FCS Fairchild Semiconductor International, Inc. (MM)

Fairchild Semiconductor (NYSE: FCS) announced today that a federal court in San Francisco has dismissed a patent infringement lawsuit by Power Integrations, Inc. (Nasdaq: POWI) against Fairchild subsidiary System General Corporation. The dismissal follows actions by the U.S. Patent and Trademark Office rejecting all of the claims of all Power Integrations patents asserted in the case. All asserted patents are undergoing reexamination proceedings. Fairchild Semiconductor said it believes the patents are invalid and was not surprised by the Patent Office actions. The lawsuit was filed in 2004 in the United States District Court for the Northern District of California. While the lawsuit was pending, Power Integrations obtained an exclusion order from the U.S. International Trade Commission (ITC), based on two of the four patents involved in the lawsuit, barring some System General products from importation into the United States. (Power Integrations withdrew the other two patents during the ITC proceedings, but had not withdrawn them from the lawsuit.) Because of the ITC order, the affected products were withdrawn from the market and replaced with alternative products not affected by the order. Depending on the outcome of the Patent Office reexamination proceedings, which are continuing, Fairchild may address the ITC order at a later time. Fairchild acquired System General in 2007, after the ITC order was issued and while the lawsuit was pending. Meanwhile, Fairchild Semiconductor continues to defend separate proceedings with Power Integrations, pending before the United States District Court for the District of Delaware. All of the unexpired patents asserted by Power Integrations in a lawsuit against Fairchild that began in 2004 are also undergoing Patent Office reexamination proceedings. The Patent Office recently issued rejections against all asserted claims of two of the three Power Integrations patents being re-examined; results for the third patent remain pending. Late last week, Power Integrations filed a new complaint against Fairchild Semiconductor and System General in the Delaware court, asserting two of the same patents whose previously asserted claims have been rejected by the Patent Office, as well as a third patent, alleging unspecified damages as a result of alleged infringement by unspecified Fairchild and System General pulse-width modulation integrated circuit products, and demanding a permanent injunction and other relief. Special Note on Forward-Looking Statements: Some of the paragraphs above contain forward-looking statements that are based on management�s assumptions and expectations and that involve risk and uncertainty. All statements in this release, other than statements or characterizations of historical fact, are forward-looking statements. Forward-looking statements usually, but do not always, contain forward-looking terminology such as �we believe,� �we expect,� or �we anticipate,� or refer to management�s expectations about Fairchild�s future performance. Many factors could cause actual results to differ materially from those expressed in forward-looking statements. Important factors that may cause such a difference for Fairchild Semiconductor in connection with the company�s continuing litigation with Power Integrations include, but are not limited to, the outcome of reexamination proceedings before the U.S. Patent and Trademark Office affecting the Power Integrations patents asserted in the dismissed and pending lawsuits, the company�s ability to prevail in the enforceability phase of the litigation, the company�s ability to prevail in post-trial motions and possibly on appeal, and the risks associated with litigation in general, including the costs and time that must be devoted to litigation, the potential diversion of attention of management and key employees that may result from being engaged in litigation, and the possibility of adverse results. Risk factors affecting the company generally, including those related to intellectual property and litigation, are discussed in the company�s quarterly and annual reports filed with the Securities and Exchange Commission (SEC) and available at the Investor Relations section of Fairchild Semiconductor�s web site at investor.fairchildsemi.com, or the SEC�s web site at www.sec.gov. About Fairchild Semiconductor: Fairchild Semiconductor (NYSE: FCS) is a global leader delivering energy-efficient power analog and power discrete solutions. Fairchild is The Power Franchise�, providing leading-edge silicon and packaging technologies, manufacturing strength and system expertise for consumer, communications, industrial, portable, computing and automotive systems. An application-driven, solution-based semiconductor supplier, Fairchild provides online design tools and design centers worldwide as part of its comprehensive Global Power ResourceSM. Please contact us on the web at www.fairchildsemi.com.