inSilicon Corporation Announces Workforce Reduction as Part of Ongoing Expense Reduction Program

Company Reiterates First Quarter Revenue Guidance

SAN JOSE, Calif., Dec. 4 /PRNewswire/ -- inSilicon Corporation (Nasdaq: INSN - news) -- a leading provider of communications technology for complex systems-on-chip (SOC) -- today announced that it would cut its workforce by approximately 20 percent as part of its ongoing efforts to reduce costs and return to profitability.

The reduction is expected to be complete by the end of December and the company anticipates an annualized cost savings of approximately $2.8 million. The Company expects to take a one-time charge of approximately $3.5 million in its first fiscal quarter that will include a one-time cash restructuring charge and a substantial non-cash write-down of previously capitalized software.

"During the past year, we have focused on several initiatives to help cut expenses in light of the tough economic conditions we have faced," said Wayne C. Cantwell, President and CEO. "Although we have continued to reduce operating expenses each quarter, it is clear that we need to realign our ongoing expense structure to ensure that we are able to return to profitability as quickly as possible. These reductions have been taken across the entire organization. From a product perspective, we intend to focus our efforts in the near-term on the core communications products that have been the backbone of our success. We remain committed to providing our customers with the high quality products and service that have become trademarks of the inSilicon brand."

Mr. Cantwell concluded, "Our balance sheet and financial position remain strong, and we look forward to taking advantage of growth opportunities in our core product line as market conditions improve. Today's actions are aimed at improving our ability to break-even in the coming quarters. We remain on track to achieve first quarter revenue in our previously announced range of $4.5-$5 million."

inSilicon is scheduled to release first fiscal quarter results on January 15, 2002, and expects to give further guidance on the company's expected future financial performance at that time.

About inSilicon

inSilicon Corporation is a leading provider of communications semiconductor intellectual property used by semiconductor and systems companies to design systems-on-chip that are critical components of a wide variety of electronic products. inSilicon's technology provides customers faster time-to-market and reduced risk and development cost. The company's broad portfolio of analog and mixed-signal products and enabling communications technologies, including the Java(TM) Accelerators, Ethernet, USB, PCI, and IEEE-1394, are used in a wide variety of markets encompassing communications, consumer, computing, and office automation. Information about inSilicon products and technologies is available at http://www.insilicon.com.

NOTE: inSilicon is a trademark of inSilicon Corporation. Java(TM) is a trademark of Sun Microsystems.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based on management's beliefs as well as on a number of assumptions concerning current and future events made by and information currently available to management. Readers are cautioned not to put undue reliance on such forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside inSilicon's control, that could cause actual results to differ materially from such statements. For a more detailed description of the factors that could cause such a difference, please see inSilicon's filings with the Securities and Exchange Commission including its Annual Report on Form 10-K. inSilicon disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This information is presented solely to provide additional information to further understand the results of inSilicon.