Trident Microsystems Reports Financial Results for First Quarter of Fiscal Year 2008

Record Non-GAAP Operating Income in September Quarter

SANTA CLARA, Calif. — Trident Microsystems, Inc. TRID a leading provider of digital TV technology for the consumer digital video marketplace, today announced for the first fiscal quarter of 2008, ended September 30, 2007, the Company achieved net revenues of $88,174,000, a sequential increase of 25% from the $70,593,000 reported in the quarter ended June 30, 2007 and a 24% year-over-year increase from the $71,363,000 reported in the quarter ended September 30, 2006.

Net income of $10,059,000 was recorded in the first quarter ended September 30, 2007, on a generally accepted accounting principles (“GAAP”) basis, or $0.16 per share on a diluted basis, which included $10,443,000 in stock-based compensation expense as recognized under FASB 123R, $3,761,000 in legal and accounting fees related to our investigation into our historical stock option practices, $1,653,000 charged to cost of revenues relating to amortization of intangible assets and a $1,783,000 gain from a cash dividend received as a shareholder of United Microelectronics Corporation (“UMC”). This compares to net income of $10,513,000 in the quarter ended September 30, 2006, on a GAAP basis, or $0.17 per share on a diluted basis, which included $3,599,000 in stock-based compensation expense, $4,227,000 in legal and accounting fees related to our investigation into our historical stock option practices, $1,519,000 charged to cost of revenues relating to amortization of intangible assets and $190,000 in expense from the cumulative effect of a change in accounting principle.

Non-GAAP net income in the quarter ended September 30, 2007, was $24,133,000, or $0.38 per share on a diluted basis, and excludes the items noted above. This compares to non-GAAP net income of $16,637,000, or $0.26 per share on a diluted basis, in the fourth quarter of fiscal 2007 and to non-GAAP net income of $20,048,000 in the quarter ended September 30, 2006, or $0.32 per share on a diluted basis. A reconciliation between net income on a GAAP basis and non-GAAP net income is provided in a table following the non-GAAP Consolidated Statements of Income.

“We were able to generate record non-GAAP operating income of $27,783,000 ($11,926,000 on a GAAP basis), representing 31.5% of revenues, despite the fact that revenues came in at the low end of our expectations,” said Sylvia D. Summers, Trident’s new Chief Executive Officer.

“We believe the market is clearly segmenting between high quality Full HD (“1080P”) capable large screen TV’s found in prevailing specialty retailers and smaller, more cost sensitive, WXGA-driven TV’s found in prevailing club channels and discount chains. We are very strong in the former – branded 1080P MEMC-enabled TV’s, but our share in the latter category has begun to face challenges from new entrants and off brands who have begun to challenge branded TV’s. Our primary focus remains on converting our customer base to use our single chip SOC — our HiDTV Pro series, however, we expect that we may face challenges and competition in the less profitable WXGA markets. For this reason, we are forecasting our December quarter revenues in the range of $70 – $72 million and planning to resume revenue growth in the second half of calendar 2008, expecting our HiDTV Pro UX/WX/QX to begin shipping in high volume at that time. Expecting a growing portion of the market for calendar 2008 to continue shifting toward 1080P on both 120hz and 60hz panels, we believe we are particularly well positioned with the HiDTV Pro UX/WX/QX — which is the only SOC offering in the market that supports 1080P with MEMC on both 120hz and 60hz panels from a single device,” continued Ms. Summers.

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