Applications – Multimedia Convergence

Philippe Geyres Executive Vice President

Field Trip 2006 - London, May 23rd Application Specific Group

2005 restructuring… Refocus on priority projects 9.0% Home/Mobile/Office R&D synergies 8.6% 8.2% Cores & DSP 8.2% 7.9% 8.0%

Audio & Video (%) 7.8% 7.9% Home audio & Wireless 7.4% 7.5% 7.4% 7.0%

… has started to pay off Share Market ASP ST Worldwide Q4-2004 Q1-2005 Q2-2005 Q3-2005 Q4-2005 Q1-2006 First effects visible More new products in the pipe Worldwide ST ASP market share (%)

Convergence Philippe Geyres Applications: Multimedia Convergence

Office Home CPG ASP ASP flash

ASP

HPC

Mobile

Convergence Philippe Geyres Applications - Mobile

Field Trip 2006 - London, May 23rd Focus on Cellular Phone Handsets TAM may reach 1B units this year 800 Feature-rich segment is 700 gaining share Multimedia is driving 600 silicon content growth

500 - Wireless communication 400 (BB and RF): stable - Mobile multimedia 300 (Camera, BT,

Unit (Millions) WLAN, APE): 200 growing Bluetooth WiFi 100 FM Mobile TV GPS 0 Primary Camera 2005 2006 2007 2008 2009 Secondary Camera Source iSuppli : Mobile Handset Market Tracker H2-2005

Convergence Philippe Geyres ST Product Portfolio

cdmaOne Audio Wi-Fi BT/UWB DTV A-GPS WiMax GSM

Imaging Connectivity PDC Developer 3GPP Video Cellular Standards Applications Imaging SW Stack GPRS 2nd camera TV CDMA 20001x OS and UI MP camera RF Web Browse EDGE HWA Applications Analog, Security Software and IVE Power WCDMA Media Management Engines Games CDMA EV-DO Application Modem Office Processor Base Band TD-SCDMA Cellular Multimedia HSDPA

Hardware and Software Reference Designs Cellular TAM is much more than the sole cellular modem Convergence Philippe Geyres Phone Architectures: Modem & Application Processor

Flash SRAM Flash SRAM EM

APE NCW ISP Modem Base Band ISP Base Band Slim APE APE BT WLAN Integration Modem BE EM IC

ISP Modem HWA Base Band ISP Modem CO-PROC Base Band

Modem APE-RTOS EM RF Base Band FEATURE SMART PHONE

ISP

BB-RF-EM ENTRY

Convergence Philippe Geyres ST Focus and Opportunities Nomadik/Modem optimized solutions

Flash SRAM Flash SRAM EM Flash APE NCW ISP Modem Base Band Base Band ISP Slim APE APE BT WLAN Modem Integration BE EM IC

ISP BB ASIC with Nomadik and Modem Base Band Connectivity IPs Modem CO-PROC Base Band Nomadik into Feature Phones Modem Base Band APE-RTOS EM RF FEATURE SMART PHONE

ISP

BB-RF-EM ENTRY

Convergence Philippe Geyres 4 Pillars of ST’s Mobile Strategy Cellular Application Processor

Camera Connectivity

Convergence Philippe Geyres Cellular Communications

Serving Tier 1 market leaders with Mobile handset Shipment Share ASICs: large and growing segment Top 5 vs. Others 90% 81% Growth in mixed signal 76% 80% 68% #1 in 3G RF and energy management 70% 64% 3G: Higher $ content and market 60% share gain 50% 36% 3G finally taking off 40% 32% 30% 24% Growth in digital baseband 19% Design win in 3G, 3.5G 20% System in Package for 10% 0% miniaturization: 2003 2004 2005 Q1 2006

RF and EM Top 5 Others - (Not Top 5) SoC for super integration: Source: iSuppli 1Q2006 & Press Releases Digital, RF and mixed signals 65nm Convergence Process Non-cellular wireless IPs Multimedia IP

