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Delaware Supreme Court Rules in TI’s Favor, Affirms Lower Court Ruling

TI Retains Rights to Qualcomm Patents

Jun 9, 2005

DALLAS (June 9, 2005) -- The Delaware Supreme Court has affirmed the ruling of the Delaware Court of Chancery, by a 5-0 vote, rejecting a claim by Qualcomm Incorporated that Texas Instruments Incorporated (TI) (NYSE:TXN) materially breached the parties' cross-license agreement.

Qualcomm had appealed a ruling by Chancellor William B. Chandler, III of the Delaware Court of Chancery, issued in June last year. In that ruling, the court rejected an assertion by Qualcomm that TI materially breached the cross-license agreement that has existed between the companies since December 2000. The Delaware Supreme Court heard the appeal April 20 and in its finding, dated June 8, affirmed the Court of Chancery ruling that no such material breach of the agreement occurred.

With Qualcomm having abandoned in August 2004 a previous claim for damages, the latest ruling disposes of all outstanding claims in the existing litigation between the parties. The license rights of each party under the cross-license agreement remain in effect.

"We are pleased that the Delaware Supreme Court has upheld the Court of Chancery's ruling in TI's favor on these issues. We believe that this was the correct outcome," said Senior Vice President and General Counsel Joseph F. Hubach.

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About Texas Instruments
Texas Instruments Incorporated provides innovative DSP and Analog technologies to meet our customers’ real world signal processing requirements. In addition to Semiconductor, the company’s businesses include Sensors & Controls and Education Technology. TI is headquartered in Dallas, Texas, and has manufacturing, design or sales operations in more than 25 countries.

Texas Instruments is traded on the New York Stock Exchange under the symbol TXN. More information is located on the World Wide Web at www.ti.com.

Safe Harbor
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as TI or its management “believes,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates” or other words or phrases of similar import. Similarly, statements in this release that describe the company’s business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements.

We urge you to carefully consider the following important factors that could cause actual results to differ materially from the expectations of the company or its management:

  • Market demand for semiconductors, particularly for analog chips and digital signal processors in key markets such as telecommunications and computers;
  • TI’s ability to maintain or improve profit margins, including its ability to utilize its manufacturing facilities at sufficient levels to cover its fixed operating costs, in an intensely competitive and cyclical industry;
  • TI’s ability to develop, manufacture and market innovative products in a rapidly changing technological environment;
  • TI’s ability to compete in products and prices in an intensely competitive industry;
  • TI’s ability to maintain and enforce a strong intellectual property portfolio and obtain needed licenses from third parties;
  • Consolidation of TI’s patent licensees and market conditions reducing royalty payments to TI;
  • Economic, social and political conditions in the countries in which TI, its customers or its suppliers operate, including security risks, health conditions, possible disruptions in transportation networks and fluctuations in foreign currency exchange rates;
  • Natural events such as severe weather and earthquakes in the locations in which TI, its customers or its suppliers operate;
  • Availability and cost of raw materials and critical manufacturing equipment;
  • Changes in the tax rate applicable to TI as a result of changes in tax law, the jurisdictions in which profits are determined to be earned and taxed, the outcome of tax audits and the ability to realize deferred tax assets;
  • Changes in the accounting treatment of stock options and other share-based compensation;
  • Losses or curtailments of purchases from key customers and the timing and amount of distributor and other customer inventory adjustments;
  • Customer demand that differs from company forecasts;
  • The financial impact of inadequate or excess TI inventories to meet demand that differs from projections;
  • Product liability or warranty claims, or recalls by TI customers for a product containing a TI part;
  • TI’s ability to recruit and retain skilled personnel; and
  • Timely implementation of new manufacturing technologies, installation of manufacturing equipment, and the ability to obtain needed third-party foundry and assembly/test subcontract services.

For a more detailed discussion of these factors, see the text under the heading “Cautionary Statements Regarding Future Results of Operations” in Item 1 of the company’s most recent Form 10-K. The forward-looking statements included in this release are made only as of the date of publication, and the company undertakes no obligation to update the forward-looking statements to reflect subsequent events or circumstances.