nxp 2012 analyst day final

ZNXP SemiconductorsAnalyst Day 2012

New York | September 13, 2012

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Agenda

Begin End Presenter

8:05 8:20 Introduction Rick Clemmer, Chief Executive Officer

8:20 8:50 Automotive Kurt Sievers, EVP and General Manager

8:50 9:05 Automotive Q & A

9:05 9:25 Infrastructure & Industrial Alexander Everke, EVP and General Manager

9:25 9:35 Infrastructure & Industrial Q & A

9:35 9:50 Break

9:50 10:20 Portable & Computing Dave French, EVP and General Manager

10:20 10:35 Portable & Computing Q & A

10:35 11:05 Identification Ruediger Stroh, EVP and General Manager

11:05 11:20 Identification Q & A

11:20 11:50 Financial Update Peter Kelly. Chief Financial Officer

11:50 12:05 Financial Q & A

12:05 12:15 Close Rick Clemmer, Chief Executive Officer

ZNXP Semiconductors

Rick ClemmerChief Executive Officer

Strategy Review

Lessons Learned

Key Achievements

Overview

Leverage unique HPMS capabilities to power new product engine

Margin expansion into long-term model

Focused on high growth application segments fueled by key mega-trends

Multiple growth drivers across a range of target applications

Capital structure de-leveraging

Business Strategy

Above-market

Sales Growth

Unparalleled

Earnings Leverage

1

2

3

4

5

Key Mega-Trends (>$1,100 billion spend1)

Highest Growth Segments in 8 Priority Application Areas

Application-optimized analog and digital solutions that help our customers totruly differentiate their products in terms of features, cost and time to market

8

Energy

Efficiency

Connected

DevicesSecurity

Focused on Growth from Key Mega Trends

Health

Automotive IdentificationWireless

InfrastructureIndustrial MobileLighting ComputingConsumer

1. Represents estimated market size of the sectors shown

High-Performance Mixed-Signal Solutions

require

to address

Product Engine Tuned to HPMS Capabilities

Source: Patent data from annual filings and company websites

Note: Total non-GAAP R&D expenses associated with HPMS segment.

Leading RF,

Mixed-Signal and

Power Design Skills

Deep Systems

Applications

Expertise

Deep IP

Portfolio

HPMS R&D Investment($M)1

Broad Product

Portfolio Across

System Functions

Differentiated Processes

Technology + World-class

Manufacturing Assets

389 533

2009 2011

900

1,100

2,253

3,858

11,000

35,000

MXIM

LLTC

MCHP

ADI

NXP

TXN

WW Patent Awards

Broad and diverse customer base

High barriers to entry

Sticky customer relationships

Long product life cycles

Greater price stability

Sustainable and higher margins

Large, Fast Growing

HPMS SAM Estimated to Grow 7% 5-yr CAGR

Approximately 250300bps Faster than Overall

Semiconductor Market1

($ in

M)

-

5,000

10,000

15,000

20,000

25,000

2010 2011 2012E 2013E 2014E 2015E

7%

Continued Focus on the HPMS Market

and is Attractive Due to

HPMS SAM

1. Based on NXP internal research and analysis of the serviceable and addressable market (SAM)

Lessons Learned

Product Investments CFL Lighting Driver - rare earth cost and LED pricing closed opportunity

DAC Investment would not have yielded acceptable return or share

Gross margin expansion slower than anticipated model still valid

Operating margin expansion should accelerate faster

Not immune from macro influence

Margin Expansion

Cyclicality

$3.7 $3.7 $3.8 $3.8 $3.0 $3.1 $3.0 $3.0 $2.9

0x1x2x3x4x5x

3QCY2010 1QCY2011 3QCY2011 1QCY2012 3QCY2012E

0.00

0.40

0.80

1.20

1.60


1.5x

~$575M

Key Achievements

1. Based on NXP internal design win tracking database, all values assume a 3-year lifecycle

2. Based on normalized NXP revenue growth, versus normalized, market-capitalization weighted index of HPMS Peers

3. Data for 3Q12 based on First Call estimates

Increased Product Traction1

Delivered Faster Growth2,3

Reduced Leverage

Cumulative and Approved Design-win Award

NXPI - HPMS HPMS Peer

Net Debt ($B) Net Debt/TTM adj. EBITDA

2.9x

4.9x

0x

10x

20x

30x


#3 - Focused

Contender

11%

#2 - Competitive

22%

#1 - Market

Leader

50%

Emerging

Player

17%Automotive

~ Flat Y-Y

Identification

+19% Y-Y

Infrastructure

& Industrial

(3%) Y-Y

Portable &

Computing

(4%) Y-Y

Standard Products

9% Y-Y

2011 Product Segment Contribution ($M) and 2011 Product Line Position1

Competitive HPMS and Standard

Product Franchises

1. Based on NXP internal research and analysis of the serviceable and addressable market (SAM)

Kurt Sievers Executive Vice President & General Manager

Automotive Business Unit

Automotive

NXP Connects the Car

Car to Car, Car to Infrastructure, Car to Portable, Inside the Car

NFC

LF, UHF

802.11p

NFC

802.11p

Ethernet

ISDB-T

Cellular

Automotive Market Opportunities

Car EntertainmentIn-Vehicle

NetworkingCar Access

Magnetic

Sensors

Emerging

Market Size1

Market Growth Rate2

Market Share3

NXP Rank4

RMS5

Key Products

$1.2B

6%

35%

#1

1.5

$0.5B

6%

52%

#1

2.3

$0.4B

6%

41%

#1

2.6

$0.8B

5%

12%

#3

0.4

$0.2B

40%

0%

N/A

N/A

Key Competitors STM TXN

SLAB

IFX

ATML

TXN

TXN

ATML

IFX

Allegro

MELE

LLTC

TXN

Key Customers

Source:

(1) Market size based on NXP CMI internal research of applicable peers for 2011; (2) Market growth rate is 3-yr. CAGR based on NXP CMI research for 2012 2015;(3) Market share based on NXP CMI internal research versus applicable peers for 2011; (4) NXP rank 2011; (5) Relative Market Share 2011

Core

Business

Tuners

DSPs

Audio Amps

CAN/LIN

FlexRay

Ethernet

Immobilization

Keyless Entry/Go

SmartKey

ABS Sensors

Angular Sensors

Temp. Sensors

LED Drivers

Intelligent Traffic Management

1.0

1.1

1.2

1.3

2012 2013 2014 2015

0

20

40

60

80

100

2012 2013 2014 2015

419

460

210

249

190 213

323344

100

150

200

250

300

350

400

450

500

2012 2013 2014 2015

$/c

ar

Semiconductors to Outgrow Car Market

Global Car Production(CAGR 2012 2015: 3%)

Source: IHS Automotive July 2012, Strategy Analytics July 2012, NXP estimates

Average Semi Content Per Car ($)

Mill

Un

its

Europe 2% China 7% N. America 2%

Japan -3% ROW 5%

Light Vehicle

Production [MU]

Automotive

TAM [M$]

Automotive SAM [M$]

Semi TAM to Outgrow Car Production

Mature Regions China ROW WW Average

Ind

exed

to

1 f

or

20

11

0500

1000

1500

2000

2500

3000

3500

4000

2012E 2013E 2014E 2015E

2011 TAM $23B

NXP is clear leader in selected MixedSignal segments

Strategy: SAM expansion through innovationand add select emerging business

Sharp Focus on Selected Segments

Source: Strategy Analytics, April 2012

Power 23%

Discrete 3%

Memory 5%

C 28%

Non-Power Analog

Mixed Signal 24%

Sensors

13%

Automotive BU Focus SAM 6.5% 3-Yr CAGR

Car Entertainment Sensors IVN

Car Access SSL

SA

M [

M$

]

Opto 4%

Mega Trends Shaping Automotive

Energy Efficiency Government regulations

Electrification of Drive-Train

Replacement of mechanics by smart electronics

Connected Devices Safety

Entertainment & convenience

Intelligent traffic management

Security

Hacking prevention for connected cars

Theft prevention

Counterfeit part detection

Safety Entertainment

Assisted driving

Collision avoidance

eCall & roadsideassist

Traffic Management

Seamless media

Digital radio

Multi-channel sound

Hands free calls

New mobility

- Car sharing

- eCar management

Road pricing

Remote car management

Passive keyless entry / go

Personalization

Trends Driving the Connected Car

Convenience

Driving Growth in Automotive Connect the Car

#1 Car Entertainment

#1 Car Access

#1 In-Vehicle Networking

#3 Magnetic Sensors

Core

SW Defined Digital Radio

Class-D Amplifiers

Passive Keyless Entry/Go

Smart Key

FlexRay & Ethernet

Partial Networking

LED Drivers

Intelligent Traffic Mgmt

Growth

Expand SAM in Core

and Add Select

Emerging Business

Maximize Share

Car Access

Immobilizer

Remote Keyless Entry


2 Way RF

Smart-Key

SA

M/C

ar

Time

Emerging Business

Telematics

LED Lighting

Car-2-X

Time

SA

M/C

arIn-Vehicle Networking

CAN/LIN

Partial Networking

Isolation

SA

M/C

ar

Time

FlexRay

Ethernet

Car Entertainment

SA

M/C

ar

AM/FM

ClassAB

RFCMOS 1-Chip (DSP & Tuner)

Class-D

Software Defined

Digital Radio

Time

SAM Expansion & Addition of Select Emerging Business

Software Defined

Digital Radio

#1 in Car Entertainment Growth Strategy

Designed-In at 19 of Top 20 Tier-1

Expand #1 in AM/FM & Digital Radio- Fully integrated 1-Chip

Expand SAM in fast growthDigital Radio & TV

- Software Defined Radio

Conversion Class-AB Class-D

AM/FM &

Basic Audio

Sound

System/

Adv.

Audio

Digital

Radio

System Value:

$69 /Car

System Value:

$1325 /Car

AM/FM

Car Entertainment

SA

M/C

ar

AM/FM

ClassAB

RFCMOS 1-Chip (DSP & Tuner)

Class-D

Time

SAF775x Industry 1st Analog/Digital Radio One-Chip

HD Radio, DAB, DRM

Software-defined multi-standard

In mass production

Radio/audio processing and AM/FM/DAB tuners

Release early 2013

Designed-in at several leading OEMs and Tier-1s

SAF35xx Industry 1st GlobalAutomotive Digital Radio

#1 in Car Entertainment Leadership Products

Surround Sound

AcousticNoise Cancel

#1 in Car Access Growth Strategy

Designed-In at almost all OEMs

Expand #1 in classic keys

- Fully scalable system solutions

Expand SAM with fast growth convenience functions

- Passive keyless entry/go

- 2-way long range keys

- NFC enabled keys

incl. 2-way RF~$10-13/car

Classic Key

RKE

Passive Keyless

Entry/Go

PKE 2-way RF

~$7/car$5/carSystem Value:

2-3x

1x

2 x

1x

Car Access

Immobilizer

Remote Keyless Entry


2 Way RF

Smart-Key

SA

M/C

ar

Time

NCF2960 Industrys Smallest One-Chip Car-Key

2-way communication

Multi channel simultaneous low power reception

Volume ramp 2013 Japanese car maker

Immobilizer, keyless entry, AES security, 16bit MCU

Full one-chip integration

Volume ramp in 2013 with leading EU car maker

NCF2983 Multi Channel 2-way RF Transceiver

#1 in Car Access Leadership Products

010

20

30

2008 2010 2012 2014 2016 2018

#1 in In-Vehicle Networking Growth Strategy

On average, every new car

contains 8 NXP IVN-chips

Total Market [Nodes/ Car]