Convergence Philippe Geyres Application Processor

Gaining momentum with S60 smart phones Extending to feature phones (mobile TV) Several design wins with tier-one customers First handsets in shops in H2-06 (8810) Significant revenue take off in 2007 (8810 and 8815)

Convergence Philippe Geyres Application Processor - Strategy

1) Best in class for High-end Smartphones 2005-6: Focus on handset & Tier 1 OEMs Symbian-S60, Windows Mobile, RTOS Mobile TV Volume start of 8810 2007: Enter into mass volumes with 2nd generation-8815 Introduce 3rd generation-8820 2) Also addressing Feature Phones and other portable multi-media Cost reduction to enlarge the served market Integrated reference platform with cellular modem Linux PMP, VideoPhone, automotive

Convergence Philippe Geyres Nomadik SoC Roadmap

Mobile & Consumer STn8830 Web-Convergence 45nm

STn8820 + Trustzone security Mobile Multimedia + Ultra fast pixel processing Smart Accelerators 65nm + Advanced 3D Graphics Acc Imaging + DVFS power management Graphics Video Audio + Advanced security STn8815 + H.264 Acceleration 90nm + Fast pixel processing (ISP-MS) + 3D Graphics Acceleration System Performance STn8810 + VGA Video/Mobile TV 130nm + 2-4Mpixel Camera support + Security

20052006 2007 2008

Convergence Philippe Geyres Nomadik-based Complete Platform Solutions

Class D Amp

A-GPS Audio Energy Codec Management Video Denc TVOUT WLAN

Cameras

Bluetooth OSs & UIs S60 USB

FM radio

RTOS DVB-H Displays Embedded SW & Firmware

Convergence Philippe Geyres Connectivity

2006 is the 1st year of significant volumes Product portfolio is fully geared towards portable applications Bluetooth, WLAN, Mobile TV, GPS Also investing in UWB, RFID, NFC, WiMax… Technology roadmap converging into 65nm Standard products IP for multiradio ASIC SOC All radio design is “digital radio”

Convergence Philippe Geyres Connectivity Roadmap Roadmap WLAN 802.11 STLC4420 converging Single package on 65 nm a/b/g/(n) RF/BB/PM STLC8600 Single Chip 65 nm 802.11 STLC4550 STLC4560 Single package Single package b/g RF/BB/PM RF/BB/PM

STLC4590 WLAN + Combo’s : WLAN +BT Bluetooth LTCC 65 nm SoC WLAN + BT STLC2590 STLC2591 STLC2690 FM + BT BT 2.0 EDR BT Lisbon BT + FM + FM + FM 65 nm SoC

STLC2500C STLC2500D STLC2600 EDR Bluetooth BT Lisbon 65 nm BT 2.0

STLC6510 STLC6610 DVB-H Single package Single Chip RF/BB. 65 nm

2005 2006 2007 2008 Convergence Philippe Geyres Connectivity – Product Status

Bluetooth in full production STLC2500A in volumes in 13 phones EDR STLC2500C: in volume in >20 phones WLAN in full production STLC4370 b,g in volume with a top-tier OEM Cost & performance enhancements sampling now: STLC4550 : WLAN 11b, g STLC4420 : WLAN 11a, b, g Combo BT+FM sampled, and under evaluation by 4 Tier 1 OEMs STLC2590 : BT+FM (RDS) single package

Convergence Philippe Geyres Mobile TV Offering The application driver for many Nomadik projects

STLC 6510 Nomadik BasebandBaseband DemodulatorDemodulator andand LinkLink LayerLayer or customer BB

RFRF FrontFront 2K2K 4K4K 8K8K TPSTPS EndEnd TimeTime MPE-FECMPE-FEC slicingslicing MPEG4MPEG4 H.264H.264 AVC-AACAVC-AAC

Front End demodulator: memorymemory UserUser I/FI/F SiP DVB-H only: Q1 2007 SiP DVB-H/T-DMB: Q1 2008 SoC multistandard: Q2 2009

Convergence Philippe Geyres NOR Flash Wireless Applications

Leading technologies and products portfolio 100% 2bit/cell for high densities; Introducing 65nm Common memory systems specifications with Intel

