Philips Semiconductors and SGS-THOMSON Join Forces to Accelerate Chipset Development For Digital Video; Partnership Brings Rapidly to Market a Chipset Fully Compliant With 2K and 8K DVB-T Standards/a.

SUNNYVALE, Calif.--(BUSINESS WIRE)--Aug. 29, 1997--Philips Semiconductors and SGS-THOMSON Microelectronics today announced the signing of an agreement to combine their efforts in the development and promotion of a front-end chipset for Digital Video Broadcast-Terrestrial (DVB-T/a) digital television receivers.

The aim of this cooperation is to bring to market as quickly as possible a chipset fully compliant with the DVB-T recommendations, which allows the reception of all European 2K and 8K standards/a.

The chipset consists of four integrated circuits. Three are designed and manufactured by SGS-THOMSON: the FFT processor, channel estimate/corrector and error correction circuit. The fourth device, designed and manufactured by Philips Semiconductors, is the synchronization circuit.

"By working with Philips Semiconductors on this project we are able to offer stronger customer support, thanks to the pooled resources of both companies," said Jean-Pierre Lusinchi, general manager of the video division of SGS-THOMSON's Dedicated Product Group.

This co-operation will be extended to the next generation chipset that will maintain software compatibility and use greater integration and optimization to produce a substantial cost reduction.

"The combined experience and support of Philips Semiconductors and SGS-THOMSON in the digital set-top box market represents definite advantages for any set-top box or TV manufacturer wanting to enter this new digital terrestrial market," said Eric Blanchard, product line manager of Philips Semiconductors' Digital Media Broadcasting Group.

This new agreement is facilitated by a technology agreement between the two companies signed in 1992. It brings to the DVB-T market the benefits of the long experience and broad know-how of the two semiconductor companies in the consumer electronics field.

Philips Semiconductors has over 20 years' high technology experience in producing chipsets for television. More than one in three TVs produced in the world use Philips Semiconductors' One Chip TV solution. Equally distinguished in the consumer market, SGS-THOMSON has 30 years of experience developing dedicated integrated circuits for the consumer sector and among the many firsts of the company is the first MPEG2 decoder chip, which contributed to the early success of the first digital satellite TV service.

Both companies also benefit from the know-how acquired in the European DVBird/b program, a pre-competitive cooperative research project to demonstrate the feasibility of a highly integrated DVB-T receiver front end.

Philips Semiconductors, Inc. is a subsidiary of Philips Electronics North America and an affiliate of Philips Electronics NV, headquartered in Eindhoven, The Netherlands. Philips Semiconductors' innovations in digital audio, video, and mobile technology position the company as a leader in the consumer, multimedia and wireless communications markets. According to market research firm, Dataquest, the company is one of the top ten semiconductor suppliers in the world. Dataquest also lists Philips Semiconductors as the number one supplier in 10 segments including RF circuits for mobile telecommunications, digital-to-analog and analog-to-digital conversion ICs and one-chip TV. Sales offices, located in all major markets around the world, are supported by regional customer applications labs. Additional information on Philips Semiconductors can be obtained by accessing its home page at www.semiconductors.philips.com .

SGS-THOMSON Microelectronics is a global independent semiconductor company listed on the New York Stock Exchange (NYSE:STM) and on the Bourse de Paris. It designs, develops, manufactures and markets a broad range of semiconductor integrated circuits (ICs) and discrete devices used in a wide variety of microelectronic applications, including telecommunications systems, computer systems, consumer products and industrial automation and control systems. -0-

Note to Editors:

a: DVB-T (Digital Video Broadcasting - Terrestrial) is the European standard for the terrestrial broadcasting of digital television signals. Standardized by the European Telecom Standards Institute (ETSI) in early 1997, it is based on the cooperation of more than 200 European companies.

2K and 8K standards: COFDM (Coded Orthogonal Frequency Division Multiplex) is the modulation technique adopted for DVB-T broadcasting. Transmitted data is sent using a very large number of sub-carrier frequencies (several thousand) each of which is modulated at a very low data rate. Currently there are two variants. The "2K" standard uses 2048 sub-carrier frequencies and is the version currently being used by the BBC in England for test transmissions from Crystal Palace. The "8K" standard uses 8192 sub-carrier frequencies and is being evaluated in several European and Far Eastern countries. One of the advantages of COFDM is that it allows adjacent transmitter areas to use the same frequency, creating a Single Frequency Network.

b: DVBIRD is a European co-operative research program sponsored by the European Commission within the framework of the ACTS Programme, created to accelerate the introduction of digital terrestrial television in Europe by demonstrating the feasibility of highly integrated prototype set top boxes before the end of 1997. The new chipset now being developed by SGS-THOMSON and Philips Semiconductors is based in part on know-how developed by the companies through this project. Partners in this project are SGS-THOMSON Microelectronics, Laboratoires d'Electronique Philips (LEP), Centre Commund'Etudes de Telediffusion et de Telecommunications (CCETT), France Telecom CNET, Deutsche Forschungsanstalt fur Luft-und Raumfahrt (DLR, the German Aerospace Research Establishment), Deutsche Thomson-Brandt, Matra Communication, ComAtlas, Seleco Italtel Multimedia and the Politecnico di Torino.

CONTACT: Philips Semiconductors

Jeanne Alford, 408/991-3626

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or

SGS-THOMSON

Carol Brown, 617/259-2519

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or

Miller/Shandwick Technologies

Marla Kertzman, 415/962-9550

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