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Tuesday 05 March, 2002

Koninklijke Philips

Re Agreement

Koninklijke Philips Electronics NV
5 March 2002


Joint development project focuses on R&D for production of advanced CMOS
processes at 90-nm, 65-nm and beyond 

Eindhoven, The Netherlands, Geneva, Switzerland and Hsin-Chu, Taiwan, March 5,
2002 - Royal Philips Electronics (NYSE: PHG, AEX: PHI), STMicroelectronics
(NYSE: STM) and Taiwan Semiconductor Manufacturing Company Ltd. (TAIEX: 2330,
NYSE: TSM) ('TSMC') today announced that the three companies have reached
agreement on a new advanced 90-nm (0.09-micron) CMOS process. The agreement
between the three companies also includes the development of CMOS processes to
the next technology node at 65-nm and beyond.

Test devices for 90-nm have already been successfully fabricated by ST and
Philips in Crolles, France, and by TSMC in Hsin-Chu, Taiwan. Prototyping of 90-
nm products is expected to take place in the second half of 2002. This
development was made possible by leveraging the technical expertise of all
three companies' internal research and development teams and customer
engineering organizations. The 90-nm process involves the collaborative
resources of all three partners and their associated advanced laboratories,
including Philips Research, IMEC, CEA/LETI and France Telecom R&D. The joint
development agreement between Philips, ST and TSMC is expected to provide
designers with early access to industry-leading 90-nm technology that is quickly
transferable to high-volume production by all three companies. Customers that
take advantage of this effort will further benefit by leading their markets - or
creating new markets - with high-performance devices capable of supporting new
and unique applications.

This joint project extends existing alliances among the three companies. 
STMicroelectronics and Philips' semiconductors divisions have been cooperating 
since 1992 on joint development of CMOS digital and mixed-signal processes, a
cooperation that was strengthened and extended in 2000. Similarly, Philips and
TSMC have collaborated in process research and development since the founding of
TSMC in 1987. This landmark collaboration, which brings TSMC together with two
of the world's largest producers of semiconductors, allows the three companies
to reinforce their R&D efforts in leading edge technology.

The technology developed by the three partners has already been validated on
fully functional test chips produced on the ST/Philips pilot line in Crolles,
France and at TSMC Fab3's R&D facilities in the fourth quarter of 2001. These
test chips included 1-Mbit and 4-Mbit of embedded static RAM (SRAM). The SRAM
density of 735kbit/mm(2), already one of the highest in the world, will be 
further increased by the end of the year when the SRAM cell size is reduced from 
its initial 1.36um(2) to 1.27um(2).

'The development of this process will give our customers early access to an
advanced System-on-Chip process that supports high performance processors and
peripherals, together with embedded DRAM and SRAM and enables us to exploit the
scalability of our Nexperia architectures to even greater complexities within 
the shortest time to market,' said Theo Claasen, Chief Technology Officer at 
Philips Semiconductors. 'Leveraging the expertise of the three companies, we 
will be in a leading position to offer the world's most advanced and 
manufacturing-efficient CMOS technology. A rich library of standard cells is 
already available, and the strong partnership between the three industry-leading 
members is expected to stimulate IP providers to generate even more offerings.'
'ST has already proven its ability to design and manufacture advanced complex
System-on-Chip solutions for its world-leading customers and is now moving
forward to the next level of advanced process technology. This joint development
project is not simply an alignment of design rules. Thanks to our initial
collaboration on fundamental technical issues and the ongoing interchange of
data, we can be sure that the processes of all three partners in this and
subsequent generations will be fully compatible,' said Joel Monnier, Corporate
Vice President and Central R&D director at STMicroelectronics. 'In addition,
the ability to quickly add specific options to the baseline CMOS process will
allow us to offer our customers a rich portfolio of differentiated product
design capability to meet their application and system needs.' 

'This collaboration with two of the world's leading Integrated Devices
Manufacturers (IDMs) allows TSMC to contribute its experience and strength in
advanced technologies and extends its 90-nm technology alignment program,' said
Shang-Yi Chiang, Senior Vice President of Research & Development at TSMC.
'Together with our partners, we are looking forward to proliferating this new
90-nm advanced CMOS process while achieving world-class yields. TSMC is already
installing manufacturing equipment capable of delivering the 90nm process in 
high volume in the shortest possible time.'

About the 90-nm process
The 90-nm process is expected to deliver substantial improvements in speed,
power reduction, integration and density compared with today's 0.13-micron
technology. For example, a device built in the 90-nm process occupies only
half the area of a device in the 0.13-micron generation. This allows circuits
containing over 400 million transistors to be integrated on a single silicon
chip. This in turn enables the production of System-on-Chip (SoC) devices that
offer not only higher performance and greater complexity, but also greater cost-

This new process is expected to particularly benefit manufacturers of
convergence products, such as mobile multimedia devices (including 3G and 4G
cellular phones), and digital consumer products that combine applications such
as DVD, set-top box and Personal Video Recorders.

About Philips
Royal Philips Electronics of the Netherlands is one of the world's biggest
electronics companies and Europe's largest, with sales of EUR 32.3 billion in
2001. It is a global leader in color television sets, lighting, electric
shavers, medical diagnostic imaging and patient monitoring, and one-chip TV
products. Its 189,000 employees in more than 60 countries are active in the
areas of lighting, consumer electronics, domestic appliances, components,
semiconductors, and medical systems. Philips is quoted on the NYSE (symbol:
PHG), London, Frankfurt, Amsterdam and other stock exchanges. News from Philips
is located at

About STMicroelectronics
STMicroelectronics, the world's third largest independent semiconductor company,
is a global leader in developing and delivering semiconductor solutions across
the spectrum of microelectronics applications. An unrivalled combination of
silicon and system expertise, manufacturing strength, Intellectual Property (IP)
portfolio and strategic partner positions the Company at the forefront of
System-on-Chip (SoC) technology and its products play a key role in enabling
today's convergence markets. The Company's shares are traded on the New York
Stock Exchange, on Euronext Paris and on the Milan Stock Exchange. In 2001, the
Company's net revenues were $6.36 billion and net earnings were $257.1 million.
Further information on ST can be found at

About TSMC
TSMC is the world's largest dedicated semiconductor foundry, providing the
industry's leading process technology and the foundry industry's largest
portfolio of process-proven library, IP, design tools and reference flows. The
company has one advanced 300mm wafer fab in production and one under
construction, in addition to five eight-inch fabs (Fab 3, 5, 6, 7 and 8) and one
six-inch wafer fab (Fab 2). TSMC also has substantial capacity commitments at
its wholly-owned subsidiary, WaferTech, and two joint ventures fabs (Vanguard
and SSMC). TSMC's corporate headquarters are in Hsin-Chu, Taiwan. For more
information about TSMC please go to

For further information:
Europe:         Birgit van Gellecom,
                Warman & Bannister Tel. +31 40 214 60 14,
USA:            Paul Morrison,
                Philips Semiconductors Tel. +1 408 474 5065,
Asia Pacific:   Robyn Kao,
                Philips Semiconductors Tel. +886 2 2134 2968,

Or visit the press room at

                      This information is provided by RNS
            The company news service from the London Stock Exchange