NXP #1

NXP #1

NXP #1

20 kbit/s

1 Mbit/s

10 Mbit/s

100 Mbit/s

Body

Drivetrain

Chassis

Infotainment

Camera

Emerging

Drive share and value in CAN/LIN

Lead emerging FlexRay- BMW, Audi, VW, Daimler

Seed ethernet OPEN Alliance

In-Vehicle Networking

CAN/LIN

Partial Networking

Isolation

SA

M/C

ar

Time

FlexRay

Ethernet

Emerging Business

- Secure location based service

- Designed In at leading OEMs

- >1500 cars in field trials globally

Telematics Car-2-X Communication

- Secure software defined radio

- 1st SoP at OEMs 2015/16

- >2500 cars in trials with leading OEMs

Emerging Business

Telematics

LED Lighting

Car-2-X

Time

SA

M/C

ar Automotive LED lighting

- 1-channel driver for bulb

replacement (Launch Q1 2013)

- Multi-channel drivers for

complete LED front-lighting module

- Design win with top global Tier1

Automotive Sustainable Competitive Advantage

Leading, in-house Mixed-Signal

- High voltage/temperature

World class RF-CMOS

- High integration/

low power

NXP connects the car

- Car entertainment

- Car access

- In-vehicle networks

- Telematics & Car-2-X

Unique application & system expertise

Automotive quality & customer service

Global supply-chain

Competent, motivated and engaged workforce

TrustedPartnerTechnology Solutions

NXP Connects the Car

ZAlexander EverkeExecutive Vice President & General Manager

Infrastructure & Industrial Business Unit

Infrastructure & Industrial

Leading RF and Power Process Technology

and System Know-How

SiGe:C BiCMOS

System

Know-How

Product

Businesses

Proprietary

Process

Technologies

Supply chain:

In-house 8 Fabsand Back-end

SSMC Singapore (JV TSMC) ICN8, Nijmegen, NL

0.18 0.8 m0.14 0.25 m

Back-end: APP,

APB, APK

LDMOS

7/8High Voltage SOI

RF Front-End AC-DC Power Conversion

RF

Power

Amp

RF

Small

Signal

RF

Trans-

ceiver

Power

Adaptors

Lighting

Drivers

Base Station Broadcast Broadband Power Adaptor Lighting

Infrastructure & Industrial Market Opportunities

Power Amplifier

Small Signal

Power Adapters

Lighting Drivers

Market Size1

Market Growth Rate2

Market Share3

NXP Rank4

Key Products

$0.93B

4%

23%

#2

BST PA &

MMIC

Broadcast PA

A&D PA

$1.10B

6%

11%

#3

LNA, VGA

BST ICs

Building

blocks

$0.62B

5%

8%

#4

AC/DC

Controllers

AC/DC

Regulators

$0.18B

19%

16%

#1

TL/HID drivers

CFL drivers

LED drivers

$1.35B

14%

3%

N/A

Smart Audio

Amplifier

Healthcare

Low power RF

IPCAM

Key Competitors FSL

IFX

ADI

TXN

SWKS

HITT

ONNN

STM

FCS

POWI

POWI

iWatt

TXN

FCS

TXN

WLF

SLAB

STM

Key Customers

Core

Emerging

Business

High Performance RF Power & Lighting SolutionsRF

Transceivers

$0.51B

2%

24%

#1

Silicon Tuners

MXL

SLAB

RDA

Mature Emerging

Source:

(1) Market size based on NXP CMI internal research of applicable peers for 2011; (2) Market growth rate is 3-yr. CAGR based on NXP CMI research for 2012 2015;(3) Market share based on NXP CMI internal research versus applicable peers for 2011; (4) NXP rank based on NXP CMI research in 2011

Mega Trends Shaping Infrastructure & Industrial

Energy Efficiency

Increasing cost of energy and

CO2 footprint regulations

GreenChipTM power adaptors

LED general lighting

Remote energy management

Connected Devices

10-fold growth in mobile data

traffic 2012-15, Internet of Things

3G/4G base station RF ICs

Mobile WLAN LNAs

Smart Lighting / Internet of Things

Health

Aging population and increasing

health care cost

Wireless hearing aids / implantables

Wireless compliance monitoring

Key Opportunities

HPRF Strategy to Outgrow the Market1,2

Key Growth Drivers

0.47 0.50 0.47 0.50 0.53 0.56

0.39 0.42 0.37 0.39 0.41 0.42

1.13 1.10 1.07 1.08 1.11

1.15

2010 '11 '12 '13 '14 2015

6%

RF PA

Microwave/

Broadband

RF PA

Base Station

RF Small

Signal

5%

2%

1.98 2.031.91

1.982.05

2.13

RF PA: Capitalize on leading market share in

3G/4G base stations

RF SS: Attack adjacent GaAs market with our

next generation SiGe

Capture multimarket opportunities through

specialty distributors

Total 4%

CAGR

12-15

HPRF Market Grows at 4% CAGR

$ Million

Source:

(1) Market size based on NXP CMI internal research; (2) Market growth rate is 3-yr. CAGR based on NXP CMI research for 2012 2015

0100

200

300

400

500

600

2010 '11 '12 '13 '14 2015

RF PA: Capitalize on Leading Market Share in

3G/4G Base Stations

2G

3G

4G

NXP MS ~15%

NXP MS ~40%+

NXP MS 50%+

Non-2G market CAGR 15% for

201215

40 /50%+ Design-Win share in new

3G/4G platforms

2.5X market share growth 2008-

2011, and

continuing

RF Power Market for Base Stations ($M)

