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TI to Acquire Butterfly VLSI, Ltd

Move Addresses Emerging Short Distance Wireless Market

Dallas (January 20, 1999) -- Texas Instruments (NYSE: TXN) announced today it has entered into an agreement to acquire Butterfly VLSI, Ltd, a pioneer in the development of Radio Frequency (RF) wireless technology targeting communications in a range of up to 100 meters. This move provides TI with added expertise to address this emerging short distance wireless market and continue to strengthen the company's digital signal processing leadership.

Butterfly, with sites in Tel Aviv, Israel, and Santa Clara, California, develops low cost chipsets that enable RF wireless communications in the 900 MHz and 2.4 GHz frequency bands. The company employs about 60 people, involved primarily in engineering, who will become part of TI and operate under the Texas Instruments name. Purchase price was approximately $50 million.

Butterfly's expertise, coupled with TI's leadership in digital signal processing, analog and software development, will allow the company to provide seamless wireless connectivity to typical fixed or mobile peripheral devices. Some example applications include laptops, short distance connections between cellular phones, natural input devices, home automation, game peripherals or telephones - all with cost-effective and interference-free transmission without wires.

"This acquisition is very complementary to our existing leadership in wireless communications," said Gilles Delfassy, TI vice president and manager of the Wireless Communications business unit. "Butterfly and TI together will make a dynamic combination to provide a total systems solution to enable the various voice, data, control and multimedia applications that are emerging in the general wireless consumer market place."

For instance, TI's short distance wireless solutions will allow a user to take a photo with a digital camera that will automatically be sent as a postcard through a cell phone, which connects to the Internet. With this technology, personal organizers and computers in the same room or home could synch up every few hours, with no action required.

"This transaction signals an exciting future for Butterfly and its employees," said Gideon Barak, Butterfly's chief executive officer. "Joining forces with TI will give Butterfly a powerful presence and ability to leverage its expertise in this new market."

The systems solutions will continue to be based on the WINGs protocol and in the future will address Bluetooth and HomeRF protocols, both emerging wireless industry standards.

Butterfly was established in 1992 and is primarily focused on research and development activities related to RF wireless technology. Their products target the home and small office environments and include Monarch™ and Apollo™, chipsets for multi-handset cordless phone PC based systems, Admiral™, a chipset for wireless human input devices and data terminals, and various wireless devices and controls. The company is privately held with a variety of investors. The transaction is expected to close in the first quarter.

Monarch, Admiral and Apollo are registered trademarks of Butterfly VLSI, Ltd.