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Trident Announces
Restructuring of Operations and Conference Call
Sunnyvale, Calif. — June 12, 2003:
Trident Microsystems, Inc. (NASDAQ: TRID),
a leading provider of semiconductor solutions to the videographics,
multimedia and digital television markets, today announced
a significant restructuring of its operations involving both
the Company’s Graphics and Digital Media businesses.
Trident’s Graphic division will be merged with XGI,
the graphics unit previously spun off from Silicon Integrated
System Corp (SiS). XGI will be capitalized through cash infusion
from outside investors. In a separate transaction, the Company’s
Digital Media Division (DM) will be merged with Tridents’
subsidiary, Trident Technologies, Inc. (TTI) in Taiwan, to
strengthen and extend the company’s digital TV business.
“This restructuring will position Trident as one of
the leading contenders in the emerging digital media space
and put the company on track to return to profitability,”
said Frank Lin, President and CEO of Trident. “By merging
our graphics business into XGI, all Trident’s business
deals and commitment to its customers and partners can be
satisfied by XGI. Trident will also have the opportunity to
participate in the upside from the new graphics entity. As
a result, Trident will be able to focus its resources on its
restructured DM business as well as focus on other challenges
and opportunities in the rapidly growing digital media market.”
Creating a Graphics Semiconductor
Contender
The newly formed XGI will combine the operating assets and
intellectual property of Trident’s and XGI’ graphics
businesses. “By combining Trident’s strength in
the mobile graphics market with XGI’ leading presence
in the desktop market, XGI will merge the complementary strengths
of both companies to effectively attack the graphics market.
These combined strengths, together with a strategic alliance
with SiS’ core logic business and new capitalization
from new investors should create a formidable power in both
the mobile and desktop graphics markets,” said Michael
Chen, Chairman of the board of XGI and President and CEO of
SiS.
Other key highlights of the transaction include:
· Trident will initially own 30% of XGI when the transaction
is completed.
· XGI’s new management team will also consist
of Trident’s graphics management team
This transaction will close as soon as all the closing conditions
are satisfied, expected to be prior to July 1, 2003.
Accelerating the Momentum of
the DM Business
“I am also pleased to announce that we have decided
to merge our subsidiary, Trident Technologies, Inc. (TTI)
in Taiwan with our Digital Media business unit to form a new
DM organization which will retain the name TTI. By merging
Trident’s DM division with Trident’s existing
TTI subsidiary, the new DM organization strengthens Trident’s
existing DM division and realizes several product, customer
and infrastructure synergies,” Frank Lin commented.
“Additionally, we believe we can enhance our position
to compete effectively in the burgeoning Progressive TV, LCDTV,
PDP, HDTV and Digital Set-top Box markets. With the graphics
business spun off, by combining resources with existing TTI
subsidiary, our Digital Media business can now aggressively
focus on developing more exciting new products in this emerging
business.” Other key highlights of the transaction include:
· Trident, which currently owns 68% of existing TTI
subsidiary, will own an 90% equity interest in the new DM
organization.
· Trident will transfer $10 million’s worth of
UMC stock to the new DM organization to fund working capital
obligations.
· The existing TTI subsidiary’s video controller
products and Asia-based sales and technical supporting force
will be combined with the DM division’s DPTV chip business.
· The new management team for the new DM organization
will consist of Trident’s US DM management team.
· The new DM organization will also be in a position
to seek a separate IPO in either Taiwan or the US.
This restructuring is expected to be completed before the
end of June.
Going forward, Trident will continue to be actively involved
in overseeing the operations of TTI as well as focus on the
operations of its subsidiary in China, Trident Multimedia
Technologies (Shanghai) Co., Ltd. (TMT), which will serve
as the focal point to promote Trident’s products in
China. Over the past few years, Trident has established a
strong and powerful VLSI design team in TMT. This VLSI team
will not only provide VLSI IPs and integrated design services
to TTI and XGI, but will also utilize Trident’s existing
graphics and digital media IPs to develop products outside
the PC and TV spaces, such as those for cell phones and PDAs,
and other products in the consumer field. We believe, by restructuring
our operations and combining the technical strength of Trident
and its subsidiaries, Trident will emerge once again as a
leading player in the semiconductor industry.
The Company also announced that it will hold a conference
call to discuss the restructuring, which will occur on Thursday,
June 12, 2003 at 2:30 p.m. Pacific Time (5:30 p.m. Eastern
Time). Shareholders may participate in the call by calling
800-482-5519 (U.S.), or 303-224-6999 (International) conference
ID number 172606. A replay of the conference call will be
available approximately two hours following the conference
call until midnight PT, on June 19, 2003, and can be accessed
by calling 888-852-5733 using access code 172606.
Forward-Looking Information
This press release contains forward-looking statements, including
statements which use the words “believe”, “intends”,
“potential”, “anticipate”, and similar
words. The forward-looking statements above are subject to
certain risksand actual results could vary materially depending
on a number of factors. These risks include that one or the
other of the transactions will not be completed in a timely
manner, or at all, or that once completed the restructuring
will not produce the anticipated results due to a variety
of factors including failure to integrate operations effectively,
or continuing competitive challenges and a difficult economic
climate. Additional factors that may affect the Company’s
business are described in detail in the Company’s filings
with the Securities and Exchange Commission.
About Trident Microsystems,
Inc.
Trident Microsystems, Inc., with headquarters in Sunnyvale,
California, designs, develops and markets digital media for
the masses in the form of graphics controllers and multimedia
integrated circuits for both notebook and desktop PCs. Trident's
products are sold through a network of OEMs, original design
manufacturers and system integrators worldwide. For further
information about Trident and its products, please consult
the Company's web site: http://www.tridentmicro.com.
About XGI Technology Inc.
XGI Technology was founded on May 26, 2003. The corporate
headquarter and design center are in Hsin-Chu, and the sales
and marketing office is in Taipei, Taiwan. The company’s
management and R&D team are from the former SiS Multimedia
Product Division. The company is led by the President and
CEO of SiS, as Chairman of the board of XGI; and by the former
VP of SiS Multimedia Product Division, as President and CEO
of XGI. Based on the foundation of SiS Multimedia Product
Division, many professionals in the field have also joined
the venture to create a world-class graphics vendor focused
on providing the most innovative graphic processor available.
About Silicon Integrated Systems Corp. (SiS)
Silicon Integrated Systems Corp. (SiS) is a worldwide leader
in the development, manufacturing and marketing of leading-edge
logic products, including core logic, multimedia, connectivity,
and information appliance. The company was founded in 1987
in the Hsin-Chu Science-based Industrial Park in Taiwan and
has been listed on the Taiwan Stock Exchange (TSE2363) since
August 1997. SiS combines professional chip design with advanced
semiconductor manufacturing technologies. For more information,
please visit www.sis.com.
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