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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
For the transition period from to
Commission file number: 1-13546

STMicroelectronics N.V.
(Exact name of Registrant as specified in its charter)

Not Applicable
(Translation of Registrant’s name into English)

The Netherlands
(Jurisdiction of incorporation or organization)
WTC Schiphol Airport
Schiphol Boulevard 265
1118 BH Schiphol
The Netherlands
(Address of principal executive offices)
Jean-Marc Chery
39, Chemin du Champ des Filles
1228 Plan-Les-Ouates
Geneva
Switzerland
Tel: +41 22 929 29 29
Fax: +41 22 929 29 88
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of Each Class Trading Symbol(s) Name of each exchange on which registered
Common shares, nominal value €1.04 per share STM New York Stock Exchange
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
(Title of Class)
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual
report.
903,865,763 common shares outstanding as of December 31, 2022
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒Yes ☐No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934. ☐Yes ☒No
Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. ☒Yes ☐No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). ☒Yes ☐No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company.
See definition of “large accelerated filer”, “accelerated filer”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐
Non-accelerated filer ☐ Emerging growth company ☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected
not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the
Exchange Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting
Standards Codification after April 5, 2012.
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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received
by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ☒ International Financial Reporting Standards as issued Other ☐
by the International Accounting Standards Board ☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to
follow. ☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒
No
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☐ Yes ☐ No
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TABLE OF CONTENTS

Page

PART I......................................................................................................................................................... 6

Item 1. Identity of Directors, Senior Management and Advisers........................................... 6

Item 2. Offer Statistics and Expected Timetable.................................................................... 6
Item 3. Key Information ......................................................................................................... 6
Item 4. Information on the Company ..................................................................................... 23
Item 5. Operating and Financial Review and Prospects......................................................... 38
Item 6. Directors, Senior Management and Employees ......................................................... 67
Item 7. Major Shareholders and Related Party Transactions ................................................. 105
Item 8. Financial Information................................................................................................. 106
Item 9. Listing ........................................................................................................................ 107
Item 10. Additional Information............................................................................................... 107
Item 11. Quantitative and Qualitative Disclosures About Market Risk................................... 121
Item 12. Description of Securities Other than Equity Securities.............................................. 124

PART II ....................................................................................................................................................... 125

Item 13. Defaults, Dividend Arrearages and Delinquencies .................................................... 125

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds ....... 125
Item 15. Controls and Procedures ............................................................................................ 125
Item 16.
Item 16A. Audit Committee Financial Expert ............................................................................ 128
Item 16B. Code of Ethics ............................................................................................................ 128
Item 16C. Principal Accountant Fees and Services .................................................................... 128
Item 16D. Exemptions from the Listing Standards for Audit Committees................................. 129
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.................... 129
Item 16F. Change in Registrant’s Certifying Accountant. ......................................................... 130
Item 16G. Corporate Governance ............................................................................................... 130

PART III ...................................................................................................................................................... 132

Item 17. Financial Statements .................................................................................................. 132

Item 18. Financial Statements .................................................................................................. 132
Item 19. Exhibits ...................................................................................................................... 132

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PRESENTATION OF FINANCIAL AND OTHER INFORMATION

In this annual report on Form 20-F (the “Form 20-F”), references to “we”, “us” and “Company” are to
STMicroelectronics N.V. together with its consolidated subsidiaries, references to “EU” are to the European
Union, references to “€” and the “Euro” are to the Euro currency of the EU, references to the “United States”
and the “U.S.” are to the United States of America and references to “$” and to “U.S. dollars” are to United
States dollars. References to “mm” are to millimeters and references to “nm” are to nanometers.

We have compiled market size and our market share data in this Form 20-F using statistics and other
information obtained from several third-party sources. Except as otherwise disclosed herein, all references to
trade association data are references to World Semiconductor Trade Statistics (“WSTS”). Certain terms used in
this Form 20-F are defined in “Certain Terms”.

We report our financial statements in U.S. dollars and prepare our Consolidated Financial Statements in
accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). We also report
certain non-U.S. GAAP financial measures (free cash flow and net financial position), which are derived from
the amounts presented in the financial statements prepared under U.S. GAAP. Furthermore, we are required by
Dutch law to report our Statutory and Consolidated Financial Statements, in accordance with International
Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”)
and adopted by the European Union. The IFRS financial statements are reported separately and can differ
materially from the statements reported in U.S. GAAP.

Various amounts and percentages used in this Form 20-F have been rounded and, accordingly, they may
not total 100%.

We and our affiliates own or otherwise have rights to the trademarks and trade names, including those
mentioned in this Form 20-F, used in conjunction with the marketing and sale of our products.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements contained in this Form 20-F that are not historical facts, particularly in “Item 3.
Key Information — Risk Factors”, “Item 4. Information on the Company” and “Item 5. Operating and Financial
Review and Prospects” and “— Business Outlook” 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) that are based on management’s current views and
assumptions, and are conditioned upon and also involve known and unknown risks and uncertainties that could
cause actual results, performance or events to differ materially from those anticipated by such statements due to,
among other factors:
• changes in global trade policies, including the adoption and expansion of tariffs and trade barriers,
that could affect the macro-economic environment and adversely impact the demand for our
products;
• uncertain macro-economic and industry trends (such as inflation and fluctuations in supply chains),
which may impact production capacity and end-market demand for our products;
• customer demand that differs from projections;
• the ability to design, manufacture and sell innovative products in a rapidly changing technological
environment;
• changes in economic, social, public health, labor, political, or infrastructure conditions in the
locations where we, our customers, or our suppliers operate, including as a result of macro-
economic or regional events, geopolitical and military conflicts (including the ongoing conflict
between Russia and Ukraine), social unrest, labor actions, or terrorist activities;
• unanticipated events or circumstances, which may impact our ability to execute our plans and/or
meet the objectives of our R&D and manufacturing programs, which benefit from public funding;
• financial difficulties with any of our major distributors or significant curtailment of purchases by
key customers;

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• the loading, product mix, and manufacturing performance of our production facilities and/or our
required volume to fulfill capacity reserved with suppliers or third-party manufacturing providers;
• availability and costs of equipment, raw materials, utilities, third-party manufacturing services and
technology, or other supplies required by our operations (including increasing costs resulting from
inflation);
• the functionalities and performance of our IT systems, which are subject to cybersecurity threats and
which support our critical operational activities including manufacturing, finance and sales, and any
breaches of our IT systems or those of our customers, suppliers, partners and providers of third-
party licensed technology;
• theft, loss, or misuse of personal data about our employees, customers, or other third parties, and
breaches of data privacy legislation;
• the impact of intellectual property (“IP”) claims by our competitors or other third parties, and our
ability to obtain required licenses on reasonable terms and conditions;
• changes in our overall tax position as a result of changes in tax rules, new or revised legislation, the
outcome of tax audits or changes in international tax treaties which may impact our results of
operations as well as our ability to accurately estimate tax credits, benefits, deductions and
provisions and to realize deferred tax assets;
• variations in the foreign exchange markets and, more particularly, the U.S. dollar exchange rate as
compared to the Euro and the other major currencies we use for our operations;
• the outcome of ongoing litigation as well as the impact of any new litigation to which we may
become a defendant;
• product liability or warranty claims, claims based on epidemic or delivery failure, or other claims
relating to our products, or recalls by our customers for products containing our parts;
• natural events such as severe weather, earthquakes, tsunamis, volcano eruptions or other acts of
nature, the effects of climate change, health risks and epidemics or pandemics such as the COVID-
19 pandemic in locations where we, our customers or our suppliers operate;
• increased regulation and initiatives in our industry, including those concerning climate change and
sustainability matters and our goal to become carbon neutral by 2027;
• potential loss of key employees and potential inability to recruit and retain qualified employees as a
result of epidemics or pandemics such as the COVID-19 pandemic, remote-working arrangements
and the corresponding limitation on social and professional interaction;
• the duration and the severity of the global outbreak of COVID-19 may continue to negatively
impact the global economy in a significant manner for an extended period of time, and also could
materially adversely affect our business and operating results;
• industry changes resulting from vertical and horizontal consolidation among our suppliers,
competitors, and customers; and
• the ability to successfully ramp up new programs that could be impacted by factors beyond our
control, including the availability of critical third-party components and performance of
subcontractors in line with our expectations.

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.
Certain forward-looking statements can be identified by the use of forward-looking terminology, such as
“believes”, “expects”, “may”, “are expected to”, “should”, “would be”, “seeks” or “anticipates” or similar
expressions or the negative thereof or other variations thereof or comparable terminology, or by discussions of
strategy, plans or intentions. Some of these risk factors are set forth and are discussed in more detail in “Item 3.
Key Information — Risk Factors”. 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 Form
20-F as anticipated, believed or expected. We do not intend, and do not assume any obligation, to update any
industry information or forward-looking statements set forth in this Form 20-F to reflect subsequent events or
circumstances.

Unfavorable changes in the above or other factors listed under “Item 3. Key Information — Risk Factors”
from time to time in our Securities and Exchange Commission (“SEC”) filings, could have a material adverse
effect on our business and/or financial condition.

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PART I

Item 1. Identity of Directors, Senior Management and Advisers

Not applicable.

Item 2. Offer Statistics and Expected Timetable

Not applicable.

Item 3. Key Information

Selected Financial Data
The table below sets forth our selected consolidated financial data for each of the years in the five-year
period ended December 31, 2022. Such data have been derived from our audited Consolidated Financial
Statements. Audited Consolidated Financial Statements for each of the years in the three-year period ended
December 31, 2022, including the Notes thereto (collectively, the “Consolidated Financial Statements”), are
included elsewhere in this Form 20-F, while data for prior periods have been derived from our audited
Consolidated Financial Statements used in such periods.

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The following information should be read in conjunction with “Item 5. Operating and Financial Review
and Prospects” and the audited Consolidated Financial Statements and the related Notes thereto included in
“Item 18. Financial Statements” in this Form 20-F.

Year Ended December 31,

2022 2021 2020 2019 2018
(In millions except per share and ratio data)
Consolidated Statements of Income Data:
Net sales $ 16,083 $ 12,729 $ 10,181 $ 9,529 $ 9,612
Other revenues 45 32 38 27 52
Net revenues 16,128 12,761 10,219 9,556 9,664
Cost of sales (8,493) (7,435) (6,430) (5,860) (5,803)
Gross profit 7,635 5,326 3,789 3,696 3,861
Operating expenses:
Selling, general and administrative (1,454) (1,323) (1,109) (1,093) (1,095)
Research and development (1,901) (1,723) (1,548) (1,498) (1,398)
Other income and expenses, net 159 141 202 103 53
Impairment, restructuring charges and other related
closure costs — (2) (11) (5) (21)
Operating income 4,439 2,419 1,323 1,203 1,400
Interest income (expense), net(1) 58 (29) (20) 1 (7)
Other components of pension benefit costs (11) (10) (12) (16) (11)
Income on equity-method investments — — 2 1 8
Loss on financial instruments, net — (43) (26) — (1)
Income before income taxes and noncontrolling interest(1) 4,486 2,337 1,267 1,189 1,389
Income tax expense (520) (331) (159) (156) (96)
Net income(1) 3,966 2,006 1,108 1,033 1,293
Net income attributable to noncontrolling interest (6) (6) (2) (1) (6)
Net income attributable to parent company(1) 3,960 2,000 1,106 1,032 1,287
Earnings per share (basic) attributable to parent company
stockholders 4.37 2.21 1.24 1.15 1.43
Earnings per share (diluted) attributable to parent company
stockholders(1) 4.19 2.16 1.20 1.14 1.41
Number of shares used in calculating earnings per share
(basic) 905.6 904.3 894.6 894.3 899.4
Number of shares used in calculating earnings per share
(diluted)(1) 946.2 924.8 919.7 903.6 911.0
Consolidated Balance Sheets Data (end of period):
Cash and cash equivalents 3,258 3,225 3,006 2,597 2,266
Restricted cash — — — 10 —
Short-term deposits 581 291 581 4 —
Marketable securities 679 — 133 133 330
Total assets 19,982 15,540 14,454 11,868 10,867
Net assets(1) 12,758 9,273 8,506 7,111 6,424
Short-term debt 175 143 795 173 146
Long-term debt(1) 2,542 2,396 1,826 1,899 1,764
Total parent company stockholders’ equity 12,693 9,209 8,448 7,043 6,359
Common stock and Additional Paid-in Capital(1) 3,788 3,690 4,219 4,149 4,000
Other Data:
Dividend per share 0.240 0.240 0.168 0.240 0.240
Capital expenditures, net of proceeds from sales (3,524) (1,828) (1,279) (1,174) (1,262)
Net cash from operating activities 5,202 3,060 2,093 1,869 1,845
Depreciation and amortization 1,216 1,045 923 854 791
Debt-to-equity ratio(2) 0.21 0.28 0.31 0.29 0.30

(1) On January 1, 2022, we adopted the new U.S. GAAP guidance applicable to 2020 Senior Unsecured Convertible Bonds. Prior year
comparative periods have not been restated.
(2) Debt-to-equity ratio is the ratio between our total financial debt (short-term debt and long-term debt) and our total parent company
stockholder’s equity.

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RISK FACTORS
Risks Related to the Semiconductor Industry which Impact Us
We, and the semiconductor industry as a whole, may be impacted by changes in, or uncertainty about, global,
regional and local economic, political, legal, regulatory and social environments as well as climate change.
Changes in, and uncertainty about, economic, political, legal, regulatory and social conditions pose a risk
as consumers and businesses may postpone spending in response to factors such as curtailment of trade and
other business restrictions, financial market volatility, interest rate fluctuations, shifts in inflationary and
deflationary expectations, lower capital and productivity growth, unemployment, negative news, declines in
income or asset values and/or other factors. Such global, regional and local conditions could have a material
adverse effect on customer and end-market demand for our products, thus materially adversely affecting our
business and financial condition.

The ongoing geopolitical conflict between Russia and Ukraine has resulted in the U.S. and certain other
countries imposing sanctions on Russia. Any further consequences of this conflict could include a risk of further
sanctions, embargoes, regional instability, geopolitical shifts and adverse effects on macro-economic conditions,
currency exchange rates and financial markets. This could lead to further disruption to international commerce
and the global economy, and could have a negative effect on our ability to sell to, ship products to, collect
payments from, and support customers in certain regions based on trade restrictions, embargoes, logistics
restrictions and export control law restrictions. We may also experience a shortage of certain semiconductor
components and delays in shipments due to supply chain disruptions caused by geopolitical conflicts such as the
ongoing conflict between Russia and Ukraine.

The institution of trade tariffs globally, as well as the threat thereof, could negatively impact economic
conditions, which could have negative repercussions for our business. In particular, trade protection and national
security policies of the U.S. and Chinese governments, including tariffs, trade restrictions, export restrictions
and the placing of companies on restricted entity lists, have and may continue to limit or prevent us from
transacting business with certain of our Chinese customers or suppliers; limit, prevent or discourage certain of
our Chinese customers or suppliers from transacting business with us; or make it more expensive to do so. If
disputes were to arise under any of our agreements with other parties conducting business in China, the
resolution of such dispute may be subject to the exercise of discretion by the Chinese government, or agencies
of the Chinese government, which may have a material adverse effect on our business. In addition, we could
face increased competition as a result of China's programs to promote a domestic semiconductor industry and
supply chains (including the Made in China 2025 campaign).

Trade policy changes could trigger retaliatory actions by affected countries, which could have a negative
impact on our ability to do business in affected countries or lead to reduced purchases of our products by foreign
customers, leading to increased costs of components contained in our products, increased manufacturing costs of
our products, currency exchange rate volatility, and higher prices for our products in foreign markets. Further,
protectionist measures, laws or governmental policies may encourage our customers to relocate their
manufacturing capacity or supply chain to their own respective countries or other countries, or require their
respective contractors, subcontractors and relevant agents to do so, which could impair our ability to sustain our
current level of productivity and manufacturing efficiency.

We, and the semiconductor industry as a whole, face greater risks due to the international nature of the
semiconductor business, including in the countries where we, our customers or our suppliers operate, such as:
• instability of foreign governments, including the threat of war, military conflict, civil unrest, regime
changes, mass migration and terrorist attacks;
• natural events such as severe weather, earthquakes and tsunamis, or the effects of climate change;
• epidemics or pandemics such as disease outbreaks or more recently COVID-19 and other health
related issues;
• changes in, or uncertainty about, laws, regulations (including executive orders) and policies
affecting trade and investment, including following Brexit and including through the imposition of
trade and travel restrictions, government sanctions, local practices which favor local companies and
constraints on investment;

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• complex and varying government regulations and legal standards, particularly with respect to export
control regulations and restrictions, customs and tax requirements, data privacy, IP and anti-
corruption; and
• differing practices of regulatory, tax, judicial and administrative bodies, including with regards to
the interpretation of laws, governmental approvals, permits and licenses.

The semiconductor industry is cyclical and downturns in the semiconductor industry can negatively affect
our results of operations and financial condition.
The semiconductor industry is cyclical and has been subject to significant downturns from time to time, as
a result of global economic conditions, as well as industry-specific factors, such as built-in excess capacity,
fluctuations in product supply, product obsolescence and changes in end-customer preferences. The COVID-19
pandemic has caused a significant contraction in the global economy, and there is considerable uncertainty as to
its severity and duration. See “Item 3. Key Information — Risk Factors — Risks Related to the Semiconductor
Industry which Impact Us — We, and the semiconductor industry as a whole, may be impacted by changes in,
or uncertainty about, global, regional and local economic, political, legal, regulatory and social environments as
well as climate change.”

Downturns are typically characterized by reduction in overall demand, accelerated erosion of selling
prices, reduced revenues and high inventory levels, any of which could result in a significant deterioration of our
results of operations. Such macro-economic trends typically relate to the semiconductor industry as a whole
rather than to the individual semiconductor markets to which we sell our products. To the extent that industry
downturns are concurrent with the timing of new increases in production capacity or introduction of new
advanced technologies in our industry, the negative effects on our business from such industry downturns may
also be more severe. We have experienced revenue volatility and market downturns in the past and expect to
experience them in the future, which could have a material adverse impact on our results of operations and
financial condition.

The recent increase in inflation rates in the markets in which we operate may lead us to experience higher
labor costs, energy costs, water costs, transportation costs, wafer costs and other costs for raw materials from
suppliers. Our suppliers may raise their prices, and in the competitive markets in which we operate, we may not
be able to make corresponding price increases to preserve our gross margins and profitability due to market
conditions and competitive dynamics. Additionally, any such increase in prices may not be accepted by our
customers.

The duration and the severity of the global outbreak of COVID-19 has impacted and may continue to impact
the global economy and also could adversely affect our business, financial condition and results of
operations.
The COVID-19 pandemic has resulted in authorities imposing, and businesses and individuals
implementing, numerous measures to try to contain the virus, including travel bans and restrictions, shelter-in-
place and stay-at-home orders, quarantines and social distancing guidelines. While to date we have not seen a
significant impact on our manufacturing facilities or our supply chain – the ability of our suppliers to deliver on
their commitments to us, our ability to ship our products to our customers and general consumer demand for our
products may be negatively impacted by the pandemic and/or government responses thereto.

Many of our products and services are considered to be essential under national and local guidelines. As
such, we have generally continued to operate in each of the jurisdictions where we are present. However, certain
of our facilities have not been able to operate at optimal capacity and any future restrictive measures may have
negative impact on our operations, supply chain and transportation networks. In addition, our customers and
suppliers have experienced, and may in the future experience, disruptions in their operations and supply chains,
which can result in delayed, reduced, or cancelled orders, or collection risks, and which may adversely affect
our results of operations and financial condition.

The COVID-19 pandemic has adversely affected and may continue to adversely affect the economies and
financial markets of many countries, and may result in a further prolonged period of regional, national, and
global economic slowdown. In response to the COVID-19 pandemic, governments across the world have and
are expected to spend significant amounts to fund disease control measures, support healthcare infrastructure,
support businesses and revive their economies. Governments could look to re-direct resources and implement

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austerity measures in the future to balance public finances, which could result in reduced economic activity.
Any further economic downturn could reduce overall demand for our products, accelerate the erosion of selling
prices, lead to reduced revenues and higher inventory levels, any of which could result in a significant
deterioration of our results of operations and financial condition.

The COVID-19 pandemic has caused us to modify our business practices, including with respect to work-
from home policies, employee travel, the cancellation of physical participation in meetings, events, and
conferences, and social distancing measures. Although these changes have not led to a significant impact on our
business or results of operations, we could be negatively affected in the future if government policies further
restrict the ability of our employees to perform their functions or if our employees contract or are exposed to
COVID-19. In addition, work-from-home and other measures introduce additional operational risks, including
cybersecurity risks. There is no certainty that such measures will be sufficient to mitigate the risks posed by the
virus, and illness and workforce disruptions could lead to unavailability of key personnel and harm our ability to
perform critical functions.

The COVID-19 pandemic has led to increased disruption and volatility in capital markets and credit
markets. Unanticipated consequences of this pandemic and resulting economic uncertainty could adversely
affect our liquidity and capital resources in the future.

The degree to which the COVID-19 pandemic impacts our results will depend on future developments,
which are highly uncertain and cannot be predicted, including, but not limited to, the duration and severity of the
pandemic, the actions taken to contain the virus or treat its impact, other actions taken by governments,
businesses, and individuals in response to the virus and resulting economic disruption, and how quickly and to
what extent normal economic and operating conditions can resume. We are unable to predict the extent of the
impact of the pandemic on our customers, suppliers, vendors, and other partners, and their financial conditions,
but a material effect on these parties could also materially adversely affect us.

Given the continued and substantial economic uncertainty and volatility created by the COVID-19
pandemic, it is difficult to predict the nature and extent of impacts on demand for our products. For example, the
increased demand for certain of our products that benefited as a result of work- and learn-from-home dynamics
may not continue as the pandemic progresses or subsides. Similarly, even as the pandemic progresses or
subsides, products for which sales have declined or where costs have increased could continue to experience
lower sales or higher costs.

The impact of the COVID-19 pandemic can also exacerbate other risks discussed herein, which could in
turn have a material adverse effect on us. Developments related to COVID-19 have been unpredictable, and
additional impacts and risks may arise that we are not aware of or able to respond to appropriately.

We may not be able to match our production capacity to demand.

As a result of the cyclicality and volatility of the semiconductor industry, it is difficult to predict future
developments in the markets we serve, and, in turn, to estimate requirements for production capacity. If our
markets, start-up or ramp-ups in manufacturing operations are not efficiently executed, major customers or
certain product designs or technologies do not perform as well as we have anticipated, or if demand is impacted
by factors outside of our or our customers’ control, such as the COVID-19 pandemic, we risk unused capacity
charges, write-offs of inventories and losses on products, and we could be required to undertake restructuring
and transformation measures that may involve significant charges to our earnings. Furthermore, during certain
periods, we have also experienced increased demand in certain market segments and product technologies,
which has led to a shortage of capacity, an increase in the lead times of our delivery to customers and, in certain
instances, being required to enter into agreements with our suppliers with onerous terms, such as take-or-pay
arrangements.

The global supply of semiconductor industry fabrication capacity is currently not sufficient to meet the
demand for semiconductor products. Any shortage of our capacity and the capacity of our sub-contractors may
lead to us being unable to service some of our customers, which may result in adverse effects on our customer
relationships and in liability claims. Further, as a result of this supply imbalance, the industry in general has
experienced a high level of profitability and gross margins, which may not be sustainable over the long-term.

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Competition in the semiconductor industry is intense, and we may not be able to compete successfully if our
product design technologies, process technologies and products do not meet market requirements.
Furthermore, the competitive environment of the industry has resulted, and is expected to continue to result,
in vertical and horizontal consolidation among our suppliers, competitors and customers, which may lead to
erosion of our market share, impact our ability to compete and require us to restructure our operations.
We compete in different product lines to various degrees on certain characteristics, for example, price,
technical performance, product features, product design, product availability, process technology, manufacturing
capabilities and sales and technical support. Given the intense competition in the semiconductor industry, if our
products do not meet market requirements based on any of these characteristics, our business, financial
condition and results of operations could be materially adversely affected. Our competitors may have a stronger
presence in key markets and geographic regions, greater name recognition, larger customer bases, greater
government support and greater financial, research and development, sales and marketing, manufacturing,
distribution, technical and other resources than we do. These competitors may be able to adapt more quickly to
changes in the business environment, to new or emerging technologies and to changes in customer requirements.

The semiconductor industry is intensely competitive and characterized by the high costs associated with
developing marketable products and manufacturing technologies as well as high levels of investment in
production capabilities. As a result, the semiconductor industry has experienced, and is expected to continue to
experience, significant vertical and horizontal consolidation among our suppliers, competitors and customers.
Consolidation in the semiconductor industry could erode our market share, negatively impact our ability to
compete and require us to increase our R&D effort, engage in mergers and acquisitions and/or restructure our
operations.

Risks Related to Our Operations

Our high fixed costs could adversely impact our results.
Our operations are characterized by high fixed or other costs which are difficult to reduce, including costs
related to manufacturing, particularly as we operate our own manufacturing facilities, and the employment of
our highly skilled workforce. When demand for our products decreases, competition increases or we fail to
forecast demand accurately, we may be driven to reduce prices and we may not always be able to decrease our
total costs in line with resulting revenue declines. As a result, the costs associated with our operations may not
be fully absorbed, leading to unused capacity charges, higher average unit costs and lower gross margins,
adversely impacting our results.

Our capital needs are high compared to those competitors who do not manufacture their own products and
we may need additional funding in the coming years to finance our investments, to purchase other companies
or technologies developed by third parties or to refinance our maturing indebtedness.
As a result of our choice to maintain control of a large portion of our manufacturing technologies and
capabilities, we may require significant capital expenditure to maintain or upgrade our facilities if our facilities
become inadequate in terms of capacity, flexibility and location. We monitor our capital expenditures taking
into consideration factors such as trends in the semiconductor market, customer requirements and capacity
utilization. These capital expenditures may increase in the future if we decide to upgrade or expand the capacity
of our manufacturing facilities, purchase or build new facilities or increase investments supporting key strategic
initiatives. For instance, we may be unable to successfully maintain and operate large infrastructure projects.
Such increased capital expenditures associated with large infrastructure projects and strategic initiatives might
not achieve profitability or we may be unable to utilize infrastructure projects to full capacity. There can also be
no assurance that future market demand and products required by our customers will meet our expectations. We
also may need to invest in other companies, in IP and/or in technology developed either by us or by third parties
to maintain or improve our position in the market or to reinforce our existing business. Failure to invest
appropriately and in a timely manner or to successfully integrate any recent or future business acquisitions may
prevent us from achieving the anticipated benefits and could have a material adverse effect on our business and
results of operations.

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The foregoing may require us to secure additional financing, including through the issuance of debt,
equity or both. The timing and the size of any new share or bond offering would depend upon market conditions
as well as a variety of other factors. In addition, the capital markets may from time to time offer terms of
financing that are particularly favorable. We cannot exclude that we may access the capital markets
opportunistically to take advantage of market conditions. Any such transaction or any announcement concerning
such a transaction could materially impact the market price of our common shares. If we are unable to access
capital on acceptable terms, this may adversely affect our business and results of operations.

Our operating results depend on our ability to obtain quality supplies on commercially reasonable terms. As
we depend on a limited number of suppliers for materials, equipment and technology, we may experience
supply disruptions if suppliers interrupt supply, increase prices or experience material adverse changes in
their financial condition.
Our ability to meet our customers’ demand to manufacture our products depends upon obtaining adequate
supplies of quality materials on a timely basis and on commercially reasonable terms. Certain materials are
available from a limited number of suppliers or only from a limited number of suppliers in a particular region.
We purchase certain materials whose prices on the world markets have fluctuated significantly in the past and
may fluctuate significantly in the future. Although supplies for most of the materials we currently use are
adequate, shortages could occur in various essential materials due to interruption of supply or increased demand
in the industry. For instance, epidemics or pandemics such as the COVID-19 pandemic could cause disruptions
from the temporary closure of suppliers’ facilities or delays and reduced export or shipment of various materials.
Geopolitical conflicts such as the ongoing conflict between Russia and Ukraine could also disrupt supply chains
and cause shortages of certain semiconductor components and corresponding delays in shipments. Any such
shortage may impact different geographical markets disproportionately, leading to shortages or unavailability of
supplies in specific areas and higher transportation costs. In addition, the costs of certain materials may increase
due to recent inflationary rates and market pressures and we may not be able to pass on such cost increases to
our customers.

We also purchase semiconductor manufacturing equipment and third-party licensed technology from a
limited number of suppliers and providers and, because such equipment and technology are complex, it is
difficult to replace one supplier or provider with another or to substitute one piece of equipment or type of
technology for another. In addition, suppliers and providers may extend lead times, limit our supply, increase
prices or change contractual terms related to certain manufacturing equipment and third-party licensed
technology, any of which could adversely affect our results. Furthermore, suppliers and technology providers
tend to focus their investments on providing the most technologically advanced equipment, materials and
technology and may not be able to address our requirements for equipment, materials or technology of older
generations. Although we work closely with our suppliers and providers to avoid such shortages, there can be no
assurance that we will not encounter these problems in the future.

Consolidation among our suppliers or vertical integration among our competitors may limit our ability to
obtain sufficient quantities of materials, equipment and/or technology on commercially reasonable terms and
engage in mergers and acquisitions. In certain instances, we may be required to enter into agreements with our
suppliers with onerous terms, such as take-or-pay arrangements. If we are unable to obtain supplies of materials,
equipment or technology in a timely manner or at all, or if such materials, equipment or technology prove
inadequate or too costly, our results of operations could be adversely affected.

Our financial results can be affected by fluctuations in exchange rates, principally in the value of the U.S.
dollar.
Currency exchange rate fluctuations affect our results of operations because our reporting currency is the
U.S. dollar, in which we receive the major portion of our revenues, while, more importantly, we incur a limited
portion of our revenue and a significantly higher portion of our costs in currencies other than the U.S. dollar. A
significant variation of the value of the U.S. dollar against the principal currencies that have a material impact
on us (primarily the Euro, but also certain other currencies of countries where we have operations, such as the
Singapore dollar) could result in a favorable impact, net of hedging, on our net income in the case of an
appreciation of the U.S. dollar, or a negative impact, net of hedging, on our net income if the U.S. dollar
depreciates relative to these currencies, in particular with respect to the Euro.

In order to reduce the exposure of our financial results to the fluctuations in exchange rates, our principal
strategy has been to balance as much as possible the proportion of sales to our customers denominated in U.S.
dollars with the amount of purchases from our suppliers denominated in U.S. dollars and to reduce the weight of

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the other costs, including depreciation, denominated in Euros and in other currencies. In order to further reduce
our exposure to U.S. dollar exchange rate fluctuations, we have hedged certain line items on our consolidated
statements of income, in particular with respect to a portion of the cost of sales, the majority of the R&D
expenses and certain SG&A expenses located in the Euro zone. We also hedge certain manufacturing costs,
included within the cost of sales, denominated in Singapore dollars. There can be no assurance that our hedging
transactions will prevent us from incurring higher Euro-denominated manufacturing costs and/or operating
expenses when translated into our U.S. dollar-based accounts. See “Item 5. Operating and Financial Review and
Prospects — Impact of Changes in Exchange Rates” and “Item 11. Quantitative and Qualitative Disclosures
About Market Risk”.

Our operating results may vary significantly from quarter to quarter and annually and may also differ
significantly from our expectations or guidance.
Our operating results are affected by a wide variety of factors that could materially and adversely affect
revenues and profitability or lead to significant variability of our operating results from one period to the next.
These factors include changes in demand from our key customers, capital requirements, inventory management,
availability of funding, competition, new product developments, start of adoption of our new products by
customers, technological changes, manufacturing or supplier issues and effective tax rates. In addition, in
periods of industry overcapacity or when our key customers encounter difficulties in their end-markets or
product ramps, orders are more exposed to cancellations, reductions, price renegotiation or postponements,
which in turn reduce our ability to forecast the next quarter or full year production levels, revenues and margins.
As a result, we may not meet our financial targets, which could in turn have an impact on our reputation or
brand. For these reasons and others that we may not yet have identified, our revenues and operating results may
differ materially from our expectations or guidance as visibility is reduced. See “Item 4. Information on the
Company — Backlog”.

If our external silicon foundries or back-end subcontractors fail to perform, this could adversely affect our
business prospects, financial condition and results of operations.
We currently use external silicon foundries and back-end subcontractors for a portion of our
manufacturing activities. Our external silicon foundries or back-end subcontractors are currently unable to
satisfy our demand as a result of an increase in demand across our industry and disruptions due to the COVID-
19 pandemic, and we expect such limitation in capacity to continue through 2023. This limitation on our ability
to satisfy our demand may extend beyond 2023, and our external silicon foundries and back-end subcontractors
may experience further inability to satisfy our demand as a result of competing orders, disruptions due to the
COVID-19 pandemic or otherwise or may experience manufacturing difficulties, delays or reduced yields. Any
limitation on the ability of our external silicon foundries and back-end subcontractors to satisfy our demand may
cause our results of operations and ability to satisfy the demand of our customers to suffer. Likewise, if we are
unable to meet our commitments to silicon foundries and back-end subcontractors, our results of operations
could suffer. Prices for these services also vary depending on capacity utilization rates at our external silicon
foundries and back-end subcontractors, quantities demanded and product and process technology. Such
outsourcing costs can vary materially and, in cases of industry shortages, they can increase significantly,
negatively impacting our business prospects, financial condition and results of operations.

Our manufacturing processes are highly complex, costly and potentially vulnerable to impurities, disruptions
or inefficient implementation of production changes or interruptions that can significantly increase our costs
and delay product shipments to our customers.
Our manufacturing processes are highly complex, require advanced and increasingly costly equipment and
are continuously modified or maintained in an effort to improve yields and product performance and lower the
cost of production.

Furthermore, impurities or other difficulties in the manufacturing process can lower yields, interrupt
production or result in scrap. As system complexity and production changes have increased and sub-micron
technology has become more advanced, manufacturing tolerances have been reduced and requirements for
precision have become even more demanding. We have from time to time experienced bottlenecks and
production difficulties that have caused delivery delays and quality control problems. There can be no assurance
that we will not experience bottlenecks or production, transition or other difficulties in the future.

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In addition, we are exposed to risks related to interruptions of our manufacturing processes. If any of our
property or equipment is damaged or otherwise rendered unusable or inoperable due to accident, cyberattack or
otherwise this could result in interruptions which could have a material adverse effect on our business, financial
condition and results of operations.

We may experience quality problems from time to time that can result in decreased sales and operating
margin and product liability or warranty claims.
We sell complex products that may not in each case comply with specifications or customer requirements,
or may contain design or manufacturing defects, that could cause personal injury, property damage or security
risks that could be exploited by unauthorized third parties hacking, corrupting or otherwise obtaining access to
our products, including the software loaded thereon by us, our suppliers or our customers. Although our general
practice is to contractually limit our liability to the repair, replacement or refund of defective products, we
occasionally agree to contractual terms with key customers in which we provide extended warranties and
accordingly we may face product liability, warranty, delivery failure, and/or other claims relating to our
products that could result in significant expenses relating to compensation payments, product recalls or other
actions related to such extended warranties and/or to maintain good customer relationships, which could result
in decreased sales and operating margin and other material adverse effects on our business. Costs or payments
we may make in connection with warranty and other claims or product recalls may adversely affect our results
of operations. There can be no assurance that we will be successful in maintaining our relationships with
customers with whom we incur quality problems. Furthermore, if litigation occurs we could incur significant
costs and liabilities to defend ourselves against such claims. The industry has experienced a rise in premiums
and deductibles with regards to insurance policies. These may continue to increase and insurance coverage may
also correspondingly decrease. If litigation occurs and damages are awarded against us, there can be no
assurance that our insurance policies will be available or adequate to protect us against such claims.

Disruptions in our relationships with any one of our key customers or distributors, and/or material changes
in their strategy or financial condition or business prospects, could adversely affect our results of operations.
A substantial portion of our sales is derived from a limited number of customers and distributors. There
can be no assurance that our customers or distributors will continue to book the same level of sales with us that
they have in the past, will continue to succeed in the markets they serve and will not purchase competing
products over our products. Many of our key customers and distributors operate in cyclical businesses that are
also highly competitive, and their own market positions may vary considerably. In recent years, some of our
customers have vertically integrated their businesses. Such vertical integrations may impact our business. Our
relationships with the newly formed entities could be either reinforced or jeopardized by the integration. If we
are unable to maintain or increase our market share with our key customers or distributors, or if they were to
increase product returns or fail to meet payment obligations, our results of operations could be materially
adversely affected. Certain of our products are customized to our customers’ specifications. If customers do not
purchase products made specifically for them, we may not be able to recover a cancellation fee from our
customers or resell such products to other customers. In addition, the occurrence of epidemic or pandemic
outbreaks such as COVID-19 could affect our customers. While the geographic spread of epidemics or
pandemics such as the COVID-19 pandemic cannot be predicted and its future developments are uncertain, if its
severity increases, the adverse public health impact on our customers could negatively affect our results.

We may experience delays in delivering our product and technology roadmaps as well as transformation
initiatives.
Our industry adapts to technological advancements and it is likely that new products, equipment,
processes and service methods, including transformation initiatives related to digitalization, are in the process of
being implemented. Any failure by us to manage our data governance processes could undermine our initiatives
related to digitalization and any failure by us to react to changes or advances in existing technologies and
processes as we develop and invest in our product, technology and transformation roadmaps could materially
delay the introduction of new solutions. If we are not able to execute on these roadmaps on a timely basis or at
an acceptable cost this could result in loss of competitiveness of our solutions, decreased revenue and a loss of
market share.

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Our computer systems, including hardware, software, information and cloud-based initiatives, are subject to
attempted security breaches and other cybersecurity threats, which, if successful, could adversely impact our
business.
We have, from time to time, detected and experienced attempts by others to gain unauthorized access to
our computer systems and networks. The reliability and security of our information technology infrastructure
and software, and our ability to expand and continually update technologies, including to transition to cloud-
based technologies, in response to our changing needs is critical to our business. In the current environment,
there are numerous and evolving risks to cybersecurity, including criminal hackers, state-sponsored intrusions,
terrorism, industrial espionage, employee malfeasance, vandalism and human or technological error. Computer
hackers and others routinely attempt to breach the security of technology products, services, and systems, and
those of our customers, suppliers, partners and providers of third-party licensed technology, and some of those
attempts may be successful. Such breaches could result in, for example, unauthorized access to, disclosure,
modification, misuse, loss, or destruction of our, our customer, or other third-party data or systems, theft of our
trade secrets and other sensitive or confidential data, including personal information and IP, system disruptions,
and denial of service.

The attempts to breach our systems, including our cloud-based systems, and to gain unauthorized access
to our information technology systems are becoming increasingly more sophisticated. These attempts may
include covertly introducing malware into our computers, including those in our manufacturing operations, and
impersonating unauthorized users, among others. For instance, employees and former employees, in particular
former employees who become employees of our competitors or customers, may misappropriate, use, publish or
provide to our competitors or customers our IP and/or proprietary or confidential business information. Also,
third parties may attempt to register domain names similar to our brands or website, which could cause
confusion and divert online customers away from our products. In the event of such breaches, we, our customers
or other third parties could be exposed to potential liability, litigation, and regulatory action, as well as the loss
of existing or potential customers, damage to our reputation, and other financial loss and such breaches could
also result in losing existing or potential customers in connection with any actual or perceived security
vulnerabilities in our systems. In addition, the cost and operational consequences of responding to breaches and
implementing remediation measures could be significant. As these threats continue to develop and grow, we
have been adapting and strengthening our security measures.

As a result of the social distancing measures and regulations enforced by governments in connection with
the COVID-19 pandemic, and the resulting work-from-home policies that we have undertaken, there has been
additional reliance placed on our IT systems and resources. The resulting reliance on these resources, and the
added need to communicate by electronic means, could increase our risk of cybersecurity incidents.

Geopolitical instability, such as the ongoing conflict between Russia and Ukraine, have been associated
with an increase in cybersecurity incidents. This may result in a higher likelihood that we may experience direct
or collateral consequences from cybersecurity conflicts between nation-states or other politically motivated
actors targeting critical technology infrastructure.

U.S. and foreign regulators have increased their focus on cybersecurity vulnerabilities and risks, and
customers and service providers are increasingly demanding more rigorous contractual certification and audit
provisions regarding cybersecurity and data governance. This may result in an increase of our overall
compliance burden due to increasingly onerous obligations and leading to significant expense. There may also
be shorter deadlines in which to notify the authorities of data breaches and ever-increasing fines and penalties
for businesses that fail to respond swiftly and appropriately to cyberattacks. Any failure to comply could also
result in proceedings against us by regulatory authorities or other third parties.

We continue to increase the resources we allocate to implementing, maintaining and/or updating security
systems to protect data and infrastructure and to raising security awareness among those having access to our
systems. However, these security measures cannot provide absolute security and there can be no assurance that
our employee training, operational, and other technical security measures or other controls will detect, prevent
or remediate security or data breaches in a timely manner or otherwise prevent unauthorized access to, damage
to, or interruption of our systems and operations.

We regularly evaluate our IT systems and business continuity plan to make enhancements and
periodically implement new or upgraded systems, including the transition and migration of our data systems to
cloud-based platforms and critical system migration. Any delay in the implementation of, or disruption in the
transition to different systems could adversely affect our ability to record and report financial and management
information on a timely and accurate basis and could impact our operations and financial position. In addition, a

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miscalculation of the level of investment needed to ensure our technology solutions are current and up-to-date as
technology advances and evolves could result in disruptions in our business should the software, hardware or
maintenance of such items become out-of-date or obsolete and the costs of upgrading our cybersecurity systems
and remediating damages could be substantial.

We may also be adversely affected by security breaches related to our equipment providers and providers
of IT services or third-party licensed technology. As a global enterprise, we could also be impacted by existing
and proposed laws and regulations, as well as government policies and practices related to cybersecurity, data
privacy and data protection. Additionally, cyberattacks or other catastrophic events resulting in disruptions to or
failures in power, information technology, communication systems or other critical infrastructure could result in
interruptions or delays to us, our customers, or other third-party operations or services, financial loss, potential
liability, damage to our reputation and could also affect our relationships with our customers, suppliers and
partners.

We may be subject to theft, loss, or misuse of personal data about our employees, customers, or other third
parties, which could increase our expenses, damage our reputation, or result in legal or regulatory
proceedings.
The theft, loss, or misuse of personal data processed by us could result in significantly increased security
costs or costs related to defending legal claims.

Further, with increasing digitalization, data privacy-related legislations are rapidly evolving around the
globe which may have a negative impact on our business if interpreted or implemented in a manner that is
inconsistent from country to country and inconsistent with the current policies and practices of our customers or
business partners. We may also have to change the manner in which we contract with our business partners,
store and transfer information and otherwise conduct our business, which could increase our costs and reduce
our revenues.

Our business is dependent in large part on continued growth in the industries and segments into which our
products are sold and on our ability to retain existing customers and attract new ones. A market decline in
any of these industries, our inability to retain and attract customers, or customer demand for our products
which differs from our projections, could have a material adverse effect on our results of operations.
The demand for our products depends significantly on the demand for our customers’ end products.
Growth of demand in the industries and segments into which our products are sold fluctuates significantly and is
driven by a variety of factors, including consumer spending, consumer preferences, the development and
acceptance of new technologies and prevailing economic conditions. Changes in our customers’ markets and in
our customers’ respective shares in such markets could result in slower growth and a decline in demand for our
products. In addition, if projected industry growth rates do not materialize as forecasted, our spending on
process and product development ahead of market acceptance could have a material adverse effect on our
business, financial condition and results of operations.

Our business is dependent upon our ability to retain existing customers. In 2022 our largest customer,
Apple, accounted for 16.8% of our total revenues. While we do not believe to be dependent on any one
customer or group of customers, the loss of key customers or important sockets at key customers could have an
adverse effect on our results of operations and financial condition.

Our existing customers’ product strategy may change from time to time and/or product specifications may
change on short-time product life cycles and we have no certainty that our business, financial position and
results of operations will not be affected. Our business is also dependent upon our ability to attract new
customers. There can be no assurance that we will be successful in attracting and retaining new customers, or in
adequately projecting customer demand for our products. Our failure to do so could materially adversely affect
our business, financial condition and results of operations.

Market dynamics have driven, and continue to drive us, to a strategic repositioning.
In recent years, we have undertaken several initiatives to reposition our business. Our strategies to
improve our results of operations and financial condition have led us, and may in the future lead us, to acquire
businesses that we believe to be complementary to our own, or to divest ourselves of or wind down activities
that we believe do not serve our longer term business plans. Our potential acquisition strategies depend in part
on our ability to identify suitable acquisition targets, finance their acquisition, obtain approval by our

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shareholders and obtain required regulatory and other approvals. Our potential divestiture strategies depend in
part on our ability to compete and to identify the activities in which we should no longer engage, obtain the
relevant approvals pursuant to our governance process and then determine and execute appropriate methods to
divest of them.

We are constantly monitoring our product portfolio and cannot exclude that additional steps in this
repositioning process may be required. Furthermore, we cannot assure that any strategic repositioning of our
business, including executed and possible future acquisitions or dispositions, will be successful and will not
result in impairment, restructuring charges and other related closure costs.

Acquisitions and divestitures involve a number of risks that could adversely affect our operating results
and financial condition, including the inability for us to successfully integrate businesses or teams that we
acquire with our culture and strategies on a timely basis or at all, and the potential requirement for us to record
charges related to the goodwill or other long-term assets associated with the acquired businesses. There can be
no assurance that we will be able to achieve the full scope of the benefits we expect from a particular
acquisition, divestiture or investment. Our business, financial condition and results of operations may suffer if
we fail to coordinate our resources effectively to manage both our existing businesses and any acquired
businesses. In addition, the financing of future acquisitions or divestitures may negatively impact our financial
position, including our ability to pay a dividend and/or repurchase our shares, and credit rating and we could be
required to raise additional funding.

Other risks associated with acquisitions include the assumption of potential liabilities, disclosed or
undisclosed, associated with the business acquired, which liabilities may exceed the amount of indemnification
available from the seller, potential inaccuracies in the financials of the business acquired, and our ability to
retain customers of an acquired entity, its business or industrialize an acquired process or technology. Identified
risks associated with divestitures include loss of activities and technologies that may have complemented our
remaining businesses or operations and loss of important services provided by key employees that are assigned
to divested activities.

We depend on collaboration with other semiconductor industry companies, research organizations,

universities, customers and suppliers to further our R&D efforts, and our business and prospects could be
materially adversely affected by the failure or termination of such alliances.
Our success depends on our ability to introduce innovative new products and technologies to the
marketplace on a timely basis. In light of the high levels of investment required for R&D activities, we depend
in certain instances on collaborations with other semiconductor industry companies, research organizations,
universities, customers and suppliers to develop or access new technologies.

Such collaboration provides us with a number of important benefits, including the sharing of costs,
reductions in our own capital requirements, acquisitions of technical know-how and access to additional
production capacities. However, there can be no assurance that our collaboration efforts will be successful and
allow us to develop and access new technologies in due time, in a cost-effective manner and/or to meet customer
demands. If a particular collaboration terminates before our intended goals are accomplished we may incur
additional unforeseen costs, and our business and prospects could be adversely affected. Furthermore, if we are
unable to develop or otherwise access new technologies, whether independently or in collaboration with another
industry participant, we may fail to keep pace with the rapid technology advances in the semiconductor industry,
our participation in the overall semiconductor industry may decrease and we may also lose market share.

We depend on patents to protect our rights to our technology and may face claims of infringing the IP rights
of others.
We depend on patents and other IP rights to protect our products and our manufacturing processes against
misappropriation by others. The process of seeking patent protection can be long and expensive, and there can
be no assurance that that we will receive patents from currently pending or future applications. Even if patents
are issued, they may not be of sufficient scope or strength to provide meaningful protection or any commercial
advantage. In addition, effective IP protection may be unavailable or limited in some countries. Our ability to
enforce one or more of our patents could be adversely affected by changes in patent laws, laws in certain foreign
jurisdictions that may not effectively protect our IP rights or by ineffective enforcement of laws in such
jurisdictions. Competitors may also develop technologies that are protected by patents and other IP and
therefore either be unavailable to us or be made available to us subject to adverse terms and conditions. We have
in the past used our patent portfolio to negotiate broad patent cross-licenses with many of our competitors

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enabling us to design, manufacture and sell semiconductor products, without concern of infringing patents held
by such competitors. We may not in the future be able to obtain such licenses or other rights to protect necessary
IP on favorable terms for the conduct of our business, and such failure may adversely impact our results of
operations. Such cross-license agreements expire from time to time and there is no assurance that we can or we
will extend them.

We have from time to time received, and may in the future receive, communications alleging possible
infringement of third-party patents and other IP rights. Some of those claims are made by so-called non-
practicing entities against which we are unable to assert our own patent portfolio to lever licensing terms and
conditions. Competitors with whom we do not have patent cross-license agreements may also develop
technologies that are protected by patents and other IP rights and which may be unavailable to us or only made
available on unfavorable terms and conditions. We may therefore become involved in costly litigation brought
against us regarding patents and other IP rights. See Note 26 to our Consolidated Financial Statements. IP
litigation may also involve our customers who in turn may seek indemnification from us should we not prevail
and/or who may decide to curtail their orders for those of our products over which claims have been asserted.
Such lawsuits may therefore have a material adverse effect on our business. We may be forced to stop producing
substantially all or some of our products or to license the underlying technology upon economically unfavorable
terms and conditions or we may be required to pay damages for the prior use of third-party IP and/or face an
injunction.

The outcome of IP litigation is inherently uncertain and may divert the efforts and attention of our
management and other specialized technical personnel. Such litigation can result in significant costs and, if not
resolved in our favor, could materially and adversely affect our business, financial condition and results of
operations.

We operate in many jurisdictions with highly complex and varied tax regimes. Changes in tax rules, new or
revised legislation or the outcome of tax assessments and audits could cause a material adverse effect on our
results.
We operate in many jurisdictions with highly complex and varied tax regimes. Changes in tax rules, new
or revised legislation or the outcome of tax assessments and audits could have a material adverse effect on our
results.

In 2021, the Organization for Economic Cooperation and Development (OECD) and the G20 Inclusive
Framework on base erosion and profit shifting (BEPS) agreed to a two-pillar solution to address the tax
challenges arising from the digitalization of the economy. Pillar I is a set of proposals to revisit tax allocation
rules in a changed economy. The intention is that a portion of a multinationals' residual profit is taxed in the
jurisdiction where revenue is sourced.

Pillar II enforces a global minimum corporate income tax at an effective rate of 15% for large
multinationals. On December 15, 2022, the Council of the European Union formally adopted the directive
implementing the minimum taxation at EU level (“Pillar II Directive”). EU Member States will now have to
transpose the Pillar II Directive into their national laws before December 31, 2023 and they will have to apply
the Pillar II measures in respect of the fiscal years beginning on or after December 31, 2023. As of December
31, 2022, none of the 137 Inclusive Framework member states has passed the model rules as part of their
national laws. The tax impact of the Pillar I and II rules is currently being analyzed to determine the potential
effect on our results and to ensure compliance when the legislation is effective. Sufficient information is not
currently available to estimate the quantitative impact on the Company's tax position as per December 31, 2022.

Our tax rate is variable and depends on changes in the level of operating results within various local
jurisdictions and on changes in the applicable taxation rates of these jurisdictions, as well as changes in
estimated tax provisions due to new events. We currently receive certain tax benefits or benefit from net
operating losses cumulated in prior years in some countries, and these benefits may not be available in the future
due to changes in the local jurisdictions or credits on net operating losses being no longer available due to either
full utilization or expiration of the statute of limitations in such jurisdictions. As a result, our effective tax rate
could increase and/or our benefits from carrying forward net operating losses could affect our deferred tax assets
in certain countries in the coming years. In addition, the acquisition or divestiture of businesses in certain
jurisdictions could materially affect our effective tax rate.

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We evaluate our deferred tax asset position and the need for a valuation allowance on a regular basis. The
ultimate realization of deferred tax assets is dependent upon, among other things, our ability to generate future
taxable income that is sufficient to utilize in certain jurisdictions loss carry-forwards or tax credits before their
expiration or our ability to implement prudent and feasible tax optimization strategies. The recorded amount of
total deferred tax assets could be reduced, which could have a material adverse effect on our results of
operations and financial position, if our estimates of projected future taxable income and benefits from available
tax strategies are reduced as a result of a change in business condition or in management’s plans or due to other
factors, such as changes in tax laws and regulations.

We are subject to the possibility of loss contingencies arising out of tax claims, assessment of uncertain
tax positions and provisions for specifically identified income tax exposures. We are also subject to tax audits in
certain jurisdictions. There can be no assurance that we will be successful in resolving potential tax claims that
result from these audits, which could result in material adjustments in our tax positions. We record provisions on
the basis of the best current understanding; however, we could be required to record additional provisions in
future periods for amounts that cannot currently be assessed. Our failure to do so and/or the need to increase our
provisions for such claims could have a material adverse effect on our results of operations and our financial
position.

Our operating results can also vary significantly due to impairment of goodwill and other intangible assets
incurred in the course of acquisitions and equity investments, as well as to impairment of tangible assets due to
changes in the business environment.

Our operating results can vary significantly due to impairment of goodwill, other intangible assets and
equity investments booked pursuant to acquisitions and the timeframe required to foster and realize synergies
thereof, joint venture agreements and the purchase of technologies and licenses from third parties, as well as to
impairment of tangible assets due to changes in the business environment. Because the market for our products
is characterized by rapidly changing technologies, significant changes in the semiconductor industry, and the
potential failure of our business initiatives, our future cash flows may not support the value of goodwill, tangible
assets and other intangibles registered in our consolidated balance sheets. See “Item 5. Operating and Financial
Review and Prospects— Critical Accounting Policies Using Significant Estimates — Impairment of goodwill”,
“— Intangible assets subject to amortization” and “Item 4. Information on the Company — Property, Plants and
Equipment”.

We receive public funding, and a reduction in the amount available to us or demands for repayment could
increase our costs and impact our results of operations.
We have in the past obtained public funding, primarily to support our proprietary R&D for technology
investments and investments in cooperative R&D ventures, and expect to obtain public funding in the future,
mainly from French, Italian and EU governmental entities. The public funding we receive is subject to periodic
review by the relevant authorities and there can be no assurance that we will continue to benefit from such
programs at current levels or that sufficient alternative funding will be available if we lose such support. If any
of the public funding programs we participate in are curtailed or discontinued and we do not reduce the relevant
R&D costs, this could have a material adverse effect on our business. Furthermore, to receive public funding,
we enter into agreements which require compliance with extensive regulatory requirements and set forth certain
conditions relating to the funded programs. If we fail to meet the regulatory requirements or applicable
conditions, we may, under certain circumstances, be required to refund previously received amounts, which
could have a material adverse effect on our results of operations. If there are changes in the public funding we
receive this could increase the net costs for us to continue investing in R&D at current levels and could result in
a material adverse effect on our results of operations.

A change in the landscape in public funding may also affect our business. For example, there are currently
proposals within Europe to enact a European Chips Act, and similar proposals in other regions, which may
provide public funding towards manufacturing activities of semiconductors. It is yet to be seen whether this
would impact the amount of public funding currently available to us for our R&D investments and ventures, but
any reduction in said funding could result in a material adverse effect on our results of operations. Further, this
may result in new or existing competitors benefitting from such funding and could also have an impact on the
competitive landscape in our industry.

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Some of our production processes and materials are environmentally sensitive, which could expose us to
liability and increase our costs due to environmental, health and safety laws and regulations or because of
damage to the environment.
We are subject to environmental, health and safety laws and regulations that govern various aspects,
including the use, storage, discharge and disposal of chemicals, gases and other hazardous substances used in
our operations. Compliance with such laws and regulations could adversely affect our manufacturing costs or
product sales by requiring us to acquire costly equipment, materials or greenhouse gas allowances, or to incur
other significant expenses in adapting our manufacturing processes or waste and emission disposal processes.
Furthermore, environmental claims or our failure to comply with present or future regulations could result in the
assessment of damages or imposition of fines against us, suspension of production or a cessation of operations.
Failure by us to control the use of, or adequately restrict the discharge of, chemicals or hazardous substances
could subject us to future liabilities.

Climate change and related sustainability regulations and initiatives, including our commitment to become
carbon neutral by 2027, could place additional burden on us and our operations.
As climate change issues become more pronounced, we may correspondingly face increased regulation
and also expectations from our stakeholders to take actions beyond existing regulatory requirements to minimize
our impact on the environment and mitigate climate change related effects. The semiconductor manufacturing
process has historically contributed to direct greenhouse gas emissions by utilizing perfluorocarbons, which may
lead to new or increased regulation of such compounds. In order to address such regulation, we may be required
to adapt our production processes or purchase additional equipment or carbon offsets, leading to increased costs.
As of the end of 2022, we are on track towards our goal to become carbon neutral by 2027, which includes two
specific targets: compliance with the 1.5°C scenario defined at the Paris COP21 by 2025, implying a 50%
reduction of direct and indirect greenhouse gas emissions compared to 2018, and the sourcing of 100%
renewable energy by 2027 (as further explained below in “Item 4. – Environmental, Health and Safety
Matters”).

To meet these additional requirements, we will need to continue to deploy additional equipment, introduce
process changes, utilize alternative suppliers and materials, and take other similar actions, some or all of which
may require us to incur additional costs which could result in a material adverse effect on our results of
operations and our financial condition. In addition, if we fail to meet these expectations, or foster additional
sustainability initiatives, we may experience reputational risk which could impact our ability to attract and retain
customers, employees, and investors.

Further, our sites, as well as those of our partners along the supply chain, may be exposed to changing
and/or increasing physical risks resulting from climate change that are either chronic (induced by longer-term
shifts in climate patterns, such as sea level rise or constraints in the availability of water, changing temperature,
wind or precipitation patterns) or acute (event-drive such as cyclones, hurricanes or heat waves). In the context
of the transition to a lower-carbon economy, we will likely be exposed to further policy, legal, technology, and
market transition risks. We have already seen further policy developments in this area in the form of Regulation
(EU) 2020/852 of the European Parliament and of the Council of June 18, 2020 on the establishment of a
framework to facilitate sustainable investment and amending Regulation (EU) 2019/2088 (the “EU Taxonomy
Regulation”), which entered into force on July 12, 2020. As a result of the EU Taxonomy Regulation, we must
disclose information on how and to what extent our activities are associated with economic activities that
qualify as environmentally sustainable. See “Item 4. Information on the Company – Environmental, Health and
Safety Matters”.

Directive (EU) 2022/2464 of the European Parliament and of the Council of December 14, 2022
amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive
2013/34/EU, as regards corporate sustainability reporting (the “CSRD”), which entered into force on January 5,
2023 will strengthen the rules regarding social and environmental information that will be required to be
reported. The CSRD seeks to provide investors and other stakeholders with access to the information they need
to assess investment risks arising from climate change and other sustainability topics. The CSRD further makes
it mandatory for us to have an audit of the sustainability information that we report on. If our disclosure metrics
relating to climate change and other sustainability topics are lower than those of our peers in the industry, this
may lead to reputational risk which may lead to onward financial repercussions such as a decrease in share price
or difficulty in raising capital.

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Loss of key employees and the inability to continuously recruit and retain qualified employees could hurt our
competitive position.
Our success depends to a significant extent upon our key executives and R&D, engineering, marketing,
sales, manufacturing, support and other personnel. Our success also depends upon our ability to continue to
identify, attract, retain and motivate highly trained and skilled engineering, technical and professional personnel
in a competitive recruitment environment, as well our ability to ensure the smooth succession and continuity of
business with newly hired and promoted personnel. For instance, in highly specialized areas, it may become
more difficult to retain employees. As a result of the COVID-19 pandemic, work-from-home arrangements and
a limitation on social and professional interaction has expanded the competition in employee recruitment and
retention.

Our employee hiring and retention also depend on our ability to build and maintain a diverse and inclusive
workplace culture and be viewed as an employer of choice. We intend to continue to devote significant
resources to recruit, train and retain qualified employees, however, we may not be able to attract, obtain and
retain these employees, which may affect our growth in future years and the loss of the services of any of these
key personnel without adequate replacement or the inability to attract new qualified personnel could have a
material adverse effect on us.

The interests of our controlling shareholder, which is in turn indirectly controlled by the French and Italian
governments, may conflict with other investors’ interests. In addition, our controlling shareholder may sell
our existing common shares or issue financial instruments exchangeable into our common shares at any
time.
We understand that as of December 31, 2022, STMicroelectronics Holding N.V. (“ST Holding”), owned
250,704,754 shares, or approximately 27.5%, of our issued common shares. ST Holding may therefore be in a
position to effectively control the outcome of decisions submitted to the vote at our shareholders’ meetings,
including but not limited to the appointment of the members of our Managing and Supervisory Boards.

We have been informed that ST Holding’s shareholders, each of which is ultimately controlled by the
French or Italian government, are party to a shareholders agreement (the “STH Shareholders Agreement”),
which governs relations between them. We are not a party to the STH Shareholders Agreement. See “Item 7.
Major Shareholders and Related Party Transactions — Major Shareholders”. The STH Shareholders Agreement
includes provisions requiring the unanimous approval by the shareholders of ST Holding before ST Holding can
vote its shares in our share capital, which may give rise to a conflict of interest between our interests and
investors’ interests, on the one hand, and the (political) interests of ST Holding’s shareholders, on the other
hand. Our ability to issue new shares or other securities giving access to our shares may be limited by ST
Holding’s desire to maintain its shareholding at a certain level and our ability to buy back shares may be limited
by ST Holding due to a Dutch law requiring one or more shareholders acquiring 30% or more of our voting
rights to launch a tender offer for our outstanding shares.

The STH Shareholders Agreement also permits our respective French and Italian indirect shareholders to
direct ST Holding to dispose of its stake in us at any time, thereby reducing the current level of their respective
indirect interests in our common shares. Sales of our common shares or the issuance of financial instruments
exchangeable into our common shares or any announcements concerning a potential sale by ST Holding could
materially impact the market price of our common shares depending on the timing and size of such sale, market
conditions as well as a variety of other factors.

Our shareholder structure and our preference shares may deter a change of control.
We have an option agreement in place with an independent foundation, whereby the foundation can
acquire preference shares in the event of actions which the board of the independent foundation determines
would be contrary to our interests, our shareholders and our other stakeholders and which in the event of a
creeping acquisition or offer for our common shares are not supported by our Managing Board and Supervisory
Board. In addition, our shareholders have authorized us to issue additional capital within the limits of the
authorization by our Annual General Meeting of Shareholders (“AGM”), subject to the requirements of our
Articles of Association, without the need to seek a specific shareholder resolution for each capital increase.
Accordingly, an issue of preference shares or new shares may make it more difficult for a shareholder to obtain
control over our general meeting of shareholders. These anti-takeover provisions could substantially impede the
ability of our shareholders to benefit from a change in control and, as a result, may materially adversely affect

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the market price of our ordinary shares and our investors’ ability to realize any potential change of control
premium. See “Item 7. Major Shareholders and Related Party Transactions — Major Shareholders —
Preference Shares”.

Any decision to reduce or discontinue paying cash dividends to our shareholders could adversely impact the
market price of our common shares.
On an annual basis, our Supervisory Board, upon the proposal of the Managing Board, may propose the
distribution of a cash dividend to the general meeting of shareholders. See “Item 8. Dividend Policy”. Any
reduction or discontinuance by us of the payment of cash dividends at historical levels could cause the market
price of our common shares to decline.

We are required to prepare financial statements under IFRS and we also prepare Consolidated Financial
Statements under U.S. GAAP, and such dual reporting may impair the clarity of our financial reporting.
We use U.S. GAAP as our primary set of reporting standards. Applying U.S. GAAP in our financial
reporting is designed to ensure the comparability of our results to those of our competitors, as well as the
continuity of our reporting, thereby providing our stakeholders and potential investors with a clear
understanding of our financial performance. As we are incorporated in The Netherlands and our shares are listed
in Europe on Euronext Paris and on the Borsa Italiana, we are subject to EU regulations requiring us to also
report our results of operations and financial statements using IFRS.

As a result of the obligation to report our financial statements under IFRS, we prepare our results of
operations using both U.S. GAAP and IFRS, which are currently not consistent. Such dual reporting can
materially increase the complexity of our financial communications. Our financial position and results of
operations reported in accordance with IFRS will differ from our financial position and results of operations
reported in accordance with U.S. GAAP, which could give rise to confusion in the marketplace.

There are inherent limitations on the effectiveness of our controls.

There can be no assurance that a system of internal control over financial reporting, including one
determined to be effective, will prevent or detect all misstatements. A control system, no matter how well
designed and operated, can provide only reasonable, not absolute, assurance regarding financial statement
preparation and presentation. Projections of the results of any evaluation of the effectiveness of internal control
over financial reporting into future periods are subject to inherent risk. The relevant controls may become
inadequate due to changes in circumstances or the degree of compliance with the underlying policies or
procedures may deteriorate.

Because we are subject to the corporate law of The Netherlands, U.S. investors might have more difficulty
protecting their interests in a court of law or otherwise than if we were a U.S. company.
Our corporate affairs are governed by our Articles of Association and by the laws governing corporations
incorporated in The Netherlands. The rights of our investors and the responsibilities of members of our
Managing and Supervisory Boards under Dutch law are not as clearly established as under the rules of some
U.S. jurisdictions. Therefore, U.S. investors may have more difficulty in protecting their interests in the face of
actions by our management, members of our Managing and Supervisory Boards or our controlling shareholders
than U.S. investors would have if we were incorporated in the United States.

Our executive offices and a substantial portion of our assets are located outside the United States. In
addition, ST Holding and most members of our Managing and Supervisory Boards are residents of jurisdictions
other than the United States. As a result, it may be difficult or impossible for shareholders to effect service
within the United States upon us, ST Holding, or members of our Managing or Supervisory Boards. It may also
be difficult or impossible for shareholders to enforce outside the United States judgments obtained against such
persons in U.S. courts, or to enforce in U.S. courts judgments obtained against such persons in courts in
jurisdictions outside the United States. This could be true in any legal action, including actions predicated upon
the civil liability provisions of U.S. securities laws. In addition, it may be difficult or impossible for
shareholders to enforce, in original actions brought in courts in jurisdictions located outside the United States,
rights predicated upon U.S. securities laws.

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We have been advised by Dutch counsel that the United States and The Netherlands do not currently have
a treaty providing for reciprocal recognition and enforcement of judgments (other than arbitration awards) in
civil and commercial matters. With respect to choice of court agreements in civil or commercial matters, it is
noted that the Hague Convention on Choice of Court Agreements entered into force in The Netherlands, but has
not entered into force in the United States. As a consequence, a final judgment for the payment of money
rendered by any federal or state court in the United States based on civil liability, whether or not predicated
solely upon the federal securities laws of the United States, will not be enforceable in The Netherlands.
However, if the party in whose favor such final judgment is rendered brings a new suit in a competent court in
The Netherlands, such party may submit to The Netherlands court the final judgment that has been rendered in
the United States. If The Netherlands court finds that the jurisdiction of the federal or state court in the United
States has been based on grounds that are internationally acceptable and that proper legal procedures that are in
accordance with the Dutch standards of proper administration of justice including sufficient safeguards
(behoorlijke rechtspleging) have been observed, the court in The Netherlands would, under current practice, in
principle give binding effect to the final judgment that has been rendered in the United States unless such
judgment contradicts The Netherlands’ public policy and provided that the judgment by the foreign court is not
incompatible with a decision rendered between the same parties by a Dutch court, or with a previous decision
rendered between the same parties by a foreign court in a dispute that concerns the same subject and is based on
the same cause, provided that the previous decision qualifies for acknowledgment in The Netherlands. Even if
such a foreign judgment is given binding effect, a claim based thereon may, however, still be rejected if the
foreign judgment is not or no longer formally enforceable.

Item 4. Information on the Company

History and Development of the Company
STMicroelectronics N.V. was formed and incorporated in 1987 as a result of the combination of the
semiconductor business of SGS Microelettronica (then owned by Società Finanziaria Telefonica (S.T.E.T.), an
Italian corporation) and the non-military business of Thomson Semiconducteurs (then owned by the former
Thomson-CSF, now Thales, a French corporation). We completed our initial public offering in December 1994
with simultaneous listings on the Bourse de Paris (now known as “Euronext Paris”) and the New York Stock
Exchange (“NYSE”). In 1998, we also listed our shares on the Borsa Italiana S.p.A. (“Borsa Italiana”).

We operated as SGS-Thomson Microelectronics N.V. until May 1998, when we changed our name to
STMicroelectronics N.V. We are organized under the laws of The Netherlands, with our corporate legal seat in
Amsterdam, The Netherlands, and our head offices at WTC Schiphol Airport, Schiphol Boulevard 265, 1118
BH Schiphol, The Netherlands. Our telephone number there is +31-20-654-3210. Our headquarters and
operational offices are managed through our wholly owned subsidiary, STMicroelectronics International N.V.,
and are located at 39 Chemin du Champ des Filles, 1228 Plan-Les-Ouates, Geneva, Switzerland. Our main
telephone number there is +41-22-929-2929. Our agent for service of process in the United States related to our
registration under the U.S. Securities Exchange Act of 1934, as amended, is Corporation Service Company
(CSC), 80 State Street, Albany, New York, 12207. Our operations are also conducted through our various
subsidiaries, which are organized and operated according to the laws of their country of incorporation, and
consolidated by STMicroelectronics N.V.

Business Overview
We are a global semiconductor company that designs, develops, manufactures and markets a broad range
of products used in a wide variety of applications for the four end-markets we address: automotive, industrial,
personal electronics and communications equipment, computers and peripherals. For the automotive and
industrial markets we address a wide customer base, particularly in industrial, with a broad and deep product
portfolio. In personal electronics and communications equipment, computers and peripherals we have a selective
approach both in terms of the customers we serve, as well as in the technologies and products we offer, while
leveraging our broad portfolio to address high-volume applications.

Our diverse product portfolio includes discrete and general purpose components, application-specific
integrated circuits (“ASICs”), full-custom devices and semi-custom devices and application-specific standard
products (“ASSPs”) for analog, digital and mixed-signal applications. It benefits from a unique, strong
foundation of proprietary and differentiated leading-edge technologies. We use all of the prevalent function-
oriented process technologies, including complementary metal-on silicon oxide semiconductors (“CMOS”),
bipolar and non-volatile memory technologies. In addition, by combining basic processes, we have developed

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advanced systems-oriented technologies that enable us to produce differentiated and application-specific

products, including fully depleted silicon-on-insulator (“FD-SOI”) technology offering superior performance
and power efficiency compared to bulk CMOS, bipolar CMOS (“Bi-CMOS”) and radio frequency silicon-on-
insulator (“RF-SOI”) for mixed-signal and high-frequency applications, as well as a combination of Bipolar,
CMOS and DMOS (“BCD”), vertically integrated power (“VIPower”), and intelligent integrated gallium-nitride
(STI2GaN) technologies for smart power applications, Power MOSFET, silicon carbide (“SiC”) and gallium-
nitride (“GaN”) for high-efficiency systems, Micro-Electro-Mechanical Systems (“MEMS”) technologies for
sensors and actuators, embedded memory technologies for our microcontrollers and differentiated optical
sensing technologies for our optical sensing solutions. For our 2022 Results of Operations, see “Item 5.
Operating and Financial Review and Prospects — Results of Operations — Segment Information”.

Strategy
At ST, we are over 50,000 creators and makers of semiconductor technologies mastering the
semiconductor supply chain with state-of-the-art manufacturing facilities. As an integrated device manufacturer,
we work with more than 200,000 customers and thousands of partners to design and build products, solutions,
and ecosystems that address their challenges and opportunities, and the need to support a more sustainable
world. Our technologies enable smarter mobility, more efficient power and energy management, and the wide-
scale deployment of the Internet of Things (“IoT”) and connectivity. We are committed to achieving our goal to
become carbon neutral by 2027.

