News & Events
Intersil Announces Fourth Quarter Results

-- Achieves revenue of $121.6 million, exceeding consensus expectations~-- Grows sequential wireless access revenue by 27%~-- Reports earnings per share (EPS) of $.12, beating consensus estimates

IRVINE, Calif. – January 29, 2002 – Intersil Corporation (NASDAQ: ISIL) today reported financial results for the quarter ended December 28, 2001. Sales grew to $121.6 million, an increase of 7.2% compared to the prior quarter, exceeding previous guidance. Adjusted net income was $13.3 million, or $.12 per diluted share of common stock, surpassing consensus expectations. Including amortization of intangibles, the company recorded net income of $ 3.5 million, or $.03 per share.

Intersil’s gross margins increased again in the fourth quarter to an all-time high of 52.0%, a 120 basis point gain from the previous quarter, with improvement in all business units. Intersil maintained its strong balance sheet, exiting the fourth quarter with over $600 million in cash, and continues to generate cash from operations. For the total year, Intersil achieved revenue of $481.1 million, improved gross margins to over 50% for the first time ever, and reported adjusted earnings per share of $.38.

“With stronger than expected revenue growth and significant gross margin improvement, Intersil made excellent progress in the fourth quarter. Wireless access sales increased 27% sequentially due to our ongoing leadership in the wireless LAN market, and power management sales were up an impressive 14% from the previous quarter,” said Greg Williams, Intersil’s President and CEO. “We continue to outperform the overall semiconductor industry because of our relentless focus on two of the fastest growing market segments – wireless networking and high-performance analog. Furthermore, we improved gross margins and net income in each successive quarter of 2001.”

Results by Product Group

Wireless Access
Intersil’s Wireless Access sales were $37.7 million, an increase of 27.3% from the third quarter of 2001. Orders grew over 50% from the previous quarter as many new customers were added for Intersil’s industry-leading PRISM® wireless local area networking (WLAN) solutions.

“The fourth quarter marked a return to double-digit sequential revenue growth in Wireless Access, driven by several factors,” said Williams. “Sales to our broad, global customer base increased as we experienced strong demand from key retail and enterprise customers in the fourth quarter. Intersil also began shipping our 11 megabit per second (Mbps) PRISM 2.5 solution to many of the world’s leading notebook manufacturers, allowing customers such as IBM, Fujitsu, HP and Compaq to offer professionals and consumers built-in wireless networking capabilities in their new notebook computers.”

“Design activities for Intersil’s PRISM wireless networking solutions continue to outpace the industry, and we saw many more wins during the quarter with customers including IBM, Intel, Linksys and Symbol Technologies,” said Williams. “Our new 11 megabit direct down conversion PRISM 3 began shipping in the fourth quarter and will reach retail shelves and corporate campuses this quarter. Intersil’s highly integrated PRISM 3 is quickly becoming the WLAN architecture of choice for the industry, due to its high performance, low cost and low power consumption. Our highly integrated PRISM 3 puts Intersil once again ahead of the rest of the industry. With an installed base of nearly 15 million wireless networking radios, the market for 802.11b continues to grow, its applications are increasing and our relationships with the world’s leading networking and communications companies will further increase the market momentum of 2.4 GHz products.”

During the quarter, Intersil helped ratify a proposal before Task Group G of the IEEE’s 802.11 Committee that sets the stage for a new wireless networking standard (802.11g) allowing data rates up to 54 Mbps in the 2.4 GHz spectrum. The new draft standard redefines next-generation, high-data-rate platforms for the industry by allowing companies to offer products that are five times faster, but backward compatible with the existing 11 Mbps Wi-Fi products. Intersil is currently developing a new platform, PRISM GT™, which meets the draft 802.11g standard and will begin sampling in the second quarter of 2002. PRISM GT will provide millions of Wi-Fi customers with an easy upgrade path to 54 Mbps data rates with the extended range and power consumption benefits of the 2.4 GHz band.

Intersil recently began sampling its new PRISM Indigo™ 5 GHz 802.11a wireless LAN solution. Incorporating an ARM-based MAC architecture, PRISM Indigo is a more flexible solution that will provide lower power consumption and better range than current competitive products. While not currently a global standard, 802.11a is ideally suited for short-range access and building-to-building bridges. PRISM Indigo further solidifies Intersil’s position as the leading semiconductor provider with the most comprehensive portfolio of 802.11 products for the rapidly growing WLAN market.

According to a report from Allied Business Intelligence published in October 2001, worldwide wireless LAN IC revenue is forecasted to grow around 37% each of the next two years. Adds Williams, “As the volume production leader in this high-growth market, our experience has proven that customers want WLAN solutions, not just components. Only Intersil provides the complete WLAN solution – ICs, firmware, software, drivers and radio reference designs – and proven high-volume experience with the world’s leading customers. With more than 300 engineers focused on WLAN research & development, Intersil has a commitment unmatched by any competitor in the industry today.”

Communications Analog
Intersil’s Communications Analog sales were $49.4 million during the fourth quarter, an 8% increase from the previous quarter. With a 14% revenue increase from the third quarter, the Power Management portion of the analog business continued to exhibit strong gains. This increase was due to continued demand for Intersil’s Endura ICs that manage power for over 50% of Intel®’s popular Pentium® 4 microprocessors.

“Our Communications Analog business continues to be driven by our leadership position and strong share gains in power management,” said Williams. “Intersil has made outstanding progress with the world’s leading motherboard manufacturers. During the quarter, we were selected as the power solution provider of choice by ASUSTek, Fujitsu-Siemens, Gigabyte and Legend QDI. ASUSTek is the world’s largest motherboard manufacturer and Legend QDI is the leading PC motherboard manufacturer in mainland China. Intersil’s multiphase approach to power management yields reliable and power-efficient solutions that have made us the world’s leading supplier for desktop PCs, workstations, and file servers.”