Wireless Core Introduction NOR Products & technology 2005 256Mb 512Mb 130nm, 90nm, 2bit/cell 2bit/cell 2006 512Mb 512Mb-1Gb 90nm, 2bit/cell 65nm, 2b/cell 65 nm: 512Mb 2bit/c & 0.042 µm2 cell Serving leading Cellular Phone Makers Representing more than 70% of Cellular Phone market

Convergence Philippe Geyres NAND Flash Wireless & other embedded systems share of NAND Market * % 25

Focus on Wireless 20

(40% target for 2006 sales) 15 & embedded applications 10

5

0 2005 2006 2007

Core Products Introduction & Technology

2005 128Mb - 2Gb 4Gb 90nm 70nm 2006 512Mb - 4Gb 8Gb 90 nm, 2b/cell 60nm, 2b/cell 70 nm 4 Gb, 60 nm *Source: iSupply 03/06 & 05/06, incl MCP revenues

Convergence Philippe Geyres Mobile Display Drivers: A Large and Growing TAM

US$M

APPLICATIONS: 2000 • TFT LCD (aSi & LTPS) • Camcorder OLED • Digital still Camera Passive Color LCD 1000 Monochrome LCD •Gaming • PMP (portable Multimedia SAM Player) • Handheld/PDA 0 • Cordless Phones 2005 2006 2007

New product line, based on new 0.18µ high-voltage technology This new technology is compatible with our existing mature 8” Fabs

Convergence Philippe Geyres Mobile Display Drivers Sampling 0.18µ product line (CSTN and TFT) since Feb 06

Mobile Handset Display In design at major customers: Revenue share in 2005

Others - CSTN and TFT Drivers in design KOR 1 ) at first tiers in Japan and Korea SII (mainly MSTN - MSTN drivers in design at first &, CSTN) Kor 2 tier in Korea and Taiwan Jap 1 Jap 4

Jap 2 Jap 3 Volume production to start in Q4 2006 (CSTN and (CSTN & TFT LTPS) mainly) Developing 0.11µ high-voltage technology Current designs ongoing - Al Back-end - Compatible with chosen 0.18µ fab

Convergence Philippe Geyres Imaging Cumulative shipment of over 140M Camera Modules from CIF to 2MP #1 Camera Module supplier in 2005 3 MP Q4’06 5 MP sampling Q4’06 Autofocus G2 reflowable Ultra-low Z for secondary camera G1 CIF – shipping now VGA – sampling Q3’06 Integrated manufacturing: from sensor to module Referenced with multiple chipsets

Convergence Philippe Geyres Mobile Imaging Solutions : Portfolio VS6451 VS6555 VS6652 VS6750 VB6850 VB6950 CIF+ USM VGA USM 1.3MP 2MP 3MP AF 5MP AF

STV0976 30 fps 30 fps

STV0984 30 fps 30 fps 30 fps 25 fps

STV0986 30 fps 30 fps 30 fps 30 fps 20 fps 15 fps

CCP2 (SMIA) partner BB / APE / BEIC

Parallel bayer interface BB / APE / BEIC

CSI-2 (MIPI) interface BB / APE / BEIC Convergence Philippe Geyres Applications - Office

Field Trip 2006 - London, May 23rd Good Traction from Volumes and Customers 700 600 500 HDD shipments FJTS TSHB 400 Enterprise Desktop SMSG STX (*) 300 Mobile 2.5 200 Sub-2.5" HGST 100 0 WDC 160Mu 2006 2007 2008 2009 2010 (*) including MXO share 140

120 Printers shipments Dell 100 Others 80 Laser color Canon HP 60 Laser mono Inkj MFP Lexmark 40 Inkj SFP

20 Epson 0 Mu 2006 2007 2008 2009 2010 customers served by ST Source: Databeans, ST

Convergence Philippe Geyres Expanding Sales and Market Share

115 110 105 Reference -- 100 95 90 H1 2004 H2 2004 H1 2005 H2 2005 Computer peripheral revenue trend relative to H104

