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Microcontroller Solutions Paul Grimme Senior Vice President and General Manager

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Microcontroller Solutions Paul Grimme Senior Vice President and General Manager 17 June 2008 Microcontroller Solutions Paul Grimme Senior Vice President and General Manager TM Freescale™ and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc. 2008. Financial Overview Freescale 2007 Revenue: $5.7 Billion 2007 Market Share Rankings Total MCU Auto ICs RF, Analog, Other Microcontroller and Sensor $458 $1,878 1 $1,048 2 3 4 Networking Cellular and Multimedia $1,217 $1,121 5 Sources: iSuppli, Strategy Analytics Freescale™ and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are TM the property of their respective owners. © Freescale Semiconductor, Inc. 2008. Microcontroller Business Mix Industrial and Multiple Market Legacy/Exits ue nn Reve ROW Auto Big 3 Auto 2004 2005 2006 2007 2008(e) 2009(e) 2010(e) Freescale™ and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are TM the property of their respective owners. © Freescale Semiconductor, Inc. 2008. Microcontroller Growth Strategies Goal: Create value by building on solid profitability and growing revenues above our average market growth rates ► Aggregate system value with strong integration capability • Multiple component integration: analog power management, sensors, discretes • Memory configurations: flash, MRAM, SRAM • Low power consumption and system management ► Provide complete design-in support “package” • Controller Continuum leadership • The development environment: tools, reference designs, software, simulation • Best-in-class quality and availability ► Aggressively build our customer “network” • SiSemi-custtttom strategy • Asia: automotive, industrial/multiple market headquarters • Global network of customer/market labs • Field resource increases Freescale™ and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are TM the property of their respective owners. © Freescale Semiconductor, Inc. 2008. Market Overview: Automotive Automotive Microcontrollers (CAGR 2006 – 2011: 8.3%*) 2008 SAM*: $4. 9B ► Vehicle production growth 3-5% per year (Source: Global Insight) ► Emerging markets leading production growth Growth Drivers: ► Average of semiconductor content per vehicle • Safety increasing 4-5% per year (Source: Strategy Analytics) • Environmental • Connectivity & Infotainment ► Average MCU content, $64 per vehicle in 2007 ► Freescale No.1 global supplier of automotive MCUs Automotive Microcontroller Demand ($M)* 8000 Driver Info & Entertainment 7000 BdBody 6000 5000 Safety 4000 Security 3000 2000 Chassis 1000 Powertrain 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 *Sources: Strategy Analytics, Freescale Strategy Freescale™ and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are TM the property of their respective owners. © Freescale Semiconductor, Inc. 2008. Automotive Electronic System Trends Going Green Vehicle Stability • Stringent emissions regulation Infotainment System • Hybrids, gasoline direct injection Telematics/eCall • Electronics replacing hydraulics FlexRay™ Safety Hybrid Engine Control Radar • Active safety systems proliferating • Intelligence driving performance • Higher standards of reliability required Connectivity/ Infotainment • “Standard” convenience features • Wireless inside and out Intelligent Distributed • Regulations: Telematics/eCall systems may Night Vision Control become mandatory Camera-based Collision Avoidance The Affordable Vehicle • 30M cars in emerging markets by 2009 • Ultra-low-cost vehicles Freescale™ and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are TM the property of their respective owners. © Freescale Semiconductor, Inc. 2008. Automotive Strategy Alignment to Regional Markets $M Market Strategy and Key Actions 9000 AUTO MCU TAM Dynamics (by design-in region) • Rapidly growing vehicle Invest for Growth: 8000 production • Targeted products and design Rest of • Low electronic content, cappyacity in Asia but significant growth • Automotive pricing for mass mkt 7000 World • Faster cycle time to • Shanghai-led ROW resources market • Strategic partnerships 6000 • OEMs gaining market Invest in Local Infrastructure: Japan share • Automotive marketing and 5000 • Globally expanding systems teams tier 1s • H/W and S/W local engagement • Industry technology Technology Driver: 4000 powerhouse • AUTOSAR software • Globally growing tier 1s • Safety standards compliance 3000 but flat vehicle • Architecture/Product leadership Europe production (STM Joint Activity) • Declining