STMicroelectronics and Freescale Launch Broad Technology Agreement for Automotive Applications

Freescale (NYSE:FSL) (NYSE:FSL.B) and STMicroelectronics(NYSE:STM), the two leading semiconductor suppliers to the automotiveindustry(a), are teaming up to establish a wide-ranging initiative toreinforce their respective strengths in automotive applications. Thetwo companies will create a joint microcontroller design team, alignprocess technologies and share intellectual property, includinghigh-power MOS technologies.

The agreement between the companies covers high-performance,cost-effective 32-bit microcontrollers based on PowerPC(R) cores; thebasic Intellectual-Property (IP) for automotive and navigationapplications; alignment of 90-nm embedded Flash process technology;and high-voltage Power MOSFET (Metal-Oxide Semiconductor Field-EffectTransistors) and IGBT (Insulated-Gate Bipolar Transistor)technologies.

The jointly designed products will use the market-proven PowerPCarchitecture, with ST and Freescale's well-established expertise inembedded Flash, providing robust and cost-effective solutions tocustomers. At the same time, Freescale will use ST's high-powertechnologies for applications such as hybrid electric vehicles.

The new microcontrollers resulting from the joint efforts of thetwo companies will meet industry demand for more power and enhancedintelligence to drive control-intensive products in all segments ofautomotive electronic systems. Target applications include high-volumesolutions for engine and transmission control up throughmultiprocessing capabilities for fault-tolerant systems required byapplications such as Drive- and Brake-by-Wire, advanced vehiclecontrol and driver information systems.

The joint design program will be co-managed by the companies andwill be headquartered in the Munich area. The project will initiallycombine the expertise of more than 100 existing designers from the twocompanies, and will define, manage and design products to complementeach company's ongoing independent roadmaps. ST and Freescale willmanufacture the microcontrollers using aligned process technologies,starting at 90-nanometers, and will market them independently,assuring a dual source and securing a better supply of these devicesfor customers.

"Electronics has clearly become a major differentiator in theautomotive market," said Paul Grimme, senior V.P. and general manager,Freescale's Transportation and Standard Products Group. "And thePowerPC architecture, the leading 32-bit architecture in theautomotive industry, is a driver of that differentiation. The combineddesign and manufacturing resources of ST and Freescale will giveautomakers a broader portfolio of world-class, 32-bit products forincreasingly complex control functions within the car."

"This partnership of the two leading automotive IC suppliers isset to better serve our customers and partners by bringing thecombined design strengths of Freescale and ST to an ever wider rangeof automotive applications, from high-end power train to advancedsafety and driver-information systems," said Ugo Carena, corporateV.P. and general manager of the Automotive Product Group ofSTMicroelectronics. "Furthermore ST's proven manufacturing expertise,along with its ability to meet the needs of the market by leveragingthe knowledge accumulated from its strategic alliances with automotiveleaders, will make a solid contribution to the success of thecooperation."

According to Strategy Analytics, the worldwide automotivesemiconductor market is forecast to rise from $16 billion-plus in 2005to more than $22 billion through 2009, an annual growth rate of 8percent. The research firm has identified the 32-bit and 64-bitmicrocontroller (MCU) segments as the two fastest-growing segments ofthe automotive electronics market, with the 32-bit market expected tobecome the dominant automotive MCU architecture by 2007-2008.

This agreement, though independent of previous collaborations, isanother in a long history of successful collaboration between the twocompanies. Freescale and ST began working together in the Crolles2Alliance in 2002. The companies' cooperative efforts have encompassedIP, packaging and process development.

(a) according to iSuppli's preliminary 2005 rankings

About STMicroelectronics

STMicroelectronics is a global leader in developing and deliveringsemiconductor solutions across the spectrum of microelectronicsapplications. An unrivalled combination of silicon and systemexpertise, manufacturing strength, Intellectual Property (IP)portfolio and strategic partners positions the Company at theforefront of System-on-Chip (SoC) technology and its products play akey role in enabling today's convergence markets. The Company's sharesare traded on the New York Stock Exchange, on Euronext Paris and onthe Milan Stock Exchange. In 2005, the Company's net revenues were$8.88 billion and net earnings were $266 million. Further informationon ST can be found at www.st.com.

About Freescale

Freescale Semiconductor Inc. (NYSE:FSL) (NYSE:FSL.B) is a globalleader in the design and manufacture of embedded semiconductors forthe automotive, consumer, industrial, networking and wireless markets.Freescale became a publicly traded company in July 2004. The companyis based in Austin, Texas, and has design, research and development,manufacturing or sales operations in more than 30 countries.Freescale, a member of the S&P 500(R), is one of the world's largestsemiconductor companies with 2005 sales of $5.8 billion (US).

www.freescale.com
Reader Inquiry Response:
Freescale Semiconductor
P.O. Box 17927
Denver, CO 80217 USA

Freescale(TM) and the Freescale logo are trademarks of FreescaleSemiconductor Inc. All other product or service names are the propertyof their respective owners. The "PowerPC" name is a trademark of IBMCorp. and used under license. (C) Freescale

Caution Regarding Forward-Looking Statements

This press release contains "forward-looking statements" withinthe meaning of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements may be identified by words such asexpects, anticipates, plans, believes, estimates, will or words ofsimilar meaning and include statements regarding the plans andexpectations for the upcoming quarter, the year and the future.Forward-looking statements are based on management's currentexpectations and assumptions, including but not limited to thefollowing general underlying assumptions: the market for semiconductorproducts will grow over the long term; new technologies andapplications will continue to be developed; and manufacturers ofautomotive, networking and wireless products will increasingly look tosemiconductor providers for platform-level products andsystems-on-a-chip. These assumptions are subject to inherentuncertainties, risks and changes in circumstances that are difficultto predict and could cause actual outcomes to differ materially fromthe expectations of the company and its management. Theseuncertainties, risks and changes include, but are not limited to therisk factors discussed from time to time by the company in reportsfiled with the Securities and Exchange Commission. We urge you tocarefully consider these and other risks which are described in thecompany's Form 10-K and in the company's other SEC filings. Thecompany undertakes no obligation to publicly update anyforward-looking statement, whether as a result of new information,future developments or otherwise.