SMC Acquires Personal Computer Systems Logic Technology From EFAR Microsystems, Inc.

HAUPPAUGE, N.Y.--(BUSINESS WIRE)--March 4, 1996--Standard Microsystems Corporation (SMC) has announced its acquisition of the assets and technology of EFAR Microsystems, Inc. (EFAR), a Santa Clara, California, and Taiwan-based supplier of highly-integrated chipsets for X86-type (including Pentium) microprocessors. EFAR will provide SMC with many critical technologies and patents in the personal computer systems logic field, including PCI chipset SuperCell technology such as memory controllers, cache controllers, PCI bus controllers, IDE disk controllers, DMA controllers, power management technologies, and other SuperCells used today for motherboard personal computer systems logic. The acquisition is a major step in SMC's positioning strategy, bringing EFAR's uniquely skilled personnel, design expertise and proprietary device technology into the SMC organization.

The transaction includes an initial payment of 240,000 shares of SMC common stock and the assumption of certain liabilities, which together total approximately $5.6 million in value. SMC will incur a one-time charge for purchased in-process technology for substantially all of this $5.6 million during its fourth quarter ending February 29, 1996. Additional SMC common stock of up to $20 million may be issued to EFAR over the next three years, contingent upon achieving certain operating results.

Arthur Sidorsky, SMC Executive Vice President and head of the company's Component Products Division, said, "We value the acquisition as a key piece of our strategy to position SMC as a broad and powerful source of component level technology for advanced portable and desktop computers. The EFAR acquisition dovetails well with SMC's technology roadmap and with other strategic steps the company plans to take in the future. The true long-term benefits will accrue to SMC as EFAR's design talent and device technology are incorporated into future SMC products."

EFAR will operate as a separate business unit called the Personal Computer Systems Logic Business Unit within SMC's Component Products Division. It will be headed by Peter Ju, who will become SMC's Divisional Vice President of the unit. Joining Mr. Ju will be EFAR cofounders Ying Feng Chang as Director of Engineering, Chin Wu as Director of Technical Marketing and all of the current key employees of EFAR. Mr. Ju commented, "We created EFAR to leverage our design, engineering and marketing abilities and create efficient, high-performance personal computer systems logic that would succeed in an intensely competitive market.

We are excited to be part of the SMC organization because this will allow our accomplishments to go a lot further. We plan on becoming major contributors to the company's continued technological and market success."

Product technologies that SMC will obtain as part of the transaction include the UltraCore PCI Personal Computer Systems Logic Chipset for Intel, Cyrix, and AMD 64-bit microprocessors as well as the UltraCache PCI Core Logic Chipset with integrated cache memory. The UltraCache technology will represent a leapfrog step over current core logic products when it is formally introduced later this year because it contains a built-in 256Kbyte cache memory and will significantly reduce the board space and bill-of-material costs of PC motherboards.

EFAR's operations will be moved into SMC's San Jose facilities during the second quarter of calendar 1996.

Founded in 1971, Standard Microsystems Corporation's (NASDAQ:SMSC) Component Products Division designs, develops and manufactures MOS VLSI circuits. The component products are designed for the computer peripherals market with a focus in networking, industrial and personal computer input/output. In addition to the Component Products Division, SMC's System Products Division provides a broad range of networking solutions for scaling, managing and connecting local area networks. SMC's products include LAN switches, hubs, LAN adapters and network management software.

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