Our strategy focuses on long-term value creation for the Company and its affiliated enterprises and takes
into account the short-, medium- and longer-term evolution of the markets we serve and the environment and
opportunities we see. It stems from key long-term enablers: Smart Mobility, where we provide innovative
solutions to help our customers make driving safer, greener and more connected for everyone; Power & Energy:
our technology and solutions enable customers to increase energy efficiency everywhere and support the use of
renewable energy sources; IoT & connectivity supporting the proliferation of smart, connected IoT devices with
products, solutions and ecosystems to make development fast and easy for our customers.

We are focused on application areas which are expected to experience solid growth rates driven by broad,
long-term trends in electronic systems. These trends require enablers such as autonomous systems, robotics,
securely connected machines and personal devices, digitalization and electrification of automobiles and
infrastructure, advanced communications equipment and networks and more power efficient systems. These
enablers drive in turn the demand for the electronic components we develop and manufacture.

Product Information
Semiconductors are electronic components that serve as the building blocks inside electronic systems and
equipment. Semiconductors, generally known as “chips” combine multiple transistors on a single piece of
material to form a complete electronic circuit. With our portfolio of semiconductor products, we serve
customers across the spectrum of electronics applications with innovative solutions.

We have a portfolio of power products and analog products, including sensors, signal channel devices and
output power stages - discrete and/or integrated - as well as complete power management blocks. Our analog
products, including both general purpose and application specific, can fulfill the needs of a wide range of
designs and systems.

We also have digital products that are at the heart of electronics systems, including microcontrollers and
microprocessors, ASICs and optical sensing solutions. Our full set of microcontrollers and microprocessors
includes one of the industry’s broadest ranges of general-purpose devices serving all market segments,
microprocessors addressing the industrial market, secure microcontrollers for mobile devices, wearables,
banking, identification, industrial, automotive and IoT markets and a series of embedded processing solutions
for our strategic end-markets (automotive, industrial, personal electronics and communications equipment,
computers and peripherals).

We are one of the leading suppliers and innovators in the domain of semiconductor devices dedicated to
automotive applications. We have a portfolio spanning complex power train, audio and infotainment devices
and body and convenience dedicated and standard functions as well as a broad offering of components for
advanced driver assistance systems (“ADAS”), dedicated automotive microcontrollers, MEMS automotive

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sensors and power drivers, including SiC and GaN devices for hybrid and electric cars. The products designed
and manufactured specifically for automotive applications are complemented by a large range of “automotive
grade” standard products, both tested and guaranteed to perform under stringent automotive environmental
conditions.

On top of the product design R&D spending, our principal investment and resource allocation decisions in
the semiconductor business area are for expenditures on technology R&D as well as capital investments in
front-end and back-end manufacturing facilities, which are planned at the corporate level; therefore, our product
groups share common R&D for process technology and manufacturing capacity for some of their products.

Our reportable segments are as follows:

• Automotive and Discrete Group (ADG), comprised of dedicated automotive integrated circuits
(“ICs”), and discrete and power transistor products.
• Analog, MEMS and Sensors Group (AMS), comprised of analog, smart power, MEMS sensors and
actuators, and optical sensing solutions.
• Microcontrollers and Digital ICs Group (MDG), comprised of general-purpose microcontrollers
and microprocessors, connected security products (e.g. embedded secured elements and NFC
readers), memories (e.g. serial and page EEPROM) and RF and Communications products.

Effective July 1, 2022, the Low Power RF business unit was transferred from AMS (within the Analog
sub-group) to MDG (within the Microcontrollers and Memories sub-group) with no significant impact on our
segment reporting. Prior year periods have been adjusted accordingly.

Below is a description of our main categories of products.

Automotive and Discrete Group (ADG)

Dedicated Automotive ICs

We are a top automotive semiconductor vendor supplying innovative solutions to the automotive industry
worldwide. We combine an unparalleled platform of advanced technologies with an unswerving commitment to
quality, and a thorough understanding of the automotive market gained through close collaboration with leading
customers. Our automotive-solutions portfolio is enabling the electrification and digitalization of the car and
covers all key application areas including Powertrain, Chassis, Safety and Security, including ADAS, Body
Electronics, Telematics & Infotainment and Connectivity.

For Powertrain, we provide silicon solutions for the full range of engine-management systems: from
motorbikes and scooters to the most advanced drive-by-wire solutions. Developments in engine management are
driven by both government emission regulations and energy concerns. We continue to work closely with major
automotive OEMs, as we have for decades, to reduce fuel consumption and CO2 emission via advanced
technologies such as Variable Valve Timing and Gasoline Direct Injection and Battery Management for hybrid
and full electric cars. Due to the cooperation with certain leading car makers, our microcontrollers are currently
in the electrical engines of leading hybrid and electric cars. The first automotive microcontrollers to feature
multiple Arm® Cortex®-R52 cores with on-chip non-volatile memory for safe, real-time performance, our Stellar
microcontrollers provide advanced connectivity and security features to support the transition to service-
oriented automotive system architectures.

With regards to Chassis, we provide a broad range of solutions to increase vehicle-occupant safety,
including devices for airbags, anti-lock brakes, traction control, electric power steering and active suspension
systems. We are a leading supplier of chips for automotive airbags and anti-lock braking systems, which
currently represent the largest portion of automotive safety electronics.

We are a leading player in ADAS that help avoid or minimize the severity of traffic accidents. We
manufacture leading-edge products for vision and radar (both short range 24 GHz and long range 77 GHz) based
systems that assist the driver with capabilities such as lane-departure warning, forward-collision warning,
vision/radar fusion and pedestrian detection including specific modular solutions for the mass market. We
produce vision based ADAS solutions fully compliant with level 2+ and level 3 autonomous systems and we are
prototyping ASICs fully compliant with level 4 autonomous systems. We also produce V2X (vehicle to vehicle
and vehicle to infrastructure) connectivity solution, and we are working on solutions to grant full connectivity
using multiple channels such as Wi-Fi, radar and GNSS.

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Today’s car body electronics involve a myriad of inter-networked electronic systems, from dome and
door-zone controls, HVAC (heating, ventilation, and air-conditioning) systems, and seat controls to wiper and
lighting controls. The penetration of electronics in the car is increasing, as are the requirements for improved
reliability and diagnostic capabilities. We address the concept of the “smart” junction box, which is an
intelligent power and switching center for the vehicle that integrates functions and features from exterior and
cabin lighting to wipers, with a comprehensive architecture that consists of upgradable hardware and software
modules. With our proprietary VIPower silicon technology and thorough application knowledge, we have
become a market leader in automotive lighting electronics, offering solutions for both exterior and interior
lighting, from incandescent bulbs to LED- or HID -based systems.

Our car infotainment and telematics portfolio includes complete turnkey solutions for digital radio,
navigation and telematics, and wireless connectivity in the car. We have leveraged our experience of more than
30 years, at the forefront of AM/FM radio technology to lead in digital radio. We produce all of the
semiconductor components for car radios — from the tuner through the baseband to multimedia processing and
playback. Our car-radio systems are optimized for harsh reception environments and minimized power
consumption. Our portfolio of products for navigation also includes a family of System-on-Chip solutions
capable of receiving signals from multiple satellite navigation systems to improve user position accuracy and
navigation in poor satellite visibility conditions, such as in urban canyons.

Discrete and Power Transistor

Discrete and power transistors families include both power products and protection devices serving our
strategic end markets (automotive, industrial, personal electronics and communications equipment, computers
and peripherals).

Leading-edge power technologies for both high-voltage and low-voltage applications combined with a full
package range and innovative die bonding technologies exemplify our innovation in power transistors. Our
portfolio includes silicon MOSFETs ranging from 12 to 1700 V, SiC MOSFETs from 650 to 2200 V featuring
the industry’s highest temperature rating of 200°C, IGBTs with breakdown voltages ranging from 300 to 1700 V
and a wide range of power bipolar transistors. We are expanding our offering based on wide bandgap materials
with a full range of GaN-based power device solutions targeting a wide variety of applications. Our portfolio of
protection devices supports all industry requirements for electrical overstress and electrostatic surge protection,
lightning surge protection and automotive protection. Our protection devices have passed all certifications,
meeting or exceeding international protection standards for electrical hazards on electronics boards found in the
demanding automotive, industrial, personal electronics and communications equipment, computers and
peripherals.

Analog, MEMS and Sensors Group (AMS)

Analog, Smart Power, Touch Screen Controllers
We develop a broad range of innovative power, smart power and analog ICs, to serve markets such as
those relating to smart grid, cloud computing, automation, personal electronics and power conversion. These
product families include Industrial ASICs and ASSPs, covering motion control, power and energy management
and factory automation, General Purpose Analog Products, which includes high end analog front-end products
as well as standard interfaces and Custom Analog ICs, mainly power management ICs for data storage, servers
and portable power management devices. In 2022, we further deployed wireless charging solutions and enlarged
our offering to cover low to high power products and across personal electronics applications from smartphones
to wearables and industrial battery management enabling fast charging applications. We also expanded our
presence in the automotive and industrial markets with our Galvanic Isolated Gate Drivers (also known as
STGAP Family).

We also develop a comprehensive range of operational amplifiers (both low-voltage and high-voltage),
comparators and current-sense amplifiers. In addition to our portfolio of mainstream operational amplifiers and
comparators, we offer specific products for healthcare, industrial, and automotive applications, as well as a
range of high-performance products specifically designed to meet the strict requirements of the wearable
market.

In 2022, we introduced further devices in our MasterGaN® family and the new ViperGaN family,
integrating a silicon driver and GaN power transistors in a single package. Our connectivity ICs range from

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wireline to wireless solutions. We optimize our products for reliability of the communication channel and low
power consumption. For wireline communication, we offer a complete family of transceivers compatible with
different protocol standards used in the industry (PRIME, Meters and More, IEC 61334-5-1, CAN and others).

Our FingerTip family of Touch Screen Controllers provides true multi-touch capability, supporting
unlimited simultaneous touches, and it is optimized for the extreme low power consumption. FingerTip also
enhances multi-touch actions such as pinch-to-zoom, supports stylus operations and is compatible with both flat
and curved display panel.

MEMS Sensors and Actuators

Our MEMS portfolio includes both Sensors and Actuators. We sell our MEMS products in a broad range
of application fields, including mobile, gaming, computer, automotive, industrial, healthcare and IoT.

MEMS Sensors include Motion MEMS (accelerometers, gyroscopes, magnetic sensors), Environmental
Sensors (pressure, humidity and temperature) and Microphones. We offer a unique sensor portfolio, from
discrete to fully-integrated solutions, high performance sensor fusion to improve the accuracy of multi-axis
sensor systems in order to enable highly-demanding applications, such as indoor navigation and location-based
services, optical image stabilization and high-level quality products.

MEMS actuators include: (i) Thermal and Piezoelectric Actuators for 2D and 3D Printing in Consumer,
Commercial and Industrial market applications; (ii) Piezoelectric Actuators for applications such as smartphone
camera auto focus and MEMS loudspeakers; and (iii) Piezoelectric, Electrostatic and Electromagnetic Actuators
for emerging VR/AR applications such as our MEMS ScanAR technology, ultra-low power depth cameras and
LIDAR Systems for assisted Smart Driving.

Optical Sensing Solutions

We also have a broad portfolio of optical sensing solutions based on our proprietary differentiated
technologies such as FlightSense, addressing various markets, and in particular the fast growing 3D sensing
consumer and automotive applications such as in-cabin monitoring and occupant detection. Our optical sensing
solutions are composed of both specialized components developed for dedicated customers’ systems; and full
optical sense and illumination system solutions targeting multiple customers.

Microcontrollers and Digital ICs Group (MDG)

Microcontrollers, Memories & Secure microcontrollers
Our general purpose microcontroller product portfolio largely contains families of products based on 32-
bit ARM®-based Cortex®-M0, -M0+, -M3, -M4, and M33 with the ARM® TrustZone®. The STM32U5, for
secure & Ultra-Low-Power applications for the mass market, based on the Cortex®-M33 with the ARM®
TrustZone® received level 3 Platform Security Architecture and Security Evaluation Standard for IOT Platform
security certifications, taking IOT cyber-protection to the next level.

For each product family, a broad selection of features is available with respect to microcontroller
performance, ultra-low-power, memory size, peripherals, and packaging. Numerous dedicated families include
features such as our TouchGFX advanced 3D graphics, dedicated peripherals for industrial motor controls,
security features, and low-power wireless connectivity.

Our microprocessors product line targeting the industrial market is based on 32-bit ARM®-based®
Cortex®-A7 Core, complemented by an integrated Cortex®-M4 and a dedicated Linux distribution.

The STM32 family based on the ARM® Cortex®-M and -A processors are designed to offer significant
degrees of freedom to microcontroller and microprocessors users. The product range combines very high
performance, real-time capabilities, digital signal processing, and low-power, low-voltage operation, while
maintaining full integration and ease of development. We offer an unparalleled range of STM32 devices,
accompanied by a vast choice of tools and software including support for Industrial Safety Standard IEC 61508
SIL2/3, Human Machine Interface. Our dedicated Cube-AI toolbox for Artificial Intelligence includes Machine
learning and neural networks. This comprehensive portfolio makes our STM32 an ideal choice for enabling ever
smarter objects for an increasingly broad range of applications.

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In 2022, we continued to strengthen our STM32 microcontroller ecosystem with various releases and
updates of STM32cube, STM32Cube.AI, NanoEdge AI Studio, CubeMX and TouchGFX. Together with
Microsoft, we developed a highly secure Azure IoT cloud reference implementation embedding the STM32U5,
Microsoft Azure RTOS and the STSAFE-A110 secure element. Together with Amazon Web Services, we also
developed a new secure AWS FreeRTOS-qualified reference implementation embedding the STM32U5 and the
STSAFE-A110 secure element.

We offer leading products for secure applications in traditional smartcard applications and embedded
security applications. Throughout our 20+ year presence in the smartcard security industry, we have supplied the
market’s most advanced technologies and solutions, with a continuous focus on innovation and the highest
levels of security certification. Our expertise in security is key to our leadership in the mobile communications,
banking, digital identity, IoT security, pay-TV and transport fields. We are the leading supplier for the
Embedded SIM market and we are scaling-up in secure mobile transactions using Near Field Communication
(“NFC”) for mobile phones, trusted computing, brand protection and security for IoT devices. Our secure
microcontroller product portfolio offers compliance with the latest security standards up to Common Criteria
EAL6+, ICAO, and TCG1.2. Our secure microcontrollers cover a complete range of interfaces for both contact
and contactless communication, including ISO 7816, ISO 14443 Type A & B, NFC, USB, SPI and I²C.

In 2022 our STPayBio biometric payment solution was named CES Innovation Honoree in the
Cybersecurity & Personal Privacy category and the STPay-Topaz-Bio biometric payment card platform
completed the EMVCo certification.

Our secure-microcontroller platforms rely on a highly secure architecture combined with leading-edge
CPUs, such as ARM®’s SC300 and SC000, and our proprietary advanced embedded non-volatile memory
technologies such as 40 nm embedded Flash and 80 nm embedded EEPROM technologies.

Our wide range of small density serial non-volatile memories has among the highest industry
performance. The serial EEPROM family ranges from 1 Kbit to 32 Mbits and offers the most common serial
interfaces to facilitate adoption: I²C, SPI and Microwire. Our wide range of products are also automotive
compliant. Very small package options are available for applications where space is critical, such as in camera
modules for consumer and mobile devices.

In 2022 we introduced the 32Mbit M95P32, the market’s first serial page EEPROM for ultra-low power
applications, manufactured using our patented e-STM 40 nm non-volatile memory.

We offer RF memory and transceiver products that are key for logistic and retail applications and are
based on the industry standard for short range High-Frequency RFID ISO 14443 and 15693. The products are
compatible with all NFC technology standards, as defined by the NFC Forum, where ST plays a key role,
including the latest NFC type 5. We offer one of the most comprehensive portfolios, which includes NFC/RFID
readers, Dynamic NFC/RFID tags, also known as Dual Interface NFC/RFID tags, and Standalone NFC/RFID
tags. We also offer RFID Readers operating in the UHF bands for longer range logistics operation.

We offer RF, digital and mixed-signal ASICs, which are based on our proprietary FD-SOI, RF-SOI, and
SiGe technologies, as well as foundry-based FinFET technologies, for 4G-5G and Satellite wireless
communications RF Front-End Modules, and wired communications infrastructure and Satellite terminals.

We also use our proprietary FD-SOI, RF-SOI, and SiGe technologies to provide RF and mmWave
components, based on our know-how in analog and digital beamforming design techniques, to address Massive
MIMO Antenna Architectures.

Our unique combination of differentiated Silicon technologies and design expertise is particularly
pertinent to address the markets for satellite constellations and user terminals, 5G infrastructure RF Front-End,
and transceivers for very-short-range ultra-low-power 60 GHz multi-Gigabit/second links.

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Alliances with Customers and Industry Partnerships

We believe that customer alliances and industry partnerships are critical to our success in the
semiconductor market. Customer alliances provide us with valuable systems and application know-how and
access to markets for key products, while enabling our customers to gain access to our technologies and
manufacturing infrastructure. We are actively working to expand the number of our customer alliances,
targeting key global OEMs as well as emerging, innovative customers and partners around the globe.

From time to time we collaborate with other semiconductor industry companies, research organizations,
universities, and suppliers to further our R&D efforts. Such collaboration provides us with a number of
important benefits, including the sharing of costs, reductions in our own capital requirements, acquisitions of
technical know-how and access to additional production capacities.

Customers and Applications

We design, develop, manufacture and market thousands of products which we sell to over 200,000
customers. We emphasize a broad and balanced product portfolio, in the applications and regional markets we
serve. Our major customers include Apple, Bosch, Continental, HP, Huawei, Mobileye, Samsung, SpaceX,
Tesla and Vitesco. In addition, our broad portfolio including dedicated Automotive ICs; Discrete and Power
Transistors; Analog, Industrial and Power Conversion ICs; General Purpose Microcontrollers and
Microprocessors, Connected Security products and EEPROMs; MEMS and Optical Sensing solutions; and
ASICs based on ST proprietary technologies helps foster closer, strategic relationships with customers. This
broad product breadth provides opportunities to enable application solutions and to supply such customers’
requirements for all their product and technology needs. We also sell our products through our distribution
channel.

Sales, Marketing and Distribution

Our sales and marketing is organized by a combination of regional and key account coverage with the
primary objective of accelerating sales growth and gaining market share. Emphasis is placed on strengthening
the development of our global and major local accounts; boosting demand creation through an enhanced focus
on geographical and key account coverage with strong technical and application expertise, supported in the mass
market by our distribution channel and local initiatives; and establishing regional sales and marketing teams that
are fully aligned with our strategic end-markets: automotive, industrial, personal electronics and
communications equipment, computers and peripherals.

We have four regional sales organizations reporting to a global head of Sales & Marketing: Americas,
APeC (Asia Pacific excluding China), China and EMEA. Our regional sales organizations have a similar
structure to enhance global coordination and go-to-market activities. The sales and marketing teams are strongly
focused on profitable revenue growth and business performance as well as on fostering demand creation,
expanding the customer base, maximizing market share, developing new product-roadmaps and providing the
best technical and application support in the field for our customers. The sales and marketing activities are
supported by sales engineers, system marketing, product marketing, application labs, field application engineers
and quality engineers.

We engage distributors and sales representatives to distribute and promote our products around the world.
Typically, distributors handle a wide variety of products, including those that compete with ours. Our
distributors have a dual role, in that they assist in fulfilling the demand of our customers by servicing their
orders, while also supporting the creation of product demand and business development. Most of our sales to
distributors are made under specific agreements allowing for price protection and stock rotation for unsold
merchandise. Sales representatives, on the other hand, generally do not offer products that compete directly with
our products, but may carry complementary items manufactured by others. Sales representatives do not maintain
a product inventory and their customers place large quantity orders directly with us and are referred to
distributors for smaller orders.

At the request of certain customers, we also sell and deliver our products to electronics manufacturing
services (“EMS”) companies, which, on a contractual basis with our customers, incorporate our products into
the application specific products they manufacture for our customers. We also sell products to original design
manufacturers (“ODM”). ODMs manufacture products for our customers much like EMS companies do, but
they also design applications for our customers, and in doing so themselves select the products and suppliers

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that they wish to purchase from. In furtherance of our strong commitment to quality, our sales organizations
include personnel dedicated to close monitoring and resolution of quality related issues. For a breakdown of net
revenues by segment and geographic region for the last three fiscal years, see “Item 5. Operating and Financial
Review and Prospects”.

Research and Development

Since our formation, we have maintained a solid commitment to innovation because we believe that
market driven R&D based on leading-edge products and technologies is critical to our success. We devote
significant effort to R&D because we believe such investment can be leveraged into competitive advantages:
about 17.6% of our employees work in R&D on product design/development and technology and, in 2022, we
spent approximately 11.8% of our net revenues on R&D.

New developments in semiconductor technology can make end products significantly cheaper, smaller,
faster, more reliable and embedded than their predecessors, with differentiated functionalities. They can enable
significant value creation opportunities with their timely appearance on the market. Our innovations in
semiconductor technology as well as in hardware and software contribute to the creation of successful products
that generate value for us and our customers. Our complete design platforms, including a large selection of IP
and silicon-proven models and design rules, enable the fast development of products designed to meet customer
expectations in terms of reliability, quality, competitiveness in price and time-to-market. Through our R&D
efforts, we contribute to making our customers’ products more efficient, more appealing, more reliable and
safer.

Our technology R&D strategy is based on the development of differentiated technologies, allowing for a
unique offer in terms of new products and enabling new applications opportunities. We draw on a rich pool of
chip fabrication technologies, including advanced CMOS, FD-SOI, RF-SOI, optical sensing, embedded non-
volatile memories, mixed-signal, analog, MEMS, smart power, SiC and GaN processes. This is well embedded
in our strong packaging technologies portfolio such as high pin count BGA, Wafer level packaging, highly
integrated sensor packages and leadframe package power products. We combine both front-end and back-end
manufacturing and technology R&D under the same organization to ensure a smooth flow of information
between our R&D and manufacturing organizations. We leverage significant synergies and shared activities
between our product groups to cross-fertilize them. We also use silicon foundries, especially for advanced
CMOS beyond the 28 nm node that we do not plan to manufacture nor develop internally.

We have advanced R&D and innovation centers which offer us a significant advantage in quickly and cost
effectively introducing products. Furthermore, we have established a strong culture of partnerships and through
the years have created a network of strategic collaborations with key customers, suppliers, competitors, and
leading universities and research institutes around the world. See “Item 4. Information on the Company —
Alliances with Customers and Industry Partnerships”. We also play leadership roles in numerous projects
running under the European Union’s IST (Information Society Technologies) programs. We also participate in
certain R&D programs established by the EU, individual countries and local authorities in Europe (primarily in
France and Italy). See “Item 4. Information on the Company — Public Funding”.

The total amount of our R&D expenses in the past three fiscal years was $1,901 million, $1,723 million
and $1,548 million in 2022, 2021 and 2020, respectively. For more information on our R&D expenses, see
“Item 5. Operating and Financial Review and Prospects — Results of Operations — Research and Development
Expenses”.

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Property, Plants and Equipment

We currently operate 14 main manufacturing sites around the world. The table below sets forth certain
information with respect to our current manufacturing facilities, products and technologies. Front-end
manufacturing facilities are fabs and back-end facilities are assembly, packaging and final testing plants.
Location Products Technologies
Front-end facilities
Agrate, Italy(1) Application-specific, MEMS, Smart Fab 1: 200mm, BCD and MEMS
Power and analog ICs Fab 2: 200mm, advanced BCD and
Integrated GaN Power ICs
Fab 3: 300mm, Analog CMOS, BCD, and
embedded non-volatile memories
Ang Mo Kio, Singapore Application-specific, analog, Fab 1: 150mm, BCD, Bi-CMOS, Bipolar,
commodity, microcontrollers, non- CMOS logic, EEPROM, MEMS,
volatile memories and power transistors Microfluidics, Power metal-on silicon oxide
semiconductor process technology (“MOS”)
and SiC power devices
Fab 2: 200mm, advanced BCD, BCD,
EEPROM, embedded non-volatile
memories, Power MOS and VIPpowerTM
Catania, Italy(2) Application-specific, MEMS, power Fab 1: 150mm, SiC power devices and RF
transistors and Smart Power and analog GaN
ICs Fab 2: 200mm, advanced BCD, Power
MOS and VIPpowerTM
Crolles, France(3) Application-specific, optical sensors, Fab 1: 200mm, Analog/RF, CMOS, Bi-
leading edge logic and non-volatile CMOS and Optical Sensing
memories and microcontrollers Fab 2: 300mm, Analog/RF, Bi-CMOS, Bulk
CMOS, embedded non-volatile memories,
FD-SOI advanced CMOS and Optical
Sensing
Norrköping, Sweden Industrialization, Research and SiC 150mm and 200mm wafers; N+ doped
development and SiC substrate and Semi Insulated
Rousset, France Application-specific and Standard and Fab: 200mm, Analog/RF, BiCMOS
secure microcontrollers EEPROM, embedded non-volatile memories
and CMOS
Tours, France ASDTM power transistors, diodes, Fab 1: 150mm, Power Schottky diodes and
IPADTM and Protection thyristors Triacs
Fab 2: 200mm IPD, Power GaN and
rectifiers
Back-end facilities
Bouskoura, Morocco Discrete and standard, micro modules, Micromodules, Power, Power Automotive
power and power module, RF and and SOIC
subsystems
Calamba, Philippines Application-specific and standard, Ball and Land Grid Array, Optical Sensors
MEMS Module, Micromodules and QFN
Kirkop, Malta Application-specific, MEMS, Ball and Land Grid Array, FC Ball Grid
microcontrollers Array and QFP
Marcianise, Italy Secure microcontrollers and smartcards Reel-to-reel secure device provisioning and
smartcards and issuance technology
Muar, Malaysia Application-specific and standard, Ball Grid Array, Power Automotive, QFP
microcontrollers and SOIC
Rennes, France Application specific Rad-hard technologies
Shenzhen, China(4) Application-specific and standard, Optical Sensors, Power, Power Automotive,
discrete, Non-volatile memories, optical Power Modules and SOIC
packages, power and power module
(1) Fab 3 is currently shared in a partnership between ST and Tower Semiconductor. In February 2022, Intel Corporation announced a
proposed acquisition of Tower Semiconductor.

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(2) We are currently building a new integrated Silicon Carbide (SiC) substrate manufacturing facility for the production in volume of
150mm SiC epitaxial substrates, to support the increasing demand from our customers for SiC devices across automotive and
industrial applications.
(3) We signed a Memorandum of Understanding on July 11, 2022 to create a new, jointly-operated 300mm semiconductor
manufacturing facility with GlobalFoundries Inc. We are currently waiting for approval from the European Commission’s DG
Competition.
(4) Jointly owned with SHIC, a subsidiary of Shenzhen Electronics Group.

At December 31, 2022, our front-end facilities had a total maximum capacity of approximately 140,000
wafer starts per week (200mm equivalent). The number of wafer starts per week varies from facility to facility
and from period to period as a result of changes in product mix.

We own all of our manufacturing facilities, but certain facilities (Muar, Malaysia; Shenzhen, China;
Kirkop, Malta; and Toa Payoh and Ang Mo Kio, Singapore) are built on land subject to long-term leases.

We have historically subcontracted a portion of total manufacturing volumes to external suppliers. In

2022, we subcontracted approximately 25% of the value of our total silicon production to external foundries.
Our plan is to continue sourcing silicon from external foundries to give us flexibility in supporting our growth.

At December 31, 2022, we had approximately $3,584 million in outstanding commitments for purchases
of equipment and other assets for delivery in 2023. In 2022, our capital spending, net of proceeds, was $3,524
million compared to $1,828 million in 2021. In the 2020-2022 period the ratio of capital investment spending to
net revenues was about 17%. For more information, see “Item 5. Operating and Financial Review and Prospects
— Financial Outlook: Capital Investment”.

Intellectual Property (IP)

Our success depends in part on our ability to obtain patents, licenses and other IP rights to protect our
proprietary technologies and processes. IP rights that apply to our various products include patents, copyrights,
trade secrets, trademarks and mask work rights. We currently own approximately 19,500 patents and pending
patent applications, corresponding to approximately 9,300 patent families (each patent family containing all
patents originating from the same invention), including 597 new patent filings in 2022.

We believe that our IP represents valuable assets. We rely on various intellectual property laws,
confidentiality procedures and contractual provisions to protect our IP assets and enforce our IP rights. To
optimize the value of our IP assets, we have engaged in licensing our design technology and other IP, including
patents, when consistent with our competitive position and our customers’ interests. We have also entered into
broad-scope cross-licenses and other agreements which enable us to design, manufacture and sell semiconductor
products using the IP rights of third parties and/or operating within the scope of IP rights owned by third parties.

From time to time, we are involved in IP litigation and infringement claims. See Note 26 to our
Consolidated Financial Statements and “Item 3. Key Information — Risk Factors”. Regardless of the validity or
the successful assertion of such claims, we may incur significant costs with respect to the defense thereof, which
could have a material adverse effect on our results of operations, cash flow or financial condition.

Backlog
Our sales are made primarily pursuant to standard purchase orders that are generally booked from one to
twelve months in advance of delivery. Quantities actually purchased by customers, as well as prices, are subject
to variations between booking and delivery and, in some cases, to cancellation due to changes in customer needs
or industry conditions. During periods of economic slowdown and/or industry overcapacity and/or declining
selling prices, customer orders are not generally made far in advance of the scheduled shipment date. Such
reduced lead time can diminish management’s ability to forecast production levels and revenues. When the
economy rebounds, our customers may strongly increase their demands, which can result in capacity constraints
due to a time lag when matching manufacturing capacity with such demand.

In addition, our sales are affected by seasonality, with the first quarter generally showing lowest revenue
levels in the year, and the third or fourth quarter historically generating higher amounts of revenues partly as a
result of the seasonal dynamics for smartphone applications dynamics.

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We also sell certain products to key customers pursuant to frame contracts. Frame contracts are annual
contracts with customers setting forth quantities and prices on specific products that may be ordered in the
future. These contracts allow us to schedule production capacity in advance and allow customers to manage
their inventory levels consistent with just-in-time principles while shortening the cycle times required to
produce ordered products. Orders under frame contracts are also subject to a high degree of volatility, because
they reflect expected market conditions which may or may not materialize. Thus, they are subject to risks of
price reduction, order cancellation and modifications as to quantities actually ordered resulting in inventory
build-ups.

Furthermore, developing industry trends, including customers’ use of outsourcing and their deployment of
new and revised supply chain models, may reduce our ability to forecast changes in customer demand and may
increase our financial requirements in terms of capital expenditures and inventory levels.

We entered 2022 with a backlog higher than we had entering 2021. For 2023, we entered the year with a
backlog higher than what we had entering 2022.

Competition
Markets for our products are intensely competitive. We compete with major international semiconductor
companies and while only a few companies compete with us in all of our product lines, we face significant
competition from each of them. Smaller niche companies are also increasing their participation in the
semiconductor market, and semiconductor foundry companies have expanded significantly, particularly in Asia.
Competitors include manufacturers of standard semiconductors, ASICs and fully customized ICs, including both
chip and board-level products, as well as customers who develop their own IC products and foundry operations.
Some of our competitors are also our customers or suppliers. We compete in different product lines to various
degrees on the basis of price, technical performance, product features, product system compatibility, customized
design, availability, quality and sales and technical support. In particular, standard products may involve greater
risk of competitive pricing, inventory imbalances and severe market fluctuations than differentiated products.
Our ability to compete successfully depends on factors both within and outside our control, including successful
and timely development of new products and manufacturing processes, product performance and quality,
manufacturing yields and product availability, customer service, pricing, industry trends and general economic
trends.

The semiconductor industry is characterized by the high costs associated with developing marketable
products and manufacturing technologies as well as high levels of investment in production capabilities. As a
result, the semiconductor industry has experienced, and is expected to continue to experience, significant
vertical and horizontal consolidation among our suppliers, competitors and customers, which could lead to
erosion of our market share, impact our capacity to compete and require us to restructure our operations. See
“Item 3. Key Information — Risk Factors”.

Organizational Structure and History

We are organized in a matrix structure with geographic regions interacting with product lines, both
supported by shared technology and manufacturing operations and by central functions, designed to enable us to
be closer to our customers and to facilitate communication among the R&D, production, marketing and sales
organizations.

While STMicroelectronics N.V. is the parent company, we conduct our global business through
STMicroelectronics International N.V. and also conduct our operations through service activities from our
subsidiaries. We provide certain administrative, human resources, legal, treasury, strategy, manufacturing,
marketing, insurance and other overhead services to our consolidated subsidiaries pursuant to service
agreements for which we recover the cost.

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The following table lists our consolidated subsidiaries and our percentage of ownership as of December
31, 2022:

Percentage of
Ownership
Legal Seat Name (direct or indirect)
Australia, Sydney STMicroelectronics PTY Ltd 100
Austria, Vienna STMicroelectronics Austria GmbH 100
Belgium, Diegem Proton World International N.V. 100
Brazil, Sao Paulo STMicroelectronics Ltda 100
Canada, Ottawa STMicroelectronics (Canada), Inc. 100
China, Beijing STMicroelectronics (Beijing) R&D Co. Ltd 100
China, Shanghai STMicroelectronics (China) Investment Co. Ltd 100
China, Shenzhen Shenzhen STS Microelectronics Co. Ltd 60
China, Shenzhen STMicroelectronics (Shenzhen) R&D Co. Ltd 100
Czech Republic, Prague STMicroelectronics Design and Application s.r.o. 100
Denmark, Aarhus STMicroelectronics A/S 100
Egypt, Cairo STMicroelectronics Egypt SSC 100
Finland, Nummela STMicroelectronics Finland OY 100
France, Crolles STMicroelectronics (Crolles 2) SAS 100
France, Grenoble STMicroelectronics (Alps) SAS 100
France, Grenoble STMicroelectronics (Grenoble 2) SAS 100
France, Le Mans STMicroelectronics (Grand Ouest) SAS 100
France, Montrouge STMicroelectronics S.A. 100
France, Rousset STMicroelectronics (Rousset) SAS 100
France, Tours STMicroelectronics (Tours) SAS 100
Germany, Aschheim-Dornach STMicroelectronics GmbH 100
Germany, Aschheim-Dornach STMicroelectronics Application GmbH 100
Hong Kong, Kowloon STMicroelectronics Ltd 100
India, New Delhi ST-Ericsson India Pvt Ltd 100
India, Noida STMicroelectronics Pvt Ltd 100
Israel, Netanya STMicroelectronics Limited 100
Italy, Agrate Brianza STMicroelectronics S.r.l. 100
Italy, Naples STMicroelectronics Services S.r.l. 100
Japan, Tokyo STMicroelectronics KK 100
Malaysia, Kuala Lumpur STMicroelectronics Marketing SDN BHD 100
Malaysia, Muar STMicroelectronics SDN BHD 100
Malta, Kirkop STMicroelectronics (Malta) Ltd 100
Mexico, Guadalajara STMicroelectronics Marketing, S. de R.L. de C.V. 100
Morocco, Casablanca STMicroelectronics (MAROC) SAS, a associé unique 100
The Netherlands, Amsterdam STMicroelectronics Finance B.V. 100
The Netherlands, Amsterdam STMicroelectronics Finance II N.V. 100
The Netherlands, Amsterdam STMicroelectronics International N.V. 100
Philippines, Calamba STMicroelectronics, Inc. 100
Philippines, Calamba Mountain Drive Property, Inc. 40
Singapore, Ang Mo Kio STMicroelectronics Asia Pacific Pte Ltd 100
Singapore, Ang Mo Kio STMicroelectronics Pte Ltd 100
Slovenia, Ljubljana STMicroelectronics d.o.o. 100
Spain, Barcelona STMicroelectronics Iberia S.A. 100
Sweden, Jönköping STMicroelectronics Software AB 100
Sweden, Kista STMicroelectronics A.B. 100
Sweden, Norrköping STMicroelectronics Silicon Carbide A.B. 100
Switzerland, Geneva STMicroelectronics S.A. 100
Switzerland, Geneva STMicroelectronics RE S.A. 100
Taiwan, Taipei City Exagan Taiwan Ltd. 80
Thailand, Bangkok STMicroelectronics (Thailand) Ltd 100
United Kingdom, Bristol STMicroelectronics (Research & Development) Limited 100
United Kingdom, Marlow STMicroelectronics Limited 100
United States, Coppell STMicroelectronics Inc. 100
United States, Coppell STMicroelectronics (North America) Holding, Inc. 100

Public Funding
We receive public funding mainly from French, Italian and EU governmental entities. Such funding is
generally provided to encourage R&D activities, industrialization and local economic development. Public

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funding in France, Italy and Europe is generally available to all companies having R&D operations in Europe,
regardless of their ownership structure or country of incorporation. The conditions for the receipt of government
funding may include eligibility restrictions, approval by EU authorities, annual budget appropriations,
compliance with EU regulations, royalties or contingent return provisions as well as specifications regarding
objectives and results. The approval process for such funding may last up to several years. Certain specific
contracts require compliance with extensive regulatory requirements and set forth certain conditions relating to
the funded programs. There could be penalties if these objectives are not fulfilled. Other contracts contain
penalties for late deliveries or for breach of contract, which may result in repayment obligations. Our funding
programs are classified under three general categories: funding for Research and Development (R&D),
Innovation activities (RDI), funding for First Industrial Deployment activities (FID) and capital investment for
pilot lines. We also benefit from tax credits for R&D activities in several countries which are generally available
to all companies. See “Item 5. Operating and Financial Review and Prospects — Results of Operations” and the
Notes to our Consolidated Financial Statements.

The main programs in which we are involved include: (i) Important Project of Common European Interest
(IPCEI) which combines Research, Development and Innovation activities (RDI) as well as First Industrials
Deployment activities (FID); (ii) Key Digital Technologies Initiative (KDT), formerly Electronic Components
and Systems for European Leadership (ECSEL), which combines all electronics related R&D activities and is
operated by joint undertakings formed by the European Union, certain member states and industry; (iii) EU
R&D projects within Horizon Europe (the European Union's research and innovation framework); and (iv)
national or regional programs for R&D and for industrialization in the electronics industries involving many
companies and laboratories. The pan-European programs cover a period of several years, while national or
regional programs in France and Italy are subject mostly to annual budget appropriation.

In December 2018, the European Commission announced the approval of the IPCEI, a Pan-European
project initiated to foster research and innovation in microelectronics to be funded by Germany, France, Italy,
the U.K. and Austria.

In our combined role as beneficiary of the IPCEI on Microelectronics, we have been allocated an overall
funding budget of approximately €340 million for the period 2016-2022 in France (locally referenced as
Nano2022) which was linked to technical objective and associated achievements, and about €720 million for the
period 2018-2024 in Italy. The IPCEI program is highly strengthening our leadership in key technologies. It
contributes to anticipating, accelerating, and securing our technological developments. The IPCEI also has wide
ranging, pan-European benefits on the microelectronics ecosystem from education to downstream industries.

In December 2021, we submitted a new IPCEI program, titled IPCEI on Microelectronics and
Communication Technologies (IPCEI – ME/CT). This new pan-European project was initiated to foster research
and innovation and kick-start the first industrialization of microelectronics. This new IPCEI will involve ST in
France (from 2022 to 2026), Italy (from 2023 to 2027) and Malta (from 2021 to 2025), as well as about 80 other
companies across 16 European countries. In 2022 we recognized €101.5 million of grants related to our
participation in IPCEI in Italy and €72.3 million related to our participation in IPCEI, KDT and other national
and European programs in France.

In addition to public funding through IPCEI programs, in October 2022, the European Commission approved,
under EU State Aid Rules, a support up to €292.5million through the Italian Recovery and Resilience Plan for
the construction of a new integrated silicon carbide substrate manufacturing facility in Catania, Italy. The
project has been recognized as a “first-of-a-kind” facility in Europe in line with the ambitions set out in the
European Chips Act Communication, issued on February 8, 2022.

Suppliers
We use three primary critical types of suppliers in our business: (i) equipment suppliers, (ii) material
suppliers and (iii) external silicon foundries and back-end subcontractors. We also purchase third-party licensed
technology from a limited number of providers.

In the front-end process, we use steppers, scanners, tracking equipment, strippers, chemo-mechanical
polishing equipment, cleaners, inspection equipment, etchers, physical and chemical vapor-deposition
equipment, implanters, furnaces, testers, probers and other specialized equipment. The manufacturing tools that
we use in the back-end process include bonders, burn-in ovens, testers and other specialized equipment. The
quality and technology of equipment used in the IC manufacturing process defines the limits of our technology.
Demand for increasingly smaller chip structures means that semiconductor producers must quickly incorporate

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the latest advances in process technology to remain competitive. Advances in process technology cannot occur
without commensurate advances in equipment technology, and equipment costs tend to increase as the
equipment becomes more sophisticated.

Our manufacturing processes consume significant amounts of energy and use many materials, including
silicon and SiC, GaN and glass wafers, lead frames, mold compound, ceramic packages and chemicals, gases
and water. The prices of energy, such as electricity and natural gas, and many of these materials are volatile due
to the specificity of the market, and other factors including geopolitics. We have therefore adopted a “multiple
sourcing strategy” designed to protect us from the risk of price increases. The same strategy applies to energy
and to supplies for the materials used by us to avoid potential material disruption of essential materials and to
ensure the continuity of energy supply. Our “multiple sourcing strategy”, our financial risk monitoring as well
as the robustness of our supply chain and strong partnership with suppliers are intended to mitigate these risks.
See “Item 3. Key Information — Risk Factors”.

Finally, we also use external subcontractors to outsource wafer manufacturing and assembly and testing of
finished products. See “— Property, Plants and Equipment” above.

Environmental, Health and Safety Matters

We are subject to a variety of environmental, health and safety laws and regulations in the jurisdictions
where we operate. Such laws and regulations govern, among other things, the use, storage, discharge and
disposal of chemicals and other hazardous substances, emissions and waste, as well as the investigation and
remediation of soil and ground water contamination. We are also required to obtain environmental permits,
licenses and other forms of authorization, or give prior notification, in order to operate.

We also adopt a rigorous and pro-active approach to managing our business operations in an
environmentally responsible way. Consistent with our sustainability strategy, we have established proactive
environmental policies with respect to the handling of chemicals, emissions, waste disposals and other
substances of concern from our manufacturing operations. We are certified to be in compliance with quality
standard ISO 9001 on a Company-wide basis. We implement the highest standards across our manufacturing
activities and supply chain. The majority of our manufacturing sites are ISO 14001 (environment), ISO 14064
(greenhouse gas emissions), and ISO 50001 (energy) certified and EMAS validated.

We believe that in 2022 our activities complied with then-applicable environmental regulations in all
material respects. We have engaged outside consultants to audit all of our environmental activities and have
created environmental management teams, information systems and training. We have also instituted
environmental control procedures for processes used by us as well as our suppliers. In 2022, there were no
material environmental claims made against us.

On December 9, 2020, we announced our goal to become carbon neutral by 2027. Our comprehensive
roadmap to carbon neutrality includes two specific targets: compliance with the 1.5°C scenario defined at the
Paris COP21 by 2025, which implies a 50% reduction of direct and indirect greenhouse gas emissions compared
to 2018, and the sourcing of 100% renewable energy by 2027. Our action plan will reduce:
(i) our direct emissions of greenhouse gases (scope 1), mainly through investment in equipment to
burn the gases remaining after manufacturing;
(ii) our overall energy consumption (scope 2);
(iii) our emissions from product transportation, business travel, and employee commuting (part of
scope 3); and
(iv) remaining emissions through the identification and implementation of the most credible and
relevant carbon avoidance and sequestration programs.

On July 12, 2020, the EU Taxonomy Regulation entered into force. The EU Taxonomy Regulation
provides the basis for the EU taxonomy: a classification system, on the basis of which a list of environmentally
sustainable economic activities has been drawn up. The EU Taxonomy Regulation defines overarching
conditions that an economic activity must meet to be considered environmentally sustainable, and focuses on six
environmental objectives. On January 1, 2022 the delegated acts on the technical screening criteria for two
environmental objectives, being Climate Change Mitigation and Adaption to Climate Change, entered into
force, in which technical screening criteria have been laid down which specify environmental performance
requirements for the economic activities to be classified as environmentally sustainable. The delegated acts on
the technical screening criteria for the remaining four environmental objectives are expected to enter into force

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in the course of 2023. As we are subject to an obligation to publish non-financial information pursuant to
Directive 2013/34/EU of the European Parliament and of the Council of June 26, 2013 on the annual financial
statements, consolidated financial statements and related reports of certain types of undertakings, amending
Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives
78/660/EEC and 83/349/EEC (the Non-Financial Reporting Directive), the EU Taxonomy Regulation is
applicable to us, and subsequently, we must disclose information on how and to what extent our activities are
associated with economic activities that qualify as environmentally sustainable. This information will be
disclosed in our Dutch Annual Report.

On January 5, 2023, the CSRD entered into force. The CSRD modernizes and strengthens the rules about
the social and environmental information that companies have to report. The CSRD aims to ensure that investors
and other stakeholders have access to the information they need to assess investment risks arising from climate
change and other sustainability topics. As of our reporting in relation to financial year 2024, the CSRD will
require us to disclose information on the basis of European Sustainability Reporting Standards (“ESRS”) in our
annual report. Based on the CSRD, we will be required to report on the way we operate and manage social and
environmental challenges. In connection with these reporting obligations we will be required to formulate long-
term ESG targets, policy, strategic plans and to conduct due diligence for our own operations and supply chain.
Under the CSRD, further transparency rules are introduced on division of roles and responsibilities within the
Company for our ESG targets. The CSRD also makes it mandatory for companies to have an audit of the
sustainability information that they report. The ESRS, that are currently being further developed, require us to
disclose detailed information on environmental protection, social responsibility and treatment of employees,
respect for human rights, anti-corruption, bribery and on diversity. This information will be disclosed in our
Dutch Annual Report starting from financial year 2024.

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Item 5. Operating and Financial Review and Prospects

Overview
The following discussion should be read in conjunction with our Consolidated Financial Statements and
Notes thereto included elsewhere in this Form 20-F. The following discussion contains 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, particularly in the sections “—
Critical Accounting Policies Using Significant Estimates”, “— Business Outlook”, “— Liquidity and Capital
Resources” and “— Financial Outlook: Capital Investment”. Our actual results may differ significantly from
those projected in the forward-looking statements. For a discussion of factors that might cause future actual
results to differ materially from our recent results or those projected in the forward-looking statements in
addition to the factors set forth below, see “Cautionary Note Regarding Forward-Looking Statements” and Item
3. “Key Information — Risk Factors”. We assume no obligation to update the forward-looking statements or
such risk factors.

Critical Accounting Policies Using Significant Estimates

The preparation of our Consolidated Financial Statements in accordance with U.S. GAAP requires us to
make estimates and assumptions. The primary areas that require significant estimates and judgments by us
include, but are not limited to:
• sales allowances and returns;
• inventory obsolescence reserves and normal manufacturing capacity thresholds to determine costs
capitalized in inventory;
• recognition and measurement of loss contingencies;
• valuation at fair value of assets acquired and liabilities assumed on business acquisitions, and
measurement of any contingent consideration;
• annual and trigger-based impairment review of goodwill and intangible assets, as well as the
assessment of events, which could trigger impairment testing on long-lived assets;
• assessment of our long-lived assets economic useful lives;
• assumptions used in measuring expected credit losses and impairment charges on financial assets;
• assumptions used in assessing the number of awards expected to vest on stock-based compensation
plans;
• assumptions used in calculating pension obligations and other long-term employee benefits; and
• determination of the amount of tax expected to be paid and tax benefit expected to be received,
including deferred income tax assets, valuation allowance and provisions for uncertain tax positions
and claims.

We base the estimates and assumptions on historical experience and on various other factors such as
market trends, market information used by market participants and the latest available business plans that we
believe to be reasonable under the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities. While we regularly evaluate our estimates and assumptions,
the actual results we experience could differ materially and adversely from our estimates.

We believe the following critical accounting policies require us to make significant judgments and
estimates in the preparation of our Consolidated Financial Statements:

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Revenue recognition. Arrangements with customers are considered contracts if all the following criteria
are met: (a) parties have approved the contract and are committed to perform their respective obligations; (b)
each party’s rights regarding the goods or services to be transferred can be identified; (c) payment terms for the
goods or services to be transferred can be identified; (d) the contract has commercial substance and (e)
collectability of substantially all of the consideration is probable. We recognize revenue from products sold to a
customer, including distributors, when we satisfy a performance obligation by transferring control over a
product to the customer. In certain circumstances, we may enter into agreements that concern principally
revenues from services, where the performance obligation is satisfied over time. The objective when allocating
the transaction price is to allocate the transaction price to each performance obligation (or distinct good or
service) in an amount that depicts the amount of consideration to which we expect to be entitled in exchange for
transferring the promised goods or services to the customer. The payment terms typically range between 30 and
90 days. Certain of our customers require us to hold inventory as consignment in their hubs and only purchase
inventory when they require it. Revenue for sales of such inventory is recognized when, at the customer’s
option, the products are withdrawn from the consignment and we satisfy a performance obligation by
transferring control over a product to the customer.

Consistent with standard business practice in the semiconductor industry, price protection is granted to
distribution customers on their existing inventory of our products to compensate them for changes in market
prices. We accrue a provision for price protection based on a rolling historical price trend computed monthly as
a percentage of gross distributor sales. This historical price trend represents differences in recent months
between the invoiced price and the final price to the distributor, adjusted to accommodate a significant change in
the selling price. The short outstanding inventory time, visibility into the inventory product pricing and long
distributor pricing history have enabled us to reliably estimate price protection provisions at period-end. We
record the accrued amounts as a deduction of “Net sales” in the consolidated statements of income at the time of
the sale.

Our customers occasionally return our products for technical reasons. Our standard terms and conditions
of sale provide that if we determine that products do not conform, we will repair or replace the non-conforming
products, or issue a credit note or rebate of the purchase price. Quality returns are identified shortly after sale in
customer quality control testing. Quality returns are usually associated with end-user customers, not with
distribution channels. We record the accrued amounts as a deduction of “Net sales” in the consolidated
statements of income, using historical and current conditions to form a reasonable estimate of future returns.

We record a provision for warranty costs as a charge against “Cost of sales” in the consolidated statements
of income, based on historical trends of warranty costs incurred as a percentage of sales, which management had
determined to be a reasonable estimate of the probable losses to be incurred for warranty claims in a period. Any
potential warranty claims are subject to our determination that we are at fault for damages, and that such claims
usually must be submitted within a short period of time following the date of sale. This warranty is given in lieu
of all other warranties, conditions or terms expressed or implied by statute or common law. Our contractual
terms and conditions typically limit our liability to the sales value of the products that gave rise to the claims.

Our insurance policy relating to product liability covers third-party physical damages and bodily injury,
indirect financial damages as well as immaterial non-consequential damages caused by defective products.

In addition to product sales, we enter into arrangements with customers consisting in transferring licenses
or related to license services. The revenue generated from these arrangements is reported on the line “Other
revenues” of the consolidated statements of income. Other revenues also include patent royalty income, sale of
scrap materials and manufacturing by-products.

Trade accounts receivable. We use a lifetime expected credit losses allowance for all trade receivables.
The allowance includes reasonable assumptions about future credit trends. The historical loss rates are adjusted
to reflect current and forward-looking information on macro-economic factors affecting the ability of our
customers to settle the receivables. Adjustments to the expected credit losses allowance are reported in the line
“Selling, general and administrative” in the consolidated statements of income.

Business combinations and goodwill. The acquisition method of accounting applied to business
combinations requires extensive use of estimates and judgments to allocate the purchase price to the fair value
of acquired assets less assumed liabilities, including any contingent consideration, net of related deferred tax
impacts. If the assumptions and estimates used to allocate the purchase price are not correct or if business

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conditions change, purchase price adjustments or future asset impairment charges could be required. As of
December 31, 2022, the value of goodwill in our consolidated balance sheet amounted to $297 million.

Impairment of goodwill. Goodwill recognized in business combinations is not amortized but is tested for
impairment annually, or more frequently if a triggering event indicating a possible impairment exists. Goodwill
subject to potential impairment is tested at the reporting unit level. This impairment test determines whether the
fair value of each reporting unit under which goodwill is allocated is lower than the total carrying amount of
relevant net assets allocated to such reporting unit, including its allocated goodwill. A goodwill impairment
charge, if any, is recorded for the amount by which a reporting unit’s carrying value exceeds its fair value.
Significant management judgments and estimates are used in forecasting the future discounted cash flows
associated with the reporting unit, including: the applicable industry’s sales volume forecast and selling price
evolution, the reporting unit’s market penetration and its revenues evolution, the market acceptance of certain
new technologies and products, the relevant cost structure, the discount rates applied using a weighted average
cost of capital and the perpetuity rates used in calculating cash flow terminal values. Our evaluations are based
on financial plans updated with the latest available projections of the semiconductor market, our sales
expectations and our costs evolution, and are consistent with the plans and estimates that we use to manage our
business. It is possible, however, that the plans and estimates used may prove to be incorrect, and future adverse
changes in market conditions, changes in strategies, lack of performance of major customers or operating results
of acquired businesses that are not in line with our estimates may require impairments.

We performed our annual impairment test of goodwill during the fourth quarter of 2022 and concluded
that there was no goodwill impairment loss. Impairment charges could result from new valuations triggered by
changes in our product portfolio or strategic alternatives, particularly in the event of a downward shift in future
revenues or operating cash flows in relation to our current plans or in case of capital injections by, or equity
transfers to, third parties at a value lower than the current carrying value.

Intangible assets subject to amortization. Intangible assets subject to amortization include intangible
assets purchased from third parties recorded at cost and intangible assets acquired in business combinations
initially recorded at fair value, comprised mainly of technologies and licenses, and capitalized computer
software. Intangible assets with finite useful lives are reflected net of any impairment losses and are amortized
over their estimated useful lives. Amortization begins when the intangible asset is available for its intended use.
Amortization reflects the pattern in which the asset’s economic benefits are consumed, which usually consists in
applying the straight-line method to allocate the cost of the intangible assets over the estimated useful lives. The
carrying value of intangible assets with finite useful lives is evaluated whenever changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by
which the asset’s carrying amount exceeds its fair value. We evaluate the remaining useful life of an intangible
asset at each reporting date to determine whether events and circumstances warrant a revision to the remaining
period of amortization. Our evaluations are based on financial plans updated with the latest available projections
of growth in the semiconductor market and our sales expectations. They are consistent with the plans and
estimates that we use to manage our business. It is possible, however, that the plans and estimates used may be
incorrect and that future adverse changes in market conditions or operating results of businesses acquired may
not be in line with our estimates and may therefore require us to recognize impairment charges on certain
intangible assets.

In 2022, we recorded a $38 million impairment loss related to certain technologies acquired from a recent
business combination. In 2021 and 2020, we impaired $1 million and $4 million, respectively, of acquired
licenses and technologies with no alternative future use.

We will continue to monitor the carrying value of our assets. If market conditions deteriorate, this could
result in future impairment losses. Further impairment charges could also result from new valuations triggered
by changes in our product portfolio or by strategic transactions, particularly in the event of a downward shift in
future revenues or operating cash flows in relation to our current plans or in case of capital injections by, or
equity transfers to, third parties at a value lower than the one underlying the carrying amount.

As of December 31, 2022, the value of intangible assets subject to amortization in our consolidated
balance sheet amounted to $405 million.

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Property, plant and equipment. Our business requires substantial investments in technologically advanced
manufacturing facilities, which may become significantly underutilized or obsolete as a result of rapid changes
in demand and ongoing technological evolution. The largest component of our long-lived assets is our
manufacturing equipment primarily in our front-end activities, for which the useful life is estimated to be six
years, except for our 300mm manufacturing equipment whose useful life is estimated to be ten years. This
estimate is based on our experience using the equipment over time. Depreciation expense is an important
element of our manufacturing cost structure. We begin to depreciate property, plant and equipment when it is
ready for its intended use.

We evaluate each period whether there is reason to suspect that tangible assets or groups of assets held for
use might not be recoverable. Several impairment indicators exist for making this assessment, such as:
restructuring plans, significant changes in the technology, market, economic or legal environment in which we
operate, available evidence of obsolescence of the asset, or indication that its economic performance is, or will
be, worse than expected. In determining the recoverability of assets to be held and used, we initially assess
whether the carrying value of the tangible assets or group of assets exceeds the undiscounted cash flows
associated with these assets. If exceeded, we then evaluate whether an impairment charge is required by
determining if the asset’s carrying value also exceeds its fair value. We normally estimate this fair value based
on independent market appraisals or the sum of discounted future cash flows, using market assumptions such as
the utilization of our fabrication facilities and the ability to upgrade such facilities, change in the selling price
and the adoption of new technologies. We also evaluate and adjust, if appropriate, the assets’ useful lives at each
reporting date. In 2022, 2021 and 2020, no significant impairment charge was recorded on property, plant and
equipment.

Our evaluations are based on financial plans updated with the latest projections of growth in the
semiconductor market and our sales expectations, from which we derive the future production needs and loading
of our manufacturing facilities, and which are consistent with the plans and estimates that we use to manage our
business. These plans are highly variable due to the high volatility of the semiconductor business and therefore
are subject to continuous modifications. If future growth differs from the estimates used in our plans, in terms of
both market growth and production allocation to our manufacturing plants, this could require a further review of
the carrying amount of our tangible assets and result in a potential impairment loss.

As of December 31, 2022, we did not hold any significant assets for sale.

Inventory. Inventory is stated at the lower of cost or net realizable value. Actual cost is based on an
adjusted standard cost, which approximates cost on a first-in first-out basis for all categories of inventory (raw
materials, work-in-process, finished products). Actual costs are therefore dependent on our manufacturing
performance and cost is based on the normal utilization of our production capacity. In the case of
underutilization of our manufacturing facilities, we estimate the costs associated with unused capacity. These
costs are not included in the valuation of inventory but are charged directly to cost of sales in the consolidated
statements of income. Net realizable value is the estimated selling price in the ordinary course of business, less
reasonably predictable costs of completion, disposal and transportation.

We perform, on a continuous basis, write-offs of inventories, which have the characteristics of slow-
moving, old production dates and technical obsolescence. We evaluate inventory to identify obsolete or slow-
selling items, as well as inventory that is not of saleable quality and we record a specific reserve if we estimate
the inventory will eventually become obsolete. Reserve for obsolescence is estimated for excess uncommitted
inventories based on historical sales data, order backlog and production plans. To the extent that future negative
market conditions generate order backlog cancellations and declining sales, or if future conditions are less
favorable than the projected revenue assumptions, we could record additional inventory reserve, which would
have a negative impact on our gross margin.

Share-based compensation. Our share-based service awards are granted to senior executives and selected
employees. We measure the cost of share-based service awards based on the fair value of the awards as of the
grant date reflecting the market price of the underlying shares at the date of the grant, reduced by the present
value of the dividends expected to be paid on the shares during the requisite service period. While the awards
granted to selected employees are subject to a three-year service period, the awards granted to senior executives
are subject to both a three-year service period and the fulfillment of certain performance conditions, including
our financial results when compared to industry performance. The expense is recognized over the requisite
service period. In 2022, approximately one-half of the total amount of shares awarded were granted to senior
executives and consequently were contingent on the achievement of performance conditions. In order to

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determine share-based compensation to be recorded for the period, we use significant estimates on the number
of awards expected to vest, including the probability of achieving the fixed performance conditions including
those relating to our financial results compared to industry performance, and our best estimates of award
forfeitures and employees’ service periods. Our assumptions related to industry performance are generally taken
with a one quarter lag in line with the availability of market information. In 2022, 2021 and 2020, we recorded a
total charge of approximately $215 million, $221 million and $155 million relating to our outstanding stock
award plans, respectively.

Financial assets. The financial assets held at reporting date are primarily receivables, debt securities and
equity securities. Receivables are measured at amortized cost less any currently expected credit loss allowance.
Investments in equity securities that have readily determinable fair values and for which we do not have the
ability to exercise significant influence are classified as financial assets measured at fair value through earnings.
For investments in equity securities without readily determinable fair values and for which we do not have the
ability to exercise significant influence, we have elected to apply the cost-method as a measurement alternative.
We determine the classification of our financial assets at initial recognition.

Debt securities are classified as-available-for-sale financial assets, with changes in fair value recognized
as a component of other comprehensive income in our consolidated statements of comprehensive income.

The fair values of publicly traded securities are based on current market prices. If the market for a
financial asset is not active and if no observable market price is obtainable, we measure fair value by using
assumptions and estimates. In measuring fair value, we make maximum use of market inputs and minimize the
use of unobservable inputs.

As of December 31, 2022, we did not hold any material equity securities reported under the equity
method. Debt securities totaled $679 million and were reported as marketable securities in the consolidated
balance sheet as of December 31, 2022.

Income taxes. We make estimates and judgments in determining income tax for the period, comprising
current and deferred income tax. We assess the income tax expected to be paid or the tax benefit expected to be
received related to the current year taxable profit and loss in each individual tax jurisdiction and recognize
deferred income tax for all temporary differences arising between the tax bases of assets and liabilities and their
carrying amount in the Consolidated Financial Statements. Furthermore, at each reporting date, we assess all
material uncertain tax positions in all jurisdictions to determine the amount of income tax benefits that we do
not expect to reasonably sustain. As of December 31, 2022, we had uncertain tax positions estimated at $61
million.

We also assess the likelihood of realization of our deferred tax assets. Their ultimate realization is
dependent upon, among other things, our ability to generate future taxable profit available, or tax credits before
their expiration, or our ability to implement prudent and feasible tax planning, or the possibility to settle
uncertain tax positions against available net operating loss carry forwards, or similar tax losses and credits. We
record a valuation allowance against the deferred tax assets when we consider it is more likely than not that the
deferred tax assets will not be realized.

As of December 31, 2022, we had deferred tax assets of $602 million, net of valuation allowance.

We could be required to record further valuation allowances thereby reducing the amount of total deferred
tax assets, resulting in an increase in our income tax charge, if our estimates of projected future taxable income
and benefits from available tax strategies are reduced as a result of a change in business conditions or in
management’s plans or due to other factors, or if changes in current tax regulations are enacted that impose
restrictions on the timing or extent of our ability to utilize net operating losses and tax credit carry-forwards in
the future. Likewise, a change in the tax rates applicable in the various jurisdictions or unfavorable outcomes of
any ongoing tax audits could have a material impact on our future tax provisions in the periods in which these
changes could occur.

Pension and Post-Employment Benefits. Our consolidated statements of income and our consolidated
balance sheets include amounts for pension obligations and other long-term employee benefits that are measured
using actuarial valuations. As of December 31, 2022, our pension and other long-term employee benefit
obligations net of plan assets amounted to $405 million. These valuations are based on key assumptions,
including discount rates, expected long-term rates of return on funds, turnover rates and salary increase rates.

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These assumptions used in the determination of the net periodic benefit cost are updated on an annual basis at
the beginning of each fiscal year or more frequently upon the occurrence of significant events. Any changes in
the pension schemes or in the above assumptions can have an impact on our valuations. The measurement date
we use for our plans is December 31.

Patent and other Intellectual Property (“IP”) litigation or claims. We record a provision when we believe
that it is probable that a liability has been incurred at the date of the Consolidated Financial Statements and the
amount of the loss can be reasonably estimated. We regularly evaluate losses and claims to determine whether
they need to be adjusted based on current information available to us. Such estimates are difficult to the extent
that they are largely dependent on the status of ongoing litigation that may vary based on positions taken by the
court with respect to issues submitted, demands of opposing parties, changing laws, discovery of new facts or
other matters of fact or law. As of December 31, 2022, based on our current evaluation of ongoing litigation and
claims we face, we have not estimated any amounts that could have a material impact on our results of
operations and financial condition with respect to either probable or possible risks. In the event of litigation that
is adversely determined with respect to our interests, or in the event that we need to change our evaluation of a
potential third-party claim based on new evidence, facts or communications, unexpected rulings or changes in
the law, this could have a material adverse effect on our results of operations or financial condition at the time it
were to materialize. We are in discussion with several parties with respect to claims against us relating to
possible infringement of IP rights. We are also involved in certain legal proceedings concerning such issues. See
“Item 8. Financial Information — Legal Proceedings” and Note 26 to our Consolidated Financial Statements.

Other claims. We are subject to the possibility of loss contingencies arising in the ordinary course of
business. These include but are not limited to: product liability claims and/or warranty costs on our products,
contractual disputes, indemnification claims, employee grievances, tax claims beyond assessed uncertain tax
positions as well as claims for environmental damages. We are also exposed to numerous legal risks which until
now have not resulted in legal disputes and proceedings. These include risks related to product recalls,
environment, anti-trust, anti-corruption and competition as well as other compliance regulations. We may also
face claims in the event of breaches of law committed by individual employees or third parties. In determining
loss contingencies, we consider the likelihood of a loss of an asset or the occurrence of a liability, as well as our
ability to reasonably estimate the amount of such loss or liability. An estimated loss is recorded when we believe
that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We
regularly re-evaluate any losses and claims and determine whether our provisions need to be adjusted based on
the current information available to us. As of December 31, 2022, based on our current evaluation of ongoing
litigation and claims we face, we have not estimated any amounts that could have a material impact on our
results of operations and financial condition with respect to either probable or possible risks. In the event we are
unable to accurately estimate the amount of such loss in a correct and timely manner, this could have a material
adverse effect on our results of operations or financial condition at the time such loss was to materialize. For
further details of our legal proceedings refer to “Item 8. Financial Information — Legal Proceedings” and Note
26 to our Consolidated Financial Statements.

Fiscal Year 2022

Under Article 35 of our Articles of Association, our financial year extends from January 1 to December
31, which is the period end of each fiscal year. In 2022, the first quarter ended on April 2, the second quarter
ended on July 2, the third quarter ended on October 1 and the fourth quarter ended on December 31. In 2023, the
first quarter will end on April 1, the second quarter will end on July 1, the third quarter will end on September
30 and the fourth quarter will end on December 31. Based on our fiscal calendar, the distribution of our
revenues and expenses by quarter may be unbalanced due to a different number of days in the various quarters
of the fiscal year and can also differ from equivalent prior years’ periods, as illustrated in the below table for the
years 2021, 2022 and 2023.

Q1 Q2 Q3 Q4
Days
2021 93 91 91 90
2022 92 91 91 91
2023 91 91 91 92

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2022 Business Overview

Our results of operations for each period were as follows:

Year ended December 31, Three Months Ended

December 31, October 1, December 31,
2022 2021 2022 2022 2021
(In millions, except per (Unaudited, in millions, except per share
share amounts) amounts)
Net revenues $ 16,128 $ 12,761 $ 4,424 $ 4,321 $ 3,556
Gross profit 7,635 5,326 2,102 2,059 1,609
Gross margin as percentage of net
revenues 47.3% 41.7% 47.5% 47.6% 45.2%
Operating income 4,439 2,419 1,287 1,272 885
Operating margin 27.5% 19.0% 29.1% 29.4% 24.9%
Net income attributable to parent
company(1) 3,960 2,000 1,248 1,099 750
Diluted earnings per share(2) 4.19 2.16 1.32 1.16 0.82
(1) Following a change in U.S. GAAP reporting guidance effective January 1, 2022, net income for the full year 2022 and the third and
fourth quarters of 2022, do not include phantom interests associated with convertible bonds. Prior year comparative periods have not
been restated.
(2) Diluted earnings per share for the full year 2022 and the third and fourth quarters of 2022, include the full dilutive effect of our
outstanding convertible debt upon adoption of the new U.S. GAAP reporting guidance adopted on January 1, 2022. Prior year
comparative periods have not been restated.

Our total available market is defined as “TAM”, while our serviceable available market is defined as
“SAM” and represents the market for products sold by us (i.e., TAM excluding major devices such as
microprocessors, DRAM and flash-memories, optoelectronics devices other than optical sensors, video
processing and wireless application specific market products, such as baseband and application processors).

Based on industry data published by WSTS, semiconductor industry revenues in 2022 increased on a
year-over-year basis by approximately 3% for the TAM and by approximately 16% for the SAM, to reach
approximately $573 billion and $285 billion, respectively. In the fourth quarter of 2022, on a year-over-year
basis, the TAM decreased by approximately 15% and the SAM increased by approximately 4%. Sequentially,
the TAM decreased by approximately 8% and the SAM decreased by approximately 3%.

Full year 2022 net revenues increased 26.4% to $16.13 billion, driven by strong demand in automotive
and industrial, and our engaged customer programs; gross margin was 47.3% and operating margin was 27.5%.

Our fourth quarter net revenues amounted to $4,424 million, increasing 24.4% year-over-year, gross
margin was 47.5%, and operating margin was 29.1%. On a sequential basis, fourth quarter net revenues
increased 2.4%, 60 basis points above the mid-point of our guidance. ADG and MDG reported increases in net
revenues on a sequential basis, while AMS decreased.

Our quarterly performance was above the SAM on a sequential basis.

Our effective average exchange rate was $1.10 for €1.00 for the full year 2022, as compared to $1.18 for
€1.00 for the full year 2021. Our effective average exchange rate for the fourth quarter of 2022 was $1.04 for
€1.00, compared to $1.08 for €1.00 for the third quarter of 2022 and $1.17 for €1.00 in the fourth quarter of
2021. For a more detailed discussion of our hedging arrangements and the impact of fluctuations in exchange
rates, see “Impact of Changes in Exchange Rates”.

Our 2022 gross margin increased 560 basis points to 47.3% from 41.7% in 2021, principally driven by
favorable pricing, improved product mix and positive currency effects, net of hedging, partially offset by the
inflation of manufacturing input costs.

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Our fourth quarter 2022 gross profit was $2,102 million and gross margin was 47.5%, 20 basis points
above the mid-point of our guidance, principally driven by a more favorable product mix. On a sequential basis,
gross margin decreased by 10 basis points. On a year-over-year basis, gross margin increased 230 basis points,
mainly due to favorable pricing, improved product mix, positive currency effects, net of hedging, partially offset
by the inflation of manufacturing input costs.

Our operating expenses, comprised of aggregated selling, general & administrative (“SG&A”) and
research & development (“R&D”) expenses, amounted to $3,355 million in 2022, increasing by 10.2% from
$3,046 million in the prior year, mainly due to higher cost of labor and higher levels of activity, primarily in
R&D programs, partially offset by positive currency effects. Aggregated R&D and SG&A expenses were $850
million for the fourth quarter of 2022, compared to $815 million and $752 million in the prior and year-ago
quarters, respectively. The sequential increase was mainly due to seasonality associated with lower vacation
days and higher activity, primarily on R&D programs. The year-over-year increase of operating expenses was
mainly due to higher cost of labor and higher activity, partially offset by positive currency effects.

Other income and expenses, net, were $159 million in 2022 compared to $141 million in 2021, increasing
mainly due to higher income from public funding. Fourth quarter other income and expenses, net, were $35
million, compared to $28 million in the prior quarter and $32 million in the year-ago quarter, mainly driven by
higher income from public funding.

In 2022, no impairment and restructuring charges were reported compared to $2 million in 2021.

Operating income in 2022 was $4,439 million, increasing by $2,020 million compared to 2021, mainly
driven by the combining effect of higher revenues and improved gross margin profitability, partially offset by
higher operating expenses.

Operating income in the fourth quarter grew on a sequential and year-over-year basis to $1,287 million
compared to $1,272 million and $885 million in the prior and year-ago quarter, respectively. The year-over-year
increase was mainly driven by higher revenues and increased gross margin profitability, partially offset by
higher operating expenses.

Full year 2022 net income was $3,960 million, or $4.19 diluted earnings per share, compared to net
income of $2,000 million, or $2.16 diluted earnings per share for the full year 2021. Fourth quarter net income
increased on a sequential and year-over-year basis to $1,248 million, or $1.32 diluted earnings per share,
compared to net income of $1,099 million, or $1.16 diluted earnings per share, in the prior quarter, and a net
income of $750 million, or $0.82 diluted earnings per share, in the year-ago quarter.

