Transportation

1. Information & Communications Transportation Health Services Energy Automation & Control Pictures of the Future: Research and Development at SiemensJASS ´05St. Petersburg, April 2005Prof.Dr. Dietmar Theisdietmar.theis@siemens.com

2. Innovations have kept Siemens strong for 158 years Outstanding innovations and sales development by Siemens AG, 1847 – 2005 Sales (in logarithmic scale) ISDN "HICOM" Market launchof Transrapid First GSM cellular phonewith color display Start of Production of large-scale integrated (LSI) circuits "Eurosprinter" 64-kbit-memory chip Implantation of firstcardiac pacemakerby Siemens High purity silicon Fingertip sensors First 256megabit chip First Siemensradioreceiver Digital electronic switching system (EWSD) -first telephone exchange ICE3 W.v. Siemens discovers dynamo-electric principle Siretom computertomograph Magnetom First Simatic Piezo injection valves First electricrailway Surface wave technology First pointer telegraph First trafficlights Year of introduction 1847 1866 1879 1924 1926 1958 1959 1973 '74 '80 '81 '84 '92 … '03 1853 first office St. Petersburg

3. Siemens – Global Network of Innovation (1) 87 90 80 45 12 2 NAFTA AFR ME GER APAC SAM EUR ohne D Broad scope of business (6 business segments, 13 Groups + SFS, SRE) Global presence (in more than 190 countries) Production sites Transportation Medical 13,3 Europe Lighting 7,0 4,1 Middle East North America Asia / Pacific Africa Power 10,8 South America 20,8 Automation and Control 17,1 Information and Communications • 430.000 employees wordwide • 164.000 (38%) in Germany • 110.000 (26%) in Europe (w/o Ger) • 95.000 (22%) in North America • 52.000 (12%) in Asia-Pacific • 9.000 (2%) in other countries External sales in billions of €w/o SFS, SRE) - FY 2003/04 Source: CD S 8 - 11/04

4. Siemens – Global Network of Innovation (2) 5,1 Power Automatin& Control 4,6 Transportation Medical 4,6 Business Units Information and Communications Lighting Others 4,0 3,9 2,9 2,8 Corporate Technology 2,6 1,8 0,5 … more than 50% for Software (worldwide about 30 000 Software engineers) R&D expenditure in 2004: 5,1 billions of € … Expenditures in billions of € Siemens Matsushita IBM Sony HP Samsung Hitachi Toshiba 1 US$ = 0,82125 EUR1 Yen = 0,00755 EUR1 Won = 0,00070 EUR 1) GE 1) e/o GECS (GE Capital Services) Dell Sourcee: Siemens AG, CD S 8 – 11/04

5. Mülheim Göteborg Pandrup London Issaquah Chatham Helsinki Bracknell Peterborough Oslo Tilbury St. Petersburg Drummondville Eynsham Sacramento Auburn Hills Roke Manor Berlin Burlington Berkeley HoffmannEstates Dresden Erlangen-Nuremberg Danvers Brussels Karlsruhe Mountain View Concord Piscataway Changchun Regensburg Pittsburgh Paris San José Santa Clara Princeton Bratislava Zurich Johnson City Vienna San Diego Toulouse Budapest Beijing Arlington Newport News Tokyo Seoul Istanbul Porto Knoxville Norcross Austin Tianjin Athens Lisbon Kawasaki Netanya Lake Mary Graz Ichon Yokohama Xi‘an Tel Aviv Madrid Linz Orlando Munich Nanjing Kakegawa Zaragoza Shanghai Salzburg New Delhi Chengdu Taipei Treviso SophiaAntipolis Bombay Hong Kong Milan Goa Bangalore Penang Sao Paulo Pretoria Curitiba Sydney Melbourne Buenos Aires Date: 30.09.2003 Worldwide Activities in R&D

6. Corporate Structure(as of October 1, 2004) Power Power Generation (PG) Power Transmissionand Distribution (PTD) Siemens Business Services GmbH & Co. OHG (SBS) Transportation Transportation Systems (TS) Medical Medical Solutions (Med) Siemens VDOAutomotive AG (SV) * Lighting * Osram GmbH Legally Separate Group *) Managing Board Operations Corporate Departments Information and Communications Automation and Control Communications (COM) Corporate Finance(CF) Automation and Drives (A&D) Corporate Personnel(CP) Industrial Solutions and Services (I&S) * Siemens Logistics and Assembly Systems (L&A) Corporate Technology(CT) Financing and Real Estate Siemens Building Technologies AG (SBT) Corporate Development (CD) Siemens Financial Services GmbH (SFS) * * Corporate Centers: Corporate Communications (CC) Corporate Information and Operations (CIO) Global Procurement and Logistics (GPL) Chief Economist / Corporate Relations(ECR) Management Consulting Personnel (MCP) Siemens Real Estate(SRE) Regional Units: Regional Offices, Regional Companies, Representative Offices, Agencies

