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Freescale Technology Forum - Paris Tuesday, October 11, 2005

AS PREPARED FOR DELIVERY

Bonjour, Good morning! It is a great pleasure for me to be with you here in Paris.

There are 13 European nationalities and participants from all around the world

amongst us today. I want to welcome you all to the Freescale Technology Forum

and thank you very much for taking time to be here with us.

For many of you in the audience, you know Freescale very well because you are

already doing business with us. I don’t want to get any further into my remarks

this morning before I stop and personally thank you for putting your trust in us as

a technology solutions provider and look forward to working with each of you for

many years to come.

We have invited you for a single purpose: to connect with you. Of course here at

FTF, you are going to get an opportunity to hear about leading technology and

exchange ideas with experts from the industry. But what is even more important

is that we hear about the challenges you are facing and that we build a closer

relationship with you and the company’s you represent.

Aside from those of you who are our customers, we also have in the audience

today members of the media, partners who collaborate with us on services and

tool offerings and even industry analysts interested in understanding our

business better. We welcome you all and appreciate you taking your time to be

with us for today and tomorrow.

In my remarks this morning, I would like to address three topics.

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First, I want to provide you and overview of Freescale. Second, I am going to

speak about a few mega-trends we see happening in the industry – and where

those trends take both Freescale and your companies as well.

Finally, I will talk about Freescale’s strategy and how it fits into those trends –

and how we are helping you advance your own embedded technology products

and solutions.

Let me talk for a few minutes about Freescale.

As most of you know, we became an independent company just over a year ago

after being part of Motorola for more than 50 years. Interestingly enough, our IPO

was the second largest technology offering of the year in the U.S. behind Google.

We are the third largest semiconductor company in the U.S., with sales last year

of $5.7 billion, balanced geographically around the world.

We have approximately 22,000 employees world-wide and have wafer

manufacturing fabs located in the U.S., Europe and in Japan. We have

assembly and test facilities in Malaysia and China and we leverage design talent

from around the world with design centers in more than two dozen locations on

five continents.

Here in the EMEA region, Freescale has 4,600 employees in 20 countries. The

company’s main manufacturing locations in EMEA are in East Kilbride, Scotland

and Toulouse, France with significant hardware design, software and IP creation

centers located in Denmark, France, Germany, Ireland, Israel, Romania, Russia

and the United Kingdom.

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Freescale is also part of the Crolles2 Alliance (near Grenoble, France) that brings

together STMicroelectronics, Philips and Freescale in an alliance of

unprecedented scope in the microelectronics sector. The joint Crolles2 R&D

center focuses on providing a state-of-the-art 300mm silicon wafer pilot line and

on specific technologies at the forefront of semiconductor R&D. Having started at

90nm, the alliance will develop CMOS processes at 65nm, 45nm and, ultimately,

the 32nm node.

Today marks our 1st year anniversary for manufacturing 90-nanometer designs.

During that time, Freescale has introduced 12 new products on 90-nanometer

technology, including the first 90-nanometer multi-core programmable DSPs to

be produced in volume.

Our other 90-nanometer products include digital, analog, RF and embedded

memory devices for diverse end applications such as wireless handsets, printers,

enterprise networking components and telecom transmission equipment.

And here is one more testament to the high caliber of technology work being

done her in Europe. At our Crolles2 location, Freescale has completed each of its

successive 90-nanometer design releases “right-the-first-time”, producing fully

functional samples in customer applications after only one pass. This 100

percent first-pass success rate demonstrates Freescale’s ability to reduce the

design gap between ever-improving technology and manufacturing capabilities

and the industry’s capacity to generate designs able to keep pace with these

advances.

Our achievements over the past year have set the stage for successful 65-

nanometer prototyping, which we will begin soon.

Whether we’re talking about France, Europe or anywhere else in our global

operation, the key to our future growth is going to be leveraging the expertise we

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have gained in embedded intelligence and connectivity. That expertise is

supported by an intellectual property portfolio of more than 4,900 patent families.

To give you an idea of the kind of growth we’re shooting for in the years to come,

the three large businesses that anchor our portfolio – transportation, networking

and wireless – today sell into a $55 billion market, which we expect to reach $83

billion by 2007.

The diversity and breadth of this portfolio gives us an insight to create innovative

integrated solutions. Our mission is to enable you – our customers – to imagine

and deliver more intelligent, more connected products.

