Innovation processes in a

large enterpriseWouter Leibbrandt

NXP SemiconductorsCTO Office

Outline

Introduction into NXP and the journey of NXP

R&D in semiconductors Centralized versus de-centralized

Open Innovation

Innovation across the value chain Smart-in-car

Personalized climate systems

Roadmapping

Discussion

3

NXP - a global innovator

Established in 2006 (formerly a division of Royal Philips)

Sales: $5.6 billion in 2014, >60% in Asia

Employee base: ~ 28,000 employees in 25 countries

Manufacturing: Europe and Asia

Global #1 Semiconductor Player in Security and Automotive Connectivity

4

NXP: 4th Private R&D Investor

Bron: Technisch Weekblad, April 2015

5

In a nutshell Growth by serving many applications

Security

Smart Cities

Car-2-X

Smart City Wearables Mobile Devices

Smart Docs

Secure PaymentIndustry 4.0

Secure Interfaces

Loyalty, rewardSmart Supply Chain

Everything

Smart

Everything

Connected

Everything

Secure

• Approx $763M/year in R&D

• ~3,500 engineers at 20 locations

• ~9,000 issued and pending patents

• World-class competences in all Analog and

Mixed-Signal technology domains

• Collaborative R&D practice with customers,

suppliers, universities and institutes

• Active in over 80 standardization bodies &

consortia

R&D: Key enabler of Secure Connections for a Smarter World

Milestones in our journey to date…

Secure

Connections

for a Smarter

World

2014+

Portfolio and

R&D focusing

Divesture of

Mobile

baseband and

Digital Home

business

Spin-off from

Philips

High-

Performance

Mixed Signal

2006 2010-20132006-2008 2008-2009

M&A flexibility to rationalize portfolio and become industry shaper

Focus on segments where NXP has leadership potential, sell/milk others

Mobile sold to ST-Ericsson; Home to Trident

Build true leadership and outgrow market in the area of NXP’s core strengths (RF, AMS, HV, Security)

Win in the fast-growing pockets in the market – Internet of ThingsRestructure R&D

NASDAQ

August 6, 2010

NASDAQ top 100

Dec 23, 2013

Merger with

Freescale

2015

Create #7 Semiconductor company by Q4 2015Decentralised R&D

Security Portable and

Wearable

•Mobile transactions

•E-Government

•Smart bank cards

•User authentication

•Embedded security

•Mobile audio

•High-speed Interfaces

•Gaming

•Personal health & fitness

•Healthcare

Connected

Car

•Car entertainment

• In-vehicle networking

•Secure car access

•Secure V2X Comm.

•Radar

•Smart home and

buildings

•Smart cities - smart grid

•M2M - Industry 4.0

• Intelligent logistics

Internet of

Things

NXP: Secure Connections for a Smarter World

8

R&D in Semiconductors at three levels

Process Technology, Modelling and Characterisation

Next Generation Process Nodes, Process OptionsMore than Moore devices, Device and Circuit Models

Applications

Long term trends, selective prototypingcustomer engagements, de-risking on targeted platforms

Algorithms, Systems on Chip, Components

Advanced Media and Modem Processing, Security,Next Generation Systems on Chip, Embedded Software

RF, Mixed Signal, Digital Building BlocksExploitation of new process nodes

6nmSi Fin

Poly

HK/MG

Across the value chain, with industrial partners.

From long term visionary to market-ready concepts

Core electrical engineeringAcademic partners

IP blocks need to be de-risked at start of product

developement

Advanced nodes (65, 55, 40, 28, 22 nm) restricted to few

foundries

Centralised R&D modelNXP 2006 - 2013

Central• Research

• Process Technology• Circuit and system design• Applications

• Development• Process technologies• IC packaging• Common IP (ADCs, timers, memory, …)• Common architectures• Tools and models

• Technology roadmap• Application marketing• Fab operation• University programs• Standardization• Intellectual Property

In product groups• Product development

• Functional requirement spec• IC design• Tape-out to internal or external Fab• Validation and product release

