Fairchild Semiconductor International, Inc.

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1 Fairchild Semiconductor International, Inc. September 2006 Investor Presentation

2 Notes on Forward Looking Statements and Non- GAAP Measures Comments in this presentation other than statements of historical fact may constitute forward looking statements. Forward looking statements are based on Fairchild management s estimates and projections and are subject to various risks and uncertainties. These risks and uncertainties are described in the Company s periodic reports and other filings with the Securities and Exchange Commission (see the Business Risks section) and are available at and investor.fairchildsemi.com. Actual results may differ materially from those projected in the forward looking statements. Some data in this presentation may include non-gaap measures that we believe provide useful information about the operating performance of our businesses that should be considered by investors in conjunction with GAAP measures that we also provide. You can find a reconciliation of non-gaap to comparable GAAP measures at the Investor Relations section of our web site at Recent additions to our website at Updated Financials (through 2006 Q2, with segment revenue/gross margin breakouts) Quarterly Fact Sheet with 2006 Q2 highlights This investor presentation 2

3 Q2 Summary Continued Margin Growth Q2 average daily sales rate increased >6% sequentially Gross margins increase 90 bps to 30.8% from prior quarter Distribution re-sales increased >3% QoQ and 9% YoY Channel and internal inventories remain lean and within our target range End market demand remains healthy greatest sales & bookings strength in the industrial end market Effectively managing lead times average lead time peaked at the mid quarter then finished in the week range 3

4 Q3 Mid-Quarter Update Raised guidance to Flat to +2% from previous Flat guidance Q3 sales trend has averaged -2% QoQ for the last 4 years Order rates remained healthy cancellations were lower than expected Better matching of sales into the distribution channel to end market demand appears to be smoothing demand between Q3 and Q4...more sales growth in Q3 and less in Q4 Channel and internal inventories remain lean and within our target range Lead times tracking to same levels as Q2 4

5 Q3 Mid-Quarter Update End Markets Strongest demand in the industrial end market good order and sales rates Handset order rates have increased through the quarter and are now at very solid levels Computing demand was seasonally slow early in the quarter and began increasing through August Other end markets show normal seasonal demand pattern 5

6 2006 Strategy for Success Improve the quality of our business Ramp higher margin new products Mix out lower margin, non-core standard products Tightly manage the distribution channel POS focus Maintain inventory in the weeks of supply range Continue growing POS and market share Maintain capital expenditure discipline Budget of 6 8% of sales in 2006 Focus capacity adds on higher margin core business Capital budget drives low margin mix out discipline 6

7 Fairchild Overview

8 Geographic Footprint Overview San Jose, CA Analog & Discrete Design Salt Lake City, UT Wafer Fab Colorado Springs, CO Analog Design Wootton Bassett, England Europe Sales Headquarters Suzhou, China Assembly and Test Bucheon, South Korea Wafer Fab Korea Sales Headquarter South Portland, ME Headquarters, Wafer Fab, North American Sales Headquarters Mountaintop, PA Wafer Fab Tokyo, Japan Japan Sales Headquarters Irving, TX Customer Service Center sales: $1.4 billion employees worldwide - 8 production facilities and 5 customer service centers - 36 direct sales offices in 17 countries Product Group and Design Centers, Manufacturing Locations Regional Sales Headquarters, Customer Service Centers Penang, Malaysia Assembly and Test Singapore Asia Ops Mgmt Wafer Fab Hong Kong Asia-Pacific Sales Headquarters Cebu, Philippines Assembly and Test 8

9 Fairchild Semiconductor Overview $227.5B Semi TAM 2005 ASIC/SystemOnChip $88.9B High Performance Multi-Market Products $29.6B Power Analog/Std Linear Memory $48.5B Processing $60.5B Power Discrete All Other Power Discrete 58% Analog 20% Fairchild s 2005 Served Available Market ~ $29.6B Fairchild Q Product Mix Standard Products 22% Source: WSTS, January,

10 2006 Q2 Sales by End Market Segment Flat Panel Displays Monitors, CRTs Desktops Notebooks Disk Drives Printers, Copiers Memory Modules Cellular Handsets, Base Stations Central Office Switches Wireless Networking Routers/Hubs Displays Communications Computing 13% 7% 25% Auto 4% : 21% 15% CD/DVD Players Game Consoles TV s, VCRs, Set Top Boxes Consumer PDA s, MP3 s, Cameras White Goods, Appliances 15% Industrial: Other Industrial: Power Supplies, Adaptors Power Supplies DC-DC Power Bricks Power Adaptors Voltage Regulator Modules Source: Fairchild internal estimates Ignition, Engine Management Entertainment Body Electronics Navigation, Safety Factory Automation ATE, Instrumentation Lighting, Medical Motor Control 10

