NXP Semiconductors Announces Second Quarter 2008 Results

EINDHOVEN, The Netherlands — NXP Semiconductors today announced second quarter sales of USD 1,524 million, a comparable decrease of 1.9% on the second quarter of 2007 and a comparable decrease of 0.6% over the first quarter of 2008, reflecting the continuing softness of the overall market.

Home Segment

“¢ DTV production ramp-ups with Philips and another major CE brand
“¢ Announced acquisition of STB business of Conexant creating a leadership position
“¢ Final agreement to create JV for Can tuner business with Thomson
“¢ Loewe AG has chosen PNX5100 for full-HD picture quality for latest 40-inch LCD TV line-up
“¢ Announced Hauppauge win for PCTV and silicon tuner solution
“¢ Design in of IP-STB225 and HDMI transmitter in Roku STB for Netflix, world’s largest online movie rental service

Sales amounted to USD 196 million, compared to USD 216 million in the 2nd quarter of 2007, a comparable decrease of 8.6% (nominal decrease of 9.3%). The sales were affected by the continued decline in the CRT market in which the Home business has sustained its substantial market share. This was only partly offset by increased sales in the TV Front-End, Digital TV and Set-top Box market.

On April 29, 2008, NXP announced it will acquire the Broadband Media Processing (BMP) business of Conexant Systems, Inc. which provides industry-leading solutions for satellite, cable and IPTV applications. Under the terms of the deal, NXP will pay Conexant USD 110 million cash up front, and additional consideration of up to USD 35 million based on the achievement of certain revenue milestones over the period from closing through 2009. The transaction is subject to customary closing conditions and regulatory approvals, and is expected to close in the 3rd quarter of 2008.

Following the Memorandum of Understanding between NXP and Thomson of February this year, the two companies on June 27, 2008 announced that they have signed a contract to combine their can tuner module operations in a joint venture. NXP will have a 55% holding in the new venture and Thomson the remaining 45%. In the full year 2007, these combined operations recorded sales of approximately USD 250 million. NXP and Thomson expect that the transaction will close in the 3rd quarter of 2008, subject to closing conditions, including regulatory approvals.

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