• Product marketing and sales• Product roadmap• Development and maintenance of product

specific IP• Customer support• Product and loss responsibility

Decentralised R&D modelNXP 2014 -

Central• Development

• Process technologies – selected only• IC packaging – selected only

• Fab operation• IP shop• Open Innovation

• Technology scouting• University programs

• Standardization – coordination only• Intellectual Property

In product groups• Long term innovation• Development

• IP blocks• Architectures• Tools and models

• Product development• Functional requirement spec• IC design• Tape-out to internal or external Fab• Validation and product release

• Technology and product roadmap• Standardization• Product marketing and sales• Customer support• Product and loss responsibility

Innovation in decentralized organizations

Breakthrough projects in virtual cross-business teams

Kilby labs model – Texas Instruments Good ideas worked out in a central lab on rotary basis

Contract research Knowledge institutes, TNO, IMEC, Fraunhofer, CEA-LETI, …

Sub-contract, e.g. to suppliers – NRE

At universities

Acquisition Buy or license technology

Invest in (start-up) company

Buy (start-up) company

Open Innovation Pool competences and resources across the value chain

Open Innovation

Source: Prof. Henry Chesbrough, UC Berkeley

Open Innovation

Works very well when innovations run through the value chain

Two examples:

Smart-in-car: Automotive data in the cloud

UCER: personalized office climate

Car as sensor: bring CAN data to the Cloud

Car as a sensor: range of applications

Road authorities: benefit from road surface info Potholes, roughness, speedbumps

Public: Smart phone apps can display relevantevents Fog, heavy rain Road assistance car on rescue lane

Harsh braking – more accurate traffic jam info

Professional Drivers: Cibatax drivers improved driving style and lowered fuel consumption

This real time in-car data delivers valuable information

In-CarCAN data

DynamicMaximum

Speed

Real TimeTraffic Info

Smart phonenavigation

apps forroad users

Driving style&‘black box’info for fleet

managers

Traffic & roadcondition info

for roadauthorities

Car as sensor: bring CAN data to the Cloud

Speed real time

Braking real time Rain real time

• Smart-in-car project 2013• 200 cars• 3 months• 1.8 Bln data points

Individual Climate System with sensor network

Sensor node

Sensor node

Sensor node

Sensor node

Router RouterCoordi-nator

UCERControl & Actuation

Sensor node

Sensor node

1. Power autonomy through energy harvesting

2. Ease-of-Install with NFC

3. CMOS-based multi-modal sensing

CPU + memory

gas sensors, …

RF Tx/Rx

NFC Tag

NFC Ease-of-Install

humiditysensor

temperaturesensor

LiPo battery(30 mAh)

pressuresensor

Vbatt

monitor

Wireless sensor node

Roadmapping

COMPANY CONFIDENTIAL

.

2005 2014 2015 2016 2017 2018 2019-2024

Product Roadmap

Market Segment

Product Name

Main featuresRFS

CQS

CES

DEV

Production

Development

Concept

Product Idea

Owner:

Date:

Product Name

Main features

Product Name

Main features

Product Name

Main features

Product Name

Main features

Product Name

Main features

Products in

Volume

Production

Product Name

Main features

Product Name

Main features

NX5-00065 Template Owner M. ten Have

9

Market Segment

COMPANY CONFIDENTIAL

.

2005 2014 2015 2016 2017 2018 >>>

City/rural

Owner: Marino Strik

Date: 23 May 2014

Connected solutions for wide area fine grained sensing and control

Infrastructure monitoring, agriculture, air quality, track and trace

Personalized Climate and Comfort

Fine grained low cost sensing

Secure smart homes and buildings

Interoperable connectivity, End to end security for connected applications

Available

Trends/Needs

Energy efficient

building

Home

automation

Smart cities

NX5-00065 Template Owner M. ten Have

28

Building control

Trends & Needs Roadmap

Body

Towards 50 Bn connected devices,

>50% frugal nodes (<5 uW)

See wearable trends under Mobile

Internet of Things

COMPANY CONFIDENTIAL

Summary

Centralized vs de-centralized trade-off speed vs breakthrough innovation

Innovating in decentralized organizations Finding the optimal working mode

Open Innovation Along the value chain

Roadmapping Trends

Solutions

Technologies

Products

Discussion with audience

Do you experience a gap between

innovation and product development?

How do you balance long term innovation

versus short term operational excellence?

Hoe do you deal with roadmapping

Experience with Open innovation?

Thank you!