Ericsson and STMicroelectronics to create world leader in semiconductors and platforms for mobile applications

STMicroelectronics (NYSE:STM) and Ericsson (NASDAQ:ERIC) today
announced an agreement to merge Ericsson Mobile Platforms and ST-NXP
Wireless into a joint venture. The 50/50 joint venture will have the
industry's strongest product offering in semiconductors and platforms
for mobile applications and will be an important supplier to Nokia,
Samsung, Sony Ericsson, LG and Sharp. The fabless joint venture will
employ almost 8,000 people with pro-forma 2007 sales of USD 3.6 b.
ST is expected to exercise its option to buy NXP's 20 percent of
ST-NXP Wireless before the closing of this transaction.

In the joint venture, ST contributes its industry-leading multimedia
and connectivity solutions as well as a complete world-class 2G/EDGE
platform and strong 3G offering, including customer relationships
with Nokia, Samsung, and Sony Ericsson. Ericsson contributes its
industry-leading 3G and LTE platform technology as well as customer
relationships with Sony Ericsson, LG and Sharp. The joint venture,
staffed by proven professionals across all functional areas, is
designed for long-term stability in its original structure, and is
set to become an industry leader in product research, as well as
design, development, and the creation of cutting-edge mobile
platforms and wireless semiconductors.

In a business where scale matters, the complementary product
portfolios contributed by the parent companies will deliver
significant scale and synergies by leveraging and expanding the
existing strategic cooperation between Ericsson Mobile Platforms and
ST-NXP Wireless."By combining the complementary strengths and product offerings of
Ericsson and ST in platforms and semiconductors the joint venture is
well positioned to become a world leader," said Carl-Henric Svanberg,
President and CEO of Ericsson. "The industry continues to develop at
a swift pace and customers see benefits from our broad offering. This
partnership is a perfect fit and secures a complete offering, as well
as the necessary scale for technology leadership.""ST is taking another bold step. By combining two industry-leading
operations, we will create a world leader in mobile platforms and
semiconductor solutions with even stronger capabilities to create
customer value and continue to deliver rapid innovation," said Carlo
Bozotti, President and CEO of ST. "In April, we announced a plan to
join wireless resources with NXP to strengthen our wireless business
and enhance our leadership position in a sector which we have
targeted for strong organic and external growth and substantial
expansion of financial returns. Now, we've expanded our ambitions and
will be even better positioned to meet our opportunities."

Frans van Houten, CEO of NXP, said: "We understand the desire of ST
to call our 20 percent stake in order to expand the ST-NXP Wireless
joint venture with Ericsson. We support this next step that Ericsson
and ST are taking to create the global leader in wireless
semiconductors. To help ensure the success of the joint venture going
forward all NXP's supply and support agreements will continue as
planned. The additional proceeds of the 20 percent stake will enable
NXP to further build leadership positions through innovation and
investment in NXP's core businesses."

The joint venture's top-tier and broad customer base will also
benefit from a tighter relationship that follows from the success of
the existing cooperation between ST and Ericsson. The businesses
being combined are major suppliers to four of the industry's top five
handset manufacturers, who together represent almost 80 percent of
handset shipments, as well as to other exciting industry leaders.

The joint venture will rely on its complete platform offering, which
will include modems, multimedia and connectivity solutions for
2G/EDGE, 3G, HSPA and LTE technologies. It will also include all
appropriate hardware, software and support to enable handset
manufacturers to develop mass-market products. Ericsson Mobile
Platforms has state-of-the-art mobile modem design and mobile
terminal architecture expertise and ST-NXP Wireless brings vast
experience in wireless semiconductor development, including an
industry-leading ASIC, ASSP, Application Processor and connectivity
portfolio and hardware assembly and testing.

The business in the 50/50 joint venture will be led by a development
and marketing company with approximately 7,000 people employed. This
company will be consolidated by ST and Ericsson will account for it
using the equity method. A separate platform design company, with
approximately 1,000 people employed, will provide platform designs to
the development and marketing company. Ericsson will consolidate this
company and ST will account for it using the equity method. Of the
almost 8,000 people employed, almost 5,000 will be from ST-NXP
Wireless and roughly 3,000 will be from Ericsson Mobile Platforms.
The new company will be fabless and will use silicon technologies and
manufacturing capabilities from ST and other external providers.

The joint venture will be headquartered in Geneva, Switzerland and
governance will be balanced. Each parent will appoint four directors
to the board and Ericsson will designate Carl-Henric Svanberg as the
Chairman of the Board while ST will appoint Carlo Bozotti as the Vice
Chairman. In addition, ST will designate the Chief Executive Officer
and Ericsson will appoint the Executive Vice President to the
company. An integration management team, led by Alain Dutheil, has
already been selected.

The joint venture will acquire relevant assets from the parent
companies. After these acquisitions the joint venture will have a
cash position of about USD 0.4 b. Ericsson will contribute USD 1.1 b.
net to the joint venture, out of which USD 0.7 b. will be paid by the
joint venture to ST. The joint venture is subject to ordinary
regulatory approvals.

As ST-NXP Wireless was launched as an 80-20 venture between
STMicroelectronics and NXP, ST will acquire the remaining shares
under the terms already agreed with NXP. The value of the 20 percent
stake will be a function of the last twelve months (LTM) performance
of the ST-NXP Wireless joint venture at the exercise of the call,
which is expected to take place before the closing of the transaction
between ST and Ericsson.

