Customer Presentation November 7, 2016
Standard products towards a standalone global powerhouse Nexperia´s Customers
A standalone world-class company for Discretes, Logic and Mosfets NXP‘s announcement about Standard Products June 14th 2016
• NXP has announced a binding agreement to sell its Standard Products business to a consortium of financial investors consisting of Beijing Jianguang Asset Management Co. Ltd (‘JAC Capital’) and Wise Road Capital LTD (‘Wise Road Capital’), leading to a stand-alone world-class leader in Discretes, Logic and PowerMOS to be named Nexperia.
• The business will be operated by the Nexperia management team which will be responsible for Nexperia day-to-day business operations and productions. Investors regard Nexperia as a global company and consider the best support to global customers is a key factor for the success of the new company. JAC will continue to make investment to support Nexperia management team and the business including R&D activities, customer supports and growth aspirations.
• The transaction is expected close in the first quarter of 2017, pending all required regulatory approval and employee representative consultations.
• Transaction is a positive accomplishment for all parties involved, enabling NXP to continue to focus on its HPMS business, and furthering its Secure Connections for a Smarter World strategy.
• As stand-alone global powerhouse, Nexperia will continue the product portfolio (Discretes, Logic, PowerMOS) of today. Nexperia will decide efficiently by its own on growth strategies and associated investments.
2 nexperia.com Transaction highlights
• The new company, to be named Nexperia, will be headquartered in Nijmegen, the Netherlands.
• The new company will become a world-class producer/supplier of standard products. It will be fully focused on the Logic, Discretes and MOSFETs markets, producing over 70 billion devices a year.
• The transaction concerns all employees of BU Standard Products, its associated manufacturing sites and dedicated Standard Products resources in other functional areas within NXP.
nexperia.com Transaction includes
• 5 factories: - 2 Front-end: Manchester, UK and Hamburg, Germany - 3 Back-end: Guangdong, China, Seremban, Malaysia and Cabuyao, Philippines
• About 11,000 employees - Numerous sales, marketing, logistics, R&D and other personnel resources dedicated for Standard Products today
• Nexperia to be managed by Frans Scheper and his leadership team
nexperia.com Business continuity and focus on our customers
“As a strong leader we consistently provide a highly reliable and innovative Discretes, MOSFETs and Logic product portfolio to our global customers. With our engaged and motivated employees we invest in product development and best-in-class quality. This ensures our leading position and profitability today and in the future. It is our intent to daily exceed the needs and expectations of our customers!”
Frans Scheper EVP and GM BU Standard Products Designated CEO of Nexperia
nexperia.com A successful Strategic Partnership continues… &
“NXP and Nexperia will have a strategic and financial partnership on the technical cooperation for reference designs and securing important design ins. NXP will continue to provide innovative ICs for Automotive, Security & Connectivity and Digital Networking which are supplemented by Nexperia´s broad portfolio of Discretes, MOSFETs and Logic devices to provide proven world-class reference design solutions towards our common customer base.”
Rick Clemmer Frans Scheper CEO NXP Semiconductors EVP and GM BU Standard Products Designated CEO of Nexperia
6 nexperia.com Nexperia – Differentiated position in the market Translating our positioning „The efficiency company“ into a promise into the market
• Customers
• Distributors
• Partners
• Investors
• Employees
• Suppliers
7 nexperia.com Nexperia – Executive Management Team As of day 1 CEO Frans Scheper
BG Bipolar Discretes General Manager CFO and BG Erik Just-Wartiainen BG Logic & Protection Jürgen Lange
General Manager SVP Human Resources BG MOS Discretes BG Stefan Hermans Julian Humphreys
COO General Counsel Sean Hunkler Charles Smit
VP Strategy & Chief of SVP Sales Staff Jennifer Zhao Rainer Buschke
BG = Business Group SVP Marketing Gerton Jansen
8 nexperia.com Business continuity
• Nexperia will continue to source its front end and back end • Both NXP and Nexperia will continue to support its mutual production from its current manufacturing sites. As such business operations with their factories and hence will there will be no consequences to our sourcing strategy as a continue as a strategic partnership once the transaction is result of the announced transaction. Both NXP and our new completed by early 2017. investors agree that business continuity across the board is of critical importance to the success of Nexperia and hence we will make sure that there will not be any disruption in our supply chain or any other processes for that matter.
