GM, ramping at VW 2019 • Safe automotive vision SoC • Partnerships with leading tier-1s • #1 Leader, design wins at 10 of top 10 OEMs “We trust NXP’s V2X leadership & innovation that • Major new wins with RFCMOS at 7 OEMS enables us to improve road safety by launching V2X as standard feature in volume cars from 2019.” Dr. Alexander Graf, Connected Car, Volkswagen AG
Lidar • Safe processing with AI Parking • Working with 5 Lidar leaders Camera • Safe processing & machine learning • Designed in at >10 major OEMs System Selling • Full solutions adding $ value • Networking & power management Fusion and Central Processing • Safe processing with integrated AI capability • Leading MIPS for automotive safety (ASIL-D)
125 Radar: Triple Acceleration for Semiconductor Value
More ICs & higher value per sensor High resolution 360° imaging More sensors per car + 360° radar cocoon More cars with radar + NCAP safety
Precise environment map and localization
Front & rear cross traffic / people detection
Blind spot detection Automatic emergency brake
126 Radar: Triple Acceleration for Semiconductor Value
More ICs & higher value per sensor High resolution 360° imaging More sensors per car 360° radar cocoon More cars with radar NCAP safety
Precise environment map and localization
Front & rear cross traffic / people detection
Blind spot detection Automatic emergency brake
127 Radar: Taking Safety to New Levels – Saving Lives
Full 360° Seeing pedestrians Precise Detecting other cars surround view + & bicycles + + Environmental Map small & low power sensors e.g. curbstones & pylons in distance
NXP full performance span
Bulky 24GHz 77 GHz Multiple 77 GHz Small High Low Power SiGe RFCMOS Power Low Radar processing Advanced object detection Imaging Radar High Res <1 GFlops 15-20 GFlops >350 GFlops Res
NXP Investment Focus
128 Radar: NXP’s Unique Scalable Full System Solutions Full 77GHz System Solution + Full Performance Span = Winning Across All Segments
Mid Premium Short Range Range OEMs
Long RFCMOS Range Transceiver
Imaging Radar S32 Radar processor Mass Market 4x NXP Power Management Transceiver Ethernet NCAP Full Autonomous
• Full reference design • SiGe & RFCMOS transceiver portfolio • Designed in with all top 10 OEMs… • Plus Software Development Kit • Scalable processor families • …while also growing with new players • Plus Functional Safety • From simple sensor to imaging radar • System solutions for China (e.g. )
129 Radar: Extending #1 Leadership Position TAM-F Growth 19% + Outgrowing the Market = True Leadership Position
$2.0B NXP vs. Market #1 77GHz #1 $1.2B
2 3 4 1.4X
24GHz
2018 2019 2020 2021 2018 2021
1 More cars with radar Designed in at 10 of top 10 Car Makers 2 More sensors per car 50+ vehicle platforms with NXP 77GHz solution ramping over next 3 years 3 More ICs & higher value per sensor
130 1. Source: IHS Markit, NXP CMI Imaging Radar: Next Wave of Growth with L3-L5 Autonomy1
4-6 Up to $360 systems/car Semi content per vehicle
Imaging Radar Sensor System
• Imaging radar approaching Lidar-like resolution Safe Power High 4x Management • Capture precise environmental map Performance More77GHz ICs & Radar higher value per sensor Radar • Outperforming Lidar in adverse weather / light conditions Transceiver Gbit Ethernet Processor and CAN
up to $60 semi content
131 1. Source: NXP Processing: Further Growth by Enabling Safe Autonomous Driving
Safe Computing Leader New Safety Applications
Fusion Decade of experience Broad OEM adoption
Safety Companion Primary Autonomous Safety checker and safe communication 1 Drive System to vehicle (ASIL-D )
Basic Functions Safety Safety Co-Pilot Companion NXP S32 Safety Co-pilot NXP S32 Validate decisions & provide fail operational backup
132 1. ASIL-D: highest Automotive Safety Integrity Level Connected Connectivity Infotainment Domain Powertrain & Vehicle Connected Gateway Domain Controller Dynamics Domain infotainment