During 2022, our net cash from operating activities was at $5,202 million. Our net cash used in investing
activities was at $4,591 million with capital expenditure payments, net of proceeds from sales at $920 million
and $3,524 million during the fourth quarter and full year 2022, respectively, compared to $1,828 million for the
full year 2021.

Our free cash flow, a non-U.S. GAAP measure, amounted to $1,591 million in 2022 compared to $1,120
million in 2021. Refer to “Liquidity and Capital Resources” for the reconciliation of the free cash flow, a non-
U.S. GAAP measure, to our consolidated statements of cash flows.

During 2022, we received $200 million of proceeds from long-term debt and used $346 million for the
repurchase of common stock, $212 million of cash dividends to our shareholders and $134 million for long-term
debt repayment.

Business Outlook
Our first quarter 2023 outlook reflects revenues of approximately $4.20 billion at the mid-point,
increasing year-over-year by 18.5%, and decreasing on a sequential basis by 5.1%, plus or minus 350 basis
points. Gross margin is expected to be at approximately 48.0%, plus or minus 200 basis points. For 2023, we
plan to invest about $4.0 billion in capital expenditures, mainly to increase our 300mm wafer fabs and silicon
carbide manufacturing capacity including our substrate initiative.

Based on our strong customer demand and increased manufacturing capacity, we will drive the Company
based on a plan for 2023 revenues in the range of $16.8 billion to $17.8 billion.

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This outlook is based on an assumed effective currency exchange rate of approximately $1.06 = €1.00 for
the 2023 first quarter and includes the impact of existing hedging contracts. The first quarter will close on April
1, 2023.

These are forward-looking statements that are subject to known and unknown risks and uncertainties that
could cause actual results to differ materially; in particular, refer to those known risks and uncertainties
described in “Cautionary Note Regarding Forward-Looking Statements” and “Item 3. Key Information — Risk
Factors” herein.

Other Developments
On December 13, 2022, we announced that we have been recognized for leadership in corporate
transparency and performance on water security by global environmental non-profit CDP, securing a place on
CDP’s annual “A List”.

On December 1, 2022, we announced the cooperation with Soitec on Silicon Carbide (SiC) substrates,
with the qualification of Soitec’s SiC substrate technology by ST planned over the next 18 months.

On October 5, 2022, we announced our plan to build an integrated Silicon Carbide (SiC) substrate
manufacturing facility in Italy to support the increasing demand from our customers for SiC devices across
automotive and industrial applications. This facility, built at our Catania site in Italy alongside the existing SiC
device manufacturing facility, will be a first of a kind in Europe for the production in volume of 150mm SiC
epitaxial substrates, integrating all steps in the production flow. Production is expected to start in 2023, enabling
a balanced supply of SiC substrate between internal and merchant supply.

On August 24, 2022, we published our IFRS 2022 Semi Annual Accounts for the six-month period ended
July 2, 2022 on our website and filed them with the Netherlands Authority for the Financial Markets (Autoriteit
Financiële Markten) (“AFM”).

On August 4, 2022, we signed a Commercial and Cooperation Agreement with GlobalFoundries to create
a new, jointly-operated 300mm semiconductor manufacturing facility adjacent to ST’s existing 300mm facility
in Crolles, France. This facility is targeted to ramp at full capacity by 2026, with up to 620,000 300mm wafer
per year production at full build-out. The project remains subject to regulatory approvals from the European
Commission’s DG Competition.

On July 20, 2022, we announced a new cooperation model with CARIAD, the software unit of
Volkswagen Group, under which the underlying parties will jointly develop an automotive system-on-chip
(SoC). The planned cooperation targets the new generation of Volkswagen Group vehicles that will be based on
the unified and scalable software platform. At the same time, the parties indicated that they are moving to agree
that TSMC, one of the world's leading dedicated semiconductor foundry companies, will manufacture the SoC
wafers for ST.

On July 11, 2022, we signed a Memorandum of Understanding with GlobalFoundries to create a new,
jointly-operated 300mm semiconductor manufacturing facility adjacent to ST’s existing 300mm facility in
Crolles, France. This facility is targeted to ramp at full capacity by 2026, with up to 620,000 300mm wafer per
year production at full build-out.

On May 25, 2022, we held our AGM in Amsterdam, the Netherlands. The proposed resolutions, all
approved by the shareholders, were:
• The adoption of the Company's Statutory Annual Accounts for the year ended December 31, 2021,
prepared in accordance with International Financial Reporting Standards (IFRS-EU) and filed with
the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten) on March 24,
2022;
• The distribution of a cash dividend of $0.24 per outstanding share of the Company’s common stock
to be distributed in quarterly installments of $0.06 in each of the second, third and fourth quarters of
2022 and first quarter of 2023;
• The reappointment of Ms. Janet Davidson, as member of the Supervisory Board for a two-year term
to expire at the end of the 2024 AGM;

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• The appointment of Ms. Donatella Sciuto, as member of the Supervisory Board, for a three-year term
expiring at the end of the 2025 AGM in replacement of Ms. Lucia Morselli whose mandate expired
at the end of the 2022 AGM;
• The approval of the stock-based portion of the compensation of the President and CEO;
• The authorization to the Managing Board, until the end of the 2023 AGM, to repurchase shares,
subject to the approval of the Supervisory Board;
• The delegation to the Supervisory Board of the authority to issue new common shares, to grant rights
to subscribe for such shares, and to limit and/or exclude existing shareholders’ pre-emptive rights on
common shares, until the end of the 2023 AGM;
• The discharge of the sole member of the Managing Board; and
• The discharge of the members of the Supervisory Board.

On May 12, 2022, we outlined the path to our $20 billion+ revenue ambition at our Capital Markets Day
in Paris, France.

On May 3, 2022, we announced the publication of our 25th sustainability report detailing our 2021
performance.

On April 8, 2022, we announced a new collaboration with other leading semiconductor players to advance
the next generation FD-SOI roadmap for Automotive, IoT and Mobile Applications.

On March 2, 2022, we announced that the European Investment Bank is providing us with a €600 million
loan to support our research and development and pre-industrialisation activities in Europe.

Results of Operations
Segment Information
We design, develop, manufacture and market a broad range of products, including discrete and standard
commodity components, application-specific integrated circuits (“ASICs”), full-custom devices and semi-
custom devices and application-specific standard products (“ASSPs”) for analog, digital and mixed-signal
applications. In addition, we further participate in the manufacturing value chain of smartcard products, which
includes the production and sale of both silicon chips and smartcards.

Our reportable segments are as follows:

• Automotive and Discrete Group (ADG), comprised of dedicated automotive integrated circuits
(“ICs”), and discrete and power transistor products.
• Analog, MEMS and Sensors Group (AMS), comprised of analog, smart power, MEMS sensors and
actuators, and optical sensing solutions.
• Microcontrollers and Digital ICs Group (MDG), comprised of general-purpose microcontrollers
and microprocessors, connected security products (e.g. embedded secured elements and NFC
readers), memories (e.g. serial and page EEPROM) and RF and Communications products.

Effective July 1, 2022, the Low Power RF business unit was transferred from AMS (within the Analog
sub-group) to MDG (within the Microcontrollers and Memories sub-group) with no significant impact on our
segment reporting. Prior year periods have been adjusted accordingly.

For the computation of the segments’ internal financial measurements, we use certain internal rules of
allocation for the costs not directly chargeable to the segments, including cost of sales, SG&A expenses and a
part of R&D expenses. In compliance with our internal policies, certain costs are not allocated to the segments,
but reported in “Others”. Net revenues of “Others” include revenues from sales assembly services and other
revenues. Operating income (loss) of Others includes items such as unused capacity charges, including reduced
manufacturing activity due to COVID-19 and incidents leading to power outage, impairment, restructuring
charges and other related closure costs, management reorganization expenses, phase-out and start-up costs of
certain manufacturing facilities, and other unallocated expenses such as: strategic or special R&D programs,
certain corporate-level operating expenses, patent claims and litigations, and other costs that are not allocated to

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product groups, as well as operating earnings of other products. In addition, depreciation and amortization
expense is part of the manufacturing costs allocated to the segments and is neither identified as part of the
inventory variation nor as part of the unused capacity charges; therefore, it cannot be isolated in cost of sales.
Finally, public grants are allocated to our segments proportionally to the incurred expenses on the sponsored
projects.

Wafer costs are allocated to the segments based on actual cost. From time to time, with respect to specific
technologies, wafer costs are allocated to segments based on market price.

Annual Results of Operations

The following table sets forth certain financial data from our consolidated statements of income:

2022 2021 2020

% of net % of net % of net
$ million revenues $ million revenues $ million revenues
Net sales $ 16,083 99.7% $ 12,729 99.7% $ 10,181 99.6%
Other revenues 45 0.3 32 0.3 38 0.4
Net revenues 16,128 100.0 12,761 100.0 10,219 100.0
Cost of sales (8,493) (52.7) (7,435) (58.3) (6,430) (62.9)
Gross profit 7,635 47.3 5,326 41.7 3,789 37.1
Selling, general and administrative (1,454) (9.0) (1,323) (10.4) (1,109) (10.9)
Research and development (1,901) (11.8) (1,723) (13.5) (1,548) (15.1)
Other income and expenses, net 159 1.0 141 1.2 202 1.9
Impairment, restructuring charges and other
related closure costs — — (2) — (11) (0.1)
Operating income 4,439 27.5 2,419 19.0 1,323 12.9
Interest income (expense), net 58 0.4 (29) (0.2) (20) (0.1)
Other components of pension benefit costs (11) (0.1) (10) (0.1) (12) (0.1)
Income (loss) on equity-method investments — — — — 2 —
Loss on financial instruments, net — — (43) (0.4) (26) (0.3)
Income before income taxes and
noncontrolling interest 4,486 27.8 2,337 18.3 1,267 12.4
Income tax expense (520) (3.2) (331) (2.6) (159) (1.6)
Net income 3,966 24.6 2,006 15.7 1,108 10.8
Net income attributable to noncontrolling
interest (6) — (6) — (2) —
Net income attributable to parent
company stockholders $ 3,960 24.6% $ 2,000 15.7% $ 1,106 10.8%

Net revenues

Year Ended December 31, % Variation

2022 2021 2020 2022 vs 2021 2021 vs 2020
(in millions)
Net sales $ 16,083 $ 12,729 $ 10,181 26.3% 25.0%
Other revenues 45 32 38 40.3 (17.2)
Net revenues $ 16,128 $ 12,761 $ 10,219 26.4% 24.9%

Our 2022 net revenues increased 26.4% compared to the prior year, as a result of an approximate 27%
increase in average selling prices, driven by a more favorable product mix and sales price increase, partially
offset by 1% decrease in volumes.

Our 2021 net revenues increased 24.9% compared to the prior year, as a result of an approximate 19%
increase in volumes and an approximate 6% increase in average selling price, mainly due to higher selling prices
and a more favorable product mix.

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In 2022, 2021 and 2020, our largest customer, Apple, accounted for 16.8%, 20.5% and 23.9% of our net
revenues, respectively, reported within our three product groups.

Net revenues by product group

Year Ended % Variation

2022 2021 2020 2022 vs 2021 2021 vs 2020
(In millions)
ADG $ 5,969 $ 4,350 $ 3,284 37.2% 32.5%
AMS(1) 4,911 4,587 3,858 7.1 18.9
MDG(1) 5,228 3,802 3,064 37.5 24.1
Others 20 22 13 — —
Total consolidated net revenues $ 16,128 $ 12,761 $ 10,219 26.4% 24.9%

(1) Effective July 1, 2022, the Low Power RF business unit was transferred from AMS to MDG with no significant impact on segment
reporting. Prior year periods have been adjusted accordingly.

For the full year 2022, ADG revenues were up 37.2% with higher average selling prices of approximately
40%, thanks to a better product mix and higher selling prices, partially offset by lower volumes of
approximately 3%. AMS revenues increased 7.1% due to higher average selling prices of approximately 18%,
mainly due to a better product mix, partially offset by lower volumes of approximately 11%. MDG revenues
increased by 37.5% compared to prior year, driven by higher average selling prices of approximately 24%, due
to a better product mix and higher selling prices, and higher volumes of approximately 14%.

For the full year 2021, ADG revenues were up 32.5% with higher volumes of approximately 17% and
higher average selling prices of approximately 15%, mainly due to favorable product mix and higher selling
prices. AMS revenues increased 18.9%, due to higher volumes of approximately 22%, partially offset by lower
average selling prices of approximately 3%, as a result of a less favorable product mix. MDG revenues
increased 24.1% compared to the prior year, driven by higher volumes of approximately 20%, and higher
average selling prices of approximately 4%, mainly due to higher selling prices.

Net revenues by Market Channel(1)

Year Ended December 31,

2022 2021 2020
(As percentage of net revenues)
OEM 67% 66% 73%
Distribution 33 34 27
Total 100% 100% 100%

(1) Original Equipment Manufacturers (“OEM”) are the end-customers to which we provide direct marketing application engineering
support, while Distribution refers to the distributors and representatives that we engage to distribute our products around the world.

By market channel, our 2022 net revenues in Distribution amounted to 33% of our total consolidated
revenues, decreasing from 34% in 2021. When comparing 2021 with 2020 figures, net revenues in Distribution
had increased by 7 percentage points, from 27% to 34%.

Net Revenues by Location of Shipment(1)

Year Ended December 31, % Variation

2022 2021 2020 2022 vs 2021 2021 vs 2020
(In millions)
Europe, Middle East, Africa (“EMEA”) $ 3,619 $ 2,557 $ 1,966 41.6% 30.0%
Americas 2,310 1,525 1,165 51.4 30.9
Asia Pacific 10,199 8,679 7,088 17.5 22.5
Total consolidated net revenues $ 16,128 $ 12,761 $ 10,219 26.4% 24.9%

(1) Net revenues by location of shipment are classified by location of customer invoiced or reclassified by shipment destination in line
with customer demand. For example, products ordered by U.S.-based companies to be invoiced to Asia Pacific affiliates are
classified as Asia Pacific revenues. Furthermore, the comparison among the different periods may be affected by shifts in shipments
from one location to another, as requested by our customers.

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By location of shipment, EMEA revenues grew 41.6%, mainly driven by higher sales in Microcontrollers
and Automotive. Americas revenues increased 51.4%, mainly due to higher sales in Microcontrollers,
Automotive, RF Communications and Power Discrete. Asia Pacific revenues increased 17.5% mainly driven by
higher sales in Automotive, Microcontrollers and Power Discrete.

In 2021, EMEA revenues grew 30.0%, mainly driven by higher sales in Automotive, Microcontrollers and
Power Discrete. Americas revenues increased 30.9%, mainly due to higher sales in Power Discrete and
Microcontrollers. Asia Pacific revenues increased 22.5% with all sub-groups except RF Communications
contributing to the increase.

Gross profit

Year Ended December 31, Variation

2022 2021 2020 2022 vs 2021 2021 vs 2020
(In millions)
Cost of sales $ (8,493) $ (7,435) $ (6,430) (14.2)% (15.6)%
Gross profit $ 7,635 $ 5,326 $ 3,789 43.4% 40.6%
Gross margin (as percentage of net revenues) 47.3% 41.7% 37.1% 560 bps 460 bps

In 2022, gross margin increased 560 basis points to 47.3% from 41.7% in 2021, principally driven by
favorable pricing, improved product mix and positive currency effects, net of hedging, partially offset by the
inflation of manufacturing input costs. Unused capacity charges in 2022 were $22 million.

In 2021, gross margin increased by 460 basis points to 41.7% from 37.1% in the full year 2020,
principally driven by improved manufacturing efficiency, lower unused charges, product mix and favorable
pricing. Unused capacity charges in 2021 were $16 million.

Operating expenses

Year Ended December 31, Variation

2022 2021 2020 2022 vs 2021 2021 vs 2020
(In millions)
Selling, general and administrative expenses $(1,454) $(1,323) $(1,109) (9.9)% (19.2)%
Research and development expenses (1,901) (1,723) (1,548) (10.4) (11.3)
Total operating expenses $(3,355) $(3,046) $(2,657) (10.2)% (14.6)%
As percentage of net revenues 20.8% 23.9% 26.0% -310 bps -210 bps

The 2022 operating expenses increased 10.2% from $3,046 million in the prior year, mainly due to higher
cost of labor and higher levels of activity primarily in R&D programs, partially offset by positive currency
effects, net of hedging.

The 2021 operating expenses increased 14.6% compared to the prior year, mainly due to higher cost of
labor and negative currency effects, net of hedging.

The R&D expenses were net of research tax credits, which amounted to $106 million in 2022, $130
million in 2021 and $131 million in 2020.

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Other income and expenses, net

Year Ended December 31,

2022 2021 2020
(In millions)
Public funding $ 177 $ 162 $ 231
Start-up and phase-out costs (13) — (8)
Exchange gain (loss), net 15 7 8
Patent costs (8) (10) (11)
Gain on sale of non-current assets 2 5 14
COVID-19 incremental costs (10) (19) (32)
Other, net (4) (4) —
Other income and expenses, net $ 159 $ 141 $ 202
As percentage of net revenues 1.0% 1.2% 1.9%

In 2022 we recognized other income, net, of $159 million, increasing compared to $141 million in 2021.
The increase was mainly due to higher public funding.

In 2021 we recognized other income, net, of $141 million, decreasing compared to $202 million in 2020.
The decrease was mainly due to lower public funding.

Impairment, restructuring charges and other related closure costs

Year Ended December 31,

2022 2021 2020
(In millions)
Impairment, restructuring charges and other
related closure costs $ — $ (2) $ (11)

There were no pending restructuring initiatives in 2022.

In 2021 we recorded $2 million of impairment, restructuring charges and other related closure costs,
composed of $3 million restructuring charges in association with the restructuring plan in Bouskoura, Morocco,
$2 million reversal as an adjustment to accrued restructuring charges when compared to actual amounts paid and
$1 million impairment charge on licenses with no alternative future use.

In 2020 we recorded $11 million of impairment, restructuring charges and other related closure costs,
mainly composed of $8 million restructuring charges in association with the restructuring plan in Bouskoura,
Morocco and $4 million consisting of impairment of licenses with no alternative future use.

Operating income

Year Ended December 31,

2022 2021 2020
(In millions)
Operating income $ 4,439 $ 2,419 $ 1,323
As percentage of net revenues 27.5% 19.0% 12.9%

Operating income in 2022 was $4,439 million, increasing by $2,020 million compared to 2021, mainly
driven by the combining effect of higher revenues and improved gross margin profitability, partially offset by
higher operating expenses.

Operating income in 2021 was $2,419 million, increasing by $1,096 million compared to 2020, mainly
driven by the combining effect of higher revenues and improved gross margin profitability, partially offset by
higher operating expenses and lower public funding.

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Operating income by product group

Year Ended December 31,

2022 2021 2020
% of net % of net % of net
$ million revenues $ million revenues $ million revenues
ADG $ 1,469 24.6% $ 512 11.8% $ 182 5.5%
AMS(1) 1,237 25.2 1,022 22.5 816 21.2
MDG(1) 1,830 35.0 908 23.7 498 16.3
Total operating income of product
groups 4,536 28.1 2,442 19.2 1,496 14.6
Others(2) (97) — (23) — (173) —
Total consolidated operating income $ 4,439 27.5% $ 2,419 19.0% $ 1,323 12.9%

(1) Effective July 1, 2022, the Low Power RF business unit was transferred from AMS to MDG with no significant impact on segment
reporting. Prior year periods have been adjusted accordingly.
(2) Operating income (loss) of Others includes items such as unused capacity charges, including reduced manufacturing activity due to
COVID-19 and incidents leading to power outage, impairment, restructuring charges and other related closure costs, management
reorganization costs, phase-out and start-up costs of certain manufacturing facilities, and other unallocated income (expenses) such as:
strategic or special R&D programs, certain corporate level operating expenses, patent claims and litigations, and other costs that are
not allocated to product groups, as well as operating earnings of other products.

In 2022, ADG operating income was $1,469 million compared to $512 million in 2021, with higher
profitability in both Automotive and Power Discrete. AMS operating income increased by $215 million to
$1,237 million, with all subgroups contributing. MDG operating income increased by $922 million from $908
million in 2021, driven by both Microcontrollers and RF Communications.

In 2021, ADG operating income was $512 million compared to $182 million in 2020, with higher
profitability in both Automotive and Power Discrete. AMS operating income increased by $206 million to
$1,022 million, mainly driven by Analog and MEMS. MDG operating income increased to $908 million from
$498 million in 2020, driven by Microcontrollers.

Reconciliation to consolidated operating income

Year Ended December 31,

2022 2021 2020
(In millions)
Total operating income of product groups $ 4,536 $ 2,442 $ 1,496
Impairment, restructuring charges and other
related closure costs — (2) (11)
Start-up and phase-out costs (13) — —
Unused capacity charges (22) (16) (153)
Other unallocated manufacturing results (57) 1 (8)
Gain on sale of non-current assets 2 3 11
Strategic and other R&D
programs and other non-allocated provisions(1) (7) (9) (12)
Total operating loss Others (97) (23) (173)
Total consolidated operating income $ 4,439 $ 2,419 $ 1,323

(1) Includes unallocated income and expenses such as certain corporate-level operating expenses and other income (costs) that are not
allocated to the product groups.

Interest income (expense), net

Year Ended December 31,

2022 2021 2020
(In millions)
Interest income (expense), net $ 58 $ (29) $ (20)

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In 2022, we recorded a net interest income of $58 million, compared to net interest expense of $29 million
and $20 million in 2021 and 2020, respectively. In 2022, net interest income was composed of $71 million of
interest income, partially offset by interest expense on borrowings and banking fees of $13 million.

On January 1, 2022, we adopted the new U.S. GAAP reporting guidance on distinguishing liabilities from
equity and EPS, by applying the modified retrospective method, under which prior year periods are not restated.
Interest expense recorded in 2021 and 2020 included a charge of $34 million and $42 million related to the
outstanding senior unsecured convertible bonds, mainly resulting from the non-cash accretion expense, as
recorded under the previous accounting guidance. With the adoption of the new guidance, the finance cost of the
convertible debt instruments outstanding at the date of adoption is limited to the amortization expense of debt
issuance costs.

In 2021, interest expense on our borrowings and banking fees amounted to $42 million, of which $34
million was a non-cash interest expense resulting from the accretion of the liability component of our senior
unsecured convertible bonds. The interest expense was partially offset by $13 million of interest income on cash
and cash equivalents, short-term deposits and marketable securities.

In 2020, interest expense on our borrowings and banking fees amounted to $54 million, of which $42
million was a non-cash interest expense related to our senior unsecured convertible bonds. The interest expense
was partially offset by $34 million of interest income on cash and cash equivalents, short-term deposits and
marketable securities.

Loss on financial instruments, net

Year Ended December 31,

2022 2021 2020
(In millions)
Loss on financial instruments, net $ — $ (43) $ (26)

In 2022, we recorded a gain on financial instruments of less than $1 million.

In 2021, we recorded a net $43 million loss on financial instruments, of which $45 million loss on the
settlement of Tranche B of our 2017 Senior Unsecured Convertible Bonds. This loss was associated with the fair
value measurement of the liability component of Tranche B upon settlement and the write-off of unamortized
debt issuance costs. In addition, we recorded a $2 million gain on the sale of one of our non-strategic
investments.

In 2020, we recorded a net $26 million loss on financial instruments, of which $25 million loss on the
settlement of Tranche A of our 2017 Senior Unsecured Convertible Bonds. This loss was associated with the
fair value measurement of the liability component of Tranche A upon settlement and the write-off of the
unamortized debt issuance costs.

Income tax expense

Year Ended December 31,

2022 2021 2020
(In millions)
Income tax expense $ (520) $ (331) $ (159)

In 2022, we registered an income tax expense of $520 million, compared to $331 million in 2021 and
$159 million in 2020. These amounts reflect the actual taxes calculated on our income before income taxes in
each of our jurisdictions and tax benefits, net of valuation allowances, associated with our estimates of the net
operating loss realization, in certain jurisdictions, against future taxable profits, one-time tax benefits related to
previous year positions and our best estimate of additional tax charges related to potential uncertain tax
positions and claims.

In 2022, the effective tax rate was 15%, before $133 million of tax benefit from discrete items, which
included a one-time non-cash income tax benefit of $140 million due to the reversal of valuation allowances in
certain tax jurisdictions.

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In 2021, the effective tax rate was 15%, before $17 million of tax benefit from discrete items, which
included the reversal of valuation allowances in certain tax jurisdictions.

In 2020, the effective tax rate was 15%, before $31 million of tax benefit from discrete items.

Our tax rate is variable and depends on changes in the level of operating results within various local
jurisdictions and on changes in the taxation rates applicable in these jurisdictions, as well as changes in
estimates and assumptions used when assessing our tax positions. Our income tax amounts and rates depend
also on our loss carry-forwards and their relevant valuation allowances, which are based on estimated projected
plans and available tax planning; in the case of material changes in these plans, the valuation allowances could
be adjusted accordingly with an impact on our income tax expense (benefit). We currently enjoy certain tax
benefits in some countries. Such benefits may not be available in the future due to changes in the local
jurisdictions; our effective tax rate could be different in future periods and may increase in the coming years. In
addition, our yearly income tax expense includes the estimated impact of provisions related to tax positions
which have been considered as uncertain.

Net income attributable to noncontrolling interest

Year Ended December 31,

2022 2021 2020
(In millions)
Net income attributable to noncontrolling interest $ (6) $ (6) $ (2)

Net income attributable to noncontrolling interest amounted to $6 million in 2022 and 2021, and $2 million in
2020.

Net income attributable to parent company

Year Ended December 31,

2022 2021 2020
(In millions)
Net income attributable to parent company $ 3,960 $ 2,000 $ 1,106
As percentage of net revenues 24.6% 15.7% 10.8%

For 2022, we reported a net income attributable to parent company of $3,960 million, compared to $2,000
million and $1,106 million for 2021 and 2020, respectively.

The 2022 net income attributable to parent company represented diluted earnings per share of $4.19
compared to $2.16 and $1.20 for 2021 and 2020, respectively.

Diluted earnings per share for the year 2022 includes the full dilutive effect of our outstanding convertible
debt upon adoption of the newly applicable U.S. GAAP reporting guidance on January 1, 2022. Prior year
periods have not been restated.

Quarterly Results of Operations

Certain quarterly financial information for the years 2022 and 2021 are set forth below. Such information
is derived from our unaudited Consolidated Financial Statements, prepared on a basis consistent with the
audited Consolidated Financial Statements that include, in our opinion, all normal adjustments necessary for a
fair statement of the interim information set forth therein. Operating results for any quarter are not necessarily
indicative of results for any future period. In addition, in view of the significant volatility we have experienced
in recent years, the increasingly competitive nature of the markets in which we operate, the changes in products
mix and the currency effects of changes in the composition of sales and production among different geographic
regions, we believe that period-to-period comparisons of our operating results should not be relied upon as an
indication of future performance.

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Our quarterly and annual operating results are also affected by a wide variety of other factors that could
materially and adversely affect revenues and profitability or lead to significant variability of operating results,
please see “Item 3. Key Information — Risk Factors — Risks Related to Our Operations”. As only a portion of
our expenses varies with our revenues, there can be no assurance that we will be able to reduce costs promptly
or adequately in relation to revenue declines to compensate for the effect of any such factors. As a result,
unfavorable changes in the above or other factors have in the past and may in the future adversely affect our
operating results. Quarterly results have also been and may be expected to continue to be substantially affected
by the cyclical nature of the semiconductor and electronic systems industries, the speed of some process and
manufacturing technology developments, market demand for existing products, the timing and success of new
product introductions and the levels of provisions and other unusual charges incurred. Certain additions of our
quarterly results will not total our annual results due to rounding.

Net revenues

Three Months Ended % Variation

Year-
December 31, October 1, December 31, Over-
2022 2022 2021 Sequential Year
(Unaudited, in millions)
Net sales $ 4,408 $ 4,305 $ 3,542 2.4% 24.5%
Other revenues 16 16 14 (3.7) 9.1
Net revenues $ 4,424 $ 4,321 $ 3,556 2.4% 24.4%

Our fourth quarter 2022 net revenues amounted to $4,424 million, registering a sequential increase of
2.4%, 60 basis points above the mid-point of the released guidance. The sequential increase resulted from higher
average selling prices of approximately 10%, driven by a more favorable product mix, partially offset by lower
volumes of approximately 8%.

On a year-over-year basis, our net revenues increased by 24.4%. This increase was mainly due to higher
average selling prices of approximately 33%, driven by higher selling prices and a more favorable product mix,
partially offset by lower volumes of approximately 9%.

Net revenues by product group

Three Months Ended % Variation

Year-
December 31, October 1, December 31, Over-
2022 2022 2021 Sequential Year
(Unaudited, in millions)
ADG $ 1,696 $ 1,563 $ 1,226 8.5% 38.4%
AMS(1) 1,339 1,380 1,251 (3.0) 7.0
MDG(1) 1,383 1,374 1,072 0.7 29.1
Others 6 4 7 — —
Total consolidated net revenues $ 4,424 $ 4,321 $ 3,556 2.4% 24.4%

(1) Effective July 1, 2022, the Low Power RF business unit was transferred from AMS to MDG with no significant impact on segment
reporting. Prior year period has been adjusted accordingly.

On a sequential basis, ADG revenues were up 8.5%, driven by an approximate 20% increase in average
selling prices, mainly due to a more favorable product mix, partially offset by lower volumes of approximately
11%. AMS revenues decreased 3.0%, as a result of lower volumes of approximately 9%, partially offset by
higher average selling prices of 6%, mainly due to a more favorable product mix. MDG revenues increased
0.7% due to higher volumes of approximately 1%.

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On a year-over-year basis, fourth quarter net revenues increased 24.4%. ADG revenues increased 38.4%
compared to the year-ago quarter due to higher average selling prices of approximately 52%, mainly due to a
better product mix and higher selling prices, partially offset by lower volumes of approximately 14%. AMS
quarter revenues increased 7.0% year-over-year. The increase was driven by higher average selling prices of
approximately 22% due to a more favorable product mix, partially offset by lower volumes of approximately
15%. MDG fourth quarter revenues increased 29.1%, driven by higher average selling prices of approximately
17%, due to the combination of a more favorable product mix and higher selling prices, and higher volumes of
approximately 12%.

Net Revenues by Market Channel(1)

Three Months Ended

December 31, October 1, December 31,
2022 2022 2021
(Unaudited, in %)
OEM 68% 67% 67%
Distribution 32 33 33
Total 100% 100% 100%

(1) Original Equipment Manufacturers (“OEM”) are the end-customers to which we provide direct marketing application engineering
support, while Distribution refers to the distributors and representatives that we engage to distribute our products around the world.

By market channel, our fourth quarter revenues in Distribution amounted to 32% of our total net revenues,
substantially flat compared to the previous and year-ago quarters.

Net Revenues by Location of Shipment(1)

Three Months Ended % Variation

Year-
December 31, October 1, December 31, Over-
2022 2022 2021 Sequential Year
(Unaudited, in millions)
EMEA $ 1,065 $ 936 $ 709 13.8% 50.3%
Americas 669 586 412 14.2 62.1
Asia Pacific 2,690 2,799 2,435 (3.9) 10.5
Total consolidated net revenues $ 4,424 $ 4,321 $ 3,556 2.4% 24.4%

(1) Net revenues by location of shipment are classified by location of customer invoiced or reclassified by shipment destination in line
with customer demand. For example, products ordered by U.S.-based companies to be invoiced to Asia Pacific affiliates are
classified as Asia Pacific revenues. Furthermore, the comparison among the different periods may be affected by shifts in shipments
from one location to another, as requested by our customers.

By region of shipment, in the 2022 fourth quarter, EMEA revenues grew 13.8%, mainly driven by higher
sales in Automotive and Microcontrollers. Americas revenues increased 14.2%, mainly due to higher sales in
RF Communications and Power Discrete. Asia Pacific revenues decreased by 3.9%, mainly due to lower sales in
Analog and MEMS, partially offset by higher sales in the Optical Sensing Solutions sub-group.

On a year-over-year basis, EMEA revenues grew 50.3%, mainly driven by higher sales in
Microcontrollers and Automotive. Americas revenues increased 62.1%, mainly due to higher sales in Power
Discrete, Automotive and Microcontrollers. Asia Pacific revenues increased 10.5%, mainly due to higher sales
in Optical Sensing Solutions and Automotive, partially offset by lower sales in Analog.

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Gross Profit

Three Months Ended Variation

Year-
December 31, October 1, December 31, Over-
2022 2022 2021 Sequential Year
(Unaudited, in millions)
Cost of sales $ (2,322) $ (2,262) $ (1,947) (2.6)% (19.2%)
Gross profit $ 2,102 $ 2,059 $ 1,609 2.1% 30.7%
Gross margin
(as percentage of net revenues) 47.5% 47.6% 45.2% -10 bps 230 bps

Fourth quarter gross profit was $2,102 million and gross margin was 47.5%, 20 basis points above the
mid-point of our guidance, principally driven by a more favorable product mix. On a sequential basis, gross
margin decreased by 10 basis points while it increased 230 basis points year-over-year, principally due to
favorable pricing, improved product mix, positive currency effects, net of hedging, partially offset by the
inflation of manufacturing input costs.

Operating expenses

Three Months Ended % Variation

Year-
December 31, October 1, December 31, Over-
2022 2022 2021 Sequential Year
(Unaudited, in millions)
Selling, general and administrative
expenses $ (378) $ (352) $ (350) (7.3)% (7.9)%
Research and development expenses (472) (463) (402) (1.9) (17.4)
Total operating expenses $ (850) $ (815) $ (752) (4.3)% (13.0)%
As percentage of net revenues 19.2% 18.9% 21.1% 30 bps -190 bps

On a sequential basis, operating expenses increased by $35 million, mainly due to seasonality associated
with lower vacation days and higher activity.

On a year-over-year basis, operating expenses increased by $98 million, mainly due to higher cost of labor
and higher activity primarily on R&D programs, partially offset by positive currency effects, net of hedging.

R&D expenses were net of research tax credits, which amounted to $27 million in the fourth quarter of
2022, compared to $33 million and $31 million in the prior and year-ago quarters, respectively.

Other income and expenses, net

Three Months Ended

December 31, October 1, December 31,
2022 2022 2021
(Unaudited, in millions)
Public funding $ 47 $ 28 $ 40
Start-up and phase-out costs (11) (1) —
Exchange gain (loss), net 2 6 2
Patent costs (1) (3) (5)
COVID-19 incremental costs (1) (1) (5)
Other, net (1) (1) —
Other income and expenses, net $ 35 $ 28 $ 32
As percentage of net revenues 0.8% 0.6% 0.9%

Fourth quarter other income and expenses, net, amounted to $35 million, compared to $28 million in the
prior quarter and $32 million in the year-ago quarter, mainly driven by higher income from public funding.

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Impairment, restructuring charges and other related closure costs

Three Months Ended

December 31, October 1, December 31,
2022 2022 2021
(Unaudited, in millions)
Impairment, restructuring charges and
other related closure costs $ — $ — $ (4)

There were no pending restructuring initiatives in 2022.

In the fourth quarter of 2021 we recorded $4 million of restructuring charges, related to an additional
charge on benefits paid to employees as part of prior year restructuring plans incurred in one of our back-end
sites.

Operating income

Three Months Ended

December 31, October 1, December 31,
2022 2022 2021
(Unaudited, in millions)
Operating income $ 1,287 $ 1,272 $ 885
As percentage of net revenues 29.1% 29.4% 24.9%

In the fourth quarter of 2022, operating income was $1,287 million, compared to an operating income of
$1,272 million and $885 million in the prior and year-ago quarters, respectively.

While on a sequential basis, our operating income remained substantially flat, the year-over-year increase
was mainly driven by higher revenues and increased gross margin profitability, partially offset by higher
operating expenses.
Operating income by product group

Three Months Ended

December 31, 2022 October 1, 2022 December 31, 2021
% of net % of net % of net
$ million revenues $ million revenues $ million revenues
(Unaudited)
ADG $ 470 27.7% $ 404 25.9% $ 216 17.6%
AMS(1) 346 25.8 376 27.2 337 27.0
MDG(1) 495 35.8 504 36.7 316 29.5
Total operating income of product
groups 1,311 29.7 1,284 29.7 869 24.4
Others(2) (24) — (12) — 16 —
Total consolidated operating income $ 1,287 29.1% $ 1,272 29.4% $ 885 24.9%

(1) Effective July 1, 2022, the Low Power RF business unit was transferred from AMS to MDG with no significant impact on segment
reporting. Prior year periods have been adjusted accordingly.
(2) Operating income (loss) of Others includes items such as unused capacity charges, including reduced manufacturing activity due to
COVID-19 and incidents leading to power outage, impairment, restructuring charges and other related closure costs, management
reorganization costs, phase-out and start-up costs of certain manufacturing facilities, and other unallocated income (expenses) such
as: strategic or special R&D programs, certain corporate level operating expenses, patent claims and litigations, and other costs that
are not allocated to product groups, as well as operating earnings of other products.

On a sequential basis, ADG fourth quarter operating income improved by $66 million, driven by both
Automotive and Power Discrete. AMS operating income decreased sequentially by $30 million, due to lower
profitability in Analog and MEMS, partially offset by higher profitability in Optical Sensing Solutions. MDG
operating income decreased by $9 million sequentially.

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On a year-over-year basis, ADG operating income increased by $254 million, reflecting higher
profitability in both Power Discrete and Automotive. AMS operating income increased by $9 million, mainly
due to higher profitability in Optical Sensing Solutions, partially offset by lower profitability in Analog. MDG
operating income increased by $179 million, driven by both Microcontrollers and RF Communications.

Reconciliation to consolidated operating income

Three Months Ended

December 31, October 1, December 31,
2022 2022 2021
(Unaudited, in millions)
Total operating income of product groups $ 1,311 $ 1,284 $ 869
Impairment, restructuring charges and other
related closure costs — — (4)
Start-up and phase-out costs (11) (1) —
Other unallocated manufacturing results 2 (8) 8
Strategic and other R&D
programs and other non-allocated provisions (15) (3) 12
Total operating income (loss) Others (24) (12) 16
Total consolidated operating income $ 1,287 $ 1,272 $ 885

Interest income (expense), net

Three Months Ended

December 31, October 1, December 31,
2022 2022 2021
(Unaudited, in millions)
Interest income (expense), net $ 33 $ 16 $ (5)

In the fourth quarter of 2022, we recorded net interest income of $33 million, compared to $16 million in
the prior quarter and $5 million of net interest expense in the year-ago quarter. The fourth quarter net interest
income was composed of $40 million of interest income, partially offset by $7 million of interest expenses on
our borrowings and banking fees.

On January 1, 2022, we adopted the new U.S. GAAP reporting guidance on distinguishing liabilities from
equity and EPS, by applying the modified retrospective method, under which prior year periods are not restated.
Interest expense recorded in the year ago quarter included a charge of $5 million related to the outstanding
senior unsecured convertible bonds, mainly resulting from the non-cash accretion expense, as recorded under
the previous accounting guidance. With the adoption of the new guidance, the finance cost of the convertible
debt instruments outstanding at the date of adoption is limited to the amortization expense of debt issuance
costs.

Income tax expense

Three Months Ended

December 31, October 1, December 31,
2022 2022 2021
(Unaudited, in millions)
Income tax expense $ (66) $ (185) $ (127)

During the fourth and third quarters of 2022 and the fourth quarter of 2021, we recorded an income tax
expense of $66 million, $185 million and $127 million, respectively, reflecting (i) in the third quarter of 2022
the estimated annual effective tax rate based on expected taxes to be paid or received in each of our
jurisdictions, as applied to the consolidated income before income taxes and (ii) in both fourth quarters, the
actual income tax expense or benefit in each jurisdiction as well as the true-up of tax provisions based upon the
most updated visibility on open tax positions.

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The fourth quarter of 2022 income tax expense included a one-time tax benefit of $140 million due to the
reversal of valuation allowances in certain tax jurisdictions.

Net income attributable to parent company

Three Months Ended

December 31, October 1, December 31,
2022 2022 2021
(Unaudited, in millions)
Net income attributable to parent company $ 1,248 $ 1,099 $ 750
As percentage of net revenues 28.2% 25.4% 21.1%

For the fourth quarter of 2022, we reported a net income of $1,248 million, compared to a net income of
$1,099 million and $750 million in the prior and year-ago quarters, respectively. The fourth quarter 2022, net
income represented diluted earnings per share of $1.32 compared to $1.16 in the prior quarter and $0.82 in the
prior-year quarter.

Diluted earnings per share for the fourth quarter of 2022 includes the full dilutive effect of our outstanding
convertible debt upon adoption of the newly applicable U.S. GAAP reporting guidance on January 1, 2022.
Prior periods have not been restated.
Impact of Changes in Exchange Rates
Our results of operations and financial condition can be significantly affected by material changes in the
exchange rates between the U.S. dollar and other currencies, particularly the Euro.

As a market practice, the reference currency for the semiconductor industry is the U.S. dollar and the
market prices of semiconductor products are mainly denominated in U.S. dollars. However, revenues for some
of our products are quoted in currencies other than the U.S. dollar, such as Euro-denominated sales, and
consequently are directly affected by fluctuations in the value of the U.S. dollar. As a result of currency
variations, the appreciation of the Euro compared to the U.S. dollar could increase our level of revenues when
translated into U.S. dollars or the depreciation of the Euro compared to the U.S. dollar could decrease our level
of revenues when reported in U.S. dollars. Over time and depending on market conditions, the prices in the
industry could align to the equivalent amount in U.S. dollars, except that there is a lag between the changes in
the currency rate and the adjustment in the price paid in local currency, which is proportional to the amplitude of
the currency swing, and such adjustment could be only partial and/or delayed, depending on market demand.
Furthermore, certain significant costs incurred by us, such as manufacturing costs, SG&A expenses, and R&D
expenses, are largely incurred in the currency of the jurisdictions in which our operations are located. Given that
most of our operations are located in the Eurozone and other non-U.S. dollar currency areas, including
Singapore, our costs tend to increase when translated into U.S. dollars when the U.S. dollar weakens or to
decrease when the U.S. dollar strengthens.

Our principal strategy to reduce the risks associated with exchange rate fluctuations is to balance as much
as possible the proportion of sales to our customers denominated in U.S. dollars with the amount of materials,
purchases and services from our suppliers denominated in U.S. dollars, thereby reducing the potential exchange
rate impact of certain variable costs relative to revenues. Moreover, in order to further reduce the exposure to
U.S. dollar exchange fluctuations, we hedge certain line items on our consolidated statements of income, in
particular with respect to a portion of cost of sales, most of R&D expenses and certain SG&A expenses, located
in the Eurozone, which we designate as cash flow hedge transactions. We use two different types of hedging
instruments: forward contracts and currency options (including collars).

Our consolidated statements of income included income and expense items translated at the average U.S.
dollar exchange rate for the period, plus the impact of the hedging contracts expiring during the period. Our
effective average exchange rate was $1.10 for €1.00 for the full year 2022 and $1.18 for €1.00 for the full year
2021. Our effective exchange rate was $1.04 for €1.00 for the fourth quarter of 2022, $1.08 for €1.00 for the
third quarter of 2022 and $1.17 for €1.00 for the fourth quarter of 2021. These effective exchange rates reflect
the actual exchange rates combined with the effect of cash flow hedge transactions impacting earnings in the
period.

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The time horizon of our cash flow hedging for manufacturing costs and operating expenses may run up to
24 months, for a limited percentage of our exposure to the Euro, depending on currency market circumstances.
As of December 31, 2022, the outstanding hedged amounts were €1,777 million to cover manufacturing costs
and €1,040 million to cover operating expenses, at an average exchange rate of approximately $1.09 for €1.00
(considering the collars at upper strike), maturing from January 4, 2023 to August 28, 2024. As of December 31,
2022, measured in respect to the exchange rate at period closing of about $1.07 to €1.00, these outstanding
hedging contracts and certain settled contracts covering manufacturing expenses capitalized in inventory
resulted in a deferred gain of approximately $17 million before tax, recorded in “Accumulated other
comprehensive income (loss)” in the consolidated statements of equity, compared to a deferred loss of
approximately $48 million before tax as of December 31, 2021.

We also hedge certain manufacturing costs denominated in Singapore dollars (SGD); as of December 31,
2022, the outstanding hedged amounts were SGD 247 million at an average exchange rate of about SGD 1.38 to
$1.00 maturing over the period from January 5, 2023 to November 30, 2023. As of December 31, 2022, the
deferred gain of these outstanding hedging contracts were $6 million, compared to immaterial deferred gains
before tax as of December 31, 2021.

Our cash flow hedging policy is not intended to cover our full exposure and is based on hedging a
declining portion of our exposure in the next four quarters. In 2022, as a result of our cash flow hedging, we
recycled to earnings a loss of $197 million, composed of a $129 million loss impacting cost of sales, a $53
million loss impacting R&D and a $15 million loss impacting SG&A expenses. In 2021, as a result of our cash
flow hedging, we recycled to earnings a gain of $19 million, composed of a $15 million gain impacting cost of
sales, a $3 million gain impacting R&D and $1 million gain impacting SG&A expenses.

In addition to our cash flow hedging, in order to mitigate potential exchange rate risks on our commercial
transactions, we purchase and enter into foreign exchange forward contracts and currency options to cover
foreign currency exposure in payables or receivables at our affiliates, which we do not designate for hedge
accounting. We may in the future purchase or sell similar types of instruments. See “Item 11. Quantitative and
Qualitative Disclosures About Market Risk” in our Form 20-F. Furthermore, we may not predict on a timely
basis the amount of future transactions in the volatile industry environment. No assurance may be given that our
hedging activities will sufficiently protect us against fluctuations in the value of the U.S. dollar. Consequently,
our results of operations have been and may continue to be impacted by fluctuations in exchange rates. The net
effect of our consolidated foreign exchange exposure in payables and receivables at our affiliates resulted in a
net gain of $15 million recorded in “Other income and expenses, net” in our 2022 consolidated statement of
income compared to a net gain of $7 million and $8 million in 2021 and 2020, respectively.

The assets and liabilities of subsidiaries whose functional currency is different from the U.S. dollar
reporting currency are, for consolidation purposes, translated into U.S. dollars at the period-end exchange rate.
Income and expenses, as well as cash flows, are translated at the average exchange rate for the period. The
balance sheet impact, as well as the income statement and cash flow impact, of these currency translations have
been, and may be, significant from period to period since a large part of our assets and liabilities and activities
are accounted for in Euros as they are located in jurisdictions where the Euro is the functional currency.
Adjustments resulting from the currency translation are recorded directly in equity and are reported as
“Accumulated other comprehensive income (loss)” in the consolidated statements of equity. As of December
31, 2022, our outstanding indebtedness was denominated mainly in U.S. dollars and in Euros.

For a more detailed discussion, see “Item 3. Key Information — Risk Factors — Risks Related to Our
Operations”.

Impact of Changes in Interest Rates

Interest rates may fluctuate upon changes in financial market conditions and material changes can affect
our results of operations and financial condition, since these changes can impact the total interest income
received on our cash and cash equivalents, short-term deposits and marketable securities, as well as the total
interest expense paid on our financial debt.

Our interest income (expense), net, as reported in our consolidated statements of income, is the balance
between interest income received from our cash and cash equivalents, short-term deposits and marketable
securities and interest expense recorded on our financial liabilities, including bank fees (including fees on
committed credit lines or on the sale without recourse of receivables, if any). Our interest income is dependent

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upon fluctuations in interest rates, mainly in U.S. dollars and Euros, since we invest primarily on a short-term
basis; any increase or decrease in the market interest rates would mean a proportional increase or decrease in our
interest income. Our interest expenses are also dependent upon fluctuations in interest rates since our financial
liabilities include European Investment Bank (“EIB”) and Cassa Depositi e Prestiti SpA (“CDP”) Floating Rate
Loans at Euribor plus variable spreads. See Note 15 to our Consolidated Financial Statements.

As of December 31, 2022, our total financial resources, including cash and cash equivalents, short-term
deposits and marketable securities, generated an average annual interest rate of 4.16%. At the same date, the
average annual interest rate on our outstanding debt was 0.82%.

A rise in interest rates to address inflation or otherwise will also impact the base rates applicable in our
credit arrangements and will result in borrowed funds becoming more expensive to us over time. These
financing and inflationary pressures may also reduce disposable income on a macro-economic basis, eroding the
values of savings, and could have a negative impact on our customers’ ability to purchase our products in the
same volumes.

Impact of Changes in Equity Prices

As of December 31, 2022, we did not hold any significant investments in equity securities with a material
exposure to equity price risk. However, on these equity investments, carrying value could be reduced due to
further losses or impairment charges. See Note 12 and Note 13 to our Consolidated Financial Statements.

Liquidity and Capital Resources

Treasury activities are regulated by our policies, which define procedures, objectives and controls. Our
policies focus on the management of our financial risk in terms of exposure to currency rates and interest rates.
Most treasury activities are centralized, with any local treasury activities subject to oversight from our head
treasury office. The majority of our cash and cash equivalents are held in U.S. dollars and Euros and are placed
with financial institutions rated at least as single A long-term rating from two of the major rating agencies,
meaning at least A3 from Moody’s Investors Service (“Moody’s”) and A- from Standard & Poor’s (“S&P”) or
Fitch Ratings (“Fitch”). Marginal amounts are held in other currencies. See “Item 11. Quantitative and
Qualitative Disclosures About Market Risk”.

Our total liquidity was $4,518 million as of December 31, 2022, increasing compared to $3,516 million as
of December 31, 2021. As of December 31, 2022, our total liquidity was comprised of $3,258 million in cash
and cash equivalents, $581 million in short-term deposits and $679 million in marketable securities, all
classified as current assets.

As of December 31, 2022, marketable securities were $679 million invested in U.S. Treasury Bonds, with
a rating of Aaa/AA+/AAA from Moody’s, S&P and Fitch, respectively, and a weighted average maturity of 3.5
years. The securities are classified as available-for-sale and reported at fair value. This fair value measurement
corresponds to a Level 1 fair value hierarchy measurement. To optimize the return yield on our short-term
investments, we also held $581 million of available cash in short-term deposits as of December 31, 2022. These
short-term deposits represent liquidity with original maturity beyond three months and no significant risk of
changes in fair value.

Cash flow
We maintain an adequate cash position and a low debt-to-equity ratio to provide us with adequate
financial flexibility. As in the past, our cash management policy is to finance our investment needs mainly with
net cash from operating activities.

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During 2022, our cash and cash equivalents increased by $33 million. The components of the net cash
increase for 2022 and the comparable periods are set forth below:

Year Ended December 31,

2022 2021 2020
(In millions)
Net cash from operating activities $ 5,202 $ 3,060 $ 2,093
Net cash used in investing activities (4,591) (1,518) (2,043)
Net cash from (used in) financing activities (567) (1,314) 348
Effect of changes in exchange rates (11) (9) 1
Net cash increase $ 33 $ 219 $ 399

Net cash from operating activities. Net cash from operating activities is the sum of (i) net income adjusted
for non-cash items and (ii) changes in net working capital. The net cash from operating activities in 2022 was
$5,202 million compared to $3,060 million in the prior year, increasing mainly due to higher net income.

Net cash used in investing activities. Investing activities used $4,591 million in 2022, increasing from
$1,518 million in the prior year, mainly due to higher payment for net purchase of tangible assets which totaled
$3,524 million compared to $1,828 million in the prior year, purchases of marketable securities and net
investments in short-term deposits. Capital investments for the year 2022 included (i) investments in advanced
wafer fabs, such as the 300mm fab in Crolles, France and the new 300mm fab in Agrate, Italy; (ii) SiC
activities, primarily in Singapore and Catania, Italy; and (iii) in selected programs of capacity growth in other
front-end and back-end activities.

Net cash from (used in) financing activities. Net cash used in financing activities was $567 million in
2022, compared to net cash from financing activities of $1,314 million in 2021, and consisted mainly of $346
million repurchase of common stock, $212 million of dividends paid to our stockholders and $134 million
repayment of long-term debt, partially offset by $200 million of proceeds from the drawdown of our credit
facility with CDP signed in 2022.

Free Cash Flow (non-U.S. GAAP measure). We also present Free Cash Flow, which is a non-U.S. GAAP
measure, defined as (i) net cash from operating activities plus (ii) net cash used in investing activities, excluding
payment for purchase of (and proceeds from matured) marketable securities, and net investment in (and
proceeds from) short-term deposits, which are considered as temporary financial investments. The result of this
definition is ultimately net cash from operating activities plus payment for purchase (and proceeds from sale) of
tangible, intangible and financial assets, and net cash paid for business acquisitions. We believe Free Cash Flow,
a non-U.S. GAAP measure, provides useful information for investors and management because it measures our
capacity to generate cash from our operating and investing activities to sustain our operations. Free Cash Flow is
not a U.S. GAAP measure and does not represent total cash flow since it does not include the cash flows
generated by or used in financing activities. Free Cash Flow reconciles with the net cash increase (decrease) by
including the payment for purchase of (and proceeds from matured) marketable securities and net investment in
(and proceeds from) short-term deposits, the net cash from (used in) financing activities and the effect of
changes in exchange rates. In addition, our definition of Free Cash Flow may differ from definitions used by
other companies. Free Cash Flow is determined from our consolidated statements of cash flows as follows:

Year Ended December 31,

2022 2021 2020
(In millions)
Net cash from operating activities $ 5,202 $ 3,060 $ 2,093
Payment for purchase, net of proceeds from sale of tangible assets (3,524) (1,828) (1,279)
Payment for purchase, net of proceeds from sale, of intangible assets (87) (97) (75)
Payment for purchase, net of proceeds from sale, of financial assets and
equity investments — (15) 1
Payment for business acquisitions, net of cash acquired — — (113)
Free Cash Flow (non-U.S. GAAP measure) (1) $ 1,591 $ 1,120 $ 627
(1) Free Cash Flow can also be expressed as Net cash from operating and investing activities, excluding cash from (used in) marketable
securities and short-term deposits.

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In 2022, we had a positive Free Cash Flow of $1,591 million, compared to positive $1,120 million and
positive $627 million in 2021 and 2020, respectively.

Capital Resources
Net Financial Position (non-U.S. GAAP measure). Our Net Financial Position represents the difference
between our total liquidity and our total financial debt. Our total liquidity includes cash and cash equivalents,
short-term deposits and marketable securities, and our total financial debt includes short-term debt and long-
term debt, as reported in our consolidated balance sheets. Net Financial Position is not a U.S. GAAP measure,
but we believe it provides useful information for investors and management because it gives evidence of our
global position either in terms of net indebtedness or net cash by measuring our capital resources based on cash
and cash equivalents, short-term deposits and marketable securities and the total level of our financial debt. Our
definition of Net Financial Position may differ from definitions used by other companies and therefore
comparability may be limited. Our Net Financial Position for each period has been determined from our
consolidated balance sheets as follows:

Year Ended December 31,

2022 2021 2020
(In millions)
Cash and cash equivalents $ 3,258 $ 3,225 $ 3,006
Short-term deposits 581 291 581
Marketable securities 679 — 133
Total liquidity 4,518 3,516 3,720
Short-term debt (175) (143) (795)
Long-term debt (2,542) (2,396) (1,826)
Total financial debt (2,717) (2,539) (2,621)
Net Financial Position $ 1,801 $ 977 $ 1,099

Our Net Financial Position as of December 31, 2022 was a net cash position of $1,801 million, increasing
compared to the net cash position of $977 million as of December 31, 2021.

Cash and cash equivalents amounted to $3,258 million as of December 31, 2022.

Short-term deposits amounted to $581 million as of December 31, 2022 and consisted of available
liquidity with original maturity over three months.

Marketable securities amounted to $679 million as of December 31, 2022 and consisted of U.S. Treasury
Bonds classified as available-for-sale.

Financial debt was $2,717 million, as of December 31, 2022 and was composed of (i) $175 million of
short-term debt and (ii) $2,542 million of long-term debt. The breakdown of our total financial debt included
(i) $827 million in EIB loans, (ii) $334 million in CDP loans, (iii) $1,495 million in our 2020 Senior Unsecured
Convertible Bonds, (iii) $57 million in finance leases and, (iv) $4 million in loans from other funding programs.

The EIB loans are comprised of three long-term amortizing credit facilities as part of public funding
programs. The first, signed in August 2017, is a €500 million loan, in relation to R&D and capital expenditures
in the European Union, fully drawn in Euros, of which $346 million was outstanding as of December 31, 2022.
The second one, signed in 2020, is a €500 million credit facility agreement with EIB to support R&D and capital
expenditure programs in Italy and France. The amount was fully drawn in Euros representing $481 million
outstanding as of December 31, 2022. In 2022, the Company signed a third long-term amortizing credit facility
with EIB of €600 million, out of which, no amount had been drawn as of December 31, 2022.

The CDP loans are comprised of two long-term credit facilities. The first, signed in 2021, is a €150
million loan, fully drawn in Euros, of which $120 million were outstanding as of December 31, 2022. The
second one, signed in 2022, is a €200 million loan, fully drawn in Euros, of which $214 million was outstanding
as of December 31, 2022.

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On August 4, 2020, we issued a $1.5 billion principal amount of dual tranche senior unsecured convertible
bonds (Tranche A and Tranche B for $750 million each tranche), due 2025 and 2027, respectively. Tranche A
bonds were issued at 105.8% as zero-coupon bonds while Tranche B bonds were issued at 104.5% as zero-
coupon bonds. The conversion price at issuance was $43.62 for Tranche A equivalent to a 47.5% conversion
premium and $45.10 for Tranche B, equivalent to a 52.5% conversion premium. These conversion features
correspond to an equivalent of 4,585 shares per each Tranche A bond $200,000 par value and an equivalent of
4,435 shares per each Tranche B bond $200,000 par value. The bonds are convertible by the bondholders or are
callable by the issuer upon certain conditions, on a net-share settlement basis, except if the issuer elects a full-
cash or full-share conversion as an alternative settlement. The net proceeds from the bond offering were $1,567
million, after deducting issuance costs paid by the Company.

As of December 31, 2022, the Company’s stock price did not exceed the conversion price of the senior
unsecured convertible bonds issued on August 4, 2020.

Our long-term debt contains standard conditions but does not impose minimum financial ratios. We had
unutilized committed medium-term credit facilities with core relationship banks totaling $1,281 million as of
December 31, 2022.

As of December 31, 2022, debt payments at principal amount by period were as follows:

Payments Due by Period

Total 2023 2024 2025 2026 2027 Thereafter
(In millions)
Long-term debt (including
current portion) $ 2,722 $ 175 $ 172 $ 922 $ 172 $ 908 $ 373

Our 2020 Senior Unsecured Convertible Bonds are presented at their principal amount with original
maturity date of 2025 for Tranche A and 2027 for Tranche B, in line with contractual terms.

Our current ratings with the three major rating agencies that report on us on a solicited basis, are as
follows: S&P: “BBB” with positive outlook; Moody’s: “Baa2” with stable outlook; Fitch: “BBB” with stable
outlook.

Contractual Obligations, Commercial Commitments and Contingencies

Our contractual obligations, commercial commitments and contingencies as of December 31, 2022, and
for each of the five years to come and thereafter, were as follows:(1)
Total 2023 2024 2025 2026 2027 Thereafter
(In millions)
Purchase obligations(2) $5,554 $4,556 $424 $287 $101 $62 124
of which:
Equipment and other asset
purchases 3,587 3,584 3 — — — —
Foundry purchases 1,827 872 393 275 101 62 124
Software, design, technologies
and licenses 140 100 28 12 — — —
Other obligations(2) 1,864 1,072 155 100 56 155 326
Operating Lease obligations
(including current portion)(3) 193 52 36 24 15 10 56
Long-term debt obligations
(including current portion)(3)(4) 2,722 175 172 922 172 908 373
of which:
Finance Lease obligations 57 7 5 5 5 4 31
Pension obligations
(including current portion)(3) 333 44 47 58 71 52 61
Other long-term liabilities(3)(5) 313 — 178 28 21 13 73
Total $11,036 $5,906 $1,017 $1,424 $441 $1,204 $1,044
(1) Contingent liabilities which cannot be quantified are excluded from the table above.
(2) Items not reflected on the consolidated balance sheet as of December 31, 2022.

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(3) Items reflected on the consolidated balance sheet as of December 31, 2022.
(4) For long-term debt obligations the difference between the total obligations and the total carrying amount of long-term debt is due to
the unamortized debt issuance costs on the dual tranche senior unsecured convertible bonds. See Note 15 to our Consolidated
Financial Statements as of December 31, 2022 for additional information related to long-term debt.
(5) For other long-term liabilities, the difference with the amount reported on the consolidated balance sheet as of December 31, 2022 is
related to the long-term portion of the operating lease obligation of $141 million reported under the “Lease obligations” line. See
Note 11 and Note 17 to our Consolidated Financial Statements as of December 31, 2022 for additional information related to leases
and other long-term liabilities.

Purchase obligations are primarily comprised of purchase commitments for equipment, outsourced
foundry wafers and software licenses.

Other obligations primarily relate to firm contractual commitments with respect to partnership and
cooperation agreements.

Long-term debt obligations mainly consist of bank loans and senior unsecured convertible bonds. In the
table above, our 2020 Senior Unsecured Convertible Bonds are presented at their principal amount with original
maturity date of 2025 for Tranche A and 2027 for Tranche B, in line with contractual terms. In 2023 we expect
to repay with available cash and cash equivalents an amount of $166 million related to our loan with the
European Investment Bank as an annual installment and $7 million related to our finance leases. See “— Net
financial position (non-U.S. GAAP measure)” above.

Pension obligations amounting to $333 million consist of our best estimates of the amounts projected to
be payable by us for the pension and post-employment plans. The final actual amount to be paid and related
timing of such payments may vary significantly due to early retirements, terminations and changes in
assumptions rates. See Note 16 to our Consolidated Financial Statements.

Other long-term liabilities mainly include future obligations related to other long-term employees benefits,
contingent consideration on business combinations and other contractual obligations. In accordance with the
authoritative guidance for accounting for uncertainty in income taxes, as of December 31, 2022, liabilities
related to uncertain tax positions totaled $61 million. See Note 23 of our Consolidated Financial Statements.

Off-Balance Sheet Arrangements

We had no material off-balance sheet arrangements as of December 31, 2022.

Financial Outlook: Capital Investment

Our policy is to modulate our capital spending according to the evolution of the semiconductor market.
For 2023, we plan to invest about $4.0 billion in capital expenditures mainly to increase our 300mm wafer fabs
and silicon carbide manufacturing capacity including our substrate initiative.

A large portion of capital expenditures will be devoted to support capacity additions and mix change in
our manufacturing footprint, in particular for our wafer fabs: (i) the ramp-up of our new 300mm wafer fab in
Agrate, Italy, to support mixed signal technologies and then phase-in smart power technologies and embedded-
non-volatile memory at a later stage; (ii) digital 300mm in Crolles, France, to extend the cleanroom and support
production ramp-up of our main runner technologies; (iii) certain selected programs of capacity growth in some
of our most advanced 200mm fabs, including the analog 200mm fab in Singapore; (iv) increase capacity for
silicon carbide products in our Catania and Singapore fabs; and (v) ramping a new integrated silicon carbide
substrate manufacturing facility for the production in volume of 150mm, moving to 200mm in the future, silicon
carbide epitaxial substrates. The most important 2023 capital investments for our back-end facilities will be: (i)
capacity growth on certain package families, including the SiC technology and automotive related packages, (ii)
the new generation of Intelligent Power Modules for Automotive and Industrial applications, and (iii) specific
investments in innovative assembly processes and test operations.

The remaining part of our capital investment plan covers the overall maintenance and efficiency
improvements of our manufacturing operations and infrastructure, R&D activities, laboratories as well as the
execution of our carbon neutrality programs.

We will continue to invest to support revenues growth and new products introduction, taking into
consideration factors such as trends in the semiconductor industry, capacity utilization and our goal to become

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carbon neutral by 2027. We expect to need significant financial resources in the coming years for capital
expenditures and for our investments in manufacturing and R&D. We plan to fund our capital requirements with
cash provided by operating activities, available funds and support from third parties, and may have recourse to
borrowings under available credit lines and, to the extent necessary or attractive based on market conditions
prevailing at the time, the issuance of debt, convertible bonds or additional equity securities. A substantial
deterioration of our economic results, and consequently of our profitability, could generate a deterioration of the
cash generated by our operating activities. Therefore, there can be no assurance that, in future periods, we will
generate the same level of cash as in prior years to fund our capital expenditure plans for expanding/upgrading
our production facilities, our working capital requirements, our R&D and manufacturing costs.

We believe that we have the financial resources needed to meet our currently projected business
requirements for the next twelve months, including capital expenditures for our manufacturing activities,
working capital requirements, approved dividend payments, share buy-backs as part of our current repurchase
program and the repayment of our debt in line with maturity dates.

Based on our strong customer demand and increased manufacturing capacity, we will drive the Company
based on a plan for 2023 revenues in the range of $16.8 billion to $17.8 billion.

Impact of Recently Issued U.S. Accounting Standards

See Note 2 to our Consolidated Financial Statements.

Backlog and Customers

See “Item 4. Information on the Company — Backlog”.

Item 6. Directors, Senior Management and Employees

Directors and Senior Management

The management of our Company is entrusted to the Managing Board under the supervision of the
Supervisory Board.

The term “Directors” refers to the non-executive members of the Supervisory Board of the Company and
the term “Senior Management” refers to:
• The sole member of the Managing Board, our President and Chief Executive Officer;
• The members of the Executive Committee (including the sole member of the Managing Board, our
President and Chief Executive Officer) of the Company; and
• The Executive Vice Presidents of the Company.

A. Supervisory Board
i. Role of the Supervisory Board
Our Supervisory Board advises our Managing Board and is responsible for supervising the policies
pursued by our Managing Board, the manner in which the Managing Board implements the long-term value
creation strategy and the general course of our affairs and business. In performing its duties, the Supervisory
Board shall be guided by the interests of our Company and its business; it shall take into account the relevant
interests of all stakeholders (including our shareholders). The Supervisory Board is responsible for the quality of
its own performance.
Our Supervisory Board consists of such number of members as is resolved by our AGM upon a non-
binding proposal of our Supervisory Board, with a minimum of six members. Decisions by our AGM
concerning the number and the identity of our Supervisory Board members are taken by a simple majority of the
votes cast at a meeting, provided quorum conditions are met.

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Our Supervisory Board was composed of the following nine members as of December 31, 2022(1):

Year First Term

Name Position Appointed Expires Age
Maurizio Tamagnini Chairman 2014 2023 57
Nicolas Dufourcq Vice Chairman 2015 2024 59
Janet Davidson Member 2013 2024 66
Ana de Pro Gonzalo Member 2020 2023 55
Yann Delabrière Member 2020 2023 72
Heleen Kersten Member 2014 2023 57
Alessandro Rivera Member 2011 2023 52
Frédéric Sanchez Member 2017 2023 62
Donatella Sciuto(1) Member 2022 2025 60

(1) Ms. Lucia Morselli was a member of our Supervisory Board until May 25, 2022, on which date her term expired and on such date she
was replaced by Ms. Donatella Sciuto.

Resolutions of our Supervisory Board require the approval of at least three-quarters of its members in
office, with each member being entitled to one vote. Our Supervisory Board must meet upon request by two or
more of its members or by our Managing Board. Our Supervisory Board meets at least five times a year (and in
2022, our Supervisory Board met 10 times), including to approve our quarterly, semi-annual and annual
accounts and their release. In 2022, the average attendance rate for the meetings of our Supervisory Board was
90.5%. Our Supervisory Board has adopted (i) a Supervisory Board charter, (ii) a profile for the Supervisory
Board based on which proposed new members of the Supervisory Board are selected (both of which are
available on our website (www.st.com)), (iii) a diversity policy for the composition of the Managing Board, the
Executive Committee and the Supervisory Board, and (iv) a selection criteria and appointment procedure for the
Supervisory Board and Managing Board members.

Our Supervisory Board may make a proposal to our AGM for the suspension or dismissal of one or more
of its members. Each member of our Supervisory Board must resign no later than three years after appointment,
as described in our Articles of Association, but may be reappointed following the expiration of his/her term of
office. Pursuant to Dutch law, there is no mandatory retirement age for members of our Supervisory Board.
Members of the Supervisory Board may be suspended or dismissed by our AGM. Certain of our Supervisory
Board members are proposed by and may retain certain relationships with our direct or indirect shareholders
represented through our major shareholder. See “Item 7. Major Shareholders and Related Party Transactions —
Major Shareholders”.

In accordance with the best practice provisions of the Dutch Corporate Governance Code, on an annual
basis our Supervisory Board undertakes to perform an evaluation of the functioning of the Managing Board and
the Supervisory Board (which also includes an evaluation of the functioning of the Supervisory Board’s
committees and its individual members). Once every three years, this evaluation is conducted by an independent
external expert, whose mission is to assist the Supervisory Board in this evaluation through, inter alia,
conducting interviews with individual members of the Supervisory Board and Managing Board and facilitating
discussions within the Supervisory Board on the functioning of the boards, its committees and its members,
including an evaluation of the involvement of each member, the culture within the Supervisory Board and the
relationship between the Supervisory Board and the Managing Board. The evaluation for the year ended
December 31, 2022 was completed on February 22, 2023 and concluded that both our Supervisory Board and
our Managing Board are functioning well. The evaluation noted opportunities for improvements, including but
not limited to additional training sessions for members of the Supervisory Board.

ii. Biographies of our Current Supervisory Board Members

Maurizio Tamagnini
Maurizio Tamagnini has been a member of our Supervisory Board since June 2014 and is the Chairman of
our Supervisory Board since June 2020. He was the Chairman of the Supervisory Board from June 2014 to June
2017 and Vice Chairman from June 2017 to June 2020. He also serves on our Supervisory Board’s Nominating
& Corporate Governance Committee, Sustainability Committee, and chairs its Compensation Committee and
Strategic Committee. Mr. Tamagnini is currently Chief Executive Officer of FSI SGR S.p.A., an asset
management company sponsored, until July 2022, by Cassa Depositi e Prestiti S.p.A. (“CDP”) (with a 39%
stake), which is 82.7% controlled by the Italian Government. FSI SGR S.p.A. manages “FSI I” and “FSI II”,
private equity closed-end funds with approximately €2 billion capital endowment, specialized on growth equity

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investments in Italian midmarket companies with development potential. He was, until April 2019, non-
executive Chairman of FSI Investimenti S.p.A., which is controlled 77% by CDP. Until 31st March 2016, Mr.
Tamagnini was Chief Executive Officer and Chairman of the Investment Committee of Fondo Strategico
Italiano S.p.A.(now CDP Equity S.p.A.), an investment company controlled by CDP. Until April 2016, he was
Chairman of the joint venture between Fondo Strategico Italiano S.p.A. and Qatar Holding (IQ Made in Italy
Investment Company S.p.A.) with capital endowment of up to €2 billion in total for investments in the food,
brands, furniture & design and tourism sectors. He was previously Southern European Manager of the Corporate
& Investments Banking division of Bank of America Merrill Lynch and a member of the Executive Committee
of Bank of America Merrill Lynch for the EMEA region. Mr. Tamagnini has gained over 32 years of experience
in the financial sector specializing in the areas of Corporate Finance, Private Equity, Debt and Equity. Mr.
Tamagnini is also a member of the International Advisory Board of BIDMC Harvard Medical School. He holds
a degree in International Monetary Economics from Bocconi University in Milan and has also studied at the
Rensselaer Polytechnic Institute — Troy in New York, USA.

