| ST’s strong performance in the computer sector accounted for $1,232 million, the second largest contribution to the Company’s 1999 results, contributing 24% to total revenues. This market is expected to grow at a compounded rate of 21% between 1999 and 2003, and with key customers including Creative Technology, Hewlett-Packard, Maxtor, Seagate and Western Digital, ST is well positioned to capitalize on this growth. Within this market, computer peripherals are a priority application for ST as they make extensive use of technologies such as smart power and embedded non-volatile memory in which the Company is a world leader. Driving this up- surge is consumer demand for increased hard disk storage and more sophisticated printers, displays and monitors — areas where ST is strongly established as a leading chip supplier. In 1999, ST continued to set the pace in disk drive ICs, with major manufacturers adopting
its innovative Giorgione™ read/write channel IC and the L7200 spindle/voice coil motor driver for next generation, low cost, desktop devices. ST is also a major supplier of printhead driver ICs and is currently partnering with a leading printer manufacturer on a new architecture that will significantly improve the performance/cost ratio of inkjet printers. In April, ST signed an agreement with Imagination Technologies designed to deliver a new class of interactive, intuitive and life-like visual experience. The partnership combines ST’s excellence in manufacturing, process technology and digital video with Imagination’s successful Power VR 2D/3D graphics technology. ST also strengthened its position in the exploding market for flat panel displays with the acquisition of Arithmos, Inc., the designer of high performance, high quality LCD flat panel display ICs. The combination of ST’s leadership in system- on-chip solutions and as a supplier of ICs for PC monitors,
digital set-top boxes and digital TV with the cutting-edge Arithmos technology places the Company in a prime position to address the high volume needs for the PC monitor and consumer display markets.
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