7. Business Model of Corporate Technology Goal:Creation of Economic Value Added for the Company • Projects for the Business Group(Contract R&D) • Projects to build up new competences New Businessopportunities byexternal commercializationof technologies and IPRs Cross BusinessGroup/Segment Technology Strategies for the Company • Pictures of the Future • - Markets • - Trends • - Technology • - Business • Opportunities • Technology Screening & Analysis • Spin off´s (STA, TTB*) • IP marketing • External marketing of technologicalservices Innovations Strategies External Business Core Business International Network of Competences-Worldwide Partner for Innovations * Partnership with A&D, including spin-in‘s

8. Corporate Technology Corporate Intellectual Property Intellectual Property Services Regional Intellectual Property Intellectual Property Support Company Name & Trademark Law Strategic Marketing Corporate Functions Standardization & Regulation Information Research Center Environmental Affairs & Technical Safety Siemens Corporate Research, Inc. 2) Strategic Planning SISL CT 2) OOO Siemens CT 2) Roke Manor Research, Ltd.1) Structure of Corporate Technology (Status: October 1, 2004) Technology Divisions Materials & Microsystems Production Processes Power & Sensor Systems Software & Engineering Information & Communications Business Administrationand Controlling Human Resources Chief Information Officer Chief Knowledge Office International Relations & Projects Siemens Ltd. China Corporate Technology 2) Siemens Technology 2)Accelerator GmbH Technology-toBusiness Center, LLC 2) 1) Functional reporting to Corporate Technology 2) Separate Legal Entity; Part of Separate Legal Entity

9. Corporate Technology: About 1,700 Researchers and Developers Worldwide … Roke Manor, Romsey Berlin Berkeley, CA Erlangen Beijing Tokyo Princeton, NJ München Perlach • New Sites planned in 2005: • Shanghai • St. Petersburg • Moscow Bangalore

10. CT Russia CT China Roke Manor Research* Corporate Technology: International Network of Competences – Worldwide Partner for Innovations Services 1 - 3 Licensing & Transactions Materials & Microsystems Production Processes Strategy & Communication Corporate Intellectual Property Corporate Issues & Consultancies Technology Divisions Company Name & Trademark Law Strategic Marketing & Strategic Planning Information & Communications Power & Sensor Systems IP Support Software & Enginnering Intellectual Property US SiemensTechnology Accelerator Siemens Technology-to-Business Center Standardization & Regulation Corporate Functions Environmental Affairs & Techn. Safety Information Research Center CT India Siemens Corporate Research CT Liaison Office Tokyo * functional reporting

11. Functional Materialsfor Optoelectronics Ultrafast Ceramicsfor ComputedTomography Polymerelectronic FunctionalPolymers InnovativeElectronics Ceramics Micromechanics& Coatings Design to Prototype(D2P) Materials&Microsystems Multichip Module for Radar Evaluation Parallel Optical Link Packaging &Assembly Project: Environmentally Compatible Products JoiningTechnologies Analytics Electronic Assembly Eco-Design of Products Materials Analysisby Ion Bombardment Joining of Plastic Materials CT / E 090-1 a - 10.03

12. ProductionProcesses Structure World Class ManufacturingProcess Logistics Technology Remote Service Center Become Front-Runner with holistic Solutions Innovation with System Service Strategiesand Processes HolisticProcesses ServiceManagement Product Definition Field Service ManufacturingEngineering VirtualEngineering From Concept to Product Simulation & RiskManagement Innovative Manufacturing Technologies and Processes RealizedManufacturingProcesses Optimized and reliable Products With virtual Products and Processes to shorter Time to Market Risk Analysis of hybrid Systems CT / E 090-2 a - 05.03

13. Information&Communications ComputerEmergencyResponse Team(CERT) Protection of critical I&C infrastructure: Hacking prevention, incident handling Knowledge Management:Processes, Methods and Toolsfor distributed Organizations User Interface DesignUsability Lab Knowledge Man-agement & BusinessTransformation UserInterface Design IntelligentAutonomousSystems Networks& MultimediaCommunications Intelligent Robotsand Software Agents assist everywhere InteractionTechnologies Security Neural Computation Cryptographic Algorithms andSecurity Solutions and Consulting We add SENSEto Interaction Neuro-Fuzzy Techniques for Systems & Industrial Projects CT / E 090-6 a - 05.03

14. The Time Horizons of the R&D Activities of the Business Groups and of Corporate Technology are Different R&DExpenses Total R&D expenses BusinessGroups CorporateTechnology One product generation in the future Two product generations in the future Time to market Today (The absolute time scale depends on business) A seamless transition from R&D in Corporate Technologyto the Business Groups is crucial for our success

