Silicon Laboratories Inc.
Oct 24, 2007

Silicon Laboratories Announces Record Revenue

--Company Earnings Exceed Expectations--

AUSTIN, Texas--(BUSINESS WIRE)--Oct. 24, 2007--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 $87.9 million, a 21 percent increase over the same period last year. Earnings per share exceeded expectations, increasing significantly over prior quarters. The company's improved profitability increased non-GAAP operating income percent to double that of first quarter levels, primarily due to accelerating revenues and continued cost controls.

Third Quarter Financial Results

Revenue grew by 16 percent sequentially driven by growth across the company's major product lines. GAAP gross margin was 60.2 percent. GAAP operating income was $10.4 million and GAAP diluted earnings per share from continuing operations increased to $0.31, inclusive of a seven cent favorable impact from a tax benefit credited in the quarter.

Excluding $8.5 million in stock compensation expense, non-GAAP gross margin increased slightly to 60.7 percent. Operating expenses declined to less than 40 percent of revenue resulting in non-GAAP operating income of $19.0 million, or 21.6 percent of revenue, representing significant progress towards the company's target model. Non-GAAP diluted earnings per share from continuing operations was $0.43, which also includes the seven cent tax benefit credited in the quarter. The reconciling charges are set forth in the financial measures table included below.

The company ended the quarter with approximately $638 million in cash, cash equivalents and short-term investments.

Business Summary

Third quarter revenue was fueled broadly by a number of growing product lines. The voice and embedded modem businesses benefited from growth at key customers during the quarter. The broad-based businesses, which include timing and microcontrollers, achieved double-digit sequential growth. Design wins accelerated for these products throughout the quarter. New product introductions, including the first programmable XOs and VCXOs and a new family of small form factor MCUs, are expected to contribute to design win momentum and sustained high growth for the broad-based products.

The broadcast business grew significantly again during the quarter driven by strength across both the handset and portable markets. The demand for the company's new FM transmitter in portable navigation devices and MP3 accessories was very healthy, and unit volume for FM tuners in handsets continued to expand. The company also anticipates first revenue from the AM/FM receiver in the fourth quarter, further diversifying the broadcast revenue base and market reach.

"We are realizing the leverage of our mixed-signal business model as strong demand combined with lower operating expenses drove better than anticipated results," said Necip Sayiner, president and chief executive officer of Silicon Laboratories. "With this foundation in place, we are prepared to further invest in our R&D efforts to continue to accelerate our growth in order to optimize the business for the future."

For the fourth quarter of 2007, the company is guiding revenue in the range of $93 to $97 million.

Webcast and Conference Call

A conference call discussing the third 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 866-347-5805 or +1 203-369-0021 (international). Replays will be available through November 7, 2007.

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.
             Condensed Consolidated Statements of Income
                (In thousands, except per share data)
                             (Unaudited)

                         Three Months Ended       Nine Months Ended
                       ----------------------- -----------------------
                        September   September  September   September
                         29, 2007    30, 2006    29, 2007    30, 2006
                       ------------ ---------- ----------- -----------
Revenues                    $87,938    $72,956    $237,349    $213,544
Cost of revenues             34,986     25,880      93,658      71,449
                       ------------ ---------- ----------- -----------
Gross profit                 52,952     47,076     143,691     142,095
Operating expenses:
   Research and
    development              20,844     23,007      67,796      66,695
   Selling, general
    and administrative       21,693     24,210      67,267      67,763
   In-process research
    and development              --         --          --       2,600
                       ------------ ---------- ----------- -----------
Operating expenses           42,537     47,217     135,063     137,058
                       ------------ ---------- ----------- -----------
Operating income
 (loss)                      10,415      (141)       8,628       5,037
Other income
 (expense):
   Interest income            7,136      3,525      18,003      10,352
   Interest expense           (129)      (236)       (527)       (636)
   Other income
    (expense), net            (214)         53       (384)         344
                       ------------ ---------- ----------- -----------
Income from continuing
 operations before
 income taxes                17,208      3,201      25,720      15,097
Provision (benefit)
 for income taxes             (416)        412       1,950       4,105
                       ------------ ---------- ----------- -----------
Income from continuing
 operations                  17,624      2,789      23,770      10,992
Income from
 discontinued
 operations, net of
 income taxes                 2,810      1,945     159,750      14,943
                       ------------ ---------- ----------- -----------
Net income                  $20,434     $4,734    $183,520     $25,935
                       ============ ========== =========== ===========
Basic earnings per
 share:
   Income from
    continuing
    operations                $0.32      $0.05       $0.43       $0.20
   Net income                 $0.37      $0.08       $3.34       $0.47

