STMicroelectronics

Citigroup Technology Conference

Carlo Ferro

Chief Financial Officer

September 3, 2008

2

Morocco

Malta

SingaporeMalaysia

China

CarrolltonPhoenix

France (Crolles I & II, Rousset, Tours)Italy (Agrate, Catania)

13%North America

29%Europe

21%Asia Pacific

7%EmergingMarkets**

• 15 main production sites

• 16 advanced R&D centers

• 39 design and application centers

• 78 direct sales offices in 36 countries

• Listed on NYSE Euronext (New York & Paris), Borsa Italiana

5%Japan

* Sales by region of destination as % of Q208 sales (Percentages may not equal 100% due to rounding)** India, Russia, Africa, Latin America, Middle East

26%Greater China

STMicroelectronics’ Global Presence*

Q208 Revenues = $2.39B

3* The above chart estimates, within a variance of 5% - 10% in the absolute dollar amount, the relative weighting of each of the Company’s target market segments

17%

16%

17%18%

32%

Q208 Sales: $2.39B

Automotive Computer Consumer Industrial Telecom

• Industrial Segment +20%• Telecom +19%• Computer +12%• Consumer +11%• Automotive +7%

Revenues by Market Segment*

Y-o-Y Growth

#1 Industrial

#3 Wireless

#3 Automotive

#4 Digital Consumer

2007 Ranking

4

14.6%

9.7%

13.2%

8.0%

3.0%

5.4%

0%

5%

10%

15%

20%

Q208 / Q207 Q208 / Q108 1H08 / 1H07

TAM STSource: ST, WSTS – June 2008

Gaining Market ShareST vs. Total Available Market (TAM)

5

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

19951996

19971998

19992000

20012002

20032004

20052006

20072008e

CapEx as % of Revenues

ST 1995 - 2004 Average = 26%

2008e ≤ 10%

Assets Lighter Strategy

• Increasing use of silicon foundry: – Approximately 8% of wafers out in Q208 to about 20% at end 2009

• Partnership / IBM alliance• Acceleration of manufacturing restructuring

– Target $150 million COGS savings at completion– Number of fabs down from 17 in 2005 to 8 at completion

‘05-’06 Avg.=16%’07= 11.4%

Reduced Cap Ex to Sales Ratio

6

Portfolio Management Actions in 2008

Wireless•ST FY07 Sales ~ $1.3B

•Negative EBIT in 2007• FY07 Sales ~ $1.5B

• FY07 EBIT ~ $100M

• + Synergies

• ~ $200M sales

• Accretive 2009

Consolidated

DivestituresMerger & Acquisition

• FY07 Sales ~ $600M

• + Synergies

Mobile Platforms

7

High Margin Memories

Flash***

EBIT **%

Imaging

Digital

Analog

Discrete

*Not drawn to scale **Excludes restructuring costs***Including impact of AHFS accounting

Addressing Profitability* by SegmentAddressing Profitability* by Segment

Company Average,Last Twelve Months

EBIT % < ST Average

EBIT % > ST Average

Gro

ss M

argi

n

Op Expenses

8

ST – NXP – EMP Wireless Merger

9

• Merging Ericsson Mobile Platforms and ST-NXP Wireless – Industry’s strongest product offering– Industry’s strongest customer base– Building on current partnership

• 50/50 joint venture• Strong endorsement from key customers• Pro forma sales in 2007 of US$ 3.6 billion• About 8,000 employed, majority in R&D

ST & Ericsson: Creating a New World Leader

10

ST-NXP Wireless Today

• Pro forma sales 2007 of US$ 3 billion• Almost 8,000 employed

– About 3,800 in R&D

• Headquarters in Geneva– Major sites in France, India, the US, and the Netherlands, and plants

in Malaysia and the Philippines

• Main business– Major supplier to Nokia– 2G, 2.5G, EDGE and 3G supplier to Samsung – Baseband and RF ASIC supplier to EMP– 2G, 2.5G, EDGE and TD-SCDMA supplier to the China market– Multimedia and connectivity supplier to top handset manufacturers

11

Ericsson Mobile Platforms today

• Sales 2007 of SEK 3.7 billion• Roughly 3,000 employed

– About 2,700 in R&D• Headquarters in Lund, Sweden

– Main sites in Sweden, UK, Germany and the US• Main business

– 3G, HSPA and LTE technologies– 3G, HSPA platform supplier to Sony Ericsson – 3G, HSPA platform supplier to LG and Sharp

