SMSC Introduces New Generation of MOST(R) Technology Enabling Fast Transport of Multiple High-Definition Video and Multi-Channel Surround Sound

SMSC (Nasdaq: SMSC) today announced support of the new MOST150 network technology with the launch of its OS81110 Media Oriented Systems Transport (MOST®) Intelligent Network Interface Controller (INIC™). MOST150 is an all-digital networking solution for high-end multimedia and infotainment systems that enables the transfer of digital audio, video, data and control information between multiple networked devices in the automobile and applications outside the car. This new generation of MOST allows for a cost-efficient way to transfer this content at 150 Mbps over a Polymer Optical Fiber (POF)-based wire harness, multiplying the speed of the network by a factor of six over its current generation (MOST25), which is currently deployed in more than 45 car models on the road today. In addition to higher bandwidth, MOST150 features new isochronous transport mechanisms to support extensive video applications, as well as an Ethernet channel for efficient transport of IP-based packet data. Through the use of SMSC’s INIC architecture and POF-based Physical Layer, SMSC’s new OS81110 ensures a seamless migration path for customers from MOST25 to the 150 Mbps speed grade. SMSC has extended its networking technology platform in accordance with the MOST Cooperation’s requirement specification. Due to the synchronous nature of the MOST network, combined with the 150 Mbps of bandwidth, MOST150 enables an effective bandwidth that other packet-switched networks can only achieve with much higher gross bandwidth, typically using several hundred Mbps. As a result, MOST150 can be used to transmit multiple high-definition (HD) video streams and multi-channel surround sound with premium quality of service, while simultaneously moving high loads of packet data around. "Because we understand our customers’ need to design for increasing content in the car, we developed MOST150 to best address the next generation of infotainment systems, particularly those featuring extensive digital video and IP-based applications," said Dr. Christian Thiel, Vice President and Managing Director of SMSC’s automotive group. "Keeping cost in mind, the MOST Cooperation designated 150 Mbps as the speed grade for the next generation MOST network since this bandwidth allows car makers to continue to use POF and LEDs as light sources, eliminating the need to introduce glass fibers and laser diodes. This way, the car makers can continue to use their established optical wire harness and assembly processes. SMSC’s OS81110 features the same INIC hardware and software interfaces as our MOST25 and MOST50 INICs, so our customers are provided a very smooth migration path to this new generation of MOST.” MOST150 supports the legacy MOST25 real-time control channel for device control, synchronous channels for streaming audio and video data and packet channel for transmission of packet-based data services. In addition, MOST150 features two new transfer mechanisms. First, the new Ethernet channel allows for transmission of legacy Ethernet frames. The OS81110’s support of IEEE MAC allows applications to communicate as they would via Ethernet. TCP/IP stacks or protocols utilizing TCP/IP can communicate via MOST150 without any necessary modification. In essence, they operate as if they are communicating via Ethernet. This permits software stacks and applications from the consumer and IT domain, where the speed of innovation is much faster, to be seamlessly migrated into the car. The second new transfer mechanism, via Isochronous channels, enables smoother transmission for data streams with a variable bit-rate, such as MPEG video or audio streams, that are not synchronized to the MOST network. These new channels offer car makers and their suppliers a new freedom in architecting digital audio and video systems while saving cost for sampling rate conversion and other digital adaptation technology. For glueless, low-cost connectivity to video chipsets, the OS81110 also provides Transport Stream and MediaLB Interfaces. Together with the OS81110, SMSC is launching a first set of infrastructure products for MOST150, including a MOST150 INIC evaluation board and INIC Explorer and MOST150 OptoLyzer network analysis tools. About INIC: SMSC’s INIC architecture for MOST is a new concept for making the design of networked devices simple and the systems robust while enabling SMSC’s customers fast time to market. SMSC provides INICs for MOST25, MOST50 and now also for MOST150. The INIC architecture is a combination of a network interface controller and network driver that runs on-chip. The INIC chip is a stand-alone network node that encapsulates all network management and time-critical communication functions, allowing them to run autonomously and service the MOST network without requiring interaction with an External Host Controller (EHC). An INIC can initialize the network interface while the EHC is still booting. Once finished, the EHC can attach itself to the INIC and thereby to the MOST network. The INIC monitors the EHC with a watchdog timer. If the EHC runs into a problem, for example encountering a reset, the INIC enters into a protected mode, running the network node autonomously again. Application robustness issues, therefore, remain local and do not influence the system. All INICs provide a common interface in hardware and software to the applications, which makes them exchangeable. This allows an INIC-based device to easily migrate to another speed grade of the MOST network or another Physical Layer – in most cases without even having to change the application software. About MOST Technology: MOST is a multimedia networking technology optimized for, but not restricted to, use in cars. It enables transport of high quality of service audio and video together with high-speed packet data and real-time control over a single transmission medium. MOST offers transmission over Polymer Optical Fiber and Unshielded Twisted Pair copper physical layers under automotive conditions. To date, MOST is used in over 45 car models and serves as the communication backbone for their information and entertainment equipment. About MOST Cooperation: The MOST Cooperation is the organization through which MOST Technology is standardized and refined so that it continues to stay abreast of the latest industry requirements. Today it consists of 15 international carmakers and more than 70 key component suppliers. They have joined together to work with the MOST technology and contribute to its innovation. The MOST Cooperation is prepared to embrace efforts to further develop and standardize the technology for other industries and to establish the corresponding work structures. The MOST Cooperation was founded in 1998 by BMW, DaimlerChrysler, Harman/Becker and OASIS SiliconSystems (now part of SMSC). Audi joined its Steering Committee in 2000. For more information, visit www.mostcooperation.com. 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 key vertical markets including consumer electronics, automotive infotainment, PC and industrial applications. The Company has developed leadership positions in its select markets by providing application specific solutions such as mixed-signal embedded controllers, non-PCI Ethernet, ARCNET, MOST and Hi-Speed USB. SMSC is headquartered in Hauppauge, New York with operations in North America, Asia and Europe. Engineering design centers are located in Arizona, New York, Texas and Karlsruhe, Germany. Additional information is available at www.smsc.com. SMSC and MOST are registered trademarks and INIC is a trademark of Standard Microsystems Corporation. Forward Looking Statements: Except for historical information contained herein, the matters discussed in this announcement are forward-looking statements about expected future events and financial and operating results that involve risks and uncertainties. These uncertainties may cause our actual future results to be materially different from those discussed in forward-looking statements. Our risks and uncertainties include the timely development and market acceptance of new products; the impact of competitive products and pricing; our ability to procure capacity from our suppliers and the timely performance of their obligations, the effects of changing economic conditions domestically and internationally and on our customers; our relationships with and dependence on customers and growth rates in the personal computer, consumer electronics and embedded and automotive markets and within our sales channel; changes in customer order patterns, including order cancellations or reduced bookings; the effects of tariff, import and currency regulation; potential or actual litigation; and excess or obsolete inventory and variations in inventory valuation, among others. 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Investors are advised to read the Company's Annual Report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission, particularly those sections entitled "Other Factors That May Affect Future Operating Results" or "Risk Factors" for a more complete discussion of these and other risks and uncertainties.