Philips Semiconductors Becomes NXP; Fifty Years of Innovation and a Rich IP Portfolio Firmly Establishes NXP as Europe's Second Largest Semiconductor Company

   IFA 2006 - World of Consumer Electronics

   BERLIN--(BUSINESS WIRE)--Sept. 1, 2006--Philips Semiconductors CEO
Frans van Houten today revealed the company will move forward as NXP,
marking a milestone in its 53 year history as it becomes independent
from Royal Philips. The name change announcement follows an agreement
between Royal Philips and Kohlberg Kravis Roberts & Co. (KKR), Bain
Capital, Silver Lake Partners, Apax and AlpInvest Partners NV that
will see the consortium take an 80.1 percent stake in the
semiconductor operation with Philips retaining a 19.9 percent
interest. NXP is Europe's second largest semiconductor company and a
global top 10 player.
   Speaking at the Internationale Funkausstellung (IFA) consumer
electronics show in Berlin, Mr. van Houten explained that the
company's 'vibrant media' brand promise reflects its leadership in
media technologies that enable better sensory experiences for
consumers such as superior image and sound quality in digital
televisions, mobile phones and other entertainment products.
   "Today we take control of our own destiny and start to shape the
future of the semiconductor industry. We enable our customers to build
better products, based on our next generation vibrant media
technologies," said Mr. van Houten. "NXP stands for Next Experience.
Put simply, we're enabling the next generation of consumer
entertainment products. In order to emphasize the rich heritage that
NXP gained from 53 years as part of Royal Philips, the NXP name will
be supported by the tagline founded by Philips."
   Derek Lidow, CEO of iSuppli said, "This largest technology
leveraged buyout ever will create a real semiconductor powerhouse.
Armed with its independence, and starting out as Europe's second
largest semiconductor company, the management team has clearly just
started re-writing the history books."

   Commitment to Business Renewal Strategy Confirmed

   Mr. van Houten confirmed that NXP will continue its current
business renewal strategy, which has been underway for 18 months and
has contributed to sustained profitability and cost savings, as a
strong foundation for the future.
   The new shareholders support the continuation of the strategy of
NXP, which is driving for leadership in five markets on which the
company focuses: Automotive, Identification, Home, Mobile and
Personal, and Multimarket Semiconductors. This will be achieved
through investment of one billion Euro in R&D, the asset light
manufacturing strategy, a strong customer focus, the enormous talent
base among its 37,000 employees, and the continued Business Renewal
   Explaining the financial structure of the equity funding, Mr. van
Houten confirmed NXP will have over 1.2 billion Euro in cash and
credit reserves. This financial buffer will also enable the company to
explore options for acquisitions.
   Mr. Johannes Huth from KKR, the leading partner in the private
equity consortium, added: "We were attracted to a world class business
with a global scale and presence. NXP is leading in markets with
strong growth characteristics, for example Near Field Communication
and digital TV. The business renewal strategy is a strong foundation
for future growth, and we look forward to supporting the existing
management team as it continues to add value to this business."
   A center dedicated to emerging technologies has been established
within NXP with close to 600 scientists joining from Philips Research
and Applied Technologies, ensuring continued innovation. In total, NXP
now has over 6,700 engineers in research & development. NXP will
remain headquartered in Eindhoven, the Netherlands.
   "We want to be a leader in everything we do," said Mr. van Houten.
"NXP already has number one market share in areas such as TV chips,
contactless identification for e-passports, RFID for electronic
ticketing in public transport, car radio digital signal processors and
key mobile phone system solutions."

   About NXP:

   NXP is a top 10 semiconductor company founded by Philips more than
50 years ago. Headquartered in Europe, the company has 37,000
employees working in 20 countries across the world. NXP creates
semiconductors, system solutions and software that deliver better
sensory experiences in mobile phones, personal media players, TVs,
set-top boxes, identification applications, cars and a wide range of
other electronic devices. News from NXP is located at www.NXP.com.
   Chief Executive Frans van Houten will be hosting a press call at
11.00 CET on Friday 1 September to answer questions about the new
company. To receive dial in details for this call please send an email
to Press.office@text100.co.uk.

For further press information, please contact:

Europe: Heather Drake            Greater China: Terry Chiang
       Tel. +31 40 27 65949                    Tel. +886 2 3789 2821
       heather.drake@nxp.com                   terry.chiang@nxp.com

USA:    Paul Morrison            APAC:          Mark Chisholm
       Tel. +1 408 474 5065                    Tel. +81 3 3740 4792
       paul.morrison@nxp.com                   mark.chisholm@nxp.com


   Forward-looking Statements

   This release may contain certain forward-looking statements with
respect to the financial condition, results of operations and business
of NXP and certain plans and objectives of NXP with respect to these
items. By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on circumstances
that will occur in the future and there are many factors that could
cause actual results and developments to differ materially from those
expressed or implied by these forward-looking statements.


            Heather Drake, +31 40 27 65949 (Europe)
            Paul Morrison, 408-474-5065 (USA)
            Terry Chiang, +886 2 3789 2821 (Greater China)
            Mark Chisholm, +81 3 3740 4792 (APAC)