12

Strong Rationale for JV

ST• Leading supplier to Nokia

Samsung and Sony Ericsson• Industry-leading RF, analog,

multimedia and connectivity• World-class 2G/EDGE platforms

and strong 3G offering

Ericsson• Leading supplier to Sony

Ericsson, LG, Sharp• Industry-leading 3G and LTE

platform technology• Leading IPR portfolio

Combination of ST & Ericsson• Technology leader

– 2G, EDGE, 3G, HSPA and LTE– Clear scale advantage

• Complete platform offering– RF, analog, modem, multimedia,

connectivity

• Strong customer base– Nokia, Samsung, Sony Ericsson, LG

and Sharp and other exciting leaders

• Leverage semiconductor technology, manufacturing and infrastructure from ST

• Perfect fit, with synergies

13

ST’s Rationale

• Expands leadership from 2G and 3G to HSPA and LTE

• Strengthens IPR portfolio• Exciting growth potential

– Competitive position in growing market– Synergies in product portfolio

• Net positive cash flow with enhanced profitability, driven by strong long-term growth potential

14

The Deal

Joint venture

Cash paymentUS$ 1.1B

Cash paymentUS$ 0.7B

Cash of US$ 0.4B

EMPCash/Debt free

ST-NXP WirelessUS$ 1.2B Net assets

Cash/Debt free

15

Strategic Investment

• Net Investment in the range of $1 billion • Fully funded by outstanding cash

0.2 B$50% of residual Cash in JV

0.7 B$Compensation to be paid by Ericsson to ST

< (0.5) B$Expected payment to buy-out 20% of ST NXP wireless

(1.52) B$Consideration to NXP in exchange of 80%net of financial assets

16

0

1,000

2,000

3,000

4,000

5,000

6,000

Qua

lcom

m

Texa

s In

stru

men

ts

Falc

on

STM

icro

elec

tron

ics

Infin

eon

Tech

nolo

gies

NXP

Med

iaTe

k

Broa

dcom

Free

scal

eSe

mic

ondu

ctor

RF M

icro

Dev

ices

Rene

sas

Tech

nolo

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Skyw

orks

Sol

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CSR

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Tech

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roup

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Sam

sung

Ele

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nics

2007 Wireless Sales Comparison

NX

P

M$

EMP Sales

ST-NXP Wireless Sales

New

Co

Source: iSuppli, ST, Ericsson

Q2 2008 Results

18

0

500

1,000

1,500

2,000

2,500

Q105

Q106

Q107

Q108

Q205

Q206

Q207

Q208

Q305

Q306

Q307

Q308 (

est.*

)

Q405

Q406

Q407

ASG IMS Other* Based on mid-point of company guidance

Revenues by Product SegmentExcluding Flash

US$M

ASG: +8.4% Q/Q, +15.9% Y-o-Y• Strong growth driven by wireless (3G DBB, connectivity) and consumer (PND)IMS: +11.9% Q/Q, +12.8% Y-o-Y• Strong growth driven by MEMS, smartcards/MCU & advanced analog

19

Japan

• Sales: +12% sequentially+33% Y-o-Y

Greater China

• Sales:+11% sequentially+7% Y-o-Y*

New Major Key Accounts

• Sales: +36% sequentially+73% Y-o-Y

Mass Market

• Sales:+18% sequentially+20% Y-o-Y

Key Customers & RegionsQ208 Results Excluding Flash

Strong improvement in all key sales initiatives

*Transnational customer request to change shipment location from Greater China region

20

Baseband• 3G Digital Baseband

– 3X unit growth expected in 2008– ST continues to be a strategic partner to Ericsson Mobile

Platforms (EMP) in technology nodes beyond 90nm• Analog Baseband – working to develop a future high-volume

EMP platform

Imaging• Moving to higher resolution sensor

– Design win for 5MP sensor• Diversifying customer base

Application Processor• Ramping in mobile phone and automotive applications

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• Ramping up Bluetooth headsets

New Products: Wireless

21

Digital Consumer• Set-top Box

• Strong H.264 (SD/HD) sales; transition from MPEG-2 to H.264 will continue throughout 2008

• Sampled four different products in 65nm to world-leading set-top-box manufacturers

• Digital TV• Addressing market with STB “plug-in” solutions

(SD/HD)• Genesis integration ongoing; integrating image and

video processors into ST’s product offering• Nomadik-based Cartesio: embedded-GPS

application processor ramping in portable navigation devices for Garmin

Computer Peripherals• Data Storage

• 90nm SoC ramping in volume now• Printers

• New design wins in the US for SPEAr processor in printers & networking applications

MORE…New Products…

22

MEMS • Very well positioned in Gaming, supplying sensors for

the Nintendo Wii• Serving a differentiated customer base with new

design-wins for sensors in game controllers and a consumer application

• Introduced a “Gyroscope” angular-rate sensor offering extended voltage range and reduced standby power

Industrial• Advanced analog: numerous design-wins for logic

switches and translators in computer and communications applications

• Power applications: several design-wins for MOSFETS including high-end desktop PCs