Diluted earnings per
 share:
   Income from
    continuing
    operations                $0.31      $0.05       $0.42       $0.19
   Net income                 $0.36      $0.08       $3.25       $0.45

Weighted-average
 common shares
outstanding:
   Basic                     55,215     55,725      54,996      55,557
   Diluted                   56,767     57,151      56,481      57,566
   Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
                (In thousands, except per share data)

                                          Three Months Ended
Non-GAAP Income Statement Items           September 29, 2007
-------------------------------- -------------------------------------
                                                              Non-GAAP
                                            Stock      Non-    Percent
                                  GAAP   Compensation   GAAP     of
                                 Measure    Expense   Measure  Revenue
                                 ------- ------------ ------- --------
Revenues                         $87,938

Gross profit                      52,952         $414 $53,366    60.7%

Operating expenses                42,537        8,537  34,413    38.7%

Operating income                  10,415        8,537  18,952    21.6%


-------------------------------- -------------------------------------
                                          Three Months Ended
Non-GAAP Operating Income                   March 31, 2007
-------------------------------- -------------------------------------
                                                              Non-GAAP
                                            Stock      Non-    Percent
                                  GAAP   Compensation   GAAP     of
                                 Measure    Expense   Measure  Revenue
                                 ------- ------------ ------- --------
Revenues                         $73,814

Operating income (loss)          (3,724)       11,770   8,046    10.9%


-------------------------------- --------------------
Non-GAAP Diluted Earnings Per     Three Months Ended
 Share                            September 29, 2007
-------------------------------- --------------------
GAAP income from continuing
 operations                                   $17,624
Stock compensation adjustments:
   Cost of revenues                               414
   Research and development                     3,472
   Selling, general and
    administrative                              4,651
   Provision for income taxes                 (1,524)
                                 --------------------
Non-GAAP income from continuing
 operations                                   $24,637

GAAP diluted shares outstanding                56,767

Non-GAAP diluted earnings per
 share                                          $0.43
                                 --------------------


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


                                            September 29, December 30,
                                                2007          2006
                                            ------------- ------------
                  Assets
Current assets:
   Cash and cash equivalents                     $151,554      $68,188
   Short-term investments                         486,023      318,104
   Accounts receivable, net of allowance
    for doubtful accounts of $573 at
    September 29, 2007 and $421 at December
    30, 2006
                                                   56,693       36,657
   Inventories                                     24,182       22,016
   Deferred income taxes                            6,642       12,118
   Prepaid expenses and other current
    assets                                         27,149       12,944
   Current assets of discontinued
    operations                                         --       33,680
                                            ------------- ------------
Total current assets                              752,243      503,707
Property, equipment and software, net              28,700       34,070
Goodwill                                           65,519       65,680
Other intangible assets, net                       17,089       20,271
Other assets, net                                  28,420       24,528
Non-current assets of discontinued
 operations                                            --       38,739
                                            ------------- ------------
Total assets                                     $891,971     $686,995
                                            ============= ============

   Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable                               $35,227      $26,438
   Accrued expenses                                15,836       23,051
   Deferred income on shipments to
    distributors                                   24,288       20,568
   Income taxes                                       957       15,063
   Current liabilities of discontinued
    operations                                      2,479       16,502
                                            ------------- ------------
Total current liabilities                          78,787      101,622
Long-term obligations and other liabilities        44,676       15,641
Non-current liabilities of discontinued
 operations                                            --        1,050
                                            ------------- ------------
Total liabilities                                 123,463      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; 55,129 and 54,802
    shares issued and outstanding at
    September 29, 2007 and December 30,
    2006, respectively
                                                        6            5
   Additional paid-in capital                     389,960      373,655
   Retained earnings                              378,542      195,022
                                            ------------- ------------
Total stockholders' equity                        768,508      568,682
                                            ------------- ------------
Total liabilities and stockholders' equity       $891,971     $686,995
                                            ============= ============

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

SOURCE: Silicon Laboratories Inc.