Intersil is now leveraging many years of successful desktop power management experience for the emerging mobile Pentium 4 market. The company recently launched its first power management solution for Intel’s new mobile Pentium 4 platform, called Intel Mobile Voltage Positioning IV (IMVP IV). Intersil also recently announced its first major program win and entry point in notebook power solutions supporting IMVP IV with Samsung Corporation.

Intersil has also launched another growth platform for power management by expanding its portfolio to address peripheral functions more common on Pentium 4-based desktops and notebooks, with new Endura ICs for graphics cards and Double Data Rate (DDR) memory. Multiple design wins have been secured for these new products and should begin contributing to revenue at the end of the first quarter of 2002.

“Power Management is a great strategic fit with Intersil’s vision of enabling personal freedom,” adds Williams. “Faster microprocessors need more power, and the ongoing convergence of cell phones and handheld computing devices requires more complex power management. Intersil is developing the leading, next generation solutions that will power mobile connectivity and connect many of these new devices wirelessly to the Internet.”

Other Analog
Revenue for Intersil’s other analog products was $34.6 million during the fourth quarter, a decrease of 9.2% from the third quarter – in line with expectations due to continued softness in standard analog markets. Gross margins for other analog products improved to 54%. This semiconductor cycle-dependent business appears to have reached an inflection point based on the fourth quarter order trends.

“Our crisp execution in 2001 has resulted in a total analog business with sales in excess of $300 million, gross margins approaching 55%, and many exciting new products,” said Williams. “The ramp-up of these attractive new products and our analog fab consolidation should lead to further revenue growth and improvement in total analog margins.”

Business Outlook
“Due to the continued strength in our Wireless Access business, we expect an increase of 3-5% in total company revenue in the first quarter of 2002 from the fourth quarter of 2001, despite seasonal weakness for computing in the March quarter. We anticipate gross margins of 52% and adjusted earnings per share of $.12,” said Williams. “We close out 2001 feeling very good about our progress and outgrowing the industry for the second consecutive year, while improving gross margins and profitability. At the same time, we have invested 22% of annual sales on next generation leadership technologies and products that are now coming to market. Our focus and commitment to wireless networking and power management is unparalleled in the industry. We are excited about our return to sequential growth and believe that we are well positioned for the upturn ahead.”

Investors and interested parties within the United States may listen to Intersil's conference call today at 1:30 p.m. Pacific/4:30 p.m. Eastern by dialing (888) 795-2173 and providing the operator with the pass code Intersil. International callers may connect to the call by dialing (712) 271-0561. A replay of Intersil’s conference call will be available for one week beginning at 3:30 p.m. Pacific/6:30 p.m. Eastern by calling (800) 677-7715 in the US or (402) 220-0274 Internationally. Confirmation code for the replay is 42069. A live webcast will also be available until February 5, 2002 on Intersil’s Internet homepage at http://www.intersil.com/investor.











About Intersil
Intersil is a global leader in designing innovative wireless networking and high performance analog solutions that enable wireless access to video, data and voice in homes, offices and public places. Creating advanced power management products, Intersil provides reliable solutions for file servers, portable information appliances and over half of all computer microprocessors manufactured today. With a rich high performance analog and mixed signal portfolio, Intersil brings added value in providing complete silicon, software and reference design solutions to new products that bring portable connectivity to people wherever they live, work or travel. Headquartered in Irvine, California, Intersil has offices in cities throughout the US, Europe and Asia. For more information about Intersil or to find out how to become a member of our winning team, visit the company's Web site and career page at: http://www.intersil.com.

This press release contains forward-looking statements as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are based Intersil Corporation’s (“Intersil”) management’s current expectations, estimates, beliefs, assumptions, and projections about Intersil’s business and industry. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "may," "will," and variations of these words or similar expressions, are intended to identify forward-looking statements. In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various risk factors. Important risk factors that may cause such material differences for Intersil include, but are not limited to: the recent economic slowdown ; the rate at which consumers adopt small handheld Internet appliances and portable computing devices in enterprises and in homes; the rate at which consumers purchase notebook computers; the rate at which our present and future customers and end-users adopt Intersil’s wireless access, communications analog, and other analog technologies and products; the timing, rescheduling or cancellation of significant customer orders; the loss of a key customer; the qualification, availability and pricing of competing products and technologies and the resulting effects on sales and pricing of our products; silicon wafer pricing and the availability and quality of foundry and assembly capacity and raw materials; the effectiveness of Intersil’s expense and product cost control and reduction efforts; intellectual property disputes, customer indemnification claims, and other litigation risks; Intersil’s ability to develop, market, and transition to volume production new products and technologies in a timely manner as well as other risk factors. Intersil’s most recent Quarterly Reports on Form 10-Q, and other Intersil filings with the U.S. Securities and Exchange Commission (“SEC”) (which you may obtain for free at the SEC’s Web site at www.sec.gov) discuss some of the important risk factors that may affect our business, results of operations, and financial condition. These forward-looking statements are made only as of the date of this press release and Intersil undertakes no obligation to update or revise these forward-looking statements. PRISM is a registered trademark, and PRISM GT, PRISM Indigo and Endura are trademarks of Intersil Americas Inc.
IBM, HP, Compaq, Samsung, Symbol Technologies, Legend, ASUSTek, Linksys, Fujitsu, Siemens, Gigabyte, Intel and Pentium are trademarks of those respective companies in the United States and certain other countries.
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