VeriSilicon Receives US$ 14.8M in Series-C Financing Round From US Based Leading Venture Capital Firms

Funding to Be Used for the Acquisition of ZSP(R) From LSI Logic and for the Expansion of Its Worldwide Operations

SANTA CLARA, Calif. and SHANGHAI, China -- July 6, 2006 -- VeriSilicon Holdings Co., Ltd. (VeriSilicon), a leading world class ASIC design foundry that provides semiconductor IP, design and manufacturing services to customers worldwide today announced that it has raised US$ 14.8 million in its Series C financing co-led by Austin Ventures and Sierra Ventures. The Company will use the funding to finance the acquisition of the assets of the ZSP® Digital Signal Processor business unit of LSI Logic Corporation; as part of this series-C funding, LSI Logic will also receive a certain number of VeriSilicon shares as part of the consideration for the recent acquisition of the assets of ZSP. In addition, the investment will support the Company's expansion of its operations, sales & marketing and engineering teams.

"The semiconductor industry is undergoing a major transition; companies are shifting their focus away from implementation and are increasing their differentiation on creating complex system solutions; at the same time they are facing the challenge of shorter product cycles in a very cost competitive environment. Design implementation outsourcing is the clear model that will fuel this transition. Austin Ventures strongly believes that VeriSilicon, with its new compelling IP play, its existing service and production turnkey capabilities and its solid worldwide customer base, has the right mix to innovate in this space and the growth potential of to become a leader," said Clark Jernigan, Principal at Austin Ventures, who joins the VeriSilicon Board.

Founded in 2001, VeriSilicon has since then experienced a fast, steady growth both in terms of business and worldwide customer base. Originally known for its innovative multi-fab Design Platform approach, the Company has added the capability and the right infrastructure to serve customers in all phases of the silicon implementation and has accumulated a track record in designing and taking to full production a variety of customer SoCs, achieving first time silicon success. Today, VeriSilicon has operational presence with many active customer engagements in US, Taiwan, China, Japan and Europe.

"Our decision to invest in VeriSilicon has been driven by sound strategic considerations. We view the combination of VeriSilicon and ZSP as a key milestone for the Company moving forward. ZSP's existing customer base will continue to enjoy the benefits of the classic licensable, open DSP IP platform, while being able to take advantage of VeriSilicon's silicon implementation and manufacturing capability. Similarly, the Company will be able to offer its existing and future customers, application specific building blocks based on ZSP, reducing their development risks and shortening their time to market. We are excited to participate in the Company's success," said Ben Yu, Managing Director at Sierra Ventures, who also joins the VeriSilicon board.

"I am delighted to have Austin Ventures and Sierra Ventures as our new investors. With their broad and proven industry experience, they are bringing the right strengths into VeriSilicon. This funding round is giving us the financial backing, the right vision and the strategic guidance to take our company to the next level," said Dr. Wayne Dai, chairman, president and CEO of VeriSilicon.

About Austin Ventures

Austin Ventures (AV) has been working with talented entrepreneurs to build valuable companies since 1979. With $3 billion under management, AV is the most active venture capital firm in Texas, and one of the most established in the nation. With a focus on business services, information services, computer and communications hardware, and enterprise software, Austin Ventures invests at all stages of company development, from $100,000 "planned experiments" to $50+ million investments in management buyouts. More information is available at http://www.austinventures.com .

About Sierra Ventures

Sierra Ventures, founded in 1982, is a privately held venture capital firm focused on investments across all areas of the Information Technology sector from semiconductors to enterprise software. Sierra Ventures has managed eight venture capital partnerships and currently has more than $1 billion of capital under management. Some of the firm's investments include Combinet (acquired by Cisco), StrataCom (acquired by Cisco), ConvergeNet (acquired by Dell), Quinta (acquired by Seagate), Intuit (INTU), OnLink (acquired by Siebel), Healtheon (merged with WebMD), AmeriGroup (AGP), Micromuse (MUSE), Active Software (acquired by WebMethods), Centex (acquired by WorldCom), Interact Commerce (acquired by Sage), Frontbridge (acquired by Microsoft), 360Commerce (acquired by Oracle). More information is available at http://www.sierraventures.com .

About VeriSilicon

VeriSilicon Holdings Co., Ltd. is a leading world class ASIC design foundry providing libraries, semiconductor IPs, design and turnkey manufacturing services with multi-fab capability and on process technologies down to 90nm. VeriSilicon has achieved first silicon success and entered volume production of many complex, multi-million gates SoCs using the leading wafer foundries in APAC and China. VeriSilicon has operations in US, China, Taiwan, Japan, France, and Korea. Over 500 customers worldwide have licensed VeriSilicon IPs and Standard Design Platforms. In 2005, VeriSilicon was ranked number three in Deloitte Technology Fast 50 China, the top 50 fastest-growing technology companies in China and number six in Deloitte Fast 500 Asia Pacific, the top 500 fastest-growing technology companies in Asia Pacific. VeriSilicon was also named one of the Red Herring 100 Private Companies of Asia, and selected as one of the EE Times 60 Emerging Startups. More information is available at www.verisilicon.com.

About LSI Logic

LSI Logic Corporation is a leading provider of silicon-to-system solutions that are used at the core of products that create, store and consume digital information. LSI offers a broad portfolio of capabilities including custom and standard product ICs, host bus and RAID adapters, storage area network solutions and software applications. LSI products enable leading technology companies in the Storage and Consumer markets to deliver some of the most advanced and well-known electronic systems in the market today. More information is available at www.lsi.com.

About ZSP®

ZSP is a leading licensor of signal processing cores and solutions. With more than 50 customers worldwide, the ZSP processor architecture enables customer innovation as the DSP of choice in many key vertical markets including 3G wireless handsets, multimedia and networked voice appliances. The ZSP roadmap offers a range of software compatible cores delivering performance points that meet the cost, power and efficiency constraints of today's SoC designs. A number of standard products are also available for VoIP applications and lower volume designs. ZSP Solution Partners augment the technology with world-class software tools, EDA modeling support and a large portfolio of application software. ZSP customers include Broadcom, Marvell, IBM, Renesas, Yamaha, Huawei Technologies, Datang Microelectronics, Murata, AVID Electronics Corp. and many other world-class companies. More information is available at www.zsp.com.

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