Automotive• New design-wins in powertrain and car body

applications (dynamic vehicle control & ABS platform for a major Japanese manufacturer; smart actuators in body-control modules in China and India)

MORE…New Products

23

Financial PerformanceAs Reported

185183906Pre-tax restructuring & total impairment charges***

1.55

-.050.18

-47

6.7%

31.4%

36.8%

2,391

Q208

1.47

-.090.13

-84

4.7%

31.9%

36.3%

2,478

Q108

29.6%Operating Expenses / Sales(excluding in-process R&D in Q108)

5.5%Operating Margin*(before impairment, restructuring & other charges)

1.33

-0.840.15

-758

34.7%

2,418

Q207

Effective Exchange Rate € / $

EPS Diluted(before impairment, restructuring & other charges) **

Net Income

Gross Margin

Net Revenues

In US$M, except EPS

* Accounting for Assets of Flash Memory Business Held for Sale started in June 2007. The pro-forma operating margin excludes impairment, restructuring and in-process R&D charges of $906M for Q207, $204M for Q108 and $185M for Q208.

** In addition to the charges for impairment, restructuring and in-process R&D, diluted EPS also excludes the other-than-temporary impairment of financial assets, a pre-tax charge, of $29M in Q108 and $39M in Q208.

*** Includes charges related to the deconsolidation of FMG of $857M in Q207, $164M in Q108 and $35M in Q208.

24

Currency Impact on Profitability

1.28 1.24 1.351.55

1.231.13

$0.75

$1.00

$1.25

$1.50

$1.75

2003

2004

2005

2006

2007

Q208

Effective Exchange Rate ($ to Euro)

159 159

134

$0$50

$100$150$200$250$300

Q207 Q208

Y-o-Y CurrencyImpact (Est.)EBIT**

+37%

*The above chart reflects non-GAAP best estimates of exchange rate impact on selected financial metrics for ST. Net revenues is based on the assumption that industry prices adjust to equivalent US$ prices with a delay of one quarter.

**Pro-forma EBIT excluding impairment & restructuring charges is a metric management believes represent a meaningful comparison of operating performance. The Q207 amount is derived by adding $906million in impairment & restructuring charges to the reported operating loss (excluding FMG) of $747 million; while the Q208 amount comes from the addition of $185 million in impairment & restructuring to the reported operating loss of $26 million.

Effective Exchange Rate ($ to Euro)$1.33 $1.55

159

(281)

(470)

36.8

880

2,391

$1.55

Q208 as

reported:

$1.33$1.33Effective $/Euro

293

(252)

(431)

39.9

955

2,391

Estimated Q208 results at Q207 exchange rate*:

159Operating Income (Proforma)**

(243)SG&A

(397)R&D

37.8Gross Margin

788Gross Profit

2,087Net Revenues

Q207 ex

FMG:

In US$ M & %

US$M

25

0

100

200

Q2 2007 OperatingIncome*

Currency Genesis OperatingImprovements

Q2 2008 OperatingIncome*

US$M71% of incremental revenues (ex FMG)

* Q207 and Q208 Operating Profit before impairment & restructuring charges of $906 million and $185 million, respectively

159 159

-134-17

+151

Year-over-Year Comparison (ex FMG):EBIT before Impairment & Restructuring

26

Generating Cash

347225

339

480

208270

666

840

0

200

400

600

800

1000

2001

2002

2003

2004

2005

2006

2007

1H08

0%

2%

4%

6%

8%

10%

NOCF* NOCF/Sales (%)

US$M

*Non US GAAP measure defined as: Net cash from operating activities minus net cash used in investing activities excluding payments for purchase of and proceeds from the sale of marketable securities and short term deposits.

Net Operating Cash Flow*

NOCF* (ex Genesis)

27

Distributing Wealth

• Current dividend = $.09 per quarter:– 20% growth Y-o-Y– 2007 Yield ~ 2.7%*– Payout ~ 46% of 2007 Clean

Net Earnings**– Moving from annual to

quarterly payments– 73% dividend increase from

2005, despite adverse currency

• Share repurchase started; 30 million shares authorized

$0.00$0.05$0.10$0.15$0.20$0.25$0.30$0.35$0.40

1999 2000 2001 2002 2003 2004 2005 2006 2007

0%

1%

2%

3%

Dividend Yield

*Yield calculated using ST’s share price as of September 2, 2008. 2007 annualized dividend is payable in four equal installments: May, August and November 2008 and February 2009.

**2007 clean net earnings excludes impairment, restructuring and one time costs and other-than-temporary impairment charge

Dividends

28

Outlook

• Q308 revenues to increase sequentially in the range between -1% and +6%

• Q308 gross margin expected to be equal to 36.8% +/- 1 percentage point

• 2008 capex to sales ratio at or below 10%

Q308 outlook based on:

• Expected effective currency rate of about $1.57 = €1• ST as configured entering the quarter. It does not include any

impact of the ST-NXP Wireless joint venture, which closed on August 2nd, 2008.

