Mobile, Multimedia & Communications

Tommi UhariExecutive Vice President

MMC Group

2

• Leading positions*– # 1 in Analog/mixed signal– # 1 in 3G RF – # 3 in Wireless

• Focus on high-growth segments and leading customers

• Complete mainstream multimedia platform with modem

• Positive momentum in 2007– EMP business ramped up– 3X growth in connectivity– Strong demand from existing customer base

*Source: iSuppli, ST

2007 Accomplishments

3

LTM Wireless Revenues = $2.28B (+11% Y-o-Y)Q108 (+18% Y-o-Y)

ST Wireless Revenues (ex Flash)Last Twelve Months in US$M

0

100

200

300

400

500

600

700

Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108

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Handset Market Remains Concentrated…

0%

20%

40%

60%

80%

100%

2004 2005 2006 2007

Nokia Samsung SEMC LG Motorola

Innovation in Smartphones is driving share gains

0%

1%

2%

2006 2007

RIM Apple

Source: ST and ABI Research

Top 5 Handset OEMs

5

…but Wireless Semi Market is Fragmented

0%

20%

40%

60%

80%

100%

Handset OEMs Wireless Semi

TOP 5 TOP 15 Others

• Mastering all the key products and IPs is necessary for success

• ST is working with all of the top 5 players and several of the emerging leaders

• ST/NXP joint venture started consolidation of the fragmented semi market

Source: ST, iSuppli and ABI Research

6

ST Mobile Strategy

• Technologies– Multimedia– Connectivity– Imaging– Intellectual property

• Focus on leading global customers

• Consolidation

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ST StrengthsMultimedia

Analog/Mixed Signal

CMOS RF

Connectivity

Design for Low Power

SoC Integration

Software Integration

Reference Design

Wireless Multimedia Platform Ingredients

PartneringProcessor

Cellular Modem IP

High-Level OS

32nm and beyond

8

RF Front End

RF

DBB

MS-ABB

SW Integration perimeter

APE

Connectivity

RF Front End

RF

SW Integration perimeter

DBB

Modem IP3G+

Stac

k

MS-ABB

APE

ASSP

Before After

ASIC

Connectivity

Licensed IP

Modem IP

3G+

Stac

k

Complete Wireless Multimedia Platform

9

Successful Parallel Business Models

Platform

ASICs Flexible Product Offering Required

• Nokia• Samsung• Motorola• SEMC• LG• Emerging Leaders

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Leadership in Wireless ASICs

• Major presence at tier-one OEMs– Emphasis on fast-growing 3G segment– Strong position in 2G / 2.5G / 2.75G

• RF, analog / mixed signal and DBB– Record sales & shipments

• High-volume manufacturing capability• Outstanding supply chain

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Wireless Multimedia Platform

• NOKIA-ST technology agreement on 3G– Leading chipset supplier to Nokia– 45nm; production 2010

• Nomadik platform shipping to 3 tier-one customers– Nokia, LG, Samsung– Pre-integration platform

• Symbian/S60 platform• Cameras• WLAN • Bluetooth• Energy management• MEMS and TV-Out devices

• Next-generation Nomadik introduced at 2008 MWC– 3-D graphics – Adaptable for modem integration

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• EMP DBB shipments– 3X unit growth expected in 2008– ST continues to be a strategic partner to EMP in technology

nodes beyond 90nm

Product Highlight: 3G Digital Baseband

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Product Highlights: Connectivity

• WLAN handset market share >30% • Bluetooth handset market share from

standing start to >10% in 2 years• ST connectivity products designed-in

>150 phones; over half on the market today

• Increasing presence at 4 of top 5• Ramping up Bluetooth headsets

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ST’s Imaging Business

• Sensors• Camera modules • Image processors

• Business model

15

Product Highlights: Imaging

• Leading pixel performance• Expanding our customer base• Reflowable cameras shipping in

volume– Transitioning to wafer level camera

• 3MP Digital Auto-focus sampling• Moving to higher resolution sensor

– Design win for 5MP sensor• Diversifying customer base

– 25% of 2008 Imaging sales will be outside largest customer

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US$ MM

Source: Company Information

0

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2,000

3,000

4,000

5,000

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Texa

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Creating a Clear #3 Player in Wireless

1. Qualcomm2. TI3. ST/NXP4. Mediatek/ADI5. Infineon/Agere6. Freescale7. Broadcom

22%18%14%6%

5.5%5%

2.4%

1. Qualcomm2. TI3. ST/NXP4. Mediatek/ADI5. Infineon/Agere6. Freescale7. Broadcom

22%18%14%6%

5.5%5%

2.4%

2007 Ranking (est.)

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Complementary Customers and Products

ST • Leading supplier to Nokia and EMP• Leading 3G and Multimedia technology• Strong Connectivity supplier

NXP Wireless • Leading supplier to Samsung• Established 2G platform supplier to tier-one and tier-two handset OEMs• TD-SCDMA (Chinese standard)• Strong Connectivity supplier

Combination • NewCo will become a leading supplier to Nokia, Samsung and SEMC • Strong opportunity to build 2G/2.5G market share at major customers• Critical scale of revenue to sustain leading edge R&D roadmap• Hedge against timing of 3G market transition• Enhanced position in Connectivity through complementary products offering• Consolidate leadership in RF and Energy Management• Leverages ST’s industrial base by significantly increasing Advanced

CMOS wafer volumes• High level of identified cost synergies in excess of $250M in 2011

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#3 or #4

#1• RF TRx• PMU / ABB• FM standalone• USB• WLAN

• Baseband• BT combos

Emerging but well positioned: GPS

Source: ST, NXP

Market Leading Product Portfolio

Wireless Assets+

19

MEMS

Multimedia Platform

2008 2009

Connect. Combos

Digital Baseband

Wireless Roadmap

Imaging

Analog / RF / PMU

3G+ MODEM

+ GPS, USB-Audio and Acc, UWB

+ 2G / 2.5G / 2.75G single-chip

+ RFCMOS

+ TD-SCDMA

Wireless Assets+

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ApplicationProcessors

MultimediaCo-processors

Complete Portfolio for Mobile Applications

RFPA

PMU

Broadcast

FM

DigitalRadio Broadcast

GPS

Connectivity

Cellular Pipe

Multimedia Processing

Security

Smart card

Baseband Processor

Application Software

SIM

DRMUMAVoIP

TV

SpeakersMicrophones

DisplaysKeyboard

User Interface

Cameras Sensors Audio Accessories(USB headsets)

JV solution

Via Parents

Via Partners

BT WLAN

UWB USB

GSM/GPRS/EDGE/UMTS/LTETelecom Software

Wireless Assets+

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Conclusion

• Delivered results in 2007, positive outlook for 2008 and beyond• 3G market growth is supporting our wireless strategy • Successfully expanding customer base• Well positioned and committed to ASICs• Platform business is ramping• Mobile multimedia is becoming mainstream• Wireless multimedia, imaging and connectivity create a unique and

complete platform• Merger of ST/NXP wireless businesses will create a wireless leader