Convergence Philippe Geyres One-Stop Shop for Data Storage and Printers

System Motor Pre Digital Motor Head Print On Chip Controller Amplifier Engine Controller Driver Head (SOC)

HCMOS BCD BiCMOS HCMOS BCD BCD MFD

Complete solution only from ST

Convergence Philippe Geyres Accelerating the Shift to Advanced Technologies

100% 80% < 130 nm System 60% 130 nm On Chip 40% 20% >130 nm 0% 2005 2006

100% BICMOS6 Motor Controllers, 80% .35u Head Drivers, 60% BCD 6 40% .35u BCD 5 Preamplifiers 20% .50u 0% 2005 2006

Convergence Philippe Geyres Expanding Market Share in Data Storage

MOTOR CONTROLLER Market Leader, again in 2005 Launched L6206 and L6207 for Consumer and Computing applications in April 2006 PREAMPLIFIER Volume production from Q4/2005, with increasing market share in 2006 Sampling next generation for Consumer application SYSTEM ON CHIP In production with 130nm ST SoC for Performance Desk Top and SATA based Near Line Enterprise Sampling the first 90nm ST SoC 65nm IP under development

Convergence Philippe Geyres Expanding Market Share in Printers

Continue to leverage on the ASIC business 7 new design in gained during 2005 Ethernet 110nm ASIC SoC in production since Q1/06 Accelerating 90nm ASIC introduction Flash, SRAM SDRAM, DDR First Tape out already completed

2 additional designs in progress LEDs, Customizable 65nm IP in development KBD, Logic LVDS Create new opportunities with ASSP SPEAR™ Memory SPEAr, Structured Processor Enhanced Cards Architecture Powerful architecture based on ARM cores, customizable logic bank & Specific IPs Very well received in inkjet and laser markets 90nm version under development, including accelerators for photo and multifunction products

Convergence Philippe Geyres Application: Consumer

Field Trip 2006 - London, May 23rd Home Consumer Market Evolution

Mu 500 GROWTH DRIVERS: 400 Digital TVs Digital Set Top Boxes DVD Video Recorders 300 ST focus DVD Video Players DTV VCRs HD DTV 200 Analog/Color TVs IP-STB HD STB HD DVD 100 Portable

0

2002 2003 2004 2005 2006 2007 2008 2009 Source: iSuppli Q4’05

Convergence Philippe Geyres ST Leadership in Consumer 2005 ST market share at 6.8% From 2001 to 2005, increased from #6 to #3 position 2005 Consumer digital ICs market* = 12.2B$

Consumer ASSP Consumer ASSP 2005 revenues Revenue growth 2001-2005 CAGR %) (US$ M) 1800 1600 ST

1400

1200 Philips

1000 Sony 800

600 Toshiba 400

200 Fujitsu 0 SONY Toshiba ST Fujitsu Philips 0 5 10 15 20 25 *source iSuppli Convergence Philippe Geyres 2005: first MPEG-4 ST: # 1 in MPEG single available from ST

Ramp-up IPTV & IDTV 324

Ramp-up 263 Digital Terrestrial

Ramp-up 195 Sat Free-to-Air & DTT

140

1995: first MPEG2 100 on market is ST 75

35 18 2 6 10

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1995-2005 Cumulative MPEG 2 & MPEG 4 Shipments (Mu)

Convergence Philippe Geyres 10 Years After MPEG2 Standard Definition, a New Wave with High Def, DVR, MPEG4, IP… 180 Mpcs 160 iDTV ATSC Integrated HD & DVB-T Digital TVs 140 CAGR +25% 2005 Æ 2007

120 Terrestrial DVR

IP 100 Digital SD Cable MPEG4 80 Set-top Boxes 60 Satellite FTA IP 40 MPEG2

20 Emerging Satellite PayTV Markets 0 2004 2005 2006 2007

* Source : inStat 2005, ST Sales & Market Research, Feb 2006 Convergence Philippe Geyres 2005: ST Shipped more than 60 Million MPEG2-4 IC’s Mu

