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29 July 1996

VLSI Technology, Inc. (Nasdaq: VLSI) and Hitachi, Ltd.(NYSE: HIT) today announced an agreement under which VLSI will license Hitachi's SuperH(TM) RISC engine (SH) 32-bit microprocessors for incorporation in VLSI's libraries of system-level integration functional system blocks (FSB(TM)). The agreement covers VLSI access to the Hitachi SH-3 and forthcoming SH-4 engine implementations as well as joint efforts in the areas of operating system ports, middleware and application development tools. VLSI will work with Hitachi to position the SH as a leading CPU core for ASIC and ASSP applications including interactive digital entertainment, handheld computing devices, navigation systems, advanced automotive electronics and multimedia peripherals.

Al Stein, president, CEO and chairman of VLSI, commented: "The VLSI and Hitachi ASIC technology relationship has proven very successful and both companies have been looking for ways to expand it. The addition of high-performance SH processors into our libraries of RISC and DSP functional system blocks expands the VLSI-Hitachi relationship and provides significant new capabilities for our customers." Stein added, "The ease of alternate sourcing due to VLSI and Hitachi common processes and processor technologies brings new flexibility to customers in the high volume embedded applications that these building blocks target."

Dr. Tsugio Makimoto, executive managing director, Hitachi, Ltd. said: "We are very pleased that VLSI is licensing our SH processor technology. VLSI is one of the world's leading manufacturers of ASICs and ASSPs. Working together, Hitachi and VLSI will be able to speed up the development and release of a broad range of products for the multimedia market. The combination of Hitachi's SH architecture and systems technology with VLSI's ASIC technology and system level integration capabilities will mean more options and flexibility for customers. The strengthening of our alliance will also further improve the position of the SH as the world's leading RISC processor."

Technology Agreement Extension

Hitachi and VLSI have been cooperating on ASIC technologies since 1988, in a relationship that has yielded significant results in the areas of deep submicron process technology, design tools and cell libraries. By strengthening and expanding the companies' cooperative relationship this latest agreement will help provide customers around the world with new varieties of SH-based products.

Hitachi Perspective

Designed for multimedia and consumer applications, the SH offers a number of differentiating features. They include high speed, low power consumption and high code efficiency. The SH is being used in a broad range of products including digital still cameras, videogame machines, hard-disk drives, and vehicle navigation systems. The SH ranks as the world's top selling RISC processor* with 14 million units shipped in 1995, and more than 800 design-wins. Hitachi will continue to aggressively expand its development of advanced architecture as well as application-specific product families including SH-based ASICs.

VLSI Perspective

VLSI will use SH technology to offer high-performance System- Level Silicon. Emerging applications demand enormous computing power. The addition of the SH to VLSI's existing RISC, DSP and functional system blocks further strengthens the company's position in System-Level Silicon for high-performance markets such as multimedia and handheld computing.

*According to the U.S. newsletter, Inside The New Computer Industry, April 1996, Andrew Allison, the 1995 production total of 14 million units made the SH the number one shipping RISC processor.

**At an exchange rate of 106 yen to the dollar.

Super H is a trademark of Hitachi, Ltd.

FSB and System-Level Silicon are trademarks of VLSI Technology, Inc.

All other brand or product names are trademarks and/or registered trademarks of their respective owners.