Philips Electronics to establish TriMedia technologies, Inc. as an independent company to create an industry standard for advanced consumer products including digital tv sets, time-shift recorders, and set-top boxes

Sony and Philips have reached a basic agreement to be the first investors in the new company and the first licensees of TriMedia VLIW processor technology

Royal Philips Electronics of the Netherlands (NYSE: PHG) today announced that it is launching TriMedia Technologies, Inc, a Silicon Valley, CA-based company, which will create and license embedded processor core designs and software to help companies quickly develop advanced digital consumer products. TriMedia Technologies is being formed from a unit within Philips Semiconductors (an affiliate of Royal Philips Electronics). Sony Corporation and Philips have reached a basic agreement to be the first investors in TriMedia Technologies and will work to finalize definitive agreements soon. Other consumer electronics companies are also expected to invest in the new company in the near future. Morgan Stanley has been retained to help with new investor negotiations. Financial terms of the agreement were not disclosed.

Building on the TriMedia™ VLIW (very-long instruction word) processor technologies pioneered by Philips and now transferred to the new company, TriMedia Technologies will create and license new processor cores and software for advanced digital consumer products. Examples of these products include digital televisions, advanced set-top boxes, personal video recorders, video editors, home networking devices, security and surveillance systems, and videophones.

"TriMedia Technologies, Inc. has a tremendous opportunity to create an industry standard platform used in advanced digital consumer appliances," said Cor Boonstra, president, Royal Philips Electronics. "As part of Philips, we have made tremendous progress with TriMedia. As an independent company, TriMedia will have the additional support of Sony, and the potential for other leading consumer electronics firms to push the technology and product potential at a much faster pace. The result will be more features and functionality in popular digital consumer products."

"Sony is pleased to work with Philips to launch this new company, which has the potential to bring exciting new technologies to the consumer industry," said Nobuyuki Idei, president and CEO, Sony Corporation. "The TriMedia processor has tremendous potential, and the new company could help to unleash its full potential at a much faster rate. We welcome this opportunity to partner with Philips, and invite other consumer electronics companies to consider the benefits."

TriMedia Technologies, Inc. will initially focus on core technology for networked digital television appliances by developing TriMedia VLIW processor core designs, sophisticated software tools, and software applications. By processing up to five instructions with each clock cycle, a low-cost processor based on TriMedia technology can achieve the exceptional performance necessary for demanding digital media and networking applications. The company will also provide systems engineering and training services for its customers and third-party developers. TriMedia Technologies will license a foundation of programmable technologies on which consumer electronics companies can build distinct and innovative digital products.

Philips Semiconductors and Sony Corporation's Core Technology & Network Company intend to acquire licenses for the new company's technologies. Philips Electronics is using TriMedia technology for digital television and set-top box products, as well as in its Nexperia Silicon Systems Platforms and TriMedia processor semiconductor products. Sony currently uses TriMedia technology for rear projection televisions. Both companies intend to focus their initial applications of TriMedia technology on digital television receivers.

Philips Semiconductors' fast-growing TriMedia Product Segment, who have been shipping TriMedia processors since 1996, will continue to support their customer base, manufacture their family of TriMedia chips and expand their product line with higher performance processors. TriMedia Technologies, Inc. will be initially staffed by some 70 people from Philips Semiconductors and located in a new facility in Silicon Valley, California. For additional information about the proposed company please connect to their website: www.trimediatechnologies.com.

Philips Semiconductors, which has annual revenues of approximately $5 billion, designs and manufactures semiconductors and silicon systems platforms. Philips Semiconductors is spearheading the emerging field of systems on silicon solutions with the innovative Nexperia™ platform and VLSI Velocity™ tool set. The company's Sea-of-IP™ design methodology allows plug-and-play intellectual property blocks for easily customizable products. The company is a leader in communications, consumer, PC peripherals and automotive semiconductors, which are key applications for convergence in end-user products. Philips Semiconductors is headquartered in Eindhoven, The Netherlands, and has operations throughout the world. For more information: www.semiconductors.com TriMedia™, Nexperia™, Velocity™ and Sea-of-IP™ are trademarks of Philips Semiconductors

Royal Philips Electronics of the Netherlands is one of the world's biggest electronics companies and Europe's largest, with sales of $33.5 billion (EUR 31.5 billion) in 1999. It is a global leader in color television sets, lighting, electric shavers, color picture tubes for televisions and monitors, and one-chip TV products. Its 226,900 employees in more than 60 countries are active in the areas of lighting, consumer electronics, domestic appliances, components, semiconductors, medical systems, and IT services (Origin). Philips is quoted on the NYSE (symbol: PHG), London, Frankfurt, Amsterdam (symbol: PHI) and other stock exchanges. News from Philips is located at www.news.philips.com