59% Market share in MPEG STB market: 60% 80 # 1 in Terrestrial 70 # 1 in Satellite 60 # 1 in Cable 50 40 # 1 in IP 58% 69% Share 30 Competition 20 50% ST 10 0 SAT CABLE DTT IPTV

Source : ST Sales & Market Research, Feb 2006

Total 2005 Market estimated at 100Mu

Convergence Philippe Geyres 60M Set-top Boxes with ST in 2005, in a Fragmented Market

TOP 10 Next 50+

ADB JIUZHOU TECHNISAT ARION JVC TELRA ASCOM KATEK TEON ASUSTEK LG ELECTRONICS TONGDA AV FRONTIER LOEWE TONIC COSHIP AVNET MATSUSHITA TTE HOMECAST BEKOTEKNIK MOTOROLA UEC BGTECH WORLDSAT KAON BHARAT NU HORIZON ZINWELL PHILIPS CHANGHONG OCTALTV 60% CYBERHOME OPEN TECH SAMSUNG DAHUA ORIENT POWER SANDMARTIN 40% DMT PACE EASTERN PANDA SCIENTIFIC-ATLANTA ECHOSTAR PESI SKARDIN FINMEK PIONEER FREE QUANTA THOMSON FTA SAGEM FUTURE ELECTR. SEG HI-TECH VESTEL GENIUS SEUNG JUN GLOBAL SHARP GMI SHENZHOU HUMAX SIEMENS HYUNDAI SKYWORTH I3MICRO SONY

Convergence Philippe Geyres 2006: ST in IP-STB

ST’s dominant market share 7109: the only credible solution for H.264 and VC1. IP-STB: Innovation Leader (multiple play) Europe: First to deploy high volume FT based on 7100 production started in 2005. Telefonica 7100 production now. Fastweb 7100 production now. Telecom Italia 7109 production in Q3/06. Major design wins with other Telcos. Asia-Pacific now starting: China in production on 7100 for Shanghai Telecom Korea design win with KT on 7100, production in Q3/06. US: AT&T deployment late this year

Convergence Philippe Geyres 2006: ST in Cable STB CABLE: strong market share gains for ST US: Strong demand driven by HD and HD DVR Market share growth thanks to SA-Cisco Production of the new H.264 solution in large MSO‘s in Q4‘06. Europe: UPC, largest MSO, in high volume with 5100. -New HD H.264 box based on 7100 production in Q2‘06. Telewest production in Q2‘06 using ST silicon. Analog to digital conversion in progress: KDG, Cabo, Telenet, Canal Digitale, Cablecom, Swisscom, Premiere. China: Digital deployment in full speed, ST‘s market share 85%.

Convergence Philippe Geyres 2006: ST in Terrestrial STB TERRESTRIAL: the year of HD ramp up Europe: Market shift to DVR, major design-wins based on STi51xx, volume production now. STi7100 mass production H.264 HD for US: Analog transition to digital HD starting ST well positioned with key design wins Japan, Rest of the World: First HD brick on Japanese market Dominant position in Australia SD and HD

Convergence Philippe Geyres 2006: ST in Satellite STB

US SATELLITE: transition to HD H.264 started

Design-wins based on 7109 for HD Zapper and HD DVR boxes. Design-win for Dual TV based on 7200, the first 65nm digital consumer product in the world planned production in Q2/07.

Today sole supplier of TIVO replacement DVR. Design-wins based on 71xx for HD Zapper and HD DVR, production start in Q4/06.