We do that through our three business groups: Transportation and Standard

Products, Wireless and Mobile Solutions and Networking and Computing

Systems. Let me take a moment to talk about each.

Our largest business, which we call Transportation and Standard Products is

all about embedded control systems. We have a rich portfolio of 8-bit and 16-bit

microcontrollers and PowerPC-based 32-bit microprocessors, DSPs, a variety of

inertial sensors and pressure sensors, and analog products including solid-state

switching and power management devices.

In 2004, these product offerings combined to generate $2.6 billion revenue for us

– or 46% of our total business, and just over two-thirds of sales in this business

came from the automotive arena.

Of course, in addition to being Freescale’s largest business, it is also one of the

most exciting industries to be in, particularly given the fact that six of the Top 15

car makers in the world have their headquarters here in Europe. Renault-Nissan

VAG, DaimlerChrysler, PSA, Fiat and BMW are world leading brands for the

automotive industry – and key customers for us as well. They are pushing

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innovation into the vehicle through the creative use of intelligent silicon like never

before. In fact, the semiconductor content in vehicles is growing at a faster pace

(between 6 and 8%) than the projected growth of the automotive market.

I’ll be talking more about the automotive arena in just a bit, but suffice it to say

that we see some fascinating trends taking shape in this area – and we feel we

are very well positioned to help our customers capitalize on the changes taking

place in the automobile.

Next is our Wireless and Mobile Solutions business. The focus of this

business is on building complete platforms for mobile cellular, consumer and

converged devices.

Last year, it represented 28 percent of our total sales with revenues of $1.6

billion. With 44 percent growth in 2004, Wireless and Mobile outpaced the

industry’s growth by a nice margin.

Baseband processors, applications processors, RF, power management, power

amplifiers, GSM/GPRS reference designs, EDGE (2.75G), and UMTS (3G)

offerings are all part of what Wireless and Mobile bring to our customers.

We also have some very powerful emerging wireless technologies like Ultra-

Wideband, DVB-H and Zigbee that occupy leadership positions in the market.

There are so many exciting things going on in the wireless business but you will

hear more about our wireless and mobile solutions offering in a short while from

Franz Fink, Senior Vice President and General Manager of our Wireless and

Mobile Solutions Group.

Finally, our Networking and Computing Systems business is focused on

wireless and wireline infrastructure; enterprise, home and SOHO networking;

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and pervasive computing The Top products for this business are based on the

PowerPC architecture leveraged into our PowerQUICC family of

communication processors. Within this family of products the announcement of

our new QUICC Engine architecture has been recognized by the Linley

Groups as the most significant development in this area in the last ten years.

Our product portfolio also includes the Host Power PC processor (G4), the

Starcore DSP, high power RF devices and highly integrated system-on-chip

platforms.

Our networking business represents about one quarter of our total revenues

and has some impressive numbers behind it. In its history, this business has

shipped 194 million communications processors, 52 million infrastructure

DSPs and nearly 20 million plastic-packaged RF transistors.

Tomorrow morning, you will hear much more about opportunities in networking

and communications during the opening keynote from David Perkins, senior

vice president and general manager of our Networking and Computing

Solutions Group.

I want to really encourage you to be back here for David’s remarks. He has

spent a great deal of time here in Europe over the years. His comments are

going to be insightful and completely relevant to the issues, challenges and

opportunities many of you are dealing with everyday as industry leaders .

So those are Freescale’s major business groups. We believe these three

businesses – along with the IP, cores, process technology and the technical

talent we possess – provide us an excellent footing for growth and continued

innovation. I will touch on them a bit more in a few minutes when I talk about our

strategy, but first, I’d like to spend a few moments outlining what we see as key

forces around the world that are influencing the future opportunities for each of

our business segments.

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These include: globalization, the growing influence of the consumer,

convergence and standards. While these trends are not all-encompassing,

each of them underscores the fact competition in the technology world today has

become less of an individual pursuit, and more of a team sport.

Today’s world is constantly changing and market dynamics and costs are driving

centers of technology and expertise. However, with its rich history of innovation

and creativity, Europe is well positioned to take full advantage of the

opportunities the future will bring.

Nearly 30% of worldwide semiconductor demand is generated by European

based companies. That means future innovations will continue to be driven from

our region, particularly in communications and automotive.

Europe of course was the birthplace of GSM, which is now ubiquitous worldwide.

