Technology & Manufacturing Laurent Bosson Executive Vice President Front End Technology & Manufacturing
Manufacturing and Technology Strategy LEADING EDGE TECHNOLOGY + SHAREHOLDER VALUE TIME TO MARKET = CUSTOMER SATISFACTION = + + FLEXIBLE COST EFFECTIVE MANUFACTURING PROFITABLE GROWTH 2
Leading Edge Technology
Targeted Technology Markets WIRELESS COMMUNICATIONS WIRED COMMUNICATIONS CONSUMER AUTOMOTIVE INDUSTRIAL CMOS LOGIC x x x x x x CMOS LOGIC DERIVATIVES ANALOG RF - ENERGY MANAGEMENT x x x x CMOS IMAGING x x x x EMBEDDED NON VOLATILE MEMORY x SMART POWER (BCD / HVG CMOS) x x x x x MEMS x x x x POWER MANAGEMENT x PERIPHERALS INTEGRATED PASSIVE ACTIVE DEVICE & INTEGRATED PASSIVE DEVICE x x NEW ENERGY x x x TAM 2012 ($B) 68 20 62 23 31 46 TAM Source: isuppli 4
300mm R&D Technology Roadmap 30 2007 2008 2009 65nm LP 5 10 20 65nm Analog/RF 30 20 20 65nm edram 30 30 65nm envm 5 M11 10 45nm LP 20 30 45nm LP/GP 30 Mat5 = Process Defined Mat10 = Process Frozen Mat20 = Preproduction Mat30 = Production 45nm 10 Analog/RF 20 30 45nm edram 5 10 30 5 IMG140 10 20 30 New Strategy to Access 32nm Technologies 5
CMOS Logic Technology Roadmap 2005 2006 2007 2008 2009 2010 2011 2012 Q205 65nm 800K gates/mm² Q407 45nm >1M gates/mm² 65nm: 50% more dense vs 90nm Over 30 products in production/development Logic technology advancement: Performance improvement Increased speed & power Cost advantage in manufacturing 2009 CROLLES2 ALLIANCE 32nm >2M gates/mm² NEW STRATEGY TO ACCESS 32nm DIGITAL CORE TECHNOLOGIES 2011/2012 *22nm >4M gates/mm² Assuming immersion lithography can be extended to the 22nm node 6
Central CAD & Design Solutions (CCDS) Comprehensive teamwork among Process Engineers, Circuit Designers, Chip Architects and System Designers is required for optimal device performance CCDS achieves this by creating global design solutions through: Tight cooperation with process development teams Product division expertise ranging from: Transistor level Circuit design System level design Customer CCDS Design Solutions Libraries Design Flow System Design CMOS technologies 7
CMOS Logic Crolles2 Alliance Five year agreement will conclude at the end of 2007 ST is reviewing alternative lower cost options decision to be made mid-2007 Manufacturing 2800 wafers / week 12 capacity Crolles2 by the end of 2007 65nm in volume production Research & Development 45nm development complete at end of 2007, moving to production in 2008 Dedicated programs for 12 Derivative CMOS technologies New strategy to access 32nm digital core technologies ST will NOT separately develop 32nm and below core CMOS Increase R&D and capital efficiency, accelerate time-to-market ST will continue to focus on 12 Derivative CMOS technologies RF, analog & energy management, imaging, embedded NVM 8
Derivative Technologies & Products RF, analog & energy management Key applications Wireless, Consumer Products Next generation of 3G / 4G feature-rich mobile-phone platforms Imaging Key applications Wireless, Automotive, Security, Consumer Products Handsets camera modules (auto-focus, fixed-focus, ultra-small) Sensors ambient light, optical mice, webcams Embedded NVM Key applications Automotive, Consumer, Security & Smart Card Products Engine control, telematics, Smart Cards (mobile, ID, transport ) 9
Derivative CMOS RF, Analog & Energy Management 2005 2006 2007 2008 2009 2010 2011 2012 Q205 Q306 Q308 2010 130nm 65nm RF RF RF: Significant market share in 350nm Excellent Customer feedback in 130nm Product design started in 65nm Q406 130nm Analog, EM 45nm RF Q408 65nm Analog, EM Convergence 32nm RF 2010 2012 45nm Analog, EM 32nm Analog, EM Analog, Energy Management: Significant market share in 250nm State-of-the-art in 130nm with high volumes in 2008 10
