NXP Semiconductors is to purchase the Systems on Silicon Manufacturing Co. (SSMC) shares currently held by EDB Investments (EDBI) in the three months following completion of the separation of NXP from Royal Philips. SSMC is recognized as a leading manufacturer of semiconductor technology and is a manufacturing joint venture between Philips (50.5 percent), Taiwan Semiconductor Manufacturing Co. (32 percent) and EDBI (17.5 percent) located in Singapore.

The purchase price for the shares will be approximately $185 M. Pursuant to the SSMC shareholders agreement, TSMC has the right to acquire a pro rata portion of these shares. In that case, NXP will acquire approximately 10.7 percent of SSMC at a purchase price of approximately $113 M. NXP expects to fund the purchase in a cash transaction. EDBI has confirmed it would sell its shares in SSMC at the price specified in the option agreement currently in place between Philips and EDBI, as long as the sale is completed by 31 December 2006.

NXP is Europe's second largest semiconductor company and one of the world’s top 10 player semiconductor providers. The company views the SSMC share deal as another step forward. Its president and chief executive officer, Frans van Houten, commented, "This is a significant transaction as it increases our shareholding in a great company with a good cash flow."