LSI to Sell Mobility Products Business to Infineon for $450 Million

Board Authorizes New Stock Repurchase Program for $500 Million

CA Milpitas, (PresseBox) - LSI Corporation (NYSE: LSI) announced today that it has signed a definitive agreement to sell its mobility products business to Infineon Technologies AG (FSE/NYSE: IFX) for $450 million in cash, plus a performance-based payment of up to $50 million payable in the first quarter of 2009.

The sale is the result of a strategic review within LSI of its business portfolio following its merger with Agere Systems on April 2, 2007. LSI expects to benefit from the sale by realigning its resources to pursue growth opportunities for its storage systems and storage and networking semiconductor businesses.

"Since closing our merger with Agere, we have taken significant steps to drive shareholder value, including accelerating cost reductions, selling our consumer business, transitioning to a global contract manufacturing model, and completing a $500 million stock buyback," said Abhi Talwalkar, LSI president and chief executive officer. "The sale of our mobility business will allow us to further focus our efforts on attractive market opportunities in storage and networking, where we have a strong presence, significant differentiation and the scale needed to be successful over the long term."

Under terms of the agreement, Infineon will purchase the LSI Mobility Products Group (MPG), which designs semiconductors and software for cellular telephone handsets and complete chip-level solutions for satellite digital audio radio applications.

Upon closing, approximately 700 LSI employees will join the Infineon Communications Solutions business group, which manufactures and markets end-to-end semiconductor products and solutions for cellular, wireless and wired communications. Infineon will also enter into additional agreements with LSI, including an intellectual property agreement, a transition services agreement and a supply agreement.

"This move demonstrates our commitment to maintain and grow our leadership in the wireless market. The business acquired from LSI will significantly strengthen our position at important mobile phone makers and will add highly qualified experts to the Infineon team," said Dr. Wolfgang Ziebart, President and CEO of Infineon Technologies.

"Infineon’s strong commitment to the mobility market will ensure our customers have access to a stronger supplier and a broader portfolio of solutions to address their needs," added Talwalkar. "LSI is fully committed to work with Infineon to provide a seamless transition for customers."

LSI Stock Repurchase Program
LSI also announced today that its board of directors has authorized a new stock repurchase program of up to $500 million. The repurchases are expected to be funded from the proceeds of the sale of the Mobility Products Group, available cash and short-term investments.

"This new program underscores our confidence in the long-term benefits of the strategic actions we have taken since closing our merger with Agere and our belief in the future of LSI as a more focused company," said Bryon Look, LSI executive vice president and chief financial officer.

About the Transaction
As a result of the sale, LSI expects to avoid significant future investments needed to sustain a competitive position in the mobility space and expects to accelerate the progress toward attainment of its operating model and improve return on investment.

The Mobility Products Group generated revenues of $186 million in the first half of 2007, with $91 million in the second quarter of 2007. The company expects MPG revenues to grow sequentially in the third quarter. LSI expects to eliminate approximately $25 million per quarter in direct operating expenses upon closing of the transaction. The company also plans to reduce indirect costs associated with the mobility business. LSI expects the combined effect of the actions announced today to be roughly neutral to non-GAAP* earnings per share by the end of 2008.

LSI expects to use the proceeds from this transaction to fund the aforementioned stock repurchase program and potential future strategic acquisitions in the storage and networking spaces.

The company does not expect to incur any material tax obligations in connection with the transaction and expects to provide additional financial information upon closing of the transaction.

The transaction is expected to close in the fourth quarter, subject to the satisfaction of customary closing conditions and regulatory approvals including those required by the Hart-Scott-Rodino Antitrust Improvements Act.

* Non-GAAP (Generally Accepted Accounting Principles) excludes stock-based compensation, amortization of acquisition-related intangibles, restructuring of operations and other items, net, purchase accounting effect on inventory, loss on write-down of equity securities and acquired in-process research and development. It also excludes the income tax effect associated with the above mentioned items.

Forward Looking Statements
This news release contains forward-looking statements that are based on the current opinions and estimates of management. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could cause LSI’s actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to: the challenges and costs of integrating and restructuring our operations and achieving anticipated synergies following our recent acquisition of Agere Systems; a delay in the closing of the sale of our mobility business to Infineon Technologies; our ability to eliminate indirect costs related to our mobility business; our ability to repurchase our common stock at prices we believe to be advantageous; our ability to successfully and timely transition our assembly and test operations to third parties; fluctuations in the timing and volumes of customer demand; our reliance on major customers and suppliers; our ability to compete successfully in competitive markets; our ability to keep up with rapid technological change; the unavailability of appropriate levels of manufacturing capacity; and general industry and market conditions. For additional information, see the documents filed by LSI with the SEC, and specifically the risk factors set forth in the company’s most recent reports on Form 10-K and 10-Q. LSI disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

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