Derivative CMOS Imaging 2005 2006 2007 2008 2009 2010 2011 2012 8 12 5MP AF Prototype Q107 Q208 Q409 Q211 Pixel size 130nm 1.75µm 110nm 1.40µm 90nm 1.10µm 65nm 0.90µm From embedded imagers to fully dedicated process flow, ST is a leader in imaging technology and the imaging market. Huge potential market growth for: Mobile phone, first and second cameras Automotive Security 11
90nm edram Networking Product Low end Ethernet switch 45 mm²: 3.5 million gates 19 Mbit DRAM Embedded Embedded DRAM Roadmap 2004 2005 2006 2007 2008 2009 90 nm edram Dev. Full production 65 nm edram Dev. Full production 45 nm edram Dev. 12
Derivative CMOS Embedded Non Volatile Memory / Automotive 2005 2006 2007 2008 2009 2010 2011 2012 130nm 8 12 Q106 Q107 90nm Smart Card Q409 65nm Smart Card Q211 90nm envm 65nm envm 45nm epcm Proven proprietary solutions for integrated flash: Strategic Automotive market Consumer market 45nm and below High Voltage issue addressed by new innovative PCM: Competitive process costs facilitate wider markets for Automotive, Smart Card and Consumer 13
Smart Power (BCD) ST Proprietary Technology 2005 2006 2007 Q107 350nm BCD6 SOI 2008 2009 Q109 180nm BCD8 SOI 2010 2011 Thick SOI for higher voltage 2012 350nm BCD Q108 180nm BCD8 Q112 110nm BCD9 Q108 350nm BCD6 Off Line Single Chip System: Smart Power High Voltage CMOS Single Chip Solution in Lighting & Power Supply: Driver Stage Control Stage 14
MEMS Technology 2005 2006 2007 2008 2009 1X Gyroscope In-Check (2nd generation) 3X Accelerometers small size 8 In-Check (2nd generation) 2X Gyroscope Pitch & Roll Microphone Rotational Accelerometer 2010 2011 2012 Leveraging microfluidic leadership to reach a wider customer/application base ST leadership in MEMS 8 Manufacturing Accelerometers & Gyroscopes Biological applications Automotive Gaming Wireless Microfluidic cartridge Inertial sensor with metallic bonding 3X Gyroscope 3X Accelerometer (1 chip solution) 15
Power Management 2005 2006 2007 2008 2009 2010 2011 2012 HIGH VOLTAGE MD3 MD5 MD trench SiC MD SiC P-MOS CD 1µm 18 mw*cm2 deep trench filling 1 mw*cm2 1 mw*cm2 @ 600V @ 600V @ 600V Leadership to be retained by enlarging product portfolio and applications Wide enlargement of voltage rate New materials introduction (GaN, etc) LOW VOLTAGE EDD3 55-75 V EHD5 20-30V LVT -30-30V LVMD trench 55-120V VLV 2 8-20V P-channel family and voltage range extension (12 to 120V) Transfer to 8 wafer 16
Integrated Passive/Active Device (IPAD) & Integrated Passive Device (IPD) 2005 2006 2007 2008 2009 2010 2011 2012 IPAD Q107 Q308 Q409 Q410 Q411 Capacitor density Metal CD 50nF/mm² 12µm 100 nf/mm² 10µm 200 nf/mm² 10µm 500 nf/mm² 8µm 500 nf/mm² 6µm IPD Cu Thickness Cu Metal CD Q107 Q307 Q409 Q410 Q411 3µm 20µm 6µm 10µm 10µm 12µm 10µm 12µm 10µm 10µm Tunable capacitor Magnetic material 17
ST s Leadership in IPAD & IPD Reinforce IPAD & IPD leadership by improving and developing products for new business opportunities Critical dimension shrink Innovative use of new materials Vertical integration enabled by conductive vias in substrate IPAD capacitor density increase to capture decoupling capacitor market IPAD ESD protection for WLAN and ultra speed lines IPD low frequency filters System-in-Package (SiP) Product development in Tours / volume production in Singapore 18
New Energy Technology Micro Fuel Cell Hydrogen fuel based early player of technology and industrial solution provider Thin film process technology Micro Battery From silicon to flexible substrates Multiple markets and applications 19
