VLSI Commits to PowerPC Platform Support; Mass Customized System Logic Sharpens Differentiation, Speeds Time-to-Market.

LAS VEGAS--(BUSINESS WIRE)--Nov. 13, 1995--VLSI Technology, Inc. today expressed its commitment to developing mass customized logic products supporting the Apple-IBM-Motorola-sponsored PowerPC Platform.

The VLSI PowerPC development program calls for engaging with PowerPC system developers to create end products custom tailored to meet needs of rapidly growing application areas such as multimedia, consumer PC, SOHO, client-server and digital entertainment. The initiative foresees profound changes for the business model existing between system manufacturers and semiconductor suppliers. VLSI will leverage its proven system level expertise, functional system block (FSB) elements and cell-based technology to enable OEMs to deliver highly differentiated products at competitive prices in time to meet customers' rapid product introduction plans.

Umesh Padval, VLSI vice president and general manager, believes the PowerPC architecture has the power to make radical changes in the personal computing marketplace and provide a strong alternative to the x86 microprocessor architecture. "We're backing PowerPC to help customers build machines that make a difference in the way people work, play and access the world. The computing market is entering a new era of highly differentiated end products. As the one-size-fits-all clone PC becomes less relevant, the mass customized, vertically optimized information platform is coming into focus."

Mass Customized System Logic

The mass customized system logic concept lies at the heart of VLSI's PowerPC strategy. A long-time IC supplier to systems based on Macintosh and PC architectures, VLSI sees system logic products rapidly evolving beyond their current role managing bus communications, I/O, disk and peripheral interface functions. Mass customized system logic products will integrate focused sets of high value-added functions targeting specific market segments. VLSI's competitive advantage in this new market originates from its ability to integrate ASIC-derived innovations with highly optimized standard functions on a single chip. Furthermore, the disciplines the company has learned in meeting needs of custom chip customers empower it to rapidly deploy custom solutions at mass-market prices.

Business Model Implications

Mass customized system logic also changes the business model followed by semiconductor suppliers. VLSI will work closely with customers building PowerPC Platform-based systems at early stages of end product definition to develop system logic solutions in parallel with overall system design. This departs from the standards-constrained chipset business model, which focuses on developing general purpose clone computers. Comments Padval: "The new computing market encompasses users as diverse as schools, business and homes. Each market segment demands something different from their computing platform. Schools want sound, graphics and fast CD-ROM access. Businesses need computer power, portability and connectivity. Homes need capability to access education and entertainment sources. We integrate the capabilities to make our customers winners in this new environment."

PowerPC Platform Endorsement

First steps for the VLSI initiative will include support logic solutions for the Apple-IBM-Motorola PowerPC Platform. Even here, however, VLSI sees its PowerPC Platform support not as a goal, but as a departure point for a changing computing industry. "For us, delivering a great PowerPC Platform solution gets us in the door to work with end product OEMs to create focused end products. Consequently, our marketing communications will increasingly emphasize our role in achieving end-user benefits, not just what we hope to sell in the future," says Padval.

PowerPC AIM Partners Comment

Spokespeople from leading PowerPC Platform proponents welcomed VLSI's commitment to the RISC microprocessor architecture.

"Apple Computer is pleased that VLSI is making a significant commitment to support and enable the growth of an industry based on the PowerPC Platform. They have the technology and resources to make the PowerPC Platform a winning business proposition."

Lamar Potts Vice President, OS and Technology Licensing Group Apple Computer, Inc.

"As a world leader in system logic, VLSI's PowerPC program means that PowerPC platform developers will have robust range of attractive market segments and OEM business opportunities open to them. With PowerPCUs scalability and VLSI's proven technology, PowerPC system solutions now have the added versatility demanded by todayUs computer users."

Dr. Ronald Black Director IBM PowerPC Microelectronics

"Components from leading industry vendors like VLSI will help lower PowerPC system costs, as well as decrease overall time-to-market and increase differentiation of system offerings from OEMs."

Phil Pompa Director of Marketing Motorola RISC Microprocessor Division

About VLSI Technology, Inc.

VLSI Technology, Inc. (NASDAQ:VLSI) designs and manufactures application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs) based on its library of FSB functional system blocks. Targeting its offerings towards the communications, computing, and consumer entertainment marketplaces, the company offers its customers advanced system-level integration capabilities. The company is based in San Jose, California, with 1994 revenues of $587 million, and has approximately 2,700 employees worldwide. -0-

NOTE TO EDITORS: FSB is a trademark of VLSI Technology, Inc. Other trademarks and registered trademarks are property of their respective owners.

CONTACT: VLSI Technology

Martin Chorich, 408/922-5155