Source: Market size based on NXP CMI internal research of applicable peers for 2011

RF SS: Attack Adjacent GaAs Market with our

Next Generation SiGe

SiGe intrinsically lower cost than GaAs (4-8x)

8 vs. 4/6, substrate cost, integration

RF performance SiGe now as good as GaAs

First target 0.6B$ of 2.6B$ fragmented GaAs market

Base stations, WLAN/GPS LNAs

HPRF Process Technology Landscape

Low

Mediu

mH

igh

Very

hig

h

2 5 10 30

LDMOS GaN

GaAs

RF-CMOS65/45/32 nm

SiGe:C BiCMOS

BiCMOS

Handset

applications

Consumer Satellite/

Auto applications

Comms

infra apps

Military & /Aero

Source: Strategy Analytics

Pe

rfo

rma

nce

/Outp

utP

ow

er

Frequency(GHz)

Mobile Devices and Wireless Infrastructure

Provide Leverage into Adjacent Markets

Industrial

Scientific

Medical

Aerospace

& Defense

Wireless Infra

Mobile

Discretes Portable LNAs Range Extenders

LNAs VGAs VCOs Mixers Modulators Power Transistors MMICs

Multi-Market Portfolio

Shaper applications

Re-use

RF Small Signal RF Power Amplifiers

RF Small Signal

Power Adaptors Growth Mainly Driven by New Low-Power Charger Business1,2

167 178 184 198 207220

201242

275314

356386

200182

162144

130112

2010 '11 '12 '13 '14 2015

CAGR

12-15

(12%)

Low Power

Medium / High

Power

High-Power

(Not Addressed)

12%

5%

$ Million

Addressed Power Adapter Market CAGR 10%

612615

641668

701748 Total

Key Growth Drivers

Maintain/grow#1 position in

high/medium

power controllers

Establish new position in low-

power chargers

5%

Source:


Maintain/Grow #1 Position in High/Medium Power

Controllers Based on Two Key Differentiators

Lowest total system cost

Lowest switch losses in lateral process

High-temperature reliability and ease of

design

Ruggedness thanks to full oxide

isolation

Process Technology: High-Voltage SOI

advantages vs. foundry HV BCD

System Architecture: GreenChipTM

delivers leading efficiency & cost

Power efficiency up to 94%

Power density up to 20W/inch3 Enables small form factors

Minimal stand-by power

Dimming capability in

lighting applications

Also leveraging these differentiators into

low-power adaptors and LED drivers

Po

we

r ef

fici

en

cy

Load (mW)

Leading power efficiency

at all load levels100%

90%

80%

70%

60%

50%0 200 400 600 800 1000 1200

Industry Benchmark

Estimated NXP revenue

mix 2012-15

Establish New Position in Low-Power Chargers

Highest level of

BoM integration &

small form factor

Mid/HighPower

LowPower

The most innovative platform

coming out of NXP

Power yet

96%

59%

4%

41%

2012 2015

40

20

105

4 3.5

60

40

20

107

0

10

20

30

40

50

60

70

2010 2011 2012 2013 2014 2015

LED General Lighting Penetration Increasing Steeply

General lighting fastest growing opportunity for high-brightness

LED drivers

Regulation on energy conservation and CO2 abatement driving

adoption

Next is steep cost reductions for LED bulbs (~30% per year) versus

CFL

Source: McKinsey Lighting the Way (2012), NXP CMI Research

LED Bulb Retail Price ($)

LED Penetration % Per Application

47

77

92

7

15

35

12

13

17

0

20

40

60

80

100

2010 2011 2012 2013 2014 2015

60W LED

Backlighting

General Lighting

Auto Lighting

40W LED

100W CFL

General Lighting Growth Strategy1,2

28 26 27 30 35 41

72 8294 91 90

88

4774

120171

218

275

2010 '11 '12 '13 '14 2015

146

183

241

292

343

404

CAGR

12-15

32%LED

Conv. (2%)

CFL 14%

Lighting Driver Market Grows at 19% CAGR

$ Million

Key Growth Drivers

Grow #1 position in LED with lowest cost solutions

Leverage Strong Customer Base in Conventional Lighting

(15 year heritage)

Lead creation of Smart Lighting category

Source:


BottomTop

70% BoM Part-count Reduction for Dimmable Controls Possible Due to Proprietary SOI Process

Current isolated BoM

54 Pieces

Top Bottom

Non-isolated BoM

41 Pieces

BottomTop

LED direct to

Mains BoM

15 Pieces

>3x reduction

Grow #1 Position in LED with Lowest Cost Solutions

Lead Creation of Smart Lighting Category

Smart LED Lighting = Potential for 25% Home Energy Savings

Very Attractive User Experience = Convenience, Safety, Ease of

Installation

Large Semiconductor Opportunity (>12B bulbs sold per year)

Smart Lighting is cornerstone of broader Internet-of-Things strategy

Strong Growth Opportunity in Our Core Business

and More to Come

High Performance RF: Grow Market Share Highest design-win share in fastest growing LTE market

Expanding SS RF serviceable market by attacking GaAs market with SiGe

Selling our base station and mobile portfolio into adjacent markets

Power & Lighting: Win in High Growth Market Segments Leverage technology and expertise to capture high growth low-power

adaptor market

Expand leadership in LED drivers in general lighting

Shape emerging smart lighting application

Emerging Businesses: Capture New Growth Opportunities in Mobile Audio, Healthcare and Internet of Things

