Silicon Laboratories Inc.
Jul 25, 2007

Silicon Laboratories Announces Record Revenue

--Company Also Announces Significant Expansion of Share Repurchase Program--

AUSTIN, Texas--(BUSINESS WIRE)--July 25, 2007--Silicon Laboratories Inc. (Nasdaq:SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported record revenue in continuing operations of $75.6 million and earnings per share results that exceeded the company's guidance. The company also announced a significant increase in the share repurchase program.

Share Repurchase Program

Silicon Laboratories' Board of Directors approved a new $400 million share repurchase plan, quadrupling the previous authorization. The program will be executed on the open market or in private transactions, including structured or accelerated transactions, depending on market conditions.

"It is our intention to be active in the execution of this program, effectively returning capital to shareholders and significantly reducing our outstanding share base," said Bill Bock, chief financial officer of Silicon Laboratories. "We also believe this is a responsible action relative to our cash position in that it returns value to shareholders while retaining our financial flexibility for either the operation of the business or for strategic opportunities."

Second Quarter Financial Results

Revenue increased by two percent year over year to record levels in the second quarter. GAAP gross margin totaled 60 percent. GAAP operating income was $1.9 million. GAAP diluted earnings per share from continuing operations of $0.12 represented more than a 100 percent improvement over the same period last year.

Excluding an $8.6 million charge for stock compensation expense, non-GAAP operating income was $10.6 million or 14 percent of revenue, representing significant progress towards the company's target model. Non-GAAP diluted earnings per share from continuing operations totaled $0.26, an increase of 60 percent sequentially. The reconciling charges are set forth in the financial measures table included below.

The company ended the quarter with approximately $644 million in cash, cash equivalents and short-term investments.

Business Summary

During the second quarter, growth was driven by strength in the broadcast and microcontroller product lines. Strong demand from certain handset customers and increasing diversification in non-handset applications resulted in a double-digit broadcast revenue increase. The company also began to ship its new FM transmitter in the second quarter as planned.

The MCU business continued to grow across consumer, industrial and networking applications. The company believes that recent new product introductions and future products under development as part of the MCU roadmap will significantly expand the company's served available market over time.

"We believe that improved visibility into the next two quarters and current business trends support the company's annual growth targets," said Necip Sayiner, president and chief executive officer of Silicon Laboratories. "The margin leverage in our new business model will really become impactful as we grow our revenue in the second half of the year."

For the third quarter of 2007, the company believes revenue in all of its core product lines will experience growth and is guiding revenue in the range of $81 to $84 million.

Webcast and Conference Call

A conference call discussing the second 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 888-568-0091 or +1 402-530-7778 (international). Replays will be available through August 8, 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    Six Months Ended
                              ------------------- --------------------
                              June 30,   July 1,   June 30,   July 1,
                                2007      2006       2007      2006
                              --------- --------- ---------- ---------
Revenues                        $75,597   $73,936   $149,411  $140,588
Cost of revenues                 30,233    24,442     58,672    45,569
                              --------- --------- ---------- ---------
Gross profit                     45,364    49,494     90,739    95,019
Operating expenses:
   Research and development      22,145    22,619     46,952    43,688
   Selling, general and
    administrative               21,282    22,822     45,574    43,552
   In-process research and
    development                      --     2,600         --     2,600
                              --------- --------- ---------- ---------
Operating expenses               43,427    48,041     92,526    89,840
                              --------- --------- ---------- ---------
Operating income (loss)           1,937     1,453    (1,787)     5,179
Other income (expense):
   Interest income                7,032     3,624     10,867     6,826
   Interest expense               (167)     (225)      (398)     (400)
   Other income (expense),
    net                            (51)        45      (170)       291
                              --------- --------- ---------- ---------
Income from continuing
 operations
before income taxes               8,751     4,897      8,512    11,896
Provision for income taxes        1,859     1,892      2,366     3,693
                              --------- --------- ---------- ---------
Income from continuing
 operations                       6,892     3,005      6,146     8,203
Income from discontinued
 operations, net of
income taxes                        581     7,132    156,940    12,998
                              --------- --------- ---------- ---------
Net income                       $7,473   $10,137   $163,086   $21,201
                              ========= ========= ========== =========
Basic earnings per share:
   Income from continuing
    operations                    $0.13     $0.05      $0.11     $0.15
   Net income                     $0.14     $0.18      $2.97     $0.38

