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NXP Celebrates First Year as Independent Company
Sets Path for Growth in China

 2007-08-23

NXP Semiconductors, the independent company founded by Philips, today marked a celebration in China after nearly 12 months operating as an independent company, following its spin-off from Philips.

NXP President and CEO, Frans van Houten, and his Executive Management Team (EMT) are visiting China to meet with government officials, customers and employees. The Team, in addition to celebrating its first year of operation as an independent company, will also present the outcomes of a strategic review of the company’s product portfolio in its biggest single market; the next phase of the company’s ongoing Business Renewal program.

Globally, NXP has recently overhauled its overall product strategy as part of its Business Renewal Program. The strategic “Roadmapping for Leadership” project will have a major effect on NXP’s R&D focus and spending. The company will step-up investments in 27 business segments, maintain current spending level in 18 segments, and right-size spending on a more focused roadmap in six segments. In total R&D spending will stay around ?1billion per year with investment driven toward the most promising businesses and roadmaps. The objective of this program is to foster growth and market share gain in the company’s key markets, i.e. the six growth domains where it focuses: cellular phones, personal entertainment, home electronics, automotive, identification and multi market semiconductors.

Frans van Houten, President and CEO, NXP Semiconductors said, “We are making good progress on our journey to become an agile, more cost efficient, high performing company with our eyes directed towards the market place. Already we have leadership positions with approximately 50% of our product lines. The decisions that we have recently taken will help us build more leadership positions in the six growth domains where we are focused.”

The focus on product portfolio has already seen NXP acquire the cellular operations of Silicon Labs, purchase Sharp’ s BlueStreak ARM based microcontroller business and merge its Cordless & Voice over IP Terminals businesses with the DSP Group.

“Since the spin-off from Philips in September 2006, we are proud of our achievements in our first year of operation as an independent company. We continue to see positive growth momentum and strong support from our stakeholders,” said Frans van Houten. “As a standalone company, we have refocused our R&D strategy for Advanced CMOS, made progress on our asset light strategy and completed our first acquisitions.”

As one of the objectives of the EMT China visit, the Team will also review its China operations; NXP’s single largest market worldwide. It is NXP’s stated objective to further grow its business and presence in China. As part of the China strategy, NXP is investing strongly in the China’s 3G mobile phone standards, TDSCDMA and TD-HSDPA, together with its JV T3G in Beijing. Other investment areas in China include the world’s largest discrete manufacturing operation in Donguan where NXP has invested more than USD172 million, as well as the joint venture with ASE in Suzhou. NXP is also strengthening its R&D presence in Shanghai where ULC mobile phone chips and Digital Television chips are developed, specifically for the Chinese market.

NXP’s China business will continue to align closely with the government’s 11th 5 Year Development Plan and its focus on local innovation. Consequently NXP has several initiatives focused on the development of local innovations, which includes TDSCDMA, China Digital TV, Chinese JVs, as well as research and education programs with local universities like Tsinghua University to foster future talent and drive Chinese innovation.

“NXP Semiconductors has made impressive steps in its first year operating as an independent company. In China, they continue to deliver strong offerings in emerging areas, such as the digital home, mobile, automotive electronics and identification,” said Jun Li, CEO, CCID Consulting. “NXP has been very engaged in the local industry value chain, working closely with local vendors and customers to create more value-add across the industry and for Chinese consumers.”

About NXP Semiconductors
NXP is a top 10 semiconductor company founded by Philips more than 50 years ago. Headquartered in Europe, the company has 37,000 employees working in more than 20 countries and posted sales of EUR 5 billion in 2006. NXP creates semiconductors, system solutions and software that deliver better sensory experiences in mobile phones, personal media players, TVs, set-top boxes, identification applications, cars and a wide range of other electronic devices. News from NXP is located at www.nxp.com.