Z Break

ZThis Evenings Agenda

Departure: 8:00 PM

Oktoberfest MnchenDave FrenchExecutive Vice President

Portable & Computing Business Unit

Portable & Computing

ZThank Youwww.nxp.com

We are in the intelligent, connected device business

Enabling the rapid creation of programmable systems

NXP is the trusted partner in high performance,

embedded MCUs and Interconnected ICs from broad

market success to focused solutions in mobile

Portable & Computing Market Opportunities

Market Size1

Market Growth Rate2

Market Share3

NXP Rank4

Key Products

Key Competitors

Key Customers

Interface Products MCU Logic

$2.1B

4%

11%

#1

I2C, Multiprotocol

Auto Display Drivers

Display Port

Thunderbolt

GPIO

UART

Level Shifters

$3B

4%

7%

#11

MCU

Industrial Control

Building Automation

Consumer

$1.5B

2%

22%

#1 Volume, Auto,

Mobile

Voltage Translators

Data Mux

Logic Gates

$5B

10%

0%

N/A

Smart Power

High Speed Smart Switches

Connector Hub

Sensor Hub

TXN

ADI

STM

STM

FSL

Renesas

TXN

ON

TXN

STM

MXIM

Mobility

EmergingCore

Source:


54

Energy Efficiency Embedded MCU optimizing power usage

Integrating connector data/power

Connected Devices Multiple protocols, multispeed interfaces

Elegant connectors, easy plug and play

Security Device identity based power/data switching

Secure interfaces

Medical Intelligent, diagnostics devices

Easy to connect, home medical devices

Mega Trends Driving Portable & Computing

2000 2005 2010 2015

PCs

Smartphones/

Gaming

Consoles

Consumer

Electronics

Car

Industrials

Source: WSTS (extrapolated after 2011), Cisco, Machina Research / GSMA

Note: connected devices = Connections to remote sensing, monitoring and actuating devices, together with associated aggregation devices

Internet of Things Drives Connectivity Standards

Number of Connected

Devices (B Units)

2020

Internet of Things

Connections

Early

2000s

2011

~35%

PC

Mo

bile

Th

ings

~30%

~10%

~10%

~5%

~10%

2020

Consumer

Electronics

Buildings

Utilities/

Energy

Automotive

Healthcare

Other

~1

912

2550

Portable/Mobile

Low Power

Computing/Industrial Mobile Convergence

Intelligent Device Capabilities Converge in Mobile

Same connectivity used

in phones & PCs

- Interfaces: USB, I2C, SD, HDMI

- Legacy IO support issue in PC &

phone

PC becomes mobile, phones

become full PCs

- Tablet & Ultra books for PC mobility

- Docking for full PC experience of phone

Smaller Chipset

22nm

Higher

Integration

Energy

Saving

Data Rate Increase

825Gbps

Smaller Chipset

28nm

More

LED

More

SensorsSmall &

Low Power

Higher

Integration

Portable & Computing Three Product Lines

Core: White Goods, industrial, CE

Growth: Mobility, secure processing

32-bit ARM; rich analog I/O portfolio

Core: Automotive, PC, CE

Growth: Mobility

Mobile leadership; proprietary mixed

voltage processes

Core:I2C, USB, Thunderbolt,

PC market

Growth: Mobility, high speed switches

Low power, >20GHz mixed data/power

InterfaceProducts

MCULogic

Reference year % of Sales: 2011

Broad Core Business with Emerging Growth in Mobile

2011 Revenue Total: $660M

Automotive $61M

Consumer $204M

Industrial $196M

Electronic Mkt Serv $48M

Computing $70M

Communication $81M

Automotive

9%

Consumer

31%Industrial

30%

Electronic

Mkt Serv

7%

Computing

11%

Communication

12%

NXP Logic #1 in units worldwide.

#1 and fastest growth in Mobility

NXP Logic #1 in Automotive establishing

automotive class quality

Market Share in Volume (B units) Market Share in Value ($B)

NXP shipped 5.2 B units in 2011

7th year of continuous market share gains

as of 2011

15%

20%

25%

30%

2005 2006 2007 2008 2009 2010 2011

0.19 0.24 0.25 0.24 0.19 0.27 0.27

10%

12%

14%

16%

18%

20%

2005 2006 2007 2008 2009 2010 20011

WW GPL WW NXP GPL NXP Unit Share (%) WW GPL WW NXP GPL NXP Revenue Share (%)

17%

29%

13%

19%

Logic Products: Customer Engagement Foundation1

Source:

(1) WSTS Global Semiconductor June 2012 and NXP CMI internal research

Interface Market (SAM $M)

Interface Products Show Analog Business Model1,2

High Speed Interface System Management CWG

Interface Market (CAGR)

High Speed Interface (HIS) 8%

System Management (SM) 4%

Clocks, Watches, Graphics (CWG) 3%

HSI (High Speed Interface)

High-speed analog switches: multi-protocol

SM (System Management)

I2C enabled ASSP (GPIO, temp sensors,

LED controllers)

CWG (Clocks, Watches, Graphics)

LCD segment drivers; real time clocks

Precision circuits

754

446

956

701

428

900

711

455

929

722

502

975

749

543

1006

777

586

1037

Source:


Thunderbolt Switches

Speed20 Gbps

Pre-2008

Differentiation Supporting Diverse Base of Protocols

2009 2010 2011 2012

PCIe Switches

DisplayPort Switches & Adapters

2013 2014

10 Gbps

5 Gbps

2015

mSATA, USB Switches,

USB3 Redrivers

Long Product Life in Fragmented Interface Segment

Speed

5 Gbps

10 Gbps

20 Gbps

Data, Video, Power

over one connector

20G+

3.4G

5G

5.4G

2.7G

10G

Pre-2008 2009 2010 2011 2012 2013 2014 2015

8G

-200

400

600

800

1,000

1,200

1,400

1,600

Jan-97 Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11

2012 (ytd) Total MCU Market $6.07B - 6.6% vs. $6.5B (11)

