Philips Semiconductors and TSMC Announce New Benchmark in Fab ConstructionSingapore Fab Tools Up for First Silicon

Singapore, June 19, 2000 – Philips Semiconductors, an affiliate of Royal Philips Electronics, and Taiwan Semiconductor Manufacturing Company (TSMC) announced that the Systems-on-Silicon Manufacturing Company (SSMC) fab being built in Singapore is ahead of schedule and ready for the installation of manufacturing equipment.

SSMC is the joint venture company of Philips Semiconductors, TSMC and the Singapore Economic Development Board Investments (EDBI).

“By building on the experience of both Philips Semiconductors and TSMC, our highly focussed team has been able to construct a full-scale, 30,000 wafers per month capable fab faster than either parent company to date,” said Peter Yates, SSMC’s CEO. “Construction started less than a year ago with the first pile being driven in June 1999 and now we are installing the first tools, which sets a new benchmark for constructing a fab of this scale. The co-operation of the EDB has been outstanding and was fundamental to helping us achieve this record time.”

Stuart McIntosh, the SSMC board chairman and Chief Operations Officer of Philips Semiconductors, said, “This is a tremendous achievement and a world-record performance for a fab of this scale. When we first announced our intention to build this fab in late 1998, the semiconductor industry was in recession, but we predicted that we would need the capacity of this fab in late 2000 to meet the next upswing in the semiconductor market demand.

“With the experience from Philips Semiconductors’ MOS4 fab in Nijmegen, The Netherlands, which set a world record of 98 days from first equipment to first yielding wafers, the SSMC fab is all set to produce first silicon in September,” Mr. McIntosh continued. “This will ramp up to 10,000 wafers per month over the following months and culminate in a maximum monthly output of 30,000 wafers per month by June 2002. This will enable us to take advantage of the demand upturn in the industry and meet the needs for our state of the art, systems-on-silicon solutions.”

“We believe the record construction time for this fab is just the start of good things to come,” said Dr. CC Wei, TSMC vice president of operations and a member of the SSMC board of directors. “With the addition of an excellent equipment line-up, highly trained workers, and competitive technology offerings, SSMC is destined to play a major role in the world-wide system-on-chip market. SSMC is also an integral element of TSMC’s capacity expansion plans, coming on the heels of the opening of TSMC Fab 6, the largest semiconductor manufacturing facility in the world.”

To ensure that this fab project continues to be record breaking, a team of 150 engineers has been receiving training in advanced submicron process technology at Philips Semiconductors’ facilities in the Netherlands and TSMC’s facilities in Taiwan. They are now starting to return to the fab to help manage the installation, testing and qualification of the equipment. The current workforce of around 350 employees is expected to reach 1050 by mid 2002.

The first process tool to be delivered is a step and scan photolithography scanning system from ASML and this will be followed by over 200 different tools over the next couple of months. The initial process technology will be 0.25 micron CMOS with 0.18 micron CMOS being introduced during 2001.

About Philips Semiconductors

Philips Semiconductors, which has annual revenues of approximately $5 billion, designs and manufactures semiconductors and silicon systems platforms. Philips Semiconductors is spearheading the emerging field of systems on silicon solutions with the innovative Nexperia? platform and VLSI Velocity? tool set. The company’s Sea-of-IP design methodology allows plug and play intellectual property blocks for