Silicon Laboratories Inc.
Jan 30, 2008

Silicon Laboratories Reports Exceptional Financial Performance

Company Completes a Third of the Share Repurchase Authorization

AUSTIN, Texas--(BUSINESS WIRE)--Jan. 30, 2008--Silicon Laboratories Inc. (Nasdaq:SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported record revenue from continuing operations of $100 million for the fourth quarter, a 34 percent increase over the same period last year. Earnings per share for the quarter exceeded guidance, and the company surpassed its non-GAAP adjusted operating income target of 25 percent in the quarter, demonstrating the ability of the business to operate at model performance.

During the fourth quarter the company completed share repurchases totaling $112 million, bringing the total amount repurchased to over a third of the $400 million authorization in only five months.

Financial Results

2007 revenue from continuing operations of $337 million was an increase of 17 percent over 2006. Fourth quarter revenue increased sequentially by almost 14 percent, higher than expectations due primarily to stronger than anticipated demand from consumer device makers for the company's microcontrollers and broadcast products. For the fourth quarter, GAAP gross margin increased to 63.5 percent, GAAP operating income was $14.5 million, and GAAP diluted earnings per share from continuing operations was $0.28. For the full year, GAAP diluted earnings per share from continuing operations increased to $0.70. Including discontinued operations, GAAP diluted earnings per share totaled $3.64.

The following non-GAAP results exclude $11.9 million in non-cash charges. Non-GAAP gross margin increased to 63.9 percent, well above expectations due to strong margin performance across the product lines. Operating expenses were slightly lower than forecasted, declining as a percent of revenue to 37.6 percent, resulting in non-GAAP operating income of $26.3 million, or 26.3 percent of revenue. This was significantly above guidance and exceeded the company's target of 25 percent. Non-GAAP diluted earnings per share from continuing operations was a record $0.46 for the quarter and $1.30 for all of 2007, representing a year over year increase of 142 percent and 65 percent, respectively.

"In four quarters, the company has been able to achieve a level of financial performance that very few companies in our sector can deliver," said Bill Bock, chief financial officer. "We were able to reduce operating expenses, accelerate revenue and improve the gross margin profile, more than doubling operating income and earnings per share."

The reconciling charges are set forth in the financial measures table included below.

Business Summary

Fourth quarter revenue growth was driven by the broadcast, microcontrollers and timing businesses. Broadcast products and microcontrollers experienced double-digit sequential growth rates fueled by demand for products shipping into consumer devices such as handsets and portable navigation devices. Design win activity remained strong across the business and particularly in microcontrollers, which recorded over seven thousand development kit shipments.

"The results speak for themselves," said Necip Sayiner, president and chief executive officer of Silicon Laboratories. "We have a strong portfolio of differentiated products, we are continuing to diversify to expand our market reach and customer base, and we are investing in R&D to fund future growth. We will continue to focus on R&D execution and operational excellence in our business as we monitor the uncertainties in the macroeconomic environment."

For the first quarter of 2008, the company is guiding revenue in the range of $93 to $97 million.

Webcast and Conference Call

A conference call discussing the fourth quarter results will follow this press release today at 7:30 a.m. Central Time. An audio webcast will be available simultaneously on Silicon Laboratories' website under Investor Relations (www.silabs.com). A replay will be available after the call at the same website listed above or by calling 800-839-2341 or +1-203-369-3138 (international). Replays will be available through February 13, 2008.

About Silicon Laboratories Inc.

Silicon Laboratories Inc. is a leading designer of high-performance, analog-intensive, mixed-signal integrated circuits (ICs) for a broad range of applications. Silicon Laboratories' diverse portfolio of highly integrated, patented solutions is developed by a world-class engineering team with expertise in cutting-edge mixed-signal design. The company has design, engineering, marketing, sales and applications offices throughout North America, Europe and Asia. For more information about Silicon Laboratories, please visit www.silabs.com.