2012 (ytd) 8-bit MCU Market $1.62B - 14.2% 26.7% of Total; Units: - 7.0%

2012 (ytd) 32-bit MCU Market $2.85B + 0.7% 46.9% of Total; Units: + 23%

MCU Market Transition to 32bit ARM Solutions

8-bit 16-bit 32-bit MCU

MOS MCU Market Monthly Sales ($B)1

Source: 1. WSTS Global Semiconductor June 2012

32-bit, Multicore Architectures

2011 TAM: $16B

NXP Positioned for Growth in 32bit ARM

8-bit/16-bit Architectures

ARM Open

Ecosystem

Propriety Core &

Closed Ecosystem

Differentiating Leading Cores with Diverse I/O

8/16-bit Mass Market Replacement

Scalable base platforms: Cortex-M0

Low active current @ 100 uAmp/MHz

Connectivity: USB, CAN

Low-pin-count packages

Integrated EEPROM

Port

folio

Time

Building Automation

Time

Port

folio

Portable

Form factor (WLCSP, TFBGA)

USB-Audio Streaming

1.8V supply voltage

Port

folio

Time

Low-cost USB

Scalable base platforms: Cortex-M0, M3

Industrial Control

Port

folio

Configurable timer system

Time

LCD Graphics control

Connectivity: USB, Ethernet, CAN

Scalable base platforms: Cortex-M0, M3, M4

Analog sub-system

Scalable base platforms: Cortex-M0, M3, M4

Low active current @ 100 uAmp/MHz

Connectivity: Ethernet, USB, CAN

Digital signal processing

LCD Graphics

SPI

I2C

Sensor Hub System

LPC1100LV

1.8V Cortex-M0 MCU, CSP

LPC11U00

128KB Flash CM0 MCU, CSP

Cortex-A

Application

Processor

For Mobile

SPI

I2C

SPI

I2C

SPI

I2C

SPI

I2C

or

Energy Efficiency Demands Distributed Controllers

X86

CPU for

Industrial/

Computing

TempSensor

IR Sensor

Gyro

AcceleroMeter

MagnetoSensor

External Input

External Input

External Input

External Input

External Input

I2C

USB

or SPI

NXP MCU Applications in Smart Phones & Tablets

Haptics

- Partner with Haptics vendors

- MCU drives PWM for voltage control

Touchscreen

- Digital MCU for touchscreen algorithm

- CSP package option, SPI and I2C interface

- Full-speed USB option with LPM mode

Sensor Hub

- Digital processing for analog sensor

and MEMS in a smartphone or tablet

- Reduces A/P load and system power

Auto Focus

- Partner with camera module vendors

- Actuation control for image

stabilization in camera modules

Portable & Computing Sustainable Competitive Advantage

Multicore, rich connectivity

Moving towards ASSP

Ultra efficient power management for

distributed controllers

Analog business model

>20GHz switching performance

Low power data/power designs

#1 volume; deep portfolio supplier

Foundation for relationships

Automotive quality

Mobile leadership

InterfaceProducts

MCULogic

ZRuediger StrohExecutive Vice President & General Manager

Identification Business Unit

Identification

NXP is in the trust business

enabling convenience & security

in an increasingly networked world

Authenticating Identities

Securing Transactions

EmergingCore

Identification Market Opportunities

Market Size1

Market Growth Rate2

Market Share3

NXP Rank4

Key Products

Key Customers

End to end system solutions

Secure Microcontrollers for Contact & Contactless applications

Secure software

Packaging & antenna solutions

Mobile Transactions (excl. Bulk-

SIM), Authentication

eGovernment, Payment, Smart

Mobility, Tagging, Infrastructure

End to end system solutions

NFC Radio and Secure Elements for embedded, SWP-SIM and microSD

Secure software

Packaging & antenna solutions

$1.47B

12%

44%

#1

$0.36B

37%

12%

#1 in Mobile, entering Authentication

Key Competitors IFX SSG STM

Renesas BRCM INSD

Source:


-500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Identification is a Growth Market1,2E

me

rgin

gC

ore

Authentication 50%

Mobile 24%

Infrastructure 16%

Tagging 30%

eGov 12%

Pay TV 1%

Banking 10%

Transit 7%

Bulk SIM (-3.0%)

ID Market (M$)

2010 2011 2012 2013 2014 2015

CAGR

15%

Source:


CAGR

12-15

Mega Trends Driving Sustainable Growth

Digitization of Documents Urbanization & Smart Cities

Smart Phone AdoptionBanking System Security

* Assumes 1/4 thick passport stacked

25,600 miles* (>Earth

circumference)

150M1,037M

Source: Schlumberger, Smart Payment Association

Shipments of

EMVco chip cards

China, India, and Brazil in top five for smartphone shipments by 20160.3B

1B+

Sources: Population Reference Bureau, United Nations

in urban centers

67%in urban centers50%

Source: Gartner (Oct 2011)

