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Delaware Court Indicates TI Did Not Materially Breach Cross-License Agreement, Qualcomm Not Entitled to Terminate TI’s Rights

TI Retains Rights to Qualcomm Patents

Jul 1, 2004

DALLAS (July 1, 2004) -- Texas Instruments Incorporated (NYSE: TXN) today said that the Delaware Court of Chancery has expressed its intent to grant TI’s motion for summary judgment in a lawsuit between TI and Qualcomm Incorporated.

The court indicated it agreed with TI’s argument that its disclosure of information regarding terms of a patent cross-license agreement was not a material breach, and that Qualcomm is not entitled to terminate TI’s rights to Qualcomm’s CDMA patents under the agreement.

“Qualcomm’s efforts to strip us of our rights under this cross-license agreement have failed. This is a victory for TI,” said Senior Vice President and General Counsel Joseph F. Hubach. “We are grateful for the expeditious manner in which the court has dealt with this case.”

The court is expected to consider Qualcomm’s claims for damages based on a non-material breach at a trial scheduled to begin August 16.

Qualcomm filed suit against TI July 25, 2003, alleging a material breach of the confidentiality of the agreement. TI filed suit September 23, 2003, alleging that Qualcomm violated the cross-license agreement by granting royalty discounts to handset makers that use Qualcomm’s semiconductor products. The court indicated today that it intends to grant Qualcomm’s motion that it did not breach the agreement on this issue.

The court is expected to issue a written opinion confirming these indications.

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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.