Strong increase in earnings for the Micronas Group (PR10)

September 30, 1999 - Micronas Semiconductor Holding AG

Earnings estimates by Micronas Semiconductor Holding AG, Zurich, for the 1999 business year have been revised significantly upwards thanks to the unexpect-edly rapid and strong development of key sales markets and heavy demand for Micronas chips. As a result of these trends, which became clear in the third quarter of 1999, profits for the year as a whole will be around twice as high as the CHF 7-10 million range previously forecast, Group turnover looks set to reach about CHF 310 million.

Last year the Micronas Group put in place the operational and financial conditions to ensure sustained growth, leading the board of directors and executive board to forecast turnover of CHF 280-290 million and earnings of CHF 7-10 million for the 1999 business year.

By extrapolating from the available key figures for the third quarter of 1999, it is now clear that these estimates for the year as a whole will be exceeded. This boost for the Micronas Group can be attributed to a combination of factors:

• Markets in Asia have recovered rapidly and strongly, leading to an increase in orders.
• Since the middle of the year, there has been a rise in demand for audio processors (MSPs) and chips for MP3 equipment. Micronas has already supplied more than a million MP3 chips this year.
• The expansion of distribution channels has born fruit very quickly. Demand has been particularly heavy for MSP chips for multimedia applications.
• The unexpectedly high demand for Micronas chips may also be due in part to stock-piling by customers in advance of the year 2000 date change.

This extraordinary accretion of positive influences means that the forecasts for 1999 turnover and earnings can be corrected upwards.

Turnover for the 1999 business year will be around CHF 310 million, about 10 percent higher than previously estimated. Meanwhile, earnings will probably be around twice as high as the CHF 7-10 million range mentioned in the original forecasts.

Micronas is an internationally active manufacturer of applications-specific chip solutions, focusing particularly on multimedia, home entertainment, and
automobile electronics.

Definitive results for the first nine months of 1999 will be communicated to the media and financial analysts on October 29.