Our collective European countries created a standard which drove the

tremendous growth of the wireless industry. It's here too that 3G and its

evolution are setting the standards for the future,

Another example of European strength is the automotive arena. The standards –

CAN, LIN and FlexRay, were all developed and driven here, in partnership with

the main European suppliers and car OEMs.

This brings me to the growing influence of the consumer. For a long time,

innovation in our industry was driven by what was happening in the PC / IT

arena. But for the last few years, the purpose of nearly all the innovation taking

place in PCs has been to simply reduce costs. Today, the center of true

innovation has shifted to the phone, to the car, to the home servers, to the many

things consumers love, which now use a lot of the same components.

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Last year, for the first time, the monetary value of semiconductors in products

bought by consumers exceeded the amount spent by corporations. Think about

these statistics.

• Today there are more cell phones in use in China than there are people in the

United States.

• Broadband subscribers have grown more than 125% in just the last two

years. In 2004, subscribers broke the 100 millions milestone, and by 2010,

iSupply expects the decade to end with close to 300 millions subscribers.

• According to the UMTS Forum, global 3G subscriptions hit 50 millions this

month, just 2 years after the first’s commercial deployments of the

technology.

The final trend I want to mention, which is closely linked to the growth in

consumer electronics, is convergence. When people hear that term, many

automatically think about the impact the consumer is having on driving

independent functions into multi-function devices. The phone that is also a

camera – the camera that is also a phone – or the flat panel monitor that gets

used for gaming, TV and surfing the internet.

But the more important part of the convergence story is the convergence taking

place around standards.

The reason the cell phone industry and consumer electronics marketplace both

opened up so dramatically the past few years is that technological standards

have converged. And as open standards continue to take hold in other industries,

one of the consequences will be that a few key components are going to find

their way into everything.

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We are big advocates of open standards, in part because they let everyone

compete on their own merits. They drive innovation by getting more people in the

game and by letting us spend more time innovating and less time worrying about

infrastructure.

We are excited by the possibilities convergence offers and by the fact that

convergence plays to our strength in integrating our processes and products with

other technologies. Our ability to blend electronic functions using low power into

everyday products is an ever-more-important advantage.

Now that we have covered the mega trends in the market, let’s focus on

Freescale’s strategy.

Freescale's strategic intent is global leadership in embedded processing

solutions for a connected world.

Global leadership is key to us in all we do – whether it is in innovation, customer

support or providing the most competitive solution that enables your success.

This is especially important in Europe since so much of what happens here is at

the absolute cutting-edge of technology.

The solutions focus is important because we are not in the market simply to sell

silicon. We provide you with an entire solution – from silicon to software to

complete reference designs. This doesn't mean we have to do it all ourselves.

We are establishing terrific partnerships and alliances with our customers and

with third parties that complement our establish core competencies. You will

actually see many of these providers in our Tech Lab.

Connectivity is a key driver of value for you and for growth opportunities in our

marketplace. We know that it is important to you that we develop the intellectual

property needed to deliver leadership products. I want to assure you that we are

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creating technology roadmaps based on a solid understanding of market trends

and with an eye on the issues you face as you develop your own products based

on Freescale solutions.

Our strategy is driving us to anticipate customers' needs and accelerate the

offering of breakthrough products that improve system capability along

parameters most important to you.

We have strong positions in several key embedded processing and connectivity

market-spaces and we intend to grow in areas which are logical extensions of

those positions. We have expressed this notion by stating that we intend to hold

the #1, #2 or #3 positions in the markets we serve.

Let me talk a bit about these markets starting with the automotive space – an

area where Europe has clearly excelled and is a dominant force in the world.I

Our history in the automotive industry goes back almost three decades, to our

introduction of the MC6801 engine controller in late 1970s. Today,

microcontrollers and processors power virtually every major sub-system in the

vehicle, from door modules and window-lifters to safety systems such as airbag

modules and, of course, in on-board entertainment consoles where the state-of-

the-art is on par with home entertainment systems.

Freescale is at the forefront of these developments. Our intelligent silicon

products such as the S08, S12X and PowerPC architectures, industry-leading

flash-based microcontrollers, power actuation and management devices, and

pressure and inertial sensors – represent the most technologically advanced and

complete portfolio of products and capabilities.