Body & Comfort ADAS Autonomy Torsten Lehmann Domain Domain Senior Vice President & General Manager Increasing Consumer Expectations Drive Infotainment Growth
Cockpit
Multimedia
Media Source
Radio
Audio
Amplifier
134 Connected Infotainment: Key Differentiator & Sales Driver for OEMs
Cockpit Full digital eCockpit
Multimedia Multiple high resolution displays
Media Source Smartphone content, apps & services
Radio Digital radio & regional standards
Audio Noise cancellation, engine sound …
Amplifier Up to 32 channel Class D sound
135 Winning in Connected Infotainment with Full System Solution
i.MX Car DSP Family Audio Family Amplifier
Fully Scalable Radio/Audio Scalable advanced Apps Processor Family Car DSPs and 1-Chips Audio Amplifiers
Designed in at 19 of top 20 OEMs Designed in at 20 of top 20 OEMs Designed in at 15 of top 20 OEMs
i.MX8: Simplifying eCockpit Software defined radio: 6 ICs into 1 Leading full-digital class D Up to 4K resolution Advanced audio processing Best audio quality & broad range
Cockpit Multimedia Media Source Radio Audio Amplifier
136 Key Growth Drivers for NXP Connected Infotainment eCockpit Drives Increasing Audio & Major Growth with Display Count Digital Radio Systems in China
SoC Radio & Audio Outgrowing Global Value $ Per Car Infotainment
• i.MX8: driving up to 4 screens • Digital radio 1-chip drives adoption • Full infotainment system solution & • Value beyond the product: quality, • More NXP audio value: noise ecosystem accelerating customers supply, enablement & partnerships cancellation, engine sound, 5.1 etc. • Supporting China digital radio launch
137 Customer Success Confirms NXP Market Traction eCockpit Drives Increasing Audio & Major Growth with Display Count Digital Radio Systems in China
Autmotive OS by Alibaba Group
• Design in with 2 of top 3 US OEMs • NXP in ~30 car brands with Harman • Full NXP portfolio: i.MX, radio, audio • Record level i.MX awards last 2 years • Amplifiers in premium car sound brands: • Two major China OEMs won • eCockpits with i.MX8 shipping 2019 • AliOS: Supporting China Digital Radio
“Our long-term partnership helps us to “We look forward to redefining the future of the provide industry-leading solutions and new automobile sector in collaboration with our infotainment experiences to our customers.” infotainment semiconductor partner NXP.” David Slump, EVP Operations, Harman Gary Wang, General Manager, AliOS
138 #1 Leader for Connected Infotainment TAM-F1 Growth 5% + Outgrowing the Market = True Leadership Position $3.7B NXP vs. RMS ~2 $3.2B Market #1 eCockpit, #1 Headunit 1.4X
Radio, Audio
2018 2019 2020 2021 2018 2021 All top 20 OEMs use NXP infotainment solutions
Source: Strategy Analytics, NXP CMI 139 1. Excludes Device Connectivity, Cellular Chipset and GPS Location Network DC
Infrastructure DC GatewayGATEWAY DC Jens Hinrichsen DC DC Senior Vice President & General Manager New Architectures Drive Advanced Networking Requirements Up to $45 NXP content for car network infrastructure
Security Networking Solutions Functional Safety
Networking PHYs & Switches Controlled Latencies Power Efficiency Power Safety & Management Security
Fast Network Networking Processors Compute Performance
Automotive Quality
141 Automotive Networking Market Growing at 16% CAGR
CAGR $2.3B Product Segments 2018 – ‘21
Network Processing & Security ~12%
$1.5B
Safe Power Management ~14%
Network Transceivers and Switches ~17%
2018 2019 2020 2021
Network Processing Safe Power Management Ethernet Network Transceivers, SBCs (CAN/LIN/FlexRay)
142 Source: NXP NXP Leads in Providing End-to-End Networking Solutions
Market #1 #1 Broadest In-Vehicle Automotive Automotive Leadership Networking Supplier Portfolio • OEM focused go-to-market
• Trusted advisor role Networking System System Enablement Application Functional Platforms Expertise Expertise Safety • Faster innovation cycles
• Inherent security & safety Network Embedded In-Vehicle Technology IP Processing Security Networking IP IP PHY IP
