C.P. Clare Completes Transition From Components Supplier to Semiconductor Company.

BEVERLY, Mass.--(BUSINESS WIRE)--July 20, 1999--

--Divestiture of Electromagnetic Group Operations Accelerates

Strategic Focus on Communications and Connectivity Businesses--

C.P. Clare Corporation (NASDAQ:CPCL) today announced additional details regarding the planned divestiture of its Mexican electromagnetic operations and a reenergized focus on analog and mixed signal semiconductors for communications and connectivity markets. The news comes on the heels of Sumida Electric's announced intention to purchase C.P. Clare's Electromagnetic Group Operations (Clare EMG, Inc.) for approximately $36 million (US). The divestiture will enhance the Company's growth as a global provider of analog and mixed signal semiconductor solutions and is expected to close in August.

With the divestiture of Clare EMG, C.P. Clare completes its transition from a manufacturing and assembly company to a knowledge and technology-driven semiconductor company. In addition to providing added focus, this transaction recapitalizes the Company, giving C.P. Clare new resources to aggressively pursue its Internet-driven IC (integrated circuit) strategy, ultimately producing higher margins and increasing shareholder value.

Details of the Divestiture

As previously announced, Sumida Electric Co., Ltd. has agreed to purchase Clare EMG, Inc. for approximately $36 million. With annual revenues of $55 million, Clare EMG consists of the Clare-Remtech advanced magnetics division, the legacy reed relay and surge arrester businesses, all manufacturing operations in Mexico, a purchasing office in Taiwan, and C.P. Clare's Arlington Heights, Ill. facility. New information disclosed today includes a transaction gain, before taxes and closing costs, in the area of $17 million. Cash balances after closing will exceed $40 million, or more than $4 per share. In addition, C.P. Clare's total employee base will be reduced from 1,570 in September 1998 to fewer than 500 after the divestiture. Other examples of dramatic operational changes resulting from the deal include a decrease in total part numbers manufactured from 7,200 to 750, and a factory space reduction of more that 200,000 square feet.

Meeting the Needs of the "Network's Edge"

Leveraging its high-voltage analog expertise and wafer fab IP plus a command of mixed signal system level integration (SLI) from recently acquired Clare-Micronix, C.P. Clare will develop advanced ICs for communications and connectivity markets with an emphasis on emerging technologies such as home networking, DSL and cable modems. C.P. Clare's primary focus is on silicon solutions for the "Network's Edge," or the interface between communications devices and the Internet-based infrastructure that connects them. The well-documented explosive growth of the Internet and Internet-based communication is driving the demand for new and more convenient ways to communicate with increased bandwidth. The unique strengths of C.P. Clare and Clare-Micronix put C.P. Clare in an excellent position to deliver key IC building blocks that equipment manufacturers need to meet this growing market demand.

Retaining and Expanding High-Margin Businesses

In addition to the Company's core focus of developing advanced ICs for communications and connectivity, C.P. Clare will leverage the foundations of Clare-Micronix to expand its Application Specific Integrated Circuit (ASIC) business and develop SLI solutions for selected high-margin market segments, such as display drivers. In addition, C.P. Clare will continue to build on its solid state relay business, expanding into targeted niches requiring fast, reliable connectivity.

Finally, as part of C.P. Clare's commitment to communications, the Company has retained its highly profitable switch business, which supplies advanced, high-margin solutions for cellular phone hook switch and antenna switch applications.

"This divestiture is a critical leap forward in our evolution," said Arthur Buckland, C.P. Clare's president and chief executive. "With the increased cash reserves and heightened focus along with the operational and technological advances of the past several years, we're primed to achieve the final stages of the semiconductor strategy we outlined in our 1995 IPO."

About C.P. Clare

C.P. Clare Corporation is a leader in the design and manufacture of high-voltage analog circuits. The Company's products enable communications by providing the critical interface between high-voltage electrical signals and the low-voltage electronics that process those signals. Leading manufacturers of data communications, telecommunications and industrial equipment around the world rely on C.P. Clare for semiconductors and specialized electronic components. C.P. Clare trades on the NASDAQ exchange under the symbol CPCL. The Company is headquartered in Beverly, Mass., and has sales locations around the world with primary offices in Chicago, Ill.; Hasselt, Belgium; Taipei, Taiwan; and Tokyo, Japan. Information about C.P. Clare and its products is available at 978-524-6700 or on the Internet at http://www.cpclare.com.

Except for historical information contained herein, the matters set forth in this news release are forward-looking statements as defined under the federal securities laws. Actual results could differ materially from the information set forth herein and there is no assurance that any anticipated future results will be achieved.