In the next decade, the innovation story in the automotive space is going to

center on the development of the autonomous car. In the autonomous vehicle,

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body electronic systems will include controls to help manage load and fuel

consumption, intelligent lighting, climate management and smarter remote

access capability. To enhance safety, cars will contain smart airbags, lane

departure warning monitors, brake-by-wire, tire pressure monitoring systems and

electronic stability systems..Many of these capabilities are being designed in

future high-end cars.

As I mentioned earlier, much of the standard setting in car networking – CAN,

LIN and FlexRay – was developed and driven here in partnership with the main

European suppliers and car OEMs. These networks have enabled new levels of

security, comfort, economy and entertainment in the car.

Just a few weeks ago, we announced the world’s first FlexRay controller.

FlexRay, by virtue of its built-in fault-tolerance and high connection speeds,

represents a significant advance in the ability to network in-car systems, so much

so that we predict it will someday be – like CAN – a standard feature on car

microcontrollers. Freescale is the world’s leading provider of semiconductors to the automotive

industry We are confident that we have the most advanced technology solutions

in the market-place, and I believe our portfolio of technology solutions is well

aligned for the development of the autonomous vehicle.

Being first is important, but it doesn’t mean much, especially in Automotive, if it

doesn’t come along with quality. Zero Defects is a philosophy we are driving

throughout our company. It is underpinned by our focus on Six Sigma, the

industry recognized problem-solving methodology for continuous improvement

and rapid breakthrough performance to achieve sustainable business results.

Today at Freescale, we have a disciplined belt development program with over

300 black and green belts .They are the company’s change agents, tackling our

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toughest challenges – an overall methodology that drives business

improvements

Many of our core competencies in embedded processing, connectivity and

analog design lend themselves to consumer and industrial electronics. In fact,

we find that the stringent requirements of low power, data protection and

innovative thinking are a key strength of Freescale’s products.

For more than a decade, Freescale has been a market leader in power

management solutions. We’re constantly evolving and perfecting our technology

so you can design more features into your mobile device using less power. By

enabling the highest integration in the world with our SMARTMOS™ technology,

we give you key advantages in board area, system cost and cohesive hardware

and software interfacing consolidation.

As an example, on one IC, we have integrated multimode switchers with the

audio system, then added backlight drivers, fun lighting, USB interface, battery

chargers and A/D converters. So, whether you’re working on mobile handsets or

media players, digital cameras, PDAs or toys, we can help you manage power

successfully.

And that is why we have developed our SMARTMOS™ power management

technology–a cost-effective blend of analog, digital and robust power devices.

With SMARTMOS more features and capability can be economically packed into

a smaller form factor, reducing cost, improving performance and reliability.

And, as portable electronics become more central to your busy life, you worry

about data loss and damage to your handheld devices. Freescale offers peace-

of-mind with our three-axis sensor. It is designed to protect a device and its data

by putting the device into “park” mode in the event it is dropped, shaken, tilted,

inverted or flipped.

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In just a moment, Franz will talk more in-depth about a number of the

technologies and products his business is developing in this area, including UWB

and Zigbee.

In the networking arena, our technologies focus on enabling the seamless

delivery of voice, video, and data through the global network. For example, more

than 60 percent of all 2.5G and 3G wireless infrastructure applications are

enabled by Freescale's high-power RF transistors. And in the infrastructure,

enterprise and home – our range of processors accelerate, secure, converge and

connect end to end. In fact, Freescale is the top supplier of integrated

communications processors – a product category we invented more than 15

years ago.

Our PowerQUICC communications processor family based on PowerPC cores

remains the industry’s undisputed leader. These processors integrate high-speed

interfaces, such as Ethernet and RapidIO, as well as security and data path

acceleration – all while providing the best performance per watt for embedded

applications. For instance, our PowerQUICC 3 delivers 3000 MIPS at less than

10 Watt and our dual core host processor MPC8641D will run at 3Ghz for

20Watt.

Freescale continues to strengthen our processing portfolio to help meet the

needs of our networking customers. A few weeks ago we acquired Seaway

Networks – a company recognized as an innovator in high-performance, silicon-

based content processing. We expect that this technology will provide customers

with advanced security and traffic-management solutions for data networking

applications. The acquisition ensures that Freescale will be a leader in providing

breakthrough, deep-packet processing in our very popular PowerQUICC family of

communications products.