Flexible & Cost Effective Manufacturing
Manufacturing Evolution ST MODEL IDM Flexible IDM Lighter Asset PROGRESS # ST FABS 2005 Today 17 14 6 Restructuring Ex-FMG* 11 ST s Future: Continued fab rationalization Reduced capital intensity Increased foundry usage Volume 300mm in Crolles2 *Plan based on current visibility with no representation on whether and when FMG deconsolidation will occur. 21
Capacity Footprint 4 Quadrants of Production 100% ST-Owned Fabs 6 Fabs Mature 12 Fabs Advanced Logic Technologies Singapore: AMK6 France: Tours (Discretes) Italy: Catania CT6 USA: Carrollton (MEMS) France: Crolles2 with R&D 8 Fabs System Oriented Technologies France: Rousset, Crolles 1 Italy: Agrate AG8, Agrate MEMS, Catania M5 USA: Phoenix Fabs Memories Singapore: AMK8 Italy: Agrate R2 Catania M6 22
Manufacturing Evolution to a Lighter Asset Company OUR PAST 6 RESTRUCTURING COMPLETE MANUFACTURING EFFICIENCY COST SAVINGS OUR PRESENT LOW CAPEX OPERATION FLASH CARVE OUT INVENTORY CONTROL MODERATE FOUNDRY SUPPLY OUR FUTURE NOW!!! STREAMLINE MANUFACTURING EXPANDED FOUNDRY USAGE LOWER COST STRATEGIES LEADING EDGE TO MATURE TECHNOLOGIES AGGRESSIVE COST CUTTING 23
Restructuring & Consolidation Results Completed 6 restructuring program and EWS consolidation Concentration resulting in economies of scale Closer to customers resulting in reduced cost and delivery time Focus on quality of processes leading to manufacturing efficiency Exploiting Megafab Scale Mix stabilization of Singapore 6 100% 6" Production Volumes by Region (excluding passive) 80% 60% 40% 20% 0% Q303 Q404 Q405 Q406 Q107 ASIA EUROPE AMERICA 24
Cost Reduction Initiatives Low double-digit wafer cost reduction achieved for 8 and 12 in 2006 2007 will be another year of double-digit wafer cost reduction achieved through: Manufacturing efficiency & innovation Process improvement Depreciation roll-over 100% 90% 80% 70% 8 12 8" 12" 60% Q1 06 Q1 07 Q1 08 Forecast 25
Manufacturing Flexibility: Outsourcing Advanced Logic (<= 130nm) Sourcing WAFERS Q405 Q106 Q206 Q306 Q406 Q107 INTERNAL EXTERNAL 26
Manufacturing Flexibility Through The Market Cycle MARKET DEMAND AVERAGE MARKET GROWTH SUPPLIED THROUGH EXTERNAL FLEXIBILITY ST INTERNAL CAPACITY SUPPLIED THROUGH INTERNAL CAPACITY TIME 27
Manufacturing Strengths Execution Excellence Focus Quality & environment Cost reduction Integrated supply chain Suppliers Fast cycle time Yield Asset utilization Automation Production model aligned to market demand Diverse portfolio of products & technologies 28
Global Operation People Research & Development Design Manufacturing Support Partners Worldwide Presence Flexible Innovative Multicultural Security of supply Perpetual benchmark with Foundries Service driven 29
2007: Capital Spending R&D / Front-end Manufacturing Complete 300-mm joint project with partners for 90nm & 65nm / 45nm technologies Capacity growth for MEMS Closer integration of Front-end and Back-end manufacturing operations for cost efficiency Wafer-scale packaging Back-end Manufacturing Package size reduction Additional capacity in China 30
Manufacturing and Technology Strategy LEADING EDGE TECHNOLOGY + TIME TO MARKET + FLEXIBLE COST EFFECTIVE MANUFACTURING = CUSTOMER SATISFACTION SHAREHOLDER VALUE = + PROFITABLE GROWTH ST Technology & Manufacturing has been, is, and will continue to add value to ST s stakeholders through: Innovation Flexible manufacturing Technology improvements Low cost / strategic partnerships Leading edge and mature technologies 31