ZiLOG(R) Unveils 32-Bit ARM-9(R) Application-Specific Strategy to Focus on Security and Point-of-Sale Markets

New Products, Customers Support Development Effort

SAN JOSE, Calif. -- Feb. 3, 2005 -- ZiLOG (Nasdaq: ZILG), a leading provider of integrated microcontrollers (MCUs), announced today that it is entering the 32-bit ARM-9(R) MCU market. The company is leveraging its existing technology know-how and strategic focus on application-specific markets to take advantage of growth opportunities in the areas of security and Point-of-Sale (POS). Successful product development efforts in this arena have been ongoing for some time. The company is particularly pleased at the collaborative support of key security customers who have been instrumental in driving this particular program.

ZiLOG's move into the 32-bit space is not an entry into the general purpose ARM-7(R) market. Rather, it is an extension of the company's application-specific product strategy. In this instance, the company will continue to develop core families with more sophistication, processing power, and integration -- all of which build on ZiLOG's existing application leadership, technical expertise, and knowledge in key markets such as security, POS, physical access and data access control.

According the figures published by Nilson (The Nilson Report, November 2005), the POS market for microcontrollers was 8.8 million units globally in 2004 and is growing at a rate of 18.1 percent annually. Target applications encompass secure payment terminals, vending kiosks, postage meters, wireless and mobile payment terminals, ATMs, contactless terminals such as lottery and gaming machines, and other pay points. ZiLOG expects to begin shipping production parts in early summer.

"As with our existing 8-bit product portfolio, we are very much focused on an application-specific standard product strategy within the 32-bit ARM-9 space," commented ZiLOG chairman and CEO Jim Thorburn. "We are entering an exciting phase for the company working with key 'tier one' customers in the security and POS markets to develop new, leading edge products. We believe our first set of product introductions in the summer will further leverage our position as one of the leading suppliers of microcontrollers to these sectors."

Dr. Norman Sheridan, ZiLOG executive vice president of technology operations, added: "Whilst our core focus with the ARM-9 product has been on POS and security, we have identified additional opportunities for applications in physical access control, for example, transportation, ticketing and passport/ID, and data access control, such as fitness machines, remote monitoring and health cards. Although we are still at a very early stage in these areas, the potential is certainly there for us to explore and the next few months are an exciting time for our company."

About ZiLOG, Inc.

ZiLOG, Inc. founded in 1974, won international acclaim for designing one of the first architectures in the microprocessors and microcontrollers industry. Today, ZiLOG is a leading global supplier of micro-logic devices. ZiLOG designs and markets a broad portfolio of devices for embedded control and communication applications used in consumer electronics, home appliances, security systems, point of sales terminals, personal computer peripherals, as well as industrial and automotive applications. ZiLOG is headquartered in San Jose, California, and employs approximately 500 people worldwide with sales offices and design centers throughout Asia, Europe and North America. For more information about ZiLOG and its products, visit the Company's website at: www.ZiLOG.com.