vehicle Maintain Share: 2000 production • Penetration of hybrid vehicles • Weakening tier 1 base • Continued relationship for North 1000 • Limited technology America and global reach N. America development 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Sources: Strategy Analytics, Global Insights and MSG Automotive Strategy N. AMERICA EUROPE JAPAN S. KOREA CHINA INDIA R.O.W. Freescale™ and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are TM the property of their respective owners. © Freescale Semiconductor, Inc. 2008. The Most Complete Automotive MCU Portfolio Power Architecture™ TriCore™ SH High-end TriCore™ 32-bit TMS470/570 Joint Development Program V850 Low-end M32R 32-bit M16C (X)C167/ S12X XC2200 H8S MSP430 16-bit S08 H8 78K (X)C800 TMS370 8-bit 740C Freescale™ and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are TM the property of their respective owners. © Freescale Semiconductor, Inc. 2008. Auto Growth Metrics Automotive MCU Market * ($M) Freescale Auto MCU Design Win Growth 8000 7000 9.6% CAGR 6000 7.4% CAGR 5000 wards $M AA 4000 $M 3000 2000 1000 New Business New Business 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2006 2007 2008 Goal MCU 32-BIT MCU 16-BIT MCU 8-BIT FSL Auto 32-Bit Design Win Growth 32-Bit New Product Samples 30% CAGR 175% increase usiness Awards BB New 32-Bit 2006 2007 2008 Goal 2006 2007 2008 Target *Source: Strategy Analytics Freescale™ and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are TM the property of their respective owners. © Freescale Semiconductor, Inc. 2008. Key Market Overview: Industrial Industrial Microcontrollers 2008 SAM*: $3. 5B (CAGR 2005 – 2011*: 8.8%) ► Sophisticated user interfaces, power management, connectivity and protection requirements are increasing Growth Drivers: ► Energy manag ement in motor control and lig htin g s ystems is • Energy management very active • Connectivity ► Cost pressures and technology are driving 32-bit solutions • Building automation down to 8- and 16-bit space ► MCU year-to-date unit growth per year offset by ASP pressure (Source: WSTS) Industrial Processor Demand ($M)* 5000 4500 4000 Others (Tes t & Measuremen t, I nd T ransp, Power & Energy) 3500 Appliance 3000 Bldg Ctrl, Lighting, HVAC, Metering 2500 M$ Medical 2000 1500 EPOS, EFT, ID 1000 Factory Automation/Drives 500 0 2005 2006 2007 2008 2009 2010 2011 *Sources: Semicast and IMS Research Freescale™ and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are TM the property of their respective owners. © Freescale Semiconductor, Inc. 2008. Industrial Systems Trends Going Green • Energy management at the factory, in buildings, at home • Ultra-low-power devices: increased power efficiency and reduced standby currents • Huge power savings by switching to microcontroller-driven motors and drives Health & Safety • Medical is the fastest-growing segment in Industrial • Remote monitoring and portable medical devices enable outpatient services • Increased microcontroller content due to EU regulation on household electronic devices Connectivity • Internet everywhere on the factory floor • Wireless sensor networks • More focus on IP protection as networking expands Freescale™ and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are TM the property of their respective owners. © Freescale Semiconductor, Inc. 2008. Industrial Strategy Alignment to Market Drivers Market Dynamics Strategy and Actions • Market accelerating • Aligning roadmaps with strategic partners, with reuse • Designs simplifying • Providing low-level drivers and robust enablement • Increasing demand for security, • Enhancing Controller Continuum roadmap around platforms OOeaverall IP protection and safety • Adding security features to MCU and MPU portfolio Industrial • Power efficiency key • Cycle time aligning to market needs – 4 week commitment • Semi-custom strategy for optimized designs Factory • Ethernet connectivity • Launched ColdFire MCF5223 family with Ethernet MAC/PHY Automation proliferating & Drives • Variable-speed AC drives • Continuing investment in digital signal controller portfolio for growing high-efficiency motor control • Increasingggyy energy efficiency • Increasing need for noise reduction Appliances • Launched new Flexis™ AC series that supports 5V • Improving user interfaces • Inclusion of CRC and IEC60730 EU safety standard • 5V continuation compliance • Safety improvements • Focus on GUI si mpli cit y, addi ng prox im ity sens ing an d • Portable devices proliferating segment/graphical LCD products • “Baby boomer” generation • Launched Flexis QE series focusing
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