9 nexperia.com Business continuity Your 1st choice for Diodes, Transistors, ESD & EMI filtering, MOSFETs, and Logic
Market segments Reflected in Enabled by Market Position >10,000 types
• Small-signal Diodes & • Cost efficient supply 1 GA Discretes Automotive (incl. ESD protection) Transistors chain • Medium Power Diodes & • High quality with 2 PowerMOS Automotive Portable devices Transistors <0.1 PPM failure rate 3 Logic • Protection & Signal • Extended AECQ- Industrial 100/101 portfolio Conditioning Standard products is your • Best in Class 1st choice supplier with • MOSFETs packages > 12 % market share Communication • Logic Devices Infrastructure
Consumer
Back End Frond End Guandong, China Hamburg, Germany Cabuyao, Philippines Manchester, UK …AND UP TO 70 BLN PCS SHIPPED ANUALLY! Seremban Malaysia
10 nexperia.com The shape of Nexperia Value Proposition
• Portfolio • Broadest portfolio of Discretes, Logic and MOSFETs: one-stop-shop • Manufacturing • 5 owned front and back end factories • Very high degree of automation in backend factories • Own specialized equipment designer • Highly efficient supply chain and secure capacity • R&D • Dedicated and highly experienced R&D team • Extensive IP portfolio ~ 200 patent families • Financials • Strong financial position • > US$ 1 bln annual revenue • Focused on growth and associated investments Headquarter Frond End Back End • Markets Nijmegen Hamburg, Germany Guandong, China • Leading supplier to automotive customers The Netherlands Manchester, UK Cabuyao, Philippines Seremban Malaysia • Leading supplier to distribution partners
Although servicing a variety of markets, Nexperia will be especially increasing focus on Automotive applications and providing their required high-level of quality solutions. 11 nexperia.com Nexperia – The efficiency company
• We at Nexperia are the efficiency semiconductor company. We deliver over 70 billion products a year and as such service thousands of global customers, both directly and through our extensive network of channel partners.
• At Nexperia we believe that an efficient company creates efficient products. Products that are efficient in power consumption and efficient in space usage by offering industry leading small packages. All of this complemented with best in class quality levels and an extensive portfolio that meet the stringent requirements set by the Automotive industry.
• Led by our lean and passionate team, we are teaming up with our customers, partners and with the communities in which we have 11,000 employees to create the best standard semiconductor components available in the market. It’s a team effort. We call it: TeamNexperia. And it is about doing things together. Join us as we build a new company with decades of experience combined with the passion of the new generation.
12 nexperia.com Application trends in the electronic market Continued product innovations by Nexperia to serve those requirements
Power efficiency Protection and filtering Miniaturization
• Reduction of overall power • Protection of multiple bus systems • Reduction of size of modules consumption within the car • Mechanical space constraints • Reduction of standby power • Cost reduction by smaller control consumption units • Reduced wiring effort
• Reduction of overall power • Reliability of interconnections • Increased functional density consumption • Cost reduction by smaller units • Reduction of module size • Reduction of power dissipation / cooling requirements
• Longer battery life • Protection of interconnects and • Smaller form factors • Reduced power dissipation / heat internal modules (especially thinner) • Smaller charging units • Wireless charging
13 nexperia.com Global sales & marketing Close to customers
Detroit
Nijmegen* Headquarter; Sales&Marketing Office Nexperia´s planned Sales & Marketing Offices Complemented by home offices in close proximity to customers
14 nexperia.com To our customers Communication & Commitments
• Yes, all pricing agreements made by NXP´s BU Standard Products on LTA’s, MYA’s or other kind of agreement will be fully honored by Nexperia.
• Quality was, is and will remain top priority for Nexperia. Most of our revenue is in the Automotive segment and we consider our quality level as one of the key differentiators. For sure we will continue innovating in even higher quality levels going forward with Nexperia.
• Continuity of product portfolio and continuous long term supply of products towards our customers.
• Proven supply and logistics supply chain will be continued.
• For Nexperia, a European company under Dutch law, the protection of customer´s intellectual properties is of course of highest priority.
• Established customer contacts of dedicated Standard Products experts e.g. in Sales & Marketing, Logistics and in Quality will remain with Nexperia.
nexperia.com To our customers Quality Standards
Standard Products Quality Certifications are;
• ISO9001 Quality
• ISO/TS16949 Automotive
• ISO14001 Environmental and
• OHSAS18001 Health and Safety.
You can be assured that we will maintain these certifications in the new company.