Convergence Philippe Geyres 2006: ST in Satellite STB

Europe: leading in HD deployment Canal+ TPS in mass production based on 7100 Premiere volume production in May based on 7100

Europe: SD Upside potential for Premiere with new hybrid box for soccer in Germany based on 5100 SKY in production with DVR based on ST55xx Strong volumes in FTA and transition to DVR based on ST5100

Convergence Philippe Geyres STi7100/7109 High Definition Multi- Standard Decoders 90nm in volume production today Set Top Box IP-Set Top Box for Next Generation Voice, Data, Broadcast Satellite and Cable

STi71XX All Format Decode MPEG2 SD/HD H264/VC1 SD/HD Full Range Audio

DVD-HD and Combos Automotive Multimedia Media-Centres, HD DVD Navigation, DVD, Audio

Convergence Philippe Geyres STi7100-7109 Customers

And many others…

Convergence Philippe Geyres Next Generation Platform: STi7200

Dual advanced codecs HD decoder Dual TV STBs (cable and satellite) HD-DVD and Blu-Ray High end IPTV and multi-room DVR iDTV with advanced codecs

Innovation leader Latest generation of DRM, transcoding, High video quality Single chip, 65nm

Sampling mid 06, Production ramp-up H1 07

Convergence Philippe Geyres Integrated Digital TV: Increasing Volume

Total TV shipments

250 Mpcs

200

150 CAGR iDTV +56%

100

50

0 Y2005 Y2006 Y2007 Y2008 Y2009 Y2010

Integrated DTV Other TVs Source iSuppli Q1’06

Convergence Philippe Geyres 2006 ST in Digital TV

Volumes still mostly based on plug-ins ST’s leverage of STB solutions

Current production of LCD TVs based on 51xx:

Convergence Philippe Geyres 2006 ST Innovations in Digital TV

Integrated TV solution based on STD2000/1000 Major design wins in Korea, Japan and China Production in Q3’06 with STD2000 Design wins with the STD1000 cost optimized solution, samples this summer, production in 2007

Sound processor 82xx: major breakthrough Major market share gains over competition Solid revenue growth in 2006

Convergence Philippe Geyres ST: The Market Leader in Digital Audio Amplification

5V 16V 24V 12V 24V 36V 1st single package digital input class D Q4’04 STA333BW TDA7491 STA323W st 1 fully digital low power STA333W STA328W

class D (2x1.2W) Q1’06 BCD 0.3µ 1st 100dB single silicon DSP + Digital Power LCD PDP TV’s Speakers PDP Digital Amp’s Digital Amp’s (2x20W) Q1’06 Signal Processing Signal processing st 1 High Voltage (70V) 5Wx2 – 20Wx2 20Wx2 – 80Wx2 Digital power @ 2x180W – Q1’06

>30% Market share in digital Audio for TV & Speakers Convergence Philippe Geyres 2006 ST in DVD

High Definition: Major design wins in Blu-Ray DVD in the US and HD DVD Automotive: High market share

2006 ST in Media Centers

Media centers 7100 Linux based solution, production this summer in the US, major opportunities with PC and CE companies

Convergence Philippe Geyres Technology Shift Continues in 2006 STi510x, STi5528, STi7710, STi710x, STD2000

(ST revenues by process) 100% 90 nm 75%

90 65nm nm 90nm 50% 0.11um 0.18um 0.25um

25%

0%

2005 2006 2007 Source: ST

Convergence Philippe Geyres Complete Solution: Hardware, Software and System GUI and integration 8 Services ST-MyTV GUI Stack Middleware ST MHEG5 Oregan MHP ST Partner Osmosys ST DVR #1 Digital 5 Partner Highgate Highgate Simple #2 Security Solutions Devices7 Cabot Partner Exatel Exatel #3 Bitrouter Digital Deck Storage Drivers

STAPI+ 6 Communication PTI DVD DVD DVD Tune Cryp Dis Vide Audi Demu HDD Periph USB Stacks FE Play Rec STr Division: Softwaret pl o o x 4 5 Operating Systems OS: Linux/OS21 (Peripherals, Software Licence MCDTFS) 3 STAPI+ Hardware:ST Division:51xx, 8010 ,Hardware 7100, 7109, 53012 Advanced SOC’s 1 Production-ready Reference Solutions

Convergence Philippe Geyres Working with Operators World-Wide

ST in the heart of digital TV, IPTV and mobile devices Convergence

Market growth driven by: Triple / Quadruple Play Operator Competition Consumer Demand

ST uniquely positioned to benefit from: Broad portfolio = Home, office, mobile applications New products Customer & operator relationships

Convergence Philippe Geyres