Conexant Completes Sale of Broadband Media Processing Business to NXP Semiconductors

Company Now Focused on Providing Solutions for Imaging, Video, Audio, and Internet Connectivity Applications

Conexant Systems, Inc. (NASDAQ:CNXT) today announced that it has completed the sale of its Broadband Media Processing product lines to NXP Semiconductors. Conexant will receive approximately $110 million in cash and up to $35 million in an “earn-out” fee, contingent upon the achievement of certain milestones through the end of calendar 2009. The company plans to improve its balance sheet by using the majority of the net proceeds to retire debt.

“The divestiture of our Broadband Media Processing business is consistent with our overall strategy of improving our business model and generating positive cash flow, focusing our investments on the market segments where we either lead or have the opportunity to lead, and establishing a long-term, sustainable capital structure,” said Scott Mercer, Conexant’s chief executive officer. “Our continuing businesses, which consist of Imaging and PC Media and Broadband Access, address a total available market that is more than $3 billion today and expected to grow at a compound annual rate of seven percent over the next several years, and we plan to expand our presence in each of the major market segments we serve.

“I’d also like to wish our former employees who have joined NXP Semiconductors the best as they continue working to deliver innovative solutions to set-top box customers around the world,” Mercer said. “Moving forward, I am confident that the combined team will attain even higher levels of success.”

Conexant’s Imaging and PC Media business provides advanced solutions for imaging, video, audio, and modem applications. The company’s Broadband Access business delivers end-to-end system solutions for ADSL, VDSL, and SHDSL applications.

Conexant’s Broadband Media Processing team provided products for satellite, cable, terrestrial, and IPTV set-top box applications. Approximately 700 Conexant employees joined NXP Semiconductors upon completion of the transaction. Conexant’s worldwide head count is now approximately 1,350.

About Conexant

Conexant’s comprehensive portfolio of innovative semiconductor solutions includes products for imaging, video, audio, and Internet connectivity applications. Conexant is a fabless semiconductor company that recorded revenues of $809 million in fiscal year 2007. The company is headquartered in Newport Beach, Calif. To learn more, please visit www.conexant.com

Safe Harbor Statement

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as Conexant or its management “believes,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates” or other words or phrases of similar import. Similarly, statements in this release that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements.

These risks and uncertainties include, but are not limited to: pricing pressures and other competitive factors; our ability to timely develop and implement new technologies and to obtain protection for the related intellectual property; the cyclical nature of the semiconductor industry and the markets addressed by our products and our customers’ products; volatility in the technology sector and the semiconductor industry; our successful development of new products; the timing of our new product introductions and our product quality; demand for and market acceptance of our new and existing products; our ability to anticipate trends and develop products for which there will be market demand; our ability to successfully execute asset acquisitions, dispositions, mergers and restructurings; the availability of manufacturing capacity; changes in our product mix; product obsolescence; the ability of our customers to manage inventory; the risk that capital needed for our business and to repay our indebtedness will not be available when needed; the risk that the value of our common stock may be adversely affected by market volatility; the substantial losses we have incurred; the uncertainties of litigation, including claims of infringement of third-party intellectual property rights or demands that we license third-party technology, and the demands it may place on the time and attention of our management and the expense it may place on our company; our ability to identify and execute acquisitions, divestitures, mergers or restructurings, as deemed appropriate by management; general economic and political conditions and conditions in the markets we address; and possible disruptions in commerce related to terrorist activity or armed conflict, as well as other risks and uncertainties, including those detailed from time to time in our Securities and Exchange Commission filings.

The forward-looking statements are made only as of the date hereof. We undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Conexant is a registered trademark of Conexant Systems, Inc. Other brands and names contained in this release are the property of their respective owners.
Contacts

Editorial Contact:
Conexant Systems, Inc.
Gwen Carlson, 949-483-7363
or
Investor Relations Contact:
Shelton Group
Ryan Bright, 972-239-5119, x159