TDK Semiconductor, Silicon Laboratories Settle Patent Infringement

4/4/2003 - TDK Semiconductor Corporation and Silicon Laboratories Inc. (Nasdaq: SLAB) jointly announced that the companies have reached an amicable settlement of the patent infringement lawsuit brought by TDK covering one of their patents related to signal modulation technology for digital access arrangements (DAA).

Under the terms of the settlement, TDK agreed to release all claims covered by the lawsuit. In addition, TDK granted Silicon Laboratories irrevocable, royalty free licenses for the patent covered by the lawsuit and certain other related patents. In exchange, Silicon Laboratories agreed to make a one-time payment of $17 million to TDK and released all counterclaims covered by the lawsuit. Silicon Laboratories and TDK agree that the amicable resolution of this litigation does not constitute an admission or concession of liability or fault by either party.All other terms of the settlement are confidential.

"TDK Semiconductor Corporation is pleased to have resolved this litigation matter with terms and conditions that allow both parties to move forward with their business strategies," said Gerald Fitch, chief financial officer of TDK Semiconductor Corporation.

"The resolution of this lawsuit, which has been pending for almost two years, will allow the management of Silicon Laboratories to focus time and energy on the continued growth of the company," said Russ Brennan, chief financial officer of Silicon Laboratories.

The majority of the settlement payment will be expensed in Silicon Laboratories' first quarter with a $15.3 million charge to cost of revenues, resulting in approximately $0.20 per diluted share reduction to earnings. The remaining $1.7 million of the $17 million total payment will be amortized to cost of revenues over the useful life of the technology. Silicon Laboratories exited fiscal 2002 with a debt-free balance sheet and with cash, cash equivalents and short-term investments totaling $115.2 million.

About TDK Semiconductor Corp.
TDK Semiconductor, part of $4.8 billion TDK Corporation (NYSE: TDK), provides advanced ICs for communications and consumer markets worldwide. The company produces analog and mixed-signal products for applications such as digital cable and satellite set-top boxes; local, metro and wide area networking; point of sale terminals, payphones, meters and smart card readers. Additional product information and the name of a local TDK representative can be obtained by visiting the company's web site at, sending an e-mail to support@tdksemiconductor or by calling (714) 508-8800.

About Silicon Laboratories Inc.
Silicon Laboratories Inc. designs, manufactures and markets proprietary high-performance mixed-signal integrated circuits (ICs) for a broad range of communications markets. Silicon Laboratories is an ISO9001-certified manufacturer and has applied for over 161 patents on its mixed-signal technology. The company was incorporated in 1996 and is based in Austin, Texas. Additional information about Silicon Labs is available at or through the toll-free investor relations line at 1-877-411-SLAB (7522).

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