Naples, Italy, October 16, 2006 – STMicroelectronics, one of the world’s largest semiconductor manufacturers, has concluded a framework agreement to strengthen existing links with five university institutes in the Naples area. The ceremony, held last week, was attended by Italy’s Minister for Civil Service Reform, Luigi Nicolais, and Pasquale Pistorio, ST’s Honorary Chairman and Vice-president for Research and Innovation of the Confederation of Italian industrialists.

The new agreement provides a common framework for cooperation between ST and the five institutes in three main areas: higher education, joint research projects and the provision of consultancy and training.

The ST center in Naples, founded in 2001, had since then already signed cooperative programs with four universities in the region and around 20 academic and research institutes in Italy and the rest of the world. In the last five years it has provided nearly 200 internships for local students. The agreement will promote research activities in five selected areas: packaging and modeling, mechatronics, reconfigurable system design, automotive telecoms and post-silicon technologies. In particular it will provide an administrative and legal framework for many new cooperative research projects, defining timeframes and safeguarding intellectual property rights.

The arrangement between ST and the institutes is a two-way exchange with benefits for both parties. University staff and students will have access to high-level facilities and funding; at the same time their research teams will extend ST’s development programs in new and challenging directions.

The agreement was signed by the senior representatives of the five universities taking part in the initiative (Università degli studi di Napoli Federico II, Università degli Studi di Salerno, Seconda Università degli Studi di Napoli, Università degli Studi del Sannio, Università degli Studi di Napoli Parthenope).

The signing ceremony was also the occasion for the presentation of the most innovative aspect of the project: the NeaPolis Innovation Lab - dedicated laboratory facilities that ST has created at its site in Naples for the exclusive use of the staff and students of the five participating universities. At the new laboratory, university staff will have access to ST’s database and the resources necessary for their research projects, as well as workstations and other site facilities.

The NeaPolis Innovation initiative is part of an organization-wide policy of cooperation which has generated other successful projects in other parts of Italy and the rest of the world. Altogether ST has entered into formal cooperative agreements with over 100 university institutes on five continents. In Italy several centers provide dedicated facilities to university staff or have set up joint research centers in the universities themselves where ST researchers work alongside academic staff.

The Neapolis Innovation project represents another significant step towards the objectives behind the foundation of the Naples center itself: the application of the highly qualified human resources available in the local area to the design and development of advanced semiconductor devices. The center now employs a workforce of nearly 300 people. 75% come from the Naples area, with an average age of 30; the majority are graduates in engineering and IT disciplines from local universities.

The products designed and developed at the site range from the flash memories used in a vast number of electronic appliances, from mobile phones to storage devices such as USB keys and memory cards for digital cameras, to hardware and software solutions for the automotive sector and devices for the computer and peripherals market. The center is also looking at post silicon technologies and working to identify the new materials that will replace silicon as the engine of technological innovation. The Naples center also provides administrative and IT support to the rest of the ST organization worldwide.

About STMicroelectronics
STMicroelectronics is a global leader in developing and delivering semiconductor solutions across the spectrum of microelectronics applications. An unrivalled combination of silicon and system expertise, manufacturing strength, Intellectual Property (IP) portfolio and strategic partners positions the Company at the forefront of System-on-Chip (SoC) technology and its products play a key role in enabling today's convergence markets. The Company's shares are traded on the New York Stock Exchange, on Euronext Paris and on the Milan Stock Exchange. In 2005, the Company's net revenues were $8.88 billion and net earnings were $266 million. Further information on ST can be found at www.st.com