Nicolas Dufourcq

Nicolas Dufourcq has been a member of our Supervisory Board since May 2015, its Chairman from June
2017 to June 2020 and its Vice-Chairman since June 2020. He serves on our Supervisory Board’s Nominating &
Corporate Governance Committee, Compensation Committee, Strategic Committee and Sustainability
Committee. Mr. Dufourcq is a graduate of HEC (Hautes Etudes Commerciales) and ENA (Ecole Nationale
d’Administration). He began his career at the French Ministry of Finance and Economics before joining the
Ministry of Health and Social Affairs in 1992. In 1994, he joined France Telecom, where he created the
Multimedia division, before going on to chair Wanadoo, the firm’s listed Internet and Yellow Pages subsidiary.
After joining the Cap Gemini Group in 2003, he was made responsible for the Central and Southern Europe
region, successfully leading their financial turnaround. He was appointed Chief Financial Officer of the Group
and member of the Executive Committtee in September 2004. In 2005, he was named deputy Chief Executive
Officer in charge of finance, risk management, IT, delivery, purchases and LEAN program and, in 2007, also in
charge of the follow-up of the goup’s major contracts. On February 7, 2013, Mr. Dufourcq was appointed Chief
Executive Officer of Bpifrance (Banque Publique d’Investissement), which is one of the shareholders of ST
Holding. Until January 2023, he was a member of the Supervisory Committee of Doctolib and he is currently a
member of the Board of Directors of Stellantis.

Janet Davidson

Janet Davidson has been a member of our Supervisory Board since June 2013. She serves on our
Supervisory Board’s Audit Committee and Strategic Committee and chairs our newly established Supervisory
Board’s Sustainability Committee. She began her career in 1979 as a member of the Technical Staff of Bell
Laboratories, Lucent Technologies (as of 2006 Alcatel Lucent), and served from 1979 through 2011 in several
key positions, most recently as Chief Strategy Officer (2005 – 2006), Chief Compliance Officer (2006 – 2008)
and EVP Quality & Customer Care (2008 – 2011). From 2005 through 2012, Ms. Davidson was a member of
the Lehigh University Board of Trustees. In 2007 she served on the Riverside Symphonia Board of Trustees and
in 2005 and 2006, Ms. Davidson was a member of the Liberty Science Center Board of Trustees. Ms. Davidson
was a member of the board of the Alcatel Lucent Foundation from 2011 until 2014 and a member of the board
of directors of Millicom from April 2016 until June 2020. Ms. Davidson is also a member of the board of the
AES Corporation, since February 2019. Ms. Davidson is a graduate of the Georgia Institute of Technology
(Georgia Tech), Atlanta, GA, USA, and Lehigh University, Bethlehem, PA, USA and holds a Master’s degree in
Electrical Engineering.

Ana de Pro Gonzalo

Ana de Pro Gonzalo has been a member of our Supervisory Board since June 2020. She chairs our
Supervisory Board’s Audit Committee and serves on our Supervisory Board’s Sustainability Committee. She
has been an independent non-executive director for National Express Group PLC and a member of its safety and
security committee, audit committee and remuneration committee since October 2019 and she serves as
independent non-executive director of Novartis A.G. and as a member of its audit and risk committees since
March 2022. Until December 2020, she was chief financial officer of Amadeus IT Holding (a world leading
technology provider and transaction processor for the global travel and tourism industry), with global
responsibility for financial management and control for the Amadeus group. She was appointed in this role in
February 2010 and was also a member of the Amadeus executive management team. From 2002 to 2010, Ms.
De Pro Gonzalo was corporate general manager at Sacyr Vallehermoso and was instrumental in leading the

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international expansion of one of the major construction groups in the world. From 1994 to 2002, Ms. De Pro
Gonzalo was deputy general manager and finance director at Metrovacesa, and from 1990 to 1994 she was a
senior auditor at Arthur Andersen. She has been independent non-executive director for Merlin Properties, S.A.
from 2015-2017 and for Indra Sistemas S.A. from 2020-2022. Since June 2019, Ms. De Pro Gonzalo is an
independent member of the non-profit Global Steering Group for Impact Assessment (Consejo Asesor Nacional
Español) and member of the Board of Trustees of foundation Juan XXIII for the people with special intellectual
needs since October 2020. Ms. De Pro Gonzalo holds a BSc in Business Studies, specializing in Auditing, from
Universidad Complutense de Madrid, and completed IESE Business School’s general management executive
program.

Yann Delabrière

Yann Delabrière has been a member of our Supervisory Board since June 2020. He serves on our
Supervisory Board's Audit Committee. Mr. Delabrière began his career with the French Court of Auditors
before working in the French Foreign Trade ministry from 1981 to 1983. He served as chief financial officer for
COFACE, from 1983 to 1987, and for Printemps (a retail group, now Kering) as group Chief Financial Officer
from 1987 to 1990. In 1990, he joined PSA Peugeot Citroën as chief finance officer and, in 1998, he joined the
newly created executive committee of the group and, in parallel of his position as Chief Financial Officer,
became chairman and chief executive officer of PSA’s consumer finance unit, Banque PSA Finance. From
February 2007 until July 2016, Mr. Delabrière was the chief executive officer of Faurecia, and the chairman of
its board of directors until May 2017. He was appointed in April 2017 as adviser to the board and then in June
2017 as chief executive officer of Zodiac Aerospace and oversaw the sale to Safran group in February 2018.
Since July 2020, Mr. Delabrière has been the chairman of the board of Idemia, a global leader in augmented
reality, where he previously served as president and Chief Executive Officer (between October 2018 and July
2020). He has been appointed a non-executive member of the board of directors of Leddar Tech in February
2021 and has been the lead independent director of Alstom since March 2017. Mr. Delabrière also served as
non-executive director and chairman of the audit committee of Capgemini from 2004 to May 2018, and as non-
executive director of Société Générale from 2012 to 2016. Mr. Delabrière holds a PhD in Mathematics having
graduated from the Ecole Normale Supérieure and the Ecole Nationale d’Administration. He is also a Chevalier
de la Légion d’Honneur (Knight of the Legion of Honor) and Officier de l’Ordre National du Mérite (Officer of
the National Order of Merit).

Heleen Kersten

Heleen Kersten has been a member of our Supervisory Board since June 2014. She serves on our
Supervisory Board’s Audit Committee, Sustainability Committee and Compensation Committee and chairs its
Nominating & Corporate Governance Committee. Ms. Kersten is a partner at Stibbe in Amsterdam, where she
held the position of managing partner from 2008 to 2013. Stibbe is a Benelux law firm with offices in
Amsterdam, Brussels, Luxembourg, London and New York. She began her career in 1989 with Stibbe before
joining Davis Polk in New York and London (1992-1993). After her return to Stibbe Amsterdam, she rose
through the ranks to become a partner in 1997. As a member of the Bar of Amsterdam since 1989, Ms. Kersten
specializes in mergers and acquisitions, equity capital markets, corporate law and corporate governance. Ms.
Kersten was a supervisory board member of the Dutch listed Bank Van Lanschot N.V. until May 2015 and the
chairman of the supervisory board of Egeria Investment B.V. until April 2016. She is currently chairman of the
board of the Dutch Red Cross (Vereniging Het Nederlandse Rode Kruis), since January 2020, and a supervisory
board member of the Rijksmuseum (Stichting Het Rijksmuseum), since 2015. She is also a Supervisory Board
Member of Wolters Kluwer N.V since 2022. Ms. Kersten holds master’s degrees in Dutch law and tax law, both
from Leiden University in the Netherlands.

Alessandro Rivera

Alessandro Rivera has been a member of our Supervisory Board since May 2011. Mr. Rivera serves on
our Supervisory Board's Strategic Committee & Nominating and Corporate Governance Committee. He was
appointed as the Director General of the Treasury in August 2018. He is the representative for Finance Deputies
meetings of the G7, G20, and the IMF, and a member of the Economic and Financial Committee (as Vice-
President) and the Euro Working Group of the European Union, and of the Board of Directors of the European
Stability Mechanism. He chairs the EFC Sub-Committee on IMF related issues. Prior to his appointment as
Director General of the Treasury, Mr. Rivera was the Head of Directorate IV "Financial Sector Policy and
Regulation Legal Affairs" at the Department of the Treasury, Ministry of Economy and Finance from 2008 to
2018. He served as Head of Unit in the Department of the Treasury from 2000 to 2008 and was responsible for a

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variety of policy matters: financial services and markets, banking foundations, accounting, finance, corporate
governance, and auditing. Since 2013, he has been a member of the board of directors of Cassa Depositi e
Prestiti. Since 2022, he has also been a member of the board of Instituto Italiano di Technologia and Scuola
Nazionale di Administrazione. He was the Chairman of the Board of Directors of AMCO S.p.A. (formerly SGA
S.p.A.) (2017-2020). He was a member of the Boards of Directors and Compensation Committees of Poste
Italiane S.p.A. (2011-2014), Italia Lavoro S.p.A. (2005- 2008) and Mediocredito del Friuli-Venezia Giulia
S.p.A (2001-2003).

Frédéric Sanchez

Frédéric Sanchez has been a member of our Supervisory Board since June 2017. He serves on our
Supervisory Board's Compensation Committee, Strategic Committee and Nominating & Corporate Governance
Committee. Mr. Sanchez is the chairman of the executive board of Fives, an industrial engineering group with
heritage of over 200 years of engineering excellence and expertise. Fives designs and supplies machines,
process equipment and production lines for the world's largest industrial groups in various sectors such as
aluminium, steel, glass, automotive, logistics, aerospace, cement and energy, in both developing and developed
countries. Mr. Sanchez started his career in 1985 with Renault in Mexico, then in the USA. In 1987 he became a
mission manager at Ernst & Young. In 1990 he joined Fives-Lille group, in which he held various positions
before being appointed chief financial officer in 1994 and becoming chief operating officer in 1997. In 2002, the
"Compagnie de Fives-Lille" (renamed Fives in 2007) became a company with a management board and
supervisory board chaired by Mr. Sanchez. In 2018, Fives became a French simplified joint stock company
(societe par actions simplifiee) and Mr. Sanchez its chairman and Chief Executive Officer. Within MEDEF
(French Business Confederation), Mr. Sanchez is President of MEDEF International, President of the Council of
Entrepreneurs France-Japan, France-United Arab Emirates and France-Barhain. Mr. Sanchez is an administrator
of Primagaz, Orange, Thea and Bureau Veritas and he is honorary co­president of the Alliance Industrie du
Futur. Mr. Sanchez graduated from HEC Business School (1983) and Sciences-Po Paris (1985) and he also
holds a Master Degree in Economics from Universite Paris-Dauphine (1984).

Donatella Sciuto

Donatella Sciuto has been a member of our Supervisory Board since May 25, 2022 and serves on our
Supervisory Board' s Audit Committee and Compensation Committee. Donatella Sciuto has been the Executive
Vice Rector of Politecnico di Milano since 2015 and is its Executive Rector since January 2023, and full
professor in computer science and engineering since 2000. She was appointed IEEE Fellow for her scientific
contribution in the "embedded systems design". Ms. Sciuto has been a member of the governing board of the
Bank of Italy, since 2013. Since 2017, she has been an independent member of the board of directors of Avio
S.p.A and Raiway S.p.A. and of Fila S.p.A. since 2020. Ms. Sciuto has also been a member of the board of the
Italian Institute of Technology since 2021 and she was a member of the supervisory board of the Human
Technopole Foundation until May 2022. Donatella Sciuto holds a degree in Electronic Engineering from
Politecnico di Milano and a PhD in Electrical and Computer Engineering from the University of Colorado,
Boulder. She holds a Master in Business and Administration (CEGA) from the Bocconi University School of
Business Management.

iii. Supervisory Board Committees

Membership and Attendance. As of December 31, 2022, the composition of the five standing committees
of our Supervisory Board was as follows: (i) Ms. Ana de Pro Gonzalo is the Chair of the Audit Committee, and
Ms. Janet Davidson, Mr. Yann Delabrière, Ms. Heleen Kersten and Ms. Donatella Sciuto are members of the
Audit Committee; (ii) Mr. Maurizio Tamagnini is the Chair of the Compensation Committee, and Mr. Nicolas
Dufourcq, Ms. Heleen Kersten, Ms. Donatella Sciuto and Mr. Frédéric Sanchez are members of the
Compensation Committee; (iii) Ms. Heleen Kersten is the Chair of the Nominating and Corporate Governance
Committee, and Messrs. Nicolas Dufourcq, Alessandro Rivera, Frédéric Sanchez and Maurizio Tamagnini are
members of the Nominating and Corporate Governance Committee; (iv) Mr. Maurizio Tamagnini is the Chair of
the Strategic Committee, and Ms. Janet Davidson, and Messrs. Nicolas Dufourcq, Alessandro Rivera and
Frédéric Sanchez are members of the Strategic Committee; and (v) Ms. Janet Davidson is the Chair of the
Sustainability Committee, and Mr. Nicolas Dufourcq, Ms. Heleen Kersten, Ms. Ana de Pro Gonzalo and Mr.
Maurizio Tamagnini are members of the Sustainability Committee.

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Detailed information on attendance at full Supervisory Board and Supervisory Board Committee meetings
during 2022 is as follows:

Nominating
& Corporate
Number of Meetings Supervisory % Audit % Compensation % Strategic % Governance % Sustainability %
attended in 2022 Board Attendance Committee Attendance Committee Attendance Committee Attendance Committee Attendance Committee Attendance
Maurizio Tamagnini 10 100% — — 3 100% 2 100% 3 100% 4 100%
Nicolas Dufourcq 8 80% — — 3 100% 2 100% 3 100% 3 75%
Janet Davidson 10 100% 10 100% — — 2 100% — — 4 100%
Ana de Pro Gonzalo 10 100% 10 100% — — — — — — 4 100%
Yann Delabrière 10 100% 9 90% — — — — — — — —
Heleen Kersten 9 90% 9 90% 3 100% — — 3 100% 4 100%
Lucia Morselli(1) 3 75% 4 80% 2 100% — — — — — —
Alessandro Rivera 6 60% — — — — 1 50% 2 67% — —
Frédéric Sanchez 10 100% — — 3 100% 2 100% 3 100% — —
Donatella Sciuto(1) 6 100% 5 100% 1 100% — — — — — —

(1) Ms. Lucia Morselli was a member of our Supervisory Board until May 25, 2022, on which date her term expired and on such date she
was replaced by Ms. Donatella Sciuto.

Audit Committee. Our Audit Committee assists the Supervisory Board in fulfilling its oversight
responsibilities relating to corporate accounting, reporting practices, and the quality and integrity of our
financial reports as well as our auditing practices, legal and regulatory related risks, execution of our auditors’
recommendations regarding corporate auditing rules and the independence of our external auditors.

Our Audit Committee met ten times during 2022. At many of the Audit Committee’s meetings, the
committee received presentations on current financial and accounting issues and had the opportunity to discuss
with our Chief Executive Officer, Chief Financial Officer, Chief Accountant, Chief Audit and Risk Executive,
President, Legal Counsel, Chief Compliance & Ethics Officer and our external auditors. Our Audit Committee
also proceeded with its annual review of our internal audit function. Our Audit Committee reviewed our annual
Consolidated Financial Statements in U.S. GAAP for the year ended December 31, 2022, and the results press
release was published on January 26, 2023.

Our Audit Committee approved the compensation of our external auditors for 2022 and discussed the
scope of their audit, audit related and non-audit related services for 2022.

At the end of each quarter, prior to each Supervisory Board meeting to approve our quarterly results, our
Audit Committee reviewed our interim financial information and the proposed press release and had the
opportunity to raise questions to management and the independent registered public accounting firm. In
addition, our Audit Committee reviewed our quarterly “Operating and Financial Review and Prospects” and
Consolidated Financial Statements (and notes thereto) before they were furnished to the SEC and voluntarily
certified by the Chief Executive Officer and the Chief Financial Officer (pursuant to sections 302 and 906 of the
Sarbanes Oxley Act). Our Audit Committee also reviewed Operating and Financial Review and Prospects and
our Consolidated Financial Statements contained in this Form 20-F, prior to its approval by our Supervisory
Board. Furthermore, our Audit Committee monitored our compliance with the European Directive and
applicable provisions of Dutch law that require us to prepare a set of accounts pursuant to IFRS in advance of
our AGM, which was held on May 25, 2022. See “Item 3. Key Information—Risk Factors—Risks Related to
Our Operations”.

Our Audit Committee regularly reviewed management’s conclusions as to the effectiveness of internal
control over financial reporting and supervised the implementation of our corporate Enterprise Risk
Management (“ERM”) process.

As part of each of its quarterly meetings, our Audit Committee also reviewed our financial results as
presented by management and whistleblowing reports, including independent investigative reports provided in
relation thereto.

Compensation Committee. Our Compensation Committee advises our Supervisory Board in relation to the
compensation of the members of the Supervisory Board and Managing Board, including in the case of our
President and Chief Executive Officer, the variable portion of such compensation based on performance criteria
recommended by our Compensation Committee. Our Compensation Committee also reviews the stock based
compensation plans for our Senior Management and key employees. Our Compensation Committee met three
times in 2022.

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Among its main activities, in 2022 our Compensation Committee: (i) discussed the performance targets
relating to the bonus of our President and Chief Executive Officer for the fiscal year ending on December 31,
2022 (which short-term targets are based on, inter alia, four to seven performance conditions with a mix of
financial criteria for approximately 70% and non-financial criteria (including sustainability/corporate social
responsibility performance) for approximately 30%, and long-term targets are based on, inter alia, two financial
performance conditions constituting revenue growth versus a range of semiconductor peer companies (the “Peer
Group” as discussed below) and average of operating margin ratio before restructuring, and one non-financial
performance condition constituting the composite sustainability/corporate social responsibility index, including
health and safety, CO2 neutrality, diversity & inclusion and people engagement (as further detailed in “—
Compensation”)); and (ii) established, on behalf and with the approval of the entire Supervisory Board, the
applicable performance criteria, which must be met by senior managers and selected key employees
participating in the employee stock award plans to benefit from such awards (for the 2021 unvested stock award
plan, these performance criteria are further described below in “Item 6. Managing Board – Managing Board
compensation – Managing Board remuneration structure”).

Strategic Committee. Our Strategic Committee advises the Supervisory Board on and monitor key
developments within the semiconductor industry, our overall strategy for long-term value creation, and the long-
term planning and budgeting. Our Strategic Committee met twice in 2022. In addition, there were strategic
discussions, many of which occurred at extended Supervisory Board meetings and involved all Supervisory
Board members.

Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance
Committee advises the Supervisory Board on the selection criteria and procedures relating to the appointment of
members to our Supervisory Board and Managing Board, and the review of principles relating to corporate
governance. Our Nominating and Corporate Governance Committee met three times during 2022 to discuss
succession planning for our Supervisory Board and Managing Board, best practices regarding corporate
governance, and the update of our corporate governance documents.

Sustainability Committee. Our Sustainability Committee advises and supports the Supervisory Board in
relation to its responsibilities in supervising, monitoring and advising on the Company's sustainability strategy,
targets, goals and overall sustainability performance. Our Sustainability Committee met four times in 2022 to
discuss our overall sustainability strategy, as well as our sustainability performances and reporting.

Secretariat and Controllers. Our Supervisory Board appoints a Secretary and Vice Secretary.
Furthermore, the Managing Board makes an Executive Secretary available to our Supervisory Board, who is
also appointed by the Supervisory Board. The Secretary, Vice Secretary and Executive Secretary constitute the
Secretariat of the Supervisory Board. The mission of the Secretariat is primarily to organize meetings, to ensure
the continuing education and training of our Supervisory Board members and to maintain record keeping. Our
Chief Compliance & Ethics Officer, Philippe Dereeper, serves as Executive Secretary for our Supervisory
Board, and for each of the five standing committees of our Supervisory Board. Mr. Gabriele Pagnotta serves as
Secretary and Ms. Charlotte Fadlallah serves as Vice Secretary. Mr. Pagnotta and Ms. Fadlallah also serve as
managing directors of ST Holding.

Our Supervisory Board also appoints two financial experts (“Controllers”). The mission of the Controllers
is primarily to assist our Supervisory Board in evaluating our operational and financial performance, business
plan, strategic initiatives and the implementation of Supervisory Board decisions, as well as to review the
operational reports provided under the responsibility of the Managing Board. The Controllers generally meet
once a month with the management of the Company and report to our full Supervisory Board. The current
Controllers are Messrs. Samuel Dalens and Marco Zizzo. Mr. Dalens also serves as a member of the supervisory
board of ST Holding.

The STH Shareholders Agreement between our principal indirect shareholders contains provisions with
respect to the appointment of the Secretary, Vice Secretary and Controllers. See “Item 7. Major Shareholders
and Related Party Transactions”.

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iv. Supervisory Board Compensation

a. Supervisory Board Remuneration Policy

On December 1, 2019, a Dutch act implementing the revised EU Shareholders’ Rights Directive
(2017/828/EU (“SRDII”)) took effect in The Netherlands. As the Company is incorporated under the laws of
The Netherlands and the common shares of the Company are admitted to trading on regulated markets in the
European Union, the Company was required, inter alia, to update the remuneration policy accordingly with
respect to the compensation of the Supervisory Board members and to comply with the respective disclosure
requirements introduced to the Dutch Civil Code. In connection therewith, we present in this section certain
comparative information on our performance relative to the compensation of the Supervisory Board members.
Our Articles of Association provide that the compensation of our Supervisory Board members is
determined by our general meeting of shareholders. Our proposal for adoption of a remuneration policy for the
Supervisory Board members to ensure compliance with the new requirements under the Dutch Civil Code,
following the implementation of SRDII, was approved by the AGM on June 17, 2020 with a vote percentage in
favor of the policy of 98.43%.

b. Compensation paid to current and former Supervisory Board Members in financial year 2022
The annual compensation of the Supervisory Board Members is comprised of an annual fee and an
attendance fee, promoting effective and independent supervision in the interest of the Company and the long-
term success of the Company. There is no variable compensation nor stock-based compensation awarded to the
members of our Supervisory Board.
The aggregate compensation for current and former members of our Supervisory Board with respect to
service in 2022 was €961,000 before any applicable withholding or other taxes, as set forth in the following
table. No reimbursement fees were paid to members of our Supervisory Board in 2022.

Annual Attendance
Supervisory Board Members Fees Fees Fees Total
Maurizio Tamagnini € 144,000 € 26,000 € 170,000
Nicolas Dufourcq (1) € - € - € -
Janet Davidson € 84,500 € 29,500 € 114,000
Ana de Pro Gonzalo € 161,500 € - € 161,500
Yann Delabrière € 77,500 € 22,000 € 99,500
Heleen Kersten € 88,000 € 33,000 € 121,000
Lucia Morselli (2) € - € 9,000 € 9,000
Alessandro Rivera € 87,000 € - € 87,000
Frédéric Sanchez € 80,500 € 21,500 € 102,000
Donatella Sciuto € 81,000 € 16,000 € 97,000
Total € 804,000 € 157,000 € 961,000

(1) Mr. Dufourcq waived his rights to receive any compensation from the Company in relation to his mandate as a member of the
Supervisory Board or otherwise.
(2) Ms. Lucia Morselli was a member of our Supervisory Board until May 25, 2022 and was replaced by Ms. Donatella Sciuto as of May
25, 2022.

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c. Supervisory Board Remuneration Comparison

Set forth in the following table is the annual change over the last three years of (i) the average
remuneration of our Supervisory Board Members, (ii) the performance of the Company and (iii) the average
remuneration of our indirect employees (i.e., all indirect employees other than the members of our Senior
Management, including the sole member of the Managing Board, our President and Chief Executive Officer):

2022 2021 2020

Supervisory Board remuneration
Average remuneration of Supervisory Board members(1) $ 106,778 $ 114,775 $ 99,431
Company's performance
Net revenues (amounts in millions) $ 16,128 $ 12,761 $ 10,219
Operating income (amounts in millions) $ 4,439 $ 2,419 $ 1,323
Employee remuneration
Average remuneration(2) of all global indirect employees
(FTE basis)(3) $ 109,600 $ 111,200 $ 98,500

(1) Using the Euro per U.S. dollar exchange rate on December 31, 2022 of €1 = $1.0675.
(2) Remuneration is defined as all remuneration paid to indirect employees including base salary, variable compensation in both cash and
shares, social premiums, pension, expense allowances and benefits in kind. The average is calculated by taking the sum of
remuneration costs and dividing by the average number of full-time equivalent indirect employees over the period.
(3) Global indirect employees are all employees other than those directly manufacturing our products, excluding Senior Management.
“FTE” refers to full time equivalent.

We do not have any service agreements with any of the members of our Supervisory Board. We did not
extend any loans or overdrafts to any of our Supervisory Board members. Furthermore, we have not guaranteed
any debts or concluded any leases with any of our Supervisory Board members or their families.

B. Managing Board
i. Role of the Managing Board
In accordance with Dutch law, our management is entrusted to the Managing Board under the supervision
of our Supervisory Board. Mr. Jean-Marc Chery was appointed on May 31, 2018 for a three-year term and was
re-appointed on May 27, 2021 for a subsequent three-year term expiring at the 2024 AGM and is currently the
sole member of the Managing Board with the function of President and Chief Executive Officer. For further
biographical details concerning the sole member of the Managing Board, our President and Chief Executive
Officer, please refer to the “Biographies of our Executive Committee members (including the President and
Chief Executive Officer)” section.
Under our Articles of Association, Managing Board members are appointed for a three-year term upon a
non-binding proposal by our Supervisory Board at our AGM and adoption by a simple majority of the votes cast
at the AGM, provided quorum conditions are met, which term may be renewed one or more times.

Our shareholders’ meeting may suspend or dismiss one or more members of our Managing Board, in
accordance with the procedures laid down in our Articles of Association. Under Dutch law, our Managing
Board is entrusted with our general management and the representation of the Company. Our Managing Board
must seek prior approval from our shareholders’ meeting for decisions regarding a significant change in the
identity or nature of the Company. Under our Articles of Association and our Supervisory Board charter, our
Managing Board must also seek prior approval from our Supervisory Board for certain other decisions with
regard to the Company and our direct or indirect subsidiaries.

The sole member of our Managing Board may not serve on the board of a public company without the
prior approval of our Supervisory Board. Pursuant to the Supervisory Board charter, the sole member of our
Managing Board must inform our Supervisory Board of any (potential) conflict of interest and pursuant to such
charter and Dutch law, any Managing Board resolution regarding a transaction in relation to which the sole
member of our Managing Board has a conflict of interest must be approved and adopted by our Supervisory
Board. Should our entire Supervisory Board also have a conflict of interest, the resolution must be adopted by
our shareholders’ meeting pursuant to Dutch law. We are not aware of any actual or potential conflicts of
interests between the private interest or other duties of the sole member of our Managing Board and members of
our Senior Management and their duties to us.

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Pursuant to our Articles of Association and the Supervisory Board charter, the following decisions by our
Managing Board with regard to the Company and any of our direct or indirect subsidiaries (an “ST Group
Company”) require prior approval from our Supervisory Board: (i) any modification of our or any ST Group
Company’s Articles of Association or other constitutional documents, other than those of wholly owned
subsidiaries; (ii) other than for wholly owned subsidiaries, any change in our or any ST Group Company’s
authorized share capital or any issue, acquisition or disposal by us — with the exception of shares in our share
capital acquired in order to transfer these shares under employee stock option or stock purchase plans — or any
ST Group Company of own shares or change in share rights and any issue of instruments resulting in a share in
performance conditions related to corporate social responsibility and environmental, social and governance
factors. Both short-term and long-term incentive includes performance conditions promoting ST’s sustainable
growth.

ii. Managing Board compensation

a. Guiding principles of Managing Board compensation
Amongst others, the following key principles are considered by the Supervisory Board to determine the
remuneration structure of the sole member of the Managing Board, our President and Chief Executive Officer:
• Alignment with the Company’s strategy: the compensation package should be strongly linked to the
achievement of targets that are indicators of the execution of the Company’s business strategy.
• Improving the performance of the Company: most of the compensation (excluding base salary,
benefits, and pensions) is directly linked to the Company’s performance through variable pay
incentives. These incentives are based on ambitious performance conditions that include a mix of
internal and external criteria as well as relative performance conditions against peers.
• Enhancing long-term creation of shareholder value: to strengthen the alignment with the interests of
the shareholders and to enhance the long-term value creation of the Company, the compensation
structure includes short-term and long-term variable remuneration either in cash or in shares or a
combination thereof.
• Promoting sustainable corporate development: to ensure that the Company is managed in a
sustainable and responsible manner for the common good, the remuneration includes non-financial
performance conditions related to corporate social responsibility and environmental, social, and
governance factors. Both short- and long-term incentive include performance conditions promoting
ST’s sustainable growth.
• Retaining and motivating key employees: the compensation package should be competitive,
ensuring remuneration levels are determined by reference internally between the Company’s senior
managers and externally against the Peer Group.

In accordance with the key principles of the Company’s remuneration structure, the total remuneration of
the sole member of the Managing Board, our President and Chief Executive Officer takes into consideration
factors such as the size and complexity of our Company, our global presence and that of our customers, the pace
of change in our industry, the Company’s value proposition, strategy and goal of long-term value creation, and
the need to recruit and retain key personnel.

b. Managing Board remuneration policy

The remuneration of the sole member of the Managing Board, our President and Chief Executive Officer,
is determined by our Supervisory Board on the advice of the Compensation Committee
On December 1, 2019, the SRDII took effect in The Netherlands. As we are incorporated under the laws
of The Netherlands and our common shares are admitted to trading on regulated markets in the European Union,
we are required, inter alia, to update the remuneration policy with respect to the compensation of the sole
member of the Managing Board, our President and Chief Executive Officer and to comply with the respective
disclosure requirements introduced to the Dutch Civil Code. In connection therewith, we present in this Item 6
comparative information on our performance relative to the compensation of the members of our Senior
Management and the sole member of the Managing Board, our President and Chief Executive Officer.

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The Compensation Committee advises the Supervisory Board in reviewing the remuneration package of
the sole member of the Managing Board, our President and Chief Executive Officer both in the context of the
Company performance and against the Peer Group and relevant market index. Before setting targets for the sole
member of the Managing Board, our President and Chief Executive Officer, the Compensation Committee
carries out scenario analyses of the possible financial outcomes of meeting target levels.

Set forth in the table below is the list of companies retained for the Peer Group compensation analysis
used for the remuneration policy for the Managing Board adopted at the 2021 AGM:

Analog Devices ON Semiconductor

Infineon Texas Instruments
Monolithic Power Systems Vishay
Microchip Rohm
NXP Semiconductors Renesas

Should one of the Peer Group companies not publish financial results for any reason, Diodes and/or
Melexis would replace the missing company.

The remuneration of the sole member of the Managing Board, our President and Chief Executive Officer,
is bound by the remuneration policy as adopted by our 2021 AGM for a duration of a maximum of 4 years.
Under the terms of the Dutch Civil Code, the remuneration policy for the Managing Board shall be submitted to
the AGM for adoption at least every four years after its adoption. A resolution to adopt the remuneration policy
requires a majority of at least 75% of the votes cast.

The remuneration policy for the Managing Board contains the following key features:
• the reinforcement of the link between Managing Board remuneration and long-term company
strategy;
• the simplification of the short-term incentive structure (fully paid in cash, as compared to a hybrid
cash-equity pay-out previously) featuring enhanced disclosure of criteria and threshold, targets, and
maximum performance levels;
• the inclusion of corporate social responsibility criteria among performance conditions for both the
short-term and long-term incentive in line with our objectives of promoting sustainable corporate
development;
• enhanced disclosure of long-term incentive (share-settled) performance conditions and threshold and
target performance levels as well as the remaining outstanding shares (which are not yet vested);
• a three-year performance period for long-term incentives (as compared to one year previously), with
vesting based on performance measured over the 3-year performance period, to improve alignment of
Managing Board remuneration with our objective of enhancing long-term shareholder value;
• enhanced disclosure regarding early vesting provisions for the unvested stock awards;
• the implementation of share ownership guidelines for the Managing Board; and
• claw-back provisions in order to reclaim payments after they have been awarded or to withhold
remuneration under specific conditions.

We continue to increase the level of disclosure and transparency in relation to the remuneration of the
sole member of the Managing Board, our President and Chief Executive Officer to provide our stakeholders
with an increased level of insight in our remuneration practices.

c. Managing Board remuneration structure

The remuneration structure is reflective of the level of responsibility of the Company’s sole member of
the Managing Board, our President and Chief Executive Officer. The remuneration structure is further aligned to
the Company’s current context while remaining competitive and providing an incentive to promote the
Company’s performance over the medium to long-term, and is in line with the Company’s corporate interest and
the interests of all its stakeholders.

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The Supervisory Board, upon proposal from the Compensation Committee, determines the remuneration
structure and remuneration amounts for the sole member of the Managing Board, our President and Chief
Executive Officer based on the analysis of the theoretical maximum total direct remuneration (i.e., sum of base
salary, maximum short-term incentive, and maximum long-term incentive).

The remuneration package of the sole member of the Managing Board, our President and Chief Executive
Officer is comprised of the following:
• A base salary; and
• Variable components, linked to performance:
o A short-term incentive of up to 210% of base salary which is fully paid in cash.
o A long-term incentive through the grant of stock awards, up to a maximum of 100,000
shares.
The sum of these three elements represents the maximum total direct remuneration for the sole
member of the Managing Board, our President and Chief Executive Officer.
The above-mentioned three elements of the total maximum remuneration of the sole member of the
Managing Board, our President and Chief Executive Officer are further described below:
Base salary
The purpose of the base salary is to provide a fixed level of earnings and to attract and retain the sole
member of the Managing Board, our President and Chief Executive Officer. It is a key component of overall
remuneration, particularly as the short-term incentive is expressed as a percentage of base salary. The Company
seeks to determine a fair and competitive base salary as compared to the Peer Group based on several factors.

Short-term incentive
The purpose of the short-term incentive is to motivate the sole member of the Managing Board, our
President and Chief Executive Officer to achieve financial and commercial objectives consistent with and
supportive of the Company’s strategy and to create a tangible link between annual performance and individual
pay opportunity.

In accordance with the Managing Board remuneration policy and effective from the year 2021, the short-
term incentive of the sole member of the Managing Board, our President and Chief Executive Officer is fully
paid in cash up to a maximum of 210% of the base salary for the relevant year, all subject to the assessment and
achievement of a number of performance conditions which are set annually by the Compensation Committee of
our Supervisory Board.

The short-term incentive is subject to annual performance measurement of a unique set of 4 to 7

predefined criteria (both financial and non-financial) and a performance matrix both for financial and non-
financial criteria that explicitly outline threshold and target outcomes (as well as overperformance conditions for
financial criteria).

Performance measures and weightings are reviewed annually by the Compensation Committee. The
recommendations made by the Compensation Committee regarding scorecard targets and weightings are
designed to support the delivery of the Company’s strategy. The Supervisory Board, upon recommendation by
the Compensation Committee, retains the ability to adjust performance measure targets and weightings year-by-
year within the overall target and maximum pay-outs approved in the remuneration policy.

The Supervisory Board, upon the recommendation of its Compensation Committee, sets the conditions
and performance criteria that must be met by the sole member of the Managing Board, our President and Chief
Executive Officer for the attribution of his short-term incentive (which is paid in the subsequent year).

These performance conditions will enable the Supervisory Board to conduct a holistic and comprehensive
assessment of the annual performance of the sole member of the Managing Board, our President and Chief
Executive Officer. The combination of financial and non-financial criteria is well balanced in terms of external
and internal criteria and reflect the challenging objectives set by the Compensation Committee in line with the
Company's ambitious long-term vision and business strategy.

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The financial performance criteria for 2022, as chosen by the Supervisory Board were as follows:
• Market share evolution, which is measured by assessing the Company’s relative positioning and
competitiveness in relation to its market and its industry peers and how fast the Company grows its
revenues compared to its competitors. Market share is assessed on the basis of industry data
published by WSTS (“World Semiconductor Trade Statistics”).
• Revenue growth, which represents the total amount of income generated by the Company’s
operations;
• Operating income, which is an important yardstick of profit measurement and reflects the operating
performance of the business which does not take into consideration of non-operating gains or losses
suffered by business, the impact of financial leverage and tax factors; and
• Net operating cash flow, which is a liquidity metric that evaluates whether the Company has enough
liquidity to meet its debt obligations. This metric helps assess the financial soundness of the
company in terms of liquidity risk, financial risk, credit risk and business risk.

The non-financial performance criteria for 2022, as chosen by the Supervisory Board were as follows:
• Execution of special manufacturing programs;
• Execution of strategy implementation; and
• Sustainability/corporate social responsibility index, which is divided into four criteria related to:
o Health & safety: measured against, amongst others, the employee safety performance;
o Environment/climate: measured against, amongst others, direct emissions (kCO2 equivalent);
o Diversity & inclusion: measured against, amongst others, gender ratio among management
levels; and
o People management: measured against, amongst others, the employee survey (engagement
index).

The weight of the sustainability/corporate social responsibility index is designed to remain stable over
time, however the individual sub-components used to form the sustainability/corporate social responsibility
index may evolve in the future to address sustainability priorities facing the Company and society.

Set forth in the following Table A1 and Chart A1 is the weight set for 2022 for each of the performance
criteria that will be assessed by the Supervisory Board in March 2023 for the attribution of the 2022 short-term
incentive (to be paid in 2023):

Table A1: Performance criteria with target weighting and pay-out

Target
Weighting
(as a % of total
weighting for Target pay-out
performance (as a % of base
Annual short-term incentive performance criteria financial year 2022 (to be paid in 2023) criteria) salary)
Financial performance conditions
o Market share evolution 14% 30%
o Revenue growth 19% 40%
o Operating income 19% 40%
o Net operating cash flow 19% 40%
Sub-total for financial performance conditions 71% 150%
Non-financial performance conditions
o Execute special manufacturing programs 14% 30%
o Execute strategy implementation 5% 10%
o Sustainability/corporate social responsibility index 10% 20%
Sub-total for non-financial performance conditions 29% 60%
Total 100% 210%

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Chart A1: Performance criteria with target weighting and pay-out

As described in Table A2 below, the final pay-out of the short-term incentive is calculated by
measuring the performance of each condition, then adding the sums of the corresponding pay-out from Table A1
above, taking into account any applicable caps. The sum is then multiplied by the base salary to determine the
final short-term incentive pay-out.

Table A2: Pay-out according to performance for each performance criterion

Pay-out as a percentage of base salary
PerformancePerformance
above or above or
equal to equal to
Performance threshold target and Performance
Annual short-term incentive performance criteria below and below below above
financial year 2022 (to be paid in 2023) threshold target stretch stretch
Financial performance conditions
o Market share evolution 0% 15% 30% 45%
o Revenue growth 0% 20% 40% 60%
o Operating income 0% 20% 40% 60%
o Net operating cash flow 0% 20% 40% 60%
Capped at
Sub-total for financial performance conditions 0% 75% 150%
150%(1)
Non-financial performance conditions
o Execute special manufacturing programs 0% 15% 30% 30%
o Execute strategy implementation 0% 5% 10% 10%
o Sustainability/corporate social responsibility index 0% 10% 20% 20%
Sub-total for non-financial performance conditions 0% 30% 60% 60%(2)
short-
term
incentive
Total 0% 105% 210%
pay-out
capped at
210%
(1) Over-performance for financial conditions can balance the potential under-performance of other financial conditions if performance
exceeds stretch targets, without exceeding a maximum pay-out of 150% of base salary regarding the portion of the short-term
incentive dependent on financial performance criteria.
(2) No stretch targets are defined for non-financial performance criteria.

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As of the publication of this Form 20-F the evaluation and assessment of the fulfillment of conditions and
performance criteria as well as the determination of conditions for the 2022 short-term incentive have not yet
been completed by the Supervisory Board upon the proposal of the Compensation Committee (expected in
March 2023).

As a result, performance achievement levels and final pay-out for the short-term incentive based on 2022
performance (to be paid in 2023), as well as the scorecard for the 2022 short-term incentive will be disclosed at
a later date, and is expected to be included in the 2022 Dutch Annual Report. Scorecard targets are not disclosed
prospectively as it would require the disclosure of commercially sensitive information. Scorecard targets for the
2022 short-term incentive will be disclosed only when they are no longer deemed to be commercially sensitive.

Long-term incentive
The purpose of the long-term incentive is to motivate the sole member of the Managing Board, our
President and Chief Executive Officer to deliver sustainable long-term shareholder value through long-term
profitability and share price growth.

The terms of this long-term incentive are included in the long-term incentive plan approved at the 2021
AGM, allowing for grants of unvested stock awards in 2021, 2022 and 2023. The vesting of unvested stock
awards is subject to the achievement of performance conditions and calculated over a three-year performance
period. Grants of unvested stock awards made in 2022 and 2023 will fully vest, subject to performance
conditions, in 2025 and 2026 respectively.

Award levels are determined annually by the Compensation Committee within the maximum amounts set
by the Supervisory Board. In accordance with the resolution adopted by our AGM, the maximum annual grant
allowed in relation to the sole member of the Managing Board, our President and Chief Executive Officer’s
stock award for 2020, 2021 and 2022 was 100,000 unvested stock awards subject to performance criteria.

The Supervisory Board, upon recommendation of the Compensation Committee, determines whether the
performance criteria are met and concludes whether and to which extent the sole member of the Managing
Board, our President and Chief Executive Officer, is entitled to any stock awards under the long-term incentive
plan. Scorecard targets are not disclosed prospectively as it would require the disclosure of commercially
sensitive information. Scorecard targets will be disclosed only when they are no longer deemed to be
commercially sensitive.

Grants in 2022 and 2021

In accordance with the long-term incentive plan approved at the 2021 AGM, allowing for grants in 2021,
2022 and 2023, the stock awards vest at the end of a three-year performance period, from the date of the grant,
provided that the sole member of the Managing Board, our President and Chief Executive Officer is still an
employee at such time (subject to the termination provisions listed below in “Section f. Compensation
provisions in the event of termination or departure of the sole member of the Managing Board, our President and
Chief Executive Officer”).

For the 2022 long-term incentive, the performance criteria are:

• Revenue growth;
• Operating margin; and
• Sustainability/corporate social responsibility index, which was comprised of the following KPIs
(including two external criteria):
o Environment/climate: measured against, amongst others, the direct emissions (kCO2
equivalent);
o Diversity, inclusion and people engagement: measured against, amongst others, gender
ratio among management levels;
o Investor ESG index: measured against, amongst others, the Dow Jones sustainability
indices; and
o Carbon rating: measured against, amongst others, the CDP carbon rating.

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Set forth in the following Table B1 and Chart B1 is the weight set for each of the performance criteria that
will be assessed by the Supervisory Board over the three performance periods for the attribution of the relevant
long-term incentive.

Table B1: Long-term incentive performance criteria and target weighting over the three performance periods

Long-term incentive plan performance criteria to be Target Weighting

assessed over a (as % of maximum
3-year period achievement score)
Revenue growth (financial year 2024 vs financial year 2021
in comparison to Peer Group) 33.33%
Operating margin ratio before restructuring (average for the
2022 – 2024 period) 33.33%
Sustainability/corporate social responsibility index 33.33%
Maximum achievement score 100%
which correspond to a
maximum of 100,000 unvested stock awards

Chart B1: Long-term incentive performance criteria and target weighting over the three performance periods

Table B2: Shares to vest at the end of the 3-year vesting period according to performance for each
performance criterion

Shares to vest as a percentage of maximum award

Performance
above
Performance Performance threshold Performance
Long-term incentive plan performance criteria to below equal to and below above or at
be assessed over a 3-year period threshold threshold target target
Revenue growth (financial year 2024 vs financial
0% 16.67% 25% 33.33%
year 2021 in comparison to Peer Group)
Operating margin ratio before restructuring (average
0% 16.67% 16.67% 33.33%
for the 2022 – 2024 period)
Sustainability/corporate social responsibility index 0% 16.67% 16.67% 33.33%
Total 0% 50% 58.34% 100%

Table B3: Vesting schedule for the 2021 and 2022 long-term incentive grants

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Set forth in the following table is an overview of the outstanding awards that have been granted to the sole
member of the Managing Board, our President and Chief Executive Officer, in accordance with the new long-
term incentive plan adopted by the 2021 AGM. For the purposes of the vesting schedule table below, a
hypothetical achievement rate of 100% of performance conditions is used:

Max. number Share

Final of shares that price at Unvested
Grant vesting can be grant 2022 2023 2024 2025 shares as of
date date granted (in $) vesting vesting vesting vesting end of 2022

AGM
July 27,
date for 100,000 $36.33 100,000(1) 100,000
2022
2025

AGM
July 28,
date for 100,000 $39.33 100,000(1) 100,000
2021
2024

Total
200,000
vesting

(1) In the event of 100% achievement of performance criteria to be assessed by the Supervisory Board.

Grant in 2020

Set forth in the following table are the performance criteria, weight, and achievement rate for the periods
indicated below set for the long-term incentive grant in 2020.

Under the terms of the previous long-term incentive plan in place before the current remuneration policy,
performance was measured over the course of the year following the grant, subject to three performance
conditions. Based on the achievement of long-term incentive performance conditions, the total number of shares
to be vested was determined, up to a maximum of 100,000 shares. Performance conditions were assessed once,
one year following the grant date. The unvested stock awards then vested as follows:
• One year post-grant: 32% of unvested stock awards vest (a maximum of 32,000 shares if all targets
were met)
• 2 years post-grant: 32% of unvested stock awards vest (a maximum of 32,000 shares if all targets were
met)
• 3 years post-grant: 36% of unvested stock awards vest (a maximum of 36,000 shares if all targets were
met)

Following the implementation of the remuneration policy adopted at the 2021 AGM, the terms of long-
term incentive plans from 2021 onwards have changed, as detailed in the section “Grants in 2022 and 2021”
above).

Assessment of performance criteria for 2020 long-term incentive grants

Target weighting
(as % of maximum
Long-term incentive plan performance
achievement score) 2020
criteria
Evolution of sales 33.33% Criteria met
Evolution of operating income 33.33% Criteria met
Return on net assets 33.33% Criteria met
100%
which correspond to a 100%
Maximum achievement score maximum of 100,000 performance
unvested stock achieved
awards

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Vesting schedule for outstanding shares

Set forth in the following table is an overview of the outstanding awards under grants prior to
implementation of the new long-term incentive plan adopted in 2021 that have been granted to the sole member
of the Managing Board, our President and Chief Executive Officer:

Number of
Max. shares
number awarded
of shares based on Share
Final that performance price at 2020 2022 Unvested
Grant vesting can be conditions grant vestin 2021 vestin 2023 shares as of
Plan date date granted achievement (in $) g vesting g vesting end of 2022
2020
unvested
July 23, June 17,
stock 100,000 100,000 $29.97 32,000 32,000 36,000 36,000
2020 2023
awards
Grant
2019
unvested
July 24, May 23,
stock 100,000 66,672 $19.45 21,335 21,335 24,002
2019 2022
awards
Grant

Total 21,335 53,335 56,002 36,000 36,000

vesting

Share ownership guidelines

The sole member of the Managing Board, our President and Chief Executive Officer is expected to build up
a shareholding in the Company equal to 1.5 times of the base salary, in line with the remuneration policy.

Claw-back provisions

All performance-related remuneration awarded to the sole member of the Managing Board, our President
and Chief Executive Officer are subject to the following claw-back provisions, in accordance with Dutch law. If
the Supervisory Board considers that there is a significant downward restatement of the Company's financial
results, breach of duty from the sole member of the Managing Board, our President and Chief Executive Officer,
or where remuneration has been paid based upon incorrect information about the achievement of the goals on
which the remuneration was based or the circumstances on which the short-term incentive was dependent, it
may, in its discretion, within two years of the performance-related remuneration of the sole member of the
Managing Board, our President and Chief Executive Officer vesting or being paid:
• require the sole member of the Managing Board, our President and Chief Executive Officer to repay to
the Company an amount equal to the after-tax value of some or all of any short-term incentive or the
Company's shares that were granted; and/or
• require the Company to withhold from, or offset against, any other remuneration to which the sole
member of the Managing Board, our President and Chief Executive Officer may be or become entitled
in connection with its employment such an amount as the Supervisory Board considers appropriate.

When reaching its decision, the Supervisory Board will take into account of the significance of the breach
of duty and in addition, the Supervisory Board may take other actions in relation to the statutory provision e.g.
claim for damages.

During 2022, no claw-backs have occurred.

The sole member of the Managing Board, our President and Chief Executive Officer may also receive
other types of remuneration included as described in the remuneration policy approved at the 2021 AGM, such

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as social premiums, benefits in kind (including a company car), pension contributions and miscellaneous
allowances.

d. Compensation paid to the sole member of the Managing Board, our President and Chief Executive
Officer in financial year 2022

The sole member of the Managing Board, our President and Chief Executive Officer, received
compensation in the form of a base salary, short-term incentive (fully paid in cash from 2021 onwards), long-
term incentive grant (unvested stock awards), social premiums, benefits in kind (including a company car),
pension contributions and miscellaneous allowances.

Set forth in the following table and chart is an overview of the total compensation of the sole member of
the Managing Board, our President and Chief Executive Officer paid in 2022:

Base Salary $ 1,250,954

Variable components
Short-term incentive(1) $ 2,506,576
Long-term incentive(2) $ 2,043,212
Other components
Benefits $ 108,023
Social security
$ 857,448
contributions
Pensions(3) $ 452,230
Miscellaneous
-
allowances
Termination benefits -
Total $ 7,218,443

(1) Short-term incentive includes both the amount paid in cash in 2022 (based on 2021 performance) and a tranche from the short-term
incentive payable in shares based on his 2019 and 2020 performance. The achievement rate based on 2021 performance was 205%
and paid in 2022. The short-term incentive based on 2022 performance will be determined by the Compensation Committee and paid
at a date after the publication of this Form 20-F.
(2) The sole member of the Managing Board, our President and Chief Executive Officer was granted, in accordance with the
remuneration policy and subsequent shareholder authorizations, up to 100,000 unvested stock awards, subject to performance criteria.
The vesting of such stock awards is conditional upon the sole member of the Managing Board, our President and Chief Executive
Officer’s, continued service with us.
(3) Complementary pension plan for certain of the Company's key executives.

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During 2022, the sole member of the Managing Board, our President and Chief Executive Officer, did not
have any stock options, and did not purchase any shares in the Company. During 2022, the sole member of the
Managing Board, our President and Chief Executive Officer sold 73,043 shares.

e. Evolution of paid remuneration to the Managing Board

In 2022, our Supervisory Board has decided to increase the base salary of the sole member of the
Managing Board, our President and Chief Executive Officer.

In making this decision, the Supervisory Board has, amongst others:

(i) reviewed the market landscape as shown in the table below and noted that the base salary of the
sole member of the Managing Board, our President and Chief Executive Officer, has been below
the market median for many years;

(ii) considered the fact that the performance of our Company and of the sole member of the Managing
Board, our President and Chief Executive Officer, has increased since his nomination, despite the
heavy market volatility during this period; and

(iii) considered that the base salary of the sole member of the Managing Board, our President and
Chief Executive Officer has remained unchanged since his nomination in 2018.

Base salary(1)

Managing Board, Base salary 2022 Base salary 2021

President and Chief vs median vs median
Executive Officer or
equivalent titles in € in $

2022 1,100,000 1,250,954

2021 800,000 936,357
STMicroelectronics 2020(2) 800,000 856,837
2019 800,000 896,297
2018 800,000 927,820
Peer Group median 946,718 116% 85%

(1) The sole member of the Managing Board, our President and Chief Executive Officer has a base salary paid in Euros which
is converted every year in U.S. dollar for the purpose of the Form 20-F. For ease of reference the evolution of his base
salary is therefore reflected in both currencies, using the Euro per U.S. dollar exchange rate on December 31 of the
relevant year.

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(2) The base salary of the sole member of the Managing Board, our President and Chief Executive Officer for 2020, does not
take into consideration the voluntary decrease of his base salary in 2020 for a period of six months as a result of the
COVID-19 pandemic.

Set forth in the following table is the total compensation of the sole member of the Managing Board,
our President and Chief Executive Officer, from 2020 to 2022:

Variable components Other components(3)

Social
Fixed/
Base Short-term Long-term security
Name Year Benefits Pensions Total Variable
salary Incentives (1) Incentives contributions
(2) remuneration
Jean‐Marc C 37% fixed /
2022$ 1,250,954 $ 2,506,576 $ 2,043,212 $ 108,023 $ 857,448 $ 452,230 $ 7,218,443
hery 63% variable
Jean‐Marc C 32% fixed /
2021$ 936,357 $ 1,907,307 $ 3,245,640 $ 101,867 $ 904,742 $ 463,617 $ 7,559,530
hery 68% variable
Jean‐Marc C 39% fixed /
2020$ 856,837 $ 1,285,378 $ 2,224,984 $ 103,599 $ 797,306 $ 471,143 $ 5,739,247
hery 61% variable

(1) The short-term incentive includes both the amount paid in cash and the amount paid in shares for the year 2020. As of 2021 with the
implementation of the remuneration policy for our Managing Board adopted at the 2021 AGM, the short-term incentive is paid fully
in cash. The short-term incentive related to 2021, 2020 and 2019 was approved by the Compensation Committee and Supervisory
Board with respect to the 2021, 2020 and 2019 financial year, respectively, based on the evaluation and assessment of the actual
fulfillment of a number of pre-defined objectives for such year. The short-term incentive related to a relevant year is paid in the
subsequent year, i.e. the short-term incentive related to the 2021, 2020 and 2019 financial year, respectively, is paid in 2022, 2021 and
2020 respectively. The achievement rate for the 2021 short-term incentive (paid in 2022), based on 2021 performance, was 205% in
cash out of maximum of 210%. The achievement rate for the 2020 short-term incentive (paid in 2021), based on 2020 performance,
was 183% (135% in cash and 48% in shares) out of maximum of 210%. The achievement rate for the 2019 short-term incentive (paid
in 2020), based on 2019 performance, was 170% (110% in cash and 60% in shares) out of maximum of 210%.
(2) The social security contributions relate to the fixed and variable remuneration, including the unvested stock awards.
(3) There were no miscellaneous allowances nor termination benefits in the years 2022, 2021, and 2020.
(4) The base salary of the sole member of the Managing Board, our President and Chief Executive Officer for 2020, does not take into
consideration the voluntary decrease of his base salary in 2020 for a period of six months as a result of the COVID-19 pandemic.

f. Compensation provisions in the event of termination or departure of the sole member of the
Managing Board, our President and Chief Executive Officer

The sole member of the Managing Board, our President and Chief Executive Officer, was appointed on
May 31, 2018 for a three-year term and was reappointed for another three-year term at the 2021 AGM, expiring
at the 2024 AGM. He has two employment agreements with us, the first with the Company, which relates to his
activities as sole member of our Managing Board and representative of the Company, and the second with one
of our entities in Switzerland, which relates to his activities as President and Chief Executive Officer, the EIP,
Pension and other items covered by the remuneration policy for our Managing Board. While the relationship
between a member of the Managing Board and a listed Dutch company will be treated as a mandate agreement,
not an employment agreement, existing employment agreements, including the employment agreement between
us and our sole member of the Managing Board, will remain in effect.

The agreements can be terminated with a notice period of 6 months if terminated by the Company or 3
months if terminated by the sole member of the Managing Board, our President and Chief Executive Officer.

Severance clause

Pursuant to the agreements, the sole member of the Managing Board, our President and Chief Executive
Officer will be entitled to a severance payment if his employment is terminated at the initiative of the Company
and other than for cause, considering amongst others, his critical role in the Company and his seniority. The
severance payment will be equal to a gross lump sum payment in the amount of two times his latest gross annual
salary, plus the short-term incentive (being the average of the short-term incentive received in the last three
years) subject to any and all applicable legal, regulatory and/or contractual deductions.

Any severance payments made will be disclosed in the remuneration report in the annual report of the
financial year that this amount relates to, as well as the reason for the severance payment.

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Vesting of stock awards in the event of termination or departure

In the event of termination of the employment or departure of the sole member of the Managing Board,
our President and Chief Executive Officer, his stock awards will either (i) be forfeited in full, (ii) accelerate in
vesting or (iii) continue vesting, as shown in the table below.

Table of the compensation in the event of termination or departure of the sole member of the Managing Board,
our President and Chief Executive Officer

Set forth in the table below is an overview of the compensation of the sole member of the Managing
Board, our President and Chief Executive Officer in the event of his termination or departure, as applicable.

Termination by the Company

Not in connection In connection
In connection
Resignation Retirement with change of with serious
with change of
control or serious or gross
control
or gross misconduct misconduct
2 times the
2 times the annual annual base
base salary plus salary plus
Severance
Not applicable Not applicable average short-term average short- Not applicable
Clause
incentive over the term incentive
last 3 years over the last 3
years
Outcome
of unvested Continuation of Accelerated Forfeited in
Forfeited in full Accelerated vesting
stock vesting vesting full
awards

C. Senior Management
i. Definition of Senior Management
The term “Senior Management” refers to:
• The sole member of the Managing Board, our President and Chief Executive Officer;
• The members of the Executive Committee (including the sole member of the Managing Board, our
President and Chief Executive Officer); and
• The Executive Vice Presidents of the Company.
The sole member of the Managing Board, our President and Chief Executive Officer, is entrusted with our
general management and is supported in his tasks by our Executive Committee and Executive Vice Presidents,
who together constitute the Senior Management.

ii. Role of Executive Committee

The Executive Committee acts under the authority and responsibility of the Managing Board and in this
respect manages the Company. The Managing Board remains legally responsible for the management of the
Company. The responsibilities of the Executive Committee include overseeing the general strategy as well as
the risk management in connection with the Company's activities, operational and financial objectives and
financial reporting processes. The Executive Committee adopts resolutions based on consensus, or if no
consensus can be reached, by a majority of the votes cast by the members of the Managing Board including the
vote of the chairman of the Executive Committee.

The chairman of the Executive Committee is the President and Chief Executive Officer of the Company.
Members of the Executive Committee are appointed by the Managing Board subject to the approval of the
Supervisory Board. Members of the Executive Committee can be suspended and dismissed by the Managing
Board without prior approval by the Supervisory Board.

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The Executive Committee was composed of the following nine members as of December 31, 2022 as set
forth in the table below:

Years with Years in Semi-

Name(1) Position Company Conductor Industry Age
Jean-Marc Chery President and Chief Executive Officer 38 38 62
President, Technology,
Orio Bellezza Manufacturing, Quality and Supply 39 39 63
Chain
President, Analog, MEMS and Sensors
Marco Cassis 35 35 59
Group
Remi El- President, Microcontrollers and
1 25 49
Ouazzane (1) Digital ICs Group
Chief Financial Officer (CFO) and
President, Finance, Purchasing,
Lorenzo Grandi 35 35 61
Enterprise Risk Management (ERM) &
Resilience
President, Automotive and Discrete
Marco Monti 36 36 61
Group
Steven Rose President, Legal Counsel 31 31 60
President, Human Resources,
Rajita D'Souza 2 2 50
Corporate Social Responsibility
Jerome Roux (2) President, Sales & Marketing 31 35 57
(1) Claude Dardanne retired from the Executive Committee on January 1, 2022, on which date Remi El-Ouazzane joined the Executive
Committee as President, Microcontrollers & Digital ICs Group.
(2) Jerome Roux joined the Executive Committee as President, Sales & Marketing on January 1, 2022.

iii. Biographies of our Senior Management

a. Biographies of our Executive Committee Members (including the President and Chief Executive
Officer)

Jean-Marc Chery

Jean-Marc Chery is STMicroelectronics’ President and Chief Executive Officer and has held this position
since May 31, 2018. He is the sole member of ST’s Managing Board and chairs its Executive Committee. Chery
began his career in the Quality organization of Matra, the French engineering group. In 1986, he joined
Thomson Semiconducteurs, which subsequently became ST, and held various management positions in product
planning and manufacturing, rising to lead ST’s wafer fabs in Tours, France, and later in Rousset, France. In
2005, Chery led the company-wide 6-inch wafer-production restructuring program before taking charge of ST’s
Front-End Manufacturing operations in Asia Pacific. In 2008, he was promoted to Chief Technology Officer and
assumed additional responsibilities for Manufacturing and Quality (2011) and the Digital Product Sector (2012).
In 2014, Chery was appointed ST’s Chief Operating Officer responsible for Technology and Manufacturing
operations. In July 2017, Chery was appointed Deputy Chief Executive Officer with overall responsibility for
Technology and Manufacturing, as well as for Sales and Marketing operations. Chery sits on the board of
directors at the Global Semiconductor Alliance (GSA). He is also a member of the Board of Directors at
Legrand and Chairman of the France – Malaysia Business Council at Medef International. Previously, he was
President of the European microelectronics R&D program AENEAS and served as President of the European
Semiconductor Industry Association (ESIA) in 2019- 2021. Chery was promoted Knight of the Legion of Honor
by the French Ministry of Economy and Finance in July 2019. Jean-Marc Chery was born in Orleans, France, in
1960, and graduated with a degree in Engineering from the ENSAM engineering school in Paris, France.

Orio Bellezza

Orio Bellezza is STMicroelectronics’ President, Technology, Manufacturing, Quality and Supply Chain
and has held this position since May 31, 2018. He has been responsible for Front-End Manufacturing since 2008
and his mandate was expanded in 2018 to cover ST’s technology, manufacturing operations, supply chain, and
quality. Bellezza is a member of ST’s Executive Committee. Bellezza joined SGS-ATES, a predecessor

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company to STMicroelectronics, in 1984 as a fab process engineer. He soon moved to ST’s Central R&D
organization and participated in several key projects, including the introduction of process technology modules
for manufacturing sub-micron non-volatile memories. In 1996, Bellezza was appointed Director of ST’s R&D
facility in Agrate and led its upgrade and expansion into a manufacturing and development center for non-
volatile memory and smart-power technologies. In 2002, he became Vice President of Central R&D, and in
2005, was appointed Vice President and Assistant General Manager of Front-End Technology and
Manufacturing. Bellezza also serves as Managing Director of the ST Italy legal entity. He has published
multiple technical papers and earned several patents in non-volatile memories. Orio Bellezza was born in
Bergamo, Italy, in 1959, and graduated cum laude with a degree in Chemistry from the University of Milan,
Italy.

Marco Cassis

Marco Cassis is STMicroelectronics’ President, Analog, MEMS and Sensors Group and has held this
position since January 1, 2022. He also heads the corporate functions of Strategy Development, System
Research and Applications, and Innovation Office, and is a member of ST’s Executive Committee. Cassis joined
SGS-Thomson Microelectronics (now STMicroelectronics) as a car-radio chip designer in 1987. He later moved
to Japan to help expand ST’s audio business with major local players, including ST’s strategic alliance with
Pioneer. In the early 2000s, Cassis managed the Audio Business Unit and was subsequently promoted to
Director of Audio and Automotive Group. In 2004, Cassis was named Vice President of Marketing for
automotive, computer peripheral, and telecom products. In 2005, he advanced to Vice President of the
Automotive Segment Group and was promoted to lead ST’s operations in Japan. His mandate was expanded to
include Korea in 2010 and Greater China and South Asia in 2016, when he was appointed President of ST’s
Asia Pacific Region. In 2017, Cassis was promoted President, Global Sales and Marketing, and added
Communications and Strategy Development in 2018. Marco Cassis was born in Treviso, Italy, in 1963, and
graduated with a degree in Electronic Engineering from the Polytechnic of Milan, Italy.

Remi El-Ouazzane

Remi El-Ouazzane is STMicroelectronics’ President, Microcontrollers and Digital ICs Group and has held
this position since January 1, 2022. He is a member of ST’s Executive Committee. El-Ouazzane started his
career at Texas Instruments in 1997. He rose through the ranks across the broadband, mobile, and embedded
processing divisions to become Vice President and General Manager of the Open Multimedia Applications
Platform (OMAP) in 2009. El-Ouazzane was appointed Chief Executive Officer of Movidius in 2013,
responsible for driving its vision-processing technologies to advance the adoption of AI in the Internet of
Things. With the acquisition of Movidius by Intel in 2016, he joined Intel’s New Technology Group as Vice
President and General Manager and became Chief Operating Officer of Intel’s Artificial Intelligence Products
Group in 2018. In 2020, El-Ouazzane became Intel’s Datacenter Platform Group Chief Strategy Officer, driving
strategic initiatives in the data center and cloud markets. In 2009, El-Ouazzane was honored with the French-
American Foundation’s Young Leaders Award. Remi El-Ouazzane was born in Neuilly-sur-Seine, France in
1973 and graduated from the Grenoble Institute of Technology (INPG) in 1996 and the Grenoble Institute of
Political Studies in 1997. He graduated from the General Management Program at Harvard Business School in
2004.

Lorenzo Grandi

Lorenzo Grandi is STMicroelectronics’ Chief Financial Officer (CFO) and President, Finance,
Purchasing, Enterprise Risk Management (ERM) & Resilience, and has held this position since January 1, 2022.
He is a member of ST’s Executive Committee. Grandi joined SGS-THOMSON Microelectronics (now
STMicroelectronics) in 1987 as an R&D process engineer. In 1990, he moved to ST’s Memory Product Group
as Financial Analyst and later was appointed Group Controller contributing to the expansion of ST’s flash
memory business. In 2005, Grandi joined ST’s Corporate Finance organization responsible for Budgeting and
Reporting. In 2012, he was promoted to Corporate Vice President in charge of Corporate Control. Grandi was
appointed ST’s Chief Financial Officer in 2018 and his overall responsibilities include Finance and Business
Control, Treasury, Capital investment Control and Planning, Global Procurement, Investor Relations and
Enterprise Risk Management and Business Continuity. In December 2020, Grandi received a special award for
his long-standing professional achievements from the French Association of Financial Directors and
Management Controllers (DFCG). Lorenzo Grandi was born in Sondrio, Italy, in 1961. He graduated cum laude
in Physics from the University of Modena, Italy, and holds an MBA from SDA Bocconi School of Management
in Milan, Italy.

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Marco Monti

Marco Monti is STMicroelectronics’ President, Automotive and Discrete Group. The head of ST’s
Automotive Product Group since 2012, his mandate was expanded to include discrete and power transistor
products in January 2016. Monti is a member of ST’s Executive Committee. Monti joined ST in Central R&D in
1986 and transferred to the Automotive Division in 1988, where he designed automotive ICs incorporating
smart-power technologies. He moved to Japan in 1990 working on a co-development activity designing a noise-
reduction system for audio applications. Subsequently, Monti transferred into marketing, contributing to the
expansion of ST’s automotive business in Japan. In 2000, he became the marketing manager for ST’s
Automotive Division and started the Company’s automotive microprocessor business two years later. In 2004,
Monti was promoted to Division General Manager for Powertrain, Safety, and Chassis products. He earned
responsibility for the Automotive Electronics Division in 2009. Then, in 2012, Monti was appointed Executive
Vice President, General Manager of ST’s Automotive Product Group. Marco Monti was born in Milan, Italy, in
1961. He graduated cum laude in Electronic Engineering from the Polytechnic of Milan and earned a PhD in
Electronics from the University of Pavia, Italy.

Steven Rose

Steven Rose is STMicroelectronics’ President, Legal Counsel, and has held this position since May 31,
2018. He has been in charge of ST’s legal affairs since 2013. Rose is a member of ST’s Executive Committee.
Rose started his career as a corporate attorney at the law firm Gardere & Wynne in Dallas, Texas, providing
legal advice and services to public and private companies. He joined SGS-THOMSON Microelectronics (now
STMicroelectronics) in 1991 as the Associate General Counsel for the U.S. subsidiary, STMicroelectronics, Inc.
In 2006, Rose was appointed Senior Associate General Counsel for the Americas, Greater China & South Asia,
and Japan & Korea regions, in addition to serving as Vice President, Secretary & General Counsel and a
Director of STMicroelectronics, Inc. Steven Rose was born in Wichita, Kansas (USA), in 1962. He obtained a
degree in Accounting from Oklahoma State University and a Juris Doctor degree from the University of
Oklahoma College of Law.

Rajita D’Souza

Rajita D’Souza is President of STMicroelectronics’ Human Resources and Corporate Social

Responsibility (CHRO) and has held this role since January 2021. Her mandate also entails the Company’s
directions on environment, health, and safety. D’Souza is a member of ST’s Executive Committee. D’Souza
started her career in 1993 as Manager Operations with Reliance Consultancy Services in Mumbai, India. In
1997 she joined General Electric, where she held various HR leadership positions with increasing responsibility
and scope. In 2007 D’Souza moved to SABIC to become Director Human Resources in Europe. In 2011, she
was appointed Vice President Human Resources for the EMEA region of The Goodyear Tire & Rubber
Company. In 2017 D’Souza joined Bekaert as Chief Human Resources Officer. Rajita D’Souza was born in
Mumbai, India, in 1973. She holds a master’s degree in Law from the University of Mumbai and a bachelor’s
degree in Business Management. She is also a certified Master Black-Belt in Six Sigma quality.

Jerome Roux

Jerome Roux is STMicroelectronics’ President, Sales & Marketing, and has held this position since
January 1, 2022. He is a member of ST’s Executive Committee. Roux began his career in the Planning
department of SGS-THOMSON Microelectronics (now STMicroelectronics) in 1988. He soon moved to the
Company’s packaging facility in Casablanca, Morocco as Material Manager. Afterwards, Roux moved to
Singapore and then Shanghai as the Asia Pacific Marketing Director for ST’s Discrete and Standard Product
Group. He left ST briefly to manage an ST supplier company and returned to ST in 2006 as Group Vice
President, Assembly & Testing Outsourcing Operations. Global Purchasing responsibilities were added to his
mandate in 2008. Roux was promoted to Corporate Vice President in 2012 and managed ST’s sales in the
Greater China & South Asia Region and later the whole Asia Pacific Region. In 2017, Roux was appointed
Executive Vice President, Sales & Marketing, for the Company’s Asia Pacific region. Roux serves as Advisor to
the French Government (CCEF) on Foreign Trade. Jerome Roux was born in Antibes, France, in 1965, and
graduated from ISG Business School in Paris with a master’s degree in Commerce (Management & Marketing).

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b. Biographies of our Executive Vice Presidents

The group of Executive Vice Presidents consisted of the following people as of December 31, 2022:
Years with Years in Semi-
Name(1) Position Company Conductor Industry Age
Executive Vice President, Sales & Marketing,
Michael Anfang 24 32 54
Europe, Middle East and Africa Region (EMEA)
Executive Vice President and General Manager of
Eric Aussedat the Imaging sub-group within ST’s Analog, 42 42 68
MEMS and Sensors Group
Executive Vice President, Smart Power Solutions
Sub-Group within STMicroelectronics’
Stefano Cantù 28 28 54
Automotive and Discrete Group (ADG),
Automotive Business Deputy
Executive Vice President, Sales & Marketing,
Henry Cao 2 2 49
China Region
Executive Vice President, Chief Innovation Officer
Alessandro
and General Manager System Research and 38 38 64
Cremonesi
Applications (SRA) Group
Alberto Della Chiesa Executive Vice President Supply Chain 34 34 58
Executive Vice President, General-Purpose
Ricardo De Sa Earp 25 25 59
Microcontroller Sub-Group
Executive Vice President, Chief Audit & Risk
Franck Freymond 12 12 54
Executive
Executive Vice President, Head of Back-End
Fabio Gualandris 34 35 63
Manufacturing & Technology
Executive Vice President, Analog and Power,
Michael Hummel 4 32 63
Front-End Manufacturing
Executive Vice President, Europe and France
Frédérique Le Grevès 2 2 55
Public Affairs
Executive Vice President, Integrated Marketing &
Claudia Levo 11 13 57
Communications
Executive Vice President, Analog, Sub-Group
Matteo Lo Presti General Manager, Analog MEMS and Sensors 29 32 58
Group
Executive Vice President Digital Front-End
Laurent Malier 7 28 55
Manufacturing and Technology
Executive Vice President, Power Transistor Sub-
Edoardo Merli 24 24 60
Group
Executive Vice President, Sales & Marketing, Asia
Hiroshi Noguchi 15 15 47
Pacific Region excluding China (APeC)
Executive Vice President, Corporate, Treasury,
Giuseppe Notarnicola Insurance, M&A, IP BU, Real Estate and Italy 17 17 61
Public Affairs
Andrea Onetti Executive Vice President, MEMS Sub-Group 32 32 57
Executive Vice President, Sales & Marketing,
Rino Peruzzi 24 24 57
Americas and Global Key Account Organization
Executive Vice President, Digital Transformation
Chouaib Rokbi 22 22 51
and Information Technology
Executive Vice President Finance, Global Shared
Bertrand Stoltz 28 28 52
Services and Systems, Asia Public Affairs
Executive Vice President, Product Quality &
Nicolas Yackowlew 27 28 53
Reliability

(1) Eric Aussedat retired in January 2023 and was replaced by Alexandre Balmefrezol, who was appointed Executive Vice President,
Optical Sensing Solutions Sub-Group. Paul Cihak left his position in September 2022, and Rino Peruzzi was appointed Executive
Vice President, Sales & Marketing, Americas. Joel Hartmann retired as Executive Vice President, Digital & Smart Power Technology
and Digital Front-End Manufacturing in 2022.

