Siemens VDO Automotive Partners With Freescale Semiconductor in Global Electronics Components Supply Agreement

AUBURN HILLS, Mich.--Sept. 27, 2004--Siemens VDO Automotive has selected Freescale Semiconductor, the leading supplier of semiconductors to the automotive market, as a global supplier partner. This renewed relationship between the two companies represents more than EUR 200 million (approximately $245 million) in business awarded by Siemens VDO Automotive to Freescale to supply electronics components, such as ASIC, microcontroller, analog and sensor components, over the lifetime of product starting in 2006.

"Siemens is built on more than 150 years of electronics innovation experience, and Freescale has a heritage built on 50 years of semiconductor experience," said Siemens VDO Automotive Vice President of Purchasing - NAFTA Frank Homann. "They have demonstrated their commitment to the growing automotive electronics industry, as well as to helping Siemens VDO Automotive continue to supply value to our worldwide Original Equipment Manufacturer (OEM) customers."

Siemens VDO Automotive's increasing global presence in the $125 billion automotive electronics is fueled by projections for an 8.5 percent growth rate between 2001 and 2006 for the industry overall - with electronic systems representing nearly 35 percent of a vehicle's value by 2010.

In fact, electronics is the fastest-growing sector of automotive content. Including all electromechanical and micromechanical components, such as sensors and actuators, relays and minimotors, the total value of electronics and electrics in a vehicle will rise from approximately $2,250 in 2000 to $3,870 in 2010.

"There is a wealth of opportunity in the automotive electronics market and we are helping our customers take advantage of it," said Freescale Transportation and Standard Products Group Senior Vice President and General Manager Paul Grimme. "With this agreement, Siemens VDO Automotive has selected a number of products from our portfolio - extending their range of automotive electronics solutions and strengthening our long-term relationship. Particularly significant is their decision to adopt our MPC5500 family of 32-bit microcontrollers and supporting analog products, across multiple engine and transmission applications."

Freescale Semiconductor, Inc. is a global leader in the design and manufacture of embedded semiconductors for the automotive, consumer, industrial, networking and wireless markets. Freescale became a publicly traded company in July 2004 after more than 50 years as part of Motorola, Inc. . The company is based in Austin, Texas and has design, research and development, manufacturing or sales operations in more than 30 countries. Freescale Semiconductor's 2003 sales were $4.9 billion (USD). For more information: www.freescale.com.

Siemens VDO Automotive is a tier-one supplier of automotive electronic/electrical systems and components with applications covering gasoline and diesel powertrain technologies, safety and chassis systems, body electronics, plus interior products including infotainment systems. Worldwide sales reflecting fiscal year 2002/2003 totaled $9.589 billion (EUR 8.375 billion). For more information: www.usa.siemensvdo.com.

Siemens AG is a leading global electronics and engineering company with reported worldwide sales of $80.5 billion in fiscal year 2003. With its U.S. corporate headquarters in New York City, Siemens in the USA has sales of $16.6 billion and employs 65,000 people throughout all 50 states and Puerto Rico. Eleven of Siemens' worldwide businesses are based in the United States. With its global headquarters in Munich, Siemens AG and its subsidiaries employ 417,000 people in 192 countries. For more information on Siemens in the U.S.: www.usa.siemens.com.