143 Source: Strategy Analytics, NXP Leadership in Network Processing for ADAS Vehicles
THINK
SENSE ACT Gateway Processor ADAS Vehicle Radar Anti-Lock Domain Dynamics Sensor Braking Controller Controller Safety & Power Network Security Management Interfaces Ethernet Ethernet
End-to-End Networking Solution
• By 2025 majority of all new cars will have a central gateway • Network processing enables end-to-end security, over-the-air upgradeability and revenue-generating services
144 Leadership in In-Vehicle Networking Interfaces
NXP Portfolio Networking NXP Covers all Standards Growth Focus
rate • True automotive robust
Connectivity Data
$/Vehicle Ethernet solutions Connected Infotainment Gbps Fast ADAS Autonomy Secure • Lead standardization of 100 Mbps multi-Gbit Ethernet Powertrain & 10 Mbps Smart Vehicle Dynamics • Launch high-speed 1-5 Mbps Robust Body & Comfort CAN FD solutions 20kbps • Introduce SecureCAN 10-20 20-50 50-100 Complementary Major Networking Standards Nodes/Car
145 Expand Leadership Position in Automotive Networking
SAM Growth 16% + Outgrowing the Market = True Leadership $2.3B Network Processing 1.3x
$1.5B Safe Power #1 1.3x Management #1 Ethernet 1.8x
CAN / LIN / FlexRay 1x 2018 2019 2020 2021 2018 2021
• NXP defines next generation vehicle architectures with OEMs as trusted advisor • NXP won all major 2021+ gateway processor platforms • NXP outgrows Ethernet market, defines multiple-Gbit automotive Ethernet PHY standards
146 Source: Strategy Analytics, NXP NXP Automotive Networking Key Strategic Moves
NXP Digital Networking business boosts Automotive Network Processing Extend lead in automotive networking
Define next generation network processors and Leading Ethernet & SerDes IP provider secure Ethernet solutions
becomes part of NXP
147 Powertrain & Vehicle Dynamics Connectivity Electrification Domain Connected Domain Controller Gateway Infotainment Domain Jens Hinrichsen Body & Comfort ADAS Autonomy Domain Domain Senior Vice President & General Manager Electrification of Powertrains Boosts Semiconductor Content
Combustion Mild Full Plug-in Range Battery Electric Types of Powertrains Engine Hybrid Hybrid Hybrid Extended EV Vehicle (ICE) (MHEV) (FHV) (PHEV) (REEV) (BEV)
Combustion Engine
Battery System LV LV 48V LV HV LV HV LV HV LV HV
Mains Charging - - -
Electric Traction - 10 – 20kW 15 – 60kW 40 – 80kW 40 – 80kW > 80kW
Added Semiconductor Value - +$200 +$350 +$400 +$425 +$450
149 Source: NXP, Strategy Analytics Accelerated Growth of Electrified Vehicles
100%
• 2030: ~50% of all vehicles sold 80% contain electrified powertrains Pure Electric Vehicle (BEV) • Dynamic market environment with 60% emerging (xEV) OEMs 50% • China major market driver
40% Penetration Rate Penetration
PHEV • Europe leading in 48V hybrid 20% FHEV 48V MHEV 0% 2015 2020 2025 2030 2035 2040 2045 2050
150 Source: Strategy Analytics, HIS Markit, Evercore, NXP CMI NXP Focuses on Power Control NXP addresses 40% of electrification TAM growing at 25% CAGR $3.5B
CAGR NXP Focus 2018 – ’21
CAGR Power Power Semiconductors ~20% +20% Delivery (IGBTs, Mosfets) -
Battery Management ~30% ✓✓✓ $1.8B Motor Control ~20% ✓✓ $1.5B NXP Focus: Hybrid Control Unit ~25% ✓✓ CAGR Power +25% Control $0.6B 48V eMachines >50% ✓✓
Voltage Converters & ~40% Chargers ✓ 2018 2021
151 Source: Strategy Analytics, NXP NXP Provides Leading Powertrain Control Solutions System optimized, scalable, secure and safe
Battery Management System
Battery Cell Network Processor Controller HV
Electric Motor Hybrid Vehicle Control Unit Combustion Engine Control Unit Motor Control Unit
Network Processor Network Processor Network Processor
Inverter Gate Driver DC/DC Converter
High Voltage Input Signal Output IGBT Module Network Processor & Sensor Drivers Interface
IGBT IGBT Power MOSFET
LV
152 NXP Provides Leading Powertrain Control Solutions System optimized, scalable, secure and safe
Battery Management System
Battery Cell Network ProcessorMCU Controller HV
