NXP acquires Silicon Labs'<br>Cellular Communications Business

NXP may pay up to an additional US$65million [approximately 50 million Euro equivalent] contingent upon the achievement of certain milestones in the next three years. The assets to be acquired include the RF CMOS technology based transceivers for cellular phones, as well as the monolithic cellular systems chips. The business to be acquired had a revenue of approximately US$176 million in 2006. The transaction is expected to close by the end of the first quarter of 2007, subject to closing conditions, including regulatory approvals. The combination of Silicon Labs' RFCMOS capabilities for transceivers and cellular system chips with NXP's existing 2G and 3G system solutions will result in a unique and powerful combination for mobile phone manufacturers who demand highly functional, integrated solutions with clear cost-down roadmaps. “Our objective is to produce affordable communication devices that can run rich media services based on advanced technology. We want to accelerate the uptake of 3G subscriptions, benefiting operators and the wider industry. Silicon Labs' outstanding RF CMOS technology and outstanding engineers will strengthen NXP," commented Frans van Houten, President and Chief Executive Officer, NXP. The acquisition will also enable NXP to enhance its existing cellular operations by increasing its leadership in system solution with monolithic ICs for low-end phones and strengthen the company's RF transceiver business. Silicon Labs chips have been built into over 380 million mobile phones covering more than 600 mobile handset models. The Silicon Labs team will be incorporated into NXP's Mobile and Personal Business, which produces solutions for the cellular systems, connectivity, personal multimedia, sound solutions and cordless/VoIP markets. “Silicon Labs has established leadership in RF technology including being the first-to-market with the innovative, truly single-chip phone," said Necip Sayiner, president and chief executive officer of Silicon Laboratories. “Through this transaction, NXP gains the opportunity to advance this technology within leading handset vendors." Approximately 160 employees of Silicon Labs wireless operations will be merged with NXP. Dan Rabinovitsj, Silicon Labs vice president, heading up the cellular communications business will lead the team as general manager and senior vice president of NXP's Cellular Systems business line, subject to the closing of the deal. “I am really pleased that Silicon Labs' Dan Rabinovitsj will join NXP, subject to the closing of the transaction, to lead our Cellular Systems business line. This acquisition represents a first step in the upcoming wireless industry consolidation. As such we make a step forward to achieve the scale and innovation needed towards leadership in mobile communications," stated Frans van Houten, President and Chief Executive Officer, NXP.