Our ways of working will continue in the new company as well as our internal and external audit programs. We are already working with the certification company DEKRA to ensure there is a seamless transition and certifications can continue from day 1 of the new company.
We also recognize that new ISO standards are now being introduced and we plan to move to these new standards during 2017.
nexperia.com From NXP´s Standard Products to Nexperia Migration approach
17 nexperia.com From NXP´s Standard Products to Nexperia Order migration and shipping around day 1
• The high-level plan for the transition of NXP’s Standard Products Group to Nexperia is described/depicted below.
• As we approach order migration day, operations will be frozen before the cutover weekend. • Migrations will take place during the cutover weekend (for customer orders, inventory, etc.).
• Functional testing as well as backlog processing (including pilot orders) will take place at the end of the cutover weekend.
• The detailed cutover plan, including risk mitigations, will be finalized in Q4 2016.
18 nexperia.com Next steps
• Set up Nexperia´s systems & processes (ongoing).
• Nexperia´s Vendor Master Data provided to customers in August. Customers are kindly asked to implement aiming system readiness in 4Q16.
• Transfer established Standard Products dedicated Sales & Marketing team towards Nexperia.
• Transfer of the Standard Products orderbook from NXP towards Nexperia on day 1.
• Closure of the divestment and start of Nexperia by mid of 1Q17.
nexperia.com
Back up FAQs Frequently asked questions
Are the Standard Products (Nexperia) and the NXP/Freescale integration activities related? . The NXP Freescale integration is a separate and distinct activity from the carve-out of the NXP Standard Products Business as a stand-alone company called, Nexperia.
. As announced on July 6, 2016, Nexperia will become a new, stand-alone company on February 6, 2017.
. Although Nexperia order migration activities are separate and distinct from current NXP/Freescale integration activities, many customer communications efforts will run parallel to minimize the number of communications moments to the same customer.
. If any requested activity requires further clarification, please contact your Customer Supply Representative for navigational assistance!
22 PUBLIC Frequently asked questions
Will the recently announced agreement between Qualcomm and NXP impact the transition of NXP’s Standard Products Business to Nexperia? . The recently announced agreement between Qualcomm and NXP does not impact the plans to transition NXP’s Standard Products Business to Nexperia.
23 PUBLIC Frequently asked questions
Which terms and conditions will apply for future Nexperia customers?
. As Nexperia will be a completely stand- alone, independent company from NXP on February 6th, 2017, we are striving for a smooth continuation of business operations for our customers after the transition/close date. To best support this, Nexperia’s policy will be to honor all Standard Products customer contracts that are and/or will be in place as of February 6, 2017 through the end of 2017.
. We will be approaching customers within the next few months with customized contract assignment letters to formalize the continuity of business terms, as required.
24 PUBLIC Frequently asked questions
Will Nexperia support the existing NXP quality requirements?
. Nexperia will be fully-covered with all valid/relevant Quality certificates. The following quality standards will continue to be supported: — ISO9001 Quality — ISO/TS16949 Automotive — ISO14001 Environmental — OHSAS18001 Health and Safety
. The above certifications will continue to be maintained by Nexperia, as will the consistency associated with all business operations and internal/external audit programs.
25 PUBLIC Frequently asked questions
Is a new vendor code required for Nexperia?
. A new vendor creation process will need to be adopted by customers to enable sales transactions after February 6, 2017.
Is EDI testing transmission required? When does Nexperia expect the first EDI transmission? . Customers are being contacted about supporting EDI testing prior to the cutover so that we can validate the approach and timing of the testing. . EDI testing is highly advised due to the complexity and volume of orders typically associated with Standard Products sales transactions. . It is expected that all EDI connections will be enabled prior to February 6, 2017.
26 PUBLIC Frequently asked questions
Will Nexperia manufacturing capabilities/capacities change? . Nexperia will continue to support manufacturing operations in 5 factories: — 2 front-end factories: Manchester, UK and Hamburg, Germany — 3 back-end factories: Guangdong, China; Seremban, Malaysia; and Cabuyao, Philippines . There will be no changes to Nexperia’s sourcing strategy: Front-end and back-end production will continue to be sourced from current manufacturing sites. Business continuity is critical to the success of the transaction and we are working hard to minimize any disruption to manufacturing operations/supply chain.
. Both NXP and Nexperia will continue to support mutual business operations at common factory locations and will establish a strategic manufacturing partnership once the transaction is 27 completed.PUBLIC