New York with operations in North America

In the schedules attached to this press release, the non-GAAPmeasures have been reconciled to and should be considered together with theCondensed Consolidated Income Statements. These non-GAAP measures are not meant as a substitute for GAAP, but are includedsolely for informational and comparative purposes. The Company's managementbelieves that this information assists in evaluating operational trends,financial performance, and cash generating capacity. Management believes thesenon-GAAP measures allow investors to evaluate SMSCs financial performance usingsome of the same measures as management. SMSC also presents unaudited non-GAAP financial measures and supplementalvertical market information to provide additional insight into underlyingoperating performance on a comparable basis. The unaudited non-GAAP financialmeasures exclude charges and credits for stock appreciation rights (SARs) andstock options associated with the accounting pursuant to SFAS 123R and theamortization of acquired intangible assets. Forward Looking StatementsSMSC's quarterly results of operations have not been audited by the Company'sindependent accountants.

Except for historical information contained herein, thematters discussed in this announcement are forward-looking statements aboutexpected future events and financial and operating results that involve risksand uncertainties. These uncertainties may cause our actual future results to bematerially different from those discussed in forward-looking statements. In addition, SMSC competes inthe semiconductor industry, which has historically been characterized by intensecompetition, rapid technological change, cyclical market patterns, price erosionand periods of mismatched supply and demand. Our forward looking statements are qualified in their entirety by the inherentrisks and uncertainties surrounding future expectations and may not reflect thepotential impact of any future acquisitions, mergers or divestitures. Allforward-looking statements speak only as of the date hereof and are based uponthe information available to SMSC at this time. Such statements are subject tochange, and the Company does not undertake to update such statements, except tothe extent required under applicable law and regulation. These and other risksand uncertainties, including potential liability resulting from pending orfuture litigation, are detailed from time to time in the Company's reports filedwith the SEC.

About SMSCMany of the worlds most successful global technology companies rely upon SMSCas a go-to resource for semiconductor system solutions that span analog, digitaland mixed-signal technologies. Leveraging substantial intellectual property,integration expertise and a comprehensive global infrastructure, SMSC solvesdesign challenges and delivers performance, space, cost and time-to-marketadvantages to its customers. SMSCs application focus targets key verticalmarkets including consumer electronics, automotive infotainment, PC andindustrial applications. The Company has developed leadership positions in itsselect markets by providing application specific solutions such as mixed-signalsystem controllers, non-PCI Ethernet, ARCNET, MOST and Hi-Speed USB. SMSC is headquartered in Hauppauge, New York with operations in North America,Asia and Europe. Engineering design centers are located in Arizona, New York,Texas and Karlsruhe, Germany Additional information is available at