SGS-THOMSON Microelectronics announces the construction of a new submicron wafer diffusion plant in Singapore.

Singapore, 13 June 1996

SGS-THOMSON Microelectronics is strengthening its presence in the Asia Pacific region with the construction of a new state-of-the-art submicron wafer diffusion plant in Singapore.

The new plant will be located adjacent to the existing manufacturing and Asian headquarters sites at Ang Mo Kio Industrial Estate.

This advanced 8-inch (200mm) sub-micron facility will bring the total number of such plants operating or announced by SGS-THOMSON to six worldwide. Two of them are already in volume production; one at Crolles (France) and the other in Phoenix (Arizona, US). A third plant is being equipped in Catania, Italy and will start ramp-up in Q4, 1996, while works are in progress to upgrade one of the fabs in Agrate, Italy, from 6-inch (150mm) to 8-inch. The fifth, in Rousset, France will break ground in the summer of this year. Moreover, the company is considering building and equipping another (the seventh) new 8-inch front-end wafer fabrication plant in Italy.

The new unit, called Ang Mo Kio 8, will add a new dimension to SGS-THOMSON's manufacturing capabilities in the Asia Pacific. It will be designed to handle ULSI (Ultra Large Scale Integration) products with geometries starting at 0.5 micron, but with capability for future upgrades, in BiCMOS and CMOS technologies. These are the key processes used in the Company's range of dedicated products to serve a variety of applications, such as disk drives, multimedia PCs, mobile communications, and advanced consumer products.

Mr Pasquale Pistorio, President and CEO of SGS-THOMSON, in commenting on the announcement declared, "Our new facility is an investment in SGS-THOMSON's future in the Asia Pacific region. In recent years the Asia Pacific semiconductor market has been the fastest growing in the world, and is expected to continue to outpace the industry growth for several years in the future."

"SGS-THOMSON was among the first microelectronics companies to recognize the importance of the region and to make an early commitment to serve it. Now by increasing our commitment in quantity and in quality, we are taking steps to ensure that our support infrastructure keeps pace with the changing and growing needs of the market. In this way, our Asia Pacific customers' needs for a diverse range of submicron technology products will be met, " continued Mr Pistorio.

SGS-THOMSON was the first semiconductor company to set up a wafer fab in Singapore. The existing fab, which when it started operations in 1984 was also the first one set up in Asia by a company of non-Asian origin, is today a mass volume manufacturing engine which has a capacity of 32,000 5-inch wafers per week of mainly analog, logic and power devices.

The new wafer fab will occupy 32,000 sq m of land. The cleanroom will be designed to use 'mini environments' to reduce the total amount of Class 1 cleanroom area needed. Only enclosed areas housing the critical operations of the diffusion process will be at Class 1, with a Class 100 clean air environment being maintained throughout the fab.

The new facility will employ at completion of the project, about 600 highly skilled people half of which with diploma qualification or university degree. It will manufacture up to 5,000 wafers per week, with flexibility for further expansion. Building construction is expected to begin in October 1996 and volume production could be reached by late 1998.

The expertise and support infrastructure available at the existing fab will pave the way to a smooth start-up. The proximity of the new fab to the existing one will maximize the sharing of resources and know-how for an efficient and advanced operation.

The Economic Development Board of Singapore was instrumental in preparing the ground for the setting up of the submicron fab.

Mr Philip Yeo, Chairman, EDB said," SGS-THOMSON is a pioneer of our semiconductor industry and one of our major corporate partners. We are glad that existing wafer fabrication companies such as SGS-THOMSON continue to expand and upgrade in Singapore. Their expansions reflect the recognition of MNCs(multinationals) here that Singapore remains an attractive manufacturing base while the government is aggressively promoting new semiconductor companies to set up wafer fabrication plants in Singapore. This second fab represents a significant upgrade in technology and the diversified portfolio of products that the fab will be producing will also complement the other sectors in our electronics industry. We are glad that Singapore can continue to support companies like SGS-THOMSON in their strive for excellence. I wish SGS-THOMSON every success and look forward to an even better partnership in the years ahead."

SGS-THOMSON Microelectronics is a global independent semiconductor company listed on the New York Stock Exchange and on the Bourse de Paris. The company, which in Q1, 1996, had net revenues of US$1.03 billion (US$3.55 billion in total 1995, with net profit of US$526M) designs, develops, manufactures and markets a broad range of semiconductor integrated circuits (ICs) and discrete devices used in a wide variety of microelectronic applications, including telecommunications systems, computer systems, consumer products, automotive products and industrial automation and control systems.

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