ISSI (MM)

ISSI to Acquire ICSI in Taiwan Conference Call Scheduled for January 25, 2005 SANTA CLARA, Calif., Jan. 25 /PRNewswire-FirstCall/ -- Integrated Silicon Solution, Inc. (NASDAQ:ISSI) today announced that it has reached an agreement to acquire Integrated Circuit Solution, Inc. (ICSI) in Taiwan. Currently, ISSI owns 29% of ICSI and ISSI's CEO serves on the ICSI board of directors. Under the agreement, ISSI will acquire ICSI for approximately US$69 million in cash. ISSI's decision to acquire ICSI is being driven by several considerations: 1) ISSI's conclusion that overall size or scale is a critical success factor in its markets. ISSI believes that the combined revenue of the two companies will help immediately in further growing the top line. 2) ISSI believes that significant economies of scale can be achieved on the expense line by combining with ICSI. As a result of the acquisition, ISSI plans to eliminate duplications in expense structure and significantly reduce overall operating expenses. 3) ISSI believes it can benefit from scaling its purchasing power. The combined volume of ISSI and ICSI will give ISSI a stronger position when purchasing wafers, assembly and test services. 4) The acquisition will accelerate ISSI's non-memory product line offerings, which can mitigate some of the spikes in the Company's memory business. Both ISSI and ICSI have been investing in non-memory products. ISSI's focus is wireless chipsets and Smartcards. ICSI's focus is card controller and MP3 player products. In the December 2004 quarter, ICSI's revenue totaled $26.8M and approximately 19% of its sales were derived from non-memory products. 5) ISSI believes the acquisition will enable it to gain new customers as ISSI's customer overlap with ICSI is minimal. Thus, the combined sales channels and expanded customer base should have a positive impact on ISSI's revenue. ISSI believes it will especially benefit in sales to Japan, where ICSI has had very good success. "Combining forces for strategic product development and operating efficiencies makes a lot of sense for ISSI and ICSI," said Jimmy Lee, ISSI's Chairman and CEO. "ISSI's addressed markets are substantial and we believe our opportunity to serve them will be improved by this merger." ICSI is headquartered in the Science Park in Hsinchi, Taiwan, and ISSI intends to move its current operations in Taiwan into this building. ICSI currently has about 210 employees and its revenue for calendar year 2004 is estimated at approximately $150 million. Both companies are announcing the transaction on January 25, 2005. Additional due diligence, legal steps, and regulatory review will proceed and the close is targeted for sometime in the mid to late June quarter of 2005. Information regarding ICSI, including their December 31, 2004 quarterly financial statement (unaudited), is available on their website at http://www.icsi.com.tw/ under Press Center -- Corporate News -- ICSI Operating Results for Year 2004. The events in this news release will be discussed at ISSI's regularly scheduled quarterly conference call scheduled for today at 1:30 p.m. (PST). To access ISSI's conference call via telephone, dial 719-457-2680 by 1:20 p.m. Pacific time on January 25. If you plan to participate in the call, please RSVP either by telephone at 408-969-4774 or by e-mail to . The call will be webcast from ISSI's website at http://www.issi.com/. About ISSI ISSI is a fabless semiconductor company that designs and markets high performance integrated circuits for the following key markets: (i) digital consumer electronics, (ii) networking, (iii) mobile communications and (iv) automotive electronics. The Company's primary products are high speed and low power SRAM and low and medium density DRAM. The Company also designs and markets EEPROM, wireless chipsets, and SmartCards and is developing selected non-memory products focused on its key markets. ISSI is headquartered in Silicon Valley with worldwide offices in China, Europe, Hong Kong, India, Korea and Taiwan. Visit our web site at http://www.issi.com/. Safe Harbor Statement The statements in this press release regarding the expected benefits of ISSI's acquisition of ICSI including further growing top line revenue, economies of scale, significantly reduced operating expenses, scaling purchasing power, benefits in purchasing wafers, assembly and test services, accelerating non-memory revenue and mitigating spikes in the Company's memory business, gaining new customers, and benefiting from ICSI's success in Japan, combining forces making a lot of sense, and improved opportunity to serve markets are forward-looking statements that are subject to risks. Actual results may differ materially from current expectations due to many factors, including our failure to retain ICSI's customers and revenue for memory and non-memory products, inability to reduce operating expenses, deterioration of our relationships with wafer foundries, assembly and test providers, design flaws and yield problems in new products, difficulties in merging the operations of ISSI and ICSI, failure to retain key employees, satisfactory completion of closing conditions, our ability to close the transaction in a timely manner. Further, our actual results and the actual results of the ICSI acquisition could differ from current expectations due to reductions in average selling prices, changes in manufacturing yields, order cancellations, order rescheduling, decreasing demand for memory or non-memory products, product warranty claims, competition, the level and value of inventory held by OEM customers, or other factors. Also, ICSI's estimated revenue for 2004 and the December quarter is subject to audit adjustments. Stockholders of ISSI are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. ISSI does not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances, or new information after this January 25, 2005 press release, or to reflect the occurrence of unanticipated events. Further information that could affect the Company's results is detailed in ISSI's periodic filings with the Securities and Exchange Commission, including its Annual Report on Form 10K for the fiscal year ended September 30, 2004. DATASOURCE: Integrated Silicon Solution, Inc. CONTACT: Suzanne Weaver, Investor Relations, +1-408-969-4774, or , or Gary L. Fischer, President & COO, +1-408-969-4612, or , both of ISSI Web site: http://www.issi.com/

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