SMSC to acquire CONEXANT SYSTEMS, Inc.
{SMSC declined to increase price in Feb 2011 and the deal was terminated}

HAUPPAUGE, N.Y. & NEWPORT BEACH, Calif., Jan 10, 2011 - SMSC (NASDAQ: SMSC), a leading semiconductor company providing Smart Mixed-Signal Connectivity(TM) solutions, and Conexant Systems, Inc. (NASDAQ: CNXT), a leading supplier of innovative semiconductor solutions for imaging, audio, embedded modem, and video surveillance applications, today announced the signing of a definitive agreement under which SMSC will purchase all of the outstanding shares of Conexant in a stock and cash transaction valued at approximately $284 million including the assumption of Conexant's net debt. The transaction has been approved by the boards of directors of both companies.

The combination of Conexant's imaging, audio, embedded modem and video productswith SMSC's broad connectivity solutions targeting the computing, consumer, industrial and automotive markets provides for a highly complementary merger of talent and technology. Headquartered in Newport Beach, California, Conexant has approximately 600 employees worldwide, including over 230 in Asia.

"We believe that combining the growth potential of Conexant and SMSC will allow us to leverage complementary technology and engineering resources to provide our customers with expanded solutions in connectivity and content," said Christine King, President & Chief Executive Officer of SMSC. "We plan to focus our resources on the areas of highest return and believe that our respective sales and supply chain relationships will help create a platform to grow our businesses. We expect the acquisition will be accretive to non-GAAP EPS immediately upon close. In addition, we expect to capture significant operating efficiencies that will position us to increase earnings growth. SMSC's larger scale should position us to increase our R&D productivity and drive profitability and shareholder value."

"In our industry, size and scope provide a significant advantage with customers and suppliers," said Scott Mercer, Conexant's Chairman and Chief Executive Officer. "SMSC and Conexant share similar core competencies in analog and mixed-signal design, possess complementary product portfolios, and count many customers in common. By joining forces, we get the opportunity to take advantage of economies of scale and drive profitable growth. I am convinced that combining our companies will best serve the interests of Conexant stockholders, customers, and employees moving forward."

Sailesh Chittipeddi, currently President & Chief Operating Officer at Conexant, will join SMSC upon close of the acquisition as Executive Vice President, reporting to Christine King. Mr. Chittipeddi's responsibilities will include all product lines and global marketing and engineering functions for SMSC. Mr. Chittipeddi joined Conexant in 2006. In his role as President & Chief Operating Officer, he had worldwide responsibility for engineering, operations, quality and marketing.

Under the terms of the agreement, for each share of Conexant that they own, Conexant stockholders will receive approximately $2.25 consisting of $1.125 in cash and a fraction of a share of SMSC common stock equal to $1.125 divided by the volume weighted average price of SMSC common stock for the 20 trading days ending on the second trading day prior to closing, but in no event more than 0.04264 nor less than 0.03489 shares of SMSC common stock. The total cash consideration to be paid in the transaction is approximately $98 million and the total number of shares of SMSC common stock to be issued (including the assumption of outstanding Conexant restricted stock units) is approximately 2.9 to 3.6 million. The transaction is expected to close in the first half of calendar 2011 subject to the satisfaction of regulatory requirements, approval by Conexant shareholders and other customary closing conditions. SMSC expects to realize approximately $8 to $10 million in annualized pre-tax cost synergies by the end of SMSC's fourth quarter of fiscal 2012 as a result of the consolidation of support functions and optimization of the supply chain across a larger base.

About SMSC

SMSC is a leading developer of Smart Mixed-Signal Connectivity(TM) solutions. SMSC employs a unique systems level approach that incorporates a broad set of technologies and intellectual property to deliver differentiating products to its customers. The company is focused on delivering connectivity solutions that enable the proliferation of data in personal computers, automobiles, portable consumer devices and other applications. SMSC's feature-rich products drive a number of industry standards and include USB, MOST(R) automotive networking, embedded system control and analog solutions, including thermal management and RightTouch(TM) capacitive sensing. SMSC is headquartered in New York and has offices and research facilities in North America, Asia, Europe and India. Additional information is available at http://www.smsc.com/.

About Conexant Systems

Conexant's portfolio of innovative semiconductor solutions includes products for imaging, audio, embedded modem, and video surveillance applications. Conexant is a fabless semiconductor company headquartered in Newport Beach, Calif. To learn more, please visit http://www.conexant.com/.

"Forward-Looking" and "Safe-Harbor" Statements are omitted