Press Releases
Intersil and ChipPAC Sign Multi-year Supply Agreement

IRVINE, CA — May 8, 2000 — Intersil (NASDAQ: ISIL) announced today that it will enter into a multi-year supply agreement with ChipPAC, Inc. of Santa Clara, California for integrated circuit (IC) assembly and test services. Under terms of the proposed transaction — expected to be completed by June 2000 — Intersil will sell its Kuala Lumpur, Malaysia-based semiconductor assembly and test operations to ChipPAC, which will supply services on a subcontract basis.

"This agreement plays to the strengths of both companies," says Greg Williams, Intersil President and CEO. "We can devote our energy to the design, development and marketing of high value ICs and chip sets for the integrated communications market while ChipPAC can expand its global operations by investing in a world-class assembly and test facility. This agreement will give Intersil additional test and assembly capacity, access to new packaging technologies and cost reduction benefits that support our goal of improving overall gross margins. More importantly, we gain a valued, long-term partner who will work closely with us to ensure a seamless transition for our customers."

"The addition of Intersil’s assembly and test facility to ChipPAC’s already extensive portfolio of IC packages, provides the broadest package assembly and test capability in the industry," says Dennis McKenna, President and CEO of ChipPAC. "As a result of this agreement, Intersil will become one of ChipPAC’s largest customers and we look forward to continuing their tradition of high quality manufacturing and superior customer service. The acquisition of the Kuala Lumpur operations also makes us one of the global leaders in the discrete power segment and wireless/RF test, and significantly improves our customers’ ability to deal with fewer suppliers. We will continue to pursue our three-pronged strategy to grow through acquisitions, provide innovative package technology and grow with our customers."

Under terms of the transaction, ChipPAC will acquire all of Intersil’s Kuala Lumpur manufacturing assets, including a 524,000 square foot semiconductor assembly and test facility, wireless and analog/mixed-signal test capabilities, product distribution center as well as the operation’s management team and approximately 2,900 employees. As a result of the transaction — subject to final closing — Intersil will receive approximately $52.5 million in cash and $17.5 million in ChipPAC preferred convertible stock for its Kuala Lumpur operations, and anticipates it will recognize a non-recurring, after-tax charge of between $10 million and $15 million in the quarter ending June 30, 2000. In addition, Intersil will achieve world class cost performance, incremental assembly and test capacity and access to new packaging technologies through this five-year supply agreement.

About Intersil
Intersil uses its semiconductor expertise to enable highly integrated voice, data and video communications. Intersil's integrated communications portfolio includes PRISM^® Wireless Local Area Network (WLAN) chip sets that enable mobile connectivity products for the home and office; analog, mixed-signal and digital integrated circuits for broadband access to wireless and wired Wide Area Networks (WANs); and power management products that enable 24x7 reliability in network servers, next generation PCs and information appliances. For more information about Intersil, visit the company's Internet homepage at www.intersil.com.

About ChipPAC, Inc.

ChipPAC, Inc. is one of the few assembly and test companies in the world that is a full-portfolio supplier. The company offers a full array of packaging, from basic 6-pin to 2000-pin BGA/CSP and leaded packages. These packages are offered in wire-bond and flip-chip processes. The company has 4,000 employees worldwide, with sales offices in Boston, Dallas, Phoenix, San Diego, Santa Clara, Japan, Korea, Singapore and The Netherlands, and ISO 9002-certified manufacturing facilities located in Ichon, Korea, and Shanghai, China. ChipPAC headquarters are 3151 Coronado Dr., Santa Clara, California 95054, 408-486-5900 or 1-888-232-2003, e-mail: info@chippac.com. ChipPAC Inc. is first in Shaping Solutions™. Visit www.chippac.com for complete information about ChipPAC, including our new on-line Customer Center for product-specific information.

PRISM is a registered trademark of Intersil Corporation.

Shaping Solutions is a trademark of ChipPAC, Inc.

This press release contains information relating to forecasted results of Intersil, including certain benefits, projections and business trends, that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from these forward-looking statements as a result of certain risks and uncertainties. These risks and uncertainties include, but are not limited to global and market conditions, risks that the divestiture and subcontract arrangement may prove difficult to transfer and integrate, risks associated with international operations, as well as other risks and uncertainties detailed from time to time in Intersil's filings with the Securities Exchange Commission. These forward-looking statements are made only as of the date of this press release and Intersil undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events, or otherwise. Specific risk factors can be found in Intersil's filings with the Securities and Exchange Commission.

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