X-FAB Semiconductor Foundries and 1st Silicon Complete Merger

Erfurt, Germany and Kuching -- Sarawak September 6, 2006 -- X-FAB Silicon Foundries today announced completion of the merger of X-FAB Semiconductor Foundries AG with 1st Silicon (Malaysia) Sdn. Bhd.; the contracts became effective on Sept. 1, 2006. The extended X-FAB Group is organized under the umbrella of the Belgian holding X-FAB Silicon Foundries N.V., located in Tessenderlo, Belgium. (See related press release dated March 22, 2006 at www.xfab.com)

Belgium-based XTRION N.V., with approximately 58-percent of the shares, and Malaysia-based State Financial Secretary Inc. of Sarawak, holding approximately 35-percent of the shares, are the two major shareholders. 1st Silicon will operate in the future as X-FAB Sarawak Sdn. Bhd.

X-FAB Silicon Foundries also announced that Datu Ahmad Tarmizi Hj. Sulaiman was elected chairman of the board of directors. Hans-J�rgen Straub (Chief Executive Officer) and Roger Diels (Executive Vice President) are named as management and executive directors of the board.

The combined entity has a capacity of 700,000 200mm-equivalent wafers per year, and offers customers production technologies ranging from 1.0 to 0.13 micrometers.

"This merger represents a significant step in the development of the X-FAB Group in terms of extending its market position, production capacity and technology portfolio," said Mr. Straub. "As a global player and the leading analog mixed-signal foundry, X-FAB Silicon Foundries offers its customers stability and a solid technology base for the most advanced integrated circuit development."

"We are very excited about this successful merger and are extremely optimistic about the future of Sarawak as a key high-tech region," said Datu Tarmizi. "The merger is an ideal partnership because it promotes healthy development for our high-tech foundry in Sarawak. Through this merger, X-FAB Silicon Foundries with fabs in Europe, the US and Asia has been put on the map as a truly global foundry source."

About X-FAB Silicon Foundries

X-FAB Silicon Foundries is the leading analog/mixed-signal foundry manufacturing silicon wafers for analog-digital integrated circuits (mixed-signal ICs). The company maintains wafer production facilities in Erfurt (Germany), Plymouth (UK), Lubbock, Texas (US) and Kuching, Sarawak (Malaysia), and employs more than 2,200 people worldwide. Wafers are manufactured based on ultra-modern modular CMOS and BiCMOS processes with technologies ranging from 1.0 to 0.13 micrometers, for applications primarily in the automotive, communications, consumer and industrial sectors. For more information, please visit www.xfab.com.