NXP Semiconductors and TSMC Strengthen R&D Cooperation and Manufacturing Partnership.

EINDHOVEN, Netherlands & HSINCHU, Taiwan -- NXP, the independent semiconductor company founded by Philips, and Taiwan Semiconductor Manufacturing Company Limited (TSMC) today announced they will strengthen their cooperation to include advanced R&D in CMOS process technologies as well as manufacturing partnership. NXP is a global leader in semiconductor solutions for mobile phones, personal media players, TVs, set-top boxes, identification applications, cars and a wide range of other electronic devices; TSMC is the world's largest dedicated semiconductor foundry, with proven world-class CMOS manufacturing and leading process R&D capabilities.

"We've chosen to strengthen our cooperation with TSMC, in the area of advanced CMOS development," stated Frans van Houten, NXP President and Chief Executive Officer. "This move will enable NXP to concentrate more on creating innovative, differentiating process options, such as embedded non-volatile technology in 45nm for our state of the art System-on-Chip products, while building on the process platform from TSMC. It underlines our commitment to be a leader in advanced CMOS system chips."

"With our strengths of technology leadership, manufacturing excellence, and customer partnership, TSMC has become a strategic partner for many global customers with whom we have forged a powerful competitive force in the semiconductor industry. This agreement with NXP Semiconductors represents an extension of the long-term, strategic and fruitful alliance between the two companies. The synergy between these two global technology leaders will achieve new milestones in the foreseeable future," stated Dr. Rick Tsai, president and Chief Executive Officer of TSMC.

The strengthened global R&D cooperation will be built upon the existing NXP Research organization at the IMEC facilities in Leuven, Belgium, and TSMC corporate R&D in Hsinchu, Taiwan. It leverages the R&D talent and infrastructures of both companies in the area of IP, design, modeling, materials, and process technologies. NXP has a fruitful cooperation with IMEC, Europe's leading independent research center in the field of micro- and nanoelectronics and nanotechnology. TSMC is also a core member of IMEC. The joint research effort will enable NXP to do proprietary development based on TSMC platform technology. This strengthened cooperation will also allow TSMC to further expand its research activities in Europe.

About NXP

NXP is a top 10 semiconductor company founded by Philips, more than 50 years ago. Headquartered in the Netherlands, the company has 37,000 employees working in 20 countries across the world. 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.

About TSMC

TSMC is the world's largest dedicated semiconductor foundry, providing the industry's leading process technology and the foundry industry's largest portfolio of process-proven libraries, IP, design tools and reference flows. The Company's total installed capacity in 2006 will exceed seven million (8-inch equivalent) wafers, including capacity from two advanced 12-inch GigaFabs, four eight-inch fabs, and one six-inch fab. TSMC also has substantial capacity commitments at its wholly owned subsidiaries, WaferTech and TSMC (Shanghai), and its joint venture fab, SSMC. TSMC is the first foundry to provide 65nm production capabilities. Its corporate headquarters are in Hsinchu, Taiwan. For more information about TSMC please see http://www.tsmc.com.