NXP Semiconductors Announces Second Quarter 2008 Results

Gross Margin Improved from 34.7% to 36.5% Year-over-Year

Q2 Highlights

-- Q2 sales USD 1,524M compared to USD 1,538M in Q2 2007 and USD
1,519M in Q1 2008

-- Comparable YoY decrease of 1.9% and comparable QoQ sales
decrease of 0.6%

-- Book to bill ratio stable at 1.03 compared to 1.00 in Q1 2008

-- Q2 adjusted EBITDA (excluding effects of Purchase Price
Accounting) USD 114M, compared to USD 190M in Q2 2007 and USD
183M in Q1 2008

-- Cash position USD 660M(1) at the end of Q2, compared to USD
519M at the end of Q1 and USD 691M at the end of Q2 2007

-- The ST-NXP Wireless JV on track to close in Q3, resulting in a
cash receipt of USD 1.55BN and 20% ownership in the JV

-- Factory loading 78% in Q2 compared to 74% in Q2 2007 and 87%
in Q1 2008
EINDHOVEN, Netherlands--(Business Wire)--
NXP Semiconductors today announced second quarter sales of USD
1,524 million, a comparable decrease of 1.9% on the second quarter of
2007 and a comparable decrease of 0.6% over the first quarter of 2008,
reflecting the continuing softness of the overall market. Adjusted
EBITDA in the second quarter was USD 114 million, down from USD 190
million in the second quarter of 2007 and down from USD 183 million in
the first quarter of 2008. Adjusted EBITA showed a loss of USD 29
million this quarter compared to a profit of USD 9 million in the same
period last year. Although costs were significantly reduced this
quarter leading to improved gross margins, the strong negative impact
of the weaker dollar, which had an EBIT impact of approximately USD 70
million, offset these gains and led to a decreased EBITA.

Frans van Houten, President and CEO of NXP Semiconductors,
commented:

"We were able to achieve a sales level in line with our guidance,
primarily as a result of solid sales performance by both the
MultiMarket Semiconductors and Automotive & Identification businesses.
Overall, the Home business made progress in digital TV, in particular
through production ramp-ups with Philips and another leading CE brand
and a design win with Loewe, but the decline in analog TV continued.
The Mobile & Personal business suffered from soft market conditions,
but saw continued design-in traction in 3G, EDGE and Ultra Low Cost
phones with Samsung."

"I am pleased to say that we are swiftly executing on our strategy
focusing on scale and leadership positions. This is evidenced by the
good progress we are making in the creation of ST-NXP Wireless: in
this quarter, we announced the name of the JV, its Executive
Management Team, received regulatory approvals, including from the
European Commission, and finalized labor council consultations. This
transaction will give us a stake in an ambitious and exciting joint
venture, as well as USD 1.55 billion in cash enabling us to pursue
growth and increased investments in our core businesses. Furthermore,
we announced the acquisition of the Conexant STB business and we
signed the definitive agreement for the formation of a JV with Thomson
creating the leader in Can tuners."

"The continued focus on our Business Renewal strategy resulted in
improved gross margins, however savings have been eroded by the
continuing weakness of the dollar. A core priority for the remainder
of the year is to take additional decisive steps to mitigate our
currency exposure and re-align our business to better suit our reduced
size following the creation of ST-NXP Wireless."

Outlook: Due to the overall market sentiment we continue to see a
relatively flat market. The company expects a year-over-year
comparable mid single digit sales decrease, translating into similar
sales levels as in the second quarter.

The full report is available on NXP website
(www.nxp.com/investor).

(1) Cash figure includes USD 450 million draw down under the
revolving credit facility early May 2008

About NXP Semiconductors

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 more than 20 countries and posted sales of USD
6.3 billion in 2007. 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.

NXP Semiconductors
Lieke de Jong-Tops, +31 40 27 25202 (Media)
lieke.de.jong-tops@nxp.com
Jan Maarten Ingen Housz, +31 40 27 28685 (Investors)
janmaarten.ingen.housz@nxp.com

Copyright Business Wire 2008