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Koninklijke Philips (PHPE)

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Wednesday 03 May, 2000

Koninklijke Philips

Disposal

Koninklijke Philips Electronics NV
3 May 2000


PHILIPS TO SELL DISCRETE CERAMICS AND FERRITE CERAMICS TO YAGEO CORPORATION

EINDHOVEN, THE NETHERLANDS, May 3, 2000 - Philips Components, a division of
Royal Philips Electronics of the Netherlands, today announced it intends to sell
its Discrete and Ferrites Ceramics business lines. A preliminary agreement has
been reached between Philips and Yageo Corporation. The transaction is valued at
EUR 650 million.

The business line Discrete Ceramics is a well-positioned, mid-sized player in
multi-layer capacitors (CMCs) and chip resistors (R-SMDs). These products are
used in all areas of electronic equipment manufacturing. In 1999 the business
line had annual sales of EUR 235 million and expects a double-digit growth for
this year.

The business line Ferrite Ceramics is a pioneer of the ferrite ceramics industry
with a track record of almost 50 years. It designs, produces and 
sells soft ferrites for a wide range of applications in the electronics
industries. With annual sales of nearly EUR 100 million, the business line is
well-positioned within the global industry.

Both business lines employ approximately 3,200 people within facilities in
Germany, Spain, the Netherlands, Poland, Taiwan, Mexico, Hungary, Malaysia,
United States and sales organizations all over the world. The proposed
transaction encompasses virtually all activities and employees including senior
management.

This intended divestment results from the strategy that Philips Components has
previously announced. In a step by step approach Philips Components has been
putting focus on specific market segments that demand integrated digital
solutions based on Philips' key technologies. The divestment of Discrete and
Ferrite Ceramics follows previous divestments, which have included hard ferrites
in 1997 and conventional passive components in 1999.

Yageo Corporation based in Taipei, Taiwan was founded 23 years ago and supplies
passive components to the computer, telecom and automotive industries. Today
Yageo Corporation is Taiwan's largest producer of passive components and employs
approximately 5,000 people all around the world.

Commenting on this divestment Gerard Kleisterlee, President and CEO of Philips
Components, said: 'In order to be the technology partner of choice for leading
global OEMs we focus on creating value for our customers by providing integrated
digital electronic solutions rather than base components.' To this he added: ' I
am very pleased that we have been able to reach agreement with Yageo
Corporation, a company which has demonstrated its strong commitment to the
passive components industry already for a long time. I strongly believe that the
future of our Discrete and Ferrite Ceramics business lines will be considerably
strengthened by this spin-off.'

Philips and Yageo Corporation expect to close the proposed transaction later
this year.

For further information please contact: 

Philips Components
Corporate Communications Department
Mr. Pieter Schaffels
Tel: +31 40 2724440

Philips Components, headquartered in Eindhoven, the Netherlands, is a world
leader in supplying integrated digital electronic solutions in the areas of
display, storage and power management to global customers in the Consumer
Electronics, EDP, Telecom and Automotive industries. Philips Components with
1999 annual revenue of EURO 5.3 billion employs more than 40,000 people in over
40 countries around the world. More information about Philips Components is
available through the Philips homepage as www.philips.com.

Royal Philips Electronics of the Netherlands is one of the world's biggest
electronics companies and Europe's largest, with sales of EUR 31.5 billion in
1999. It is a global leader in color television sets, lighting, electric
shavers, color picture tubes for televisions and monitors, and one-chip TV
products. Its 226,900 employees in more than 60 countries are active in the
areas of lighting, consumer electronics, domestic appliances, components,
semiconductors, medical systems, and IT services (Origin). Philips is quoted on
the NYSE (symbol:PHG), London, Frankfurt, Amsterdam and other stock exchanges.
News from Philips is located at www.news.philips.com.