Philips Semiconductors Achieves 80 Percent Growth in Chip Card IC Market

High Growth Supported by Strengthening Position as Number One Supplier of Contactless Chip Technology

SAN JOSE, Calif.--(BUSINESS WIRE)--Feb. 11, 2002-- Philips Semiconductors, a division of Royal Philips Electronics (NYSE:PHG, AEX:PHI), today announced the massive impact it has made on the chip card IC market during 2001 with an 80 percent increase in its sales figures for the overall sector. By focusing on its core competencies, extending its leadership in security expertise and strengthening its domination of the contactless smart card market, Philips Semiconductors has achieved impressive results in key market areas despite a significant economic downturn.

Commenting on the general success of the business, Anoop Ubhey, smart card industry analyst at Frost & Sullivan said, "Philips Semiconductors' growth is mainly based on its strong development in the banking and transport markets. The business saw impressive growth in the banking smart card world based upon its success with the VISA-Java card program and other important banking schemes while also experiencing excellent performance levels in the transport arena using MIFARE® technology. Additionally during 2001, Philips Semiconductors saw growth in the SIM card market; an area that has seen many smart card players affected by slowdown." Ubhey concluded, "It would not surprise me to see Philips Semiconductors move to the overall number two position for smart card IC revenue in 2001."

Integral to Philips Semiconductors success in 2001 was its continuation as the number one supplier of contactless smart card technology with the shipment of its 200 millionth MIFARE® chip card IC to the marketplace. This unrivalled milestone combined with nearly ten million MIFARE® dual interface smart card controller ICs and more than one million contactless MIFARE® reader ICs currently in use worldwide, reinforces the company's position as the leading provider of chips for contactless applications.

"In 2001, global contactless smart card market volumes exploded, particularly in the transportation sector and in Asia," said Derrick Robinson of IMS -- an electronics industry market research company. "Philips Semiconductors was once again the dominant chip supplier having maintained an estimated 80 percent market share with its MIFARE® interface technology."

"Growth of this nature underlines Philips Semiconductors' position as a leading supplier of advanced ICs to smart card manufacturers and system providers in a range of sectors including e-business, banking, mobile communications and transport," said Karsten Ottenberg, general manager of Philips Semiconductors' dedicated Identification business unit. "As security becomes an increasingly important issue for service providers and as demand for contactless and dual interface chip card applications continues to grow we find ourselves in a good position to build on our current status and become the number one provider of chip card IC solutions worldwide."

About Philips Semiconductors

Philips Semiconductors, a top ten semiconductor supplier with revenues of US $4.4 billion in 2001, is a world leader in silicon systems and standard products for consumer, communications, automotive and computing products. The organization designs, develops and manufactures silicon solutions based on its innovative Nexperia(TM) architectures to create living technology for its customers creating products, service providers using the products, and consumers enjoying the resulting products and services. For more information: www.semiconductors.philips.com.

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