SMSC Reduces Cost of Notebook PCs with New Mobile Embedded Controllers; New Chip Design Provides Highly Integrated Features to Ensure Data and Hardware Integrity.

TAIPEI, Taiwan -- Targeting the fast growing value and mainstream consumer notebook PC market, SMSC (Nasdaq: SMSC), a leading semiconductor company delivering innovative system solutions spanning analog, digital and mixed-signal technologies, introduced the KBC1100 and KBC1100L family of integrated microcontrollers today at the Intel Developer Forum in Taipei, Taiwan. SMSC expands the role of the traditional keyboard controller (KBC) to deliver the industry's first mobile embedded controller solution that integrates critical thermal, power and system management capabilities with keyboard scan, serial port and consumer infrared (CIR) functionality into a single device.

With the introduction of the KBC1100 and KBC1100L, notebook PC designers benefit from up to a 50 percent reduction in overall system costs. SMSC's new chip architecture integrates up to 12 different components, removing considerable design time, while also designing in key thermal, power and system management functionality in an effort to meet market demand for smaller, less expensive mobile devices.

"We are enabling a lower system cost and allowing designers to get product to market quickly and efficiently," said Drew Dutton, Vice President of Marketing - Mobile I/O Products at SMSC. "By leveraging our expertise in analog and mixed-signal design we are able to integrate critical system functionality, normally requiring multiple parts, into a single device. We are helping our ODM partners meet consumer's demands for smarter, smaller and less expensive solutions."

According to Barry Chuang, Vice President of Engineering at Insyde Software, "With the KBC1100, SMSC addresses many concerns of consumer notebook PC designers and delivers a broad set of features addressing system management tasks for embedded controllers. We are pleased to be working closely with SMSC to bring Insyde's industry-leading keyboard controller firmware and development tools to market to maximize customer benefits."

More Than a Keyboard Controller:

With the KBC1100 and KBC1100L controllers, SMSC is introducing SMSC SentinelAlert!(TM) technology to help defend mobile PCs against thermal damage. Combining a watchdog timer and proprietary thermal sensor interface, SMSC SentinelAlert! technology provides a hardware response to dangerous conditions such as unresponsive system execution or excessive temperatures. The SMSC SentinelAlert! hardware automatically sets specific analog and digital interface outputs to safely disable affected system functions, such as a battery charging circuit. These safe output levels are programmed into the KBC1100 hardware by the microcontroller at start-up and are completely automatic from that point on.

The KBC1000 and KBC1100L products provide cost reductions and significant board area reductions for ODMs and OEMs designing laptops in the mid- to sub-$1,000 range through the use of its proprietary SMSC BudgetBus(TM) sensor interface. The easily routed single wire digital interface eliminates the need to design the traditional two wire clock and data interfaces or the noise sensitive analog interfaces. At the other end of the interface, SMSC delivers the smallest two-sensor product available today in a small SOT23 package.

Feature-Rich Solution:

The KBC1100 controller also integrates a CIR transceiver to address the growing consumer demand to access audio, video and data. By integrating a CIR transceiver, SMSC provides the lowest cost solution in comparison to existing "dongle" solutions. With the KBC1100 controller integrating the majority of the circuitry, only the Infrared optical transceiver and lens are needed to complete the design. Additionally, the KBC1100 improves remote control wake-up capability of mobile PCs.

To further enhance the reliability of the system, SMSC's new products have the ability to reprogram the shared flash memory via a serial link provided by the KBC1100 controller. This innovative programming of the flash enables a flexible development environment and easy field repair through the ability to detect corrupted firmware and enter the serial programming mode.

Key Features of SMSC's KBC1100 and KBC1100L Controllers:

--High Performance 8051 Controller with Shared 8MB Flash Interface

--16550 Compatible Serial Port with IRCC2 IR Controller

--CIRCC2.0 IR Controller including System Wake Up on IR Code

--Integrated ADC and DAC Interface

--SMSC BudgetBus(TM) Sensor Interface

--SMSC SentinelAlert!(TM) Technology

--176 TQFP Package (KBC1100) and 144 TQFP Package (KBC1100L) Options

Price and Availability:

Samples of the KBC1100 and KBC1100L are available now with production quantities available in the first quarter of 2005. Pricing will be $7.45 per unit and $5.95 per unit (U.S. list price), respectively in 10K quantities.

About SMSC:

Many of the world's most successful global technology companies rely upon SMSC as a go-to resource for integrated circuits and semiconductor system solutions that span analog, digital and mixed-signal technologies. SMSC delivers products that solve the challenges of space, cost and time-to-market for high-speed computing, connectivity and embedded networking applications.

SMSC addresses computing, communications and consumer electronics markets through world-leading positions in Input/Output and non-PCI Ethernet products; innovations in USB2.0 and other high-speed serial solutions; and integrated networking products employed in a broad range of applications. Leveraging substantial intellectual property and a comprehensive global infrastructure, SMSC thrives at the intersection of silicon, software and customized OEM applications. SMSC is based in Hauppauge, New York with operations in North America, Taiwan, Japan, Korea, China and Europe. Engineering design centers are located in Arizona, New York and Texas. Additional information is available at www.smsc.com.

Forward Looking Statements:

Except for historical information contained herein, the matters discussed in this announcement are forward-looking statements about expected future events and financial and operating results that involve risks and uncertainties. These include the timely development and market acceptance of new products; the impact of competitive products and pricing; the effect of changing economic conditions in domestic and international markets; changes in customer order patterns, including loss of key customers, order cancellations or reduced bookings; and excess or obsolete inventory and variations in inventory valuation, among others. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations and may not reflect the potential impact of any future acquisitions, mergers or divestitures.

SMSC competes in the semiconductor industry, which has historically been characterized by intense competition, rapid technological change, cyclical market patterns, price erosion and periods of mismatched supply and demand. In addition, sales of many of the Company's products depend largely on sales of personal computers and peripheral devices, and reductions in the rate of growth of the PC, consumer electronics and embedded markets could adversely affect its operating results. SMSC conducts business outside the United States and is subject to tariff and import regulations and currency fluctuations, which may have an effect on its business. All forward-looking statements speak only as of the date hereof and are based upon the information available to SMSC at this time. Such information is subject to change, and the Company may not necessarily inform, or be required to inform, investors of such changes. These and other risks and uncertainties, including potential liability resulting from pending or future litigation, are detailed from time to time in the Company's reports filed with the SEC. Investors are advised to read the Company's Annual Report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission, particularly those sections entitled "Other Factors That May Affect Future Operating Results" for a more complete discussion of these and other risks and uncertainties.

SMSC is a registered trademark of Standard Microsystems Corporation. Product names and company names are trademarks of their respective holders.