Conexant Acquires U.K. Wireless Broadband Business Group of Oak Technology Inc.

Business Editors

NEWPORT BEACH, Calif.--(BUSINESS WIRE)--Jan. 19, 2000

Acquisition Expands Conexant's Technology and Product Portfolio

in Digital Television and Set-Top Box Markets

Conexant Systems Inc. (NASDAQ:CNXT) Wednesday announced that it has acquired the wireless broadband business unit of Oak Technology Inc. located in Bristol, United Kingdom.

The acquisition significantly extends Conexant's reach from the digital cable and satellite TV market segments into the digital terrestrial TV broadband communications arena. The transaction is valued at approximately $25 million in a combination of cash and Conexant stock.

Part of Oak Technology's larger consumer digital broadcast unit, the Oak Technology Limited organization in Bristol is a separate business entity and has established itself as a leading developer of broadband wireless communications technology for the digital terrestrial TV marketplace. The organization was responsible for the algorithms, architecture and systems engineering expertise for the world's first single-chip 2K/8K coded orthogonal frequency-division multiplexing (COFDM) demodulator/decoder, the OTI-7000. COFDM demodulators/decoders are key elements in wireless communications systems, and allow the digital broadcast signal to be received and processed for display.

"This acquisition immediately extends our business from the digital cable and satellite market segments into the rapidly emerging market for semiconductor system solutions used in digital terrestrial TV sets and set-top boxes," said Dan Marotta, vice president and general manager for Conexant's Digital Infotainment Division. "The addition of this group's technology, product expertise and customer base will enable Conexant to complete its system solutions portfolio in the digital set-top box and integrated digital TV markets."

The Bristol organization will continue to operate from its current location as part of Conexant's Digital Infotainment Division. According to Marotta, Conexant plans to expand the operation in Bristol and consolidate in this new group much of the division's development work in broadband wireless communications products. Peter Claydon, general manager for the group, will continue to run the organization and will report directly to Marotta.

"Conexant's global reach and product breadth will allow the team in Bristol to significantly expand our business," Claydon said. "We are looking forward to joining Conexant and building this organization into a leading design and support center for the European digital TV and set-top box market segments."

Conexant's Digital Infotainment Division is a leading provider of semiconductor systems for broadband and broadcast communications applications. Addressing the convergence of PCs with consumer entertainment products, the division's broad portfolio includes cable and wireless modems, IP telephony products, digital set-top boxes, and digital broadcast and video solutions for personal computing appliances.

About Conexant Systems

With revenues of approximately $1.5 billion, Conexant is the world's largest independent company focused exclusively on providing semiconductor products and systems solutions for communications electronics. With more than 30 years of experience in developing communications technology, the company draws upon its expertise in mixed-signal processing to deliver integrated systems and semiconductor products for a broad range of communications applications. These products facilitate communications worldwide through wireline voice and data communications networks, cordless and cellular wireless telephony systems, personal imaging devices and equipment, and emerging cable and wireless broadband communications networks. The company aligns its business into five product platforms: Network Access, Wireless Communications, Digital Infotainment, Personal Imaging, and Personal Computing. Conexant is a member of the Nasdaq-100 Index, which represents the largest and most active stocks listed on The Nasdaq Stock Market across major industry groups. For more information, visit Conexant at www.conexant.com.

Safe Harbor Statement

This news release contains statements relating to future results of the company (including certain projections and business trends) that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties. These risks and uncertainties include, but are not limited to: the company's ability to integrate Oak Technology Limited into its operations and realize marketing and other synergies; growth of the market for Oak Technology Limited's products; global and market conditions including, but not limited to, the cyclical nature of the semiconductor industry and the markets addressed by the company's and its customers' products; demand for and market acceptance of new and existing products; successful development of new products; the timing of new product introductions; the availability and extent of utilization of manufacturing capacity; pricing pressures and other competitive factors; changes in product mix; fluctuations in manufacturing yields; product obsolescence; the ability to develop and implement new technologies and to obtain protection for the related intellectual property; the successful implementation of the company's diversification strategy; labor relations of the company, its customers and suppliers; timely completion of Year 2000 modifications by the company and its key suppliers and customers; and the uncertainties of litigation, as well as other risks and uncertainties, including but not limited to those detailed from time to time in the company's Securities and Exchange Commission filings. These forward-looking statements are made only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. Other brands and names contained in this release are the property of their respective owners.