First quarter results for 1999 confirm earlier forecasts (PR6)

AGM approves capital increase -

April 20, 1999 - Micronas Semiconductor Holding AG

In an effort to provide maximum transparency for shareholders and interested members of the public alike, the Micronas Group is for the first time releasing key quarterly figures.

In the first quarter of 1999, the Micronas Group achieved a net profit of CHF 2.3 million. Net sales reached CHF 68.7 million (previous year: CHF 69.3 million, including operations since discontinued). The Consumer Division contributed CHF 55.5 million to this total, and the Automotive Division CHF 13.2 million.

The sales and income trends for the first three months of the current financial year confirm the projections previously communicated by the Board of Directors and the Executive Board.

For 1999 as a whole, Micronas is looking forward to group sales of between CHF 270 and 290 million, and a net profit in the region of CHF 5 to 10 million.

Operational developments

Micronas anticipates that the audio signal processor for high quality multi-channel sound (Virtual Dolby Surround Sound), which it developed in 1998, will start to be used in stereo televisions this year. This Micronas processor allows TV manufacturers to produce equipment with cinema-quality sound without the need for substantial additional development costs.

Following the conversion at Microna' wafer production plant from 5 inch to 6 inch wafers, all products will be manufactured on 6-inch wafers by the end of the year. The ramp-up of the new wafer fab has continued on schedule this year. At the end of March, 70 percent of production had been switched to 6-inch wafers. Ten percent of output is already being produced with the new 0.5µ technology.

Micronas has developed a circuit that meets the new USB standard (Universal Serial Bus) for multimedia applications. Because there is only one interface for connecting e.g. the keyboard, mouse, loudspeakers, etc., USB makes it much easier to install PCs. According to market analysis, 80 percent of all PCs will already be using the USB standard in 1999. The Micronas chip makes it possible to send digital data directly from the PC to the loudspeaker.

The WorldSpace satellite for digital radio reception in Africa was successfully launched into its orbit in autumn of last year. WorldSpace is currently embarking on a intensive advertising campaign with more than USD 10 million earmarked for the marketing of new radio receivers. Three of the four radio manufacturers involved in the project are using Micronas Starman chip sets. More than 30 radio channels are planned for broadcast in 1999.

At the beginning of this year, Micronas opened a sales office in Singapore to service the Asean market. Customer proximity in one of the essential elements required if a company is to remain successful in its markets. This is also why the Automotive Division has reinforced its marketing activities in Japan. An agreement has been concluded with an established Japanese distributor which h as very close contacts with Japanese car manufacturers and which is now going to start marketing Microna' automotive products.

Capital increase approved

The shareholders of Micronas Semiconductor Holding AG decided at the compan's Annual General Meeting in Zurich today to increase Microna' share capital in two tranches. For the first tranche, the Board of Directors has been authorized to crate approved share capital of up to CHF 5.0 million by issuing a maximum of 500,000 fully paid-up registered shares with a par value of CHF 10 each.

The second tranche involves the creation of conditional share capital reserved for the compan's employees and the members of the Board of Directors. The conditional capital registered in the Share Register will be increased by a maximum of CHF 206,400 to a maximum of CHF 700,000 by means of the issue of no more than 70,000 fully paid-up shares with a par value of CHF 10 each.

In conjunction with the proposed capital increase, the Board of Directors is reviewing a possible second listing of the company on the Neue Markt in Frankfurt. The Board of Directors believes that Micronas, which has a strong operational presence in Germany, would be well received on this extremely lively stock exchange.

The Annual General Meeting also approved the Group accounts. The 1998 annual loss will be covered by the general reserve.

The Annual General Meeting confirmed the election of Dr. Franz Betschon (Chairman), Dr. Thomas Lustenberger, Alfred Niederer, Dr. Rudolf W. Hug and Dr. Leonardo Vanotti for another term of office as members of the Board of Directors.