Philips delivers 100 millionth sensor chip for ABS systems to Continental Teves.

Business Editors/High-Tech Writers

SAN JOSE, Calif.--(BUSINESS WIRE)--June 16, 2003

Royal Philips Electronics (NYSE:PHG)(AEX:PHI) today announced that its ten year relationship with Continental Teves has reached a production landmark with the delivery of 100 million automotive sensor chips for ABS systems. The two companies have worked very closely together to develop future-oriented technologies in the area of active field sensor development -- and their products have found a place in the latest cars from most car manufacturers in the world. Continental Teves' competence in innovation and reliable wheel speed sensor technology for electronically-controlled brake systems, such as ABS, ASR (Anti-Slip Regulation) and ESP (Electronic Stability Program), combined with Philips' proven know-how in the area of magnetoresistive rotational speed sensor production have considerably increased the safety of the driver in the car.

The total demand for all types of ABS system reached 33.8 million units in 2001. This forecast is to increase to 40.9 million units in 2006 (source: Strategy Analytics, July 2002). Semiconductors play a crucial role in ABS systems. When the brakes are applied in cars with an ABS, the ABS microprocessor compares wheel speeds monitored by wheel-speed sensors measuring the rotation of each wheel. If one or more wheels are rotating more slowly than the others, the system energizes control valves to isolate the affected brake circuit. The wheel regains traction and prevents skidding, so that the tire slows down at the same rate as the car. By keeping the wheels from skidding while the car slows down, anti-lock brakes benefit the driver in two ways: he can stop faster, and he will be able to steer while he stops.

"Over the past ten years we've developed a close working relationship with Philips," said Frank Jourdan, Vice President Sensoric of Continental Teves. "Philips' sensor chips provide us with the best solution for contactless speed measurement, and their ability to meet our requirements for volume production made them our partner of choice for developing the sensor chips for our active wheel speed sensors."

"Continental Teves is a recognized technology leader in the area of brake and chassis engineering," said Drue Freeman, General Manager, Global Automotive Marketing & Sales, Philips Semiconductors. "Our relationship with Continental Teves is part of our growth strategy in the sensor area. We are proud to be co-operating with such a distinguished partner in fulfilling specific application needs in order to provide the car driver with the best in automotive safety."

Active wheel speed sensors offer more precise system control at very low speeds than is possible with passive sensors. Sensing at near zero speed is important because it contributes to the performance of the ABS and traction control systems. The OH191 and OH223 sensor chips produced by Philips are customized for Continental Teves. Both sensors detect rotational speed of ferrous tone wheels and magnetized encoders. They consist of a magnetoresistive sensor element, a signal processing IC and a ferrite magnet. The frequency of the digital current output signal is proportional to the rotational speed of a gear wheel.

The OH191 features a digital current output signal, a zero speed capacity, a wide air gap, and has a wide temperature range. It is vibration insensitive and EMC resistant. The OH223's attributes are similar, but also include additional features such as an extended air gap, digital offset compensation, direction detection, digital output protocol, a three level output signal, an additional digital input pin and a tolerance to positioning.

About Royal Philips Electronics

Royal Philips Electronics of the Netherlands is one of the world's biggest electronics companies and Europe's largest, with sales of EUR 31.8 billion in 2002. It is a global leader in color television sets, lighting, electric shavers, medical diagnostic imaging and patient monitoring, and one-chip TV products. Its 166,000 employees in more than 60 countries are active in the areas of lighting, consumer electronics, domestic appliances, components, semiconductors, and medical systems. Philips is quoted on the NYSE (symbol: PHG), London, Frankfurt, Amsterdam and other stock exchanges. News from Philips is located at www.semiconductors.philips.com