Presentation Material

RENESAS ELECTRONICS INDUSTRIAL BUSINESS

INDUSTRIAL SOLUTION BUSINESS UNIT

. Industrial Business

 Focus Market and Position  Business Direction - Endpoint Intelligence  By Artificial Intelligence  By Extreme Low Power

. Summary & Take Away

Smart Factory1) Smart Living2) Smart Infrastructure1)

(B USD) Semiconductor Forecast – SAM 3) (B USD) Semiconductor Forecast – SAM (B USD) Semiconductor Forecast – SAM

8 10 100 6 8 80 6 60 4 4 40 2 2 20 0 0 0 2016 2017 2018 2019 2020 2021 2022 2016 2017 2018 2019 2020 2021 2022 2016 2017 2018 2019 2020 2021 2022 Smart Factory : Industrial Electronics>Automation Smart Infrastructure : Industrial Electronics except Automation & Other Industrial

Overall CAGR in focus markets is 8,3% (estimated by Renesas)

1)Graph created by RENESAS based on Gartner Research, Source Gartner Forecast: : “Gartner Semi-conductor Forecast Database, Worldwide, 2Q18 Update“. All statements in this report attributable to Gartner represent Renesas Electronics interpretation of data, research opinion or viewpoints published as part of a syndicated subscription service by Gartner, Inc., and have not been reviewed by Gartner. Each Gartner publication speaks as of its original publication date (and not as of the date of this [presentation/report]). The opinions expressed in Gartner publications are not representations of fact and are subject to change without notice. 2) Fuji-Keizai “Global Home Appliance Market 2018 – Comprehensive Survey”, home appliance and healthcare. 3) SAM: Total market minus DRAM, Flash, MPU and Non-optical sensor

Smart Factory Smart Living Smart Infrastructure

Factory Automation Home Appliances Electronic Power Meter MCU MCU MCU SoC RENESAS MPU No.1 No.1 No.1 Position estimated by Renesas Average 10 Renesas MCUs Half of WW air-conditioners 70% Indian electricity meters in an industrial robot global controlled by Renesas MCU adapt Renesas MCU

MITSUBISHI Johnson FANUC ELECTRIC DAIKIN PHC Landis+Gyr controls

Major Rockwell Schneider United Players Automation Electric Midea OMRON HPL Technologies SIEMENS YASKAWA Haier Whirlpool Itron Honeywell

Enhance Endpoint Intelligence by e-AI Extreme Low Power creates new markets

Operational Technology . Realtime system . Control technology . Safety and robustness

e-AI IT . Endpoint real-time inference Information Technology . Cognition . Endpoint learning Proven Enhanced Extreme Low Power Enhance Intelligence by AI OT . Battery-less system Operational Technology . Maintenance free Enhance Market . New energy source

e-AI: Embedded Artificial Intelligence

Statistical Application Realtime Application

Learning Cloud Learning Inference Pre or 1 time IT Training Information Technology

Inference Endpoint OT OT Inference Requirements . Absolute Power Consumption Operational Technology . Flexibility in Field . Real Time Operation . Direct Actuation, Control . Safety and Robustness

e-AI Capability

Endpoint Incremental Learning Class-4 x10 by DRP-AI 2

Realtime Cognition Class-3 x10 by DRP-AI Paper reported VLSI symp. 2018

Realtime Image Processing Class-2 x10 by DRP Product release October 2018

Endpoint Inference Class-1 e-AI on MCU / MPU Solution released July 2017 1.5 years ahead of competition 2017 2018 2019 2020 2021 2022

DRP: Dynamically Reconfigurable Processor

Open Source Software AI Frameworks Learning

e-AI Class-1 e-AI Class-2 e-AI Class-3 e-AI Class-4 e-AI Translator e-AI Translator for DRP e-AI Translator for DRP-AI e-AI Translator for DRP-AI 2 e-AI - Small program size 1/1000 - Image Processing - NN pruning & quantization - Incremental Learning Tools Performance x10  Reduce Mem Size 1/16  Enable Autonomous - Power consumption 1/10 System

Inference Inference Inference Inference IDE Integrated all MCU / MPU DRP DRP-AI DRP-AI 2 Tools Design Incremental Environment Learning

Power Allowance for Embedded Solutions (10 TOPS / W) Performance (OPS) (1 TOPS / W) 100T TPU (100 GOPS / W) Class-4 10T GPU (10 GOPS / W) 1T Class-3 FPGA (1 GOPS / W) DSP 100G Class-2 10G CPU

1G 1 10 100 Power (W)

high

Hardware SoC Imaging specialized VPU

SoC Power Efficiency DRP / ASSP SoC

TPU

GPGPU

FPGA

DSP

low CPU

Benefits: . Improve service quality e-AI detects and pre-warns . Avoid downtimes anomalies everywhere every time . Reduce maintenance cost

Smart Factory Smart Living Smart Infrastructure

Renesas is shipping 200M+ motor control MCU per year. New MCU series will enable e-AI Anomaly Detection.