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PowerPC has come up a few times in my remarks this morning, so I want to take

a moment to specifically address that architecture. It represents approximately

25% of our total revenue as a company and we continue to see it as a key

technology for embedded processing – and are completely committed to its long-

term success.

Freescale currently offers the broadest portfolio of products based on the

PowerPC architecture – scaling in performance from 40 Megahertz to in excess

of 1.5 Gigahertz. But its software scalability that allows software investments to

be used across the performance range and its application flexibility make it one

of the best embedded platforms on the planet. It is also supported by a strong

ecosystem to help accelerate time-to-market for your products and solutions.

As networking technologies enter and expand in the home, we think we are very

well positioned to grow with the market opportunities. We will do that by

combining our unique embedded processing offerings with our integrated

security capabilities for protecting copyright content, and coupling that with not

only wired, but wireless connectivity solutions for multimedia streaming and

distribution.

And to explore this further, let me hand over the stage to Franz Fink, Senior Vice

President and General Manager of our Wireless and Mobile Solutions Group to

talk about Ultra-Wideband, one of our most exciting new technology offerings. He

will then speak to you in-depth about the dramatic changes and innovations he

sees in the wireless arena – and how Freescale is positioned to take advantage

of that dynamic market.

Please welcome him to the stage…

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[Franz] Thank you very much, Denis. It was great to hear you talk about Europe

and all the exciting statistics related to the region. There is no way you can look

at opportunities in wireless and not be totally excited about the potential that

exists in this market-place.

I’m here to talk to you about an explosion of growth we are likely to see not only

in Europe but worldwide in the wireless arena. We are not talking about small

numbers. But rather THREE BILLION wireless devices in the marketplace by

2010. That’s one billion traditional cell-phones plus one billion ultra-low tier cell-

phones and one billion converged mobile devices. How will that growth happen?

What technologies will be needed to drive this growth? Well, we are talking

about an explosion around mobile and wireless voice, data and multimedia

caused by a revolutionary concept we call seamless mobility.

So let me take a moment to explain what I mean by that phrase. I want you to

imagine that you are on a phone call while you are walking into your house and

you decide you would like to turn on your television and download a movie to

watch. Today, that process generally means you have to hang up your phone,

find your remote control, turn on the TV which is connected to a DVD player or

tethered to your TV by a cable and a box provided by a cable company.

In the seamless mobility era that we are talking about today, you will be able to

flip your phone over, turn on the TV with it because it contains a ZigBee driven

RF module. And because you will have a 3-axis accelerometer built into the

phone, you will be able to tilt your hand back and forth to scroll through a menu

of selections to turn on you UWB-enabled multi-media server, select the movie

you want to download, and stream that video to your television in just a few

seconds – all without wires.

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And when you are back out and about, you can also use your phone to tune into

a TV broadcast to watch your favorite soccer team. Our DVB-H technology

makes that possible today.

In fact today, along with one of our great partners, DiBcom, we are announcing

their tiny DVB-H receiver system-in-package. More on DVB later….

So, no matter where you go or what you are doing, seamless mobility means you

will be connected to voice, video and data in the way you want, when you want it.

I have been talking seamless mobility for several years now – along the way I

have heard many people say seamless mobility will never happen – it’s just too

complex. But thanks to a lot of innovation and ingenuity, it is starting to become a

reality.

But for many of you designers in the audience, you know all too well that we still

have a ways to go before seamless mobility is an everyday reality as common as

radios or television sets. That’s obviously because as the demand for more

feature-rich cell phones grows, so too does the complexity of the technology, the

need to extend battery life, and the ever-increasing challenge handset

manufacturers face, time-to-market

But before I do so, let me give you some details on Freescale’s wireless

business. As you can see from the slide, in 2004, we earned $1.6 billion in this

business and in 2004, we outpaced the growth of our competitors in this space

by a very nice margin. We are among the largest providers of wireless platform

solutions and offer complete platforms for mobile cellular, consumer and

converged devices. And we have a number of leadership positions in the market

that make this point even more interesting.

In GSM, we are the #1 supplier to Motorola, the #1 multi-mode RF design

manufacturer and #2 in total baseband global market share. We are gaining a

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great deal of momentum in the low-tier phone space with our i.250 GSM platform

and are currently working with a number of top OEMs. Like no other company,

we deliver the most complete 2/2.5G solution, featuring a totally integrated

baseband, transceiver, power management and power amplifier cellular platform.

