Silicon Laboratories Inc.
Jan 31, 2007

Silicon Laboratories Announces Fourth Quarter Results

AUSTIN, Texas--(BUSINESS WIRE)--Jan. 31, 2007--Silicon Laboratories Inc. (Nasdaq: SLAB), a leader in high-performance, analog-intensive, mixed-signal integrated circuits (ICs), today reported fourth quarter revenue of $111 million.

Fourth Quarter Financial Highlights

Gross margin for the fourth quarter was 53.4 percent, which was above the company's previously stated guidance range of 52 to 53 percent. GAAP operating income was $2.6 million. Non-GAAP operating income was $12.7 million, or 11.4 percent of revenue. GAAP net income for the fourth quarter was $5.2 million, or $0.09 per fully diluted share. Non-GAAP net income, excluding certain charges, was $13.5 million, or $0.24 per fully diluted share. The reconciling charges are set forth in the reconciliation of GAAP to non-GAAP financial measures table included below.

The company's balance sheet continued to be strong with cash, cash equivalents and short-term investments totaling approximately $386 million at December 30, 2006. During the quarter, the company repurchased shares of its common stock under its repurchase program at a cost of approximately $15 million.

"We achieved year-over-year revenue growth while managing through multiple product transitions in our mobile handset business and experiencing an overall industry slowdown in the second half of the year," said Necip Sayiner, President and CEO of Silicon Laboratories. "We continue to create a diverse set of growth drivers within our business and execute on our new product introductions in our effort to drive double digit growth in 2007."

Business Summary

During the fourth quarter, the company experienced strong demand for its Broadcast products, in particular FM tuners and satellite receivers. The broad-based mixed-signal business experienced a slight decline on a sequential basis due to lower modem shipments.

The mobile handset business performed within the company's guidance for the fourth quarter. Silicon Laboratories experienced a decline in the total GSM/GPRS transceiver shipments, which was largely offset by the increase in EDGE transceiver shipments, initial AeroFONE revenue and FM tuner growth.

Business Outlook

For the first quarter of 2007, the company anticipates revenue to be in a range of $106 to $111 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 800-801-6154 or +1-402-280-1615 (international). Replays will be available through February 14, 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 decades of cumulative 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; risks associated with shifting market demand from GSM/GPRS to EDGE and WCDMA; difficulties developing new products that achieve market acceptance; risks that Silicon Laboratories may not be able to manage strains associated with its growth; 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; 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, AeroFONE 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)

                      Three Months Ended        Twelve Months Ended
                   ------------------------- -------------------------
                   December 30, December 31, December 30, December 31,
                       2006         2005         2006         2005
                   ------------ ------------ ------------ ------------
                   (Unaudited)  (Unaudited)  (Unaudited)
Revenues              $111,012     $109,856     $464,597     $425,689
Cost of revenues        51,778       49,499      208,217      193,904
                   ------------ ------------ ------------ ------------
Gross profit            59,234       60,357      256,380      231,785
Operating expenses:
   Research and
    development         32,419       23,692      121,707      101,222
   Selling, general
    and
    administrative      24,185       18,898      102,358       72,553
   In-process
    research and
    development             --           --        3,200           --
                   ------------ ------------ ------------ ------------
Operating expenses      56,604       42,590      227,265      173,775
                   ------------ ------------ ------------ ------------
Operating income         2,630       17,767       29,115       58,010
Other income
 (expense):
   Interest income       3,394        2,743       13,745        8,285
   Interest expense       (237)        (191)        (872)        (322)
   Other income
    (expense), net         400          (91)         744         (332)
                   ------------ ------------ ------------ ------------
Income before
 income taxes            6,187       20,228       42,732       65,641
Provision for
 income taxes              964        4,965       11,574       18,135
                   ------------ ------------ ------------ ------------
Net income              $5,223      $15,263      $31,158      $47,506
                   ============ ============ ============ ============
Net income per
 share:
   Basic                 $0.10        $0.28        $0.56        $0.89
   Diluted               $0.09        $0.27        $0.54        $0.86
Weighted-average
 common shares
outstanding:
   Basic                54,715       54,210       55,346       53,399
   Diluted              56,109       56,206       57,201       55,485



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

                                                Three Months Ended
                                             -------------------------
                                             December 30, December 31,
                                                 2006         2005
                                             ------------ ------------
GAAP operating income                             $2,630      $17,767
Stock compensation adjustments:
   Cost of revenues                                  311           58
   Research and development                        5,157        1,081
   Selling, general and administrative             4,610        1,520
                                             ------------ ------------
Non-GAAP operating income                        $12,708      $20,426
                                             ------------ ------------

Non-GAAP operating income %                         11.4%        18.6%
                                             ------------ ------------

                                                Three Months Ended
                                             -------------------------
                                             December 30, December 31,
                                                 2006         2005
                                             ------------ ------------
GAAP net income                                   $5,223      $15,263
Stock compensation adjustments:
   Cost of revenues                                  311           58
   Research and development                        5,157        1,081
   Selling, general and administrative             4,610        1,520
   Provision for income taxes                     (1,781)        (890)
                                             ------------ ------------
Non-GAAP net income                              $13,520      $17,032
                                             ------------ ------------

GAAP diluted shares outstanding                   56,109       56,206
                                             ------------ ------------
Non-GAAP diluted net income per share              $0.24        $0.30
                                             ------------ ------------
                      Silicon Laboratories Inc.
                     Consolidated Balance Sheets
                (in thousands, except per share data)

                                             December 30, December 31,
                                                 2006         2005
                                             ------------ ------------
                                             (Unaudited)
                   Assets
Current assets:
   Cash and cash equivalents                     $68,188     $100,504
   Short-term investments                        318,104      263,206
   Accounts receivable, net of allowance for
    doubtful accounts of $548 at December 30,
    2006 and $1,088 at December 31, 2005          49,701       56,883
   Inventories                                    40,282       23,132
   Deferred income taxes                          13,330       11,505
   Prepaid expenses and other                     14,102        9,670
                                             ------------ ------------
Total current assets                             503,707      464,900
Property, equipment and software, net             43,321       32,584
Goodwill                                          78,224       62,877
Other intangible assets, net                      21,970       14,838
Other assets, net                                 39,773       25,863
                                             ------------ ------------
Total assets                                    $686,995     $601,062
                                             ============ ============

    Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable                              $36,396      $43,846
   Accrued expenses                               27,929       16,129
   Deferred income on shipments to
    distributors                                  22,234       17,273
   Income taxes payable                           15,063       18,348
                                             ------------ ------------
Total current liabilities                        101,622       95,596
Long-term obligations and other liabilities       16,691        7,418
                                             ------------ ------------
Total liabilities                                118,313      103,014
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; 54,802 and 54,530
    shares issued and outstanding at December
    30, 2006 and December 31, 2005,
    respectively                                       5            5
   Additional paid-in capital                    373,655      335,284
   Deferred stock compensation                        --       (1,105)
   Retained earnings                             195,022      163,864
                                             ------------ ------------
Total stockholders' equity                       568,682      498,048
                                             ------------ ------------
Total liabilities and stockholders' equity      $686,995     $601,062
                                             ============ ============

Certain prior period amounts have been reclassified to conform to the
 current period presentation.

CONTACT: Silicon Laboratories Inc.
Kellie Nugent, 972-239-5119 ext. 125
knugent@sheltongroup.com

SOURCE: Silicon Laboratories Inc.