29

Current and Future Opportunities

• Accelerated revenues growth just started• Numonyx deconsolidation complete• Genesis acquisition complete, integration ongoing• ST-NXP Wireless businesses to integrate: $250M in synergies• ST-NXP Wireless/EMP to merge: growth opportunities• New product contributions:

– Wireless (3G Digital Baseband, Connectivity)– Multimedia processor / Navigation applications– MEMS

• High margin analog to continue to grow• $150M in COGS savings to be realized from fab restructuring• Further adjustment to Op Ex cost structure

30

• CHALLENGE/OPPORTUNITY:– Euro/$ rate absorbed $134

M per quarter of Y-o-Y EBIT improvement in Q208

ST’s Financial Overwiew

• FINANCIAL OBJECTIVES:– Return On Net Assets

• 12% to 20%– Cash generation and

distribution to shareholders

• Sales Expansion

• Portfolio Management

• Cost Restructuring

• Lighter Asset Strategy

SHAREHOLDER VALUE CREATION

VALUE CREATION DRIVERS:

FOCUS ON EXECUTION

31

Forward Looking Statements

Some of the statements contained in this release that are not historical facts are statements of future expectations and other forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended) based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those in such statements due to, among other factors:

•future developments of the world semiconductor market, in particular the future demand for semiconductor products in the key application markets and from key customers served by our products;•the results of actions by our competitors, including new product offerings and our ability to react thereto;•curtailments of purchases from key customers or pricing pressures which are highly variable and difficult to predict;•the financial impact of obsolete or excess inventories if actual demand differs from our anticipations;•the impact of intellectual-property claims by our competitors or other third parties, and our ability to obtain required licenses on reasonable terms and conditions;•the outcome of ongoing litigation as well as any new litigation to which we may become a defendant;•our ability to close as planned in the third quarter of 2008 the purchase of the wireless business of NXP Semiconductors, which we announced on April 10, 2008, as well as our ability to sign and close an agreement for the sale of our manufacturing facility in Phoenix (AZ) in accordance with the currently envisaged terms;•changes in the exchange rates between the US dollar and the Euro, compared to an assumed effective exchange rate of US $1.57 = €1.00 and between the U.S. dollar and the currencies of the other major countries in which we have our operating infrastructure;•our ability to manage in an intensely competitive and cyclical industry, where a high percentage of our costs are fixed, incurred in currencies other than US dollars which is our reporting currency and difficult to reduce in the short term; • our ability to adequately utilize and operate our manufacturing facilities at sufficient levels to cover fixed operating costs;•our ability to restructure in accordance with our plans if unforeseen events require adjustments or delays in implementation;•our ability in an intensively competitive environment to secure customer acceptance and to achieve our pricing expectations for high-volume supplies of new products in whose development we have been, or are currently, investing; •the ability of our suppliers to meet our demands for supplies and materials and to offer competitive pricing;•significant differences in the gross margins we achieve compared to expectations, based on changes in revenue levels, product mix and pricing, capacity utilization, variations in inventory valuation, excess or obsolete inventory, manufacturing yields, changes in unit costs, impairments of long-lived assets (including manufacturing, assembly/test and intangible assets), and the timing, execution and associated costs for the announced transfer of manufacturing from facilities designated for closure and associated costs, including start-up costs;•changes in the economic, social or political environment, including military conflict and/or terrorist activities, as well as natural events such as severe weather, health risks, epidemics or earthquakes in the countries in which we, our key customers and our suppliers, operate;•changes in our overall tax position as a result of changes in tax laws or the outcome of tax audits, and our ability to accurately estimate tax credits, benefits, deductions and provisions and to realize deferred tax assets.

Such forward-looking statements are subject to various risks and uncertainties, which may cause actual results and performance of our business to differ materially and adversely from the forward-looking statements. Such forward-looking statements can be identified by the use of forward-looking terminology such as “believes,” “may,” “will,” “should,”, “would be” or “anticipates” or similar expressions or the negative thereof or other variations thereof, or by discussions of strategy, plans or intentions. Some of the risk factors we face are set forth and are discussed in more detail in “Item 3. Key Information—Risk Factors” included in our Annual Report on Form 20-F for the year ended December 31, 2007, as filed with the SEC on March 3, 2008. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this release as anticipated, believed or expected. We do not intend, and do not assume any obligation, to update any information or forward-looking statements set forth in this release to reflect subsequent events or circumstances.

Unfavorable changes in the above or other factors listed under “Risk Factors” from time to time in our SEC filings, including our Form 20-F, could have a material adverse effect on our results of operations or financial condition