SMSC Adds Blue-Chip Automotive Customer Base for Infotainment Networking Applications

HAUPPAUGE, N.Y.--March 31, 2005--Reaching a significant milestone in its diversification strategy, SMSC , a leading semiconductor company delivering innovative system solutions spanning analog, digital and mixed-signal technologies, announces the acquisition of OASIS SiliconSystems Holding AG (OASIS), a leader in the development and marketing of integrated circuits that enable networking of multimedia devices for automotive infotainment applications. OASIS is a leading provider of Media Oriented Systems Transport (MOST(R)) technology, which enables the seamless transport of digital audio, video, and packet-based data, along with control information, within automobiles.

Headquartered in Karlsruhe, Germany, and supported by an IC engineering team in Austin, Texas, OASIS is one of the largest privately held fabless semiconductor companies in Europe and currently serves a top tier customer base of leading automakers and automotive suppliers. OASIS's infotainment networking technology has been widely adopted by many European luxury to mid-sized car brands, including Audi, BMW, Fiat, Jaguar, Land Rover, Mercedes-Benz, Porsche, PSA, Saab and Volvo.

This acquisition allows SMSC to achieve a greater balance among its application-focused businesses. The service model employed by OASIS with automotive customers dovetails with SMSC's expertise in servicing markets that require optimized solutions for networking information. This natural fit not only enhances growth opportunities with automotive infotainment customers in Europe and Asia, but also brings strong systems design capabilities that SMSC can leverage in the consumer electronics and industrial markets.

In calendar 2004, OASIS's revenues were $50 million and it was profitable. Double-digit growth in revenues and earnings are expected in calendar 2005 for OASIS. Before amortization of acquired intangibles and in-process R&D charges, the transaction is expected to be neutral to SMSC's earnings in the first quarter of fiscal 2006 and slightly accretive for the balance of that fiscal year.

"The acquisition of OASIS marks another major step in SMSC's diversification strategy by moving into a new vertical market with the leader in automotive infotainment networking in Europe," said Steven J. Bilodeau, Chairman, President and Chief Executive Officer of SMSC. "This acquisition enables the Company to strengthen its business with broader product lines, accelerates overall revenue growth and provides for greater leverage to SG&A. Furthermore, it provides geographic diversity and increases brand visibility by establishing SMSC as an important semiconductor provider in Europe. With a now well balanced business, we are able to leverage our technology solutions across automotive, computing, consumer electronics and industrial markets, which will further increase long-term returns to shareholders."

"SMSC's strong business infrastructure will provide access to greater resources and an outstanding supply chain for OASIS's existing customer base, enabling us to provide them an even higher level of service and support," said Herbert Hetzel, Chief Executive Officer of OASIS. "Through the combination of these resources and our systems expertise in infotainment networking, we will also open the door to new opportunities with prospective customers as infotainment applications are increasingly integrated into the automotive platform. We look forward to contributing to SMSC's successful business expansion and becoming part of an even larger leading semiconductor organization."

OASIS is the exclusive supplier to nearly every major European automaker for MOST-based semiconductor solutions for vehicle infotainment systems. It is also a founding member of the MOST Cooperation, a cooperative of automakers, automotive systems architects and manufacturers and key components suppliers working to establish and refine a common standard for the evolving requirements of automotive multimedia networking. SMSC will actively support the advancement of MOST as a standard for networking and connectivity in the global automotive and consumer electronics industries.

About SMSC:

Many of the world's most successful global technology companies rely upon SMSC as a go-to resource for semiconductor system solutions that span analog, digital and mixed-signal technologies. Leveraging substantial intellectual property, integration expertise and a comprehensive global infrastructure, SMSC solves design challenges and delivers performance, space, cost and time-to-market advantages to its customers. SMSC's application focus targets high-growth vertical markets including mobile and desktop PCs, servers, consumer electronics, automotive infotainment and industrial applications. The Company has developed leadership positions in its select markets by providing application specific solutions such as mixed-signal PC system controllers, non-PCI Ethernet, ARCNET, MOST, USB2.0 and other high-speed serial communications.

SMSC is based in Hauppauge, New York with operations in North America, Taiwan, Japan, Korea, China and Europe. Engineering design centers are located in Arizona, New York, Texas and Karlsruhe, Germany. Additional information is available at www.smsc.com.