PUBLIC

CTO, NXP Semiconductors

Lars Reger

Technology Independence

Between Myth and Reality

June 2019

PUBLIC 1Source: Extracted from Jefferies Report

10B -

100M -

1M -

0.01M -

1B -

10M -

0.1M -

19

50

-

19

70

-

19

90

-

20

00

-

20

10

-

20

20

-

19

80

-

19

60

-

Units S

hip

pe

d

Bipolar ICs CMOS MPU

DRAM

Bipolar Fast Air Interface

Servers

Free Storage, Big Data

Neural Networks & Processing

Mainframe Mini-Computer PCs Cell Phones IoT/ AI

1 2 3 4 5

IoT/ AI the next innovation wave

Waves of Innovation – What’s Next?

PUBLIC 2

Safe & Secure

Mobility

Smart Cities

Smart Industry

Traffic management

Connected infotainment

Smart retail

China IoT

Safety

Smart mobility

Secure identification

Smart access

Industry 4.0

Factory automation

Machine learning

Agriculture 3.0

Smart utilities

Smart HomeSmart appliances

Home entertainment

Home control & security

Home automation

Gaming

Computing

Consumer

Mobile payment

Machine learning

Smart cards

Wearables

Healthcare

They all need Processing, Connectivity and Security

Cloud to Edge, Artificial Intelligence and Machine Learning

Major IoT Growth Markets

PUBLIC 3

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

0

20

40

60

80

(Billions)

Install base

edge nodes,

global market

Source: IHS

15 18 20 2327

31 36

43

50

62

75

The Fabric: Billions of Edge NodesFrom 15 billion in 2015 to 31 billion in 2020

and 75 billion in 2025

PUBLIC 4

Everything

AwareEverything

SmartEverything

ConnectedEverything

Efficient

Technology Foundation

Think ActConnect

Everything Safe & Secure

Sense

PUBLIC 5

Everything

AwareEverything

SmartEverything

ConnectedEverything

Efficient

Technology Foundation

Think ActConnect

Everything Safe & Secure

Uniquely positioned across

all required building blocks

Sense

PUBLIC 6

Serving Our Customers

Operations across

32 CountriesHeadquartered in

Eindhoven, Netherlands

31,000+Employees

11,000Engineers

9,000Patent Families

60+Year History

$10BApproaching $10B

Annual Revenue

INTERNAL / PROPRIETARY 7

Automotive Industrial & IoT MobileCommunication

Infrastructure

…Across Four Focus End Markets

PUBLIC 8

Autonomous DrivingCould reduce road

fatalities by 90%2

Machine Learning & AISuperior recognition & digital modelling

enabling new applications

SecurityAutomatically detecting attacks

or strange user behavior

Personal Health52% breast cancers

detected on mammography

scans one year before

officially diagnosed1

Voice AssistantsTop benefits seen by

U.S. consumers3

1)Gartner Predicts 2017

2) McKinsey & Company, 2015

3) Statista: Opinion of the benefits of virtual assistants among U.S. residents 2017

PUBLIC 9

The Car as the Ultimate Edge Node & End Point Device

Remote Access

Advanced Displays

Gateway Capability

Connected Services

Machine Learning

High Bandwidth Connectivity

Local Compute Capacity

Advanced Sensor Hub

Advanced HMI

Ingrained Security

Maximum Safety

PUBLIC 10

European Sovereignty?

The Value

Chain is a

Global One

PUBLIC 11

Investments – Conditions

Conditions Markets Countries

PUBLIC 12

Key Opportunities in EU Automotive, IoT and SecurityTop Global Electronics Growth Markets with Strong Roots in Europe

1

2

3

4

5

3 Out of the TOP 5 Automotive Semi Suppliers*

4 Out of the TOP 5 Security Semi Suppliers**

**Source: ABI Research for 2016 Full Year*Source: Strategy Analytics for 2018

PUBLIC 13

EU Value Creation

Smart TransportationFocus on battery management (!) & energy efficiency

beyond battery production

Intelligent transport systems &

G5 V2x communication technologies

Efficient ECU’s

Inference of safe & secure Machine Learning Shift from cloud to edge => adding safety and security

to AI/ML on edge devices will be the key driver for future learning systems

System Insight and development capability EU Semicon industry to provide the entirety of

PUBLIC 14

Examples of ECSEL Projects

SILENSE: ObjectivesResearches acoustic technologies and develops

concepts to activate and control devices by gesture,

data communication, and indoor positioning,

exclusively based on these innovative technologies.

SECREDAS: ObjectivesProduct Security for Cross-domain Reliable

Dependable Automated Systems

PUBLIC 15

(Ultra) Sound Interfaces

and Low Energy

Integrated Sensors

Automotive Smart Home Wearables

These concepts can be used in:

Materials Components Systems &

Algorithms

Applications

PUBLIC 16

SECREDAS: Safe System Requirements

Security

Device Reliability

Functional Safety

Zero accidents due to device failures

Zero accidents

due to system hacksZero accidents

due to system failures

Vehicle SafetyZero accidents due to human error

PUBLIC 17

SECREDAS: There is No Safety without Security

>25

Vehicle hackspublished since 2015

1.4M

Vehicles recalledin the largest

incident to date

Why now?

Wireless Interfaces

enable scalable attacks

250M connected

vehicles on the

road in 2020

Why is it possible?

High System Complexity

implies high vulnerability

Up to 150 ECUs per car,

up to 200M lines of

software code

Why hacking?

Valuable Data

attracts hackers

Car-generated data may

become a 750B USD

market by 2030

PUBLIC 18

Product Security for

Cross-domain Reliable

Dependable Automated

Systems

Secure

Processing

Secure

Network

Secure

Gateway

Secure

Interfaces

Secure Element

Gateway MCU

Switch, PHY

MCU / MPU

Immobilizer, RKE/PKE & Smart Car Access

Secure Car

Access

PUBLIC 19

ECSEL Joint Undertaking & Other ProgramsECSEL keeps EU Electronic Eco-systems at the Forefront of Technology…

Momentum Unified Vision

Mid-term/

Long-termAlignment

Diverse

PartnershipsResearch

…together with other focused and complementary programs as a.o.

Creates momentum in

Europe with the possibility to

engage in large-scale

projects with 25+ partners

Unified vision of Europe and

national public authorities on

priority setting

Allows both mid-term and

long-term projects

Creates further alignment in

Europe through the

Lighthouse initiatives

Mix of large industry, SME’s,

Research Institutes &

Universities

Solid & long term Strategic

Research Agenda (SRA) which

aligns European stakeholders

on a common view

PUBLIC 20

Automotive, Industry 4.0 and IoT

– Important Pillars in Europe

Growth markets building on European

strengths: automotive, safety & security, IoT

Safe & Secure AI / Machine Learning to

create new industry leaders

Common architecture of smart devices

create huge potential for semi industry but

require system competence

PUBLIC 21

Bringing the Edge to Life

Advancing solutions that make

lives easier, better and safer.

Sense Process Connect Act

Leading functional safety & security

PUBLIC 22

THANK YOU!