11 Fairchild Leads the Power Semi Market STMicroelectronics National Semiconductor Texas Instruments International Rectifier Renesas Technology Mitsubishi Toshiba Maxim Integrated Products ON Semiconductor Linear Technology Infineon Technologies Vishay Intertechnology Rohm Matsushita Electric Fuji Electric NEC Electronics Philips Semiconductors Sanken Electric Company Ricoh SANYO Electric Micrel Pow er Integrations Microsemi Intersil IXYS Seiko Instruments Mitsumi Electric Alpha & Omega Advanced Pow er Electronics Analog Devices Phenitec Semiconductor_Torex Semiconductor WW Analog Power Management IC and Power Discrete Leaders Fairchild Semi 15% Source: isuppli Mar. 06 $ Million in Annual Sales (2005) 11 55% Analog Power IC Power Transistor FCS Power % of Total Sales 67% 75% 77% Q2 06

12 Increasing the Quality of Business

13 Power Remains a Key Market Higher Levels of Integration Drive Increased Margins Integrate power functions into single package solutions Requires competencies in end market applications, power switch & analog control design, and advanced packaging Degree of integration is also a function of the potential market size Benefits to Our Customers Shorter design-in cycle Lower system costs Less components higher reliability Leverage our power systems expertise Benefits to Fairchild Shorter time to market Save silicon & packaging costs by optimized product design High barrier of entry Improves return on our R&D investment 13

14 Increased Functionality in Power Solutions Inputs Customer Relationships Application Size & Growth Rates Power Applications & System Knowledge Control IC Technology Power Discrete Technology Decision Making Thought Process System Partioning Silicon Technology Packaging Technology Cost Tradeoff Analysis Development Timing Value Analysis Output Self Contained Power Building Block Functions Extensible Across Markets and Products High Customer Value Cost-Effective High Volume Packaging Technology Fairchild is One of a Few Power Semiconductor Companies, Worldwide, To Offer this Unique Mix of Capabilities Across A Broad Range of Markets, Products, and Applications 14

Smart Power Modules (SPM ) SPM : 60 x 31(mm) SPM : 44 x 26.

Thermal Resistance by Ceramic-based TMT Package 2500V/1min Isolation and

Gate driving circuit (HVIC) - Control supply under-voltage protection For

sense-igbts using external shunt - Control supply under-voltage protection Input

15 Smart Power Modules (SPM ) SPM : 60 x 31(mm) SPM : 44 x 26.8(mm) SPM : 29 x 12(mm) Line-up : 600V / 1A, 2A, 3A, 5A, 10A, 15A, 20A, 30A Low Thermal Resistance by Ceramic-based TMT Package 2500V/1min Isolation and 1500V/1min Isolation Built-in Thermistor (NTC) For inverter high-side IGBTs - Gate driving circuit (HVIC) - Control supply under-voltage protection For inverter low-side IGBTs - Gate driving circuit - Short-circuit protection using sense-igbts using external shunt - Control supply under-voltage protection Input interface: 5V/3.3V CMOS/LSTTL compatible Vector control correspondence due to 3-N terminals Optimized for Motion Control 15

16 SPM Success Air Conditioning Fan Drivers From 3.5 to 2.5 Motor housing 0.5 inch Application: Brushless DC Fan motor controllers for air conditioners and air cleaners Features: SPM + Control IC(ASIC) + Hall IC Low Cost & High Performance, 180 Control Motion sensors can be eliminated PCB area reduced by 50% Motor enclosure size reduced by 20% 16

17 SPM Success - Switch Reluctance Motors (SRM) Vacuum Cleaner Drivers Heat Sink Circuit Bd. SR Motor Built-in Inverter SRM Application: SRM vacuum cleaner controllers Features: SPM + micro-controllers High reliability and high performance High thermal characteristic, SC, UV protection functions SRM delivers 50% more vacuum for the same space 17

18 SPM Success - White Goods Integration of system components 6-IGBTs 3-HVICs 1-LVICs Design Considerations Protection circuit using analog components cause time delay and noise. SPM s built-in HVIC and LVIC with protection circuit Fairchild s SPM simplifies design through an integrated inverter-controlled variable speed driver for 3-phase induction motors, low power brushless dc (BLDC) motors, and switched reluctance motors. Assembling these parts might increase manufacturing time and cause low yields. SPM, which integrates all diverse components, enhances productivity while simplifying manufacturing Manufacturing Impact 18

19 Power Supplies Switching mode off-line power supplies Off-Line Regulators, PWM Controllers, PFC ($M) Regulators ($7.4B) CAGR $1,575 $1,806 $2,073 $2,325 14% VDC 2006 Green FPS Green Low Power (low stand-by power) Full range offering from 5W-300W PWM/PFC controllers Small business with expected growth Based in consumer and expanding to high performance market Driven by power efficiency Regulations Energy Star CA Energy Commission Title 20 European-Code of Conduct on Energy Efficiency China-Energy Conservation 19