Electric Motor Hybrid Vehicle Control Unit Combustion Engine Control Unit Motor Control Unit
Network Processor Network Processor Network Processor
Inverter Gate Driver DC/DC Converter
High Voltage Input Signal Output IGBT Module Network Processor & Sensor Drivers Interface
IGBT IGBT Power MOSFET
LV
153 NXP Provides Leading Powertrain Control Solutions System optimized, scalable, secure and safe
Hybrid Vehicle Control Unit Battery Management System
Battery Cell Network ProcessorMCU Network Processor Controller
154 NXP S32 Enables Advanced Hybrid Control Units Multicore high end processor with dedicated motor control and security peripherals
Optimize energy use Big Data Trip optimization (ADAS & GPS)
Life time optimization (Analytics & AI) Hybrid Vehicle Control Unit Greenbox development platform ADAS GPS Network Processor Development platform for S32 safe and secure processors
Battery ICE E-Motor ESP/ABS Management Motor Control Control
155 NXP Battery Management Scalable Across All EV Powertrains
400V: $100 /car 800V: $180 /car
• Leading accuracy $5 – 12 /car
$3 – 4 /car • Fast & robust communication
• Highest BOM integration
6-Cell 14-Cell 14-Cell Battery MCU Network Battery MCU Network Battery MCU Network • Hardware/software scalable Controller Controller Controller
Start/Stop ICE Mild Hybrid EV EV/PHEV • ASIL-D functional safety 14V Li-ion Battery 48V Li-ion Battery HV (High Voltage) Li-ion Battery
Level of Electrification
156 Source: NXP NXP on Path to Leadership in Battery Management
SAM Growth 30% + Outgrowing the Market = Take Leadership Position1 $0.8B NXP vs. Market Growth #1 #2
#4 $0.4B 1.6x
2018 2021 2018 2021 2025 • Won key high-voltage HEV and BEV platforms from leading German, Chinese and US OEMs • Won > 80% share in worldwide 14V & 48V MHEV platforms • Partnering with globally leading battery makers
Source: Strategy Analytics, HIS Markit, NXP 157 1. Excluding captive business Agenda
AUTOMOTIVE – SAFE, SECURE MOBILITY
Megatrends Tech Leadership: Domain Architecture Customer Leadership: System Solutions Growth • ADAS Autonomy • Connected Infotainment • Network Infrastructure • Electrification Summary
158 Auto Growth: Broad-based + Select High Growth Drivers
2018–2021 3-Year CAGR Growth Drivers on Top of Core Business
NXP Auto Revenues 7-10% 1 ADAS: Radar
2 Infotainment: e-Cockpit + Radio & Audio Auto Semi TAM-F 5-7%
3 Networking: Gateway + Network Content / Car 4-5% 4 Electrification: Battery Management Car Production 1-2%
159 Source: Strategy Analytics; IHS Markit, NXP NXP Auto Value Proposition
Solution Portfolio Innovation Power Safe and Secure Complete system solutions In-house high performance Leading with security and for fastest TTM processing and networking functional safety
Trusted global automotive partner: excellent quality, reliability, supply
160 161 NXP and the NXP logo are trademarks of NXP B.V. All other product or service names are the property of their respective owners. © 2018 NXP N.V. Go to Market Steve Owen Executive Vice President Sales & Marketing Our Sales Engagements Have Become Stronger Over Past 21 Months
Strengthened our OEM Leverage the Distribution World class customer connections while shaping Channel as a force multiplier technical support as a new ecosystems (> 26k Customers) differentiator
163 NXP, a chip giant from the Netherlands, announced plans to work with a variety of Chinese tech brands at a recent tech summit in Shenzhen, south China's Guangdong Province.
The world's largest supplier of automotive semiconductors currently works with major Chinese companies like Baidu, Geely and Xiaomi. It's new partnerships include IrisKing – an iris recognition technology developer, Hangsheng Technology – an automotive supplier, and Foxconn Industrial Internet – a communications network equipment manufacturer
By He Weiwei, Huang Yi, and Li Jun QR
164 NXP Has Unrivalled Depth & Reach of Customer Access
Automotive Industrial & IoT Mobile Comm. Infra.