15. CT´s Technology Divisions: „Driver“ and „Provider“ of Innovations and Technologies Strategic principles • Focus & Multiple Impact • Key Account Management • Networking internally & externally • Systematic Technol.&Innov. Planning • „Strengthen the strength“ • Acting as entrepreneurs • Decentralization of responsibilitites • Performance differentiation Contracted R&D for groups 58 % Technology“Provider“ Know- How External funding 7 % Technology “Driver“ Corporate funding 35 %

16. Driving innovative technologies for “emerging markets” Combining technology and business orientation Generating new business through innovations: • embedded in existing Siemens structures • as start-up foundation Providing support through “seed money” from the business partners Impact on innovationand entrepreuneurship culture Technology-to-Business Center andSiemens Technology Accelerator

17. StrategicVisioning Scenarios for the Business Segments Factors ofInfluence Today‘s Business Automation and Control Individual Society Politics Economy Environment Technology Customers Competition • "Extrapolation“ via • Roadmaps • Products • Technologies • Customer Requirements Information andCommunications Lighting Medical Power Core Technologies: Sensors and Actuators Transportation Today Short-term Medium-term Long-term The combination of extropolation and retropolation leads to the Horizon of time(varies significantly in the different business segments) Strategic Planning of Innovations & Technologies • "Retropolation" out • of Scenarios • New Markets • New Customer Requirements • New Technologies • New Businesses

18. Information & Communications Transportation Medical Lighting Power Automation & Control : Detailed Description of AllRelevant Trends of Our Business Segments • Socio-economic trends • society • life of work • Market trends • size / growth • structure • geographical • Customer / business trends • value chains / networks • company´s structure • processes • Technological trends • strategic importance • multiple impact • disruptive

19. „Software“ Software substitutes hardware … System architecture Knowledge discovery Virtualisation Simulation/optimization technologies … … IT-security Augmented/ virtual reality Image and speech processing Increasing complexity Neuro-/ bio-informatics Individualisation Grid computing Semantic web … Embedded systems … … Selforganizing systems Decentralisation of intelligence Pervasive computing Modularisierung Modularisation Robotics … Nanosystems Mikro(nano)-electronics … Intelligent sensors & actuators Integration Integration Standardisation … „Biochips“ Intelligent Displays … … Functional materials … Light weight materials Nanomaterials Sustainability Miniaturisation „Materials“ Future Electrical Engineering and Electronics: Main Trends with Relevance to Technology and Key Technologies „Systems“ • Core competence: interdisciplinary research and knowledge management

20. Aspects for the Cooperation With the International public research Awards, scholarship Bilateral research projects, contract research Temporary student employees, interns, students working on theses, doctoral candidates, appointments to chairs and other teaching assignments Publicly funded projects Research and development Recruiting Equipment, training material, partnerships with schools Symposia /workshops Training/Education Experience-sharing Research and development policy “Siemens sponsors” Requirements profiles for engineers and scientists, internationalization, curricula, contributions to the work of associations Structure of the research landscape, overall legal situation Future markets, labor situation, knowledge society

21. It helps integrating our R&D base in areas in which we do not (yet) have expertise of our own. • It gets us in touch with the latest results of basic research andlikewise supports the understanding of the research partner formodern applications. • It facilitates recruiting top-notch young talent in the areas of engineering and science. • It builds up our image by giving us a presence in the “scientific community”. Scientific Cooperation with International Public ResearchInstitutions is of Great Importance for Siemens We also support university research and education by supplyingexperts for about 350 teaching and visiting positions.

22. When the winds of change are blowing, some build shelters and some build windmils . . .

24. Siemens Corporate Technology: Mission, Vision and Strategy Goal: Creation of Economic Value Added for the Company • Mission: • Securing the technological future and • Increasing the competitiveness of the company in close cooperation with the Business Groups and Regional Units Vision Network of Competences & Partner for Innovations • Strategy • Concentrating on core technologies • Internal and external networking and cooperation • Increased customer orientation • Decentralizing responsibilities andfostering technopreneurship • Success-oriented allocation of resources • Systematic innovation and technology planning process

25. The Top Ten Companies in Electrical Engineering and Electronics in Fiscal Year 2004 119,0 Total sales (in billions EUR) Sales in electrical engineering and electronics(in billions of euros) 77,8 75,2 67,4 73,9 65,6 67,7 61,6 63,7 55,9 54,5 58,5 49,0 49,2 43,4 38,8 43,6 39,1 38,8 30,9 Samsung Electronics Toshiba GE IBM Siemens Hitachi Hewlett- Packard Matsu- shita Sony Dell