I mentioned 1 billion ultra-low tier cellular handsets by 2010. In both the GSM

and GPRS space, we recognize the explosive growth taking place in countries

such as China and India, Russia and other markets. If you take a look at China

and India, you can see that we are deeply engaged with 5 out of top 11 OEMs

representing 33% ’04 market share, and 2 out of top 5 OEMs representing 20%

’04 market share respectively. We are playing a key role in servicing growth in

these markets.

Let’s look at India. I was giving a keynote address like this at our India Freescale

Technology Forum last month. There is no way you can look at opportunities in

wireless and not be totally excited about the potential of India. It’s one of the

world's fastest growing major mobile market with more than 63 million current

subscribers. New wireless subscriptions in India are growing at an average of

two million a month – and I understand that last month, that number reached

2.73 million. That is an astonishing figure, and you can trace the same

momentum in China and other vibrant economies - but it’s only the beginning of

what I see as a much more interesting future.

In 3G, there’s no question that we feel we have the best 3G solution in the world.

We are now offering the first 3G high speed downlink packet access on CMOS90

StarCore™ DSP and ARM11™ -- and just this past May, we announced that we

had completed the first call on our MXC Single Core Modem, which I’ll come

back to that revolutionary architecture in just a moment.

In both the GSM and GPRS space, we recognize the explosive growth taking

place around the world. If you take a look at this side-by-side comparison, you

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can see that we are deeply engaged with 5 out of top 11 OEMs representing

33% ’04 market share, and 2 out of top 5 OEMs representing 20% ’04 market

share respectively.

Now back to solving the seamless mobility challenge. I know each of you has

heard of Moore’s Law – a theory developed more than 30 years ago by Intel’s

Gordon Moore. He made the prediction that semiconductors will move to a higher

density or a greater number of transistors on a constant size chip. But we are

now seeing greater functionality for the same or even lower transistor count. This

is forced by the fundamental difference between a PC and a handset – size.

More precisely put, consumer appetites for smaller, feature rich mobile devices

capable of delivering a seamless mobility experience are driving the need for

more and more miniaturization. It’s not an easy challenge to deal with. High-tier

mobile devices can have over 400 separate components, with entry-level phones

having around 150-200. How can we address the challenge of a post-Moore’s

Law world?

First, you need to miniaturize to create true design freedom. You need a

replaceable chip package that allows you to choose exactly how efficiently you

need to be to design your own ultra-efficient wireless device. MXC provides a

flexible platform to allow your companies and carriers to innovate effortlessly, at

low cost and high margin. Reduced components means more design freedom,

more rapid time to market. Combining the communications and the applications

functions in a single package as MXC does, opens up enormous possibilities for

wireless platform reuse and form factor upgrades, across multiple protocols and

operating systems, with a 40% reduction in the electronic bill of materials to allow

a 3G phone the size of a postage stamp. Second, you need to reduce costs. Here at today’s Freescale Technology Forum,

we will be making a voice call on our newest generation 3G platform, the i300-30.

With the WCDMA signaling call on the i.300 platform we are continuing to

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illustrate extreme innovation through our architectural approach to reducing

handset design costs while increasing form factor flexibility. I think you’ll be

impressed by the demo in the Tech Lab. With MXC we take this concept to the

extreme. It’s easy to imagine slim and sleek 3G handsets with the affordability of

today’s 2.5G handsets when you see the size of the MXC platform on a postage-

stamp. And for current generation GSM/GPRS/EDGE and Wide-band CDMA phones,

our RF subsystem shrinks the board space by up to 70% to enable a new

generation of sleek and affordable handsets. This is an industry first. Other so-

called single chip, dual-core solutions do not begin to approach this degree of

simplicity. This is a breakthrough on the road towards seamless mobility – and it

is not an endless journey. We intend to bring a true 3G phone on-a-postage-

stamp to market in 2007.

3G is not just about how much mobile data or mobile multimedia can be held in

the handset, it’s about lowering network costs for both voice and data. One of the

major reasons for the emergence of 3G technology was to provide more voice

calls per megahertz of spectrum.

Spectrum is a finite resource and many wireless networks around the world are

running into congestion problems with their second-generation digital

technologies. We are leading the way in the RF arena to address this issue. Our

high speed packet download access technologies brings 10X greater spectrum

to 3G service providers with little to no increase in cost.

