Authenticating Identities & Securing Transactions. March 29, 2012

Transcription

1 Authenticating Identities & Securing Transactions March 29, 2012

2 Forward Looking Statements This document includes forward-looking statements which include statements regarding our business strategy, financial condition, results of operations, and market data, as well as any other statements which are not historical facts. By their nature, forwardlooking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. These factors, risks and uncertainties include the following: market demand and semiconductor industry conditions, our ability to successfully introduce new technologies and products, the demand for the goods into which our products are incorporated, our ability to generate sufficient cash, raise sufficient capital or refinance our debt at or before maturity to meet both our debt service and research and development and capital investment requirements, our ability to accurately estimate demand and match our production capacity accordingly or obtain supplies from third-party producers, our access to production from third-party outsourcing partners, and any events that might affect their business or our relationship with them, our ability to secure adequate and timely supply of equipment and materials from suppliers, our ability to avoid operational problems and product defects and, if such issues were to arise, to rectify them quickly, our ability to form strategic partnerships and joint ventures and successfully cooperate with our alliance partners, our ability to win competitive bid selection processes to develop products for use in our customers equipment and products, our ability to successfully establish a brand identity, our ability to successfully hire and retain key management and senior product architects; and, our ability to maintain good relationships with our suppliers. In addition, this document contains information concerning the semiconductor industry and our business segments generally, which is forward-looking in nature and is based on a variety of assumptions regarding the ways in which the semiconductor industry, our market segments and product areas will develop. We have based these assumptions on information currently available to us, if any one or more of these assumptions turn out to be incorrect, actual market results may differ from those predicted. While we do not know what impact any such differences may have on our business, if there are such differences, our future results of operations and financial condition, and the market price of the notes, could be materially adversely affected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak to results only as of the date the statements were made; and, except for any ongoing obligation to disclose material information as required by the United States federal securities laws, we do not have any intention or obligation to publicly update or revise any forward-looking statements after we distribute this document, whether to reflect any future events or circumstances or otherwise. For a discussion of potential risks and uncertainties, please refer to the risk factors listed in our SEC filings. Copies of our filings are available from our Investor Relations department or from the SEC website,

3 Agenda Introduction NXP Overview NXP Identification BU ID Smart Cards Business ID Smart Cards Business Break ID Smart Devices Business ID Smart Devices Business Closing Thoughts Jeff Palmer Ruediger Stroh Ruediger Stroh Steve Owen Interactive Q&A Henri Ardevol Interactive Q&A Ruediger Stroh

4 Authenticating Identities & Securing Transactions Ruediger Stroh EVP & GM NXP Identification BU

5 Company Highlights

6 NXP Semiconductors Global Innovator Distinctive Technologies: Full Portfolio of secure / non-secure MCU Embedded non-volatile & flash Mixed signal processing Zero power RF & NFC Strong Innovation Pipeline: Over $550M / year in R&D 3,200 engineers 11,000 patents Down to 40nm processes (fablite)

7 Financial Track Record Revenue (millions of USD) High Performance Mixed Signal - IDEN, AUTO, WILI, MCC STDP 2011 results: $4.2 billion Sales at 47.4% Gross Margin and 19.3% Operating Earnings

8 Partnering with Global Leading Customers Automotive SmartCard & Security Mobile Infrastructure & Industrial Consumer & Computing Distributors No account over 10% of sales, address 1,000+ Customer Design Centers directly, and over 30,000 via distribution

9 Identification BU

10 We are in the Trust Business, enabling convenience & security in an increasingly networked world NXP is the trusted partner to authenticate identities & secure transactions delivering Identification Solutions

11 Not Very Long Ago 09:38 am 10:56 am 11:17 am 01:37 pm 02:15 pm 04:48 pm 06:20 pm

12 A Life With Security & Convenience NXP is #1 with over 8B units shipped Source: NXP

13 Growth Drivers Digitization of Documents 25,600 miles* (>Earth circumference) government + healthcare ID cards going digital * Assumes 1/4 thick passport stacked

14 82 out of 96 countries trust NXP to secure their epassports

15 Growth Drivers Urbanization & Smart Cities In 2050 there will be as many people living in cities as there are people alive today 50% in urban centers 67% in urban centers Sources: Population Reference Bureau, United Nations

16 1.2 Billion people have access to our MIFARE contactless ticketing technology, making public transportation more convenient and efficient Source: NXP

17 Growth Drivers Banking System Security Smart bank cards are now a global standard 150M 1,037M Shipments of EMVco chip cards Source: Schlumberger, Smart Payment Association

18 Financial Institutions around the world trust NXP Secure Payment Solutions 600M+ happy shoppers

19 Hyper Growth Drivers Smart Phone Adoption 0.3B China, India, and Brazil in top five for smartphone shipments by B+ Source: Gartner (Oct 2011)

