October 9, 1997

VLSI Technology Partners with The Athena Group in US Commerce
Department Advanced Technology Program Award 10x Gain in Digital Signal Processing Chip Price/Performance Goal of Research Effort

San Jose, Calif., and Gainesville, Fl., October 9, 1997 - VLSI Technology, Inc. (NASDAQ:VLSI) and The Athena Group, Inc., are strategically partnering to develop advanced digital signal processing (DSP) technologies under terms of an award announced by the US Department of Commerce National Institute of Standards and Technology (NIST) Advanced Technology Program (ATP). For the project, The Athena Group will work with VLSI to develop integrated circuit elements and support software implementing advanced DSP techniques that could result in cost/performance gains up to ten times over those of current generation DSP chips. Total project funds amount to $1.86 million over the three year life of the effort. VLSI will have rights to manufacture and market circuit blocks and support software developed through the project. Fred Taylor, president of The Athena Group said: "The Advanced Technology Program award is not only a prestigious validation of the work we've been doing in digital signal processing, but it will help bring this technology to market several years sooner than otherwise would be the case. Improved DSP technology will have a significant impact on American industry and products and services available to end consumers. Partnering with VLSI means that our advanced concepts will be implemented by a truly world-class semiconductor manufacturer." Bob Payne, VLSI' s vice president of strategic technologies said: "Digital signal processing is a key technology enabling advanced consumer and commercial communications, imaging and multimedia products. Our role in the project will be to help The Athena Group convert DSP theory into silicon practice. Needless to say, DSP is also a technology with direct application to VLSI' s communications, consumer digital entertainment and computing custom silicon businesses." Athena-VLSI Research and Development Program Athena will cooperate with VLSI to develop new integrated circuit elements and software support that implement advanced signal processing algorithms. The tangible results from the Commerce Department-funded development project will include reusable DSP circuit building blocks, chip design software and programming tools for software applications running on chips based on the new technology. Digital signal processing, which models analog phenomena such as visual images, radio waves, sounds and even the functions of a car engine as streams of digital data, depends on intensive number crunching to depict, analyze, make decisions about and reshape signal characteristics. Radically improving the performance of DSPs could bring new products to market such as ultra-low-emission car engines, high-resolution-full motion medical imaging devices, silent aircraft cabins, ultra-high speed communications over bandwidth-limited phone lines and radio channels, and 3-D-virtual reality television. The Advanced Technology Program Administered by the US Department of Commerce National Institute of Standards and technology, the Advanced Technology Program' s mission is to stimulate US economic growth by developing high risk and enabling technologies through industry-driven cost-shared partnerships. To achieve these objectives, the program awards research funding to private sector organizations based on a rigorous peer-reviewed proposal selection process. For more information, reference the program' s web site, www.atp.nist.gov. The Athena Group, Inc. Founded in 1986 and based in Gainesville, Florida, The Athena Group performs research and development of advanced digital signal processing technologies. Projects undertaken by The Athena Group include applying DSP technologies to solve problems in the areas of medical imaging, communications and military reconnaissance. Visit the company' s web site at www.athena-group.com. About VLSI Technology, Inc. VLSI Technology, Inc. designs and manufactures System-Level Silicon integrated circuits based on its FSB functional system blocks library. Targeting its offerings toward the communications, consumer digital entertainment and computing markets, the company offers its customers advanced ystem-level integration capabilities. The company is based in San Jose, California, with 1996 revenues of $717 million, and approximately 2,600 employees worldwide. Visit VLSI' s homepage at http:/www.vlsi.com. FSB, functional system blocks and System-Level Silicon are trademarks of VLSI Technology, Inc. All other brand or product names are trademarks and/or registered trademarks of their respective owners.