Identification Sustainable Competitive Advantage

ContactlessPerformance

SecurityComplete Solutions

Deep Expertise in Security Technology

1000+ Engineers and >700 Related Patents

Hardened SiliconSoftware Resistant

to Fault Injection

Tamper Resistant Circuits

The Security Cube

Fastest e-Passport Transaction Time 2x Operating Distance, 1/3 Antenna Size

World-Class Contactless Performance

Source: NXP

4G NFC: NXP PN547

3G NFC: NXP PN544

1G NFC: Competition2x Performance

1/3 Footprint

Operating Distance

Antenna Cost/Footprint

>$0.50Cost Savings

MIFARE is the Industrys Choice90% of Contactless POS Rely on NXP

Source: NXP

Source: NXP

Source: NXP,

www.MIFARE.net

NXP = Governments Trusted Partner

China Ministry

of Public Security

Contactless

Intelligence

Smart Card

Middle East

Complete Solutions Deliver Long Term Growth

Over 1B

certified secure

micro controller

delivered to

citizens

Trusted by

86 out of 102

governments

for their

ePassports

90% of the

ecosystem

players have

qualified NXP

solution

Emerging Markets Are Our Next Growth Engine

Anti-counterfeiting

Cyber-security

Mobile

NFC Enables a Richer and Secure Consumer

Experience with Mobile

Loyalty Mobile Apps

Couponing

PaymentSecure

Element

NFC

Radio

NFC

Tag PresenceBased

Services

SE, Trusted Middleware, NFC Radio

driving Optimized Antenna

Host SW

Secure ElementSecure OS

NFC Radio

NFC Antenna

We Secure Complete Mobile Transactions Solutions

Computing Add-on

Cloud Computing

Industrial Control

SmartGrid

Anti-Counterfeit and Cyber Security Offer New

Growth Opportunities in Authentication

BenefitBrand Protection Networking Trusted

Contract Manufacturing on NET Critical ServicesMarket Driver

Anti-Cloning Device TrustedNXP Solution

Anti-Counterfeit Cyber Security

Electronic Accessories

High ValueDisposables

Global Leader in Authenticating Identities,

Securing Transactions and Convenient Interactions

Mobile Transactions

Anti-Counterfeit

Cyber Security

eGovernment

Banking

Smart Mobility

Core Emerging

ZZ

NXP Semiconductors

Peter KellyChief Financial Officer

No other changes to original guidance

We anticipate reporting 3Q12 results on October 25, 2012,

before the market opens.

3Q12 Guidance Update

Original

Guidance

Revised

Guidance

Product Revenue 6 12% 8 10%

Total Revenue 4 10% 6 8%

Non-GAAP EPS $0.50 - $0.62 $0.53 - $0.59

Performance So Far

Our Financial Model

Our Capital Structure

Overview

2007 2009 2011 2013 2015

Phase I

Phase III

Phase II

Roadmap to Exceptional Earnings

Create Independent Company

- Separate from Philips

- Refocus on HPMS from SoC

2007 2009 2011 2013 2015

Phase I

Phase III

Phase II





Create Profitable Growth

- Restructure NXP

- Reduce debt

- Improve margin

- Lower break-even

- Develop world class team

- IPO

- Invest for product growth

2007 2009 2011 2013 2015

Phase I

Phase III

Phase II





Create Profitable Growth

- Restructure NXP

- Reduce debt

- Improve margin

- Lower break-even

- Develop world class team

- IPO

- Invest for product growth

Accelerate Profitable Growth

- Consistently outgrow market

- Improved profitability

- Strong free cash flow

- Investment grade capital structure

Financial Performance Revenue1

HPMS Revenue

Total Revenue

1. Based on trailing-twelve month revenue. Normalized NXP revenue growth, versus normalized, market-capitalization weighted index of Peers

NXP Total Revenue Normalized Peer

Revenue Growth (right)

NXP Product Revenue

Normalized (right)

NXP HPMS

Revenue

Normalized HPMS

Peer Growth (right)

NXP HPMS Normalized

Growth (right)

$2,598

$2,953 $2,898

1.12

1.000.99

0.6x

0.7x

0.8x

0.9x

1.0x

1.1x

1.2x

3Q09-2Q10 3Q10-2Q11 3Q11-2Q12

$4,255 $4,494 $4,063

1.12

1.001.00

0.6x

0.7x

0.8x

0.9x

1.0x

1.1x

1.2x

3Q09-2Q10 3Q10-2Q11 3Q11-2Q12

HPMS Operating Profit

Total Operating Profit

1. Based on trailing twelve month revenue, non-GAAP operating profit and non-GAAP operating margin

HPMS Operating Profit Operating Margin (right)

Total Operating Profit Operating Margin (right)

Financial Performance Operating Profit1

429

674 559

5%

10%

15%

20%

25%

30%

3Q09-2Q10 3Q10-2Q11 3Q11-2Q12

Target 24 29%

383

845 703

5%

10%

15%

20%

25%

30%

3Q09-2Q10 3Q10-2Q11 3Q11-2Q12

Target 23 28%

42%

44%

46%

48%

50%

52%

54%

56%

1Q12 2Q12 Next Step (1) Next Step (2)

Model Performance Gross Margin Next Steps1

HPMS Gross Margin

Total Gross Margin

1. NXP non-GAAP gross margin for 1Q 12 and 2Q 12

50%

52%

54%

56%

58%

60%

62%

64%


51.6%

Target 58 -63%

Target 52 56%

53.3%

55%

58%

46.2%

44.3%

>50%

>53%

Model Performance Operating Margin Next Steps1

16%

18%

20%

22%

24%

26%

28%

30%


14%

16%

18%

20%

22%

24%

26%

28%


Target 24 29%

Target 23 28%

17.3%

21.9%

25%27%

14.4%

27%25%

18.6%

HPMS Operating Margin

Total Operating Margin

1. NXP non-GAAP operating margin for 1Q 12 and 2Q 12

18%

20%

22%

24%

26%

28%

2Q12 Next Step (1) Next Step (2)

Opportunities for Operating Margin Expansion1

18.6%

Target 23 28%

~25%

~27%

1. NXP non-GAAP operating margin for 2Q 12

18%

20%

22%

24%

26%

28%


Gross Margin Opportunities- Leverage internal cost structures

- Cost redn 3rd party relationships

Gross Margin Headwinds- Mix large mobile design wins- Transition to foundry (Short term)

Operating Expense- Continue to leverage existing base

- Move funding from G&A to R&D


18.6%

Target 23 28%

~25%

~27%


18%

20%

22%

24%

26%

28%


Gross Margin Opportunities- Leverage internal cost structures

- Cost redn 3rd party relationships

Gross Margin Headwinds- Mix large mobile design wins- Transition to foundry (Short term)

Operating Expense- Continue to leverage existing base

- Move funding from G&A to R&D

Gross Margin Opportunities

- Design for 3rd party and lever scale

- Value based pricing improvements

- Continue cost reduction

- Monetization of IP portfolio


18.6%

Target 23 28%

~25%

~27%


Driving Profitable Growth- Growing faster than the market

- Improving our gross margins

- Managing our operating expenses.

