Press release

< Acquisitions and divestitures

TI Acquires Leading Digital Amplifier Systems Design Company
TI Programmable DSP Enables All-Digital Solution for Audio Systems

DALLAS (March 16, 2000) - Texas Instruments (NYSE: TXN) announced today that it has acquired Toccata Technology ApS, a privately held company that is one of the leading developers of digital-audio amplifier technology and board solutions. This acquisition enables TI to achieve an all-digital audio solution. TI's digital-speaker technology will bring high-end audio system quality to all types of audio equipment, including personal computer (PC) speakers, A/V receivers, car stereos and home theater systems.

"This is a powerful combination," said Dr. Keh-Shew Lu, senior vice president for mixed signal products at TI. "Toccata has developed a high-quality, high-efficiency digital audio amplifier solution. When combined with TI's programmable digital signal processors (DSPs) and other digital speaker components, customers will have an all-digital audio solution with performance that is unmatched by today's audio systems. Toccata's amplifier, known as equibitâ„¢, uses only digital technology, eliminating analog feedback and the need for analog signal processing or amplification at any stage."

TI currently has a programmable DSP and other mixed-signal devices targeting digital audio applications. This technology, along with Toccata's digital amplifier system design expertise, enables TI to deliver complete, industry-leading, all-digital audio solutions that allow audio-system makers to build products with an unhampered digital signal from the source to the speaker.

"This technology leverages the power of digital signal processing," said Lu. "It delivers clearer, crisper sound while allowing easy to use plug-and-play connections."

Lu said that digital speaker technology eventually will bridge the gap between high-end and low-end audio systems, giving all types of audio equipment - from personal computer (PC) speakers to A/V receivers to car stereos to home theater systems - the capability to produce a richer, high-quality digital audio sound.

"The goal when Lars Risbo first started Toccata was to design, develop and deliver world-class, pure digital audio amplification. By joining forces with TI, the world leader in DSP and analog, we now have the manufacturing prowess and marketing reach to achieve our goals," said Toccata Chief Executive Officer Niels Anderskouv. Dr. Lars Risbo, the company's chief technical officer, founded Toccata in 1997.

TI has identified digital speakers as an emerging opportunity in the growing digitization of electronics, as the technology migrates from analog to digital. The opportunity is significant since virtually any electronic equipment with speakers can benefit from digital technology.

In the PC and consumer electronics audio end-equipment segments alone, more than 88 million digital audio units are expected to be sold worldwide in 2001. According to research firm Forward Concepts, the PC and audio industries are moving away from analog speakers and replacing them with digital speakers. The firm predicts 65 percent of PC and consumer speakers will have digital speaker technology by 2003.

"With TI's digital speaker technology, the audio quality will seem like you are attending a live concert or sitting in a movie theater," said Harry Davoody, TI vice president and manager of TI's mixed signal and DSP solutions group. "Personal computer users and PC gaming enthusiasts and others will be able to enjoy a superior audio experience."

This acquisition is the latest strategic move by TI to identify, then move quickly to gain a position in emerging opportunities that use programmable DSPs. In the last year alone, TI has organized business units and/or made acquisitions targeting applications such as digital speakers, digital printers, digital cameras, short-distance wireless, Internet audio players and Voice-over-Internet.

Toccata is based in Copenhagen, Denmark. It has about 15 employees. Toccata will become part of TI's Digital Speakers Business Unit and will continue to operate from Denmark. Terms of the transaction were not disclosed.