Create economic value for stakeholders

Payments for purchases of tangible assets | EC6 | STE1 |			US$m
	2004	2005	2006
Purchases of tangible assets	2,050	1,441	1,553

 

2005 purchases expenses by category | EC6 |	%

 

All taxes paid | EC1 |			US$m
	2004	2005	2006
Taxes paid	168	122	98

 

2006 purchases expenses by category | EC6 |	%

 

Economic impact on 4 key stakeholders
| EC9 | STE10 |

Some key product achievements in partnership with our customers

Communication: ST won a contract with Ericsson Mobile Platforms to supply 3G digital baseband processors to OEM’s that are licenses of EMP 3G mobile phone technology

Digital consumer: we introduced the first 65 nanometer single chip dual HD decoder in the industry

Data storage: we developed a new proprietary system-on-chip (SOC) for disk drives in 90 nm technology

Automotive: we designed (design-in) a range of new products for the powertrain, safety and body applications

MEMS: ST introduced a new family for new applications: accelerometers, for game consoles (Nintendo Wii), HDD’s (Toshiba laptops) and the cellular handset market

Flash memories: we grew 8% with a wave of new products in a market which grew 7%

Industrial: we achieved a remarkable growth of 20% by expanding our customer base and introducing 4 new products per day.

Creating value for our suppliers

While the amount paid to suppliers of tangible assets is an official and audited figure also published in our 20-F report (page F6), the split of purchases between tangible assets, materials and others is based on different data sources and time frames; it aims to give a realistic visibility on the most important economic flows between ST and its main suppliers categories, but it should not be considered as official and audited accounting information.

We do not publish the split of our purchases by region, because in many cases what we buy in a given country may in fact be imported from another country, and the resulting data are very difficult, if not impossible, to analyze.

Our economic contribution to society

Taxes are part of our normal economic contribution to society, but we operate in many jurisdictions with highly complex and varied tax regimes.

Our tax rate is variable and depends on changes in the level of operating profits within various local jurisdictions and on changes in the applicable taxation rates, as well as changes in estimated tax provisions due to new events. We currently enjoy certain tax benefits in some countries, but these benefits may not be available in the future due to changes in the local jurisdictions.

Creating value for our employees As we have a complete section on social issues, we decided from now on to concentrate all social data in that section. (See more on the Social performance overview section) .