Generating Cash- Lower interest expense

- Maintain minimal cash tax expense

- Constrain CAPEX

- Restructuring largely complete

We continue to demonstrate our ability to lever our Operating Margin

but clearly we have more to do

Actions NXP is Focused On

Translates to $100 to $200m of Potential Debt

Reduction per Quarter1

TTM June 12 Current

Opportunity

Revenue ($M) 4,063 4,500

Operating Profit 703 900

Operating Margin 17% 20%

Depreciation 271 250

EBITDA 974 1,150

Capex 199 250

Interest 293 240

Working Capital 153 60

Cash taxes 16 50

SSMC Dividend out 39 40

Restructuring 76 50

Cash Flow Available 198 460

Net Debt / TTM EBITDA 3.1x 2.2x

1. NXP non-GAAP financial estimates



TTM June 12 Current Grow Revenue

Opportunity

Revenue ($M) 4,063 4,500 5,000

Operating Profit 703 900 1,000

Operating Margin 17% 20% 20%

Depreciation 271 250 250

EBITDA 974 1,150 1,250

Capex 199 250 250

Interest 293 240 240

Working Capital 153 60 120

Cash taxes 16 50 50

SSMC Dividend out 39 40 40

Restructuring 76 50 50

Cash Flow Available 198 460 500

Net Debt / TTM EBITDA 3.1x 2.2x 2.0x




TTM June 12 Current Grow Revenue Grow Revenue &

Opportunity Grow Margin

Revenue ($M) 4,063 4,500 5,000 5,000

Operating Profit 703 900 1,000 1,250

Operating Margin 17% 20% 20% 25%

Depreciation 271 250 250 250

EBITDA 974 1,150 1,250 1,500

Capex 199 250 250 250

Interest 293 240 240 240

Working Capital 153 60 120 120

Cash taxes 16 50 50 50

SSMC Dividend out 39 40 40 40

Restructuring 76 50 50 50

Cash Flow Available 198 460 500 750

Net Debt / TTM EBITDA 3.1x 2.2x 2.0x

Successful Track Record of Focused Cash Usage

- Reduced debt by $1.24B over trailing 24-months

- De-risked entire maturity profile in 4Q11

- Recently retired 2013 Super Priority debt

- Simultaneously restructured and refocused the business

Capital Structure How We Feel About Our Debt1

Gross Debt - End 2010 Gross Debt - End 4Q12

400

1,877

362

920

2011 2012 2013 2014 2015 2016 2017 2018 2019

237

616

1,120

922

474

2011 2012 2013 2014 2015 2016 2017 2018 2019


NXP 9.75% Sr. Sec. Notes vs. CS High Yield Index

Debt capital markets overview1,2

NXPs senior secured notes historical performance

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

11.00%

Jul-10 Aug-10 Oct-10 Nov-10 Dec-10 Feb-11 Mar-11 May-11 Jun-11 Jul-11 Sep-11 Oct-11 Dec-11 Feb-12 Jun-12 Jul-12

NXP 9.75% Sr. Sec. Notes BB Rated B Rated

NXPs 9.75% Secured Notes are trading slightly tighter than the HY BB index

NXP 9.75s YTW

approx. 100bps

higher than B

rated CS HY

index

NXP 9.75s

trading slightly

tighter than the

BB rated CS HY

index

Source:

(1) Credit Suisse; (2) Through September 6, 2012

(1)Sep-12

Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12

NXP 9.75s 9.09% 8.53% 7.88% 6.81% 6.85% 6.06% 6.89% 8.56% 7.77% 6.47% 5.70% 5.73% 4.68% 4.44%

BB Rated 6.40% 5.99% 6.14% 5.75% 5.65% 5.47% 5.57% 6.81% 6.42% 5.57% 5.42% 5.87% 5.17% 4.98%

B Rated 8.16% 7.77% 7.78% 6.98% 7.03% 7.12% 7.33% 9.42% 8.83% 7.60% 7.38% 7.88% 7.09% 6.73%

(1)

Reduced Debt

EPS Leverage

Top line revenue growth faster than peer group

Double digit earnings momentum

Strong cash flow

Roadmap to Exceptional Earnings1

$1.73 $1.78

TTM '10 TTM '11 Q2 annualized $5B @ 22% OM $5B @ 25% OM $5B @ 27% OM

>$3

~$4

>$4+


ZZ

Q&A

-1,500

3,000

4,500

6,000

7,500

$ MM

2,011

NXP HPMS Growth >50% Faster Than Market

>1.5x

Industry Growth

Positioned to Deliver Industry Leading Growth

CORE Product Revenue EMERGING Product Revenue

Internet

of Things

2010

NFC

Cyber

Security

Car 2 - X

HPRF

HPMS

Solutions

AUTO

Healthcare

Mobile

High Speed

Interface

ZNXP Semiconductors

Thank You

nxp 2012 analyst day final

Documents

oral presentation

securities of nxp

market data

industry data

nxp group

market share

market position

market size