Forward Looking Statements

This press release contains forward-looking statements based on Silicon Laboratories' current expectations. The words "believe," "estimate," "expect," "intend," "anticipate," "plan," "project," "will" and similar phrases as they relate to Silicon Laboratories are intended to identify such forward-looking statements. These forward-looking statements reflect the current views and assumptions of Silicon Laboratories and are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are the following: risks that Silicon Laboratories may not be able to maintain its historical growth; quarterly fluctuations in revenues and operating results; volatile stock price; average selling prices of products may decrease significantly and rapidly, dependence on a limited number of products and customers; difficulties developing new products that achieve market acceptance; risks that Silicon Laboratories may not be able to manage strains associated with its growth (including risks associated with the implementation of its enterprise resource planning system); dependence on key personnel; difficulties managing our manufacturers and subcontractors; difficulties managing international activities; credit risks associated with our accounts receivable; geographic concentration of manufacturers, assemblers, test service providers and customers in the Pacific Rim that subjects Silicon Laboratories' business and results of operations to risks of natural disasters, epidemics, war and political unrest; product development risks; inventory-related risks; intellectual property litigation risks; risks associated with acquisitions and divestitures; the competitive and cyclical nature of the semiconductor industry and other factors that are detailed in Silicon Laboratories' filings with the SEC. Silicon Laboratories disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Note to editors: Silicon Laboratories, Silicon Labs and the Silicon Labs logo are trademarks of Silicon Laboratories Inc. All other product names noted herein may be trademarks of their respective holders.



                      Silicon Laboratories Inc.
                  Consolidated Statements of Income
                (In thousands, except per share data)
                             (Unaudited)

                      Three Months Ended        Twelve Months Ended
                   ------------------------- -------------------------
                   December 29, December 30, December 29, December 30,
                       2007         2006         2007         2006
                   ------------ ------------ ------------ ------------
Revenues            $ 100,111     $ 74,612    $ 337,461    $ 288,156
Cost of revenues       36,565       29,229      130,225      100,678
                   ------------ ------------ ------------ ------------
Gross profit           63,546       45,383      207,236      187,478
Operating
 expenses:
 Research and
  development          21,524       23,110       89,320       89,804
 Selling, general
  and
  administrative       27,551       21,258       94,819       89,022
 In-process
  research and
  development              --           --           --        2,600
                   ------------ ------------ ------------ ------------
Operating expenses     49,075       44,368      184,139      181,426
                   ------------ ------------ ------------ ------------
Operating income       14,471        1,015       23,097        6,052
Other income
 (expense):
 Interest income        6,523        3,394       24,525       13,745
 Interest expense        (101)        (236)        (628)        (872)
 Other income
  (expense), net          (87)         399         (469)         744
                   ------------ ------------ ------------ ------------
Income from
 continuing
 operations
before income
 taxes                 20,806        4,572       46,525       19,669
Provision for
 income taxes           4,888          222        6,838        4,326
                   ------------ ------------ ------------ ------------
Income from
 continuing
 operations            15,918        4,350       39,687       15,343
Income from
 discontinued
 operations, net
 of income taxes        5,399          873      165,149       15,815
                   ------------ ------------ ------------ ------------
Net income          $  21,317     $  5,223    $ 204,836    $  31,158
                   ============ ============ ============ ============
Basic earnings per
 share:
   Income from
    continuing
    operations      $    0.29     $   0.08    $    0.72    $    0.28
   Net income       $    0.39     $   0.10    $    3.74    $    0.56

Diluted earnings
 per share:
   Income from
    continuing
    operations      $    0.28     $   0.08    $    0.70    $    0.27
   Net income       $    0.38     $   0.09    $    3.64    $    0.54

Weighted-average
 common shares
outstanding:
   Basic               54,377       54,715       54,826       55,346
   Diluted             55,901       56,109       56,321       57,201
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)

----------- ----------------------------------------------------------
Non-GAAP
 Income
 Statement                      Three Months Ended
 Items                          December 29, 2007
----------- ----------------------------------------------------------
                       GAAP                                   Non-GAAP
                     Percent     Stock                 Non-    Percent
              GAAP      of    Compensation Relocation   GAAP     of
            Measure   Revenue    Expense     Charges  Measure  Revenue
            -------- -------- ------------ ---------- ------- --------
Revenues    $100,111

Gross
 profit       63,546    63.5%    $     440    $    -- $63,986    63.9%

Operating
 expenses     49,075    49.0%       10,610        804  37,661    37.6%

Operating
 income       14,471    14.5%       11,050        804  26,325    26.3%



-------------------------- ---------------------------------------
Non-GAAP Diluted Earnings            Three Months Ended
 Per Share                            December 29, 2007
-------------------------- ---------------------------------------
                                      Stock                 Non-
                            GAAP   Compensation Relocation   GAAP
                           Measure    Expense     Charges  Measure
                           ------- ------------ ---------- -------
Income from continuing
 operations                $15,918    $  9,025      $  523 $25,466