HSDPA is essential to realizing the power of and maximizing network operator

investments in 3G. It provides the bandwidth for advanced applications, a mobile

alternative to broadband DSL and cable, and reduces the cost per megabyte of

data transmission for the cellular operator. Last month in London, we

demonstrated HSDPA at 3.6Mbps; our roadmap has 10Mbps chipsets in the near

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future, followed closely by 14Mbps chipsets. So Freescale is blazing the trail

with HSDPA supported on both i.300 and MXC 3G platforms. You can catch a

demo of our HSDPA solution today in the Technology Lab.

Third, you need to be multimode. In other words, you need embedded

intelligence to handle multiple simultaneous tasks across multiple protocols

efficiently with the lowest possible power consumption.

The essential question we ask is: “how can a device process the massive volume

of data required to deliver a meaningful multimedia experience without

consuming a tremendous amount of power?”

At Freescale we have discovered a formula for this. Focusing on hardware

acceleration to optimize mobile multimedia performance, we are working to

achieve 20x processing performance for a given UMTS (3G) set of applications

on an applications processor. This is with minimal impact on battery life.

We are achieving this on our i.MX family of applications processors via what we

call smart speed technology. The smart speed switch inside i.MX provides for

parallelism in the system meaning the processor is more efficient, executing a

greater number of effective instructions per clock cycle.

In a Synchromesh benchmark study of i.MX21 at 266mhz vs. a leading

competing device at 398mhz, i.MX21 provided this 2X superior throughput

performance with fewer clock cycles, while consuming ½ the power, thereby

extending battery life. This means – if you have a little time to kill -- you could

listen to about 1600 songs or every recorded song by U2 and the Rolling Stones

in a single battery charge on your cellphone.

At this Freescale Technology Forum, I know we are conducting workshops on

i.MX. I really encourage those of you working in the space to take time to attend

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these sessions. i.MX has been winning sockets on the strength of its low-power

yet feature rich performance from customers around the world, so it is definitely a

product family I think you are going to want to be familiar with.

Let’s turn now from the vision of seamless mobility to the reality. I want to show

you some demonstrations of some of the building blocks of seamless mobility:

DVB-H and Ultra-Wideband.

We were one of the first to demonstrate DVB-H technology at 3GSM World

Congress, back in February 2004. Today, you are beginning to see mobile

television as an emerging mobile consumer trend. As I mentioned before, today,

along with one of our great partners, DiBcom, we are providing the tuner for a

tiny DVB-H receiver system-in-package.

This system-in-package is based on their extremely successful chipset made up

of Freescale’s MC44CD02 direct conversion tuner and DiBcom’s DiB7000-H

channel decoder. It’s a fully validated chipset now in production that enables

integrators to considerably shorten their time to market while allowing even

smaller form factors and reducing sourcing burdens.

The chipset has been validated in independent trials and is used in several

terminals currently in the field in different countries.

In addition to DVB-H, Freescale has some exciting new technologies in the

wireless arena that I want to talk to you about – one of which is Ultra-Wideband.

UWB is a wireless technology that transmits an extremely low power signal over

a wide swath of radio spectrum and promises to become a universal personal

area networking. Unlike conventional radio systems that operate within a

relatively narrow bandwidth, Ultra-Wideband operates across a wide range of

Deleted: – and I want to ask Thierry Cammal, our European Region Go-To-Market Director for the wireless business to join me on stage to help me with what we’re about to show you.

Deleted: ¶[DVB-H demo takes place]¶

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frequency spectrum by transmitting a series of very narrow and low power

pulses.

UWB is a cutting-edge technology, but at Freescale, we have already put it into

the hands of a customer and that customer is now first to market with a novel

solution that is really attracting customers.

So, this camcorder, similar to ones you have at home or nearly the same one as

this one is a High Definition camcorder. When you want to edit the film that you

have captured, you are today connecting this camcorder to the PC thru a firewire

cable and can access to the content on your PC.

Now, we are going to disconnect this from the laptop and connect it to the

transmitter over here via firewire. Obviously, this is not a final set up and some

customers including you may already be integrating this into your technology or

end equipment.

Once connected to the transmitter, we will be able to display the signal from the

camcorder, wirelessly through the laptop which is connected to another UWB

hub. Last week, Freescale was the first to demonstrate Ultra-Wideband

operating with on a Bluetooth software stack with two companies called Open

Interface and Frontline Test Equipment.