20 Over 90% of NFCequipped mobile handsets models use NXP technology today Attach rates projected near 50% by 2015 Source: ABI Research

21 NXP is the Identification Industry s #1 Semiconductor Supplier egovernment Bank Cards Smart Mobility (MIFARE) Cards Tags & Authentication Readers Mobile

22 Growing Share in a Growing Market NXP outgrowing high-growth market by 2x NXP ID Sales ($M) ID Market ($M) 16% CAGR 35% CAGR Gaining share from competition, expanding leadership Market Share Relative Market Share Source: ABI Research, NXP

23 1000+ engineers dedicated to tamper resistant secure, highperformance solutions Leading IP position: 700+ patent families in Identification

24 Sustainable Competitive Advantage Complete Solutions Security Contactless Performance

25 Global Leader in Authenticating Identities and Securing Transactions egovernment Mobile Commerce Banking Anti-Counterfeit Smart Mobility Cyber Security Smart Cards Smart Devices

26 Smart Cards and Secure Documents Steve Owen VP Sales NXP Identification BU

27 Smart Cards and Secure Documents Authenticating Identity & Securing Transactions

28 Growing Share in a Growing Market Smartcard IC market ($B) (Excluding bsim) 23% CAGR until 2016 NXP is >2x larger than closest competitor Source: ABI Research

29 Secular Trends Supporting Growth Increase business with current customers & regions New regions and new customers New applications 8B bank cards, 3 5 year replacement cycle Less than 1% penetration in India across applications Over 20B breeder documents transition initiated

30 Authenticating Identities, Securing Transactions of Smart Cards Government Documents Banking Smart Mobility

31 e-docs Generate Tremendous Benefits for Governments & Citizens Governments Improved efficiency from automation Improved national security Fraud and crime reduction Citizens Recognized Identity Safe and convenient travel Ease of access to government services

32 Digitization of Document Cloud Connected Devices > 5 Billion 22 Billion Paper Breeder Documents More than 20 billion documents waiting to be secured Deployed edoc: Passports, National IDs, Health Cards, Drivers Licenses 0.5 Billion 3 Billion 12 Billion Population 6.5 Billion 7 Billion 7.6 Billion Sources: ABI Research, Cisco, Wikipedia, NXP

33 10x Additional Untapped Potential for egovernment Documents Deployed Documents Adoption Rate Relative Market Share (est.) Paper Breeder Doc Cloud Access Drivers Licenses National IDs Health Cards 20 Billion > 6 Billion 800 Million > 3 Billion 1.5 Billion ~ 0% < 1% 8% 45% 32% 2x our largest competitor Passports 1.4 Billion 56% Overall adoption rate expected to triple by 2015 Sources: ABI Research, Cisco, Wikipedia, NXP

34 NXP = The Government s Trusted Partner China Ministry of Public Security Contactless Intelligence Smart Card Middle East Over 1B certified secure micro controller delivered to citizens Trusted by 82 out of 96 governments for their epassports 90% of the ecosystem players have qualified NXP solution

35 Payment Fraud Drops by Factor 3 Within 2 Years of Introducing Smart Cards 1. Reducing fraud 2. Increasing consumer convenience 3. Creating new consumer experiences Higher security through upgrading systems: EMV deployment, Chip & Pin Offering convenience, speed and security Multiple applications on a single card NXP ranked Top Contactless IC Vendor by ABI Research 3 years in a row Source: Financial Fraud Action UK, 2011

36 Banking Smart Card Penetration to Double NXP outgrew market by 4x reaching leadership Source: ABI Research

37 Smart Mobility (MIFARE TM ) Solutions Keep Smart Cities Moving Percent Urban Every $1 invested in public transportation generates $4 in economic returns Americans living in areas served by public transportation save 785 million hours in travel time and 640 million gallons of fuel annually Daily carbon emissions are reduced by more than 4,800 pounds per person per year Public Transport Roadway Tolls Access Control Event Ticketing Micro Payment Sources: United Nations, World Urbanization Prospects American Public Transportation Association

38 MIFARE TM by the Numbers Adopted MIFARE solutions Shipped First time to market Source: NXP

39 Sustainable Competitive Advantage Complete Solutions Security Contactless Performance System Integration Ecosystem Reach Hardware & Software co-design Interoperability The Security Cube Leading Standards Definition Common Criteria Certification Zero-power Architectures Operating distance Transaction time

40 The Richest Ecosystem of Partnerships Customer & Technology Partners Financial Institutions Transport Operators Governments/Printing Houses System Integrators Reader Makers Certification Bodies Standardization

41 The Security Architecture Tamper Resistant Circuits The Security Cube Hardened Silicon Software Immune to Fault Injection

42 Hardened Silicon Reverse Engineering FIB Attack Differential Power Analysis NXP Physically Unclonable Function Technology Will Be 1 st to Market