Biometrics Information Airport Passport

Cashless ID Card

match match match detect Office Entry Systems ID Card

Mobile Systems, Body-worn Criminal Photo Authentication Data

Smart cognitive system without cloud service. New MPU release in October.

Smart Factory Smart Living Smart Infrastructure

e-AI MARKET GROWTH

(M USD) 2,000 1,500 SAM: ~ $2B 1,000

“Integrated AI Semiconductor 500 Excellent growth potential in

Revenue Forecast for IoT” 0 Renesas’ core competence area 2017 2018 2019 2020 2021 2022 Graph created by RENESAS based on Gartner Research, Source Gartner Forecast: AI Neural Network Processing Semiconductor Revenue, Worldwide 2018, 11 January 2018 All statements in this report attributable to Gartner represent Renesas Electronics interpretation of data, research opinion or viewpoints published as part of a syndicated subscription service by Gartner, Inc., and have not been reviewed by Gartner. Each Gartner publication speaks as of its original publication date (and not as of the date of this [presentation/report]). The opinions expressed in Gartner publications are not representations of fact and are subject to change without notice.

Conventional Battery System (>200µA) Standby Current (µA) Long Battery Life 10 Battery Less (<10µW) 28/22nmFDSoI Conventional MCU 90~40nm Target of SOTB

1 130~90nm

0.1

10 100 1,000 Active Current (µA/MHz)

SOTB: Silicon on Thin Buried Oxide

Disruptive Extreme Low Power Performance of SOTB

Conventional Circuit SOTB

SOTB • Light (Solar) realizes • Temperature Operating Current • Vibration Normal SOTB MCU x 0.1 • Water flow Standby Current • Wind • … x 0.01 Battery Battery-free

Power Supply = Battery Operated by Environment Power

Application Capability Phase 2 EH sources  Temp., Bacteria

Phase 1 EH sources Vibration Phase 3: Fusion EH + RF + e-AI Solar Water Pressure Phase 2: Fusion EH + RF Phase 1: Extreme Low Power Existing Application Smart Home, Building, Healthcare Infrastructure, City

. Battery free systems . Combine BLE RF with EH . Integrate e-AI / DRP . Maintenance free systems . Expand sensor options . Combine Low Power Wide area RF . Single Energy Harvesting source . Multiple Energy Harvesting source . EH solutions by advanced PMIC

2019 2021 2023

EH = Energy Harvesting RF = Radio Frequency BLE = Bluetooth Low Energy PMIC = Power Management IC

. Last spring, we got first Silicon of SOTB ASSP . Active power and standby power are just less than the target. Continue to improve.

SOTB ASSP system structure SOTB ASSP 1st sample SOTB ASSP Evaluation board

SOTB WS1

IAR I-Jet Emulator

Public launch at November 2018 in Munich.

Use Case Phase 1: Intelligent Faucet Control

Infrared Sensor Capacitance Sensor Control

Detect object and condition ON / OFF

Generator Temperature Capacitor Solenoid valve Water Flow

Extreme Low-power with SOTB enables Endpoint Intelligence.

ELP Applications Medical / Healthcare City Infrastructure Industrial Automation

Fitness Wearable Capsule Device Smart Agriculture Transportation Urban Natural Environment Environment Monitoring Monitoring Equipment Monitor

Portable Device Smart Watch Commercial and Aquatic Product Public Facility Implantable Home/Office Infrastructure Equipped Device Stockbreeding Device Security Monitoring Worker Monitor Energy Management Gadget / Home Devices /…

Other Prototype Smart Tags

Sports & Outdoor Device Controller Lighting Meter Gadget Home Device

Sustainable Outlook until 2022 in Focus Markets IBU Gross Margin Target

60% Gross Margin

FY16 FY18 FY22 (Act) (Est) (Target)

Differentiating Core Competence High Profitable Leader of Innovation by in OT Growth Endpoint Intelligence e-AI and SOTB