75% 218 400 Sales & BD NXP Revenues Customers 400 FAEs
165 Mass Market & Distribution as a Force Multiplier Physical Digital
~8000 Digital Portals Distribution Sales & 1100 Online Training Certified FAEs & Communities Physical & Virtual >30 Tech Support Distribution Partners >26K Customers Complete Solutions 300 & Reference Designs Sales and FAEs 25% NXP Revenue Enable innovators and future leaders
166 Our Customers are Our Best Advocates1
Net Promoter Score 26% 42% 51% 42% 51% • 95th percentile of technology companies 100%
• Strong correlation with employee satisfaction 80% 41% 53% 54% 60% 60% • 68% active promoters in mass market 60%
40% 45% 36% 33% >20% Design Win growth in 2017 in focus 20% 31% 31% markets, driven by
0% 2014 2015 2016 2017 2018 • Processing leadership
Customer Responses (1,235) (1,792) (2,370) (2,101) (2,241) • Attach in Industrial & IoT and Automotive
Promoters Passives Detractors
167 1. Source: Design Win excluding communications infrastructure 168 NXP and the NXP logo are trademarks of NXP B.V. All other product or service names are the property of their respective owners. © 2018 NXP N.V. Summary and Q&A Rick Clemmer Chief Executive Officer Since April 2016…
Automotive • Semi content $ / vehicle accelerates Industrial • IoT evolved into tangible edge & • #1 auto processors position now at reach & IoT end-node opportunities to • Reached true leadership in infotainment AP enable cloud disruption • Developed & captured emerging • Grew share in GP embedded networking gateway market processing 9% to 11% • Created new electrification solution portfolio • Created & captured X-Over processor category • Achieved radar #1 leadership position • First FinFET IoT app. processor • On track for 2019 ADAS revenue >10% Auto • Unified software platform across • V2X ramping with GM, VW in 2019, + others processing portfolio • Introduced leadership S32 16nmFF Comm. Infra. Mobile & Other • Shipping single chip NFC-SE • mMIMO true leadership • 4000 banks supporting mobile payment • 16nmFF Layerscape • China mobile transit from 10 to 100 cities • Leveraged DN IP & expertise into Auto, Industrial IoT • IoT Service2GO • 2X RAIN RFID revenue growth
170 Source: NXP Continuing to Drive Profitable Growth
Automotive Industrial & IoT Solution portfolio Broad, scalable solutions Innovation powerhouse Common S/W tool environment Safety & reliability expertise Channel reach
Mobile Communication, Technology innovator & leadership Infrastructure & Other Recognized ecosystem leader Broadest portfolio (RF, tags) Focused application insights Technology leadership Deep application insights
171 NXP Uniquely Enables Disruptive Nature of the Cloud
Home Industrial Seamless cloud Broadest portfolio Complete solutions Gateway Controller connectivity & MCU / Crossover / SDK / HW / SW lifecycle application processors & ecosystem management Auto Smart Gateway City
Systems Level Integration
Edge Computing Ecosystem Embedded & High-precision systems level analog & security & privacy audio/video/display
Smart Smart Connected Smart Connected Industry Cities Vehicle Home Consumer
172 Secure Connections for a Smarter World1
Secure anchors & 25% of cars by 2025 will be L2-3 IoT Edge & end nodes from services for 40B ADAS 3x adoption rate 6B units in ‘21 to >15B units in ‘25 processors
75% connected 2B+ 5G subscribers by 2025 Up to $350 radar for L4-5 ADAS cars by 2025
UWB potential: secure 3D 50% of cars Tagging 60B products device ranging in billions are xEV by 2030 per year by 2025 of phones & things
173 1. Source: NXP, Strategy Analytics, Evercore, Ericsson, IDTechex, Value Proposition
Driving RMS Multiple High Solutions World-class Leadership Growth Markets Core Competency Expertise & Team
Focused on RMS Profitable growth Resolving customer Customer focused > 1.5X pain-points passion to win
Maximize Shareholder Value Strong cash flow generation
174 175 NXP and the NXP logo are trademarks of NXP B.V. All other product or service names are the property of their respective owners. © 2018 NXP N.V.