STMicroelectronics To Acquire Genesis Microchip

Acquisition strengthens STMicroelectronics' position as a semiconductor technology leader in the consumer electronics market
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TMicroelectronics (NYSE:STM) and Genesis Microchip Inc. (NASDAQ:GNSS) announced today that they have entered into a definitive agreement for STMicroelectronics to acquire Genesis Microchip. The acquisition confirms STMicroelectronics as a leading System-on-Chip (SoC) technology provider to the rapidly growing digital television and display markets.

Under the terms of the agreement, STMicroelectronics will commence a cash tender offer to purchase all of the outstanding shares of Genesis Microchip Inc. for $8.65 per share, net to the holder in cash, implying a total equity value of approximately $336 million. Following completion of the tender offer, STMicroelectronics will complete a second-step merger in which any remaining common shares of Genesis Microchip Inc. will be converted into the right to receive the same per share price paid in the tender offer. The offer price represents a premium of 60% to Genesis Microchip's closing share price on Monday, December 10, 2007 and 26% to the average closing share price during the last sixty trading days prior to this announcement. During the twelve months ended September 30, 2007, Genesis reported revenues of $191 million. As of September 30, 2007, Genesis Microchip's cash and cash equivalents and short-term investments totaled approximately $183 million. STMicroelectronics will finance the acquisition using existing cash on its balance sheet.

The acquisition has been approved by the Board of Directors of Genesis, which has unanimously recommended that holders of Genesis Microchip's common stock accept the tender offer and approve the second-step merger. The tender offer, which STMicroelectronics expects to commence no later than December 18, 2007, and the second-step merger, are both subject to customary conditions, including receipt of regulatory approvals, and are expected to be completed in the first quarter of 2008.

Through this acquisition, STMicroelectronics expects to expand its leadership in the $1.5 billion digital TV market, one of the fastest growing segments in consumer semiconductors. Genesis Microchip will enhance STMicroelectronics' technological capabilities for the transition to fully digital solutions in this segment and strengthen its product and intellectual- property portfolio.

"STMicroelectronics is a leader in digital consumer technologies, with a strong position in set-top box compression and decompression technologies and "front end" processing technologies in digital TV. Genesis is a leader in "back-end" image and video processing and digital interconnect technologies," said Philippe Lambinet, Corporate Vice President and General Manager of STMicroelectronics' Home Entertainment & Displays Group. "The combined company will have the products, technology, IP and expertise to offer best-in-class integrated DTV processing solutions that our customers are increasingly demanding. We also believe that the Genesis DisplayPort technology brings expanded opportunities to the PC and home entertainment markets."

"This combination represents an exciting opportunity for Genesis," said Elias Antoun, Genesis Microchip's President and Chief Executive Officer. "Joining forces with STMicroelectronics will put us in the best position to ensure that our products and technologies remain at the forefront of our industry. Our innovative technology, when combined with STMicroelectronics' resources, silicon design expertise and manufacturing capabilities can accelerate the delivery of the next generation of solutions for our digital television, flat-panel display and DisplayPort customer base."

On closing, Genesis will become part of STMicroelectronics' Home Entertainment & Displays Group. Elias Antoun will join STMicroelectronics and will lead STMicroelectronics' television and display initiatives, reporting to Philippe Lambinet.

Morgan Stanley acted as exclusive financial advisor to STMicroelectronics and Shearman & Sterling LLP acted as legal counsel. Goldman Sachs acted as exclusive financial advisor to Genesis Microchip and Wilson Sonsini Goodrich & Rosati Professional Corporation acted as legal counsel.

Conference Call

A conference call open to all interested parties regarding STMicroelectronics' acquisition of Genesis will take place on December 11, 2007, at 9 a.m. EST / 3 p.m. CET. To listen to the conference call via telephone, please call +1 877 317 6799 (US) or +44 (0) 20 7107 0611 (International). To listen via the Internet, please visit http://investors.st.com/. Playback of the conference call will be available through December 21, 2007.

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 STMicroelectronics at the forefront of System-on-Chip (SoC) technology and its products play a key role in enabling today's convergence markets. STMicroelectronics' shares are traded on the New York Stock Exchange, on Euronext Paris and on the Milan Stock Exchange. In 2006, the Company's net revenues were $9.85 billion and net earnings were $782 million. Further information on STMicroelectronics can be found at www.st.com.

About Genesis

Genesis Microchip Inc. is a leading provider of image and video processing systems enabling superior picture quality in flat-panel TVs and a variety of consumer and PC-display products. Featuring Genesis Display Perfection(R) technologies and Emmy award-winning Faroudja(R) video technologies, Genesis system-on-a-chip solutions are used worldwide by display manufacturers to produce visibly better images across a broad array of devices including flat- panel displays, digital TVs, projectors, A/V receivers and DVD players/recorders. Genesis is also the primary driver of the DisplayPort digital interface standard which enables a common, royalty free, scalable interface between any flat panel display and video or data source. In addition to DisplayPort technology, the Genesis technology portfolio features analog and mixed signal system-on-a-chip design, DCDi(R) by Faroudja deinterlacing, TrueLife(TM) video enhancement, IntelliComb(TM) video decoding and includes over 210 patents. Founded in 1987, Genesis supports its leading brand-name customers with offices in the U.S., Canada, India, Taiwan, South Korea, China, Japan and Singapore, including LG, Toshiba and Samsung. For more information about Genesis Microchip Inc. or Genesis Display Perfection technologies, please visit www.gnss.com.