43 Tamper Resistant Circuits GlueLogic TM over 100 defense measures; 4x more complex encryption technology

44 Software Immune to Fault Injections NXP s Secure Fetch TM protects against laser attacks Laser Attack

45 Consistently Outperforming on Contactless Performance

46 Our View of the Competitive Landscape in Smart Cards Source: NXP

47 Uniquely Positioned to Drive Multi-Applications Source: NXP

48 Smart Cards and Secure Documents Authenticating Identity & Securing Transactions Unrivaled leader in high-growth market The richest ecosystem of partnerships Sustainable competitive advantage

49 Q&A March 29, 2012

50 Break March 29, 2012

51 Smart Devices Henri Ardevol VP Secure Transactions NXP Identification BU

52 Smart Devices Authenticating Identity & Securing Transactions

53 Authenticating Identities, Securing Transactions of Smart Devices Mobile Anti-counterfeiting Cyber-security

54 Mobile is the New Computing Platform Source: Morgan Stanley Research

55 NXP Powering OVER 130 Smart Devices and Growing

56 > 90% of All Secure Transactions Cross an NXP Chip Mobile Solutions NFC Radio ICs NFC software Secure Element ICs

57 Central to the Ecosystem OEMs MNOs Mobile OS Mobile Apps Financial institutions Service Providers TSM/Card Partners Wallets Gaming Wallets Gaming

58 NFC Connects Your Apps with the World Around You

59 NFC Transforms mcommerce Loyalty Mobile Apps Convenience Payment Security Interactivity Presence Based Services Couponing

60 NFC Transforms mcommerce Loyalty Mobile Apps NFC Radio Payment Secure Element NFC Tag Presence Based Services Couponing

61 NFC is Everywhere

62 2.2B+ NFC Enabled Devices Shipping (Shipments) Handsets Consumer Electronics Tags Bridging Solutions Other Industries Non-mobile Source: ABI Research

63 NXP Sells Multiple Chips Per Device Host SW NFC Radio Secure Element Secure OS NFC Antenna SE, Trusted Middleware, NFC Radio driving Optimized Antenna

64 NXP Supports All Implementations Secure Element Embedded (ese) Secure Element in the SIM socket (SWP-SIM) Secure Element in the microsd (msd) Multiple Secure Elements Source: ABI Research 4 in 10 phones will have multiple SE s

65 Sustainable Competitive Advantage Complete Solutions Security Contactless Performance System Integration Ecosystem Reach Hardware & Software co-design Interoperability The Security Cube Leading Standards Definition Common Criteria Certification Zero-power Architectures Operating distance Transaction time

66 NXP s Next Gen PN547 NFC Radio Delivers 2x the Performance With An Antenna 3x Smaller Operating Distance 4G NFC: NXP PN547 3G NFC: NXP PN544 1G NFC: Competition 2x Performance 1/3 Footprint > $0.50 Cost savings Antenna Cost/Footprint Source: NXP

67 NXP Absolute Leader in Secure Smart Devices NXP INSD STM SST BRCM Maturity Bill of Material / Cost (Silicon, Ext Comp, Antenna) Solution Footprint Power Consumption Contactless Performance IP / Patent Position Host SW lib NFC Secure Element (HW, SW, Applets) Global Solution (Interoperability) Ecosystem Footprint (Mobile Transactions) Strong Moderate Weak

68 Authenticating Identities, Securing Transactions of Smart Devices Mobile Anti-counterfeiting Cyber-security

69 Tagging and Authentication IC Market Set to Grow 8x by 2016 USD NXP is the premier supplier Source: ABI Research

70 Authenticating Identities, Securing Transactions of Smart Devices Counterfeit medications kill at least 100,000 people a year Source: World Health Organization

71 Authenticating Identities, Securing Transactions of Smart Devices $100B in counterfeit IT products (1 out of 10 products sold) Source: KPMG

72 Authenticating Identities, Securing Transactions of Smart Devices 12% of imaging supplies are counterfeited ($7B loss) Source: VDG

73 Authenticating Identities, Securing Transactions of Smart Devices The economic impact of cyber attacks on businesses is over $226 billion annually Source: Congressional Research Service

74 NXP Trusted Secure Elements Authenticate Products & Services NXP complete solutions protects against Counterfeit goods NXP end to end security solutions safeguard networked infrastructure from cyber attacks

75 NXP: Winning in Smart Devices NXP brings NFC to billions of Smart Devices NXP brings security to Smart Devices Next growth engines in the making

76 NXP ID: Positioned for Hyper Growth NXP ID Sales ($M) ID Market ($M) 16% CAGR 35% CAGR Leader and Trusted Supplier in Existing and New Markets Richest Ecosystem of Partnerships Sustainable Competitive Advantage - Unique Pool of Engineering Talent - Best-in-Class Security and Contactless Technology

77 Thank You March 29, 2012