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c. Biographies of our Executive Vice Presidents Committee Members

Michael Anfang

Michael Anfang is Executive Vice President, Sales & Marketing for STMicroelectronics’ Europe, Middle
East and Africa Region (EMEA), and has held this position since November 2018. Anfang started his career
with Siemens Semiconductor AG in 1990 in product engineering, followed by responsibilities in product design,
automotive and strategic marketing. In 1999, he joined ST as an automotive business development manager. In
2002, Anfang was given responsibility for microcontroller product marketing at ST’s Automotive Division in
Agrate, Italy and was promoted to Director of Marketing & Applications in 2005. Four years later, he was
appointed Digital Automotive Business Unit Director of the Automotive Product Group and became a member
of the management team responsible for the MCU Joint Development Program between Freescale and
STMicroelectronics. In 2013, Anfang joined the EMEA regional organization of STMicroelectronics as
Automotive Marketing & Applications Vice President. Michael Anfang was born in Kitzbühel, Austria, in 1968.
He graduated with a degree in Electronic Engineering from the Higher Technical School in Saalfelden, Austria,
and a degree in Business Management and Marketing from the FU University in Hagen-Munich, Germany.

Eric Aussedat

Eric Aussedat is Executive Vice President and General Manager of the Optical Sensing Solutions sub-
group within ST’s Analog, MEMS and Sensors Group and has held this position since October 2014. Aussedat
joined Thomson Semiconducteurs, a predecessor company to ST, as Product Engineer in 1981. He held various
positions in product engineering and planning and was promoted Planning Manager of the Video Products
Group in 1986. Later on, Aussedat was appointed to manage the product and manufacturing planning operations
of INMOS, a UK company acquired by ST. Subsequently, he supervised the Engineering and Test Strategy for
the Programmable Product Group before his promotion to head ST’s Microcontroller Division in 1995. In 2000-
2004, Aussedat led the TV and Display Division and became General Manager of ST’s Cellular Communication
Division in 2005. Two years later, Aussedat was appointed General Manager of the Optical Sensing Solutions
Division. In 2012, Aussedat was appointed ST’s Executive Vice President in charge of the Optical Sensing
Solutions, Bi-CMOS ASIC and Silicon Photonics Group. Eric Aussedat was born in Montmorency near Paris,
France, in 1954. He graduated with a degree in Electronic Engineering from the Institut National Polytechnique
in Grenoble and earned a diploma from the Institut d’Administration des Entreprises of Grenoble.

Stefano Cantù

Stefano Cantù is Executive Vice President, Smart Power Solutions Sub-Group within
STMicroelectronics’ Automotive and Discrete Group (ADG) and has held this position since September 2020.
He has also been Automotive Business Deputy across all ADG organizations since April 2019. After
experiences at Italtel and the Italian Ministry of Defense, Cantù joined the Planning organization of
STMicroelectronics’ Dedicated Product Group in 1994. Five years later, he was appointed Central Planning
Manager for the Telecom, Peripheral, and Automotive Group. In 2003-2004, Cantù managed production control
at ST’s manufacturing sites in Phoenix and Carrollton in Texas, US and in 2005, he moved to Planning Director
at ST’s Automotive Product Group. Cantù was promoted to Automotive Product Group Vice President
responsible for Supply Chain in 2009 with Group Operations added to his mandate in 2012, before becoming
Supply Chain General Manager in 2016. Stefano Cantù was born in Milan, Italy, in 1968, and he graduated with
a degree in Electronic Engineering from the Polytechnic of Milan.

Henry Cao

Henry Cao is Executive Vice President, Sales & Marketing for STMicroelectronics’ China Region and has
held this position since January 2022. Cao began his career as Account Manager at Siemens Communications
Group in 1995 in charge of the communication-infrastructure business. In the following years, he moved among
roles as Business Development Manager and Sales Director in various Siemens BUs and corporate functions in
Munich, Beijing, and Shanghai. In 2006, Cao joined Dell Technologies as a Director, managing enterprise
solutions covering server, storage, networking, and related software & service businesses. In 2014, he was
appointed Vice President in charge of the data-center solutions business for Dell Technologies in Greater China
and was promoted to Senior Vice President in 2018. Cao joined ST in June 2020 as Corporate Vice President to
manage the Company’s sales in China. Henry Cao was born in Shanghai, China, in 1973. He graduated from
Shanghai University of Engineering & Science with a degree in Mechanical & Electrical Engineering and holds
an MBA degree from Washington University in St. Louis.

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Alessandro Cremonesi

Alessandro Cremonesi is STMicroelectronics’ Executive Vice President, Chief Innovation Officer and
General Manager of STMicroelectronics’ System Research and Applications (SRA) Group. He has managed the
SRA group since 2013 and added the Innovation Office to his mandate in early 2020. Cremonesi’s
responsibilities span from global innovation coordination to corporate advanced R&D to system-solutions
support for ST customers. Cremonesi joined STMicroelectronics in 1984. He has served in managerial roles
with both Strategic Marketing and R&D responsibilities across domains from telecommunications to
audio/video digital-signal processing and multimedia applications. He has been a key contributor to ST’s
extensive efforts and strategy in IoT and Artificial Intelligence and, more recently, has led the creation of
strategic initiatives to increase ST’s innovation capability. Cremonesi was part of an expert group defining the
strategy for Artificial Intelligence for the Italian Ministry of Economic Development. He has authored several
technical papers and patents and is a member of the Scientific Advisory Board at IMEC. Born in Sant’Angelo
Lodigiano, Italy in 1958, Alessandro Cremonesi graduated with a master's degree in Electronics Engineering
from University of Pavia in 1984.

Alberto Della Chiesa

Alberto Della Chiesa is STMicroelectronics’ Executive Vice President in charge of Supply Chain and has
held this role since May 2012. Della Chiesa joined STMicroelectronics as a New Product Planning Engineer in
1988. He was in charge of new product introductions in the Automotive and Hard Disk Drive market and
pioneered a number of ST’s successful collaborative programs with major key customers. In his tenure at
STMicroelectronics, Della Chiesa has covered different positions in both Planning and Operations. In 2005, he
was appointed Director, Planning & Service for the Computer Peripherals Group, where he actively contributed
to the creation of ST’s first operations and planning structure in Singapore. Over time, Della Chiesa rose to
become Group Vice President of Supply Chain, followed by the nomination of General Manager and
consequently Head of Operations and Supply Chain for ST’s Computers and Communications Infrastructure
Product Group. Alberto Della Chiesa was born in Varese, Italy, in 1964, and holds a bachelor's degree in
Statistics from the Catholic University of Milan, with a specialization in the manufacturing processes. He is also
CPIM certified with the American Production and Inventory Control Society (APICS) in Paris, France.

Ricardo De Sa Earp

Ricardo De Sa Earp is STMicroelectronics’ Executive Vice President, General-Purpose Microcontroller

Sub-Group Vice President and has held this position since January 2022. De Sa Earp started his career with
Philips Consumer Electronics in Sao Paulo, Brazil, working in TV design. In 1993, he moved to the Electronics
Division of Valeo, where he held positions in marketing and project management. De Sa Earp joined ST in 1997
as Strategic Marketing Manager in the ASD&IPAD Division at ST Tours (France). In 2003, he was promoted to
the position of ASD&IPAD Division General Manager and successfully led the Division for 15 years. In 2018,
De Sa Earp was appointed Group Vice President and General Manager of the Microcontrollers Division within
ST’s Microcontrollers and Digital ICs Group. Ricardo De Sa Earp was born in Petropolis, Brazil, in 1963. He
graduated in Electronic Engineering from the Instituto Tecnologico de Aeronautica Sao Jose dos Campos,
Brazil, and completed his master’s degree in Electronic Engineering at the Technical University of Eindhoven,
Holland. De Sa Earp also holds an MBA from INSEAD in France.

Franck Freymond

Franck Freymond is STMicroelectronics’ Executive Vice President, Chief Audit & Risk Executive, and
has held this role since March 2019. Freymond started his career with Credit Suisse Group in 1992 as credit
analyst/assistant account manager and then became manager in charge of financing solutions for specific
segments of Swiss Corporates. In 2000, he joined EY (Ernst & Young) in Switzerland as manager in the Risk
Advisory service line and was promoted Regional Leader and member of the service line leadership team in
2004. In those roles, Freymond advised multi-national companies globally in a wide cross-section of industries
in governance, risk management, internal control, and internal audit matters. In 2010, he joined
STMicroelectronics as Group Vice President, Chief Audit Executive in charge of the Corporate Audit function.
Freymond’s scope of responsibilities was subsequently extended to Enterprise Risk Management and Resilience
Management, including business continuity and crisis management. Freymond served as Chairman of
STMicroelectronics’ Corporate Ethics Committee from 2012 to 2018. Franck Freymond was born in Morges
near Lausanne, Switzerland in 1968. He holds a Master of Science in Management from HEC Lausanne
(Switzerland) and various professional certifications in internal audit and risk management assurance.

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Fabio Gualandris

Fabio Gualandris is Executive Vice President, Head of ST’s Back-End Manufacturing & Technology
organization, responsible for product test, assembly and packaging, and has held this position since January
2016. He manages the Company’s manufacturing strategy in Asia and its efforts in System-in-Package
technology. Gualandris joined SGS Microelettronica (now ST) R&D in 1984. He was promoted to R&D
Director of Operations in 1989 and became Automotive BU Director in 1996. After two years as President and
Chief Executive Officer of Semitool, a US semiconductor manufacturing equipment vendor, he rejoined ST in
2000 as Group VP responsible for the RAM/PSRAM Product Division and the Flash Automotive BU. In 2005,
Gualandris was appointed Chief Executive Officer of ST Incard, an ST smart-card subsidiary. In 2008- 2010, he
served as VP and Supply Chain General Manager at ST’s memory JV with Intel. In 2011, Gualandris was
appointed ST’s Executive Vice President, Product Quality Excellence. Gualandris has authored several technical
and managerial papers and holds some international patents. He serves as Chairman of STS, ST's manufacturing
joint venture in China. and previously sat on boards of Incard, Numonyx, and Numonyx-Hynix JV. Fabio
Gualandris was born in Bergamo, Italy, in 1959. He holds a Master’s degree in Physics from the University of
Milan.

Michael Hummel

Michael Hummel is Executive Vice President of STMicroelectronics, Analog and Power Front-End
Manufacturing, and has held this position since March 2019. In 1991, Hummel started his professional career
with IBM Microelectronics as a Process Engineer at Europe’s first 200mm wafer fab in Böblingen, Germany.
He held several managerial positions in Manufacturing and Engineering and became Director of Marketing &
Supply Chain Management for the Philips-IBM JV in 1996. In the early 2000s, Hummel served as VP of
Philips’ Display Driver business – first in Zürich and later in Taipei. In 2005, he was promoted to VP and
General Manager of Philips Semiconductors Germany and Head of the Wafer Fab Operation in Böblingen. In
2007, Hummel joined Texas Instruments as Operations Manager in Dallas and two years later became Fab
Manager at the Freising, Germany wafer plant. Upon TI’s acquisition of National Semiconductors in 2011,
Hummel assumed additional responsibility for the Greenock, UK wafer fab and its integration into TI’s Front-
End Fab structure. Hummel sat on SEMI European Advisory Board in 2005-2017. Michael Hummel was born
in Heilbronn, Germany, in 1959. He studied Chemistry at the University of Tübingen and received his PhD
degree in Organic & Physical Chemistry in 1991.

Frédérique Le Grevès

Frédérique Le Grevès is STMicroelectronics’ Executive Vice President, Europe and France Public
Affairs. She has also held the position of President and Chief Executive Officer of STMicroelectronics France
since March 2021. In 1990, Le Grevès started her career in marketing and communication for various
international companies in Europe and in the US. From 1995 to 2003, she worked at Aptiv (ex-Delphi
Automotive) as EMEA Communication Director. In 2003, Le Grevès joined Nissan Motors as VP
Communication for Europe and in 2004, she moved to Los Angeles as VP Communications for Nissan
Americas. Le Grevès returned to France in 2008 and joined the Renault Group as Global VP for Corporate
Communication. Two years later, she expanded her role to Global VP of Communications and Deputy to the
Chief Marketing and Communication officer. In 2011, Le Grevès was appointed Chief of Staff for the Renault
Nissan Mitsubishi Alliance Chairman and Chief Executive Officer. More recently, she worked as senior advisor
for several companies helping on corporate effectiveness, operations efficiency, and brand reputation. In April
2022, Le Grevès was appointed President of the “Electronic Industry” sector strategic committee in France. She
has also sat at the Supervisory Board of TRIGO Holding as an independent board member since May 2021 and
at the Strategic Board of Clinatec since October 2021. Born in Suresnes, France, in 1967, Frédérique Le Grevès
graduated with a master’s degree in business management from the Paris School of Business (1991) and
graduated from the Senior Executive Program at the London Business School (2019).

Claudia Levo

Claudia Levo is Executive Vice President at STMicroelectronics with responsibility, since June 2018, for
integrated Marketing & Communications strategies and plans. Her responsibilities encompass corporate
communications, including PR, media and industry analyst relations, marketing communications and digital
marketing. Levo began her career in 1993, with Marconi, a global telecommunications company, where she had
responsibility for a number of management roles within the Communication function, including marketing
communications and internal and external communications across wide geographies. In 2005, Levo managed the
communication activities related to the integration of Marconi with Ericsson, and was subsequently appointed

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Vice President for Communications at the newly formed Ericsson Multimedia Business Unit. In 2008, Levo was
appointed Vice President Communications at Italtel. In early 2009 she joined ST-Ericsson, the wireless joint
venture between STMicroelectronics and Ericsson, as Senior Vice President and head of Global
Communications. In this capacity, she has successfully built the Global Communication function covering
marketing and portfolio communication, public and media relations, investor relations and internal
communication. Claudia Levo was born in Genoa, Italy, in 1965, and holds a language school diploma (Liceo
Linguistico) in English and Russian.

Matteo Lo Presti

Matteo Lo Presti is Executive Vice President, General Manager of the Analog sub-group within ST’s
Analog, MEMS and Sensors Group, and has held this position since January 2016. Lo Presti joined the
Advanced Research Group of SGS-Thomson Microelectronics (now STMicroelectronics) in 1994 and was
appointed Head of Fuzzy Logic R&D four years later. From 2002 to 2004, Lo Presti led the marketing and
application labs for the Industrial and Automotive market segments in ST’s Emerging Markets. He gained
responsibility for the Company’s Systems Lab in 2004 and the Subsystem Product Group and Technical
Marketing for the Industrial & Multisegment Sector were added to his mandate in 2008 and 2009, respectively.
In 2012, Lo Presti was promoted to Group Vice President, General Manager, Industrial and Power Conversion
Division. From 1996 to 2004, Lo Presti served as a visiting professor at the University of Messina (Italy) and the
University of Catania (Italy). He has authored more than 40 international publications and holds several
industrial patents. Matteo Lo Presti was born in Misterbianco, Italy, in 1965, and graduated with a degree in
Electronic Engineering from the University of Catania.

Laurent Malier

Laurent Malier is Executive Vice President of STMicroelectronics, Digital Front-End Manufacturing and
Technology, and has held this position since January 2022. He manages ST’s manufacturing operations in
Crolles and Rousset, as well as Technology R&D and Design Enablement for the Company’s Digital, Optical
Sensing Solutions, RF, Non-Volatile Memory, and Smart Power technologies. After several years of research in
chemical physics, Malier worked at the French Ministry of Defence from 1995 to 2000. He then joined Alcatel
Optronics, first to lead new-product development and later managed semiconductor activities. Malier was
appointed Front-End R&D and Manufacturing Director for Avanex Group that merged Alcatel’s and Corning’s
opto-electronics operations in 2003. In 2005, he joined the French technology research center CEA-LETI as
deputy director, Strategy and Programs, and became Chief Executive Officer of LETI in 2006. In 2015, Malier
joined ST to drive the Company’s Digital Technology R&D. He was promoted to Group VP, RF &
Communication sub-group in 2020. Malier was elected as Member of the French “Académie des Technologies”
in 2019. He has authored 29 publications in physics and solid-state chemistry. Laurent Malier was born in Paris,
France, in 1967. He graduated from the Ecole Polytechnique and has a PhD in Physics from Paris-Saclay
University.

Edoardo Merli

Edoardo Merli is STMicroelectronics’ Executive Vice President, Power Transistor Sub-Group Vice
President and has held this position since January 2022. Merli joined STMicroelectronics in 1998 as Head of
System Architecture in the Telecom Wireline Division. In 2002, he formed and led ST’s WLAN Business Unit.
Merli was appointed Director of the Automotive Product Group in 2007, where he took responsibility for the RF
Competence Center & Connectivity Business Unit and subsequently for the Car Radio Business Unit. In 2012,
Merli was promoted to Marketing & Application Director for ST’s Automotive and Discrete Group in Greater
China and South Asia. In 2016, his responsibilities were extended to include the Company’s automotive
activities in Korea. In 2017, Merli was promoted to Power Transistor Macro-Division General Manager and
Group Vice President of ST’s Automotive and Discrete Group. Merli has filed several patents on ADSL, multi-
service routers, switches, and throughput management, and authored numerous publications in the areas of
Telecommunications, Automotive, and Connectivity. Edoardo Merli was born in Parma, Italy, in 1962, and
graduated with a degree in Electronic Engineering from University of Bologna in 1989.

Hiroshi Noguchi

Hiroshi Noguchi is Executive Vice President, Sales & Marketing for STMicroelectronics’ Asia Pacific
Region excluding China (APeC) and has held this position since January 1, 2022. Noguchi started his career as
an optics engineer in Bell Labs at Lucent Technologies in 1999. He joined ST Japan in 2007 as a Motion MEMS
marketing engineer. In 2011, Noguchi was promoted to Senior Marketing Manager for ST’s Advanced Analog

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group. Since 2015, he has served as Director of Analog, MEMS & Sensor group in Japan contributing to
significant business growth and strengthening ST’s market leadership in Japan. In 2017, Noguchi was appointed
Country Manager for ST Japan. Hiroshi Noguchi was born in Nagasaki, Japan, in 1975. He graduated from
Northwestern University with a Bachelor of Science degree in Electrical Engineering and from Stanford
University with a Master of Science degree in Electrical Engineering.

Giuseppe Notarnicola

Giuseppe Notarnicola is STMicroelectronics’ Executive Vice President responsible for managing

Corporate Treasury, a position he has held since January 2006. His responsibilities were expanded in 2013 to
include Insurance and in 2018 to include M&A, IP Business Unit and Public Affairs for Italy. Notarnicola
started his career with Banca Nazionale del Lavoro (BNL), one of Italy’s largest banks, in 1987. At BNL, he
managed financial operations in Singapore, the Financial Department of the London branch, the global Head
Office, financial advisory arm for corporate and institutional customers, and in 2004, was promoted Head of
Large Corporate clients. Notarnicola joined ST in 2006, when he initiated the Company’s relationship with the
European Investment Bank and managed the financing aspects of ST’s Flash memory business spin-out, as well
as all the Company’s strategic funding in the capital markets. Notarnicola is President of ST Italy and a board
member of several other ST affiliates. In 2021, he was appointed Vice President for Economic Research
Department and FDI Attraction at Assolombarda, an industrial organization that associates nearly 7,000
companies in the Lombardy Region of Italy. Giuseppe Notarnicola was born in Codroipo near Udine, Italy, in
1961. He graduated cum laude in Business Administration from the LUISS Guido Carli University in Rome,
Italy.

Andrea Onetti

Andrea Onetti is STMicroelectronics’ Executive Vice President, MEMS Sub-Group General Manager and
has held this position since January 2022. Onetti joined STMicroelectronics' R&D Lab in Castelletto, Italy, in
1990, as a designer of mixed-signal audio ICs. Later he moved into Product Management and Marketing for
Consumer Audio and was promoted to General Manager of a Product Division. Onetti’s mandate was expanded
to include ST’s Audio and Sound Business Unit in 2011 and the Analog and Audio Systems Division in 2014.
In 2016, he was promoted to Head of ST’s MEMS Sensors Division, driving business and margin growth in
MEMS sensors, product portfolio expansion and optimization, as well as ST MEMS ecosystem creation
including strategic partnerships with key industry players including Qualcomm and Microsoft. Onetti has
several patents for analog circuit implementations in the Audio domain. Andrea Onetti was born in Pavia, Italy,
in 1965, and graduated with a Degree in Microelectronics from University of Pavia.

Rino Peruzzi

Rino Peruzzi is Executive Vice President, Sales & Marketing, Americas and Global Key Account
Organization, and has held this combined position since August 2022. Peruzzi began his career in Electronics at
Micom Communications Systems in 1984, moved to Macom, Inc in 1989, and into the storage sector in 1990,
with StorageTek, Maxtor, and Seagate Technology. In 1998 he joined ST as an account executive in the Storage
Business Unit, where he earned Samsung Electronics’ Presidential Award. Peruzzi was promoted to Key
Account Manager in 2000 and Director of Sales for Worldwide Storage Business in 2003. He was promoted to
VP Worldwide Storage Sales (2008) and VP Sales for the Consumer Business Unit (2011), before being
appointed VP Global Key Accounts (GKAs) in 2012. Here, he assembled a global organization and grew a key
account’s revenue to become ST’s biggest. In 2014 Peruzzi’s perimeter expanded to include both GKA and
EMS (Electronics Manufacturing Services). In 2018 Peruzzi was promoted to the Chief Executive Officer’s staff
as Group VP of GKAs and became Executive VP GKAs Sales and Marketing Regions in 2021. Rino Peruzzi
was born in Buffalo, New York (USA), in 1965. He is currently pursuing his MBA from York St John
University.

Chouaib Rokbi

Chouaib Rokbi is Executive Vice President, Digital Transformation and Information Technology at
STMicroelectronics and has held this position since January 2022. Rokbi started his career in Tamrock,
Sandvik’s hard-rock mining division, in 1995 as the design manager for small-size mining rigs, where he
successfully led the redesign to reduce the cost of the equipment line. After earning his MBA in 2000, he joined
STMicroelectronics as the industrial controller for the Rousset plant in France. Four years later, Rokbi’s
controlling responsibilities were expanded to cover all of ST’s front-end manufacturing operations. Between
2007 and 2018, he held senior positions in financial control, efficiency improvement programs, and corporate

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strategic initiatives. In 2018, Rokbi was appointed Chief Transformation Officer with the mission to rebuild the
Company’s main operational processes, including Supply Chain, Product Lifecycle Management, and
Manufacturing Analytics, leveraging state-of-the-art digital technologies. Chouaib Rokbi was born in Lyon,
France in 1971, and holds a degree in mechanical engineering from INSA Lyon and an MBA from Emlyon
Business School in Lyon.

Bertrand Stoltz

Bertrand Stoltz is STMicroelectronics’ Executive Vice President in charge of Finance, Global Shared
Services and Systems, as well as the Company’s Asia Public Affairs, and has held both roles since April 2022.
He also sits on ST’s Corporate Ethics Committee. Stoltz started his career in the Finance department of SGS-
Thomson (now ST) in Tours, France, in 1994. From 1999 to 2002, he worked at the Company’s headquarters in
Corporate Strategic Planning and Corporate Internal Audit. In 2002, Stoltz moved to Singapore to lead ST’s
Asia Internal Audit team. He rose to Head of Finance at ST Singapore in 2005. Stoltz was subsequently
promoted to Group Vice President, expanding his mandate to cover Asia, Americas, France, Italy, and most
recently all local financial reporting and regional business control across ST entities worldwide. Stoltz acts as
Managing Director for ST’s Singapore entities and serves as a Board Member at several other ST affiliates.
Bertrand Stoltz was born in Moulins, France, in 1970. He holds an honour’s degree with a major in finance from
the Institute of Political Studies in Lyon, France. He also graduated with a degree from the University Business
School in Tours, and the International Executive Program of INSEAD.

Nicolas Yackowlew

Nicolas Yackowlew is Executive Vice President, Product Quality & Reliability at STMicroelectronics and
has held this position since August 2018. Yackowlew began his career in 1996 as Product Quality Engineer at
ST. He has successfully driven Quality and Reliability departments for many years at both the Division and
Group levels. Yackowlew was promoted Division Quality & Reliability Manager in 2006 leading quality for
Serial Non Volatile Memory. Three years later, he was appointed Quality & Reliability Director in charge of the
Quality for Memory, Microcontrollers and Secured Microcontrollers. In 2016, Yackowlew took the
responsibility of Quality & Reliability for the Microcontroller and Digital ICs Group (MDG). Nicolas
Yackowlew was born in Mulhouse (France) in 1969 and graduated with a degree in Chemistry from the
University of Nice Sophia Antipolis, France.

iv. Senior Management compensation

a. Guiding principles of Senior Management compensation

The Managing Board determines the remuneration structure of the Senior Management based on, amongst
others, the same key principles that the Supervisory Board considers when determining the remuneration
structure of the Managing Board. These key principles are described above in “section B.ii.a Guiding principles
of Managing Board compensation”.

In accordance with the key principles, the total remuneration of the Senior Management takes into
consideration factors such as the size and complexity of the Company, our global presence and that of our
customers, the pace of change in our industry, the Company’s value proposition, strategy and goal of long-term
value creation, and the need to recruit and retain key personnel.

b. Senior Management remuneration structure

The Managing Board determines the remuneration structure and remuneration amounts for our Senior
Management based on the analysis of the theoretical maximum total direct remuneration (i.e., sum of base
salary, maximum short-term incentive, and maximum long-term incentive).

The remuneration package of the Senior Management is comprised of the following:

• Base salary; and
• Variable components, linked to performance:
o A short-term incentive which is fully paid in cash.

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o A long-term incentive through the grant of stock awards, that are included in the long-term
incentive plan approved at the AGM.
The sum of these three elements represents the maximum total direct remuneration for the Senior
Management.

Base salary
The purpose of the base salary is to provide a fixed level of earnings and to attract and retain talent. It is a
key component of overall remuneration, particularly as the short-term incentive is expressed as a percentage of
base salary.

Short-term incentive

The short-term incentive based on the corporate executive incentive program (“EIP”), entitles selected
executives, including the members of Senior Management, to an annual short-term incentive. This short-term
incentive is based upon the assessment of the achievement of individual, organizational and Company objectives
that are set on an annual basis and focused on, inter alia, return on net assets, customer service, profit, cash flow
and market share. The maximum amount awarded under the short-term incentive is based upon a percentage of
the executive’s salary and the overall achievement of the relevant objectives on an annual basis.

The 2022 short-term incentive includes a sustainability/corporate social responsibility index for Senior
Management, as part of our efforts to include corporate social responsibility into the performance framework of
our Senior Management. For Executive Committee members and Executive Vice Presidents, the weight of the
sustainability/corporate social responsibility index ranges between 5% and 10%. The sustainability/corporate
social responsibility index is divided into four criteria related to health and safety, environment, diversity &
inclusion, and people engagement.

For the 2022 short-term incentive, the sustainability/corporate social responsibility index was comprised
of the following KPIs:
• Health & safety: measured against, amongst others, the employee safety performance
• Environment/climate: measured against, amongst others, direct emissions (kCO2 equivalent)
• Diversity & inclusion: measured against, amongst others, gender ratio among management levels
• People management: measured against, amongst others, the employee survey (engagement index)

The weight of the sustainability/corporate social responsibility index is designed to remain stable over
time, however the individual sub-components used to form the sustainability/corporate social responsibility
index may evolve in the future to address sustainability priorities facing the Company and society.

Long-term incentive

The purpose of the long-term incentive, through the grant of stock awards, is to motivate the Senior
Management to deliver sustainable long-term shareholder value through long-term profitability and share price
growth.

In accordance with the current long-term incentive plan, stock awards vest over a three-year horizon from
the date of the grant, with 32% vesting after one year, a further 32% after two years and the remaining 36% after
three years, subject to performance criteria and provided that the eligible employee is still an employee of the
Company at such time.

The Supervisory Board determines whether the performance criteria are met and concludes whether and to
which extent all eligible employees are entitled to any stock awards under the long-term incentive plan.

From 2021, a new sustainability/corporate social responsibility index has been introduced among the
performance conditions for the long-term incentive.

For the 2022 long-term incentive, the sustainability/corporate social responsibility index was comprised of
the following KPIs:

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• Environment/climate: measured against, amongst others, the direct emissions (kCO2 equivalent)
• Diversity & inclusion: measured against, amongst others, gender ratio among management levels
• ESG investor index: measured against, amongst others, the Dow Jones sustainability indices
• Carbon rating agency: measured against, amongst others, the CDP carbon rating

The weight of the sustainability/corporate social responsibility index is designed to remain stable for
future grants, however the individual sub-components used to form the sustainability/corporate social
responsibility index may evolve in the future to address sustainability priorities facing the Company and society.

Pension plan, life and medical insurance

Our Supervisory Board has approved the establishment of a complementary pension plan for certain key
executives as selected by the sole member of the Managing Board, our President and Chief Executive Officer,
according to the general criteria of eligibility and service as determined by the Supervisory Board upon the
proposal of its Compensation Committee. With respect to such complementary pension plan, we have set up an
independent foundation under Swiss law which manages the plan and to which we make contributions. Pursuant
to this plan, in 2022, we made a contribution of approximately $0.5 million to the plan of the sole member of the
Managing Board, our President and Chief Executive Officer, and of $1.05 million to the plan for all
beneficiaries other than the sole member of the Managing Board, our President and Chief Executive Officer.
The amount of pension plan payments made for other beneficiaries, such as former employees retired in 2022
and/or no longer salaried in 2022, was $1.1 million.

The members of our Senior Management, including the sole member of the Managing Board, our
President and Chief Executive Officer, were covered in 2022 under certain group life and medical insurance
programs provided by us. The aggregate additional amount set aside by us in 2022 to provide pension,
retirement or similar benefits to our Senior Management, including the sole member of the Managing Board, our
President and Chief Executive Officer, including the amounts allocated to the complementary pension plan
described above, is estimated to have been approximately $7.5 million, which includes statutory employer
contributions for state run retirement, similar benefit programs and other miscellaneous allowances.

The structure of our remuneration for our (i) Managing Board, President and Chief Executive Officer, (ii)
Senior Management, and (iii) certain other groups of senior employees is aligned and consists of a base salary,
short-term incentive and long-term incentive, under specified conditions. The standard benefits for the
aforementioned groups are also aligned.

c. Compensation paid to the Senior Management in 2022, 2021 and 2020

Base salary

Over the last three years the base salary paid to the Senior Management (including the sole member of the
Managing Board, our President and Chief Executive Officer) is:

2022(1) 2021(2) 2020(3)

Senior Management base salary $20,848,371 (4) $14,665,462 (5) $12,640,518

(1) During 2022, our Senior Management consisted of 33 members, including Joel Hartmann and Paul Cihak, who left during the course
of 2022.
(2) During 2021, our Senior Management consisted of 24 members.
(3) During 2020, our Senior Management consisted of 22 members.
(4) Including amounts paid in 2022 to our former Executive Vice President, Digital & Smart Power Technology and Digital Front-End
Manufacturing, Joel Hartmann, and former Executive Vice President, General Manager, Sales & Marketing, Americas Region, Paul
Cihak.
(5) This includes amounts paid in 2021 to our former President, Analog, MEMS and Sensors Group, Benedetto Vigna and former
Executive Vice President Europe and France Public Affairs, Thierry Tingaud.

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Short-term incentive

The amounts paid in 2022 to our Senior Management (including the sole member of the Managing Board,
our President and Chief Executive Officer) pursuant to the short-term incentive represented approximately
18.41% of the total compensation paid to our Senior Management and are further detailed below:

Bonus paid Bonus paid Bonus paid

in 2022 (2021 in 2021 (2020 in 2020 (2019
performance)(1) performance)(2) performance)
Short-term incentive (cash) amount $ 17,557,713 $ 11,476,929 $ 8,708,142
Ratio short-term incentive / (base salary
+ Short-term incentive) 45.72% 47.43% 43.15%
(1) Including amounts paid in 2022 to our former Executive Vice President, Digital & Smart Power Technology and Digital Front-End
Manufacturing, Joel Hartmann, and former Executive Vice President, General Manager, Sales & Marketing, Americas Region, Paul
Cihak.
(2) Including amounts paid in 2021 to our former President, Analog, MEMS and Sensors Group, Benedetto Vigna and former Executive
Vice President Europe and France Public Affairs, Thierry Tingaud.

Long-term incentive

The second part of the variable component is the long-term incentive which links the long-term interests
of the Senior Management with the shareholders’ and investors’ interests.

The amounts paid in 2022 to our Senior Management (including the sole member of the Managing Board,
our President and Chief Executive Officer) pursuant to the long-term incentive represented approximately
42.99% of the total compensation paid to our Senior Management and are further detailed below:

Long-term incentives Long-term incentives Long-term incentives

paid in 2022(1) paid in 2021(2) paid in 2020

Long-term incentive amount $ 41,000,100 $ 43,042,934 $ 26,925,145

Ratio long-term incentive / base
196.66% 293.50% 213.01%
salary
Ratio long-term incentive /
(short-term incentive + long- 70.02% 78.95% 75.56%
term incentive)
(1) Including amounts paid in 2022 to our former Executive Vice President, Digital & Smart Power Technology and Digital Front-End
Manufacturing, Joel Hartmann, and former Executive Vice President, General Manager, Sales & Marketing, Americas Region, Paul
Cihak.
(2) Including amounts paid in 2021 to our former President, Analog, MEMS and Sensors Group, Benedetto Vigna and former Executive
Vice President Europe and France Public Affairs, Thierry Tingaud.

Total Compensation

The following table sets forth the total amount paid as compensation in 2022, 2021 and 2020 to our Senior
Management (including the sole member of the Managing Board, our President and Chief Executive Officer) as
of December 31 of each year, before applicable withholding taxes and social contributions (amounts in
millions):
Variable components Other components(1)
Short- Social Fixed/
term Long-term security Termination Variable
Year Base salary Incentives Incentives Benefits contributions Pensions benefits Total remuneration
39% fixed/
2022(2) $20,848,371 $ 17,557,713 $ 41,000,100 $ 1,706,799 $ 10,468,677 $ 1,498,828 $ 2,284,907 $ 95,365,395
61% variable
35% fixed/
2021(3) $14,665,462 $ 11,476,929 $ 43,042,934 $ 1,395,509 $ 9,626,193 $ 794,387 $ 3,288,715 $ 84,290,129
65% variable
40% fixed/
2020 $12,640,518 $ 8,708,142 $ 26,925,145 $ 1,605,886 $ 7,890,424 $ 803,967 $ 974,705 $ 59,548,787
60% variable

(1) There were no miscellaneous allowances in the years 2022, 2021, and 2020.
(2) Including amounts paid in 2022 to our former Executive Vice President, Digital & Smart Power Technology and Digital Front-End
Manufacturing, Joel Hartmann, and former Executive Vice President, General Manager, Sales & Marketing, Americas Region, Paul
Cihak.

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(3) Including amounts paid in 2021 to our former President, Analog, MEMS and Sensors Group, Benedetto Vigna and former Executive
Vice President Europe and France Public Affairs, Thierry Tingaud.

We did not extend any loans or overdrafts to the sole member of the Managing Board, our President and
Chief Executive Officer, nor to any other member of our Senior Management. Furthermore, we have not
guaranteed any debts or concluded any leases with the sole member of the Managing Board, our President and
Chief Executive Officer, nor with any other member of our Senior Management or their families.

d. Remuneration comparison between the Managing Board, Senior Management and employees
Set forth in the following table is the annual change over the last three years of (i) the remuneration of
the sole member of the Managing Board, our President and Chief Executive Officer, (ii) the remuneration of the
Senior Management, (iii) the performance of the Company and (iv) the average remuneration of all our indirect
employees other than the members of our Senior Management, including the sole member of the Managing
Board, our President and Chief Executive Officer. The average is calculated by taking the sum of remuneration
costs and dividing by the average number of full-time equivalent employees over the period. The table below
also shows the pay ratio between our Managing Board, our Senior Management and our employees.

2022 2021 2020

Managing Board remuneration
Total remuneration of the sole member of the Managing Board,
our President and Chief Executive Officer (A) (amounts in $ 7,218 $ 7,559 $ 5,739
millions)
Evolution of the sole member of the Managing Board, our
(5) % 32 % (26) %
President and Chief Executive Officer remuneration
Senior Management remuneration
Average remuneration of our Senior Management (B) (amounts
$ 2,890(1) $ 3,512 $ 2,706
in millions)
Evolution of average remuneration of our Senior Management (18) % 30 % 40 %
Ratio A versus B 2.5 2.2 2.1
Employee remuneration(2)
Average remuneration of all global indirect employees (FTE
$ 109,600 $ 111,200 $ 98,500
basis) (C)(3)

Evolution of the average remuneration of all global indirect

(1) % 13 % 1 %
employees (FTE basis)(3)
Ratio A versus C 65.9 68.0 58.2
Ratio B versus C 26.4 31.6 27.5
Company's performance
Net revenues (amounts in millions) $ 16,128 $ 12,761 $ 10,219
Evolution of the revenues 26 % 25 % 7 %
Operating income (amounts in millions) $ 4,439 $ 2,419 $ 1,323
Evolution of the Operating income 84 % 83 % 10 %

(1) Average remuneration of our Senior Management includes amounts paid in 2022 to our former Executive Vice President, Digital &
Smart Power Technology and Digital Front-End Manufacturing, Joel Hartmann, and former Executive Vice President, General
Manager, Sales & Marketing, Americas Region, Paul Cihak.
(2) Employee remuneration is defined as all remuneration paid to our indirect employees including base salary, variable compensation in
both cash and shares, social premiums, pension, expense allowances and benefits in kind. The average is calculated by taking the sum
of remuneration costs and dividing by the average number of full-time equivalent indirect employees over the period.
(3) Global indirect employees are all employees other than those directly manufacturing our products, excluding Senior Management.
“FTE” refers to full time equivalent.

Share Ownership and Stock Awards

i. Share Ownership
None of the members of our Supervisory Board, Managing Board or Senior Management holds shares or
options to acquire shares representing more than 1% of our issued share capital.

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ii. Overview of Stock Awards and Options

Our stock-based compensation plans are designed to incentivize, attract and retain our executives and key
employees by aligning compensation with our performance and the evolution of our share price. Since 2005, we
have adopted long-term incentive plans based on stock awards for our management as well as key employees.
Furthermore, until 2012, the Compensation Committee (on behalf of the Supervisory Board and with its
approval) granted stock-based awards (the options to acquire common shares in the share capital of the
Company) to the members and professionals of the Supervisory Board. For a description of our stock option
plans and unvested share award plans, please see Note 18 to our Consolidated Financial Statements, which is
incorporated herein by reference.

Pursuant to the shareholders’ resolutions adopted by our General Meetings of Shareholders, our
Supervisory Board, upon the proposal of the Managing Board and the recommendation of the Compensation
Committee, took the following actions:
• approved conditions relating to our 2020 unvested stock award allocation under the 2017 Unvested
Stock Award Plan, including restriction criteria linked to our performance (for selected employees);
and
• approved conditions relating to our 2021 unvested stock award allocation under the 2021 Unvested
Stock Award Plan, including restriction criteria linked to our performance (for selected employees).
• approved conditions relating to our 2022 unvested stock award allocation under the 2021 Unvested
Stock Award Plan, including restriction criteria linked to our performance (for selected employees).

The sale or purchase of shares of our stock by the members or professionals of our Supervisory Board, the
sole member of the Managing Board, our President and Chief Executive Officer, and all our employees are
subject to an internal policy which involves, inter alia, certain blackout periods.

Employees
The tables below set forth the breakdown of employees by geographic area and main category of activity
for the past three years.

At December 31,
2022 2021 2020
France 11,953 11,312 10,840
Italy 12,037 11,334 10,765
Rest of Europe 1,128 1,044 991
Americas 789 759 766
Mediterranean (Malta, Morocco, Tunisia, Egypt) 5,634 4,854 4,378
Asia 19,829 18,951 18,276
Total 51,370 48,254 46,016

At December 31,
2022 2021 2020
Research and Development 9,036 8,355 8,145
Marketing and Sales 2,573 2,379 2,311
Manufacturing 33,690 31,780 30,134
Administration and General Services 2,787 2,582 2,464
Divisional Functions 3,284 3,158 2,962
Total 51,370 48,254 46,016

Our future success will partly depend on our ability to continue to attract, retain and motivate highly
qualified technical, marketing, engineering and management personnel, as well as on our ability to timely adapt
the size and/or profile of our personnel to changing industry needs. Unions are represented at almost all of our
manufacturing facilities and at several of our R&D sites. We use temporarily employees if required during
production spikes and, in Europe, during summer vacation. We have not experienced any significant strikes or
work stoppages in recent years.

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Disclosure of a registrants action to recover erroneously awarded compensation

Not applicable.

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Item 7. Major Shareholders and Related Party Transactions

Major Shareholders
The following table sets forth certain information with respect to the ownership of our issued common
shares as of December 31, 2022 based on information available to us:

Common Shares Owned

Shareholders Number %
STMicroelectronics Holding N.V. (“ST Holding”) 250,704,754 27.51
Public(1) 653,161,009 71.67
Treasury shares 7,416,157 0.81
Total 911,281,920 100.0

(1) According to the report available on Schedule 13G filed with the SEC on February 7, 2023, we understand that as of December
31, 2022 BlackRock, Inc. is the beneficial owner of 65,684,356 of our common shares (representing approximately 7.2% of our
issued common shares).

We are not aware of any significant change over the past three years in the percentage ownership of our
shares by ST Holding, our major shareholder. ST Holding does not have any different voting rights from those
of our other shareholders.

Shareholders Agreement
According to the report on Schedule 13G (“2020 ST Holding 13G”) jointly filed with the SEC on
February 11, 2020, by ST Holding, the Italian Ministry of the Economy and Finance (the “MEF”), Bpifrance
Participations S.A., a successor to its former wholly-owned subsidiary FT1CI, (“Bpifrance” and together with
the MEF, the “STH Shareholders”) and the Italian Government and the French Government, each indirectly
through the MEF and Bpifrance, respectively, held 14.1% of our share capital as of December 31, 2019. The
ownership percentages of each the MEF and Bpifrance are based on 891,434,489 shares outstanding as of
December 31, 2019. As of the date of this Form 20-F, no report on 13G in respect of the STH Shareholders was
filed subsequent to the 2020 ST Holding 13G. Below is a brief summary of certain details from the 2020 ST
Holding 13G.

Corporate Governance
Managing Board and Supervisory Board members can only be appointed by the general meeting of
shareholders upon a proposal by the Supervisory Board. The Supervisory Board passes resolutions, including on
such a proposal, by at least three quarters of the votes of the members in office. The STH Shareholders
Agreement, to which we are not a party, furthermore provides that: (i) each of the STH Shareholders,
Bpifrance, on the one hand, and the MEF, on the other hand, may propose the same number of members for
election to the Supervisory Board by our shareholders, and ST Holding shall vote in favor of such members; and
(ii) any decision relating to the voting rights of ST Holding shall require the unanimous approval of the STH
Shareholders. ST Holding may therefore be in a position to effectively control actions that require shareholder
approval, including, as discussed above, the proposal of six out of nine members for election to our Supervisory
Board (three members by each STH Shareholder) and the appointment of our Managing Board, as well as
corporate actions, and the issuance of new shares or other securities. As a result of the STH Shareholders
Agreement, the Chairman of our Supervisory Board is proposed by an STH Shareholder for a three-year term,
and the Vice-Chairman of our Supervisory Board is proposed by the other STH Shareholder for the same period,
and vice-versa for the following three-year term. The STH Shareholder proposing the appointment of the
Chairman may furthermore propose the appointment of the Assistant Secretary of our Supervisory Board, and
the STH Shareholder proposing the appointment of Vice-Chairman proposes the appointment of the Secretary of
our Supervisory Board. Finally, each STH Shareholder also proposes the appointment of a financial controller to
the Supervisory Board.

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Ownership of ST Shares
The STH Shareholders Agreement provides that each STH Shareholder retains the right to cause ST
Holding to dispose of its stake in us at its sole discretion pursuant to the issuance of financial instruments, an
equity swap, a structured finance deal or a straight sale; however, except in the case of a public offer, no sales
by any party to the STH Shareholders Agreement may be made of any of our shares or any shares of Bpifrance
or ST Holding to any of our top ten competitors or any company controlling such a competitor. The STH
Shareholders Agreement also requires all of the parties to the STH Shareholders Agreement to hold their stakes
in us at all time through the current holding structure of ST Holding, subject to certain limited exceptions, and
precludes all such parties and their affiliates from acquiring any of our common shares other than through ST
Holding.

Change of Control Provision

The STH Shareholders Agreement provides for tag-along rights, pre-emptive rights, and provisions with
respect to a change of control of any of the STH Shareholders or any controlling shareholder of Bpifrance, on
the one hand, and the Italian Ministry of the Economy and Finance, on the other hand. The STH Shareholders
may transfer shares of ST Holding and/or Bpifrance, as applicable, to any of their respective affiliates, which
could include entities ultimately controlled by the Italian Government or the French Government.

Preference Shares
We have an option agreement with an independent foundation, Stichting Continuïteit ST (the “Stichting”),
whereby the Stichting can acquire a maximum of 540,000,000 preference shares in the event of actions which
the board of the Stichting determines would be contrary to our interests, our shareholders and our other
stakeholders and which in the event of a creeping acquisition or an unsolicited offer for our common shares are
not supported by our Managing Board and Supervisory Board. If the Stichting exercises its call option and
acquires preference shares, it must pay at least 25% of the par value of such preference shares. The preference
shares may remain outstanding for no longer than two years.

No preference shares have been issued to date. The effect of the preference shares may be to deter
potential acquirers from effecting an unsolicited acquisition resulting in a change of control as well as to create a
level-playing field in the event actions which are considered hostile by our Managing Board and Supervisory
Board, as described above, occur and which the board of the Stichting determines to be contrary to our interests
and our shareholders and other stakeholders. In addition, any issuance of additional capital within the limits of
our authorized share capital, as approved by our shareholders, is subject to approval by our Supervisory Board,
other than pursuant to an exercise of the call option granted to the Stichting.

Related Party Transactions

See Note 28 to our Consolidated Financial Statements, incorporated herein by reference, for transactions
with significant related parties, which also include transactions between us and our equity method investments.

Item 8. Financial Information

Consolidated Statements and Other Financial Information
Please see “Item 18. Financial Statements” for a list of the financial statements filed with this Form 20-F.

Legal Proceedings
For a description of our material pending legal proceedings, please see Note 26 “Contingencies, Claims
and Legal Proceedings” to our Consolidated Financial Statements, which is incorporated herein by reference.

Dividend Policy
Our dividend policy reads as follows: “STMicroelectronics seeks to use its available cash in order to
develop and enhance its position in a competitive semiconductor market while at the same time managing its
cash resources to reward its shareholders for their investment and trust in STMicroelectronics. Based on its
results, projected capital requirements as well as business conditions and prospects, the Managing Board
proposes on an annual basis to the Supervisory Board, whenever deemed possible and desirable in line with

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STMicroelectronics’ objectives and financial situation, the distribution of a quarterly cash dividend, if any. The
Supervisory Board, upon the proposal of the Managing Board, decides or proposes on an annual basis, in
accordance with this policy, which portion of the profits or distributable reserves shall not be retained in
reserves to fund future growth or for other purposes and makes a proposal concerning the amount, if any, of the
quarterly cash dividend”.

On May 25, 2022, our shareholders approved a cash dividend of US$0.24 per outstanding share of our
common stock, which was distributed in quarterly installments of US$0.06 in each of the second, third and
fourth quarters of 2022 and will also be distributed in the first quarter of 2023. Future dividends, if any, and
their timing and amounts may be affected by our accumulated profits, our capacity to generate cash flow, our
financial situation, the general economic situation and prospects and any other factors that the Supervisory
Board, upon the recommendation of our Managing Board, shall deem important. For a history of dividends paid
by us to our shareholders in the past three years, see Note 18 to our Consolidated Financial Statements
“Shareholders’ Equity – Dividends”.

Item 9. Listing
Market Information
Our common shares are traded on the NYSE under the symbol “STM” and CUSIP #861012102, are listed
on the compartment A (large capitalizations) of Euronext Paris under the ISIN Code NL0000226223 and are
traded on the Borsa Italiana. On August 4, 2020, ST issued a $1.5 billion dual-tranche offering of new 2020
Senior Unsecured Convertible Bonds due 2025 and 2027 that trade on the Frankfurt Stock Exchange.

Our common shares are included in the CAC 40, a free float market capitalization weighted index that
reflects the performance of the 40 most capitalized and traded shares listed on Euronext Paris, and is the most
widely used indicator of the Paris stock market. Our common shares are included in the FTSE MIB Index,
which measures the performance of the 40 most liquid and capitalized shares listed on the Borsa Italiana and
seeks to replicate the broad sector weights of the Italian stock market.

Of the 903,865,763 common shares outstanding as of December 31, 2022, 68,905,940, or 7.6%, were
registered in the common share registry maintained on our behalf in New York and 834,959,823 or 92.4%, of
our common shares outstanding were listed on Euroclear France and traded on Euronext Paris and on the Borsa
Italiana in Milan.

Item 10. Additional Information

A. Share Capital
Not applicable.

B. Memorandum and Articles of Association

We were incorporated under the laws of The Netherlands by deed of May 21, 1987 and are registered with
the trade register (handelsregister) of the Dutch Chamber of Commerce (Kamer van Koophandel) under no.
33194537. Set forth below is a summary of certain provisions of our Articles of Association and relevant Dutch
law. The summary below does not purport to be complete and is qualified in its entirety by reference to our
Articles of Association, most recently amended on June 20, 2017, and relevant Dutch law.

Object and Purposes (Article 2)

The objects of our company is to participate in or take, in any manner, any interests in other business
enterprises; to manage such enterprises; to carry on business in semiconductors and electronic devices; to take
and grant licenses and other industrial property interests; to assume commitments in the name of any enterprises
with which we may be associated within a group of companies; to take financial interests in such enterprises and
to take any other action, such as but not limited to the granting of securities or the undertaking of obligations on
behalf of third parties, which in the broadest sense of the term, may be related or contribute to the
aforementioned objects.

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Supervisory Board Members

Our Articles of Association do not include any provisions related to a Supervisory Board member’s:
• power to vote on proposals, arrangements or contracts in which such member is materially
interested;
• power, in the absence of an independent quorum, to vote on compensation to themselves or any
members of the Supervisory Board;
• borrowing powers exercisable by the directors and how such borrowing powers can be varied;
• mandatory retirement age; or
• number of owned shares in our company required to qualify as a Supervisory Board member.

Our Supervisory Board charter and Dutch law, however, explicitly prohibit members of our Supervisory
Board from participating in discussions and voting on matters where they have a conflict of interest. If our entire
Supervisory Board has a conflict of interest, our shareholders’ meeting is the competent corporate body to adopt
the relevant resolution. Our Articles of Association provide that our shareholders’ meeting must adopt the
compensation of our Supervisory Board members. Neither our Articles of Association nor our Supervisory
Board charter has a requirement or policy that Supervisory Board members hold a minimum number of our
common shares.

We have balanced participation by men and women on our Supervisory Board and currently, our
Supervisory Board comprises nine members of which 4 are female and 5 are male.

Distribution of Profits (Articles 37, 38, 39 and 40)

Subject to certain exceptions, dividends may only be paid out of the profits as shown in our adopted
annual accounts. Our profits must first be used to set up and maintain reserves required by Dutch law and our
Articles of Association. Subsequently, if any of our preference shares are issued and outstanding, preference
shareholders shall be paid a dividend, which will be a percentage of the paid up part of the par value of their
preference shares. Our Supervisory Board may then, upon proposal of our Managing Board, also establish
reserves out of our annual profits. The portion of our annual profits that remains after the establishment or
maintenance of reserves and the payment of a dividend to our preference shareholders is at the disposal of our
shareholders’ meeting. No distribution may be made to our shareholders when the equity after such distribution
is or becomes inferior to the fully-paid share capital, increased by the legal reserves. Our preference shares are
cumulative by nature, which means that if in a financial year the dividend or the preference shares cannot be
(fully) paid, the deficit must first be paid in the following financial year(s).

Our Supervisory Board independently as well as our shareholders’ meeting, upon the proposal of our
Supervisory Board, may each declare distributions out of our share premium reserve and other reserves
available for shareholder distributions under Dutch law. Pursuant to a resolution of our Supervisory Board,
distributions adopted by the shareholders’ meeting may be fully or partially made in the form of our new shares
to be issued. Our Supervisory Board may, subject to certain statutory provisions, make one or more interim
distributions in respect of any year before the accounts for such year have been adopted at a shareholders’
meeting. Rights to cash dividends and distributions that have not been collected within five years after the date
on which they became due and payable shall revert to us.

For the history of dividends paid by us to our shareholders in the past five years, see Note 18 to our
Consolidated Financial Statements.

Notice Convening the Shareholders’ Meeting (Articles 25, 26, 27, 28 and 29)
Our ordinary shareholders’ meetings are held at least annually, within six months after the close of each
financial year, in The Netherlands. Extraordinary shareholders’ meetings may be held as often as our
Supervisory Board deems necessary, and must be held upon the written request of registered shareholders or
other persons entitled to attend shareholders’ meetings of at least 10% of the total issued share capital to our
Managing Board or our Supervisory Board specifying in detail the business to be dealt with. Such written
requests may not be submitted electronically.

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The notice convening the shareholders’ meeting shall be given in such manner as shall be authorized or
required by law with due observance of the statutory notice period, which is currently 42 days prior to the
meeting.

One or more shareholders or other persons entitled to attend shareholders’ meetings representing at least
one-tenth of our issued share capital may, provided that the request was made at least five days prior to the date
of convocation of the meeting, request proposals to be included on the agenda. Furthermore, a request that a
proposal be included on the agenda can be made in writing to our Managing Board within sixty days of a
meeting by persons who are entitled to attend our shareholders’ meetings who, solely or jointly, represent at
least 1% of our issued share capital or a market value of at least €50 million. The aforementioned requests may
not be submitted electronically and must comply with conditions stipulated by our Managing Board, subject to
the approval of our Supervisory Board, which shall be posted on our website. Pursuant to Dutch law a
shareholder requesting discussion of an agenda item must disclose to us its entire beneficial interest (long and
short position) and we are required to disclose this information on our website.

We are exempt from the proxy solicitation rules under the United States Securities Exchange Act of 1934.
Euroclear France will provide notice of shareholders’ meetings to, and compile voting instructions from, holders
of shares held directly or indirectly through Euroclear France. The Depository Trust Company (“DTC”) will
provide notice of shareholders’ meetings to holders of shares held directly or indirectly through DTC and the
New York Transfer Agent and Registrar will compile voting instructions. In order for holders of shares held
directly or indirectly through Euroclear France to attend shareholders’ meetings in person, such holders must
withdraw their shares from Euroclear France and have such shares registered directly in their name or in the
name of their nominee. In order for holders of shares held directly or indirectly through DTC to attend
shareholders’ meetings of shareholders in person, such holders need not withdraw such shares from DTC but
must follow rules and procedures established by the New York Transfer Agent and Registrar.

Attendance at Shareholders’ Meetings and Voting Rights (Articles 30, 31, 32, 33 and 34)
Each share is entitled to one vote.

All shareholders and other persons entitled to attend shareholders’ meetings may attend in person or be
represented by a person holding a written proxy. Shareholders and other persons entitled to vote, may do so
pursuant to our Articles of Association. Subject to the approval of our Supervisory Board, our Managing Board
may resolve to facilitate the use of electronic means of communication in relation to the participation and voting
in shareholders’ meetings. Dutch law prescribes a fixed registration date of 28 days prior to the shareholders’
meeting, which means that shareholders and other persons entitled to attend shareholders’ meetings are those
persons who have such rights at the 28th day prior to the shareholders’ meeting and, as such, are registered in a
register designated by our Managing Board, regardless of who is a shareholder or otherwise a person entitled to
attend shareholders’ meetings at the time of the meeting if a registration date would not be applicable. In the
notice convening the shareholders’ meeting, the time of registration must be mentioned as well as the manner in
which shareholders and other persons entitled to attend shareholders’ meetings can register themselves and the
manner in which they can exercise their rights.

All matters regarding admittance to the shareholders’ meeting, the exercise of voting rights and the result
of voting, as well as any other matters regarding the business of the shareholders’ meeting, shall be decided
upon by the chairman of that meeting, in accordance with the requirements of Section 2:13 of the Dutch Civil
Code.

Our Articles of Association allow for separate meetings for holders of common shares and for holders of
preference shares. At a meeting of holders of preference shares at which the entire issued capital of shares of
such class is represented, valid resolutions may be adopted even if the requirements in respect of the place of the
meeting and the giving of notice have not been observed, provided that such resolutions are adopted by
unanimous vote. Also, valid resolutions of preference shareholder meetings may be adopted outside a meeting if
all persons entitled to vote on our preference shares indicate in writing that they vote in favor of the proposed
resolution, provided that no depositary receipts for preference shares have been issued with our cooperation.

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Authority of our Shareholders’ Meeting (Articles 12, 16, 19, 25, 28, 32 and 41)
Our AGM may decide upon (i) the discharge of the members of our Managing Board for their
management during the past financial year and the discharge of the members of our Supervisory Board for their
supervision during the past financial year; (ii) the adoption of our statutory annual accounts and the distribution
of dividends; (iii) the appointment of the members of our Supervisory Board and our Managing Board; and (iv)
any other resolutions listed on the agenda.

Furthermore, our shareholders’ meeting has to approve resolutions of our Managing Board regarding a
significant change in the identity or nature of us or our enterprise, including in any event (i) transferring our
enterprise or practically our entire enterprise to a third-party, (ii) entering into or canceling any long-term
cooperation between us or a subsidiary of us and any other legal person or company or as a fully liable general
partner of a limited partnership or a general partnership, provided that such cooperation or the cancellation
thereof is of essential importance to us, and (iii) us or a subsidiary of us acquiring or disposing of a participating
interest in the capital of a company with a value of at least one-third of our total assets according to our
consolidated balance sheets and notes thereto in our most recently adopted annual accounts.

Our Articles of Association may only be amended (and our liquidation can only be decided on) if
amendments are proposed by our Supervisory Board and approved by a simple majority of the votes cast at a
shareholders’ meeting at which at least 15% of the issued and outstanding share capital is present or represented.
The complete proposal for the amendment (or liquidation) must be made available for inspection by the
shareholders and the other persons entitled to attend shareholders’ meetings at our offices as from the day of the
notice convening such meeting until the end of the meeting. Any amendment of our Articles of Association that
negatively affects the rights of the holders of a certain class of shares requires the prior approval of the meeting
of holders of such class of shares.

Quorum and Majority (Articles 4, 13 and 32)

Unless otherwise required by our Articles of Association or Dutch law, resolutions of shareholders’
meetings require the approval of a majority of the votes cast at a meeting at which at least 15% of the issued and
outstanding share capital is present or represented, subject to the provisions explained below. We may not vote
our common shares held in treasury. Blank and invalid votes shall not be counted.

A quorum of shareholders, present or represented, holding at least half of our issued share capital, is
required to dismiss a member of our Managing Board, unless the dismissal is proposed by our Supervisory
Board. In the event of the lack of a quorum, a second shareholders’ meeting must be held within four weeks,
with no applicable quorum requirement. Any decision or authorization by the shareholders’ meeting which has
or could have the effect of excluding or limiting preferential subscription rights must be taken by a majority of
at least two-thirds of the votes cast, if at the shareholders’ meeting less than 50% of the issued and outstanding
share capital is present or represented. Otherwise such a resolution can be taken by a simple majority at a
meeting at which at least 15% of the issued and outstanding share capital is represented.

Disclosure of holdings and capital interest under Dutch Law

Holders of our shares (including certain comparable instruments, such as instruments with a value (partly)
dependent on shares or distributions on shares, or contracts creating an economic position similar to shares) or
voting rights (including potential interests, such as via options or convertible bonds) may have disclosure
obligations under Dutch law. Any person or entity whose direct or indirect interest in our share capital or voting
rights (including potential interest) reaches, exceeds or falls below a certain threshold must make a disclosure to
the AFM immediately. The threshold percentages are 3%, 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%, 60%,
75% and 95%. If a person’s direct or indirect interest in the share capital or voting rights passively reaches,
exceeds or falls below the abovementioned thresholds (e.g. as a result of a change in the capital of the
company), the person in question must give notice to the AFM no later than the fourth trading day after the
AFM has published the change in the share capital and/or voting rights in the public register. In addition, a
notification requirement applies in respect of shares with special statutory rights (e.g. priority shares), regardless
of the abovementioned percentages.

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Furthermore, each person who is or ought to be aware that the substantial holding he holds in the
Company, reaches, exceeds or falls below any of the abovementioned thresholds vis-à-vis his most recent
notification to the AFM, which change relates to the composition of the notification as a result of certain acts
(e.g. (i) the exchange of certain financial instruments for shares or depositary receipts for shares, (ii) the
exchange of shares for depositary receipts for shares, or (iii) as a result of the exercise of rights pursuant to a
contract for the acquisition of voting rights) must give notice to the AFM no later than the fourth trading day
after he became or ought to be aware of this change.

For the purpose of calculating the percentage of capital interest or voting rights, among others, the
following interests must be taken into account: (i) those directly held by him; (ii) those held by his controlled
undertakings for purposes of the Dutch Financial Supervision Act; (iii) shares held by a third-party for such
person’s account and the votes such third-party may exercise; (iv) the votes held by a third-party if such person
has concluded an oral or written voting agreement with such party which provides for a lasting common policy
on voting; (v) the votes held by a third-party if such person has concluded an oral or written agreement with
such party which provides for a temporary and paid transfer of the votes; and (vi) the votes which a person may
exercise as a proxy but in his own discretion. A person who has a 3% or larger interest in the share capital or
voting rights and who ceases to be a controlled undertaking must without delay notify the AFM. As of that
moment, all notification obligations under the Dutch Financial Supervision Act will become applicable to the
former controlled undertaking itself. The management company of a common fund (beleggingsfonds) shall be
deemed to have the disposal of the shares held by the depositary and the related voting rights. The depositary of
a common fund shall be deemed not to have the disposal of shares or voting rights. Furthermore, special rules
apply to the attribution of the ordinary shares which are part of the property of a partnership or other community
of property. A holder of a pledge or right of usufruct in respect of our shares can also be subject to a notification
obligation if such person has, or can acquire, the right to vote on our shares. If a pledgor or usufructuary
acquires such voting rights, this may also trigger a notification obligation for the holder of our shares. A person
is also deemed to hold shares if he has a financial instrument (i) whose rise in value depends in part on the rise
in value of the underlying shares or on dividend or other payments on those shares (in other words, a long
position must be held in those shares), and (ii) which does not entitle him to acquire shares in a listed company
(i.e., it is a cash-settled financial instrument) . In addition, a person who may, by virtue of an option, be obliged
to buy shares in a listed company is also equated with a shareholder. Moreover, a person who has entered into a
contract (other than a cash-settled financial instrument) that gives him an economic position comparable to that
of a shareholder in a listed company is also deemed to hold shares for the purposes of the disclosure obligation.

The holder of a financial instrument representing a short position in our shares is required to notify the
AFM if such short position, expressed in a capital percentage, reaches or crosses a threshold percentage. The
threshold percentages are the same as referred to above in this section. Short position refers to the gross short
position (i.e., a long position held by the holder cannot be offset against the short position). There is also a
requirement to notify the AFM of the net short position (i.e., long positions are offset against short positions) if
such short position, expressed in a capital percentage, reaches or crosses a threshold percentage; The threshold
percentages are 0.2% and each 0.1% above that. Notifications as of 0.5% and each 0.1% above that will be
published by the AFM. The notification shall be made no later than 3:30 pm CET on the following trading day.

Under Dutch law, the sole member of our Managing Board and each of the members of our Supervisory
Board must without delay notify the AFM of any changes in his interest or potential interest in our share capital
or voting rights. Under the European Market Abuse Regulation, the sole member of our Managing Board, the
members of the Executive Committee and each of the members of our Supervisory Board, as well as any other
person who would have the power to take managerial decisions affecting the future developments and business
prospects of the Company having regular access to inside information relating, directly or indirectly, to the
Company, must notify the AFM of any transactions conducted for his or her own account relating to the shares
or in financial instruments the value of which is also based on the value of the shares. In addition, certain
persons who are closely associated with members of the Managing Board, the Executive Committee and
Supervisory Board or any of the other persons as described above, are required to notify the AFM of any
transactions conducted for their own account relating to the shares or in financial instruments the value of which
is also based on the value of the shares.

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The AFM publishes all notifications on its public website (www.afm.nl). Non-compliance with the
notification obligations under European or Dutch law can lead to imprisonment or criminal fines, or
administrative fines or other administrative sanctions. In addition, non-compliance with these notification
obligations may lead to civil sanctions, including, without limitation, suspension of the voting rights attaching to
our shares held by the offender for a maximum of three years, (suspension and) nullification of a resolution
adopted by our shareholders’ meeting (if it is likely that such resolution would not have been adopted if the
offender had not voted) and a prohibition for the offender to acquire our shares or votes for a period of no more
than five years. Shareholders are advised to consult with their own legal advisers to determine whether
notification obligations apply to them.

Share Capital (Articles 4, 5 and 6)

Our shares may not be issued at less than their par value. Our common shares must be fully paid up at the
time of their issuance. Our preference shares must be paid up for at least 25% of their par value at the time of
their issuance (and the remaining 75% if and when requested by our Managing Board). Our authorized share
capital is not restricted by redemption provisions, sinking fund provisions or liability to further capital calls by
us. Our Articles of Association allows for the acquisition of own shares and the cancellation of shares.

Type II shares are common shares in the form of an entry in our shareholders register with the issue of a
share certificate consisting of a main part without a dividend coupon. In addition to type II shares, type I shares
are available. Type I shares are common shares in the form of an entry in our shareholders register without the
issue of a share certificate. Type II shares are only available should our Supervisory Board decide to offer them.
Our preference shares are in the form of an entry in our shareholders register without issue of a share certificate.

Non-issued authorized share capital, which is different from issued share capital, allows us to proceed
with capital increases excluding the preemptive rights, upon our Supervisory Board’s decision. Other securities
in circulation which give access to our share capital include (i) the options giving the right to subscribe to our
shares granted to our employees, including the sole member of our Managing Board and our senior managers;
(ii) the options giving the right to subscribe to our shares granted in the past to the members of our Supervisory
Board, its secretaries and controllers, as described in “Item 6. Directors, Senior Management and Employees”;
(iii) our bonds; and (iv) the option giving the right to subscribe to our preference shares to Stichting Continuïteit
ST. See “Item 7. Major Shareholders and Related Party Transactions”. We do not have securities not
representing our share capital.

Our shareholders’ meeting, upon proposal and on the terms and conditions set by our Supervisory Board,
has the power to issue shares and rights to subscribe for shares. The shareholders’ meeting may authorize our
Supervisory Board, for a period of no more than five years, to issue shares and rights to subscribe for shares and
to determine the terms and conditions of such issuances.

Each holder of common shares has a pro rata preemptive right to subscribe to an offering of common
shares issued for cash in proportion to the number of common shares which he owns. There is no preemptive
right with respect to an offering of shares for non-cash consideration, with respect to an offering of shares to our
employees or to the employees of one of our subsidiaries, or with respect to preference shares.

Our shareholders’ meeting, upon proposal by our Supervisory Board, has the power to limit or exclude
preemptive rights in connection with new issuances of shares. Such a resolution of the shareholders’ meeting
must be taken with a majority of at least two-thirds of the votes cast if at such shareholders’ meeting less than
50% of the issued and outstanding share capital is present or represented. Otherwise such a resolution can be
taken by a simple majority of the votes cast at a shareholders’ meeting at which at least 15% of our issued and
outstanding share capital is present or represented. Our shareholders’ meeting may authorize our Supervisory
Board, for a period of no more than five years, to limit or exclude preemptive rights.

Acquisition of Shares in Our Own Share Capital (Article 5)

We may acquire our own shares, subject to certain provisions of Dutch law and of our Articles of
Association. Share acquisitions may be effected by our Managing Board, subject to the approval of our
Supervisory Board, only if the shareholders’ meeting has authorized our Managing Board to effect such
repurchases, which authorization may apply for a maximum period of 18 months. We may not vote shares we
hold in treasury. Our purchases of our own shares are subject to acquisition price conditions as authorized by
our shareholders’ meeting. Our Articles of Association provide that we shall be able to acquire shares in our
own share capital in order to transfer these shares under employee stock option or stock purchase plans, without
an authorization of our shareholders’ meeting.

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Upon the proposal of our Supervisory Board, our shareholders’ meeting may, in accordance with the legal
provisions, reduce our issued capital by canceling the shares that we hold in treasury, by reducing the par value
of the shares or by canceling our preference shares.

Liquidation Rights (Articles 42 and 43)

In the event of our dissolution and liquidation, after payment of all debts and liquidation expenses, the
holders of preference shares if issued, would receive the paid up portion of the par value of their preference
shares. Any assets then remaining shall be distributed among the registered holders of common shares in
proportion to the par value of their shareholdings.

Limitations on Right to Hold or Vote Shares

There are currently no limitations imposed by Dutch law or by our Articles of Association on the right of
non-resident holders to hold or vote the shares.

C. Material Contracts
None.

D. Exchange Controls
None.

E. Taxation
Dutch Taxation
This section only outlines certain material Dutch tax consequences of the acquisition, holding and
disposal of our common shares. This section does not purport to describe all possible tax considerations or
consequences that may be relevant to a holder or prospective holder of our common shares and does not
purport to deal with the tax consequences applicable to all categories of investors, some of which (such as trusts
or similar arrangements) may be subject to special rules. In view of its general nature, this section should be
treated with corresponding caution.

Tax matters are complex, and the tax consequences of the acquisition, holding and disposal to a particular
holder of common shares will depend in part on such holder’s circumstances. Accordingly, you are urged to
consult your own tax advisor for a full understanding of the tax consequences of the acquisition, holding and
disposal to you, including the applicability and effect of Dutch tax laws.

Where in this section English terms and expressions are used to refer to Dutch concepts, the meaning to be
attributed to such terms and expressions shall be the meaning to be attributed to the equivalent Dutch concepts
under Dutch tax law. Where in this section the terms “The Netherlands” and “Dutch” are used, these refer solely
to the European part of the Kingdom of The Netherlands.

This section assumes that we are organized, and that our business will be conducted, in the manner
outlined in this Form 20-F. A change to such organizational structure or to the manner in which we conduct our
business may invalidate the contents of this section, which will not be updated to reflect any such change.

