STMicroelectronics Licenses ARM Cortex-M3 Processor For Use In Next-Generation 32-Bit Microcontrollers

ARM Cortex-M3 processor provides STMicroelectronics with high-performance 32-bit technology for cost- and power-sensitive applications

GENEVA, SWITZERLAND AND CAMBRIDGE, UK – Oct. 4, 2006 – STMicroelectronics (NYSE: STM), one of the world’s leaders in the development of microcontrollers, and ARM [(LSE: ARM); (Nasdaq: ARMHY)] today announced at the ARM® Developers’ Conference, Santa Clara, Calif., that STMicroelectronics will integrate the ARM® Cortex™-M3 processor into its next-generation family of 32-bit microcontrollers.

ST was one of ARM’s lead Partners for the development of the new Cortex-M3 processor and the licensing agreement will enable ST to accelerate the market’s transition from high-end 8- and 16-bit MCUs to 32-bit solutions by providing high-performance devices which ease development and enable significant cost- and power-savings.

“The 32-bit microcontroller industry has accelerated massively in the last few years, doubling in opportunity for revenues to reach $3.8 billion in 2005.  Over the next five years, the market will have an opportunity to ship more than double the unit volumes compared with 2005 and reaching a revenue of over $ 6.1 billion,” said Max Baron, principal analyst, In-Stat. “The Cortex-M3 processor offers the deeply embedded applications market a good blend of a compact footprint with reduced power consumption and simplified development.”

The Cortex-M3 processor was specifically developed to target the low-cost requirements of a broad range of markets and applications where memory and processor size significantly impact device costs. The Cortex-M3 processor brings together multiple technologies to reduce memory size while delivering industry-leading performance in a small power efficient RISC core and delivers an ideal platform to accelerate the migration of thousands of applications around the globe from legacy components to 32-bit microcontrollers.

“STMicroelectronics is well recognized for anticipating market trends and the evolution towards 32-bit MCU technology is firmly in its sights,” said Jim Nicholas, general manager, Microcontroller Division, STMicroelectronics. “Our current ARM processor-based STR7 and STR9 product lines have enjoyed much success, and the Cortex-M3 processor will propel us again towards a breakthrough in performance, ease of use and quality, while also providing a competitive cost structure for our products. We feel that the Cortex M3 processor will play an important role in accelerating the convergence of the MCU market, and this is why our strategic partnership with ARM promises to quickly change the landscape and drive this new MCU market forward. It is our intention to lead this major market move.”

Ever since the launch of ST’s first 32-bit ARM processor-based STR710 family in April 2004, ST has been accelerating the release of innovative 32-bit Flash-based microcontrollers. The STR7 families have been widely adopted in industrial control, appliances, automated tolling, versatile 3D gaming, uninterruptible power supplies (UPS), photocopiers, and most recently in consumer GPS and consumer networking equipment. In addition, the recently launched ARM966E-S™ processor-based STR910 family has already been adopted in many Ethernet applications, alarm and security platforms, factory automation, as well as digital telecom and signal processing applications.

“The combination of STMicroelectronics experience in microcontrollers, and the innovative technology that ARM provides for microcontroller designs, forms the building blocks of exciting future devices,” said Graham Budd, EVP and GM, Processor Division, ARM. “By providing our Partners with a solution that delivers high performance at low cost, we are enabling ST to accelerate the delivery of highly competitive 32-bit products into the high-volume microcontroller markets, and speed the migration from legacy technology.”

About the ARM Cortex Family

The three members of the ARM Cortex family all incorporate the Thumb®-2 instruction set, and are designed to address the increasing demands of various markets. The three types of ARM Cortex processor are:

• ARM Cortex-A Series: Applications processors for complex OS and user applications

• ARM Cortex-R Series: Embedded processors for real-time systems

• ARM Cortex-M Series: Deeply embedded processors optimized for microcontroller and low-cost applications

About ARM

ARM designs the technology that lies at the heart of advanced digital products, from mobile, home and enterprise solutions to embedded and emerging applications. ARM’s comprehensive product offering includes 16/32-bit RISC microprocessors, data engines, 3D processors, digital libraries, embedded memories, peripherals, software and development tools, as well as analog functions and high-speed connectivity products. Combined with the company’s broad Partner community, they provide a total system solution that offers a fast, reliable path to market for leading electronics companies. More information on ARM is available at http://www.arm.com.

About STMicroelectronics

STMicroelectronics is a global leader in developing and delivering semiconductor solutions across the spectrum of microelectronics applications. An unrivalled combination of silicon and system expertise, manufacturing strength, Intellectual Property (IP) portfolio and strategic partners positions the Company at the forefront of System-on-Chip (SoC) technology and its products play a key role in enabling today's convergence markets. The Company’s shares are traded on the New York Stock Exchange, on Euronext Paris and on the Milan Stock Exchange. In 2005, the Company’s net revenues were $8.88 billion and net earnings were $266 million. Further information on ST can be found at www.st.com.