ZMD/ZFOUNDRY and 1st Silicon Enter Strategic Partnership for Sourcing and Developing Advanced Automotive Technologies

DRESDEN, Germany & KUCHING, Malaysia--Jan. 1, 20058, 2005--ZMD AG and 1st Silicon (Malaysia) Sdn. Bhd. today announced that they have entered a strategic partnership for sourcing and joint development of advanced automotive technologies for deep sub-micron processes.

The joint program combines ZMD's established expertise in automotive design, high-voltage processes and quality manufacturing with the advanced process know-how and production capabilities of 1st Silicon. This collaboration will ultimately result in a versatile 0.18um process platform for automotive applications. While the initial development and production will be conducted at 1st Silicon's advanced process facilities in Kuching, the partners plan to provide volume production in both Kuching, Malaysia and Dresden, Germany. This mutual second-sourcing plan offers a unique advantage in securing supply to automotive customers for complex high-voltage and mixed-signal technologies.

In addition, 1st Silicon has also started to implement ZMD's special non-volatile memory module in production of 0.18um-based non-volatile products (NVSRAM) for ZMD.

Thilo von Selchow, CEO of ZMD said, "We are extremely excited about the perspectives offered by this partnership with 1st Silicon for ZMD's future market penetration in both NVSRAM as well as advanced automotive products. The first NVSRAM products are ready to enter the market in the third quarter this year. It is a unique leverage of capabilities that each party would not be able to perform alone."

According to Dr. John Nelson, CEO of 1st Silicon, "This partnership will guide us into a niche market segment, that until recently has been covered by integrated device manufacturers. We wish to become the primary source of silicon for high-voltage and mixed-signal automotive applications in the foundry market. We will sustain our relationship with ZMD which is an established European automotive supplier. To enable our strategy, we have initiated an ISO/ TS16949 project and we aim to be certified by the end of this year."

"We will extend our current portfolio in mixed-signal and power technologies to a technology leadership position in high-performance mixed-signal and automotive processes ensuring long-term prosperity and growth for the ZFOUNDRY operation in Dresden. The strong relationship developed with 1st Silicon as our second source is an extra advantage for the target markets," added Konrad Herre, COO of ZMD and president of the production subsidiary ZFOUNDRY.

About 1st Silicon (Malaysia) Sdn. Bhd.

1st Silicon (http://www.1si.com) is a dedicated semiconductor foundry founded in 1998 by the Malaysian State of Sarawak. 1st Silicon's 200mm wafer fab has a capacity in excess of 45,000 wafers per month when fully ramped. The Company offers volume production of digital and mixed-signal CMOS technologies in 0.25um and 0.18um processes. 0.15um logic and 0.13um Flash technology will be available by first quarter of 2005. The company also focuses on niche markets by offering reliable and cost-effective embedded non-volatile memory, high-voltage, CMOS image sensor and CCD processes. 1st Silicon's customers include integrated device manufacturers and fabless semiconductor companies worldwide. 1st Silicon has its headquarters in Kuching, Sarawak, Malaysia, and sales offices in US, Korea and Taiwan.

About ZMD

Based in Dresden, ZMD AG (http://www.zmd.de) has successfully specialized in the design, manufacture and marketing of high-performance, mixed analog-digital application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs) with low power consumption. The company has established an excellent international reputation as a manufacturer of application-specific chip sets, memories and processors. ZMD's innovations are used in automobile and industrial electronics, medical technology and infra-red interfaces, e.g. in mobile phones and remote controls. The headquarters of the company, which was founded in 1961, is in Dresden. ZMD has 824 employees worldwide and runs sales operations in the USA with offices in Santa Clara (CA), San Diego (CA), and Melville (NY), and in Stuttgart and Dresden, Germany. It has Design Centers in the USA in Madison (WI) and also in Dresden and Stuttgart.

About ZFOUNDRY

ZFOUNDRY (http://www.zfoundry.com), a wholly owned subsidiary of ZMD AG, is headquartered in Dresden, Germany with U.S. sales and marketing operations in Santa Clara, California. ZFOUNDRY offers customer process transfers supported by a very experienced technology development team. In addition, its fab provides first class modular mixed-signal processes, including high-voltage structures, power (thick) metal, and back metal. ZFOUNDRY offers full support for a standard portfolio of mixed-signal technologies, including low-voltage and opto devices, with long-term availability for all process generations and certified automotive qualification. ZFOUNDRY has TS16949, QS 9000, ISO 9001 2000, and ISO 140001 certification. Products are available on 6-inch wafers down to 0.8 and 0.6 micron. As part of its full-service offering, the company provides wafer and final test in its own, fully-equipped test facility, along with product qualification, failure analysis and yield improvement.