Please note that this section does not describe the Dutch tax consequences for a holder of our common
shares:
(i) who may be deemed an owner of our common shares for Dutch tax purposes pursuant to specific
statutory attribution rules in Dutch tax law;
(ii) who has a substantial interest (aanmerkelijk belang) or deemed substantial interest (fictief
aanmerkelijk belang) in us under the Dutch Income Tax Act 2001 (Wet inkomstenbelasting 2001).
Generally, a holder is considered to hold a substantial interest in us if such holder alone or, in the
case of an individual, together with such holder’s partner for Dutch income tax purposes, or any
relatives by blood or marriage in the direct line (including foster-children), directly or indirectly,
holds (i) an interest of 5% or more of the total issued and outstanding capital of us or of 5% or more

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of the issued and outstanding capital of a certain class of shares; or (ii) rights to acquire, directly or
indirectly, such interest; or (iii) certain profit sharing rights that relate to 5% or more of our annual
profits or to 5% or more of our liquidation proceeds. A deemed substantial interest may arise if a
substantial interest (or part thereof) in has been disposed of, or is deemed to have been disposed of,
on a non-recognition basis;
(iii) if the common shares held by such holder qualify or qualified as a participation (deelneming) for
purposes of the Dutch Corporate Income Tax Act 1969 (Wet op de vennootschapsbelasting 1969).
Generally, a holder's shareholding of, or right to acquire, 5% or more in our nominal paid-up share
capital qualifies as a participation. A holder may also have a participation if (a) such holder does not
have a shareholding of 5% or more but a related entity (statutorily defined term) has a participation
or (b) we are a related entity (statutorily defined term);
(iv) which is or who is entitled to the dividend withholding tax exemption (inhoudingsvrijstelling) with
respect to any profits derived from the common shares (as defined in Article 4 of the Dutch
Dividend Withholding Tax Act 1965 (Wet op de dividendbelasting). Generally, a holder of common
shares may be entitled or required to apply, subject to certain other requirements, the dividend
withholding tax exemption if it is an entity and holds an interest of 5% or more in our nominal paid-
up share capital;
(v) pension funds, investment institutions (fiscale beleggingsinstellingen) and tax exempt investment
institutions (vrijgestelde beleggingsinstellingen) (each as defined in the Dutch Corporate Income
Tax Act 1969) and other entities that are, in whole or in part, not subject to or exempt from Dutch
corporate income tax, entities that have a function comparable to an investment institution or a tax
exempt investment institution, as well as entities that are exempt from corporate income tax in their
country of residence, such country of residence being another state of the European Union, Norway,
Liechtenstein, Iceland or any other state with which The Netherlands has agreed to exchange
information in line with international standards; and
(vi) if such holder is an individual for whom the common shares or any benefit derived from the
common shares is a remuneration or deemed to be a remuneration for (employment) activities
performed by such holder or certain individuals related to such holder (as defined in the Dutch
Income Tax Act 2001).

Dividend withholding tax

Dividends distributed by us are generally subject to Dutch dividend withholding tax at a rate of 15%.
Generally, we are responsible for the withholding of such dividend withholding tax at source; the Dutch
dividend withholding tax is for the account of the holder of common shares.

The expression “dividends distributed” includes, but is not limited to:

• distributions in cash or in kind, deemed and constructive distributions and repayments of paid-in
capital not recognized for Dutch dividend withholding tax purposes;
• liquidation proceeds, proceeds from the redemption of common shares or proceeds from the
repurchase of common shares (other than as temporary portfolio investment; tijdelijke belegging) by
us or one of our subsidiaries or other affiliated entities, in each case to the extent such proceeds
exceed the average paid-in capital of those common shares as recognized for Dutch dividend
withholding tax purposes;
• an amount equal to the par value of the common shares issued or an increase of the par value of the
common shares, to the extent that no related contribution, recognized for Dutch dividend
withholding tax purposes, has been made or will be made; and
• partial repayment of the paid-in capital, recognized for Dutch dividend withholding tax purposes, if
and to the extent that we have “net profits” (zuivere winst), unless (i) our general meeting of
shareholders has resolved in advance to make such repayment and (ii) the par value of the common
shares concerned has been reduced by an equal amount by way of an amendment to our articles of
association. The term “net profits” includes anticipated profits that have yet to be realized.

Corporate legal entities that are resident or deemed to be resident of The Netherlands for Dutch corporate
income tax purposes (“Dutch Resident Entities”) generally are entitled to an exemption from, or a credit for, any
Dutch dividend withholding tax against their Dutch (corporate) income tax liability. The credit in any given year

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is, however, limited to the amount of Dutch corporate income tax payable in respect of the relevant year with an
indefinite carry forward of any excess amount. Individuals who are resident or deemed to be resident of The
Netherlands for Dutch personal income tax purposes (“Dutch Resident Individuals”) generally are entitled to a
credit for any Dutch dividend withholding tax against their Dutch personal income tax liability and to a refund
of any residual Dutch dividend withholding tax. The above generally also applies to holders of common shares
that are neither resident nor deemed to be resident of The Netherlands (“Non-Resident Holders”) if the common
shares are attributable to a Dutch permanent establishment of such Non-Resident Holder.

A holder of common shares resident of a country other than The Netherlands may, depending on such
holder's specific circumstances, be entitled to exemptions from, reduction of, or full or partial refund of, Dutch
dividend withholding tax under Dutch domestic tax law, EU law, or treaties for the avoidance of double taxation
in effect between The Netherlands and such other country.

Dividend stripping

According to “Dutch domestic anti-dividend stripping” rules, no credit against Dutch tax, exemption
from, reduction, or refund of Dutch dividend withholding tax will be granted if the recipient of the dividends we
paid is not considered the beneficial owner (uiteindelijk gerechtigde; as described in the Dutch Dividend
Withholding Tax Act 1965) of those dividends. This legislation generally targets situations in which a
shareholder retains its economic interest in shares but reduces the withholding tax costs on dividends by a
transaction with another party. It is not required for these rules to apply that the recipient of the dividends is
aware that a dividend stripping transaction took place. The Dutch State Secretary of Finance takes the position
that the definition of beneficial ownership introduced by this legislation will also be applied in the context of a
double taxation convention.

Conditional withholding tax on dividends (as of January 1, 2024)

As of January 1, 2024, a Dutch conditional withholding tax will be imposed on dividends distributed by us
to entities related (gelieerd) to us (within the meaning of the Dutch Withholding Tax Act 2021; Wet
bronbelasting 2021), if such related entity:
(i) is considered to be resident (gevestigd) in a jurisdiction that is listed in the yearly updated Dutch
Regulation on low-taxing states and non-cooperative jurisdictions for tax purposes (Regeling
laagbelastende staten en niet-coöperatieve rechtsgebieden voor belastingdoeleinden) (a “Listed
Jurisdiction”); or
(ii) has a permanent establishment located in a Listed Jurisdiction to which the common shares are
attributable; or
(iii) holds the common shares with the main purpose or one of the main purposes of avoiding taxation
for another person or entity and there is an artificial arrangement or transaction or a series of
artificial arrangements or transactions; or
(iv) is not considered to be the beneficial owner of the common shares in its jurisdiction of residence
because such jurisdiction treats another entity as the beneficial owner of the common shares (a
hybrid mismatch); or
(v) is not resident in any jurisdiction (also a hybrid mismatch); or
(vi) is a reverse hybrid (within the meaning of Article 2(12) of the Dutch Corporate Income Tax Act
1969), if and to the extent (x) there is a participant in the reverse hybrid which is related (gelieerd)
to the reverse hybrid, (y) the jurisdiction of residence of such participant treats the reverse hybrid
as transparent for tax purposes and (z) such participant would have been subject to the Dutch
conditional withholding tax in respect of dividends distributed by us without the interposition of
the reverse hybrid,

all within the meaning of the Dutch Withholding Tax Act 2021.

The Dutch conditional withholding tax on dividends will be imposed at the highest Dutch corporate
income tax rate in effect at the time of the distribution (2023: 25.8%). The Dutch conditional withholding tax on
dividends will be reduced, but not below zero, by any regular Dutch dividend withholding tax withheld in
respect of the same dividend distribution. As such, based on the currently applicable rates, the overall effective
tax rate of withholding the regular Dutch dividend withholding tax (as described above) and the Dutch
conditional withholding tax on dividends will not exceed the highest corporate income tax rate in effect at the
time of the distribution (2023: 25.8%).

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Taxes on income and capital gains

Dutch Resident Entities

Generally, if the holder of common shares is a Dutch Resident Entity, any income derived or deemed to
be derived from the common shares or any capital gains realized on the disposal or deemed disposal of the
common shares is subject to Dutch corporate income tax at a rate of 19% with respect to taxable profits up to
€200,000 and 25.8% with respect to taxable profits in excess of that amount (rates and brackets for 2023).

Dutch Resident Individuals

If the holder of common shares is a Dutch Resident Individual, any income derived or deemed to be
derived from the common shares or any capital gains realized on the disposal or deemed disposal of the
common shares is subject to Dutch personal income tax at the progressive rates (with a maximum of 49.5% in
2023), if:
(i) the common shares are attributable to an enterprise from which the holder of common shares
derives a share of the profit, whether as an entrepreneur (ondernemer) or as a person who has a co-
entitlement to the net worth (medegerechtigd tot het vermogen) of such enterprise without being a
shareholder (as defined in the Dutch Income Tax Act 2001); or
(ii) the holder of common shares is considered to perform activities with respect to the common shares
that go beyond ordinary asset management (normaal, actief vermogensbeheer) or otherwise
derives benefits from the common shares that are taxable as benefits from miscellaneous activities
(resultaat uit overige werkzaamheden).

Taxation of savings and investments. If the above-mentioned conditions (i) and (ii) do not apply to the
Dutch Resident Individual, the common shares will be subject to an annual Dutch income tax under the regime
for savings and investments (inkomen uit sparen en beleggen). Taxation only occurs insofar the Dutch Resident
Individual's net investment assets for the year exceed a statutory threshold (heffingvrij vermogen). The net
investment assets for the year are the fair market value of the investment assets less the fair market value of the
liabilities on January 1 of the relevant calendar year (reference date; peildatum). The common shares are
included as investment assets. The taxable benefit for the year (voordeel uit sparen en beleggen) is taxed at a
flat rate of 32% (rate for 2023). Actual income or capital gains realized in respect of the common shares are as
such not subject to Dutch income tax.

The taxable benefit for the year is calculated as follows:

(i) The Dutch Resident Individual's assets and liabilities taxed under this regime, including the
common shares, are allocated over the following three categories: (a) bank savings, (b) other
investments, including the common shares, and (c) liabilities.
(ii) The return (rendement) in respect of these assets and liabilities is calculated as follows (the return
is at a minimum nihil):
a) a deemed return on the fair market value of the actual amount of bank savings and cash on January 1 of
the relevant calendar year; plus
b) a deemed return on the fair market value of the actual amount of other investments, including the
common shares, on January 1 of the relevant calendar year; minus
c) a deemed return on the sum of the fair market value of the actual amount of liabilities on January 1 of
the relevant calendar year less the statutory threshold for liabilities (drempel).
(iii) The return percentage (%) (rendementspercentage) is calculated as follows:
a) by dividing the return calculated under (ii) above by the net investment assets for the year of the Dutch
Resident Individual; multiplied by
b) 100.
(iv) The taxable base (grondslag sparen en beleggen) is calculated as follows:
a) the net investment assets for the year of the Dutch Resident Individual; minus

b) the applicable statutory threshold.

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(v) The taxable benefit for the year is equal to the taxable base calculated under (iv) above multiplied
by the return percentage calculated under (iii) above.

At the date hereof, the deemed returns for the different investment categories mentioned under (ii) above
have been temporarily set at: (a) 0.01%, (b) 5.69% and (c) 2.46%. The definitive percentages for the year 2023
will be published in the first months of 2024 and will have retroactive effect to January 1, 2023. Transactions in
the three-month period before and after January 1 of the relevant calendar year implemented to arbitrate
between the deemed return percentages applicable to bank savings, other investments and liabilities will for this
purpose be ignored if the holder of common shares cannot sufficiently demonstrate that such transactions are
implemented for other than tax reasons.

Non-Resident Holders
A holder of common shares that is neither a Dutch Resident Entity nor a Dutch Resident Individual will
not be subject to Dutch income tax in respect of income derived or deemed to be derived from the common
shares or in respect of capital gains realized on the disposal or deemed disposal of the common shares, provided
that:
(i) such holder does not have an interest in an enterprise or deemed enterprise (as defined in the
Dutch Income Tax Act 2001 and the Dutch Corporate Income Tax Act 1969, as applicable) which,
in whole or in part, is either effectively managed in The Netherlands or carried on through a
permanent establishment, a deemed permanent establishment or a permanent representative in The
Netherlands and to which enterprise or part of an enterprise the common shares are attributable;
and
(ii) in the event the holder is an individual, such holder does not carry out any activities in The
Netherlands with respect to the common shares that go beyond ordinary asset management and
does not otherwise derive benefits from the common shares that are taxable as benefits from
miscellaneous activities in The Netherlands.
If you are neither a Dutch Resident Individual nor a Dutch Resident Entity, you will for Dutch tax
purposes not carry on or be deemed to carry on an enterprise, in whole or in part, through a permanent
establishment or a permanent representative in The Netherlands by reason only of acquisition or holding of the
common shares.

Gift and inheritance taxes

Residents of The Netherlands
Gift or inheritance taxes will arise in The Netherlands with respect to a transfer of common shares by way
of a gift by, or on the death of, a holder of common shares who is resident or deemed resident of The
Netherlands at the time of the gift or such holder's death.

Non-Residents

No gift or inheritance taxes will arise in The Netherlands with respect to a transfer of common shares by
way of a gift by, or on the death of, a holder of common shares who is neither resident nor deemed to be resident
of The Netherlands, unless:
(i) in the case of a gift of a common share by an individual who at the date of the gift was neither
resident nor deemed to be resident of The Netherlands, such individual dies within 180 days after
the date of the gift, while being resident or deemed to be resident of The Netherlands; or
(ii) in the case of a gift of a common shares is made under a condition precedent, the holder of
common shares is resident or is deemed to be resident of The Netherlands at the time the condition
is fulfilled; or
(iii) the transfer is otherwise construed as a gift or inheritance made by, or on behalf of, a person who,
at the time of the gift or death, is or is deemed to be resident of The Netherlands.

For purposes of Dutch gift and inheritance taxes, amongst others, a person that holds the Dutch nationality
will be deemed to be resident of The Netherlands if such person has been a resident of The Netherlands at any

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time during the ten years preceding the date of the gift or such person’s death. Additionally, for purposes of
Dutch gift tax, amongst others, a person not holding the Dutch nationality will be deemed to be resident of The
Netherlands if such person has been a resident of The Netherlands at any time during the twelve months
preceding the date of the gift. Applicable tax treaties may override deemed residency.

Value added tax (VAT)

No Dutch VAT will be payable by a holder of common shares in respect of any payment in consideration
for the holding or disposal of the common shares.

Stamp Duties
No Dutch documentation taxes (commonly referred to as stamp duties) will be payable by a holder of common
shares in respect of any payment in consideration for the holding or disposal of the common shares.

United States Federal Income Taxation

The following discussion is a general summary of the material U.S. federal income tax consequences to a
U.S. holder (as defined below) of the ownership and disposition of our common shares. You are a U.S. holder
only if you are a beneficial owner of common shares:
• that is, for U.S. federal income tax purposes, (a) a citizen or individual resident of the United States,
(b) a U.S. domestic corporation or a U.S. domestic entity taxable as a corporation, (c) an estate, the
income of which is subject to U.S. federal income taxation regardless of its source, or (d) a trust, if a
court within the United States can exercise primary supervision over the administration of the trust
and one or more U.S. persons are authorized to control all substantial decisions of the trust;
• that owns, directly, indirectly or by attribution, less than 10% of our voting power or outstanding
share capital;
• that holds the common shares as capital assets;
• whose functional currency for U.S. federal income tax purposes is the U.S. dollar;
• that is a resident of the United States and not also a resident of The Netherlands for purposes of the
United States – The Netherlands Income Tax Treaty (the “U.S./NL Income Tax Treaty”);
• that is entitled, under the “limitation on benefits” provisions contained in the U.S./NL Income Tax
Treaty, to the benefits of the U.S./NL Income Tax Treaty; and
• that does not have a permanent establishment or fixed base in The Netherlands.

This summary does not discuss all of the tax consequences that may be relevant to you in light of your
particular circumstances. Also, it does not address holders that may be subject to special rules including, but not
limited to, U.S. expatriates, tax-exempt organizations, persons subject to the alternative minimum taxes, banks,
securities broker-dealers, financial institutions, regulated investment companies, insurance companies, traders in
securities who elect to apply a mark-to-market method of accounting, persons holding our common shares as
part of a straddle, hedging or conversion transaction, or persons who acquired common shares pursuant to the
exercise of employee stock options or otherwise as compensation. Because this is a general summary, you are
advised to consult your own tax advisor with respect to the U.S. federal, state, local and applicable foreign tax
consequences of the ownership and disposition of our common shares. In addition, you are advised to consult
your own tax advisor concerning whether you are entitled to benefits under the U.S./NL Income Tax Treaty.

If a partnership (including for this purpose any entity or arrangement treated as a partnership for U.S.
federal income tax purposes) holds common shares, the tax treatment of a partner generally will depend upon
the status of the partner and the activities of the partnership. If you are a partner in a partnership that holds
common shares, you are urged to consult your own tax advisor regarding the specific tax consequences of the
ownership and the disposition of common shares.

This summary is based on the Internal Revenue Code of 1986, as amended, the U.S./NL Income Tax
Treaty, judicial decisions, administrative pronouncements and existing, temporary and proposed Treasury
regulations as of the date of this Form 20-F, all of which are subject to change or changes in interpretation,
possibly with retroactive effect.

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Dividends
In general, you must include the gross amount of distributions paid (including the amount of any Dutch
taxes withheld from those distributions) to you by us with respect to the common shares in your gross income as
foreign-source taxable dividend income. The amount of any distribution paid in foreign currency (including the
amount of any Dutch withholding tax thereon) will be equal to the U.S. dollar value of the foreign currency on
the date of actual or constructive receipt by you regardless of whether the payment is in fact converted into U.S.
dollars at that time. Gain or loss, if any, realized on a subsequent sale or other disposition of such foreign
currency generally will be U.S.-source ordinary income or loss. Special rules govern and specific elections are
available to accrual method taxpayers to determine the U.S. dollar amount includible in income in the case of
taxes withheld in a foreign currency. Accrual basis taxpayers are urged to consult their own tax advisers
regarding the requirements and elections applicable in this regard.

Subject to applicable limitations, Dutch taxes withheld from a distribution paid to you at a rate not
exceeding the rate provided in the U.S./NL Income Tax Treaty will be eligible for credit against your U.S.
federal income tax liability. As described in “— Taxation — Dutch Taxation Tax” above, under limited
circumstances we may be entitled to retain a portion of the Dutch withholding tax that otherwise would be
required to be remitted to the taxing authorities in The Netherlands. If we withhold an amount from dividends
paid to you that we then are not required to remit to any taxing authority in The Netherlands, the amount in all
likelihood would not qualify as a creditable tax for U.S. federal income tax purposes. We will endeavor to
provide you with information concerning the extent to which we have applied the reduction described above to
dividends paid to you. The limitation on foreign taxes eligible for credit is calculated separately with respect to
specific classes of income. For this purpose, dividends distributed by us with respect to the common shares
generally will constitute “passive category income” or in the case of certain U.S. holders, “general category
income”. The use of foreign tax credits is subject to complex rules and limitations. In lieu of a credit, a U.S.
holder who itemizes deductions may elect to deduct all of such holder’s foreign taxes in the taxable year. A
deduction does not reduce tax on a dollar-for-dollar basis like a credit, but the deduction for foreign taxes is not
subject to the same limitations applicable to foreign tax credits. You should consult your own tax advisor to
determine whether and to what extent a credit would be available to you.

Certain non-corporate U.S. holders (including individuals) are eligible for reduced rates of U.S. federal
income tax in respect of “qualified dividend income”. For this purpose, “qualified dividend income” generally
includes dividends paid by a non-U.S. corporation if, among other things, the U.S. holders meet certain
minimum holding period and other requirements and the non-U.S. corporation satisfies certain requirements,
including either that (i) the shares of the non-U.S. corporation are readily tradable on an established securities
market in the United States, or (ii) the non-U.S. corporation is eligible for the benefits of a comprehensive
income tax treaty with the United States (such as the U.S./NL Income Tax Treaty) which provides for the
exchange of information. We currently believe that dividends paid by us with respect to our common shares
should constitute “qualified dividend income” for U.S. federal income tax purposes; however, this is a factual
matter and subject to change. You are urged to consult your own tax advisor regarding the availability to you of
a reduced dividend tax rate in light of your own particular situation. A dividends-received deduction will not be
allowed with respect to dividends paid by us to corporate U.S. holders.

Sale, Exchange or Other Disposition of Common Shares

Upon a sale, exchange or other disposition of common shares, you generally will recognize capital gain or
loss in an amount equal to the difference between the amount realized and your tax basis in the common shares,
as determined in U.S. dollars. This gain or loss generally will be U.S.-source gain or loss, and will be treated as
long-term capital gain or loss if you have held the common shares for more than one year. If you are an
individual, capital gains generally will be subject to U.S. federal income tax at preferential rates if specified
minimum holding periods are met. The deductibility of capital losses is subject to significant limitations.

Net Investment Income Tax

Certain U.S. holders that are individuals, estates or trusts and whose income exceeds certain thresholds
generally will be subject to a 3.8% tax on “net investment income”, including, among other things, dividends
on, and gains from the sale or other taxable disposition of, our common shares, subject to certain limitations and
exceptions. You should consult your own tax advisor regarding the effect, if any, of such tax on your ownership
and disposition of our common shares.

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Passive Foreign Investment Company Status

We believe that we should not be classified as a passive foreign investment company (a “PFIC”) for U.S.
federal income tax purposes for the year ended December 31, 2022 and we do not expect to become a PFIC in
the foreseeable future. This conclusion is a factual determination that must be made annually at the close of each
taxable year and therefore we can provide no assurance that we will not be a PFIC in our current or any future
taxable year. If we were to be characterized as a PFIC for any taxable year, the tax on certain distributions on
our common shares and on any gains realized upon the disposition of common shares may be materially less
favorable than as described herein. In addition, if we were a PFIC in a taxable year in which we were to pay
dividends or the prior taxable year, such dividends would not be “qualified dividend income” (as described
above) and would be taxed at the higher rates applicable to other items of ordinary income. You should consult
your own tax advisor regarding the application of the PFIC rules to your ownership of our common shares.

U.S. Information Reporting and Backup Withholding

Dividend payments with respect to our common shares and proceeds from the sale, exchange, retirement
or other disposition of our common shares may be subject to information reporting to the U.S. Internal Revenue
Service (the “IRS”) and possible U.S. backup withholding. Backup withholding will not apply to you, however,
if you furnish a correct taxpayer identification number and make any other required certification, or if you are
otherwise exempt from backup withholding. U.S. persons required to establish their exempt status generally
must provide certification on IRS Form W-9. Backup withholding is not an additional tax. Amounts withheld as
backup withholding may be credited against your U.S. federal income tax liability, and you may obtain a refund
of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for
refund with the IRS and furnishing any required information.

In addition, U.S. holders should be aware of annual reporting requirements with respect to the holding of
certain foreign financial assets, including our common shares that are not held in an account maintained by
certain types of financial institutions, if the aggregate value of all of such assets exceeds $50,000 (or $100,000
for married couples filing a joint return). You should consult your own tax advisor regarding the application of
the information reporting and backup withholding rules to our common shares and the application of the annual
reporting requirements to your particular situation.

F. Dividends and Paying Agents

Not applicable.

G. Statement by Experts
Not applicable.

H. Documents on Display
Any statement in this Form 20-F about any of our contracts or other documents is not necessarily
complete. If the contract or document is filed as an exhibit to this Form 20-F the contract or document is deemed
to modify the description contained in this Form 20-F. You must review the exhibits themselves for a complete
description of the contract or document.

Our Articles of Association, the minutes of our AGM, reports of the auditors and other corporate
documentation may be consulted by the shareholders and any other individual authorized to attend the meetings
at our head office at Schiphol Airport Amsterdam, The Netherlands, at the registered offices of the Managing
Board in Geneva, Switzerland and at Crédit Agricole-Indosuez, 9, Quai du Président Paul-Doumer, 92400
Courbevoie, France.

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You may review a copy of our filings with the U.S. Securities and Exchange Commission (the “SEC”),
including exhibits and schedules filed with it, at the SEC’s public reference facilities in Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information. In addition, the SEC maintains an internet site (www.sec.gov) that contains reports and other
information regarding issuers that file electronically with the SEC. These SEC filings are also available to the
public from commercial document retrieval services.

WE ARE REQUIRED TO FILE REPORTS AND OTHER INFORMATION WITH THE SEC UNDER
THE SECURITIES EXCHANGE ACT OF 1934. REPORTS AND OTHER INFORMATION FILED BY U.S.
WITH THE SEC MAY BE INSPECTED AND COPIED AT THE SEC’S PUBLIC REFERENCE FACILITIES
DESCRIBED ABOVE OR THROUGH THE INTERNET (WWW.SEC.GOV). AS A FOREIGN PRIVATE
ISSUER, WE ARE EXEMPT FROM THE RULES UNDER THE EXCHANGE ACT PRESCRIBING THE
FURNISHING AND CONTENT OF PROXY STATEMENTS AND OUR OFFICERS, DIRECTORS AND
MAJOR SHAREHOLDERS ARE EXEMPT FROM THE REPORTING AND SHORT-SWING PROFIT
RECOVERY PROVISIONS CONTAINED IN SECTION 16 OF THE EXCHANGE ACT. UNDER THE
EXCHANGE ACT, AS A FOREIGN PRIVATE ISSUER, WE ARE NOT REQUIRED TO PUBLISH
FINANCIAL STATEMENTS AS FREQUENTLY OR AS PROMPTLY AS UNITED STATES COMPANIES.

I. Subsidiary Information
Not applicable.

Item 11. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to changes in financial market conditions in the normal course of business due to our
operations in different foreign currencies and our ongoing investing and financing activities. Market risk is the
uncertainty to which future earnings or asset/liability values are exposed due to operating cash flows
denominated in foreign currencies and various financial instruments used in the normal course of operations.
The major financial risks to which we are exposed are the foreign exchange risks related to the fluctuations of
the U.S. dollar exchange rate compared to the Euro and the other major currencies in which costs are incurred,
the variation of the interest rates and the risks associated to the investments of our available cash. We have
established policies, procedures and internal processes governing our management of market risks and the use of
financial instruments to manage our exposure to such risks.

Our interest income (expense), net, as reported in our consolidated statements of income, is the balance
between interest income received from our cash and cash equivalents, short-term deposits and marketable
securities and interest expense on our financial liabilities, including bank fees (including fees on committed
credit lines or on the sale without recourse of receivables, if any). Our interest income is dependent upon
fluctuations in interest rates, mainly in U.S. dollars and Euros, since we invest primarily on a short-term basis;
any increase or decrease in the market interest rates would mean an equivalent increase or decrease in our
interest income. See “Item 5. Operating and Financial Review and Prospects — Impact of Changes in Interest
Rates”.

We place our cash and cash equivalents, or a part of it, with financial institutions with at least a single “A”
long-term rating from two of the major rating agencies, meaning at least A3 from Moody’s and A- from S&P or
Fitch, or better, invested as short-term deposits and Government debt securities and, as such, we are exposed to
the fluctuations in the market interest rates on our placement and our cash, which can have an impact on our
consolidated financial statements. We manage the credit risks associated with financial instruments through
credit approvals, investment limits and centralized monitoring procedures but do not normally require collateral
or other security from the parties to the financial instruments. As of December 31, 2022, the marketable
securities have a value of $679 million. They are classified as available-for-sale and are reported at fair value.
This fair value measurement corresponds to a Level 1 fair value hierarchy measurement. The estimated value of
these securities could further decrease in the future as a result of credit market deterioration and/or other
downgrading.

We do not anticipate any material adverse effect on our financial position, results of operations or cash
flows resulting from the use of our instruments in the future. There can be no assurance that these strategies will
be effective or that transaction losses can be minimized or forecasted accurately.

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The information below summarizes our market risks associated with cash and cash equivalents, short-term
deposits, marketable securities and debt obligations as of December 31, 2022. The information below should be
read in conjunction with Note 15 and Note 27 to our Consolidated Financial Statements.

The table below presents principal amounts and related weighted-average interest rates by year of
maturity for our investment portfolio and debt obligations (in millions of U.S. dollars, except percentages):

Fair
Value at
December 31,
Total 2022 2023 2024 2025 2026 Thereafter 2022
Assets:
Cash and cash equivalents $ 3,258 $ 3,258
of which Cash at bank and on hand $ 262 $ 262
of which Deposits at call with banks $ 2,996 $ 2,996
Short-term deposits $ 581 $ 581
Current marketable securities $ 679 $ 679
Average yield to maturity 3.95%
Long-term debt(1): $ 2,722 $ 175 $ 172 $ 922 $ 172 $ 908 $ 373 $ 2,783
Average interest rate 0.82%

(1) Long-term debt is presented at principal amount

Amounts in
millions of
U.S. dollars
Long-term debt by currency As of December 31,
2022:
U.S. dollar 1,500
Euro 1,222
Total in U.S. dollars 2,722

Amounts in
millions of
U.S. dollars
Long-term debt by currency As of December 31,
2021:
U.S. dollar 1,500
Euro 1,152
Total in U.S. dollars 2,652

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The following table provides information about our FX forward contracts and FX currency options not
designated as a hedge as of December 31, 2022 (in millions of U.S. dollars):

FORWARD CONTRACTS AND CURRENCY OPTIONS AS OF DECEMBER 31, 2022

Notional
Amount Average Rate Fair Value
Buy AUD Sell USD 1 0.67 —
Buy EUR Sell USD 399 1.06 (2)
Buy USD Sell SEK 2 10.81 —
Buy USD Sell CNY 7 6.69 —
Buy USD Sell PHP 2 55.23 —
Buy EUR Sell MAD 32 11.17 —
Buy CHF Sell USD 47 0.92 —
Buy HKD Sell USD 1 7.79 —
Buy JPY Sell EUR 32 141.64 —
Buy JPY Sell USD 49 133.45 1
Buy MYR Sell USD 29 4.41 —
Buy SEK Sell USD 7 10.31 —
Buy SGD Sell USD 149 1.38 4
Buy TWD Sell USD 17 30.66 —
Buy CNY Sell USD 73 7.02 2
Buy PHP Sell USD 19 56.86 1
Buy MAD Sell USD 5 10.64 —
Buy INR Sell USD 47 82.22 (1)
Buy KRW Sell USD 11 1,353.81 1
Buy CNH Sell USD 1 6.96 —

The following table provides information about our FX forward contracts and FX currency options not
designated as a hedge as of December 31, 2021 (in millions of U.S. dollars):

FORWARD CONTRACTS AND CURRENCY OPTIONS AS OF DECEMBER 31, 2021

Notional
Amount Average Rate Fair Value
Buy AUD Sell USD 1 0.72 —
Buy EUR Sell USD 5 1.13 —
Buy USD Sell SEK 2 8.83 —
Buy USD Sell PHP 1 50.04 —
Buy EUR Sell MAD 13 10.46 —
Buy CHF Sell USD 29 0.91 —
Buy HKD Sell USD 2 7.80 —
Buy JPY Sell EUR 36 129.87 —
Buy JPY Sell USD 29 114.41 —
Buy MYR Sell USD 23 4.21 —
Buy SEK Sell USD 46 8.91 (1)
Buy SGD Sell USD 131 1.35 1
Buy TWD Sell USD 15 27.79 —
Buy CNY Sell USD 94 6.46 2
Buy PHP Sell USD 17 50.75 —
Buy INR Sell USD 39 75.29 —
Buy KRW Sell USD 18 1,188.06 —
Buy SEK Sell EUR 3 10.23 —
Buy CNH Sell USD 1 6.39 —

Our FX forward contracts and FX currency options, including collars, designated as a hedge, are further
described in Note 27 to our Consolidated Financial Statements.

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Item 12. Description of Securities Other than Equity Securities

We sell ordinary shares in the United States that are evidenced by American registered certificates (“New
York Shares”). In connection therewith, a holder of our New York Shares may have to pay, either directly or
indirectly, certain fees and charges, as described in Item 12D.3. In addition, we receive fees and other direct and
indirect payments from our New York Agent that are related to our New York Shares, as described in Item
12D.4.

Fees and Charges that a holder of our New York Shares May Have to Pay
J.P. Morgan collects fees for the delivery and surrender of New York Shares directly from investors
depositing or surrendering New York Shares for the purpose of withdrawal or from intermediaries acting for
them.

Persons depositing or withdrawing our New York Shares must pay to J.P. Morgan:
• Up to $5.00 per 100 New York Shares (or portion of 100 New York Shares) for the issuance of New
York Shares, including issuances resulting from a distribution of shares or rights or other property,
and cancellation of New York Shares for the purpose of withdrawal, including if the New York
Share agreement terminates;
• Taxes (including applicable interest and penalties) and other governmental charges;
• Registration fees as may from time to time be in effect for the registration of New York Shares;
• Cable, telex, facsimile and electronic transmission and delivery expenses;
• Expenses and charges incurred by J.P. Morgan in the conversion of foreign currency or the sale of
any securities or property; and
• Any charges incurred by J.P. Morgan in connection with compliance with exchange control
regulations and other regulatory requirements applicable to New York Shares

Fees and Other Payments Made by the New York Agent to Us

Under the New York Share program agreement with J.P. Morgan the annual amount (contribution) of
USD 941,145 in respect of 2022 will be paid in 2023.

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PART II

Item 13. Defaults, Dividend Arrearages and Delinquencies

None.

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
None.

Item 15. Controls and Procedures

Disclosure Controls and Procedures
Evaluation
Our management, including the Chief Executive Officer and Chief Financial Officer, performed an
evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined
in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934 (“Disclosure Controls”) as of
the end of the period covered by this Form 20-F. Disclosure Controls are controls and procedures designed to
reasonably assure that information required to be disclosed in our reports filed under the Securities and
Exchange Act of 1934, such as this Form 20-F, is recorded, processed, summarized and reported within the time
periods specified in the SEC’s rules and forms. Disclosure Controls are also designed to reasonably assure that
such information is accumulated and communicated to our management, including the Chief Executive Officer
and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

The evaluation of our Disclosure Controls included a review of the controls’ objectives and design, our
implementation of the controls and their effect on the information generated for use in this Form 20-F. The
components of our Disclosure Controls are also evaluated on an ongoing basis by our Corporate Audit
Department, which reports directly to our Audit Committee. The overall goals of these various evaluation
activities are to monitor our Disclosure Controls, and to modify them as necessary. Our intent is to maintain the
Disclosure Controls as dynamic systems that change as conditions warrant.

Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that,
as of the end of the period covered by this Form 20-F, our Disclosure Controls were effective.

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting (as defined in Rule 13a-15(f) and
15d-15(f) under the Securities and Exchange Act of 1934) that occurred during the period covered by this form
20-F that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.

Limitations on Effectiveness of Controls

No system of internal control over financial reporting, including one determined to be effective, may
prevent or detect all misstatements. It can provide only reasonable assurance regarding financial statement
preparation and presentation. Also, projections of the results of any evaluation of the effectiveness of internal
control over financial reporting into future periods are subject to inherent risk. The relevant controls may
become inadequate due to changes in circumstances or the degree of compliance with the underlying policies or
procedures may deteriorate.

Other Reviews
We have sent this Form 20-F to our Audit Committee and Supervisory Board, which had an opportunity
to raise questions with our management and independent auditors before we filed it with the SEC.

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Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial
reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation
of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

Internal control over financial reporting includes those policies and procedures that (i) pertain to the
maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of
the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a
material effect on the financial statements. Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate. See “Item 3. Key Information — Risk
Factors”.

Management assessed the effectiveness of our internal control over financial reporting as of December 31,
2022, the end of our fiscal year. Management based its assessment on criteria established in Internal Control —
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(“COSO”) in Internal Control-Integrated Framework (2013). Management’s assessment included evaluation of
such elements as the design and operating effectiveness of key financial reporting controls, process
documentation, accounting policies and our overall control environment. Based on this assessment the
management concluded that, as of December 31, 2022 our internal control over financial reporting was effective
and the financial reporting is prepared on a going concern basis.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2022 has
been audited by Ernst &Young AG, an independent registered public accounting firm, as stated in their report.

Report of Independent Registered Public Accounting Firm

To the Supervisory Board and Stockholders of STMicroelectronics N.V.

Opinion on Internal Control over Financial Reporting

We have audited STMicroelectronics N.V.’s internal control over financial reporting as of December 31,
2022, based on criteria established in Internal Control - Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion,
STMicroelectronics N.V. (the Company) maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States) (PCAOB), the consolidated balance sheets of STMicroelectronics N.V. as of December
31, 2022 and 2021, the related consolidated statements of income, comprehensive income, equity and cash flows
for each of the three years in the period ended December 31, 2022, and the related notes and financial statements
schedule on page S-1, and our report dated February 23, 2023 expressed an unqualified opinion thereon.

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Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal control over financial reporting included in the
accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to
express an opinion on the Company’s internal control over financial reporting based on our audit. We are a
public accounting firm registered with the PCAOB and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial
reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk, and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A company’s internal control over
financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of
the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

/s/ Ernst & Young AG

Lancy - Geneva, Switzerland

February 23, 2023

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Item 16.
Item 16A. Audit Committee Financial Expert
Our Supervisory Board has concluded that Ana de Pro Gonzalo, the Chair of our Audit Committee,
qualifies as an “audit committee financial expert” as defined in Item 16A and is independent as defined in the
listing standards applicable to us as a listed issuer as required by Item 16A(2) of Form 20-F.

Item 16B. Code of Ethics

We have adopted written standards of business conduct and ethics (“Code of Conduct”) and related
policies, which are designed to promote honest and ethical business conduct, to deter wrongdoing and to provide
principles to which our employees are expected to adhere and advocate. Our Code of Conduct is applicable to
all of our employees and senior managers. We believe our Code of Conduct is effective in its mission and we
believe our employees are in compliance with the Code of Conduct. We have adapted and will amend our Code
of Conduct and related policies as appropriate to reflect regulatory or other changes. Our Code of Conduct
provides that if any employee or senior manager to whom it applies acts in contravention of the principles set
forth therein, we will take appropriate steps in terms of the procedures in place for fair disciplinary action. This
action may, in cases of severe breaches, include dismissal. Our Code of Conduct is available on our website in
the Corporate Governance section, at
https://www.st.com/content/st_com/en/about/st_company_information/code-of-conduct.html.

Item 16C. Principal Accountant Fees and Services

Our independent external auditors are elected at the AGM. At our AGM held in May 2015, Ernst &
Young was first appointed as our independent external auditor for the 2016-2019 fiscal years. At our AGM held
on June 17, 2020, our shareholders re-appointed Ernst & Young as our independent external auditor for the
2020-2023 fiscal years. The following table presents the aggregate fees for professional audit services and other
services rendered to us by Ernst & Young in 2022 and 2021.

Percentage of Percentage of
2022 Total Fees 2021 Total Fees
Audit Fees
Audits of consolidated and statutory financial
statements $ 4,950,590 95.2% $ 5,134,390 95.5%
Audit-Related Fees $ 210,780 4.1% $ 135,778 2.5%
Non-audit Fees
Tax Fees $ 38,400 0.7% $ 104,843 2.0%
All Other Fees — — —
Total $ 5,199,770 100.0% $ 5,375,011 100.0%

Audit Fees consist of fees billed for the annual audit of our Company’s Consolidated Financial
Statements, the statutory audit of the financial statements of the Company’s subsidiaries and consultations on
complex accounting issues relating to the annual audit. Audit Fees also include services that only our
independent external auditor can reasonably provide, such as comfort letters and carve-out audits in connection
with strategic transactions.

Audit-related services are assurance and related fees consisting of the audit of employee benefit plans, due
diligence services related to acquisitions and certain agreed-upon procedures.

Tax Fees include fees billed for tax compliance services, including the preparation of original and
amended tax returns and claims for refund; tax consultations, such as assistance in connection with tax audits
and expatriate tax compliance.

Audit Committee Pre-approval Policies and Procedures

Our Audit Committee is responsible for selecting the independent registered public accounting firm to be
employed by us to audit our financial statements, subject to ratification by the Supervisory Board and approval
by our shareholders for appointment. Our Audit Committee also assumes responsibility (inter alia in accordance
with Dutch law and the Dutch Corporate Governance Code) for the retention, compensation, oversight and

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termination of any independent external auditor employed by us. We adopted a policy (the “Policy”), which was
approved in advance by our Audit Committee, for the pre-approval of audit and permissible non-audit services
provided by our independent external auditors. The Policy defines those audit-related services eligible to be
approved by our Audit Committee.

All engagements with our independent external auditors, regardless of amount, must be authorized in
advance by our Audit Committee, pursuant to the Policy and its pre-approval authorization or otherwise.

The independent external auditors submit a proposal for audit-related services to our Audit Committee on
a quarterly basis in order to obtain prior authorization for the amount and scope of the services. The independent
external auditors must state in the proposal that none of the proposed services affect their independence. The
proposal must be endorsed by the office of our Chief Financial Officer with an explanation of why the service is
needed and the reason for sourcing it to the audit firm and validation of the amount of fees requested.

We do not intend to retain our independent external auditors for permissible non-audit services other than
by exception and within a limited amount of fees, and the Policy provides that such services must be explicitly
authorized by our Audit Committee.

The Chief Audit and Risk Executive is responsible for monitoring that the actual fees are complying with
the pre-approval amount and scope authorized by our Audit Committee. During 2022, all services provided to us
by Ernst & Young were approved by our Audit Committee pursuant to paragraph (c)(7)(i) of Rule 2-01 of
Regulation S-X.

Item 16D. Exemptions from the Listing Standards for Audit Committees
Not applicable.

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers

On July 1, 2021, we announced the launch of a share buy-back program of up to $1,040 million to be
executed within a 3-year period. We intend to carry out the buy-back program, and hold the shares bought back
as treasury stock for the purpose of meeting our obligations in relation to our employee stock award plans and to
support the potential settlement of our outstanding convertible debt.

Total
Number of Maximum
Securities Number
Average Purchased of Securities
Total Price as Part of that may be
Number of Paid per Publicly Purchased
Securities Security Announced Under the
Period Purchased € Programs Programs
2022-01-01 to 2022-01-31 786,524 41.91 4,731,556 28,500,000
2022-02-01 to 2022-02-28 1,116,854 39.28 5,848,410 28,500,000
2022-03-01 to 2022-03-31 — — 5,848,410 28,500,000
2022-04-01 to 2022-04-30 903,431 35.6 6,751,841 28,500,000
2022-05-01 to 2022-05-31 1,092,540 36.11 7,844,381 28,500,000
2022-06-01 to 2022-06-30 318,127 33.45 8,162,508 28,500,000
2022-07-01 to 2022-07-31 927,706 31.66 9,090,214 28,500,000
2022-08-01 to 2022-08-31 812,127 36.75 9,902,341 28,500,000
2022-09-01 to 2022-09-30 761,737 35.23 10,664,078 28,500,000
2022-10-01 to 2022-10-31 1,195,442 32.86 11,859,520 28,500,000
2022-11-01 to 2022-11-30 908,504 33.67 12,768,024 28,500,000
2022-12-01 to 2022-12-31 421,304 35.63 13,189,328 28,500,000

As of December 31, 2022, we held 7,416,157 of our common shares in treasury stock pursuant to
repurchases made in prior years, and as of January 31, 2023 we held 8,103,962 of such shares.

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Item 16F. Change in Registrant’s Certifying Accountant

Not applicable.

Item 16G. Corporate Governance

As we have common shares listed on the NYSE, pursuant to SEC and NYSE rules, in this Item 16G we
provide a concise summary of any significant ways in which our corporate governance practices differ from
those followed by U.S. companies under NYSE listing standards.

As a Dutch company, we are subject to the Dutch Corporate Governance Code. We have summarized our
policies and practices in the field of corporate governance in our Corporate Governance Charter, including our
corporate organization, the remuneration principles which apply to our Managing and Supervisory Boards, our
information policy and our corporate policies relating to business ethics and conflicts of interests. We are
committed to informing our shareholders of any significant changes in our corporate governance policies and
practices at our AGM. Along with our Supervisory Board charter (which also includes the charters of our
Supervisory Board Committees) and our Code of Conduct, the current version of our Corporate Governance
Charter is posted on our website (www.st.com), and these documents are available in print to any shareholder
who may request them.

Below is a description of the significant ways our corporate governance practices as a Dutch company
differ from those followed by U.S. companies listed on the NYSE:
• Because we are a Dutch company, the Audit Committee is an advisory committee to the
Supervisory Board, which reports to the Supervisory Board, and our general meeting of
shareholders appoints our statutory auditors. Our Audit Committee has established a charter
outlining its duties and responsibilities with respect to, among others, the monitoring of our
accounting, auditing, financial reporting and the appointment, retention and oversight of our
external auditors. In addition, our Audit Committee has established procedures for the receipt,
retention and treatment of complaints regarding accounting, internal accounting controls or auditing
matters, and the confidential anonymous submission by our employees regarding questionable
accounting or auditing matters.
• Pursuant to our Supervisory Board charter, the Supervisory Board is responsible for handling and
deciding on potential reported conflicts of interests between the Company and members of the
Supervisory Board, as well as the Managing Board. See “Item 7. Major Shareholders and Related
Party Transactions”.
• Our Supervisory Board is carefully selected based upon the combined experience and expertise of
its members. In fulfilling their duties under Dutch law, Supervisory Board members shall be guided
by the interests of our Company and its business, and it shall take into account the relevant interests
of all of our stakeholders (including our shareholders) and must act independently in their
supervision of our management. Our Supervisory Board has adopted criteria to assess the
independence of its members in accordance with corporate governance listing standards of the
NYSE. Our Supervisory Board has on various occasions discussed Dutch corporate governance
standards, the implementing rules and corporate governance standards of the SEC and of the NYSE,
as well as other corporate governance standards. The Supervisory Board has determined, based on
the evaluations by an ad hoc committee, the following independence criteria for its members:
Supervisory Board members must not have any material relationship with STMicroelectronics N.V.,
or any of our consolidated subsidiaries, or our management. A “material relationship” can include
commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships,
among others, but does not include a relationship with direct or indirect shareholders.

We believe we are fully compliant with all material NYSE corporate governance standards, to the extent
possible for a Dutch company listed on Euronext Paris, Borsa Italiana, as well as the NYSE.

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Our consistent commitment to good corporate governance principles is evidenced by:

• Our corporate organization under Dutch law that entrusts our management to a Managing Board
acting under the supervision and control of a Supervisory Board totally independent from the
Managing Board. Members of our Managing Board and of our Supervisory Board are appointed and
dismissed by our shareholders;
• Our early adoption of policies on important issues such as business ethics, anticorruption and
conflicts of interest and strict policies to comply with applicable regulatory requirements concerning
financial reporting, insider trading and public disclosures;
• Our compliance with Dutch securities laws, because we are a company incorporated under the laws
of The Netherlands, as well as our compliance with American, French and Italian securities laws, as
applicable, because our shares are listed in these jurisdictions, in addition to our compliance with
the corporate, social and financial laws applicable to our subsidiaries in the countries in which we
do business;
• Our broad-based activities in the field of corporate social responsibility, encompassing
environmental, social, health, safety, educational and other related issues including our corporate
governance statement which evidences our policy objectives with respect to diversity as well as the
results of implementing our diversity policy for the year ended December 31, 2022;
• Our implementation of a non-compliance reporting channel (managed by an independent third-
party). We encourage everyone, including external business partners, to express, in good faith, any
concerns they might have regarding possible violations of our Code of Conduct, the Company’s
policies, or the law through, amongst other things, our Code of Conduct, dedicated intranet web
pages and our ST Integrity App. Our misconduct reporting process is communicated to all
employees and includes, in addition to internal local and corporate reporting channels, an
independent multilingual misconduct reporting hotline;
• Our Corporate Ethics Committee and Local Ethics Committees, whose mandate is to provide
support to our management in its efforts to foster a business ethics culture consistent across regions,
functions and organizations;
• Our Chief Compliance Officer, who reports to our Chief Executive Officer, also acts as Executive
Secretary to our Supervisory Board; and
• Our Executive Vice President, Chief Audit and Risk Executive, who reports directly to our Audit
Committee for Internal Audit and directly to the Chief Financial Officer for Enterprise Risk
Management and Resilience (business continuity and crisis management) is also responsible for our
whistle-blowing hotline and related investigations.

No member of the Supervisory Board or Managing Board has been (i) subject to any convictions in
relation to fraudulent offenses during the five years preceding the date of this Form 20-F, (ii) no member has
been associated with any company in bankruptcy, receivership or liquidation in the capacity of member of the
administrative, management or supervisory body, partner with unlimited liability, founder or senior manager in
the five years preceding the date of this Form 20-F or (iii) subject to any official public incrimination and/or
sanction by statutory or regulatory authorities (including professional bodies) or disqualified by a court from
acting as a member of the administrative, management or supervisory bodies of any issuer or from acting in the
management or conduct of the affairs of any issuer during the five years preceding the date of this Form 20-F.

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PART III

Item 17. Financial Statements

Not applicable.

Item 18. Financial Statements

Page
Financial Statements:
Report of Independent Registered Public Accounting Firm for the Years Ended December 31, 2022 and
2021 (PCAOB ID:1460) ............................................................................................................................. F-1
Consolidated Statements of Income for the Years Ended December 31, 2022, 2021 and 2020 ................ F-3
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2022, 2021 and
2020.............................................................................................................................................................. F-4
Consolidated Balance Sheets as of December 31, 2022 and 2021 .............................................................. F-5
Consolidated Statements of Equity for the Years Ended December 31, 2022, 2021 and 2020................... F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021 and 2020 .......... F-7
Notes to the Consolidated Financial Statements.......................................................................................... F-8
Financial Statement Schedule:
For each of the three years in the period ended December 31, 2022, 2021 and 2020 Schedule II
Valuation and Qualifying Accounts............................................................................................................. S-1

Item 19. Exhibits

2.3 Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934 (the
“Exchange Act”)
8.1 Subsidiaries of the Company
12.1 Certification of Jean-Marc Chery, President and Chief Executive Officer and Sole Member of the
Managing Board of STMicroelectronics N.V., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2 Certification of Lorenzo Grandi, President, Finance, Purchasing, Enterprise Risk Management (ERM)
and Resilience and Chief Financial Officer of STMicroelectronics N.V., pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
13.1 Certification of Jean-Marc Chery, President and Chief Executive Officer and Sole Member of the
Managing Board of STMicroelectronics N.V., and Lorenzo Grandi, President, Finance, Purchasing,
Enterprise Risk Management (ERM) and Resilience and Chief Financial Officer of STMicroelectronics
N.V., pursuant to 18 U.S.C. §1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2
15.1 Consent of Independent Registered Public Accounting Firm
101 Inline Interactive Data File
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

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CERTAIN TERMS

ASD application-specific discrete technology

ASIC application-specific integrated circuit
ASSP application-specific standard product
BCD bipolar, CMOS and DMOS process technology
Bi-CMOS bipolar and CMOS process technology
CMOS complementary metal-on silicon oxide semiconductor
DMOS diffused metal-on silicon oxide semiconductor
DRAMs dynamic random access memory
EEPROM electrically erasable programmable read-only memory
EMAS Eco-Management and Audit Scheme, the voluntary European Community scheme for
companies performing industrial activities for the evaluation and improvement of
environmental performance
EMS electronics manufacturing services
EWS electrical wafer sorting
FD-SOI fully depleted silicon-on-insulator
GaN gallium nitride
GNSS Global Navigation Satellite System
GPS global positioning system
HID high-intensity discharge
IC integrated circuit
IGBT insulated gate bipolar transistors
IP intellectual property
IPAD integrated passive and active devices
ISO International Organization for Standardization
LED light-emitting diode
LoRa long range low-power wide-area network modulation technique
LPWANs low-power wide-area networks
MASK WORK the two- or three-dimensional layout of an integrated circuit.
MEMS micro-electro-mechanical system
MOS metal-on silicon oxide semiconductor process technology
MOSFET metal-on silicon oxide semiconductor field effect transistor
NFC near field communication
OEM original equipment manufacturer
QFP quad-flat no-leads package
QFN quad-flat package
RAM random access memory
RF radio frequency
SAM serviceable available market
SiGe silicon germanium
SiC silicon carbide
SOI silicon on insulator
SOIC small-outline integrated circuit
TAM total available market
VIPpower™ vertical integration power

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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has
duly caused and authorized the undersigned to sign this annual report on its behalf.

STMICROELECTRONICS N.V.

Date: February 23, 2023 By: /s/ Jean-Marc Chery

Jean-Marc Chery
President and Chief Executive Officer and Sole
Member of our Managing Board

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Report of Independent Registered Public Accounting Firm

To the Supervisory Board and Stockholders of STMicroelectronics N.V.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of STMicroelectronics N.V. (the Company) as
of December 31, 2022 and 2021, and the related consolidated statements of income, comprehensive income,
equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes
and financial statements schedule on page S-1 (collectively referred to as the “consolidated financial
statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the
financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally
accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022,
based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework) and our report dated February 23, 2023
expressed an unqualified opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility
is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a
public accounting firm registered with the PCAOB and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are
free of material misstatement, whether due to error or fraud. Our audits included performing procedures to
assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud,
and performing procedures that respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also
included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a
reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the
consolidated financial statements that was communicated or required to be communicated to the audit
committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial
statements and (2) involved our especially challenging, subjective or complex judgments. The communication
of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken
as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on
the critical audit matter or on the accounts or disclosures to which it relates.

F-1
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Recoverability of deferred tax assets

Description of the Matter: At December 31, 2022 the Company reports deferred tax assets of
$602 million. As explained in note 2.7 to the consolidated financial
statements, the Company performs an evaluation of the likelihood
that future taxable income will be generated in an amount sufficient
to utilize such deferred tax assets prior to their expiration, and, after
having considered positive and negative available evidence, records
a valuation allowance for any deferred tax assets when it is more
likely than not they will not be realized.

Assessing the recoverability of deferred tax assets involves

significant judgement and estimates in relation to the prospective
financial information used by management in order to assess future
taxable income, which are dependent on the outcome of future
events.
How We Addressed the Matter

In Our Audit: We obtained an understanding, evaluated the design and tested the
operating effectiveness of management’s controls around, among
others: the calculation of the gross amount of deferred tax assets
recorded, the preparation of the prospective financial information
used to determine the Company’s future taxable income and the
assessment of valuation allowance needed for deferred tax assets
not deemed recoverable.

We involved tax professionals to assist with our procedures in

evaluating management's weighting of available positive and
negative evidence used in their assessment of the realizability of
deferred tax assets. Among other procedures, we evaluated the
timing of the reversal of the temporary differences and
management’s prospective financial information used to determine
future taxable income and its consistency with current transfer
pricing policies. We compared management’s projections with the
actual results of prior periods, as well as management’s
consideration of current and expected industry and economic trends.

/s/ Ernst & Young AG

We have served as the Company’s auditor since 2016.

Lancy - Geneva, Switzerland

February 23, 2023

STMicroelectronics N.V.

F-2
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CONSOLIDATED STATEMENTS OF INCOME

Twelve months ended

December 31, December 31, December 31,
In million of U.S. dollars except per share amounts 2022 2021 2020
Net sales 16,083 12,729 10,181
Other revenues 45 32 38
Net revenues 16,128 12,761 10,219
Cost of sales (8,493) (7,435) (6,430)
Gross profit 7,635 5,326 3,789
Selling, general and administrative (1,454) (1,323) (1,109)
Research and development (1,901) (1,723) (1,548)
Other income and expenses, net 159 141 202
Impairment, restructuring charges and other related closure
costs — (2) (11)
Operating income 4,439 2,419 1,323
Interest income (expense), net 58 (29) (20)
Other components of pension benefit costs (11) (10) (12)
Income (loss) on equity-method investments — — 2
Loss on financial instruments, net — (43) (26)
Income before income taxes and noncontrolling interest 4,486 2,337 1,267
Income tax expense (520) (331) (159)
Net income 3,966 2,006 1,108
Net income attributable to noncontrolling interest (6) (6) (2)
Net income attributable to parent company stockholders 3,960 2,000 1,106
Earnings per share (Basic) attributable to parent company
stockholders 4.37 2.21 1.24
Earnings per share (Diluted) attributable to parent
company stockholders 4.19 2.16 1.20

The accompanying notes are an integral part of these audited consolidated financial statements

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STMicroelectronics N.V.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Twelve months ended

December 31, December 31, December 31,
In million of U.S. dollars 2022 2021 2020
Net income 3,966 2,006 1,108
Other comprehensive income (loss), net of tax:
Currency translation adjustments arising during the period (148) (189) 203
Less: reclassification adjustment for gains on disposal of equity
investment — — —
Foreign currency translation adjustments (148) (189) 203
Net unrealized gains (losses) on securities arising during the
period (14) (1) —
Less: reclassification adjustment for (income) losses included
in net income (loss) — — —
Net unrealized gains (losses) on securities (14) (1) —
Net unrealized gains (losses) on derivatives arising during
the period (108) (79) 56
Reclassification adjustment for (gains) losses
included in net income 170 (16) —
Net unrealized gains (losses) on derivatives 62 (95) 56
Net gains (losses) on defined benefit pension plans arising
during the period 64 57 (12)
Amortization of prior service cost included in net
periodic pension cost 1 1 1
Defined benefit pension plans 65 58 (11)
Other comprehensive income (loss), net of tax (35) (227) 248
Comprehensive income (loss) 3,931 1,779 1,356
Less: comprehensive income (loss) attributable to
noncontrolling interest 7 6 2
Comprehensive income (loss) attributable to the Company's
stockholders 3,924 1,773 1,354

The accompanying notes are an integral part of these audited consolidated financial statements

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STMicroelectronics N.V.
CONSOLIDATED BALANCE SHEETS

As of
December 31, December 31,
In million of U.S. dollars 2022 2021
Assets
Current assets:
Cash and cash equivalents 3,258 3,225
Short-term deposits 581 291
Marketable securities 679 —
Trade accounts receivable, net 1,970 1,759
Inventories 2,583 1,972
Other current assets 734 581
Total current assets 9,805 7,828
Goodwill 297 313
Other intangible assets, net 405 438
Property, plant and equipment, net 8,201 5,660
Non-current deferred tax assets 602 652
Long-term investments 11 10
Other non-current assets 661 639
10,177 7,712
Total assets 19,982 15,540

Liabilities and equity

Current liabilities:
Short-term debt 175 143
Trade accounts payable 2,122 1,582
Other payables and accrued liabilities 1,385 1,101
Dividends payable to stockholders 60 55
Accrued income tax 95 68
Total current liabilities 3,837 2,949
Long-term debt 2,542 2,396
Post-employment benefit obligations 331 442
Long-term deferred tax liabilities 60 64
Other long-term liabilities 454 416
3,387 3,318
Total liabilities 7,224 6,267
Commitment and contingencies
Equity
Parent company stockholders' equity
Common stock (preferred stock: 540,000,000 shares authorized, not issued;
common stock: Euro 1.04 par value, 1,200,000,000 shares authorized,
911,281,920 shares issued, 903,865,763 shares outstanding as of December
31, 2022) 1,157 1,157
Additional paid-in capital 2,631 2,533
Retained earnings 8,713 5,223
Accumulated other comprehensive income 460 496
Treasury stock (268) (200)
Total parent company stockholders' equity 12,693 9,209
Noncontrolling interest 65 64
Total equity 12,758 9,273
Total liabilities and equity 19,982 15,540

The accompanying notes are an integral part of these audited consolidated financial statements

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STMicroelectronics N.V.
CONSOLIDATED STATEMENTS OF EQUITY

Accumulated
Other
Additional
Common Paid-In Treasury Retained Comprehensive Noncontrolling Total
In million of U.S. dollars, except per share amounts Stock Capital Stock Earnings Income (Loss) Interest Equity
Balance as of December 31, 2019 1,157 2,992 (328) 2,747 475 68 7,111
Repurchase of common stock (125) (125)
Issuance of senior convertible bonds 184 184
Settlement of senior convertible bonds (269) 258 (11)
Stock-based compensation expense 155 102 (102) 155
Comprehensive income (loss):
Net income 1,106 2 1,108
Other comprehensive income (loss), net
of tax 248 248
Comprehensive income (loss) 1,356
Dividends to noncontrolling interest (12) (12)
Dividends, $0.168 per share (152) (152)
Balance as of December 31, 2020 1,157 3,062 (93) 3,599 723 58 8,506
Repurchase of common stock (485) (485)
Settlement of senior convertible bonds (750) 220 (530)
Stock-based compensation expense 221 158 (158) 221
Comprehensive income (loss):
Net income 2,000 6 2,006
Other comprehensive income (loss), net
of tax (227) (227)
Comprehensive income (loss) 1,779
Dividends, $0.24 per share (218) (218)
Balance as of December 31, 2021 1,157 2,533 (200) 5,223 496 64 9,273
Repurchase of common stock (346) (346)
Transition effect of update in accounting
standard (117) 25 (92)
Stock-based compensation expense 215 278 (278) 215
Comprehensive income (loss):
Net income 3,960 6 3,966
Other comprehensive income (loss), net
of tax (36) 1 (35)
Comprehensive income (loss) 3,931
Dividends to noncontrolling interest (6) (6)
Dividends, $0.24 per share (217) (217)
Balance as of December 31, 2022 1,157 2,631 (268) 8,713 460 65 12,758

The accompanying notes are an integral part of these audited consolidated financial statements

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STMicroelectronics N.V.
CONSOLIDATED STATEMENTS OF CASH FLOWS

Twelve Months Ended

December 31, December 31, December 31,
In million of U.S. dollars 2022 2021 2020
Cash flows from operating activities:
Net income 3,966 2,006 1,108
Items to reconcile net income and cash flows from
operating activities:
Depreciation and amortization 1,216 1,045 923
Interest and amortization of issuance costs on convertible
bonds 1 36 44
Interest on settled convertible bonds — (40) (41)
Loss on financial instruments, net — 43 26
Non-cash stock-based compensation 215 221 155
Other non-cash items (69) (153) (130)
Deferred income tax 3 45 (8)
Income on equity-method investments — — (2)
Impairment, restructuring charges and other related closure
costs, net of cash payments — 2 (3)
Changes in assets and liabilities:
Trade receivables, net (231) (307) (72)
Inventories (650) (188) (84)
Trade payables 240 95 161
Other assets and liabilities, net 511 255 16
Net cash from operating activities 5,202 3,060 2,093
Cash flows used in investing activities:
Payment for purchase of tangible assets (3,528) (1,830) (1,283)
Proceeds from sale of tangible assets 4 2 4
Payment for purchase of marketable securities (687) — —
Proceeds from matured marketable securities — 132 —
Net proceeds from (investment in) short-term deposits (293) 290 (577)
Payment for purchase of intangible assets (87) (97) (75)
Net payment for financial assets — (17) —
Proceeds from sale of financial assets — 2 —
Proceeds from sale of equity investments — — 1
Payment for business acquisitions, net of cash acquired — — (113)
Net cash used in investing activities (4,591) (1,518) (2,043)
Cash flows from (used in) financing activities:
Proceeds from long-term debt 200 788 4
Net proceeds from issuance of convertible bonds — — 1,567
Repayment of issued convertible bonds — (1,223) (709)
Repayment of long-term debt (134) (134) (184)
Repurchase of common stock (346) (485) (125)
Dividends paid to stockholders (212) (205) (168)
Dividends paid to noncontrolling interest (6) (6) (6)
Payment of withholding tax on vested shares (44) (49) (31)
Payment for deferred consideration on business acquisitions (25) — —
Net cash from (used in) financing activities (567) (1,314) 348
Effect of changes in exchange rates (11) (9) 1
Net cash increase 33 219 399
Cash, cash equivalents and restricted cash at beginning of the period 3,225 3,006 2,607
Cash and cash equivalents at end of the period 3,258 3,225 3,006
Supplemental cash information:
Interest paid 2 2 7
Income tax paid 416 279 138

The accompanying notes are an integral part of these audited consolidated financial statements

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions of U.S. dollars, except share and per-share amounts)

1. THE COMPANY
STMicroelectronics N.V. (the “Company”) is registered in the Netherlands with its corporate legal seat in
Amsterdam, the Netherlands, and its corporate headquarters located in Geneva, Switzerland.

The Company is a global semiconductor company that designs, develops, manufactures and markets a broad
range of products, including discrete and general purpose components, application-specific integrated circuits
(“ASICs”), full-custom devices and semi-custom devices and application-specific standard products (“ASSPs”)
for analog, digital and mixed-signal applications. In addition, the Company participates in the manufacturing
value chain of smartcard products, which includes the production and sale of both silicon chips and smartcards.

2. ACCOUNTING POLICIES
The accounting policies of the Company conform to accounting principles generally accepted in the United
States of America (“U.S. GAAP”). All balances and values in the current and prior periods are in millions of
U.S. dollars, except share and per-share amounts. Under Article 35 of the Company’s Articles of Association,
the financial year extends from January 1 to December 31, which is the period-end of each fiscal year.

2.1 Basis of presentation and consolidation

The Company's consolidated financial statements include the assets, liabilities, results of operations and cash
flows of its wholly-owned and majority-owned subsidiaries, after elimination of intercompany transactions and
balances. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They
are deconsolidated from the date that control ceases.

The Company assesses each investment in equity securities to determine whether the investee is a Variable
Interest Entity (“VIE”). The Company consolidates the VIEs for which the Company is determined to be the
primary beneficiary. The primary beneficiary of a VIE is the party that: (i) has the power to direct the most
significant activities of the VIE and (ii) is obligated to absorb losses or has the rights to receive returns that
would be considered significant to the VIE. Assets, liabilities, and the noncontrolling interest of newly
consolidated VIEs are initially measured at fair value in the same manner as if the consolidation resulted from a
business combination.

When the Company owns some, but not all, of the voting stock of a consolidated entity, the shares held by third
parties represent a noncontrolling interest. The consolidated financial statements are prepared based on the total
amount of assets and liabilities and income and expenses of the consolidated subsidiaries. However, the portion
of these items that does not belong to the Company’s shareholders is reported in the line “Noncontrolling
interest” of the consolidated financial statements.

2.2 Use of estimates

The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to
make estimates and assumptions. The primary areas that require significant estimates and judgments by
management include, but are not limited to:
• sales allowances and returns,
• inventory obsolescence reserves and normal manufacturing capacity thresholds to determine costs
capitalized in inventory,
• recognition and measurement of loss contingencies,
• valuation at fair value of assets acquired and liabilities assumed on business acquisitions, and
measurement of any contingent consideration,
• annual and trigger-based impairment review of goodwill and intangible assets, as well as the
assessment of events which could trigger impairment testing on long-lived assets,

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• assessment of the Company’s long-lived assets economic useful lives,

• assumptions used in measuring expected credit losses and impairment charges on financial assets,
• assumptions used in assessing the number of awards expected to vest on stock-based compensation
plans,
• assumptions used in calculating pension obligations and other long-term employee benefits,
• determination of the amount of tax expected to be paid and tax benefit expected to be received,
including deferred income tax assets, valuation allowance and provisions for uncertain tax positions
and claims.

The Company bases the estimates and assumptions on historical experience and on various other factors such as
market trends, market information used by market participants and the latest available business plans that it
believes to be reasonable under the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities. While the Company regularly evaluates its estimates and
assumptions, the actual results experienced by the Company could differ materially and adversely from those
estimates.

2.3 Foreign currency

The U.S. dollar is the reporting currency of the Company. The U.S. dollar is the currency of the primary
economic environment in which the Company operates since the worldwide semiconductor industry uses the
U.S. dollar as a currency of reference for actual pricing in the market. Furthermore, the majority of the
Company’s transactions are denominated in U.S. dollars, and revenues from external sales in U.S. dollars
largely exceed revenues in any other currency. However, certain significant costs are incurred in the countries of
the Eurozone and other non-U.S. dollar currency areas.

The functional currency of each subsidiary of the Company is either the local currency or the U.S. dollar,
depending on the basis of the economic environment in which each subsidiary operates. Foreign currency
transactions, including operations in local currency when the U.S. dollar is the functional currency, are
measured into the functional currency using the prevailing exchange rate. Foreign exchange gains and losses
resulting from the re-measurement at reporting date of monetary assets and liabilities denominated in currencies
other than the functional currency are recognized in the line “Other income and expenses, net” of the
consolidated statements of income.

For consolidation purposes, the results and financial position of the subsidiaries whose functional currency is
different from the U.S. dollar are translated into the reporting currency as follows:
(a) assets and liabilities for each consolidated balance sheet presented are translated into U.S. dollars
using exchange rates at the balance sheet dates;
(b) income and expenses for each consolidated statement of income presented are translated into U.S
dollars using the average monthly exchange rates;
(c) the resulting exchange differences are reported as Currency Translation Adjustments (“CTA”), a
component of “Other comprehensive income (loss)” in the consolidated statements of
comprehensive income.

2.4 Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with external financial institutions and
other short-term highly liquid investments with original maturities of three months or less. They are both readily
convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes
in value because of changes in interest rates.
Short-term deposits representing cash equivalent with original maturity beyond three months are reported as
current assets in the line “Short-term deposits” of the consolidated balance sheets.

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2.5 Trade accounts receivable

Trade accounts receivable are amounts due from customers for goods sold and services rendered to third parties
in the ordinary course of business. The Company uses a lifetime expected losses allowance for all trade
receivables. The allowance includes reasonable assumptions about future credit trends. The historical loss rates
are adjusted to reflect current and forward-looking information on macro-economic factors affecting the ability
of the Company’s customers to settle the receivables. Adjustments to the expected credit losses allowance are
reported on the line “Selling, general and administrative” in the consolidated statements of income and write-
offs, if any, are recorded against the expected credit losses allowance.

In the event of transfers of receivables such as factoring, the Company derecognizes the receivables only to the
extent that the Company has surrendered control over the receivables in exchange for a consideration other than
beneficial interest in the transferred receivables.

2.6 Inventories
Inventories are stated at the lower of cost and net realizable value. Actual cost is based on an adjusted standard
cost, which approximates cost on a first-in, first-out basis for all categories of inventory (raw materials, work-in-
process, finished products). Actual cost is therefore dependent on the Company’s manufacturing performance
and cost is based on the normal utilization of its production capacity. In case of underutilization of
manufacturing facilities, the costs associated with unused capacity are not included in the valuation of
inventories but charged directly to cost of sales. Net realizable value is based upon the estimated selling prices
in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.
The Company performs, on a continuous basis, write-offs of inventories, which have the characteristics of slow-
moving, old production dates and technical obsolescence. The Company evaluates its inventory to identify
obsolete or slow-selling items, as well as inventory that is not of saleable quality and records a specific reserve
if the Company estimates the inventory will eventually become obsolete. Reserve for obsolescence is estimated
for excess uncommitted inventory based on historical sales data, order backlog and production plans.

2.7 Income taxes

Income tax for the period comprises current and deferred income tax. Current income tax represents the income
tax expected to be paid or the tax benefit expected to be received related to the current year taxable profit and
loss in each tax jurisdiction. Deferred income tax is recognized, using the liability method, for all temporary
differences arising between the tax bases of assets and liabilities and their carrying amount in the consolidated
financial statements. Deferred tax liabilities are not recognized on the initial recognition of goodwill as a result
of a business combination. Deferred income tax is determined using tax rates and laws that are enacted at the
balance sheet date and are expected to apply when the related deferred income tax asset is realized or the
deferred income tax liability is settled. The effect on deferred tax assets and liabilities from changes in tax laws
and tax rates is recognized on the line “Income tax expense” in the consolidated statements of income in the
period in which the law is enacted. Deferred income tax assets are recognized in full but the Company assesses
whether future taxable profit will be available against which temporary differences can be utilized. A valuation
allowance is provided for deferred tax assets when management considers it is more likely than not that they
will not be realized.
The Company recognizes a deferred tax liability on undistributed earnings of subsidiaries when there is a
presumption that taxable earnings will be remitted to the parent. A deferred tax asset is recognized on
compensation for the grant of stock awards to the extent that such charge constitutes a temporary difference in
the subsidiaries’ local tax jurisdictions. Changes in the stock price do not result in any adjustments to the
deferred tax asset prior to vesting.

