Microcontroller Solutions Paul Grimme Senior Vice President and General Manager

17 June 2008

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

4 Networking Cellular and Multimedia $1,217 $1,121 5

Sources: iSuppli, Strategy Analytics

Industrial and Multiple Market

Legacy/Exits ue nn

Reve ROW Auto

Big 3 Auto

2004 2005 2006 2007 2008(e) 2009(e) 2010(e)

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

► 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.

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

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

► Sophisticated user interfaces, power management, connectivity and protection requirements are increasing Growth Drivers: ► Energy mana gement in motor control and li ghtin 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 (T est & M easurement , 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

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 on low-voltage, low- Medical driving demand for home power; reusing low-power techniques in new products medical devices • Proliferation of Flexis families for range of medical designs • Platform design key due to FDA with single platform for 8-bit and 32-bit performance restrictions

Freescale Transition Points: • 8-bit to 32-bit CPU, peripherals Power ® MPU • 32-bit ColdFire to 32-bit Power Architecture CPU ColdFire® • Converged Linux and CodeWarrior support

ARM9™ IP AVR32 32-bit MCU: Power ® SH and Performance ColdFire® M32 ARM966™

ARM7™ IP ARM7™ IP V850

IP, tools MIPS and S/W PIC32™ ARM7™ IP 16/32-bit: compatibility ARM Mid-Range V1 ColdFire® CtCortex-M3 R8C/R16C PIC24-DSPIC

IP, tools and pin 8-bit: compatibility PIC12-16-18 78K Entry Point S08 H8 8051 ST7 AVR

Industrial/Other MCU Market * (M$) Industrial/Other MCU Design Wins

18,000 32-bit MCU 16,000 16-bit MCU 14,000 25% CAGR 12,000 8-bit MCU 10,000 4-bit MCU

8,000 M$ 6,000 4,000 2,000 0 2006 2007 2008 Target

New Products Development Tool Sales

29% increase

2007 w Products

ee 2008 # of N

SW Sales / MCU HW Sales / MCU SW Sales / HW Sales / 2006 2007 2008 Plan CldFiColdFire CldFiColdFire

*Source: iSuppli

• We are well-positioned to address the growing embedded control markets • Freescale has a history of microcontroller leadership, and MCUs are key to our future growth • Priority to accelerate independence from N. American auto and shift quickly to fast-growing new product families • We are committed to growing our microcontroller business • CtiititdContinuing to introduce idtindustry-ldileading pro dtducts (benchmark low-power, Flexis™ compatibility) • Investing in technology, ecosystem and market coverage • Our forward -looking growth metrics are positive • We are expanding our global footprint and increasing our customer engagement

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. 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.