UWB has the capability to scale to multiple gigabits per second, which could

enable multiple simultaneous streams of video over a single UWB connection.

And at a megabit per milliwatt, it is more power efficient for the data being

transferred than other types of this kind.

Now what you are seeing is streaming data from the camera to the UWB hub and

then wirelessly to the laptop. The UWB Technology is providing far more

bandwidth than this camcorder is requiring. So, while we have this wireless

Deleted: ¶¶

23

connection up and running we are also going to use it to transmit a TV stream

from the DVB-T tuner to the laptop over here and onto the screen.

Now you can see inputs from the camcorder and TV tuner transmitted wirelessly

over the UWB connection. The high data rate, low power consumption and

affordability of the chipset are ideal for multimedia-centric products such as set-

top boxes, digital displays, camcorders, DVD players, digital video recorders, and

digital cameras, to send and receive digital streams of audio and video.

One of our customers, Haier Electronics, looked hard at other technologies, such

as Bluetooth to enable their newest high-definition television. In the end, they

took a consumer’s perspective of their television and correctly, in my opinion,

decided that when you invest in a high-definition television, you want a flawless

picture. So they insisted on creating a wireless solution that could support that

consumer experience.

Our customers around the world share the same enthusiasm for this new

technology – we are especially excited about the contribution our customers and

design partners here in Europe can make of this technology in their own

applications.

It’s great to know that Europe remains one of the great centers of innovation in

the world – and it has been very generous of you to let me and Thierry share this

new technology with the audience today.

Denis – Thanks Franz. Well done.

To me, one of the points Franz’s presentation drove home is the fact that a lot of

what our business is about is connectivity – about staying connected, and

leveraging the ideas that connectivity makes possible to run our businesses, and

our lives, better than ever before.

Deleted: ¶¶

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While that’s mostly great news, we also understand that designers today are in a

virtual pressure-cooker to get higher quality, smarter designs to market faster

that ever before. They need, and deserve, a partner that understands their needs

and can give them the assistance they want, when they want it.

At Freescale we are determined to be that partner. We are committed to being an

organization focused on continuous improvement, in particular

on process alignment, analytical rigor, speedy execution, timely, data driven

decisions -- and most important on your requirements.

We have more sales and application engineers in the field – well over 650 of

them worldwide -- than many of our competitors. We have invested in the ability

to support your needs in any region of the world with our own people.

We have created and rolled out a new set of services called “Fast Track” to

accelerate customer time-to-market. Fast Track brings our best-in-class services

like the DevTool Direct, CD on Demand documentation and free samples under

one menu of web-based services, allowing our customers to be self-sufficient. .

I invite you to check out the full line of Fast Track offerings in the Tech Lab.

We have reconfigured our Global Technical Information Center to use what we

call a “follow-the-sun” handoff process. That means no matter the time of day or

night, you can be assured that your issue is being worked by someone at one of

our 14 technical support centers around the world. In 2004, we managed over

77,000 inquiries and requests.

And if you need specialized software written, code converted or even a reference

design developed, we are ready to assist you in any region of the world where

you require support.

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Let me close with a few additional thoughts.

I believe that someday soon, just about everything we touch will possess

embedded intelligence and connectivity – changing our lives in profound and

unexpected ways.

I especially the see the trends in open standards and open source programming

as the driving force behind our movement out of the information age into the

conceptual age where the creation of new products, new markets and totally new

economies appear and disappear rapidly. I don’t believe the pace of change has

even begun to slow. In fact, as more and more people play a role in shaping

technology, I see it’s acceleration as an exponential curve upward.

While the outcome of that change is not easy to predict, we believe that much of

that change will be driven here in Europe and we are committed to supporting the

long-term prosperity and growth of European’s technology industry. The one

thing we know for certain is that the only sure way to win is to make sure our

customers win -- and we look forward to taking the next steps together with you.

I now encourage you to visit our Technology Lab, speak with our technical

experts who have come over from different parts of the world and discover our

latest technology platforms and IPs. These will allow you to meet your future

challenges and lead in your respective markets.

Our strategic partners, here today, have made this technology showcase

possible and I want to extend my warmest thanks to them. During the course of

these two days you will have plenty of opportunities to meet with them.

And, this evening, you are cordially invited to a cocktail reception with a picture

perfect view of Paris and live entertainment in the Tech Lab area, starting at

18h00

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I wish you an excellent Technology Forum!