NXP Semiconductors Secure Connections for a Smarter World Z

Company Presentation April 2014

     

Secure Connections for a Smarter World Connected Car

Cyber Security

Portable & Wearable

Internet of Things

NXP Semiconductors !

The electronics industry is being driven by four mega trends that are helping shape our society: Energy Efficiency, Connected Devices, Security and Health. Connecting to these trends and enabling Secure Connections for a Smarter World, NXP Semiconductors (NASDAQ: NXPI) creates solutions for the Connected Car, Cyber Security, Portable & Wearable and the Internet of Things.

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Through our innovations, customers across a wide variety of industries – including automotive, security, connected devices, lighting, industrial and infrastructure – are able to differentiate their products through features, cost of ownership and/or time-to-market. With operations in more than 25 countries, NXP posted revenue of $4.82 billion in 2013. Additional information can be found on www.nxp.com

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Strong innovation track record Our innovations are used in a wide range of applications (1/2) Automotive

Identification

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In-vehicle networking Car access & immobilizers

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Secure identity Secure transactions

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Car entertainment

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Tagging & authentication

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Solid State Lighting

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Telematics

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Speed & Angular Sensors

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Consumer

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TV Satellite, Cable, Terrestrial and IP set-top boxes

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Satellite outdoor units

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Computing

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Tablet PCs Note-/Netbooks

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Desktops

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Power supplies

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Monitors and peripherals

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Strong innovation track record Our innovations are used in a wide range of applications (2/2) Wireless infra

Lighting

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Wireless base stations Point-to-point

Lighting drivers (CFL, LED)

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CATV infrastructure

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Lighting networks

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Broadcasting

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Backlighting

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Industrial

Mobile

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Smart grid White goods

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Mobile devices Portable power supplies

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Home / building automation

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Personal health

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Power supplies

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Chargers

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Fueling Industry Leading Growth NXP HPMS Growth at Least 50% Faster Than Market 7,500 $MM

6,000

4,500

Mobile

High Speed Interface

Cyber Security

Internet of Things

Car-2-X

Healthcare

NFC

3,000 HPRF

1,500

>1.5x Industry Growth

Auto HPMS Solutions

2010

CORE Product Revenue

EMERGING Product Revenue

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Consistently outgrowing the industry ($M)(1) Identification

Automotive 32% Y-Y 9% Y-Y

2010

2011

2012

2013

2010

Portable and Computing

2011

2012

2013

Infrastructure and Industrial

15% Y-Y 17% Y-Y

2010

2011

2012

2013

2010

2011

2012

2013

Note: 1.  As of 2Q12, prior end market definitions for “Wireless Infrastructure, Lighting and Industrial” and “Mobile, Consumer and Computing” have been redefined to align internal management organization. All prior periods have been realigned to conform with new end market definitions.

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Consistently outgrowing the industry ($M)(1) Recent Quarterly Business Trends Revenue ($M)

Q1 12

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Non-GAAP Gross Margin

Q3 13

Q4 13

Q1 14

Q1 12

Q2 12

Q3 12

Non-GAAP Operating Margin

Q1 12

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

Q4 12

Q1 13

Q2 13

Q3 13

Q4 13

Q1 14

Q3 13

Q4 13

Q1 14

Adj. EBITDA Margin

Q4 13

Q1 14

Q1 12

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Note: 1.  As of 1Q13, product classification for HPMS end markets “Infrastructure and Industrial” and “Portable and Computing” in addition to segment “Standard Products” have been redefined to reflect underlying market dynamics, product complexity and organizational management. Prior periods have been realigned to conform with new end market definitions. Non-GAAP amounts exclude stock-based compensation.

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Identification 28% Product Revenue in 2013(1) Secular Trends Driving Growth ! ! ! ! !

NXP Identification Group Growth ($M) 30% CAGR

Digitization of government documents Global roll-out of chip-based bank cards Unified transit payment platforms Secure mobile payments and access Authentication of products and people

32% Y-Y

Products ! ! ! ! ! !

SmartMX secure microcontroller Secure Java-card operating system Zero and low-power RF interfaces MiFare ticketing and access solutions Complete document reader solutions Low-power RFID tagging solutions

2010

2011

2012

2013

Potential Identification Market Growth ($M)(1) 16% CAGR

Market Position ! ! ! ! ! !

#1 eGovernment documents #1 Chip-based banking cards #1 Transit system products #1 Mobile transaction solutions #1 RFID tags and labels #1 Contactless infrastructure

2012

2013E

2014E

2015E

Source: (1) Market size, historic and future growth rates based on NXP CMI internal research of applicable peers; all growth rates are 3-year CAGR

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Automotive 22% Product Revenue in 2013(1) NXP Automotive Group Growth ($M)

Secular Trends Driving Growth ! ! ! ! ! ! !