Diluted earnings per share:
   Income from continuing
    operations                    $0.12     $0.05      $0.11     $0.14
   Net income                     $0.13     $0.18      $2.90     $0.37

Weighted-average common
 shares
outstanding:
   Basic                         54,901    55,842     54,856    55,460
   Diluted                       56,312    57,858     56,308    57,761


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

                                         Three Months
                                            Ended
                                         ------------
                                           June 30,
                                             2007
                                         ------------
GAAP operating income                          $1,937
Stock compensation adjustments:
   Cost of revenues                               379
   Research and development                     4,078
   Selling, general and administrative          4,164
                                         ------------
Non-GAAP operating income                     $10,558
                                         ------------

Non-GAAP operating income %                     14.0%
                                         ------------

                                              Three Months Ended
                                         ----------------------------
                                           June 30,       March 31,
                                             2007            2007
                                         ------------    ------------
GAAP income (loss) from continuing
 operations                                    $6,892          $(746)
Stock compensation adjustments:
   Cost of revenues                               379             307
   Research and development                     4,078           5,371
   Selling, general and administrative          4,164           6,092
   Provision for income taxes                 (1,137)         (2,068)
                                         ------------    ------------
Non-GAAP income from continuing
 operations                                   $14,376          $8,956

GAAP diluted shares outstanding                56,312          54,806
Stock options and awards                           --           1,505
                                         ------------    ------------
Non-GAAP diluted shares outstanding            56,312          56,311
Non-GAAP diluted earnings per share from
 continuing operations                          $0.26           $0.16
                                         ------------    ------------


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

                                             June 30,    December 30,
                                                2007         2006
                                            ------------ -------------
                  Assets
Current assets:
   Cash and cash equivalents                    $162,066       $68,188
   Short-term investments                        481,930       318,104
   Accounts receivable, net of allowance
    for doubtful accounts of $501 at June
    30, 2007 and $421 at December 30, 2006
                                                  42,171        36,657
   Inventories                                    18,982        22,016
   Deferred income taxes                           5,229        12,118
   Prepaid expenses and other                     31,989        12,944
   Current assets of discontinued
    operations                                        --        33,680
                                            ------------ -------------
Total current assets                             742,367       503,707
Property, equipment and software, net             29,824        34,070
Goodwill                                          65,519        65,680
Other intangible assets, net                      18,109        20,271
Other assets, net                                 24,070        24,528
Non-current assets of discontinued
 operations                                           --        38,739
                                            ------------ -------------
Total assets                                    $879,889      $686,995
                                            ============ =============

   Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable                              $30,051       $26,438
   Accrued expenses                               18,148        23,051
   Deferred income on shipments to
    distributors                                  18,341        20,568
   Income taxes                                       --        15,063
   Current liabilities of discontinued
    operations                                    10,099        16,502
                                            ------------ -------------
Total current liabilities                         76,639       101,622
Long-term obligations and other liabilities       49,641        15,641
Non-current liabilities of discontinued
 operations                                           --         1,050
                                            ------------ -------------
Total liabilities                                126,280       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; 55,114 and 54,802
    shares issued and outstanding at June
    30, 2007 and December 30, 2006,
    respectively
                                                       6             5
   Additional paid-in capital                    395,495       373,655
   Retained earnings                             358,108       195,022
                                            ------------ -------------
Total stockholders' equity                       753,609       568,682
                                            ------------ -------------
Total liabilities and stockholders' equity      $879,889      $686,995
                                            ============ =============


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

SOURCE: Silicon Laboratories Inc.