SSMC Commits US$250 Million to Expand Capacity in 2004

Singapore, December 15, 2003: Systems on Silicon Manufacturing, a dedicated manufacturer of advanced semiconductor wafers, will spend US$250 million in 2004 on capacity expansion that will increase output to 33,000 200mm wafers per month in the near-term with a larger increase in the future. This expansion will bring the company well above its original planned capacity of 30,000 wafers per month.

The US $250 million capital investment will be used mainly for equipment purchases, with some infrastructure upgrades that will enable a long-term manufacturing capacity expansion of up to 40,000 wafers per month.

The company, which is a joint venture between Philips Semiconductors, Taiwan Semiconductor Manufacturing Company (TSMC) and the Economic Development Board (EDB) of Singapore, has reported positive net income since mid-2003. The present manufacturing capacity of 24,000 wafers per month is fully booked and the fab currently enjoys a 95-100% utilization rate.

“We expect SSMC to continue to be profitable in the foreseeable future, performing even better in 2004 than in 2003,” said Fred Rausch, CEO of SSMC. “This is because of the combination of high demand from customers in all of our market sectors, and an extremely efficient manufacturing operation. ”

”The Board’s approval of this investment is a strong vote of confidence in SSMC. It will certainly broaden our existing technologies and manufacturing capabilities,” said Mr. Rausch. “This additional investment also marks that the company has moved from an emerging foundry to a world-class competitor.”

“It is a credit to the smooth collaboration between Philips, TSMC and Singapore that SSMC finds itself profitable and expanding,” said Dr. Rick Tsai, President and COO of TSMC. “SSMC has demonstrated without question that it can meet our customers’ needs for faster time-to-market, short lead times and the highest possible quality.”

Ajit Manocha, Senior Vice President of Philips Semiconductors said, “SSMC has made significant progress in the semiconductor market since its inception in 1998. It has constantly challenged itself to set new benchmarks in the industry, with the latest being the introduction of embedded flash technologies. Since the initial mass production in 0.25-micron, SSMC is now moving on to 0.14-micron technology which is targetted for mass production in 2004. Through this arrangement, SSMC will now be able to provide our customers with both advanced production capacity in CMOS18 and below technology, as well as leading edge fabrication processes.”

Anticipating a marked production increase, the company is also embarking on a large-scale recruitment effort that will increase total headcount from 1,050 at present to 1,300 by the third quarter of this year. Positions available are in modules, manufacturing, account management and facilities areas.

“Increase in headcount is not only a matter of recruitment,” added Mr Rausch “It is also about applying the whole structure of training and career development which we have developed over the years and which will enable us to keep and grow our people.”

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 166,500 employees in more than 60 countries are active in the areas of lighting, consumer electronics, domestic appliances, semiconductors, and medical systems. Philips is quoted on the NYSE (symbol: PHG), Frankfurt, Amsterdam and other stock exchanges. News from Philips is located at

About TSMC

TSMC is the world's largest dedicated semiconductor foundry, providing the industry's leading process technology and the foundry industry's largest portfolio of process-proven library, IP, design tools and reference flows. The company operates one advanced 300mm wafer fab, five eight-inch fabs and one six-inch wafer fab. TSMC also has substantial capacity commitments at its wholly-owned subsidiary, WaferTech, and its joint venture fab, SSMC. In early 2001, TSMC became the first IC manufacturer to announce a 90-nm technology alignment program with its customers. TSMC's corporate headquarters are in Hsinchu, Taiwan. For more information about TSMC please see

About SSMC

Founded in 1998, SSMC is a joint venture of Royal Philips Electronics, Taiwan Semiconductor Manufacturing Company (TSMC) and the Economic Development Board (EDB) of Singapore. The company is 48 per cent owned by Philips Semiconductors, with TSMC and EDB having 32 per cent and 20 per cent respectively. The originally US$1.2 billion investment project led to the creation of a state-of-the-art wafer fabrication facility in Singapore's Pasir Ris Wafer Fab Park, capable of producing semiconductor wafers with advanced sub-micron process technologies. Construction of SSMC fab was completed in record time, setting a new benchmark in the semiconductor industry.