FCS Fairchild Semiconductor International, Inc. (MM)

Fairchild Semiconductor (NYSE: FCS), the leading global supplier of power semiconductors, today announced that as of January 11, 2007 at least 53 percent of System General shares had been tendered in response to Fairchild's tender offer announced on January 2, 2007, effectively ensuring the company will acquire the Taipei-based analog semiconductor company. As the minimum acceptance level for the tender was 50.1 percent of outstanding shares, Fairchild now expects to end its tender offer on January 31, 2007 in Taipei, purchase the majority of System General�s shares in early February, and assume legal control of System General in mid-March. Completion of the tender offer remains subject to regulatory approvals, which the company expects to obtain. The company expects to complete a share swap and merger and assume 100 percent ownership of System General by the end of the second quarter of 2007. "We are pleased that we were able to achieve a successful tender in only eight trading days,� said Mark Thompson, Fairchild�s president and CEO. "We believe that receiving support from the System General management team, board of directors, and a majority of shareholders reflects a clear recognition of the benefit to both companies in combining System General�s experienced power analog executives, their growing portfolio of analog power semiconductors, and their design and applications engineering teams with Fairchild�s global position in power semiconductors. With the addition of System General, Fairchild is poised to become a world leader in the AC/DC offline power conversion market. We believe this investment in a leading company with a strong Taiwan-based R&D design center, will enhance the combined company�s abilities to service local power supply manufacturers, and help strengthen System General�s technical and innovation capabilities,� said Thompson. This press release is neither an offer to purchase nor a solicitation of an offer to sell securities. New Conversion Co., Ltd., a subsidiary of Fairchild, has filed a tender offer circular with the Taiwan Financial Supervisory Commission (the "FSC"). System General shareholders are strongly advised to read the tender offer circular (including the offer to purchase and related tender offer documents) and the related public notice filed by Fairchild�s subsidiary with the FSC, because they contain important information. Yuanta Core Pacific Securities is the tender offer agent, and the detailed information is posted on Yuanta�s website: http://www.yuanta.com.tw/. Special Note on Forward-Looking Statements and Risk Factors: This news release contains forward-looking statements, including those regarding our ability to successfully satisfy the conditions to complete each of the tender offer, share swap and merger, our ability to realize the benefits of this transaction (including enhancing our product offerings, customer relationships and the other synergies discussed above), our ability to prevail in or otherwise resolve pending litigation as discussed below, our growth strategy, our long-term growth prospects, and other statements. These statements are based on management's assumptions and expectations, which involve risk and uncertainty. Many factors could cause actual results to differ materially from those expressed in forward-looking statements. These factors include, but are not limited to, our ability to consummate the tender offer and satisfy the conditions to closing the tender offer, share swap and merger; our ability to successfully address the challenges associated with integrating this acquisition; and our ability to retain and develop System General�s markets, facilities and personnel. System General is currently appealing the outcome of proceedings before the U.S. International Trade Commission (ITC) involving allegations of patent infringement, and is a defendant in a patent infringement lawsuit in the U.S. District Court for the Northern District of California. Both the ITC proceeding and the lawsuit were initiated by Power Integrations, Inc. As in all litigation, the results of these matters are difficult to predict and no assurance can be given as to the outcome of these proceedings. An adverse outcome in these matters, after completion of the acquisition, could negatively impact our financial results. We are also involved in patent infringement litigation against Power Integrations in U.S. district courts in Delaware and Texas, as a defendant and as a plaintiff, respectively. These lawsuits are described in our filings with the U.S. Securities and Exchange Commission (SEC) referenced below. Other risk factors include, but are not limited to, changes in overall global or regional economic conditions; changes in demand for our or System General�s products; changes in inventories at our or System General�s customers and distributors; technological and product development risks, including the risks of failing to maintain the right to use some technologies or failing to adequately protect our or System General�s intellectual property against misappropriation or infringement; availability of manufacturing capacity; the risk of production delays; availability of raw materials; competitors' actions; loss of key customers, including but not limited to distributors; the inability to attract and retain key management and other employees, including System General senior management and key employees during the transitional period; order cancellations or reduced bookings; changes in manufacturing yields or output; risks related to warranty and product liability claims; risks inherent in doing business internationally; regulatory risks and significant litigation. These and other risk factors as they relate to Fairchild are discussed in the company's quarterly and annual reports filed with the SEC and are available at the Investor Relations section of Fairchild web site at www.fairchildsemi.com or the SEC's web site at www.sec.gov. About Fairchild Semiconductor: Fairchild Semiconductor (NYSE: FCS) is the leading global supplier of high-performance power products critical to today's leading electronic applications in the computing, communications, consumer, industrial and automotive segments. As The Power Franchise�, Fairchild offers the industry's broadest portfolio of components that optimize system power. Fairchild's 9,000 employees design, manufacture and market power, analog and mixed signal, interface, logic, and optoelectronics products. Please contact us on the web at www.fairchildsemi.com.