At each reporting date, the Company assesses all significant income tax positions in all tax jurisdictions to
determine any uncertain tax positions. The Company uses a two-step process for the evaluation of uncertain tax
positions. The first step consists in assessing whether the tax benefit must be recognized. The second step
consists in measuring the amount of tax benefit to be recognized on each uncertain tax position. In step 1
(recognition), the Company assesses whether a tax position, based solely on its technical merits, is more likely
than not to be sustained upon examination. Only tax positions with a sustainability threshold higher than 50%
are recognized. In Step 2 (measurement), the Company determines the amount of recognizable tax benefit. The
measurement methodology is based on a “cumulative probability” approach, resulting in the recognition of the
largest amount that is greater than 50% likely of being realized upon settlement with the taxing authority. The

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Company accrues for interest and penalties on uncertain tax liabilities reported on the consolidated balance
sheets. Interests and penalties are classified as components of income tax expense in the consolidated statements
of income.

2.8 Business combinations and goodwill

The acquisition method of accounting is applied to all business combinations. The identifiable assets acquired,
liabilities assumed, and equity instruments issued are measured at acquisition date fair value. Any contingent
consideration is recorded at acquisition date fair value and remeasured at each reporting date. Acquisition-
related transaction costs and restructuring costs related to the acquired business are expensed as incurred.
Acquired in-process research and development (“IPR&D”) is capitalized and recorded as an intangible asset at
acquisition date, subject to impairment testing until the research or development is completed. The excess of the
consideration transferred over the acquisition-date fair value of the identifiable assets acquired and liabilities
assumed, net of related deferred tax impacts, is recorded as goodwill. In case of a bargain purchase, the
Company reassesses whether it has correctly identified all of the assets acquired and all of the liabilities
assumed, the noncontrolling interest in the acquiree, if any, the Company’s previously held equity interest in the
acquiree, if any, and the consideration transferred. If after this review, a bargain purchase is still indicated, it is
recognized in earnings attributable to parent company stockholders. The purchase of additional interests in a
partially owned subsidiary is treated as an equity transaction as well as all transactions concerning the sale of
subsidiary stock or the issuance of stock by the partially owned subsidiary, assuming there is no change in
control of the subsidiary. In the case of a sale of subsidiary shares, whereby the Company no longer maintains
control of the subsidiary, the Company recognizes a gain or loss in earnings.
Goodwill is carried at cost less accumulated impairment losses, if any. Goodwill is not amortized but is tested
for impairment at least annually, and more frequently whenever events or changes in circumstances indicate that
the carrying amount of goodwill may not be recoverable. Goodwill subject to potential impairment is tested at
the reporting unit level. The impairment test determines whether the fair value of each reporting unit under
which goodwill is allocated is lower than the total carrying amount of relevant net assets allocated to such
reporting unit, including its allocated goodwill. The Company records an impairment loss on goodwill when a
reporting unit’s carrying value exceeds its fair value. Significant management judgments and estimates are used
in forecasting the future discounted cash flows associated with the reporting unit, including: the applicable
industry’s sales volume forecast and selling price evolution, the reporting unit’s market penetration and its
revenues evolution, the market acceptance of certain new technologies and products, the relevant cost structure,
the discount rates applied using a weighted average cost of capital and the perpetuity rates used in calculating
cash flow terminal values.

2.9 Intangible assets with definite useful lives

Intangible assets subject to amortization include intangible assets purchased from third parties recorded at cost
and intangible assets acquired in business combinations initially recorded at fair value. Amortization begins
when the intangible asset is available for its intended use. Amortization reflects the pattern in which the asset’s
economic benefits are consumed, which usually consists in applying the straight-line method to allocate the cost
of the intangible assets over their estimated useful lives.
The carrying value of intangible assets with definite useful lives is evaluated whenever changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for
the amount by which the asset’s carrying amount exceeds its fair value. The Company evaluates the remaining
useful life of an intangible asset at each reporting date to determine whether events and circumstances warrant a
revision to the remaining period of amortization.

Technologies and licenses

Separately acquired technologies and licenses are recorded at historical cost. Technologies and licenses acquired
in a business combination are initially recognized at acquisition date fair value. Technologies and licenses have
a useful life which usually ranges from 3 to 8 years and are carried at cost less accumulated amortization and
impairment losses, if any.

Computer software
Separately acquired computer software is recorded at historical cost. Costs associated with maintaining
computer software programs are expensed as incurred and reported as “Cost of sales”, “Selling, general and

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administrative”, or “Research and development” in the consolidated statements of income according to their
intended use. The capitalization of costs for internally generated software developed by the Company for its
internal use begins when the preliminary project stage is completed and when the Company, implicitly or
explicitly, authorizes and commits to funding a computer software project. It must be probable that the project
will be completed and will be used to perform the function intended. Amortization of computer software begins
when the software is available for its intended use and is calculated using the straight-line method over the
estimated useful life, which does not exceed 4 years.

2.10 Property, plant and equipment

Property, plant and equipment are stated at historical cost, net of accumulated depreciation and any impairment
losses. Property, plant and equipment acquired in a business combination are initially recognized at acquisition
date fair value. Major additions and improvements are capitalized, while minor replacements and repairs are
expensed and reported as “Cost of sales”, “Selling, general and administrative”, or “Research and development”
in the consolidated statements of income according to their intended use.

Land is not depreciated. Depreciation on fixed assets is computed using the straight-line method over their
estimated useful lives, as follows:

Buildings 33 years
Facilities and leasehold improvements 5-10 years
Machinery and equipment 2-10 years
Computer and R&D equipment 3-6 years
Other 2-5 years

Property, plant and equipment are periodically reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset or a group of assets may not be recoverable. Several
impairment indicators exist for making this assessment, such as: restructuring plans, significant changes in the
technology, market, economic or legal environment in which the Company operates, available evidence of
obsolescence of the asset, or indication that its economic performance is, or will be, worse than expected. In
determining the recoverability of assets to be held and used, the Company initially assesses whether the carrying
value of the tangible assets or group of assets exceeds the undiscounted cash flows associated with these assets.
If exceeded, the Company then evaluates whether an impairment charge is required by determining if the asset’s
carrying value also exceeds its fair value. This fair value is normally estimated by the Company based on
independent market appraisals or the sum of discounted future cash flows, using market assumptions such as the
utilization of the Company’s fabrication facilities and the ability to upgrade such facilities, change in the selling
price and the adoption of new technologies. The Company also evaluates, and adjusts if appropriate, the assets’
useful lives. Any impairment loss is reported on the same income statement line as the depreciation expense
recorded on the impaired group of assets, except in case of closure of operating sites or major restructuring plans
and reorganizations. In such case, any impairment loss is reported on the line “Impairment, restructuring charges
and other related closure costs” in the consolidated statements of income.

When property, plant and equipment are retired or otherwise disposed of, the net book value of the assets is
removed from the Company’s books. Gains and losses on disposals are determined by comparing the proceeds
with the carrying amount and are included in “Other income and expenses, net” in the consolidated statements
of income.

The Company did not hold any significant assets held for sale as of December 31, 2022 and December 31, 2021.

2.11 Leases

A lease contract is a contract, or part of a contract, that conveys the right to control the use of an identified asset
for a period of time in exchange for consideration. If a lease is identified, classification between finance or
operating is determined at lease commencement. Most leases entered by the Company are operating leases.
Operating lease liabilities are recognized at the present value of the future lease payments at the lease
commencement date. The rate implicit in the lease should be used as a discount rate whenever that rate is readily
determinable. In most cases, this rate is not readily determinable and therefore, the Company uses its
incremental borrowing rate, which is derived from information available at the lease commencement date. The
Company considers its recent debt issuances as well as publicly available data for instruments with similar
characteristics when calculating its incremental borrowing rates. Operating lease right-of-use assets are based on
the corresponding lease liability adjusted for any lease payments made at or before commencement, initial direct
costs, and lease incentives.

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Right-of-use assets are included in the line “Property, plant and equipment, net” of the consolidated balance
sheet. Operating lease liabilities due within one year are included in the line “Other payables and accrued
liabilities”, while noncurrent operating lease liabilities are included in the line “Other long-term liabilities” of
the Company’s consolidated balance sheets. Operating lease expenses are recognized in the consolidated
statements of income, on a straight-line basis over the lease period and reported as “Cost of sales”, “Selling,
general and administrative”, or “Research and development”, according to the intended use of the leased asset.

Finance lease liabilities due within one year are included in the line “Short-term debt”, while noncurrent finance
lease liabilities are included in the line “Long-term debt” of the Company’s consolidated balance sheets. Right-
of-use assets for finance leases are depreciated on a straight-line basis since the lease commencement date over
the lease period or the estimated useful life of the leased asset in case of transfer of ownership or purchase
option that is reasonably certain to be exercised. The depreciation expense is reported as “Cost of sales”,
“Selling, general and administrative”, or “Research and development”, according to the intended use of the
leased asset.

Certain lease contracts contain options to extend the lease. On these contracts, the Company estimates the lease
term by including the extended duration when it is reasonably certain for the Company to exercise that option.
In addition, for short-term leases, defined as leases with a term of twelve months or less, the Company elected
the practical expedient to not recognize an associated lease liability and right-of-use asset. The short-term lease
election is made at the commencement date only. Additionally, lease contracts with a sum of lease payments not
exceeding$5,000 are excluded from recognition on the consolidated balance sheet.

The right-of-use asset is a nonmonetary asset while the lease liability is a monetary liability. When accounting
for a lease that is denominated in a foreign currency, the lease liability is remeasured using the current exchange
rate, while the right-of-use asset is measured using the historical exchange rate as of the commencement date.

The Company does not separate lease and non-lease components and instead accounts for each separate lease
component and the non-lease components associated with that lease component as a single lease component.

Variable lease payments that depend on an index or a rate are included in the lease payments and are measured
using the prevailing index or rate at the measurement date. Changes to index and rate-based variable lease
payments are recognized in earnings in the period of the change.

2.12 Loss contingencies

In determining loss contingencies, the Company considers the likelihood of the incurrence of a liability as well
as the ability to reasonably estimate the amount of such loss or liability. An estimated loss from a loss
contingency is accrued when information available indicates that it is probable that a liability has been incurred
at the date of the consolidated financial statements and when the amount of the loss can be reasonably estimated.

2.13 Long-term debt

(a) Convertible debt

The Company adopted on January 1, 2022 the new guidance on distinguishing liabilities from equity by
applying the modified retrospective approach, with the impact upon transition recorded in retained earnings for
instruments outstanding as of the adoption date. Prior to the new guidance adoption, the Company evaluated, at
initial recognition of a convertible debt, the different components and features of the hybrid instruments and
determined whether certain elements were embedded derivative instruments which required bifurcation.
Components of convertible debt instruments that may be settled in cash upon conversion based on a net-share
settlement basis were accounted for separately as long-term debt and equity when the conversion feature of the
convertible bonds constituted an embedded equity instrument. When an equity instrument was identified,
proceeds from issuance were allocated between debt and equity by measuring first the liability component and
then determining the equity component as a residual amount. The liability component was measured as the fair
value of a similar non-convertible debt, which resulted in the recognition of a debt discount. In subsequent
periods, the Company amortized the debt discount through earnings in the line “Interest income (expense), net”
of the consolidated statements of income, using the effective interest method, based on the contractual maturity
of the debt. The equity component, reported on the line “Additional paid-in capital” of the consolidated
statement of equity, was not remeasured. Deferred taxes were recognized on the difference between the carrying
amount of the liability component and its tax basis. In case of conversion from the bondholders, the fair value of
the consideration transferred was allocated between the liability component and the equity component. The

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difference between the carrying amount of the debt at the settlement date and the fair value of the debt
component was recorded in earnings as a loss on debt extinguishment and reported in the line “Loss on financial
instruments, net” of the consolidated statements of income. The liability component was measured as the fair
value of a similar non-convertible debt prior to settlement. The reacquired equity component was recorded in
equity and reported on the line “Additional paid-in capital” of the consolidated statement of equity.

The new accounting guidance adopted on January 1, 2022 has eliminated the cash conversion model in ASC
470-20 applicable to the convertible debt issued by the Company, which required separate accounting for
embedded conversion features. At initial recognition, total cash proceeds received at issuance are reported as
financial debt and no equity conversion instrument is recorded separately in equity. Impact of the new guidance
upon adoption is further described in Note 2.25.
Debt issuance costs are reported as a deduction of debt. They are subsequently amortized through earnings on
the line “Interest income (expense), net” of the consolidated statements of income, using the effective interest
rate method.
(b) Bank loans
Bank loans and non-convertible senior bonds are recognized at the amount of cash proceeds received, net of
debt issuance costs incurred. They are subsequently reported at amortized cost; any difference between the
proceeds (net of debt issuance costs) and the principal amount is recognized through earnings on the line
“Interest income (expense), net” of the consolidated statements of income over the period of the borrowings
using the effective interest method.

2.14 Employee benefits

(a) Pension obligations
The Company sponsors various pension schemes for its employees. These schemes conform to local regulations
and practices in the countries in which the Company operates. Such plans include both defined benefit and
defined contribution plans. For defined benefit pension plans, the liability recognized in the consolidated
balance sheets is the present value of the defined benefit obligation at the balance sheet date less the fair value
of plan assets. The overfunded or underfunded status of the defined benefit plans are calculated as the difference
between plan assets and the projected benefit obligations. Estimates are used in determining the assumptions
incorporated in the calculation of the pension obligations, which is supported by input from independent
actuaries. Actuarial gains and losses arising from changes in actuarial assumptions are recognized in
“Accumulated other comprehensive income (loss)” in the consolidated statements of equity and are charged or
credited to earnings over the employees’ expected average remaining working lives. Past service costs are
recognized in “Accumulated other comprehensive income (loss)” in the consolidated statements of equity and
are amortized on a straight-line basis over the vesting period. The net periodic benefit cost of the year is
determined based on the assumptions used at the end of the previous year. Past service costs are recognized in
earnings on the line “Other components of pension benefit costs” of the consolidated statements of income if the
changes to the pension scheme are not conditional on the employees remaining in service for a specified period
(the vesting period).

For defined contribution pension plans, the Company pays contributions to publicly or privately administered
pension insurance plans on a mandatory, contractual or voluntary basis. The Company has no further payment
obligations once the contributions have been paid. The contributions are recognized as employee benefit
expense when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a
reduction in the future payments is available.

The service cost component of net periodic benefit costs is presented in the same income statement line as other
employee compensation costs arising from services rendered during the period. The other components of the net
periodic benefit cost are presented separately, outside operating income, on the line “Other components of
pension benefit costs” of the consolidated statements of income. These elements include: interest cost; expected
return on plan assets; amortization of transition (asset) obligation; amortization of prior service cost;
amortization of net (gain) loss; (gain) loss recognized due to curtailment or settlement and; cost of special
termination benefits.

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(b) Termination benefits

Termination benefits are payable when an employee is involuntarily terminated, or whenever an employee
accepts voluntary termination in exchange for termination benefits. For the accounting treatment and timing
recognition of involuntary termination benefits, the Company distinguishes between one-time termination
benefit arrangements and ongoing termination benefit arrangements. A one-time termination benefit
arrangement is established by a termination plan and applies to a specified termination event. One-time
involuntary termination benefits are recognized as a liability when the termination plan meets certain criteria
and has been communicated to employees. If employees are required to render future service in order to receive
these one-time termination benefits, the liability is recognized ratably over the future service period.
Termination benefits other than one-time termination benefits are termination benefits for which the
communication criterion is not met but that are committed to by management, or termination obligations that are
not specifically determined in a new and single plan. These termination benefits are all legal, contractual and
past practice termination obligations to be paid to employees in case of involuntary termination. These
termination benefits are accrued for when commitment creates a present obligation to others for the benefits
expected to be paid, when it is probable that employees will be entitled to the benefits and the amount can be
reasonably estimated.

In case of special termination benefits related to voluntary redundancy programs, the Company recognizes a
provision for voluntary termination benefits at the date on which the employee irrevocably accepts the offer and
the amount can be reasonably estimated.

(c) Profit-sharing and bonus plans

The Company recognizes a liability and an expense for bonuses and profit-sharing plans when a contractual
obligation exists or where there is a past practice that has created a present obligation.

(d) Other long-term employee benefits

The Company provides long-term employee benefits such as seniority awards in certain countries. The
entitlement to these benefits is usually conditional on the employee completing a minimum service period. The
expected costs of these benefits are accrued over the period of employment. Actuarial gains and losses arising
from changes in actuarial assumptions are charged or credited to earnings in the period of the revised estimate.
These obligations are valued annually with the assistance of independent qualified actuaries.

(e) Share-based compensation

The Company accounts for stock-based compensation for all stock-based awards granted to senior executives
and selected employees, including awards that vest upon the satisfaction of a service condition and awards that
vest upon the satisfaction of both a service condition and a performance condition. Both equity awards vest over
a three-year service period while performance-based awards also require the Company’s attainment of certain
performance conditions. The Company measures the cost of the awards based on the grant-date fair value of the
awards, reflecting the market price of the underlying shares at the date of the grant, reduced by the present value
of the dividends expected to be paid on the shares during the requisite service period. That cost is recognized
using graded vesting over the period during which an employee is required to provide service in exchange for
the award or the requisite service period. The compensation cost is recorded through earnings with the
corresponding amount reported in equity, under “Additional paid-in capital” of the consolidated statements of
equity. The compensation cost is calculated based on the number of awards expected to vest, net of an estimated
number of awards to be forfeited due to the employees failing to satisfy the service condition or one or more
performance conditions. By the end of the vesting period, compensation is recognized only for the awards that
ultimately vest.

Liabilities for the Company’s portion of payroll taxes are recognized at vesting, which is the event triggering the
payment of the social contributions in most of the Company’s local tax jurisdictions. Employee-related social
charges are measured based on the intrinsic value of the share and recorded at vesting date.

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2.15 Share capital

Ordinary shares are classified as “Common stock” within equity on the consolidated balance sheets.
Incremental costs directly attributable to the issuance of new shares are shown in equity as a deduction, net of
tax, from the proceeds received.
Where the Company purchases its own equity share capital (treasury stock), the consideration paid, including
any directly attributable incremental costs (net of income taxes), is deducted from parent company stockholders’
equity until the shares are cancelled, reissued, or disposed of.

2.16 Comprehensive income (loss)

Comprehensive income (loss) is defined as the change in equity of a business during a period except those
changes resulting from investment by and distributions to stockholders. In the consolidated financial statements,
“Other comprehensive income (loss)” and “Accumulated other comprehensive income” primarily consists of
foreign currency translation adjustments, unrealized gains (losses) on debt securities classified as available-for-
sale, unrealized gains (losses) on derivatives designated as cash flow hedge and the accounting for defined
benefit plans as described in Note 2.14, net of tax.

2.17 Revenue recognition

Arrangements with customers are considered contracts if all the following criteria are met: (a) parties have
approved the contract and are committed to perform their respective obligations; (b) each party’s rights
regarding the goods or services to be transferred can be identified; (c) payment terms for the goods or services to
be transferred can be identified; (d) the contract has commercial substance and (e) collectability of substantially
all of the consideration is probable. The Company recognizes revenue from products sold to a customer,
including distributors, when it satisfies a performance obligation by transferring control over a product to the
customer. In certain circumstances, the Company may enter into agreements that concern principally revenues
from services, where the performance obligation is satisfied over time. The objective when allocating the
transaction price is to allocate the transaction price to each performance obligation (or distinct good or service)
in an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange
for transferring the promised goods or services to the customer. The payment terms typically range between 30
and 90 days. Certain customers require the Company to hold inventory as consignment in their hubs and only
purchase inventory when they require it. Revenue for sales of such inventory is recognized when, at the
customer’s option, the products are withdrawn from the consignment and the Company satisfies a performance
obligation by transferring control over a product to the customer.

Consistent with standard business practice in the semiconductor industry, price protection is granted to
distribution customers on their existing inventory of the Company’s products to compensate them for changes in
market prices. The Company accrues a provision for price protection based on a rolling historical price trend
computed monthly as a percentage of gross distributor sales. This historical price trend represents differences in
recent months between the invoiced price and the final price to the distributor, adjusted to accommodate a
significant change in the selling price. The short outstanding inventory time, visibility into the inventory product
pricing and long distributor pricing history have enabled the Company to reliably estimate price protection
provisions at period-end. The Company records the accrued amounts as a deduction of “Net sales” in the
consolidated statements of income at the time of the sale.

The Company’s customers occasionally return the Company’s products for technical reasons. The Company’s
standard terms and conditions of sale provide that if the Company determines that products do not conform, the
Company will repair or replace the non-conforming products, or issue a credit note or rebate of the purchase
price. Quality returns are identified shortly after sale in customer quality control testing. Quality returns are
usually associated with end-user customers, not with distribution channels. The Company records the accrued
amounts as a deduction of “Net sales” in the consolidated statements of income, using historical and current
conditions to form a reasonable estimate of future returns.

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The Company records a provision for warranty costs as a charge against “Cost of sales” in the consolidated
statements of income, based on historical trends of warranty costs incurred as a percentage of sales, which
management has determined to be a reasonable estimate of the probable losses to be incurred for warranty
claims in a period. Any potential warranty claims are subject to the Company’s determination that the Company
is at fault for damages, and such claims usually must be submitted within a short period of time following the
date of sale. This warranty is given in lieu of all other warranties, conditions or terms expressed or implied by
statute or common law. The Company’s contractual terms and conditions typically limit its liability to the sales
value of the products which gave rise to the claims.

The Company’s insurance policy relating to product liability covers third-party physical damages and bodily
injury, indirect financial damages as well as immaterial non-consequential damages caused by defective
products.

In addition to product sales, the Company enters into arrangements with customers consisting in transferring
licenses or related to license services. The revenue generated from these arrangements are reported on the line
“Other revenues” of the consolidated statements of income. Other revenues also include patent royalty income,
sale of scrap materials and manufacturing by-products.

2.18 Public funding

The Company receives funding mainly from governmental agencies and income is recognized when all
contractual conditions for receipt of these funds are fulfilled. The Company’s primary sources for government
funding are French, Italian and other country governmental entities. Such funding is generally provided to
encourage research, development and other innovation activities, industrialization and local economic
development. The conditions to receive government funding may include eligibility restrictions, approval by the
European Union authorities, annual budget appropriations, compliance with European Commission regulations,
as well as specifications regarding objectives and results. Certain specific contracts include obligations to
maintain a minimum level of employment and investment during a certain period. There could be penalties if
these objectives are not fulfilled. Other contracts contain penalties for late deliveries or for breach of contract,
which may result in repayment obligations. Funding related to these contracts is recorded when the conditions
required by the contracts are met. The Company’s funding programs are classified under two general categories:
funding for research, development and other innovative activities, and capital investments.

Funding for research, development and innovative activities is the most common form of funding that the
Company receives. This public funding is recorded as “Other income and expenses, net” in the consolidated
statements of income. The funding is recognized ratably as the related costs are incurred once the agreement
with the respective governmental agency has been signed and all applicable conditions are met. Other
government assistance, such as funding received for industrialization and local economic development in certain
regions, are reported as a deduction of cost of sales or other operating expenses according to the nature of the
underlying costs eligible to the grants.

French research tax credits (“Crédit Impôt Recherche”) and Italian research tax credits (“Credito d’Imposta
Ricerca & Sviluppo”) are deemed to be grants in substance. The French research tax credits are to be paid in
cash by the taxing authorities within three years in case they are not deducted from income tax payable during
this period of time. The Italian tax credits are compensated against payroll-related social charges. French and
Italian tax credits are reported as a reduction of “Research and development” in the consolidated statements of
income.

Capital investment funding is recorded as a reduction of “Property, plant and equipment, net” and is recognized
in the Company’s consolidated statements of income by offsetting the depreciation charges of the funded assets
during their useful lives. The Company also receives capital funding in Italy, which can be recovered through
the reduction of various governmental liabilities, including income tax, value-added tax and employee-related
social charges.

Funding receivables are reported as non-current assets unless cash settlement features of the receivables
evidence that collection is expected within one year. Long-term receivables that do not present any tax attribute
or legal restriction are reflected in the consolidated balance sheets at their net present value when the
discounting effect is deemed to be significant.

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2.19 Research and development

Research and development expenses include costs incurred by the Company, the Company’s share of costs
incurred by other research and development interest groups, and costs associated with co-development contracts.
Research and development expenses do not include marketing design center costs, which are accounted for as
“Selling, general and administrative” in the consolidated statements of income and process engineering, pre-
production or process transfer costs which are recorded as “Cost of sales” in the consolidated statements of
income. Research and development costs are expensed as incurred. The amortization expense recognized on
technologies and licenses purchased by the Company from third parties to facilitate the Company’s research and
development activities is reported as “Research and development” in the consolidated statements of income.

2.20 Advertising costs

Advertising costs are expensed as incurred and are recorded as “Selling, general and administrative” in the
consolidated statements of income. Advertising expenses for 2022, 2021 and 2020 were $18 million, $14
million and $12 million, respectively.

2.21 Start-up and phase-out costs

Start-up costs represent costs incurred in the ramp-up phase of the Company's newly integrated manufacturing
facilities. The costs of phase-outs are associated with the latest stages of facilities closure when the relevant
production volumes become immaterial. Start-up costs and phase-out costs are included in the line “Other
income and expenses, net” of the consolidated statements of income.

2.22 Investments in equity securities

Investments in equity securities that have readily determinable fair values and for which the Company does not
have the ability to exercise significant influence are classified as equity securities measured at fair value through
earnings. Changes in the fair value of these securities are reported in the consolidated statements of income
within “Other income and expenses, net” when these instruments are held within the Company’s operating
activities. Gains and losses arising from changes in the fair value of securities not related to operating activities
are presented in the consolidated statements of income as non-operating elements within “Gain (loss) on
financial instruments, net” in the period in which they arise.

For investments in equity securities without readily determinable fair values and for which the Company does
not have the ability to exercise significant influence, the Company has elected to apply the cost method as a
measurement alternative. Under the cost method of accounting, investments are carried at historical cost, less
impairment, adjusted for subsequent observable price changes. An impairment loss is recorded when there are
identified events or changes in circumstances that may have a significant adverse effect on the value of the
investment. Loss is immediately recorded in the consolidated statements of income on the line “Gain (loss) on
financial instruments, net” and is based on the Company’s assessment of any significant and sustained
reductions in the investment’s value. Gains and losses on investments sold are determined on the specific
identification method and are recorded as non-operating element in the line “Gain (loss) on financial
instruments, net” of the consolidated statements of income when the transaction is not related to operating
activities.

The fair values of quoted equity securities are based on current market prices. If the market for a financial asset
is not active and if no observable market price is obtainable, the Company measures fair value by using
assumptions and estimates. In measuring fair value, the Company makes maximum use of market inputs and
minimizes the use of unobservable inputs.

The Company did not hold any material equity securities as of December 31, 2022 and December 31, 2021.

2.23 Investments in debt securities

Debt securities are included in current assets when they represent investments of funds available for current
operations or when management intends to dispose of the securities within twelve months of the balance sheet
date.
Changes in fair value of debt securities classified as available-for-sale are recognized as a component of “Other
comprehensive income (loss)” in the consolidated statements of comprehensive income. The Company assesses
at each balance sheet date whether there is objective evidence that a debt security or group of debt securities is

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impaired. An unrealized impairment loss exists when the fair value of the instrument declines below its
amortized cost basis. An impairment loss is recognized in earnings, through a direct reduction of the value of the
asset, when the Company intends to sell the debt security or when it is more likely than not that the Company
will be required to sell the instrument before recovery of the amortized cost basis. Moreover, an impairment loss
is recognized in earnings through a credit loss allowance for any portion of the unrealized impairment loss
resulting from a credit loss. Impairment losses recognized in the consolidated statements of income are not
reversed through earnings.

The fair values of quoted debt securities are based on current market prices. If the market for a financial asset is
not active and if no observable market price is obtainable, the Company measures fair value by using
assumptions and estimates. In measuring fair value, the Company makes maximum use of market inputs and
minimizes the use of unobservable inputs.

The Company did not hold any debt securities classified as held-to-maturity or for which the Company would
have elected to apply the fair value option.

2.24 Derivative financial instruments and hedging activities

Derivative financial instruments are initially recognized on the date a derivative contract is entered into and are
subsequently measured at fair value. The method of recognizing the gain or loss resulting from the derivative
instrument depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the
hedge transaction. The Company has designated certain derivatives as hedges of a particular risk associated with
a highly probable forecasted transaction (cash flow hedge).

The Company documents, at inception of the transaction, the relationship between hedging instruments and
hedged items, as well as its risk management objectives and strategy for undertaking various hedging
transactions. The Company also documents its assessment, both at hedge inception and on an ongoing basis, of
whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash
flows of hedged items. Derivative instruments that are not designated as hedges are measured at fair value
through earnings.

Cash Flow Hedge

As part of its ongoing operating, investing and financing activities, the Company enters into certain derivative
transactions that may be designated and may qualify as hedging instruments. To reduce its exposure to U.S.
dollar exchange rate fluctuations, the Company hedges certain Euro-denominated forecasted transactions that
cover at reporting date a large part of its research and development, and selling, general and administrative
expenses as well as a portion of its front-end manufacturing costs of semi-finished goods within cost of sales
through the use of currency forward contracts and currency options, including collars. The Company also
hedges through the use of currency forward contracts certain Singapore dollar-denominated manufacturing
forecasted transactions.

The derivative instruments are designated and qualify for cash flow hedge at inception of the contract and on an
ongoing basis over the duration of the hedge relationship. They are reflected at their fair value as “Other current
assets” or “Other payables and accrued liabilities” in the consolidated balance sheets. The criteria for
designating a derivative as a hedge include the instrument’s effectiveness in risk reduction and a one-to-one
matching of the derivative instrument to its underlying transaction with the critical terms of the hedging
instrument matching the terms of the hedged forecasted transaction. This enables the Company to conclude that
changes in cash flows attributable to the risk being hedged are expected to be substantially offset by the hedging
instruments.

For derivative instruments designated as cash flow hedge, the change in fair value for the effective portion of the
hedge is reported as a component of “Other comprehensive income (loss)” in the consolidated statements of
comprehensive income and is reclassified into earnings in the same period in which the hedged transaction
affects earnings, and within the same consolidated statements of income line as the hedged transaction. For
these derivatives, ineffectiveness appears if the cumulative gain or loss on the derivative hedging instrument
exceeds the cumulative change in the expected future cash flows on the hedged transaction. Effectiveness on
transactions hedged through purchased options is measured on the full fair value of the option, including time
value.

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Derivative financial instruments not designated as a hedge

The Company conducts its business on a global basis in various major international currencies. As a result, the
Company is exposed to adverse movements in foreign currency exchange rates. The Company enters into
foreign currency forward contracts and currency options to reduce its exposure to changes in exchange rates and
the associated risk arising from the denomination of certain assets and liabilities in foreign currencies at the
Company's subsidiaries.

Financial instruments not designated as a hedge are classified as current assets when they are expected to be
realized within twelve months of the balance sheet date. Marked-to-market gains or losses arising from changes
in the fair value of these instruments are reported in the consolidated statements of income within “Other
income and expenses, net” in the period in which they arise, since the transactions for these instruments occur
within the Company’s operating activities.

2.25 Recent accounting pronouncements

(a) Accounting pronouncements effective in 2022
In August 2020, the FASB issued new guidance on distinguishing liabilities from equity and EPS, to simplify an
issuer’s accounting for convertible instruments by eliminating the cash conversion and beneficial conversion
feature models in ASC 470-20 that require separate accounting for embedded conversion features. The guidance
also simplifies the settlement assessment that issuers perform to determine whether a contract in their own
equity qualifies for equity classification. Finally, the guidance requires entities to use in the calculation of the
diluted EPS the if-converted method for all convertible instruments and to include the effect of share settlement
for instruments that may be settled in cash or shares. The new guidance was effective for public companies for
annual periods beginning after December 15, 2021, with early adoption permitted in fiscal years beginning after
December 15, 2020. The guidance could be adopted either on a full retrospective basis or by applying the
modified retrospective approach, with the impact upon transition recorded in retained earnings for existing
instruments outstanding as of the adoption date.
The guidance became effective for the Company on January 1, 2022. The Company adopted the new guidance
by applying the modified retrospective method on instruments outstanding at transition date. These instruments
correspond solely to the dual-tranche senior unsecured convertible bonds issued on August 4, 2020, which are
convertible instruments with cash conversion features in the scope of the new guidance. The impact of the new
guidance on the Company’s consolidated financial statements resulted at adoption date in a $107 million
increase in Long-term debt, to reflect the convertible debt at its $1,500 million nominal value, less $6 million of
unamortized debt issuance costs, and a $15 million decrease in Long-term deferred tax liabilities, with a
corresponding $92 million decrease in equity (composed of a $117 million decrease in Additional paid-in capital
and a $25 million increase in Retained earnings). On subsequent periods, the carrying value of the convertible
bonds, reported on the line Long-term debt of the consolidated balance sheet, is incremented up to its nominal
value over the amortization pattern of the $6 million unamortized debt issuance costs. The Company also
determines the dilutive effect of the convertible bonds by applying the if-converted method, which results in the
fully dilutive effect of the convertible bonds for the total 33,825,000 number of underlying shares.
In November 2021, the FASB issued new guidance on disclosures about government assistance, to increase the
transparency in reporting government assistance, including the disclosure of (1) the types of assistance, (2) an
entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. The
new guidance was effective for public companies for annual periods beginning after December 15, 2021, with
early adoption permitted in fiscal years beginning after December 15, 2020. The guidance became effective for
the Company on January 1, 2022, with no significant impact on its annual disclosures. Relevant disclosures are
included in Note 7.
(b) Accounting pronouncements expected to impact the Company’s operations that are not yet effective
and have not been early adopted by the Company
The Company’s financial statements and operations are not expected to be significantly impacted by any
accounting pronouncements that are not yet effective and not early adopted by the Company.

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3. SHORT-TERM DEPOSITS AND MARKETABLE SECURITIES

To optimize the return yield on its short-term investments, the Company invested $581 million of available cash
in short-term deposits as of December 31, 2022, compared to $291 million as of December 31, 2021. These
short-term deposits represent liquid assets with original maturity beyond three months and no significant risk of
changes in fair value.
Changes in the fair value of marketable securities are detailed in the tables below:

Change in
fair value
December 31, Proceeds included December 31,
2021 Purchase Accretion at maturity in OCI* 2022
U.S. Treasury debt securities — 687 8 — (16) 679
Total — 687 8 — (16) 679

* Other Comprehensive Income

Change in
fair value
December 31, Proceeds included December 31,
2020 Purchase Accretion at maturity in OCI* 2021
U.S. Treasury debt securities 133 — — (132) (1) —
Total 133 — — (132) (1) —

* Other Comprehensive Income

In 2022, the Company invested $687 million available cash in U.S. Treasury bonds. The debt securities have an
average rating of Aaa/AA+/AAA from Moody’s, S&P and Fitch, respectively, with a weighted average maturity
of 3.5 years. The debt securities are reported as current assets on the line “Marketable securities” on the
consolidated balance sheet as of December 31, 2022, since they represented investments of funds available for
current operations. The Company does not intend to sell the investments and it is not more likely than not that
the Company will be required to sell the investments before recovery of the amortized cost basis. The bonds are
classified as available-for-sale financial assets and recorded at fair value as of December 31, 2022. The fair
value measurement corresponds to a Level 1 fair value hierarchy measurement. The aggregate amortized cost
basis of these securities totaled $695 million as of December 31, 2022.

Marketable securities totaling $750 million at principal amount were transferred to financial institutions as part
of short-term securities lending transactions, in compliance with corporate policies. The Company, acting as the
securities lender, does not hold any collateral in this unsecured securities lending transaction. The Company
retains effective control on the transferred securities.

The Company did not hold debt securities as of December 31, 2021.

4. TRADE ACCOUNTS RECEIVABLE, NET

Trade accounts receivable, net consisted of the following:

December 31, December 31,

2022 2021
Trade accounts receivable 1,991 1,778
Current expected credit losses allowance
(“CECLA”) (21) (19)
Total 1,970 1,759

The Company uses a lifetime expected losses allowance for all trade receivables based on failure rates, as
applied to the gross amounts of trade accounts receivable. The allowance also includes reasonable assumptions
about future credit trends. The historical loss rates are adjusted to reflect current and forward-looking
information on macro-economic factors affecting the ability of the Company’s customers to settle the
receivables. In addition to the factors already embedded in the failure rates, as applied on trade accounts
receivable, the Company has identified cyclicality and uncertainties around continued growth for the
semiconductor industry and its serviceable available market to be the most relevant factors. These macro-

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economic factors are weighted into different economic scenarios, in line with estimates and methodologies
applied by other business entities, including financial institutions.

On that basis, the changes in reported CECLA for the year ended December 31, 2022 are presented below:

CECLA As of December 31, 2021 (19)

Current-period adjustment to CECLA (2)
CECLA As of December 31, 2022 (21)

Adjustments to the expected credit losses allowance are reported in the line “Selling, general and
administrative” in the consolidated statements of income.

There were no significant write-offs in 2022, 2021 and 2020.

5. INVENTORIES
Inventories consisted of the following:

December 31, December 31,

2022 2021
Raw materials 349 223
Work-in-process 1,490 1,235
Finished products 744 514
Total 2,583 1,972

Reserve for obsolescence is estimated for excess uncommitted inventories based on history of sales, backlog of
orders and production plans.

6. OTHER CURRENT ASSETS

Other current assets consisted of the following:

December 31, December 31,

2022 2021
Public funding receivables 190 296
Taxes and other government receivables 270 119
Advances and prepayments 125 118
Loans and deposits 10 8
Interest receivable 22 1
Derivative instruments 56 6
Other current assets 61 33
Total 734 581

Derivative instruments are further described in Note 27.

The Company applies a current expected credit losses model on all financial assets measured at amortized cost,
including deposits, loans and receivables. The major portion of other current assets to which this model applies
corresponds to government receivables. Due to the existing history of zero-default on receivables originated by
governments, the expected credit losses are assumed to be not significant as of December 31, 2022 and
December 31, 2021. Other current assets presented in the table above within the lines “Loans and deposits” and
“Other current assets” are composed of individually insignificant amounts at exposure of default. Consequently,
no significant loss allowance was reported on those current assets as of December 31, 2022 and December 31,
2021.

Public funding receivables are described in Note 7.

Taxes and other government receivables include receivables related to value-added tax, primarily in European
tax jurisdictions.

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7. PUBLIC FUNDING

The Company receives public funding mainly from French, Italian and other European Union governmental
entities. Such funding is usually provided to encourage research and innovation activities, industrialization and
other local economic development. Government assistance is generally available to all companies, regardless of
their ownership structure or country of incorporation. The conditions for the receipt of government funding may
include restrictions on eligible expenditures, approval by European Union authorities, annual budget
appropriations, compliance with European Union regulations, royalties or contingent return provisions as well as
specifications regarding objectives and results. Certain specific contracts may imply compliance with extensive
regulatory requirements. They may also set forth conditions relating to the funded programs, including penalties
in case certain conditions are not fulfilled, or repayment obligations.

The main government assistance received by the Company are classified under four general categories: funding
for Research and Development (R&D), R&D and Innovation activities (RDI), funding for First Industrial
Deployment activities (FID) and capital investments for pilot lines and other industrial activities.

The Company also benefits from research tax credits and other tax incentives to foster research and innovation
activities, together with capital investments in certain tax jurisdictions, primarily in France and Italy. These
research tax credits and tax incentive schemes are further described in Note 23. French research tax credits
(“Crédit Impôt Recherche”) and Italian research tax credits (“Credito d’Imposta Ricerca & Sviluppo”) are
deemed to be grants in substance. The Italian research tax credit scheme ended in 2019. The French research tax
credits are to be paid in cash by the taxing authorities within three years in case they are not deducted from
income tax payable during this period of time. The Italian tax credits were compensated against payroll-related
social charges. French and Italian tax credits are reported as a reduction of “Research and development” in the
consolidated statements of income.

Receivables related to public funding totaled $346 million as of December 31, 2022, of which $190 million
reported on the line “Other current assets” and $156 million reported on the line “Other non-current assets”, as
collection is expected beyond 12 months. Research tax credit receivables totaled $294 million and were reported
on the line “Other non-current assets” of the consolidated balance sheet as of December 31, 2022.

Liabilities related to public funding totaled $88 million as of December 31, 2022, of which $37 million advances
from grants reported on the line “Other payables and accrued liabilities” and $51 million reported on the line
“Other long-term liabilities” of the consolidated balance sheet. Long-term liabilities related to public funding
included $46 million grants received mainly as part of the Nano2017 program with the French government,
which is subject to a financial return and depends on future cumulative sales of a certain product group over a
five-year period.

Additionally, $95 million capital investment grants were reported as a reduction of Property, plant and
equipment, net as of December 31, 2022. Tax incentives reducing the carrying amount of Property, plant and
equipment are further described in Note 10 and in Note 23.

For the year ended December 31, 2022, the Company recorded $177 million of public funding related to R&D
and innovation activities, reported on the line “Other income and expenses, net” of the consolidated statement of
income. The research tax credit received in France totaled $106 million and was reported as a reduction of
“Research and development” in the consolidated statement of income for the year ended December 31, 2022.
The Company reported as a reduction of cost of sales in the consolidated statement of income for the year ended
December 31, 2022 a total $59 million amount related to capital investment and industrialization funding
programs.

The impact on depreciation expense of tax incentives received in certain tax jurisdictions and reducing the
carrying amount of “Property, plant and equipment, net”, are further described in Note 10 and in Note 23.

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8. GOODWILL
Goodwill allocated to reportable segments as of December 31, 2022 and 2021 and changes in the carrying
amount of goodwill during the years ended December 31, 2022 and 2021 are as follows:

ADG AMS MDG Total

December 31, 2020 91 2 237 330
Measurement period adjustment — — 1 1
Foreign currency translation (8) — (10) (18)
December 31, 2021 83 2 228 313
Measurement period adjustment — — — —
Foreign currency translation (9) — (7) (16)
December 31, 2022 74 2 221 297

In 2022, 2021 and 2020, no impairment loss was recorded by the Company.

9. OTHER INTANGIBLE ASSETS, NET

Other intangible assets, net consisted of the following:

Gross Accumulated Net

December 31, 2022 Amount Amortization Amount
Technologies & licenses 1,064 (795) 269
Purchased & internally developed software 609 (514) 95
Technologies in progress 41 — 41
Total 1,714 (1,309) 405

Gross Accumulated Net

December 31, 2021 Amount Amortization Amount
Technologies & licenses 1,050 (746) 304
Purchased & internally developed software 567 (485) 82
Technologies in progress 52 — 52
Total 1,669 (1,231) 438

The line “Technologies in progress” in the table above also includes internally developed software under
construction and software not ready for their intended use.

Amortization expense related to intangible assets subject to amortization was $103 million, $93 million and $79
million for the years ended December 31, 2022, 2021 and 2020, respectively.

Estimated future amortization expense related to intangible assets as of December 31, 2022 is as follows:

Year
2023 112
2024 98
2025 72
2026 42
2027 20
Thereafter 61
Total 405

In 2022, the Company recorded a $38 million impairment loss reported in the line “Research and development”
of the consolidated statements of income. The impairment loss was related to certain technologies acquired as
part of one of the Company’s recent business combinations.

In 2021 and 2020, the Company impaired $1 million and $4 million, respectively, of acquired licenses and
technologies with no alternative future use.

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10. PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consisted of the following:

Gross Accumulated Net

December 31, 2022 Amount Depreciation Amount
Land 83 — 83
Buildings 1,116 (563) 553
Facilities & leasehold improvements 3,877 (2,895) 982
Machinery and equipment 18,751 (14,023) 4,728
Computer and R&D equipment 398 (319) 79
Operating lease right-of-use assets 311 (118) 193
Finance lease right-of-use assets 57 (2) 55
Other tangible assets 169 (95) 74
Construction in progress 1,454 — 1,454
Total 26,216 (18,015) 8,201

Gross Accumulated Net

December 31, 2021 Amount Depreciation Amount
Land 84 — 84
Buildings 951 (562) 389
Facilities & leasehold improvements 3,490 (2,936) 554
Machinery and equipment 17,085 (13,786) 3,299
Computer and R&D equipment 395 (333) 62
Operating lease right-of-use assets 314 (114) 200
Other tangible assets 147 (97) 50
Construction in progress 1,022 — 1,022
Total 23,488 (17,828) 5,660

The line “Construction in progress” in the table above includes property, plant and equipment under
construction and equipment under qualification and not ready for their intended use.

In 2022, the Company transferred from construction in progress to definitive long-lived assets, approximately
$650 million corresponding to assets dedicated to its new 300mm fab in Agrate, Italy, where operations started
in December 2022.

The depreciation charge was $1,113 million, $952 million and $844 million in 2022, 2021 and 2020,
respectively.

Tax incentives and capital investment funding reported as a reduction of capital expenditures totaled $25
million, $13 million and $10 million for the years ended December 31, 2022, 2021 and 2020, respectively. Tax
incentives and public funding reduced depreciation charges by $56 million, $61 million and $59 million in
2022, 2021 and 2020, respectively.

Capital investment public funding is described in Note 7. Tax incentives related to capital expenditures is further
described in Note 23.

For the years ended December 31, 2022, 2021 and 2020, the Company sold property, plant and equipment for
cash proceeds of $4 million, $2 million and $4 million, respectively.

There was no significant impairment recognized for the years ended December 31, 2022, 2021 and 2020.

11. LEASES

The Company leases land, buildings, cars and certain equipment (including IT equipment) which have
remaining lease terms between less than one year and 47 years.

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Operating and finance leases consisted of the following:

December 31, December 31,

2022 2021
Right-of-use assets
Operating leases 193 200
Finance Leases 55 —
Total right-of-use assets 248 200
Lease liabilities
Current 59 55
Operating leases 52 55
Finance Leases 7 —
Non-current 191 148
Operating leases 141 148
Finance Leases 50 —
Total lease liabilities 250 203

Maturities of operating lease liabilities are as follows:

Operating Finance December 31,

Leases Leases 2022
2023 57 8 65
2024 40 5 45
2025 27 5 32
2026 19 5 24
2027 12 28 40
Thereafter 86 23 109
Total future undiscounted cash outflows 241 74 315
Effect of discounting (48) (17) (65)
Total operating lease liabilities 193 57 250

Operating and finance lease terms and discount rates are as follows:

December 31, December 31,

2022 2021
Weighted average remaining lease term (in
years) – operating leases 9.46 9.38
Weighted average remaining lease term (in
years) – finance leases 9.89 —
Weighted average discount rate – operating
lease 3.12% 2.69%
Weighted average discount rate – finance
lease 3.86% —

Operating and finance lease cost and cash paid are as follows:

2022 2021
Operating lease cost 62 68
Finance lease cost
Amortization of right-of-use assets 2 —
Interest 1 —
Operating lease cash paid 63 67
Finance lease cash paid — —

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Right-of-use assets obtained in exchange for new operating lease liabilities are as follows:

2022 2021
Operating leases 60 80
Finance leases 55 —

12. LONG-TERM INVESTMENTS

December 31, December 31,

2022 2021
Long-term investments 11 10
Total 11 10

Long-term investments are equity securities with no readily determinable fair value for which the Company has
elected to apply the cost method as a measurement alternative. It includes principally the Company’s investment
in DNP Photomask Europe S.p.A (“DNP”). The Company has identified DNP as a VIE but has determined that
it is not the primary beneficiary. The significant activities of DNP revolve around creation of masks and
development of high level mask technology. The Company does not have the power to direct these activities.
The Company’s current maximum exposure to losses as a result of its involvement with DNP is limited to its
investment. The Company has not provided additional financial support to DNP in 2022 and 2021 and has no
current requirement or intent to provide further financial support to DNP.

13. OTHER NON-CURRENT ASSETS

Other non-current assets consisted of the following:

December 31, December 31,

2022 2021
Equity securities 26 29
Receivables from government agencies 156 124
French research tax credit receivable 294 376
Defined benefit plans 9 15
Prepayments and deposits to third parties 107 21
Derivative instruments 13 —
Other non-current assets 56 74
Total 661 639

Long-term receivables from government agencies, including the French research tax credit scheme, which is
considered to be, in substance, public funding, are described in Note 7.

Prepayments and deposits to third parties include receivables related to long-term supply agreements involving
purchase of raw materials, capacity commitments, cloud-hosting arrangements, and other services.

In 2022 and 2021, and 2020, the Company entered into factoring transactions to accelerate the realization in
cash of certain long-term receivables. The Company sold without recourse $110 million and $118 million of
these receivables in the years ended December 31, 2022 and 2021 respectively, with a financial cost of $1
million for both years.

The major portion of other non-current assets to which the expected credit loss model applies are long-term
State receivables. Due to the existing history of zero-default on receivables originated by governments, the
expected credit losses are assumed to be negligible as of December 31, 2022, and December 31, 2021. Other
non-current assets presented in the table above on the line “Other non-current assets” are composed of
individually not significant amounts not deemed to have exposure of default. Consequently, no significant
expected credit loss allowance was reported on other non-current assets at reporting date.

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14. OTHER PAYABLES AND ACCRUED LIABILITIES

Other payables and accrued liabilities consisted of the following:

December 31, December 31,

2022 2021
Employee related liabilities 599 536
Employee compensated absences 196 181
Taxes other than income taxes 68 58
Advances from customers 225 25
Advances from grants 37 34
Derivative instruments 35 43
Defined benefit and contribution plans 39 34
Royalties 32 29
Current operating lease liabilities 52 55
Deferred and contingent consideration on business
combinations — 27
Others 102 79
Total 1,385 1,101

Derivative instruments are further described in Note 27.

Defined benefit and defined contribution plans and other long-term employee benefits are further described in
Note 16.

Lease liabilities are described in Note 11. In 2022, the Company paid $25 million of deferred and contingent
consideration related to business acquisitions.

Liabilities related to public funding are described in Note 7.

Advances from customers are primarily related to multi-annual capacity reservation and volume commitment
agreements signed in 2022 with certain customers. Some of these arrangements include take-or-pay clauses,
according to which the Company is entitled to receive the full amount of the contractual committed fees in case
of non-compliant orders from those customers. Certain agreements include penalties in case the Company is not
able to fulfill its contractual obligations. No significant provision for those penalties was reported on the
consolidated balance sheet as of December 31, 2022.

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15. LONG-TERM DEBT

Long-term debt consisted of the following:

December 31, December 31,

2022 2021
Funding program loans from European
Investment Bank ("EIB"):
2.67% due 2028, floating interest rate at Euribor +
0.589% 163 202
1.20% due 2029, floating interest rate at Euribor +
0.564% 183 222
1.31% due 2031, floating interest rate at Euribor +
0.583% 322 379
0.89% due 2031, floating interest rate at Euribor +
0.660% 159 187
Credit Facility from Cassa Depositi e Prestiti
SpA ("CDP")
3.15% due 2027, floating interest rate at Euribor +
0.690% 120 156
1.85% due 2027, floating interest rate at Euribor +
0.550% 107 —
2.15% due 2027, floating interest rate at Euribor +
0.850% 107 —
Dual tranche senior unsecured convertible
bonds
Zero-coupon, due 2025 (Tranche A) 748 713
Zero-coupon, due 2027 (Tranche B) 747 674
Finance leases:
3.86% due 2027, fixed interest rate 38 —
3.78% due 2042, fixed interest rate 19 —
Other funding program loans:
0.32% (weighted average), due 2023-2028, fixed
interest rate 4 6
Total long-term debt 2,717 2,539
Less current portion (175) (143)
Total long-term debt, less current portion 2,542 2,396

Long-term debt is denominated in the following currencies:

December 31, December 31,

2022 2021
U.S. dollar 1,495 1,387
Euro 1,222 1,152
Total 2,717 2,539

On August 4, 2020, the Company issued a $1.5 billion principal amount of dual tranche senior unsecured
convertible bonds (Tranche A and Tranche B for $750 million each tranche), due 2025 and 2027, respectively.
Tranche A bonds were issued at 105.8% as zero-coupon bonds while Tranche B bonds were issued at 104.5% as
zero-coupon bonds. The conversion price at issuance was $43.62 for Tranche A equivalent to a 47.5%
conversion premium and $45.10 for Tranche B, equivalent to a 52.5% conversion premium. These conversion
features correspond to an equivalent of 4,585 shares per each Tranche A bond $200,000 par value and an
equivalent of 4,435 shares per each Tranche B bond $200,000 par value. The bonds are convertible by the
bondholders or are callable by the issuer upon certain conditions, on a net-share settlement basis, except if the
issuer elects a full-cash or full-share conversion as an alternative settlement. The net proceeds from the bond
offering were $1,567 million, after deducting issuance costs paid by the Company.

On January 1, 2022, the Company adopted the new guidance on distinguishing liabilities from equity to simplify
an issuer’s accounting for convertible instruments by eliminating the cash conversion and beneficial conversion

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feature models in ASC 470-20. The Company adopted the new guidance by applying the modified retrospective
method on instruments outstanding at transition date. These instruments correspond solely to the dual-tranche
senior unsecured convertible bonds issued on August 4, 2020, which are convertible instruments with cash
conversion features in the scope of the new guidance.

Under previous guidance, proceeds were allocated between debt and equity by measuring first the liability
component and then determining the equity component as a residual amount. The fair value of the liability
component at initial recognition totaled $1,362 million before the allocation of issuance costs and deferred tax
effect. An amount of $215 million, before the allocation of $1 million issuance costs and a $30 million deferred
tax effect, was recorded in equity as the value of the conversion features of the instruments. Under the new
guidance, the Company is no longer required to separately present in equity the cash conversion features
embedded in the convertible bonds. Instead, the convertible bonds are wholly accounted for as debt and thus, are
stated at principal amount less unamortized debt issuance costs. The new guidance does not affect the separation
model for embedded conversion features of convertible debt instruments issued with substantial premium, for
which the premium is required to be recorded as additional paid-in capital. The premium received by the
Company upon issuance of the convertible bonds remains therefore in equity and amounts to $77 million, net of
the corresponding deferred tax effect. The impact upon adoption on the Company’s consolidated financial
statements was a $107 million increase in Long-term debt, to reflect the convertible debt at its $1,500 million
nominal value, less $6 million of unamortized debt issuance costs, and a $15 million decrease in Long-term
deferred tax liabilities, with a corresponding $92 million decrease in equity (composed of a $117 million
decrease in Additional paid-in capital and a $25 million increase in Retained earnings).

As of December 31, 2022, the Company stock price did not exceed the conversion prices of the dual-tranche
senior unsecured convertible bonds issued on August 4, 2020.

On July 3, 2017, the Company issued a $1.5 billion principal amount of dual tranche senior unsecured
convertible bonds (Tranche A and Tranche B for $750 million each tranche), due 2022 and 2024, respectively.
Tranche A bonds were issued at 101.265% as zero-coupon bonds, while Tranche B bonds were issued at par and
bear a 0.25% per annum nominal interest, payable semi-annually. The conversion price at issuance was $20.54,
equivalent to a 37.5% premium on both tranches, which corresponded to 9,737 equivalent shares per each
$200,000 bond par value. The bonds were convertible by the bondholders or were callable by the issuer upon
certain conditions, on a net-share settlement basis, except if the issuer elected a full-cash or full-share
conversion as an alternative settlement. The net proceeds from the bond offering were $1,502 million, after
deducting issuance costs payable by the Company. Based on the former applicable guidance, proceeds were
allocated between debt and equity by measuring first the liability component and then determining the equity
component as a residual amount. The liability component was measured at fair value based on a discount rate
adjustment technique (income approach), which corresponded to a Level 3 fair value hierarchy measurement.
The fair value of the liability component at initial recognition totaled $1,266 million before allocation of
issuance costs and was estimated by calculating the present value of cash flows using a discount rate of 2.70%
and 3.28% (including 0.25% per annum nominal interest), respectively, on each tranche, which were determined
to be consistent with the market rates at the time for similar instruments with no conversion rights. An amount
of $242 million, net of allocated issuance costs of $1 million, was recorded in equity as the value of the
conversion features of the instruments.

The call option available to the Company for the early redemption of Tranche A was exercised in July 2020. As
a consequence, bondholders exercised their conversion rights on Tranche A. As the Company elected to net
share settle the bonds, each conversion exercised by the bondholders followed the process defined in the original
terms and conditions of the senior unsecured convertible bonds, which determined the actual number of shares
to be transferred upon each conversion. The Company settled the bonds upon conversion, by redeeming through
cash the $750 million principal amount, and by settling the residual consideration through the delivery of 11.4
million treasury shares. The Company allocated the total consideration transferred between debt and equity by
measuring at fair value the liability component of Tranche A prior to settlement, then determining the equity
component as a residual amount. The liability component was measured at fair value based on a discount rate
adjustment technique (income approach), which corresponded to a Level 3 fair value hierarchy measurement
and consisted in calculating the present value of cash flows using an average estimated discount rate of 0.8%,
which approximated current market rates for similar bonds with no conversion rights. The fair value of the
liability component as measured prior to extinguishment was $739 million for Tranche A, which generated a
loss amounting to $25 million reported on the line “Loss on financial instruments, net” in the consolidated
statement of income for the year ended December 31, 2020.

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The call option available to the Company for the early redemption of Tranche B was exercised in July 2021. As
a consequence, bondholders exercised their conversion rights on the full Tranche B. Each conversion exercised
by the bondholders followed the process defined in the original terms and conditions of the convertible bonds,
which determined the actual consideration to be transferred to bondholders upon each conversion. Out of the
3,750 bonds composing Tranche B, the Company elected to settle 1,238 bonds on a net-share basis for a total
consideration of $479 million, through the payment of the $248 million nominal value in cash and the delivery
of approximately 5.8 million treasury shares. The remaining 2,512 bonds were settled on a full cash basis for a
total consideration of $1,015 million. The Company allocated the total consideration transferred between debt
and equity by measuring at fair value the liability component of Tranche B prior to settlement, then determining
the equity component as a residual amount. The liability component was measured at fair value based on a
discount rate adjustment technique (income approach), which corresponded to a Level 3 fair value hierarchy
measurement and consisted in calculating the present value of cash flows using an average estimated discount
rate of 1.1%, which approximated current market rates for similar bonds that have no conversion rights. The fair
value of the liability component as measured prior to extinguishment was $689 million for the full Tranche B,
which generated a loss amounting to $44 million, in addition to $1 million write-off of unamortized debt
issuance costs, reported on the line “Loss on financial instruments, net” in the consolidated statement of income
for the year ended December 31, 2021.

Aggregate future maturities of total long-term debt (including current portion) at principal amount are as
follows:

December 31,
2022
2023 175
2024 172
2025 922
2026 172
2027 908
Thereafter 373
Total 2,722

The difference between the total aggregated future maturities in the preceding table and the total carrying
amount of long-term debt is due to unamortized issuance costs on the dual tranche senior unsecured convertible
bonds.

Credit facilities
The Company’s long-term debt contained standard conditions but does not impose minimum financial ratios.
The Company had unutilized committed medium-term credit facilities with core relationship banks totalling
$1,281 million as of December 31, 2022.

The EIB Loans are comprised of three long-term amortizing credit facilities as part of R&D funding
programs. The first one, signed in August 2017, is a €500 million loan in relation to R&D and capital
expenditures in the European Union for the years 2017 and 2018. The entire amount was fully drawn in Euros
corresponding to $346 million outstanding as of December 31, 2022. The second one, signed in 2020, is a €500
million credit facility agreement with EIB to support R&D and capital expenditure programs in Italy and France.
The amount was fully drawn in Euros representing $481 million outstanding as of December 31, 2022. In 2022,
the Company signed a third long-term amortizing credit facility with EIB of €600 million, out of which, no
amount had been drawn as of December 31, 2022.

The CDP loans are comprised of two long-term credit facilities. The first, signed in 2021, is a €150 million loan,
fully drawn in Euros, of which $120 million were outstanding as of December 31, 2022. The second one, signed
in 2022, is a €200 million loan, fully drawn in Euros, of which $214 million was outstanding as of December
31, 2022.

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16. POST-EMPLOYMENT AND OTHER LONG-TERM EMPLOYEES BENEFITS

The Company and its subsidiaries have a number of defined benefit pension plans, mainly unfunded, and other
long-term employees’ benefits covering employees in various countries. The defined benefit plans provide
pension benefits based on years of service and employee compensation levels. The other long-term employees’
plans provide benefits due during the employees’ period of service after certain seniority levels. The Company
uses December 31 as measurement date for its plans. Eligibility is generally determined in accordance with local
statutory requirements. For Italian termination indemnity plan (“TFR”), generated before July 1, 2007, the
Company measures the vested benefits to which Italian employees are entitled as if the amounts were
immediately due as of December 31, 2022, in compliance with U.S. GAAP guidance on determining vested
benefit obligations for defined benefit pension plans.

The changes in benefit obligation and plan assets were as follows:

Pension Benefits Other Long-Term Benefits

December 31, December 31, December 31, December 31,
2022 2021 2022 2021
Change in benefit obligation:
Benefit obligation at beginning of year 1,165 1,216 94 101
Service cost 33 36 17 13
Interest cost 27 21 1 1
Employee contributions 4 4 — —
Benefits paid (22) (25) (6) (5)
Effect of settlement (14) (8) — —
Business combination — 3 — —
Actuarial (gain) loss (260) (48) (15) —
Foreign currency translation and other
adjustments (47) (34) (5) (16)
Benefit obligation at end of year 886 1,165 86 94

Change in plan assets:

Plan assets at fair value at beginning of year 743 718 — —
Return on plan assets (157) 32 — —
Employer contributions 25 17 — —
Employee contributions 4 4 — —
Benefits paid (9) (12) — —
Effect of settlement (14) (8) — —
Business combination — 2 — —
Foreign currency translation and other
adjustments (25) (10) — —
Plan assets at fair value at end of year 567 743 — —
Funded status (319) (422) (86) (94)

The actuarial gains in 2022 were primarily due to an increase in discount rates applied against future expected
benefit payments and resulted in a decrease of the benefit obligation mainly for the plans located in France, in
the United States and Switzerland. The actuarial gains in 2021 were primarily due to an increase in discount
rates applied against future expected benefit payments and resulted in a decrease of the benefit obligation
mainly for the plans located in France, in the United Kingdom and in the United States.

Net amount recognized in the consolidated balance sheets consisted of the following:

Pension Benefits Other Long-Term Benefits

December 31, December 31, December 31, December 31,
2022 2021 2022 2021
Non-current assets 9 15 — —
Current liabilities (11) (11) (5) (4)
Long-term liabilities (317) (426) (81) (90)
Net amount recognized (319) (422) (86) (94)

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Pension plans net assets are reported in the Company’s consolidated balance sheets in the line “Other non-
current assets” while current and non-current liability positions are reported in the lines “Other payables and
accrued liabilities” and “Post-employment benefit obligations” respectively.

Other long-term benefits current and non-current net liability positions are reported in our consolidated balance
sheets in the lines “Other payables and accrued liabilities” and “Other long-term liabilities” respectively.

The components of accumulated other comprehensive loss (income) before tax effects were as follows:

Actuarial Prior service

(gains)/losses cost Total
Accumulated other comprehensive loss as of
December 31, 2020 216 3 219
Net amount generated/arising in current year (56) — (56)
Amortization (12) (1) (13)
Foreign currency translation adjustment (6) — (6)
Accumulated other comprehensive loss as of
December 31, 2021 142 2 144
Net amount generated/arising in current year (84) — (84)
Amortization (3) (1) (4)
Foreign currency translation adjustment (10) — (10)
Accumulated other comprehensive loss as of
December 31, 2022 45 1 46

The accumulated benefit obligations were as follows:

Pension Benefits Other Long-Term Benefits

December 31, December 31, December 31, December 31,
2022 2021 2022 2021
Accumulated benefit obligations 778 1,004 25 79

For pension plans and other long-term benefits with accumulated benefit obligations in excess of plan assets, the
accumulated benefit obligation and fair value of plan assets were $409 million and $139 million, respectively, as
of December 31, 2022 and $528 million and $134 million, respectively, as of December 31, 2021.

For pension plans with projected benefit obligations in excess of plan assets, the benefit obligation and fair
value of plan assets were $839 million and $427 million, respectively, as of December 31, 2022 and $1,030
million and $499 million, respectively, as of December 31, 2021.

The components of the net periodic benefit cost included the following:

Pension Benefits Other Long-term Benefits

Year ended Year ended Year ended Year ended Year ended Year ended
December 31, December 31, December 31, December 31, December 31, December 31,
2022 2021 2020 2022 2021 2020
Service cost 33 36 31 17 13 11
Interest cost 27 21 21 1 1 1
Expected return on plan assets (23) (24) (23) — — —
Amortization of actuarial net loss
(gain) 6 12 12 (14) — 3
Amortization of prior service cost 1 1 1 — — —
Effect of settlement — — 1 — — —
Net periodic benefit cost 44 46 43 4 14 15

Pension benefits components other than service cost, recognized outside of Operating income in “Other
components of pension benefit costs” in the Company’s consolidated statements of income, were $11 million,
$10 million and $12 million in the years ended December 31, 2022, 2021 and 2020, respectively.

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The weighted average assumptions used in the determination of the benefit obligation and the plan assets for the
pension plans and the other long-term benefits were as follows:

Assumptions 2022 2021

Discount rate 4.18% 1.84%
Salary increase rate 2.31% 2.27%
Expected long-term rate of return on funds for
the pension expense of the following year 2.66% 3.19%

The weighted average assumptions used in the determination of the net periodic benefit cost for the pension
plans and the other long-term benefits were as follows:

Assumptions 2022 2021 2020

Discount rate 1.84% 1.45% 1.95%
Salary increase rate 2.27% 2.43% 2.48%
Expected long-term rate of return on funds for
the pension expense of the year 3.19% 3.44% 4.04%

The discount rate was determined by reference to market yields on high quality long-term corporate bonds
applicable to the respective country of each plan, with terms consistent with the terms of the benefit obligations.
In developing the expected long-term rate of return on assets, the Company modelled the expected long-term
rates of return for broad categories of investments held by the plan against a number of various potential
economic scenarios.

The Company’s pension plan asset allocation as of December 31, 2022 and December 31, 2021 is as follows:

Percentage of Plan Assets

as of December 31,
Asset Category 2022 2021
Cash and cash equivalents 1% 1%
Equity securities 17% 17%
Government debt securities 10% 12%
Corporate debt securities 21% 22%
Investments in funds(a) 16% 21%
Real estate 1% 1%
Other (mainly insurance assets – contracts and
reserves) 34% 26%
Total 100% 100%

(a) As of December 31, 2022, investments in funds were composed of commingled and multi-strategy funds
invested in diversified portfolios of fixed income (79%) - mainly corporate bonds, time deposits and
money market (11%) and other instruments (10%). As of December 31, 2021, investments in funds were
composed of commingled and multi-strategy funds invested in diversified portfolios of fixed income
(73%) - mainly corporate bonds, equity (15%) and other instruments (12%).

As of December 31, 2022, the Company’s plan asset allocation was in line with the targets set for each plan.

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The Company’s detailed pension plan asset allocation including the fair-value measurements of those plan
assets as of December 31, 2022 is as follows:

Quoted
Prices in
Active
Markets Significant
for Other Significant
Identical Observable Unobservable
Assets Inputs Inputs
Total (Level 1) (Level 2) (Level 3)
Cash and cash equivalents 4 4 — —
Equity securities 95 1 94 —
Government debt securities 59 — 59 —
Corporate debt securities 120 — 98 22
Investment funds 87 1 86 —
Real estate 6 — 6 —
Other (mainly insurance assets –
contracts and reserves) 194 — 38 156
TOTAL 565 6 381 178

The Company’s detailed pension plan asset allocation including the fair-value measurements of those plan
assets as of December 31, 2021 is as follows:

Quoted
Prices in
Active
Markets Significant
for Other Significant
Identical Observable Unobservable
Assets Inputs Inputs
Total (Level 1) (Level 2) (Level 3)
Cash and cash equivalents 5 5 — —
Equity securities 130 2 128 —
Government debt securities 87 — 87 —
Corporate debt securities 164 — 139 25
Investment funds 156 1 155 —
Real estate 10 — 10 —
Other (mainly insurance assets –
contracts and reserves) 191 — 49 142
TOTAL 743 8 568 167

The fair value of insurance contracts is based on the value of the assets held by the provider. The approach is
consistent with prior years.

For plan assets measured at fair value using significant unobservable inputs (Level 3), the reconciliation
between January 1, 2022 and December 31, 2022 is presented as follows:

Fair Value
Measurements
using
Significant
Unobservable
Inputs
(Level 3)
January 1, 2022 167
Contributions (employer and employee) 21
Net benefit payments (a) 9
Settlements (14)
Foreign currency translation adjustment (5)
December 31, 2022 178

(a) Net cash flows between benefits paid from the insurance contracts and benefits transferred into the
insurance contracts by employees.

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For plan assets measured at fair value using significant unobservable inputs (Level 3), the reconciliation
between January 1, 2021 and December 31, 2021 is presented as follows:

Fair Value
Measurements
using
Significant
Unobservable
Inputs
(Level 3)
January 1, 2021 162
Contributions (employer and employee) 15
Actual return on plan assets 2
Net benefit payments (a) 1
Settlements (8)
Foreign currency translation adjustment (5)
December 31, 2021 167

(a) Net cash flows between benefits paid from the insurance contracts and benefits transferred into the
insurance contracts by employees.

The Company’s investment strategy for its pension plans is to optimize the long-term investment return on plan
assets in relation to the liability structure to maintain an acceptable level of risk while minimizing the cost of
providing pension benefits and maintaining adequate funding levels in accordance with applicable rules in each
jurisdiction. The Company’s practice is to periodically conduct a review of its asset allocation strategy, in such a
way that the asset allocation is in line with the targeted asset allocation within reasonable boundaries. The
Company’s asset portfolios are managed in such a way as to achieve adapted diversity. The Company does not
manage any assets internally.

After considering the funded status of the Company’s defined benefit plans, movements in the discount rate,
investment performance and related tax consequences, the Company may choose to make contributions to its
pension plans in any given year in excess of required amounts. The Company’s contributions to plan assets were
$25 million in 2022 and $17 million in 2021 and the Company expects to contribute $30 million to plan assets
in 2023.

The Company’s estimated future benefit payments as of December 31, 2022 are as follows:

Other
Pension Long-term
Years Benefits Benefits
2023 41 5
2024 46 6
2025 57 9
2026 70 8
2027 51 9
From 2028 to 2032 319 43

The Company has certain defined contribution plans, which accrue benefits for employees on a pro-rata basis
during their employment period based on their individual salaries. The Company’s accrued benefits related to
defined contribution pension plans for $24 million as of December 31, 2022 and $23 million as of December 31,
2021. The annual cost of these plans amounted to approximately $100 million in 2022, $101 million in 2021 and
$91 million in 2020.

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17. OTHER LONG-TERM LIABILITIES

Other long-term liabilities consisted of the following:

December 31, December 31,

2022 2021
Non-current operating lease liabilities 141 148
Contingent consideration on business combinations 31 70
Other long-term employee benefits 81 90
Long-term liabilities related to public funding 51 44
Long-term advances from customers 73 —
Derivative instruments 4 —
Others 73 64
Total 454 416

Lease liabilities are described in Note 11.

Deferred and contingent consideration related to business acquisitions are further described in Note 27.

Other long-term employee benefits are described in Note 16.

Long-term liabilities related to public funding are described in Note 7.

Advances from customers are described in Note 14 and Note 19.

Derivative instruments are described in Note 27.

Other long-term liabilities also include individually not significant amounts as of December 31, 2022 and
December 31, 2021, presented cumulatively in the line “Others”.

18. SHAREHOLDERS’ EQUITY

18.1 Outstanding shares
The authorized share capital of the Company is Euro 1,810 million consisting of 1,200,000,000 common shares
and 540,000,000 preference shares, each with a nominal value of €1.04. As of December 31, 2022, the number
of shares of common stock issued was 911,281,920 shares (911,276,920 as of December 31, 2021).

