Press release

< Acquisitions and divestitures

TI Puts the "Voice" in Cable Modems with Acquisition of Libit

Dallas (June 21, 1999) -- Texas Instruments (NYSE: TXN) announced today plans to acquire Libit Signal Processing Ltd., a technology leader in silicon solutions for the fast-growing market for cable access equipment. This acquisition expands TI's leadership in digital signal processor (DSP) and analog technologies into all segments of the broadband communication market - xDSL (Digital Subscriber Line) and now Cable.

The cable industry is undergoing rapid technological change as cable system operators race to provide cable telephony services as a "last mile" solution. Today, cable modems are used primarily to transmit cable over cable lines. However, providing total quality telephony services requires complex system level software and complete silicon solutions. With this acquisition, TI now has the technology to deliver a complete solution to cable equipment manufacturers and their service provider customers. TI will combine the power of its market-leading programmable DSPs with the integrated silicon solutions and Internet telephony software it is acquiring with the purchases of Libit and Telogy.

The acquisition is an all-cash transaction valued at approximately $365 million. "Millions of homes and businesses will be using cable modem and xDSL for their digital communications. With Libit and Telogy, TI now has all the pieces to play in the large broadband communications market," said Mike Hames, TI vice president and manager of the company's worldwide DSP business. "Programmable DSPs will be at every point in the connection."

Libit designs, develops and manufactures highly integrated silicon solutions for cable broadband access. Its core modem technologies are available and shipping today and are low-power, CableLabs Certified™ Cable Modems silicon that allow cable-access equipment manufacturers and service providers to accelerate the move to Internet Protocol (IP) telephony by using cable bandwidth. (CableLabs Certified™ Cable Modems was formerly known as DOCSIS Certified or Data Over Cable Service Interface Specification.)

"Digital communications rely on digital signal processing capabilities," said Ehud Weinstein, CEO of Libit. "We realized that in order to address the advanced requirements of the cable broadband communications market, we needed to complement our core competencies with the best Internet telephony, the best DSP and proven manufacturing capability."

Together, TI, Libit and Telogy will develop a prototype, or reference design, that will enable manufacturers of cable modem equipment to get their products to market faster. For consumers, the combination of these three companies will improve quality of service, while also making communications faster, simpler and lower cost.

Broadband communication is the technology that enables service providers to deliver data, voice and video simultaneously over a single installed line via cable modems or xDSL modems. According to industry analyst Gartner Group, the semiconductor broadband access market is expected to grow to $1 billion by the year 2003. This acquisition expands TI's participation in all segments of this market.

Cable modems connect personal computers, set-top boxes and IP phones to the Internet by providing high-speed communications access via traditional television cable lines. Users have "always-on" connectivity, and as with xDSL, there is no need to dial-in, thereby eliminating busy signals and improving performance.

Libit Signal Processing Ltd., with over 100 employees, is based near Tel Aviv, Israel, and has offices in California and New Jersey. Libit was founded in 1994 by a group of prominent scientists, including internationally renowned experts in the field of digital signal processing and digital communications. Libit will become a wholly owned subsidiary of TI reporting into the worldwide DSP business and will continue to operate from its headquarters in Israel.

Libit targets its products to the cable modem, cable set-top box, cable headend and digital television markets, empowering high-speed Internet access, Internet Protocol telephony and digital television applications. Their products are fully compliant with leading international standards. Libit's customers include Toshiba, one of the first two cable modems certified by CableLabs.

The transaction is expected to close by July 1, 1999.

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NOTE TO EDITORS: Texas Instruments Incorporated is a global semiconductor company and the world's leading designer and supplier of digital signal processing and analog technologies, the engines driving the digitization of electronics. Headquartered in Dallas, Texas, the company's businesses also include materials and controls, education technology, and digital imaging. The company has manufacturing or sales operations in more than 25 countries.

Texas Instruments is traded on the New York Stock Exchange under the symbol TXN. More information is located on the World Wide Web at http://www.ti.com.

About Libit
Libit Signal Processing Ltd. designs, develops, and manufactures silicon solutions for the broadband access markets. Libit's products are compliant with the DOCSIS, DVB/DAVIC, IEEE802.14, and ATSC A.53 standard specifications, and are targeted to the cable modem, cable set-top box, and digital television OEM markets worldwide. Libit silicon was used to develop the worlds first certified DOCSIS modem. The company was founded in 1994 by a group of prominent scientists and engineers, including internationally recognized experts in the field of digital signal processing and digital communications. The company is headquartered in Herzlia, Israel with sales and marketing offices in Los Altos, California, and Englewood Cliffs, New Jersey. Visit Libit's web site at http://www.libit.com.

Trademarks: CableLabs Certified is a registered trademark of CableLabs.