On September 1, 2001, Ericsson formed Ericsson Mobile Platforms to
offer 2.5G and 3G platforms to manufacturers of mobile phones and
other wireless devices, based on Ericsson's global standardization
leadership and the world's strongest intellectual property rights
portfolio for 2.5G and 3G mobile phone systems. The rationale for the
new company was the transformation of the handset industry where few
companies would be able to deliver chip-sets, but many to deliver
handsets. Ericsson Mobile Platforms is the supplier of 3G and HSPA
platforms to Sony Ericsson, LG and Sharp. The unit is headquartered
in Lund, Sweden and is a part of Business Unit Multimedia within the
Ericsson Group.

ST-NXP Wireless began operations on August 2 and the new entity is a
global provider of platform solutions and ICs for wireless
communications, offering leading-edge capabilities in 2G, 2.5G
(GPRS), 2.75G (EDGE) 3G, LTE, multimedia, and connectivity. Nearly
three-quarters of the company's sales are in product categories in
which ST-NXP Wireless is the market leader and its strong position in
TD-SCDMA established the new company with a solid foundation in the
rapidly growing China market. The joint venture has been created from
successful businesses that generated USD 3B in revenue in 2007 and
which has produced thousands of important communication and
multimedia patents.

SEB Enskilda is acting as Ericsson's sole financial advisor in the
transaction while Morgan Stanley and UBS are acting as financial
advisors, respectively, to ST and its Supervisory Board.

Notes to editors:

Carlo Bozotti, President and CEO of STMicroelectronics and
Carl-Henric Svanberg, President and CEO of Ericsson, will hold a
joint conference for media and analysts in London at 12.00 noon UK
time, 1.00 pm CET, to comment on today's announcement. The press
conference will be webcast and available at www.ericsson.com/press,
www.ericsson.com/investors and ST's website at
http://investors.st.com.
An analysts, investors and media conference call will begin at 3.00pm
UK time, 4.00 pm CET.

Photos will be available during the day at
www.ericsson.com/ericsson/press/photos/index.shtml and at
www.st.com/stonline/press/news/year2008/photos.zip

Carl-Henric Svanberg's bio and photos are available at
http://www.ericsson.com/ericsson/corpinfo/management/
Carlo Bozotti's bio and photo is available at
www.st.com/stonline/company/bio/bozotti.htm

Ericsson's standard multimedia content is available at the broadcast
room:  www.ericsson.com/broadcast_room

About Ericsson
Ericsson is the world's leading provider of technology and services
to telecom operators. The market leader in 2G and 3G mobile
technologies, Ericsson supplies communications services and manages
networks that serve more than 195 million subscribers. The company's
portfolio comprises mobile and fixed network infrastructure, and
broadband and multimedia solutions for operators, enterprises and
developers. The Sony Ericsson joint venture provides consumers with
feature-rich personal mobile devices.

Ericsson is advancing its vision of "communication for all" through
innovation, technology and sustainable business solutions. Working in
175 countries, more than 70,000 employees generated revenue of USD
27.9 billion (SEK 188 billion) in 2007. Founded in 1876 and
headquartered in Stockholm, Sweden, Ericsson is listed on OMX Nordic
Exchange Stockholm and NASDAQ.

For more information, visit www.ericsson.com or www.ericsson.mobi.

About STMicroelectronics
STMicroelectronics is a global leader in developing and delivering
semiconductor solutions across the spectrum of microelectronics
applications. An unrivalled combination of silicon and system
expertise, manufacturing strength, Intellectual Property (IP)
portfolio and strategic partners positions the Company at the
forefront of System-on-Chip (SoC) technology and its products play a
key role in enabling today's convergence markets. The Company's
shares are traded on the New York Stock Exchange, on Euronext Paris
and on the Milan Stock Exchange. In 2007, the Company's net revenues
were USD 10 billion. Further information on ST can be found at
www.st.com.
FOR FURTHER INFORMATION, PLEASE CONTACT

Ericsson
Media
Ericsson Media Relations
Phone: +46 8 719 6992
E-mail: press.relations@ericsson.com

Investors
Ericsson Investor Relations
Phone: +46 8 719 0000
E-mail: investors.relations.se@ericsson.com

STMicroelectronics
Media
Maria Grazia Prestini
Phone: +41 22 929 6945
E-mail: mariagrazia.prestini@st.com

Investors
Tait Sorensen
Phone: +1-602-485-2064
E-mail: tait.sorensen@st.com

Disclosure Pursuant to the Swedish Securities Markets Act

Ericsson discloses the information provided herein pursuant to the
Securities Markets Act. The information was submitted for publication
at 08.00 CET, on August 20, 2008.

Safe Harbor Statement

Some of the statements contained in this release that are not
historical facts are statements of future expectations and other
forward-looking statements (within the meaning of Section 27A of the
Securities Act of 1933 or Section 21E of the Securities Exchange Act
of 1934, each as amended) based on management's current views and
assumptions.  Such forward-looking statements are subject to various
risks and uncertainties, which may cause actual results and
performance of our business to differ materially and adversely from
the forward-looking statements.  Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described in
this release.  We do not intend, and do not assume any obligation, to
update any information or forward-looking statements set forth in
this release to reflect subsequent events or circumstances.