As of December 31, 2022, the number of shares of common stock outstanding was 903,865,763 (906,518,057 as
of December 31, 2021).

18.2 Preference shares

The 540,000,000 preference shares, when issued, will entitle a holder to full voting rights and to a preferential
right to dividends and distributions upon liquidation.

The Company is a party to an option agreement regarding the preference shares with Stichting Continuïteit ST
(the “Stichting”), entered into on January 22, 2007, with a duration of ten years, which agreement was extended
for another ten years in October 2016. The Managing Board and Supervisory Board, along with the board of the
Stichting, have declared that they are jointly of the opinion that the Stichting is independent of the Company.
The option agreement provides for the issuance of up to a maximum 540,000,000 preference shares. Any such
shares would be issued to the Stichting upon its request and in its sole discretion and upon payment of at least
25% of the par value of the preference shares to be issued. The shares would be issuable in the event of actions
which the board of the Stichting determines would be contrary to the Company’s interests, shareholders and
other stakeholders and which in the event of a creeping acquisition or offer for the Company’s common shares
are not supported by the Company’s Managing Board and Supervisory Board. The preference shares may
remain outstanding for no longer than two years. The effect of the preference shares may be to deter potential
acquirers from effecting an unsolicited acquisition resulting in a change of control as well as to create a level-
playing field in the event actions which are considered to be hostile by the Company’s Managing Board and

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Supervisory Board, as described above, occur and which the board of the Stichting determines to be contrary to
the Company’s interests, shareholders and other stakeholders.

There were no preference shares issued as of December 31, 2022 and December 31, 2021 respectively.

18.3 Treasury stock

As of December 31, 2022, the Company owned 7,416,157 shares classified as treasury stock in the consolidated
statement of equity compared to 4,758,863 shares as of December 31, 2021.

The treasury shares have been originally designated for allocation under the Company’s share-based
remuneration programs. As of December 31, 2022, 74,520,215 of these treasury shares were transferred to
employees under the Company’s share-based remuneration programs, of which 6,587,002 during the year ended
December 31, 2022.

On July 1, 2021, the Company announced the launch of a share buy-back program of up to $1,040 million to be
executed within a three-year period. During 2022, the Company repurchased approximately 9.2 million shares
of its common stock for a total amount of $346 million.

18.4 Unvested share awards for the Supervisory Board

On an annual basis and until the year 2012, the Compensation Committee (on behalf of the Supervisory Board
and with its approval) used to grant stock-based awards (options to acquire common shares of the Company) to
the members and professionals of the Supervisory Board (“The Supervisory Board Plan”). The awards were
granted at the nominal value of the share of €1.04 (exercise price of the option). The options granted under the
Supervisory Board Plan vested and became exercisable immediately, while the shares resulting from these
awards vested and therefore became available for trade evenly over three years (one third every year), with no
market, performance or service conditions.

At the Company’s AGM held on June 21, 2013, it was resolved to abolish and terminate the stock-based
compensation for the Supervisory Board members and professionals.

The table below summarizes grants under the outstanding stock award plans, as authorized by the Compensation
Committee:

Options
Options waived
Year of grant granted at grant
2011 172,500 (30,000)
2012 180,000 (22,500)
Since 2013 No options granted

A summary of the options’ activity by plan for the years ended December 31, 2022 and December 31, 2021 is
presented below:

Outstanding Outstanding Outstanding

as of as of as of
December Expired / December Expired / December
Year of grant 31, 2020 Exercised Cancelled 31, 2021 Exercised Cancelled 31, 2022
2011 7,500 (7,500) — — — — —
2012 50,000 (30,000) — 20,000 (5,000) (15,000) —

The total intrinsic value of options exercised during the year 2022 were not significant, compared to $2 million
in 2021 and $2 million in 2020. The total intrinsic value of options outstanding was $1 million as of December
31, 2021.

18.5 Unvested share awards for the employees

On an annual basis, the Compensation Committee (on behalf of the Supervisory Board and with its approval)
grants stock-based awards to the senior executives and selected employees (the “Employee Plan”). The awards

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are granted for services under the Employee Plan. There are two types of unvested shares: (1) shares granted to
employees, which are subject only to service conditions and vest over the requisite service period, and (2) shares
granted to senior executives, whose vesting is subject to performance conditions.
For plans 2019 and 2020, the performance conditions consisted of two external targets (sales evolution and
operating income compared to a basket of competitors) weighting for two thirds of the total number of awards
granted and of one internal target (return on net assets compared to the previous period), weighting for one third
of the total number of awards granted. For plans 2021 and 2022, the performance conditions consisted of two
external targets (sales evolution and operating income compared to a basket of competitors) weighting for two
thirds of the total number of awards granted and of one internal target (Company’s sustainability and diversity
performance), weighting for one third of the total number of awards granted.
Stock awards usually vest over a three-year service period (32% as of the first anniversary of the grant, 32% as
of the second anniversary of the grant and 36% as of the third anniversary of the grant). In addition, for each of
the years 2019 and 2020, a Special Bonus was granted to the Company’s CEO.

The table below summarizes grants under the outstanding stock award plans in 2022, as authorized by the
Compensation Committee:

Number of
shares lost on
Number of Number of performance
Date of grant Plan name shares granted shares waived conditions
May 23, 2019 2019 CEO Special Bonus 34,960 — —
July 24, 2019 2019 Employee Plan 7,752,940 — (1,161,966)
December 26, 2019 2019 Employee Plan 246,750 — (17,013)
June 17, 2020 2020 CEO Special Bonus 16,000 — —
July 23, 2020 2020 Employee Plan 7,437,580 — —
December 24, 2020 2020 Employee Plan 562,350 — —
July 28, 2021 2021 Employee Plan 6,327,205 — (920,263)
December 21, 2021 2021 Employee Plan 213,270 — (60,483)
July 27, 2022 2022 Employee Plan 6,243,670 — (*)
December 22, 2022 2022 Employee Plan 287,675 — (*)

(*) As of the date of issuance of these consolidated financial statements, a final decision by the
Compensation Committee of the Supervisory Board on the achievement of the performance
conditions had not been made yet.

A summary of the unvested share activity by plan for the year ended December 31, 2022 is presented below:

Unvested as at Cancelled on Unvested as at

December 31, Forfeited / failed vesting December 31,
Unvested Shares 2021 Granted waived conditions Vested 2022
2019 CEO Special Bonus 11,652 — — — (11,652) —
2019 Employee Plan 2,356,399 — (10,988) — (2,345,411) —
2020 CEO Special Bonus 10,667 — — — (5,333) 5,334
2020 Employee Plan 5,325,666 — (52,350) — (2,492,520) 2,780,796
2021 Employee Plan 6,497,505 — (65,958) (980,746) (1,751,287) 3,699,514
2022 Employee Plan — 6,531,345 (34,820) — — 6,496,525
Total 14,201,889 6,531,345 (164,116) (980,746) (6,606,203) 12,982,169

The grant date fair value of unvested shares granted to the CEO under the 2019 CEO Special Bonus Plan was
$14.97, which was based on the market price of the shares at the date of the grant.

The grant date weighted average fair value of unvested shares granted to employees under the 2019 Employee
Plan was $19.28. On March 25, 2020, the Compensation Committee approved the statement that with respect to
the shares subject to performance conditions, two performance conditions were fully met. Consequently, the
compensation expense recorded on the 2019 Employee Plan reflects the statement that – for the portion of
shares subject to performance conditions – two thirds of the awards granted will fully vest, as far as the service
condition is met.

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The grant date fair value of unvested shares granted to the CEO under the 2020 CEO Special Bonus Plan was
$26.64, which was based on the market price of the shares at the date of the grant.

The grant date weighted average fair value of unvested shares granted to employees under the 2020 Employee
Plan was $30.17. On March 24, 2021, the Compensation Committee approved the statement that with respect to
the shares subject to performance conditions, all three performance conditions were fully met. Consequently,
the compensation expense recorded on the 2020 Employee Plan reflects the statement that – for the portion of
shares subject to performance conditions – 100% of the awards granted will fully vest, as far as the service
condition is met.

The grant date weighted average fair value of unvested shares granted to employees under the 2021 Employee
Plan was $39.20. On March 23, 2022, the Compensation Committee approved the statement that with respect to
the shares subject to performance conditions, two performance conditions were fully met. Consequently, the
compensation expense recorded on the 2021 Employee Plan reflects the statement that – for the portion of
shares subject to performance conditions – two thirds of the awards granted will fully vest, as far as the service
condition is met.

The grant date weighted average fair value of unvested shares granted to employees under the 2022 Employee
Plan was $35.92. Moreover, for the portion of the shares subject to performance conditions (2,705,521 shares)
the Company estimated the number of awards expected to vest by assessing the probability of achieving the
performance conditions. As of the date of issuance of these consolidated financial statements, a final
determination by the Compensation Committee of the Supervisory Board of the achievement of the performance
conditions had not been made yet by the Compensation Committee of the Supervisory Board. The Company
estimated that 100% of the awards subject to performance conditions are expected to vest. Consequently, the
compensation expense recorded for the 2022 Employee Plan reflects the vesting of the 100% of the awards
granted with performance conditions, subject to the service condition being met. The assumption of the expected
number of awards to be vested upon achievement of the performance conditions is subject to changes based on
the final measurement of the conditions, which is expected to occur in the first half of 2023.

The following table illustrates the classification of pre-payroll tax and social contribution stock-based
compensation expense included in the consolidated statements of income for the years ended December 31,
2022, 2021 and 2020:

December 31, December 31, December 31,

2022 2021 2020

Cost of sales 34 34 25
R&D 69 70 51
SG&A 112 117 79
Total pre-payroll tax and social contribution
compensation 215 221 155

The grant date fair value of the shares that vested in 2022 was $189 million compared to $181 million in 2021
and $141 million in 2020.

Stock-based compensation, excluding payroll tax and social contribution, capitalized as part of inventory was
$11 million as of December 31, 2022, compared to $9 million as of December 31, 2021 and $6 million as of
December 31, 2020. As of December 31, 2022, there was $228 million of total unrecognized compensation cost
related to the grant of unvested shares, which is expected to be recognized over a weighted average period of
approximately 9 months.

The total deferred income tax benefit recognized in the consolidated statements of income related to unvested
share-based compensation expense amounted to $15 million, $14 million and $10 million for the years ended
December 31, 2022, 2021 and 2020, respectively.

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18.6 Accumulated other comprehensive income (loss) attributable to parent company

stockholders
The table below details the changes in AOCI attributable to the company’s stockholders by component, net of
tax, for the years ended December 31, 2022, 2021 and 2020:

Gains (Losses) Foreign Currency

Gains (Losses) on Available- Defined Benefit Translation
on Cash Flow For-Sale Pension Plan Adjustments
Hedges Securities Items (“CTA”) Total
December 31, 2019 (3) 1 (223) 646 421
Cumulative tax impact — — 54 — 54
December 31, 2019, net of tax (3) 1 (169) 646 475
OCI before reclassifications 64 — (22) 203 245
Amounts reclassified from AOCI — — 14 — 14
OCI for the year ended December 31,
2020 64 — (8) 203 259
Cumulative tax impact (8) — (3) — (11)
OCI for the year ended December 31,
2020,
net of tax 56 — (11) 203 248
December 31, 2020 61 1 (231) 849 680
Cumulative tax impact (8) — 51 — 43
December 31, 2020, net of tax 53 1 (180) 849 723
OCI before reclassifications (90) (1) 56 (189) (224)
Amounts reclassified from AOCI (19) — 13 — (6)
OCI for the year ended December 31,
2021 (109) (1) 69 (189) (230)
Cumulative tax impact 14 — (11) — 3
OCI for the year ended December 31,
2021,
net of tax (95) (1) 58 (189) (227)
December 31, 2021 (48) — (162) 660 450
Cumulative tax impact 6 — 40 — 46
December 31, 2021, net of tax (42) — (122) 660 496
OCI before reclassifications (126) (16) 80 (149) (211)
Amounts reclassified from AOCI 197 — 4 — 201
OCI for the year ended December 31,
2022 71 (16) 84 (149) (10)
Cumulative tax impact (9) 2 (19) — (26)
OCI for the year ended December 31,
2022,
net of tax 62 (14) 65 (149) (36)
December 31, 2022 23 (16) (78) 511 440
Cumulative tax impact (3) 2 21 — 20
December 31, 2022, net of tax 20 (14) (57) 511 460

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Items reclassified out of Accumulated Other Comprehensive Income for the years ended December 31, 2022,
2021, 2020 are listed in the table below:

Amounts Amounts Amounts

reclassified reclassified reclassified
from from from
AOCI in the AOCI in the AOCI in the
year ended year ended year ended Affected line item in the
December 31, December 31, December 31, statement where
Details about AOCI components 2022 2021 2020 net income (loss) is presented
Gains (Losses) on Cash Flow
Hedges
Foreign exchange derivative
contracts (129) 15 (3) Cost of sales
Foreign exchange derivative Selling, general and
contracts (15) 1 1 administrative
Foreign exchange derivative
contracts (53) 3 2 Research and development
27 (3) — Income tax benefit (expense)
(170) 16 — Net of tax
Defined Benefit Pension Plan
Items
Amortization of actuarial gains Other components of
(losses) (3) (12) (13) pension benefit costs
Amortization of prior service cost Other components of
(1) (1) (1) pension benefit costs
1 2 3 Income tax benefit (expense)
(3) (11) (11) Net of tax
Total reclassifications for the year (173) 5 (11)
Attributable to noncontrolling
interest — — —
Attributable to the parent
company
stockholders (173) 5 (11)

18.7 Dividends
The AGM held on May 25, 2022, authorized the distribution of a cash dividend of $0.24 per outstanding share
of the Company’s common stock, to be distributed in quarterly installments of $0.06 in each of the second, third
and fourth quarters of 2022 and first quarter of 2023. An amount of $55 million corresponding to the first
installment, $54 million corresponding to the second installment and $48 million corresponding to the third
installment were paid as of December 31, 2022. The amounts of $6 million corresponding to the remaining
portion of the third installment and $54 million corresponding to the last installment were presented in the line
“Dividends payable to stockholders” in the consolidated balance sheet as of December 31, 2022.
The AGM held on May 27, 2021 authorized the distribution of a cash dividend of $0.24 per outstanding share of
the Company’s common stock, to be distributed in quarterly installments of $0.06 in each of the second, third
and fourth quarters of 2021 and first quarter of 2022. The amounts of $54 million corresponding to the first
installment, $55 million corresponding to the second installment and $54 million corresponding to the third
installment were paid as of December 31, 2021. An amount of $55 million corresponding to the fourth
installment was paid in 2022.
The AGM held on June 17, 2020 authorized the distribution of a cash dividend of $0.168 per outstanding share
of the Company’s common stock, to be distributed in quarterly installments of $0.042 in each of the second,
third and fourth quarters of 2020 and first quarter of 2021. An amount of $37 million corresponding to the first
installment, $38 million corresponding to the second installment and $34 million corresponding to the third
installment were paid as of December 31, 2020. The remaining $4 million portion of the third installment and
the fourth installment of $38 million, were paid in 2021.

The AGM held on May 31, 2019 authorized the distribution of a cash dividend of $0.24 per outstanding share of
the Company’s common stock, to be distributed in quarterly installments of $0.06 in each of the second, third

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and fourth quarters of 2019 and first quarter of 2020. The amounts of $53 million corresponding to the first
installment, $53 million corresponding to the second installment and $48 million corresponding to the third
installment were paid as of December 31, 2019. The remaining portion of $6 million related to the third
installment and the last installment of $54 million were paid in 2020.

19. REVENUES
19.1 Nature of goods and services
The Company designs, develops, manufactures and markets a broad range of products, including discrete and
standard commodity components, application-specific integrated circuits (“ASICs”), full-custom devices and
semi-custom devices and application specific standard products (“ASSPs”) for analog, digital and mixed-signal
applications. In addition, the Company participates in the manufacturing value chain of smartcard products,
which includes the production and sale of both silicon chips and smartcards.

The principal activities – separated by reportable segments – from which the Company generates its revenues
are described in Note 20.

Other revenues consist of license revenue, service revenue related to transferring licenses, patent royalty
income, sale of scrap materials and manufacturing by-products.

While the majority of the Company’s sales agreements contain standard terms and conditions, the Company
may, from time to time, enter into agreements that contain multiple performance obligations or terms and
conditions. Those agreements concern principally the revenues from services, where the performance obligation
is satisfied over time. The objective when allocating the transaction price is to allocate the transaction price to
each performance obligation (or distinct good or service) in an amount that depicts the amount of consideration
to which the Company expects to be entitled in exchange for transferring the promised goods or services to the
customer.

19.2 Revenue recognition and disaggregation

The Company recognizes revenue from products sold to a customer, including distributors, when it satisfies a
performance obligation at a point in time by transferring control over a product to the customer. This usually
occurs at the time of shipment. The performance obligations linked to the sale of goods contracts usually have
original expected length of less than one year. The transaction price is determined based on the contract terms,
adjusted for price protection, if applicable. The revenues from services are usually linked to performance
obligations transferred over time and are recognized in line with the contract terms.
In 2022, the Company signed several multi-annual capacity reservation and volume commitment arrangements
with certain customers. These agreements constitute a binding commitment for the customers to purchase and
for the Company to supply allocated commitment volumes in exchange for additional consideration. The
consideration related to commitment fees is reported as revenues from sale of products as it is usually based on
delivered quantities. Advances from customers received as part of those agreements are described in Note 14
and Note 17.

The payment terms typically range between 30 and 90 days.

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The Company’s consolidated net revenues disaggregated by reportable segment are presented in Note 20. The
following tables present the Company’s consolidated net revenues disaggregated by geographical region of
shipment, nature and market channel:

Year ended
December December December
31, 2022 31, 2021 31, 2020
Net revenues by geographical region of
shipment(1)
EMEA 3,619 2,557 1,966
Americas 2,310 1,525 1,165
Asia Pacific 10,199 8,679 7,088
Total net revenues 16,128 12,761 10,219
Net revenues by nature
Revenues from sale of products 15,953 12,560 10,049
Revenues from sale of services 130 169 132
Other revenues 45 32 38
Total net revenues 16,128 12,761 10,219
Net revenues by market channel(2)
Original Equipment Manufacturers (“OEM”) 10,764 8,486 7,411
Distribution 5,364 4,275 2,808
Total net revenues 16,128 12,761 10,219

(1) Net revenues by geographical region of shipment are classified by location of customer invoiced or reclassified by
shipment destination in line with customer demand. For example, products ordered by U.S.-based companies to be
invoiced to Asia Pacific affiliates are classified as Asia Pacific revenues. Furthermore, the Company, among the
different periods, may be affected by shifts in shipments from one location to another, as requested by customers.
(2) Original Equipment Manufacturers (“OEM”) are the end-customers to which the Company provides direct marketing
application engineering support, while Distribution refers to the distributors and representatives that the Company
engages to distribute its products around the world.

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an
original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the
amount to which the Company has the right to invoice for services performed.

In 2022, 2021 and 2020, the Company’s largest customer, Apple represented 16.8%, 20.5% and 23.9% of
consolidated net revenues, respectively, reported in the ADG, AMS and MDG segments.

20. SEGMENT INFORMATION

The Company designs, develops, manufactures and markets a broad range of products, including discrete and
standard commodity components ASICs, full custom devices and semi-custom devices and ASSPs for analog,
digital, and mixed-signal applications. In addition, the Company further participates in the manufacturing value
chain of smartcard products, which includes the production and sale of both silicon chips and smartcards.

The Company’s reportable segments are as follows:

• Automotive and Discrete Group (ADG), comprised of dedicated automotive integrated circuits (“ICs”),
and discrete and power transistor products.
• Analog, MEMS and Sensors Group (AMS), comprised of analog, smart power, MEMS sensors and
actuators, and optical sensing solutions.
• Microcontrollers and Digital ICs Group (MDG), comprised of general-purpose microcontrollers and
microprocessors, connected security products (e.g. embedded secured elements and NFC readers),
memories (e.g. serial and page EEPROM) and RF and Communications products.

Effective July 1, 2022, the Low Power RF business unit was transferred from AMS (within the Analog sub-
group) to MDG (within the Microcontrollers and Memories sub-group) with no significant impact on the
Company’s segment reporting. Prior year periods have been adjusted accordingly.

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For the computation of the segments’ internal financial measurements, the Company uses certain internal rules
of allocation for the costs not directly chargeable to the segments, including cost of sales, SG&A expenses and a
part of R&D expenses. In compliance with the Company’s internal policies, certain costs are not allocated to the
segments, but reported in “Others”. Those comprise unused capacity charges, including reduced manufacturing
activity due to COVID-19 and incidents leading to power outage, impairment, restructuring charges and other
related closure costs, management reorganization expenses, phase-out and start-up costs of certain
manufacturing facilities, and other unallocated income (expenses) such as: strategic or special R&D programs,
certain corporate-level operating expenses, patent claims and litigations, and other costs that are not allocated to
product groups, as well as operating earnings of other products. In addition, depreciation and amortization
expense is part of the manufacturing costs allocated to the segments and is neither identified as part of the
inventory variation nor as part of the unused capacity charges; therefore, it cannot be isolated in cost of sales.
Finally, public grants are allocated to the Company’s segments proportionally to the incurred expenses on the
sponsored projects.

Wafer costs are allocated to the segments based on actual cost. From time to time, with respect to specific
technologies, wafer costs are allocated to segments based on market price.

The following tables present the Company’s consolidated net revenues and consolidated operating income by
reportable segment.

Net revenues by reportable segment:

December December December

31, 2022 31, 2021 31, 2020
ADG 5,969 4,350 3,284
AMS(1) 4,911 4,587 3,858
MDG(1) 5,228 3,802 3,064
Total net revenues of product segments 16,108 12,739 10,206
Others 20 22 13
Total consolidated net revenues 16,128 12,761 10,219

(1) Effective July 1, 2022, the Low Power RF business unit was transferred from AMS to MDG with no significant impact on segment
reporting. Prior year periods have been adjusted accordingly.

Operating income by reportable segment:

December December December

31, 2022 31, 2021 31, 2020
ADG 1,469 512 182
AMS(1) 1,237 1,022 816
MDG(1) 1,830 908 498
Total operating income of product segments 4,536 2,442 1,496
Others(2) (97) (23) (173)
Total consolidated operating income 4,439 2,419 1,323

(1) Effective July 1, 2022, the Low Power RF business unit was transferred from AMS to MDG with no significant impact on segment
reporting. Prior year periods have been adjusted accordingly.
(2) Operating income (loss) of “Others” includes items such as unused capacity charges, including reduced manufacturing activity due to
COVID-19 and incidents leading to power outage, impairment, restructuring charges and other related closure costs, management
reorganization costs, phase-out and start-up costs of certain manufacturing facilities, and other unallocated income (expenses) such as:
strategic or special R&D programs, certain corporate-level operating expenses, patent claims and litigations, and other costs that are
not allocated to product groups, as well as operating earnings of other products.

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The reconciliation of operating income of reportable segments to the total consolidated operating income is
presented in the below table:

December December December

31, 2022 31, 2021 31, 2020
Total operating income of reportable segments 4,536 2,442 1,496
Impairment, restructuring charges and
other related closure costs — (2) (11)
Start-up and phase-out costs (13) — —
Unused capacity charges (22) (16) (153)
Other unallocated manufacturing results (57) 1 (8)
Gain on sale of non-current assets 2 3 11
Strategic and other research and development
programs and other non-allocated provisions(1) (7) (9) (12)
Total operating loss Others (97) (23) (173)
Total consolidated operating income 4,439 2,419 1,323
(1) Includes unallocated income and expenses such as certain corporate-level operating expenses and other income (costs) that are not
allocated to the product segments.

The following is a summary of operations by entities located within the indicated geographic areas for 2022,
2021 and 2020. Net revenues represent sales to third parties from the country in which each subsidiary is
domiciled. The Company is incorporated under Dutch law with head offices located in the Netherlands while the
Company’s operational office and headquarters are located in Switzerland. Long-lived assets consist of
property, plant and equipment, net. A significant portion of property, plant and equipment expenditures is
attributable to front-end and back-end facilities, located in the different countries in which the Company
operates. As such, the Company mainly allocates capital spending resources according to geographic areas
rather than along product segment areas.

Net revenues

December December December

31, 2022 31, 2021 31, 2020
Switzerland 4,569 3,282 2,795
France 153 126 89
Italy 47 56 52
USA 1,981 1,253 976
Singapore 8,604 7,442 5,817
Japan 758 586 479
Other countries 16 16 11
Total net revenues 16,128 12,761 10,219

Property, plant and equipment, net

December 31, December 31,

2022 2021
Netherlands 2,753 1,476
France 1,774 1,154
Italy 1,683 1,469
Other European countries 161 136
USA 52 36
Singapore 880 671
Malaysia 365 221
Other countries 533 497
Total property, plant and equipment, net 8,201 5,660

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21. OTHER INCOME AND EXPENSES, NET

Other income and expenses, net consisted of the following:

Year ended Year ended Year ended

December 31, December 31, December 31,
2022 2021 2020
Public funding 177 162 231
Start-up and phase-out costs (13) — (8)
Exchange gain (loss), net 15 7 8
Patent costs (8) (10) (11)
Gain on sale of non-current assets 2 5 14
COVID-19 incremental costs (10) (19) (32)
Other, net (4) (4) —
Total 159 141 202

The Company receives public funding from governmental bodies in several jurisdictions. Public funding is
further described in Note 7.

Start-up costs represent costs incurred in the ramp-up phase of the Company’s newly integrated manufacturing
facilities. Phase-out costs are costs incurred during the closing stage of a Company’s manufacturing facility.

Exchange gains and losses, net represent the portion of exchange rate changes on transactions denominated in
currencies other than an entity’s functional currency and the changes in fair value of derivative instruments
which are not designated as hedges, as described in Note 27.

Patent costs mainly include legal and attorney fees and payment for claims, patent pre-litigation consultancy and
legal fees. They are reported net of settlements, if any, which primarily include reimbursements of prior patent
litigation costs.

COVID-19 incremental costs are mainly composed of incremental expenses primarily related to sanitary
measures undertaken to protect employees.

22. INTEREST INCOME (EXPENSE), NET

Interest income (expense), net consisted of the following:

Year ended Year ended Year ended

December 31, December 31, December 31,
2022 2021 2020
Income 71 13 34
Expense (13) (42) (54)
Total 58 (29) (20)
Interest income recorded in 2022 was composed of $71 million of interest income, partially offset by interest
expense on borrowings and banking fees of $13 million.
Interest income is related to cash and cash equivalents, short-term deposits and marketable securities held by the
Company.
On January 1, 2022, the Company adopted the new U.S. GAAP reporting guidance on distinguishing liabilities
from equity and EPS. The new guidance was adopted by applying the modified retrospective method, under
which prior year periods are not restated. Interest expense recorded in 2021 and 2020 included a charge of $34
million and $42 million respectively, related to the outstanding senior unsecured convertible bonds, mainly
resulting from the non-cash accretion expense, as recorded under the previous accounting guidance. With the
adoption of the new guidance, the finance cost of the convertible debt instruments outstanding at the date of
adoption is limited to the amortization expense of debt issuance costs.

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No borrowing cost was capitalized in 2022, 2021 and 2020. Interest income on U.S. Treasury Bonds classified
as available-for-sale marketable securities amounted to $1 million for the year ended December 31, 2022, $1
million for the year ended December 31, 2021 and $3 million for the year ended December 31, 2020.

23. INCOME TAX

Income (loss) before income tax is comprised of the following:

Year ended Year ended Year ended

December 31 December 31 December 31
, , ,
2022 2021 2020
Income (loss) recorded in the Netherlands (22) (20) (19)
Income (loss) from foreign operations 4,508 2,357 1,286
Income (loss) before income tax benefit (expens
e) 4,486 2,337 1,267

STMicroelectronics N.V. and its subsidiaries are individually liable for income taxes in their jurisdictions.

Income tax benefit (expense) is comprised of the following:

Year ended Year ended Year ended

December 31, December 31, December 31,
2022 2021 2020
The Netherlands taxes - current — — —
Foreign taxes - current (510) (285) (171)
Total current taxes (510) (285) (171)
The Netherlands taxes - deferred — — —
Foreign taxes - deferred (10) (46) 12
Total deferred taxes (10) (46) 12
Income tax expense (520) (331) (159)
Effective tax rate 12% 14% 13%

The principal items comprising the differences in income taxes computed at the Netherlands statutory rate of
25.8% in 2022, 25% in 2021 and 25% in 2020, and the effective income tax rate are the following:

Year ended Year ended Year ended

December 31, December 31, December 31,
2022 2021 2020
Income tax benefit (expense) computed at
statutory rate (1,158) (584) (316)
Non-deductible and non-taxable permanent
differences, net 22 4 (1)
Valuation allowance adjustments 140 (2) 11
Effect on deferred taxes of changes in enacted
tax rates 6 6 (5)
Current year credits 30 39 40
Other tax and credits (51) (22) (40)
Benefits from tax holidays 60 49 37
Net impact of changes to uncertain tax positions (12) (8) (1)
Earnings of subsidiaries taxed at different rates 443 187 116
Income tax benefit (expense) (520) (331) (159)

The variation on the valuation allowance is related to the assessment of the recoverability of the deferred tax
assets in France, Malta and the US following the improved stability of profits of the Group.

The increase in the benefit from tax holidays between 2021 and 2022 is the result of the increase in profit in the
countries where tax holidays are applicable.

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The tax holidays represent a tax exemption period aimed to attract foreign technological investment in certain
tax jurisdictions. The effect of the tax benefits, from tax holidays for countries which are profitable, on basic
earnings per share was $0.07, $0.05 and $0.04 for the years ended December 31, 2022, 2021 and 2020,
respectively. These agreements are present in various countries and include programs that reduce up to and
including 100% of taxes in years affected by the agreements. The Company’s tax holidays expire at various
dates through the year ending December 31, 2029. In certain countries, tax holidays can be renewed depending
on the Company still meeting certain conditions at the date of expiration of the current tax holidays.

Component of the Net Deferred Tax Asset and Liability

Deferred tax assets and liabilities consisted of the following:

December 31, December 31,

2022 2021
Tax loss carryforwards and investment credits 520 707
Less unrecognized tax benefit (25) (81)
Tax loss carryforwards net of unrecognized tax
benefit 495 626
Inventory valuation 42 28
Impairment and restructuring charges 4 4
Fixed asset depreciation in arrears 55 52
Increased depreciation incentives 83 128
Capitalized development costs 79 121
Receivables for government funding 121 64
Tax credits granted on past capital investments 218 213
Pension service costs 62 82
Stock awards 17 14
Operating lease liabilities 50 39
Commercial accruals 27 12
Other temporary differences 23 25
Total deferred tax assets 1,276 1,408
Valuation allowances (416) (576)
Deferred tax assets, net 860 832
Accelerated fixed asset depreciation (37) (32)
Acquired intangible assets (23) (22)
Advances of government funding (177) (115)
Operating lease right-of-use assets (50) (39)
Other temporary differences (31) (36)
Deferred tax liabilities (318) (244)
Net deferred income tax asset 542 588

For a particular tax-paying component of the Company and within a particular tax jurisdiction, all deferred tax
liabilities and assets are offset and presented as a single amount. The Company does not offset deferred tax
liabilities and assets attributable to different tax-paying components or to different tax jurisdictions.

A valuation allowance is provided for deferred tax assets when management considers it is more likely than not
that they will not be realized.

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Deferred tax asset expiration

As of December 31, 2022, the Company and its subsidiaries have gross deferred tax assets on tax loss
carryforwards and investment credits that expire starting from 2023.

December 31,
Year 2022
2023 3
2024 2
2025 2
2026 2
2027 5
Thereafter 506
Total 520

The majority of the amount reported on the line “Thereafter” has no expiration date.

The “Tax credits granted on past capital investments” is mainly related to a 2003 agreement granting the
Company certain tax credits for capital investments purchased through the year ending December 31, 2006.
Any unused tax credits granted under the agreement will be impacted yearly by a legal inflationary index
(currently 2.56% per annum). The credits may be utilized depending on the Company meeting certain program
criteria and have no expiration date. In addition to this agreement, starting from 2007 the Company continues to
receive tax credits on the yearly capital investments, which may be used to offset that year’s tax liabilities and
increases by the legal inflationary rate. However, pursuant to the inability to utilize these credits currently and in
future years, the Company did not recognize any deferred tax asset on such tax allowance. As a result, there is
no financial impact to the net deferred tax assets of the Company.

Deferred Tax expense recognized through Other Comprehensive Income

In 2022, we recognized a deferred tax expense of $26 million as a component of other comprehensive income
(loss), compared to a deferred tax income of $3 million in 2021. They were related primarily to the tax effects of
the recognized unfunded status on defined benefits plan.

Deferred tax on undistributed Earnings from foreign subsidiaries

The cumulative amount of distributable earnings related to the Company’s investments in foreign subsidiaries
and corporate joint ventures was $7,140 million and $4,148 million as of December 31, 2022 and December 31,
2021, respectively. Due to the Company’s legal and tax structure, with the parent company established in the
Netherlands, there is no significant tax impact from the distribution of earnings for $6,612 million from
investments in foreign subsidiaries and corporate joint ventures. This is because there is no tax impact on
dividends paid up to a Dutch holding company by qualifying investments. The amount of distributable earnings
becoming taxable upon repatriation amount to $528 million. An amount of $308 million is indefinitely
reinvested by the foreign subsidiaries. As of December 31, 2022, a deferred tax liability is recognized for $22
million on the amount of earnings expected to be repatriated in a foreseeable future.

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Unrecognized Tax Benefits

A reconciliation of 2022, 2021 and 2020 beginning and ending amounts of unrecognized tax benefits is as
follows:

December 31, December 31, December 31,

2022 2021 2020
Balance at beginning of year 118 48 48
Additions based on tax positions related to the
current year 4 72 1
Additions based on acquisitions related to the
current year — — —
Additions for tax positions of prior years 13 1 1
Reduction for tax positions of prior years (69) (1) (2)
Settlements (2) — (1)
Foreign currency translation (3) (2) 1
Balance at end of year 61 118 48

In addition, as of December 31, 2022, $25 million of unrecognized tax benefits were classified as a reduction of
deferred tax assets (as of December 31, 2021, the amount was $81 million) . It is reasonably possible that certain
of the uncertain tax positions disclosed in the table above could increase or decrease within the next 12 months
due to ongoing tax audits. The Company is not able to make an estimate of the range of the reasonably possible
change impacting the annual effective tax rate.

Additionally, the Company elected to classify accrued interest and penalties related to uncertain tax positions as
components of income tax expense in the consolidated statements of income. They were less than $1 million in
2022, less than $1 million in 2021and $1 million in 2020. Accrued interest and penalties amounted to $6 million
as of December 31, 2022 and $7 million as of December 31, 2021.

The tax years that remain open for review in the Company’s major tax jurisdictions, including France, Italy,
United States and India, are from 1997 to 2022.

24. EARNINGS PER SHARE

For the years ended December 31, 2022, 2021 and 2020, earnings per share (“EPS”) was calculated as follows:

Year ended Year ended Year ended

December 31, December 31, December 31,
2022 2021 2020
Basic EPS
Net income attributable to parent company as reported 3,960 2,000 1,106
Weighted average number of shares outstanding 905,606,885 904,332,429 894,578,477
Basic EPS 4.37 2.21 1.24
Diluted EPS
Net income attributable to parent company as reported 3,960 2,000 1,106
add-back interest expense, net of income tax effect 2 — —
Net income attributable to parent company as adjusted 3,962 2,000 1,106
Weighted average shares outstanding 905,606,885 904,332,429 894,578,477
Dilutive effect of stock awards 6,789,662 9,107,124 8,860,216
Dilutive effect of convertible bonds 33,825,000 11,402,645 16,291,279
Number of shares used in calculating diluted EPS 946,221,547 924,842,198 919,729,972
Diluted EPS 4.19 2.16 1.20

On January 1, 2022, the Company adopted the new guidance on distinguishing liabilities from equity and EPS
by applying the modified retrospective method, under which prior year periods are not restated.

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Under the previous guidance, the Company applied the treasury stock method to determine the dilutive effect of
convertible bonds as past experience, existing stated policies, and the contractual terms of the bonds provided a
reasonable basis to expect that the settlement would include cash, shares, or a mix of both.

With the adoption of the new guidance, the treasury stock method is no longer admitted and the application of
the if-converted method is mandatory to determine the dilutive effect of convertible bonds. The senior
unsecured convertible bonds issued on August 4, 2020 are consequently fully dilutive, with the total underlying
shares presented in the line “Dilutive effect of convertible bonds” of the table above for the year ended
December 31, 2022.

25. COMMITMENTS
The Company’s commitments as of December 31, 2022 were as follows:

In millions of U.S. dollars Total 2023 2024 2025 2026 2027 Thereafter
Purchase obligations 5,554 4,556 424 287 101 62 124
of which:
Equipment purchase 3,587 3,584 3 — — — —
Foundry purchase 1,827 872 393 275 101 62 124
Software, design, technologies and licenses 140 100 28 12 — — —
Other obligations 1,864 1,072 155 100 56 155 326
Total 7,418 5,628 579 387 157 217 450

Purchase obligations are primarily comprised of purchase commitments for equipment, for outsourced foundry
wafers and for software licenses.

Other obligations primarily relate to firm contractual commitments with respect to partnership and cooperation
agreements and other service agreements.

26. CONTINGENCIES, CLAIMS AND LEGAL PROCEEDINGS

The Company is subject to possible loss contingencies arising in the ordinary course of business. These include
but are not limited to: product liability claims and/or warranty cost on the products of the Company, contractual
disputes, indemnification claims, claims for unauthorized use of third-party intellectual property, employee
grievances, tax claims beyond assessed uncertain tax positions as well as claims for environmental damages. In
determining loss contingencies, the Company considers the likelihood of impairing an asset or the incurrence of
a liability at the date of the consolidated financial statements as well as the ability to reasonably estimate the
amount of such loss. The Company records a provision for a loss contingency when information available
before the consolidated financial statements are issued or are available to be issued indicates that it is probable
that an asset has been impaired or a liability has been incurred at the date of the consolidated financial
statements and when the amount of loss can be reasonably estimated. The Company regularly re-evaluates
claims to determine whether provisions need to be readjusted based on the most current information available to
the Company. Changes in these evaluations could result in an adverse material impact on the Company’s results
of operations, cash flows or its financial position for the period in which they occur.

The Company has received and may in the future receive communications alleging possible infringements of
third-party patents or other third-party intellectual property rights. Furthermore, the Company from time to time
enters into discussions regarding a broad patent cross license arrangement with other industry participants.
There is no assurance that such discussions may be brought to a successful conclusion and result in the intended
agreement. The Company may become involved in costly litigation brought against the Company regarding
patents, mask works, copyrights, trademarks or trade secrets. In the event that the outcome of any litigation
would be unfavorable to the Company, the Company may be required to take a license to third-party patents
and/or other intellectual property rights at economically unfavorable terms and conditions, and possibly pay
damages for prior use and/or face an injunction, all of which individually or in the aggregate could have a
material adverse effect on the Company’s results of operations, cash flows, financial position and/or ability to
compete.

The Company has contractual commitments to various customers which could require the Company to incur
costs to repair or replace defective products it supplies to such customer. The duration of these contractual

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commitments varies and, in certain cases, is indefinite. The Company is otherwise also involved in various
lawsuits, claims, inquiries, inspections, investigations and/or proceedings incidental to its business and
operations. Such matters, even if not meritorious, could result in the expenditure of significant financial or
managerial resources. Any of the foregoing could have a material adverse effect on the Company’s results of
operations, cash flows or its financial position.

The Company regularly evaluates claims and legal proceedings together with their related probable losses to
determine whether they need to be adjusted based on the current information available to the Company. There
can be no assurance that its recorded reserves will be sufficient to cover the extent of its potential liabilities.
Legal costs associated with claims are expensed as incurred. In the event of litigation which is adversely
determined with respect to the Company’s interests, or in the event the Company needs to change its evaluation
of a potential third-party claim, based on new evidence or communications, a material adverse effect could
impact its operations or financial condition at the time it were to materialize.

As of December 31, 2022 and 2021, respectively, provisions for estimated probable losses with respect to claims
and legal proceedings were not considered material.

27. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

27.1 Financial risk factors
The Company is exposed to changes in financial market conditions in the normal course of business due to its
operations in different foreign currencies and its ongoing investing and financing activities. The Company’s
activities expose it to a variety of financial risks: market risk (including foreign exchange risk, fair value interest
rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Company’s overall risk
management program focuses on the unpredictability of financial markets and seeks to minimize potential
adverse effects on the Company’s financial performance. The Company uses derivative financial instruments to
hedge certain risk exposures.

Financial risk management is carried out by a central treasury department (Corporate Treasury). Additionally, a
Treasury Committee, chaired by the Chief Financial Officer, steers treasury activities and ensures compliance
with corporate policies. Treasury activities are thus regulated by the Company’s policies, which define
procedures, objectives and controls. The policies focus on managing financial risk in terms of exposure to
market risk, credit risk and liquidity risk. Treasury controls are subject to internal audits. Most treasury
activities are centralized, with any local treasury activities subject to oversight from Corporate Treasury.
Corporate Treasury identifies, evaluates and hedges financial risks in close cooperation with the Company’s
subsidiaries. It provides written principles for overall risk management, as well as written policies covering
specific areas, such as foreign exchange risk, interest rate risk, price risk, credit risk, use of derivative financial
instruments, and investments of excess liquidity.

The majority of cash and cash equivalents is held in U.S. dollars and Euros and is placed with financial
institutions rated at least a single “A” long-term rating from two of the major rating agencies, meaning at least
A3 from Moody’s and A- from S&P and Fitch, or better. These ratings are closely and continuously monitored
in order to manage exposure to the counterparty’s risk. Hedging transactions are performed only to hedge
exposures deriving from operating, investing and financing activities conducted in the normal course of
business.

Market risk
Foreign exchange risk
The Company conducts its business globally in various major international currencies. As a result, the Company
is exposed to adverse movements in foreign currency exchange rates, primarily regarding the Euro. Foreign
exchange risk mainly arises from recognized assets and liabilities at the Company’s subsidiaries and future
commercial transactions.

Management has set up a policy to require the Company’s subsidiaries to hedge their entire foreign exchange
risk exposure with the Company through financial instruments transacted or overseen by Corporate Treasury.
Subsidiaries use forward contracts and purchased currency options to manage their foreign exchange risk arising
from foreign-currency-denominated assets and liabilities. Foreign exchange risk arises when recognized assets
and liabilities are denominated in a currency that is not the entity’s functional currency. These instruments do

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not qualify as hedging instruments for accounting purposes. Forward contracts and currency options, including
collars, are also used by the Company to reduce its exposure to U.S. dollar fluctuations in Euro-denominated
forecasted transactions that cover a large part of its R&D and corporate costs expenses as well as a portion of its
front-end manufacturing costs of semi-finished goods. The Company also hedges through the use of currency
forward contracts certain Singapore dollar-denominated manufacturing forecasted transactions. The derivative
instruments used to hedge these forecasted transactions meet the criteria for designation as cash flow hedge. The
hedged forecasted transactions have a high probability of occurring for hedge accounting purposes.

It is the Company’s policy to have the foreign exchange exposures in all the currencies hedged month by month
against the monthly standard rate. At each month end, the forecasted flows for the coming month are hedged
together with the fixing of the new standard rate. For this reason, the hedging transactions will have an exchange
rate very close to the standard rate at which the forecasted flows will be recorded in the following month. As
such, the foreign exchange exposure of the Company, which consists of the balance sheet positions and other
contractually agreed transactions, is always close to zero and any movement in the foreign exchange rates will
therefore not influence the exchange effect on items of the consolidated statement of income. Any discrepancy
between the forecasted values and the actual results is constantly monitored and prompt actions are taken, if
needed.

Derivative Instruments Not Designated as a Hedge

The Company enters into foreign currency forward contracts to reduce its exposure to changes in exchange rates
and the associated risk arising from the denomination of certain assets and liabilities in foreign currencies at the
Company’s subsidiaries. These include receivables from international sales by various subsidiaries, payables for
foreign currency-denominated purchases and certain other assets and liabilities arising from intercompany
transactions.

The notional amount of these financial instruments totaled $931 million, $505 million and $897 million on
December 31, 2022, 2021 and 2020, respectively. The principal currencies covered at the end of the year 2022
are the Euro, Singapore dollar, the Japanese yen, the China Yuan Renminbi, the Indian rupee, the Swiss franc,
the Moroccan dirham, the Malaysian ringgit, the Philippines peso, the Taiwan dollar, the South Korean won and
the Swedish krona.

The risk of loss associated with forward contracts is equal to the exchange rate differential from the time the
contract is entered into until the time it is settled. The risk of loss associated with purchased currency options is
equal to the premium paid when the option is not exercised.

Foreign currency forward contracts not designated as cash flow hedge outstanding as of December 31, 2022
have remaining terms of 4 days to 188 days, maturing on average after 29 days.

Derivative Instruments Designated as a Hedge

To further reduce its exposure to U.S. dollar exchange rate fluctuations, the Company hedges through the use of
currency forward contracts and currency options, including collars, certain Euro-denominated forecasted
intercompany transactions that cover at year-end a large part of its R&D and SG&A expenses, as well as a
portion of its front-end manufacturing costs of semi-finished goods within cost of sales. The Company also
hedges through the use of currency forward contracts certain manufacturing transactions within cost of sales
denominated in Singapore dollars.

The principles regulating the hedging strategy for derivatives designated as cash flow hedge are established as
follows: (i) for R&D and corporate costs, up to 80% of the total forecasted transactions; (ii) for manufacturing
costs, up to 70% of the total forecasted transactions. In order to follow a dynamic hedge strategy, the Company
may change the percentage of the designated hedged item within the limit of 100% of the forecasted transaction.
The maximum length of time over which the Company could hedge its exposure to the variability of cash flows
for forecasted transactions is 24 months.

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For the year ended December 31, 2022, the Company recorded an increase in cost of sales of $129 million and
an increase in operating expenses of $68 million, related to the realized losses incurred on such hedged
transactions. For the year ended December 31, 2021, the Company recorded a decrease in cost of sales of $15
million and a decrease in operating expenses of $4 million, related to the realized gains incurred on such hedged
transactions. For the year ended December 31, 2020, the Company recorded an increase in cost of sales of $3
million and a decrease in operating expenses of $3 million, related to the realized losses and gains incurred on
such hedged transactions.

The notional amount of foreign currency forward contracts and currency options, including collars, designated
as cash flow hedge totaled $3,192 million, $2,165 million and $1,502 million on December 31, 2022, 2021 and
2020, respectively. The forecasted transactions hedged as of December 31, 2022 were determined to have a high
probability of occurring.

As of December 31, 2022, $14 million of deferred gains on derivative instruments included in “Accumulated
other comprehensive income (loss)” in the consolidated statements of equity were expected to be reclassified as
earnings during the next 12 months based on the monthly forecasted R&D expenses, corporate costs and semi-
finished manufacturing costs. Foreign currency forward contracts and collars designated as cash flow hedge
outstanding as of December 31, 2022 have remaining terms of 4 days to 20 months, maturing on average after
239 days.

As of December 31, 2022, the Company had the following outstanding derivative instruments that were entered
into to hedge Euro-denominated and Singapore dollar-denominated forecasted transactions:

Notional amount for hedge on

forecasted R&D and other Notional amount for hedge on
In millions of Euros operating expenses forecasted manufacturing costs
Forward contracts 540 986
Currency collars 500 791

In millions of Singapore dollars Notional amount for hedge on

forecasted R&D and other Notional amount for hedge on
operating expenses forecasted manufacturing costs
Forward contracts — 247

Cash flow and fair value interest rate risk

The Company’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose
the Company to cash flow interest rate risk. Borrowings issued at fixed rates expose the Company to fair value
interest rate risk.

The Company analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into
consideration refinancing, renewal of existing positions, alternative financing and hedging. The Company
invests primarily on a short-term basis and as such the Company’s liquidity is invested in floating interest rate
instruments. As a consequence, the Company is exposed to interest rate risk due to potential mismatch between
the return on its short-term floating interest rate investments and the portion of its long-term debt issued at fixed
rate.

Price risk
As part of its ongoing investing activities, the Company may invest in publicly traded equity securities and be
exposed to equity security price risk. In order to hedge the exposure to this market risk, the Company may enter
into certain derivative hedging transactions.

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Table of Contents

Information on fair value of derivative instruments and their location in the consolidated balance sheets as of
December 31, 2022 and December 31, 2021 is presented in the table below:

As of As of
December December
31, 2022 31, 2021
Fair Fair
Asset Derivatives Balance sheet classification value value
Derivatives designated as a hedge:
Foreign exchange forward contracts Other current assets 37 2
Foreign exchange forward contracts Other non-current assets 8 —
Currency collars Other current assets 10 1
Currency collars Other non-current assets 5 —
Total derivatives designated as a hedge: 60 3
Derivatives not designated as a hedge:
Foreign exchange forward contracts Other current assets 9 3
Total derivatives not designated as a hedge: 9 3
Total Derivatives 69 6

As of December As of December
31, 2022 31, 2021
Fair Fair
Liability Derivatives Balance sheet classification value value
Derivatives designated as a hedge:
Foreign exchange forward contracts Other payables and
accrued liabilities (23) (29)
Foreign exchange forward contracts Other non-current
liabilities (3) —
Currency collars Other payables and
accrued liabilities (9) (13)
Currency collars Other non-current
liabilities (1) —
Total derivatives designated as a hedge: (36) (42)
Derivatives not designated as a hedge:
Foreign exchange forward contracts Other payables and
accrued liabilities (3) (1)
Total derivatives not designated as a hedge: (3) (1)
Total Derivatives (39) (43)

The Company entered into currency collars as combinations of two options, which are reported, for accounting
purposes, on a net basis. As of December 31, 2022, the fair value of these collars represented assets for a net
amount of $15 million (composed of $19 million assets offset with a $4 million liability) and liabilities for a net
amount of $10 million (composed of $15 million liabilities offset with a $5 million asset). In addition, the
Company entered into other derivative instruments, primarily forward contracts, which are governed by standard
International Swaps and Derivatives Association (“ISDA”) agreements and are compliant with Protocols of the
European Market Infrastructure Regulation (“EMIR”), which are not offset in the statement of financial position
and representing total assets of $54 million and liabilities of $29 million as of December 31, 2022.

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The effect of derivative instruments designated as cashflow hedge on the consolidated statements of income for
the year ended December 31, 2022 and December 31, 2021 and on the “Accumulated other comprehensive
income (loss)” (“AOCI”) as reported in the consolidated statements of equity as of December 31, 2022 and
December 31, 2021 is presented in the table below:

Gain (loss) deferred in Gain (loss) reclassified from

OCI on derivative Location of gain (loss) OCI into earnings
December 31, December 31, reclassified from OCI into December 31, December 31,
2022 2021 earnings 2022 2021
Foreign exchange forward
contracts 14 (20) Cost of sales (83) 11
Foreign exchange forward Selling, general and
contracts 2 (2) administrative (9) —
Foreign exchange forward
contracts 4 (9) Research and development (32) 1
Currency collars 1 (11) Cost of sales (46) 4
Currency collars Selling, general and
1 (1) administrative (6) 1
Currency collars 1 (5) Research and development (21) 2
Total 23 (48) (197) 19

No significant ineffective portion of the cash flow hedge relationships was recorded in earnings for the years
ended December 31, 2022 and December 31, 2021. No amount was excluded from effectiveness measurement
on foreign exchange forward contracts and collars.

The effect on the consolidated statements of income for the year ended December 31, 2022 and December 31,
2021 of derivative instruments not designated as a hedge is presented in the table below:

Location of gain Gain (loss) recognized in earnings

(loss) recognized December 31, December 31,
in earnings 2022 2021
Foreign exchange forward contracts Other income and expenses, net 24 9
Total 24 9

The Company did not enter into any derivative containing significant credit-risk-related contingent features.

Credit risk
The expected credit loss and impairment methodology applied on each category of financial assets is further
described in each respective note. While cash and cash equivalents are also subject to the expected credit loss
model, the identified expected credit loss is deemed to be immaterial. The maximum credit risk exposure for all
financial assets is their carrying amount.

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. Credit risk typically arises from cash and cash equivalents, contractual cash
flows of debt investments carried at amortized cost, the counterparty of derivative financial instruments and
deposits with banks and financial institutions, as well as credit exposure to customers, including outstanding
receivables.

The Company is exposed to credit risk from its operating activities (primarily for trade receivables) and from its
financing activities, including deposits with banks and financial institutions, foreign exchange transactions and
other financial instruments. Credit risk is managed at the Group level. The Company selects banks and/or
financial institutions that operate with the group based on the criteria of long-term rating from at least two major
Rating Agencies and keeping a maximum outstanding amount per instrument with each bank not to exceed 20%
of the total. For derivative financial instruments, management has established limits so that, at any time, the fair
value of contracts outstanding is not concentrated with any individual counterparty.

The Company monitors the creditworthiness of its customers to which it grants credit terms in the normal course
of business. If certain customers are independently rated, these ratings are used. Otherwise, if there is no
independent rating, risk control assesses the customer’s credit quality, considering its financial position, past

F-57
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experience and other factors. The utilization of credit limits is regularly monitored. Sales to customers are
primarily settled in cash, which mitigates credit risk. As of December 31, 2022 and 2021, no customer
represented more than 10% of trade accounts receivable, net. Any remaining concentrations of credit risk with
respect to trade receivables are limited due to the large number of customers and their dispersion across many
geographic areas.

The Company’s investments in instruments carried at amortized cost primarily include receivables towards
government bodies. As such, they are investments with immaterial expected credit loss. Any remaining
receivable is of low credit risk and is individually not significant. The credit ratings of the investments are
monitored for credit deterioration.

Liquidity risk
Prudent liquidity risk management includes maintaining sufficient cash and cash equivalents, short-term
deposits and marketable securities, the availability of funding from committed credit facilities and the ability to
close out market positions. The Company’s objective is to maintain a significant cash position and a low debt-
to-equity ratio, which ensures adequate financial flexibility. Liquidity management policy is to finance the
Company’s investments with net cash from operating activities.

Management monitors rolling forecasts of the Company’s liquidity reserve based on expected cash flows.

27.2 Capital risk management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going
concern in order to create sustainable value, benefits and returns for its stakeholders, as to maintain an optimal
capital structure. In order to maintain or adjust its capital structure, the Company may review the amount of
dividends paid to shareholders, return capital to shareholders, or issue new shares.

Consistent with other peers in the industry, the Company monitors capital on the basis of the net debt-to-equity
ratio. This ratio is calculated as the net financial position of the Company, defined as the difference between
total cash position (cash and cash equivalents, short-term deposits, marketable securities and restricted cash, if
any) and total financial debt (short-term and long-term debt), divided by total parent company stockholders’
equity.

27.3 Fair value measurement

The fair value of financial instruments traded in active markets is based on quoted market prices at the balance
sheet date. The quoted market price used for financial assets held by the Company is the bid price. If the market
for a financial asset is not active and if no observable market price is obtainable, the Company measures fair
value by using significant assumptions and estimates. When measuring fair value, the Company makes
maximum use of market inputs and minimizes the use of unobservable inputs.

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The table below details financial assets (liabilities) measured at fair value on a recurring basis as of December
31, 2022:

Fair Value Measurements using

Quoted
Prices in
Active Significant
Markets for Other Significant
Identical Observable Unobservable
December 31, Assets Inputs Inputs
2022 (Level 1) (Level 2) (Level 3)
Marketable securities – U.S. Treasury debt securities 679 679 — —
Short-term deposits 581 581 — —
Equity securities measured at fair value through
earnings 26 26 — —
Derivative assets designated as cash flow hedge 60 — 60 —
Derivative assets not designated as cash flow hedge 9 — 9 —
Derivative liabilities designated as cash flow hedge (36) — (36) —
Derivative liabilities not designated as cash flow hedge (3) — (3) —
Contingent consideration on business acquisitions (31) — — (31)
Total 1,285 1,286 30 (31)

The table below details financial assets (liabilities) measured at fair value on a recurring basis as of December
31, 2021:

Fair Value Measurements using

Quoted
Prices in
Active Significant
Markets for Other Significant
Identical Observable Unobservable
December 31, Assets Inputs Inputs
2021 (Level 1) (Level 2) (Level 3)
Short-term deposits 291 291 — —
Equity securities measured at fair value through
earnings 29 29 — —
Derivative assets designated as cash flow hedge 3 — 3 —
Derivative assets not designated as cash flow hedge 3 — 3 —
Derivative liabilities designated as cash flow hedge (42) — (42) —
Derivative liabilities not designated as cash flow hedge (1) — (1) —
Contingent consideration on business acquisitions (77) — — (77)
Total 206 320 (37) (77)

For liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3), the
reconciliation between January 1, 2022 and December 31, 2022 is presented as follows:

Fair Value
Measurements
using Significant
Unobservable
Inputs (Level 3)
January 1, 2022 77
Changes in fair value measurement (35)
Currency translation adjustment (4)
Payments made (7)
December 31, 2022 31
Amount of total gains (losses) for the period included in earnings attributable to liabilities
still held at the reporting date 35

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Contingent consideration reported as liabilities on the consolidated balance sheet as of December 31, 2022 and
December 31, 2021 is based on the probability that the milestones defining the variable components of the
consideration will be achieved. In 2022, the probability of achievement of these variable components was
reassessed, resulting in a reduction of $35 million of the fair value of the contingent consideration related to
certain 2020 business acquisitions. The Company reported this change in fair value in the lines “Research and
development” and “Cost of Sales” of the consolidated statement of income, for $33 million and $2 million
respectively.

Contingent consideration is composed of $31 million reported in the line “Other long-term liabilities” in the
consolidated balance sheet as of December 31, 2022, compared to $7 million reported in the line “Other
payables and accrued liabilities” and $70 million reported in the line “Other long-term liabilities” in the
consolidated balance sheet as of December 31, 2021.

For liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3), the
reconciliation between January 1, 2021 and December 31, 2021 is presented as follows:

Fair Value
Measurements
using Significant
Unobservable
Inputs (Level 3)
January 1, 2021 123
Changes in fair value measurement (38)
Currency translation adjustment (8)
December 31, 2021 77
Amount of total gains (losses) for the period included in earnings attributable to liabilities
still held at the reporting date (2)

No asset (liability) was measured at fair value on a non-recurring basis using significant unobservable inputs
(Level 3) as of December 31, 2022 and December 31, 2021.

The Company evaluated in 2022, 2021 and 2020 for impairment the aggregate carrying amount of long-term
investments for which the Company applies the cost method as a measurement alternative, as described in Note
2.22. No significant impairment charge was recorded on these investments in 2022, 2021 and 2020.

The following table includes additional fair value information on financial assets and liabilities as of December
31, 2022 and 2021:

2022 2021
Carrying Estimated Carrying Estimated
Level Amount Fair Value Amount Fair Value
Cash equivalents(1) 1 2,996 2,996 2,883 2,883
Short-term, deposits 1 581 581 291 291
Long-term debt
– Bank loans (including current portion) 2 1,165 1,165 1,152 1,152
– Finance leases (including current portion) 2 57 57 — —
– Senior unsecured convertible bonds issued on
August 4, 2020(2) 1 1,495 1,561 1,387 1,975
(1) Cash equivalents primarily correspond to deposits at call with banks.
(2) The carrying amount as of December 31, 2022, of the senior unsecured convertible bonds as reported above, corresponds to the
nominal value of the bonds, net of $5 million unamortized debt issuance costs, in compliance with the new accounting guidance. The
impact of the adoption is described in Note 2 and Note 15. The fair value represented the market price of the bonds trading on the
Frankfurt Stock Exchange.

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Table of Contents

The Company did not report any debt securities that were in an unrealized loss position for more than one year
as of December 31, 2022 and December 31, 2021.

The methodologies used to estimate fair value are as follows:

Components Methodology used to estimate fair value

Debt securities classified as available-for-sale Quoted market prices for identical instruments
Foreign exchange forward contracts, currency Quoted market prices for similar instruments
options and collars
Equity securities measured at fair value Quoted market prices for identical instruments
through earnings
Equity securities carried at cost as a Valuation of the underlying investments on a new round of
measurement alternative third-party financing or upon liquidation
Long-term debt and current portion of long- Future cash flows on a borrowing-by-borrowing basis and
term debt discounting these future cash flows using the Company's
incremental borrowing rates for similar types of borrowing
arrangements
Cash and cash equivalents, short-term The carrying amounts reflected in the consolidated financial
deposits, accounts receivable, short-term statements are considered as reasonable estimates of fair value
borrowings, and accounts payable due to the relatively short period of time between the origination
of the instruments and their expected realization.

28. RELATED PARTY TRANSACTIONS

The below table summarizes transactions incurred in 2022, 2021 and 2020 with companies for which certain
members of the Company’s management perform similar policymaking functions. These include, but are not
limited to: Orange and Idemia France.

December 31, December 31, December 31,

2022 2021 2020
Sales & other services 13 8 5
Other purchases 25 19 21
Accounts receivable 5 2 1
Accounts payable 2 — —

In addition, the Company shares one member of its Supervisory Board with Cassa Depositi e Prestiti SpA
(CDP). The Company holds two long-term credit facilities with CDP, which contractual financing terms are
described in Note 15.

The Company did not hold any significant equity-method investments as of December 31, 2022, 2021 and 2020.
Consequently, the Company did not report any material transaction with this type of investees in the
corresponding years.

The Company made a cash contribution of $1 million for the year ended December 31, 2022 to the ST
Foundation, a non-profit organization established to deliver and co-ordinate independent programs in line with
its mission. A cash contribution of $0.5 million was made for each of the years ended December 31, 2021 and
2020. Certain members of the Foundation’s Board are senior members of the Company’s management.

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STMICROELECTRONICS N.V.

VALUATION AND QUALIFYING ACCOUNTS

Balance at Charged to Balance

Valuation and qualifying accounts deducted from the beginning Translation costs and Additions/ at end of
related asset accounts of period adjustment expenses (Deductions) period
(Currency—millions of U.S. dollars)
2022
Accounts Receivable 19 — — 2 21
Deferred Tax Assets 576 (19) (140) (1) 416
2021
Accounts Receivable 16 — — 3 19
Deferred Tax Assets 638 (24) (2) (36) 576
2020
Accounts Receivable 16 — — — 16
Deferred Tax Assets 1,534 28 (11) (913) 638

S-1
 Exhibit 2.3

Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934 (the
“Exchange Act”)

As of December 31, 2022, STMicroelectronics N.V. (the “Company”, “we”, “us” and “our”) had the following
series of securities registered pursuant to Section 12(b) of the Exchange Act:

Trading
Title of Each Class: Symbol(s) Name of Each Exchange on Which Registered:
Common shares, nominal value €1.04 per share STM New York Stock Exchange

Our common shares have a nominal value of €1.04. As of December 31, 2022 our common shares are the only
class of securities of the company that are registered under Section 12 of the Exchange Act.

Capital terms used but not defined herein have the meanings given to them in Company’s annual report
on Form 20-F for the fiscal year ended December 31, 2022 (the “2022 Form 20-F”).

Type and Class of Securities (Item 9.A.5 of Form 20-F)

Each common share has a nominal value of €1.04 per share. As of December 31, 2022, the number of shares of
common stock issued was 911,281,920 shares and the number of shares of common stock outstanding was
903,865,763.

Of the 903,865,763 common shares outstanding as of December 31, 2022, 68,905,940, or 7.6%, were registered
in the common share registry maintained on our behalf in New York.

Pre-emptive Rights (Item 9.A.3 of Form 20-F)

See “Item 10. Additional information — Memorandum and Articles of Association — Share Capital (Articles 4,
5 and 6)” of the 2022 Form 20-F.

Limitations or Qualifications (Item 9.A.6 of Form 20-F)

Not applicable.

Other Rights (Item 9.A.7 of Form 20-F)

Not applicable.

Rights of the Common Shares (Item 10.B.3 of Form 20-F)

See “Item 10. Additional information — Memorandum and Articles of Association” of the 2022 Form 20-F.

Requirements for Amendments (Item 10.B.4 of Form 20-F)

See “Item 10. Additional information — Memorandum and Articles of Association” of the 2022 Form 20-F.

Limitations on the Rights to Own Shares (Item 10.B.6 of Form 20-F)

Not applicable.

Provisions Affecting Any Change of Control (Item 10.B.7 of Form 20-F)

Not applicable.

Ownership Threshold (Item 10.B.8 of Form 20-F)

Not applicable.
Differences Between the Law of Different Jurisdictions (Item 10.B.9 of Form 20-F)

See the references to Dutch law throughout “Item 10. Additional information — Memorandum and Articles of
Association” of the form 2022 20-F.

Changes in Capital (Item 10.B.10 of Form 20-F)

Not applicable.

Debt Securities (Item 12.A of Form 20-F)

Not applicable.

Warrants and Rights (Item 12.B of Form 20-F)

Not applicable.

Other Securities (Item 12.C of Form 20-F)

Not applicable.

American Depositary Shares (Items 12.D.1 and 12.D.2 of Form 20-F)

Not applicable.
 Exhibit 8.1

Subsidiaries and Equity Investments of the Company

The following table lists our consolidated subsidiaries and our percentage ownership as of December
31, 2022:

Percentage
Ownership
Legal Seat Name (Direct or Indirect)
Australia, Sydney STMicroelectronics PTY Ltd 100
Austria, Vienna STMicroelectronics Austria GmbH 100
Belgium, Diegem Proton World International N.V. 100
Brazil, Sao Paulo STMicroelectronics Ltda 100
Canada, Ottawa STMicroelectronics (Canada), Inc. 100
China, Beijing STMicroelectronics (Beijing) R&D Co. Ltd 100
China, Shanghai STMicroelectronics (China) Investment Co. Ltd 100
China, Shenzhen Shenzhen STS Microelectronics Co. Ltd 60
China, Shenzhen STMicroelectronics (Shenzhen) R&D Co. Ltd 100
Czech Republic, Prague STMicroelectronics Design and Application s.r.o. 100
Denmark, Aarhus STMicroelectronics A/S 100
Egypt, Cairo STMicroelectronics Egypt SSC 100
Finland, Nummela STMicroelectronics Finland OY 100
France, Crolles STMicroelectronics (Crolles 2) SAS 100
France, Grenoble STMicroelectronics (Alps) SAS 100
France, Grenoble STMicroelectronics (Grenoble 2) SAS 100
France, Le Mans STMicroelectronics (Grand Ouest) SAS 100
France, Montrouge STMicroelectronics S.A. 100
France, Rousset STMicroelectronics (Rousset) SAS 100
France, Tours STMicroelectronics (Tours) SAS 100
Germany, Aschheim-Dornach STMicroelectronics GmbH 100
Germany, Aschheim-Dornach STMicroelectronics Application GmbH 100
Hong Kong, Kowloon STMicroelectronics Ltd 100
India, New Delhi ST-Ericsson India Pvt Ltd 100
India, Noida STMicroelectronics Pvt Ltd 100
Israel, Netanya STMicroelectronics Limited 100
Italy, Agrate Brianza STMicroelectronics S.r.l. 100
Italy, Naples STMicroelectronics Services S.r.l. 100
Japan, Tokyo STMicroelectronics KK 100
Malaysia, Kuala Lumpur STMicroelectronics Marketing SDN BHD 100
Malaysia, Muar STMicroelectronics SDN BHD 100
Malta, Kirkop STMicroelectronics (Malta) Ltd 100
Mexico, Guadalajara STMicroelectronics Marketing, S. de R.L. de C.V. 100
Morocco, Casablanca STMicroelectronics (MAROC) SAS, a associé unique 100
The Netherlands, Amsterdam STMicroelectronics Finance B.V. 100
The Netherlands, Amsterdam STMicroelectronics Finance II N.V. 100
The Netherlands, Amsterdam STMicroelectronics International N.V. 100
Philippines, Calamba STMicroelectronics, Inc. 100
Philippines, Calamba Mountain Drive Property, Inc. 40
Singapore, Ang Mo Kio STMicroelectronics Asia Pacific Pte Ltd 100
Singapore, Ang Mo Kio STMicroelectronics Pte Ltd 100
Slovenia, Ljubljana STMicroelectronics d.o.o 100
Spain, Barcelona STMicroelectronics Iberia S.A. 100
Sweden, Jönköping STMicroelectronics Software A.B. 100
Sweden, Kista STMicroelectronics A.B. 100
Sweden, Norrkoping STMicroelectronics Silicon Carbide A.B. 100
Switzerland, Geneva STMicroelectronics RE S.A. 100
Switzerland, Geneva STMicroelectronics S.A. 100
Taiwan, Taipei City Exagan Taiwan Ltd. 80
Thailand, Bangkok STMicroelectronics (Thailand) Ltd 100
 Percentage
Ownership
Legal Seat Name (Direct or Indirect)
STMicroelectronics (Research & Development)
United Kingdom, Bristol 100
Limited
United Kingdom, Marlow STMicroelectronics Limited 100
United States, Coppell STMicroelectronics Inc. 100
United States, Coppell STMicroelectronics (North America) Holding, Inc. 100
 Exhibit 12.1

CERTIFICATION

I, Jean-Marc Chery, certify that:

1. I have reviewed this annual report on Form 20-F of STMicroelectronics N.V.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and cash flows
of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for
the company and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the
company, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the company’s internal control over financial reporting that
occurred during the period covered by the annual report that has materially affected, or is
reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the company’s auditors and the audit committee of the
company’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the company’s ability to
record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the company’s internal control over financial reporting.

Date: February 23, 2023 By: /s/ Jean-Marc Chery

Jean-Marc Chery
President and Chief Executive Officer and
Sole Member of our Managing Board
 Exhibit 12.2

CERTIFICATION

I, Lorenzo Grandi, certify that:

1. I have reviewed this annual report on Form 20-F of STMicroelectronics N.V.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and cash flows
of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for
the company and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the
company, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the company’s internal control over financial reporting that
occurred during the period covered by the annual report that has materially affected, or is
reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the company’s auditors and the audit committee of the
company’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the company’s ability to
record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the company’s internal control over financial reporting.

Date: February 23, 2023 By: /s/ Lorenzo Grandi

Lorenzo Grandi
President and Chief Financial Officer,
Purchasing, Enterprise Risk Management (ERM)
and Resilience
 Exhibit 13.1

CERTIFICATION OF JEAN-MARC CHERY, PRESIDENT AND CHIEF EXECUTIVE OFFICER

AND SOLE MEMBER OF THE MANAGING BOARD OF STMICROELECTRONICS N.V. AND
LORENZO GRANDI, CHIEF FINANCIAL OFFICER AND PRESIDENT, FINANCE,
INFRASTRUCTURE AND SERVICES OF STMICROELECTRONICS N.V., PURSUANT TO
SECTION 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

In connection with the annual report of STMicroelectronics N.V. (the “Company”) on Form 20-F for the period
ending December 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the
“Report”), the undersigned hereby certify that to the best of our knowledge:

1. The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of
1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the Company.

Date: February 23, 2023 By: /s/ Jean-Marc Chery

Jean-Marc Chery
President and Chief Executive Officer and
Sole Member of our Managing Board

Date: February 23, 2023 By: /s/ Lorenzo Grandi

Lorenzo Grandi
President and Chief Financial Officer,
Purchasing, Enterprise Risk Management
(ERM) and Resilience
 Exhibit 15.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-109572)
pertaining to the 2001 Stock Option Plan of STMicroelectronics N.V. of our reports dated February 23, 2023, with
respect to the consolidated financial statements and financial statements schedule on page S-1 of
STMicroelectronics N.V., and the effectiveness of internal control over financial reporting of STMicroelectronics,
N.V., included in this Annual Report (Form 20-F) for the year ended December 31, 2022.

/s/ Ernst & Young AG

Lancy – Geneva, Switzerland

February 23, 2023