Secure connected car – Car-to-X management Demand for increased safety (ADAS) Adoption of global digital broadcast Increased data-flow throughout the car Increased intelligence to key Energy efficiency and CO2 reduction Complexity and long-life cycle demands

Products ! ! ! ! ! !

SoC infotainment and SDR systems CAN/LIN, FlexRay and Ethernet PHY RF passive keyless and proximity entry ABS, angular and temperature sensors LED interior and exterior lighting Car-to-X communication systems

3% CAGR

9% Y-Y 2010

2011

2012

2013

Potential Automotive Market Growth ($M)(1) 4% CAGR

Market Position ! ! ! !

#1 Auto infotainment systems #1 In-vehicle networking #1 Auto access - immobilizers #3 Magnetic sensors

2012

2013

2014E

2015E

Source: (1) Market size, historic and future growth rates based on NXP CMI internal research of applicable peers; all growth rates are 3-year CAGR

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Portable and Computing 10% Product Revenue in 2013(1) Secular Trends Driving Growth ! ! ! ! !

Portable and Computing Group Growth ($M)

Increased demand energy efficiency Market shift toward 32-bit ARM MCU Adoption of multi-protocol interfaces Low power sensor management Emergence of wireless charging

8% CAGR

17% Y-Y

Products ! ! !

Multi-protocol interface products 32-bit ARM MCU Custom SoC (MCU w/ mixed A/D)

2010

2011

2012

2013

Potential Portable and Computing Market Growth(1) 4% CAGR

Market Position ! !

#1 Multi-protocol interface products #11 32-bit ARM MCU

2012

2013

2014E

2015E

Source: (1) Market size, historic and future growth rates based on NXP CMI internal research of applicable peers; all growth rates are 3-year CAGR

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Infrastructure and Industrial 16% Product Revenue in 2013(1) Secular Trends Driving Growth ! ! ! ! !

NXP Infra. and Industrial Group Growth ($M)

Increased cellular data consumption Adoption of energy efficient lighting Low-Power RF- Connectivity (“IoT”) Increased demand for mobile charging Increased demand for Audio quality

3% CAGR

15% Y-Y

Products ! ! ! ! ! !

HPRF power amplifiers Small signal LNA and RF discrete AD/DC power controllers and regulators LED lighting drivers IoT ultra-low power RF-connectivity Smart mobile audio solutions

2010

2011

2012

2013

Potential Infra. and Industrial Market Growth ($M)(1)

11% CAGR

Market Position ! ! ! ! ! !

#1 LED lighting drivers #1 Small-signal RF #1 RF transceivers (silicon tuners) #2 HPRF power amplifiers #3 Small signal (mobile FEM) #4 AC/DC power adapters

2012

2013

2014E

2015E

Source: (1) Market size, historic and future growth rates based on NXP CMI internal research of applicable peers; all growth rates are 3-year CAGR

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Standard Products 24% Product Revenue in 2013(1) NXP Standard Product Growth ($M)

Benefits to Customers of Standard Products !

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Scale: ̶  70B units/yr. manufactured ̶  Material purchasing power Reach - #2 supplier in WW distribution Quality - Automotive qualified

0% CAGR

(2%) Y-Y

Products ! ! ! !

General purpose logic (“GPL”) Small signal discrete Signal conditioning Low-voltage power MOSFET

2010

2011

2012

Potential Standard Product Market Growth(1)

2% CAGR

Market Position ! ! ! !

2013

#1 Standard products (overall) #2 General purpose logic #2 Small signal discrete #2 Signal conditioning 2012

2013

2014E

2015E

Source: (1) Market size, historic and future growth rates based on NXP CMI internal research of applicable peers; all growth rates are 3-year CAGR

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Leveraging Secular Trends and Unique Capabilities Secular Trends and Demands Driving Growth ! ! ! !

Addressable Market Growth ($M)(1)

Security Connectivity Mobility Energy efficiency

1% CAGR

4% Y-Y

Characteristics of HPMS Focused Markets ! ! ! ! !

Large with long life cycles Growth in excess of overall market Broad and diverse customer base High barrier to entry “Sticky” customer relationships

2010

2011

2012

2013

Potential Future Market Growth ($M)(1) 6% CAGR

NXP Competitive Advantages ! ! ! !

Strong IP and patent portfolio position Broad mixed signal product portfolio Differentiated process technology Acknowledged leadership capability in Low-power RF; cryptography; Mixed-signal MCU system design 2012

2013

2014E

2015E

Source: (1) Market size, historic and future growth rates based on NXP CMI internal research of applicable peers; all growth rates are 3-year CAGR

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