20 DC:DC Switching Regulators DC:DC Switching Regulators DC to DC Regulators ($M) V O1 >V in CAGR Regulators ($7.4B) V in V O2 <V in $3,724 $4,332 $5,021 $5,686 15% VDC 2006 Computing/Consumer Intel VRD compliant regulators System regulators Derivative products for consumer applications Ultra Portable Small IC and system footprint High efficiency for long battery life Building block switching regulators High frequency drives smaller footprint and BOM LCD Displays LED and CCFL backlighting System regulators 20

21 Fairchild is Also Committed to Developing Leadership Analog Signal Path Products High Performance Analog $12.2B High Performance Analog $20.6B Amplifiers $2.7B Interface $2.0B Amplifiers $3.3B Interface $2.8B Regulators $5.4B 14% CAGR Data Converters $2.1B Regulators $11.5B Data Converters $3.0B Source; isupply, WSTS 21

22 Video Filters / Amplifiers Amplifiers $3B Filter / Amplifiers Filter Amplify Video / Amplifier ($M) CAGR $455 $509 $569 $634 12% Selantek Mar 2006 Set Top Box Integrated solution provides superior signal conditioning 1/3 of all STB contain Fairchild video filters High/Standard Definition Progressive Scan, IOP DVD, DigTV, Ultraportable Expansion to consumer applications Low cost filter drivers Derivative from STB High Performance Amplifiers Growth market that demands performance Proprietary fab process Better performance at lower power Launched May

23 Converters Video Converters $2.5B Analog Switch Audio Switch ($M) CAGR $186 $205 $226 $246 10% Selantek Mar 2006 USB Audio Switches used to turn audio outputs on/off in cellular handsets USB Growth area providing USB capability in handsets Connector Sharingswitch between power and data Video Video switching for handsets HDMI 23

24 Interface Interface $2.4B userdes Mobile SerDes ($M) CAGR $16 $65 $135 $250 99% isuppli 2006/FSC Cellular Handsets Simple design Reduced EMI Improved reliability (70 to 4 channels) 1/7 Power Small Displays Video Cameras Printers Video displays White goods Leadership Technology Gen 3 Gen 2 Fin 12/

25 Financials

26 Cycle Management Reducing Financial Variation Tracking Sales to POS $450.0 $ % Peak - Trough Variation $350.0 $300.0 $ % Peak - Trough Variation $200.0 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 FCS Sales $328.4 $369.2 $399.7 $414.3 $409.7 $379.4 $362.8 $346.0 $345.5 $370.8 $409.5 Channel POS $261.8 $272.8 $276.7 $272.8 $274.3 $265.5 $253.9 $283.3 $296.4 $307.5 $298.8 FCS Sales Channel POS 26

27 Cycle Management Reducing Financial Variation 70% 60% 50% 40% 30% Target 50% reduction GM variation 20% 10% 0% -10% -20% Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q % -40% Gross Margin - YoY Variation 27

28 Target Business Model 3 Year Horizon APG FPG SPG Total Company Annual Sales Growth +20% +10% % +10% Gross Margin R&D (% of sales) SG&A (% of sales) Operating Margin 45-50% 15% 12% 16-21% 35-37% 5% 12% 17-19% 23-27% 2% 9% 11-15% ~36-38% ~7% ~11% ~16-18% Note: This data includes stock option expense but excludes amortization of acquisition related intangibles 28

29 Adjusting the Capital Expenditure Model Capex % of Sales 20.00% 10.00% 6 8% 0.00% Leverage last 5 years of investments to reduce capex and D&A for at least the next few years 29

30 Strong Balance Sheet Management ($ in millions) 7/2/ /30/2001 Cash, marketable investments $523 $504 Total debt: $100M Revolver $19 $0 $375M Term B Loan $375 $0 10 1/8% notes due 3/07 $0 $ /8% notes due 10/07 $0 $ /2% notes due 2/09 $0 $350 5% Converts due 11/08 $200 $200 Other $0 $4 Total debt $594 $1,139 Net debt $72 $634 Shareholders' equity $1,083 $808 Debt / Equity 0.5x 1.4x 30

31 Forward Guidance Q3 sales expected to be flat to up 2% sequentially Q3 gross margins forecast to be flat to +50 bps sequentially R&D and SG&A, including equity compensation, expected to remain at % of sales in Q3 Equity based compensation forecast to be in the $6 7 million range in Q3 Effective tax rate expected to be approximately 15% in Q3 31

32 Fairchild: Building on the Momentum New product execution ramp leadership analog and integrated power products Mix out lower margin products capex discipline to drive aggressive product mix improvement Tightly manage the channel...drive POS share gain while keeping inventories at roughly the Q4 05 ending levels Continue reducing debt and lowering interest expense strong cash flow 32

Fairchild Semiconductor International, Inc.

Fairchild Semiconductor International, Inc. Matt Towse, Sr. Vice President and Chief Financial Officer CSFB Global Semiconductor & Capital Equipment Conference March 2, 2005 Notes on Forward Looking Statements