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SGS-THOMSON Microelectronics announces the construction of a new submicron semiconductor plant

ST. GENIS POUILLY (France) 8 September 1995 - SGS-THOMSON Microelectronics announced today that its Supervisory Board has approved the construction of a new high volume integrated circuit production facility at Rousset, in the Bouches du Rhone region of south east France.

This advanced 200mm. (8-inch) submicron facility, the company's fourth of this kind after Crolles (France), Phoenix (Arizona, U.S.) and Catania (Italy), will provide SGS-THOMSON with a vital new resource. SGS-THOMSON already has a large-scale industrial facility at Rousset, with a work force of more than 1,000, manufacturing semiconductor ICs on 150mm. (6-inch) wafers.

The new unit, called Rousset 2000, will handle more advanced generations of ULSI (Ultra Large Scale Integration) products using 0.5 micron, 0.35 micron and even smaller scale technologies. The product range will mostly comprise future micro-controllers, EEPROM-type non-volatile memory chips, new-generation bank and telephone smart-card chips, and more recent multi-function technology-driven products.

ROUSSET 2000 will use the latest equipment currently available in the semi-conductor industry for 200 mm. (8-inch) size wafers. A weekly throughput of 5,000 wafers is planned, thus providing the volume production for the basic technologies designed and developed in SGS-THOMSON's advanced research centers in France (at Crolles, near Grenoble) and Italy (at Agrate, near Milan).

However, the new ROUSSET 2000 facility will contribute to the development of technology options that are specific to the products under its responsibility. The Crolles and Agrate R&D centers will continue to develop the Company's most advanced technology portfolio, while ROUSSET 2000 will provide SGS-THOMSON with a rapid high-volume facility for transforming their R&D output into volume end-products.

After an in-depth design phase, building work is due to begin during the first quarter of 1996, with the first chips ready at the beginning of 1998. Total investment in Rousset 2000 will be approximately US $ 800 Million (FRF 4 billion), and will create 800 additional jobs.

Commenting on this decision, Mr Pasquale Pistorio, President and CEO of SGS-THOMSON said that "Large scale investments are already being made by our Group to the current Rousset facility, which will consequently double its capacity by the end of 1996, when the conversion from 5 to 6-inch wafers will be completed . The quality of the unit's management and human resources, together with Rousset's excellent industrial results, were a key factor in selecting the site for the new 8-inch unit."

The second critical factor behind this choice was the response and financial support from French authorities as a whole - the Ministry of Industry, DATAR (the Regional Planning Body), Provence Alpes and Cote d'Azur Region, the Bouches du Rhone departmental authority and the municipality of Rousset - aiming at improving the local employment situation.

Mr Pistorio also added, " By expanding Rousset 1, and bringing Rousset 2000 onstream, we shall have the resources to fully meet our customers' needs in a market where submicron technology products are in high demand."

SGS-THOMSON Microelectronics is a global independent semiconductor supplier listed on the New York Stock Exchange (NYSE:STM) and on the Bourse de Paris. It designs, develops, manufactures and markets a broad range of semiconductor integrated circuits (ICs) and discrete devices used in a wide variety of microelectronics applications including telecommunications systems, computer systems, consumer products, automotive products and industrial automation and control systems.