Diluted shares outstanding  55,901          --          --  55,901

Diluted earnings per share
 from continuing
 operations                $  0.28                         $  0.46


-------------------------- ---------------------------------------
Non-GAAP Diluted Earnings            Twelve Months Ended
 Per Share                            December 29, 2007
-------------------------- ---------------------------------------
                                      Stock                 Non-
                            GAAP   Compensation Relocation   GAAP
                           Measure    Expense     Charges  Measure
                           ------- ------------ ---------- -------
Income from continuing
 operations                $39,687    $ 33,223      $  523 $73,433

Diluted shares outstanding  56,321          --          --  56,321

Diluted earnings per share
 from continuing
 operations                $  0.70                         $  1.30


   Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
                (In thousands, except per share data)
                             (Continued)

--------------------------------------- ----------------------------
Non-GAAP Diluted Earnings                    Three Months Ended
Per Share                                    December 30, 2006
--------------------------------------- ----------------------------
                                                   Stock      Non-
                                         GAAP   Compensation   GAAP
                                        Measure    Expense   Measure
                                        ------- ------------ -------
Income from continuing operations       $ 4,350     $  6,307 $10,657

Diluted shares outstanding               56,109           --  56,109

Diluted earnings per share from
continuing operations                   $  0.08              $  0.19


--------------------- ------------------------------------------------
Non-GAAP Diluted
 Earnings                           Twelve Months Ended
Per Share                            December 30, 2006
--------------------- ------------------------------------------------
                                 Stock                  In-
                       GAAP   Compensation Relocation Process Non-GAAP
                      Measure    Expense     Charges    R&D   Measure
                      ------- ------------ ---------------------------
Income from
 continuing
 operations           $15,343     $ 25,336   $  1,921  $ 2,600 $45,200

Diluted shares
 outstanding           57,201           --         --       --  57,201

Diluted earnings per
 share from
continuing operations $  0.27                                  $  0.79



                      Silicon Laboratories Inc.
                     Consolidated Balance Sheets
                (In thousands, except per share data)
                             (Unaudited)

                                             December 29, December 30,
                                                 2007         2006
                                             ------------ ------------
                   Assets
Current assets:
   Cash and cash equivalents                  $   264,408  $    68,188
   Short-term investments                         308,566      318,104
   Accounts receivable, net of allowance for
    doubtful accounts of $517 at December
    29, 2007 and $421 at December 30, 2006         51,211       36,657
   Inventories                                     28,587       22,016
   Deferred income taxes                            6,025       12,118
   Prepaid expenses and other current assets       33,895       12,944
   Current assets of discontinued operations           --       33,680
                                             ------------ ------------
Total current assets                              692,692      503,707
Property, equipment and software, net              28,157       34,070
Goodwill                                           73,199       65,680
Other intangible assets, net                       18,077       20,271
Other assets, net                                  28,121       24,528
Non-current assets of discontinued
 operations                                            --       38,739
                                             ------------ ------------
Total assets                                  $   840,246  $   686,995
                                             ============ ============

    Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable                           $    33,321  $    26,438
   Accrued expenses                                26,397       23,051
   Deferred income on shipments to
    distributors                                   28,448       20,568
   Income taxes                                     5,226       15,063
   Current liabilities of discontinued
    operations                                         --       16,502
                                             ------------ ------------
Total current liabilities                          93,392      101,622
Long-term obligations and other liabilities        43,309       15,641
Non-current liabilities of discontinued
 operations                                            --        1,050
                                             ------------ ------------
Total liabilities                                 136,701      118,313

Commitments and contingencies

Stockholders' equity:
   Preferred stock -- $0.0001 par value;
    10,000 shares authorized; no shares
    issued and outstanding                             --           --
   Common stock -- $0.0001 par value;
    250,000 shares authorized; 52,810 and
    54,802 shares issued and outstanding at
    December 29, 2007 and December 30, 2006,
    respectively                                        5            5
   Additional paid-in capital                     303,682      373,655
   Retained earnings                              399,858      195,022
                                             ------------ ------------
Total stockholders' equity                        703,545      568,682
                                             ------------ ------------
Total liabilities and stockholders' equity    $   840,246  $   686,995
                                             ============ ============


CONTACT: Silicon Laboratories Inc., Austin
Shannon Pleasant, 512-464-9254
shannon.pleasant@silabs.com

SOURCE: Silicon Laboratories Inc.