NXP Semiconductors Announces First Quarter 2009 Results

The cash position was USD 1,706 million at the end of the first quarter, which includes USD 92 million from the sale of the ST-NXP Wireless shares and USD 200 million drawn down from NXP’s revolving credit facility which is now at a total of USD 600 million. The Q1 cash position compares with USD 1,796 million at the end of the fourth quarter of 2008.

During the period significant progress has been made on execution of the large-scale Redesign Program announced in September 2008. This program is focused on making necessary changes to withstand the significant weakness prevailing in the industry and to optimize the businesses to help deliver NXP’s longer term strategic objectives. The program is now forecast to have restructuring costs of no greater than USD 700 million and is expected to achieve higher annual savings than those initially projected (USD 550 million) by the end of 2010. While the cash expense of the Redesign Program will remain the same in total, the cash-out for the Redesign will increase significantly in the next quarters.

Market conditions remain extremely challenging for the semiconductor industry with very low visibility.

Outlook: Visibility of sales development going forward remains extremely limited. The very weak macro-economic conditions are still continuing. Although we recently experienced positive order book developments, we believe the improved book to bill is primarily driven by supply chain replenishment as opposed to any fundamental improvement of the semiconductors market.

Under these circumstances, a 10 to 25% sequential sales increase in the second quarter on a business and currency comparable basis could be achievable, which excludes wafer sales to the ST-Ericsson Wireless joint venture. It is still very unclear how the overall market sentiment in the remainder of the year will develop.