PSE Circular for Brokers No. 1592-99

July 1, 1999 PSE CIRCULAR FOR BROKERS NO. 1592-99 01 July 1999 THE PHILIPPINE STOCK EXCHANGE Tektite Building, Exchange Road Ortigas Center, Pasig City Gentlemen : Please be informed that in a board meeting held at 6:00 PM Manila time on June 30th, the Board, following extensive discussions with Mr. Davia Walls, President of MUSIC Semiconductors, Inc., resolved the following: "Following a careful and thorough evaluation of MUSIC Semiconductors, Inc. (Networking Products) performance and results of the past two years, the following actions are deemed essential to the Company's recovery: 1. To cease immediately the in-house activities of circuit and layout design, and to begin immediately to outsource these activities. 2. To relocate the most critical aspect of the development process, the creation and definition of new product ideas, to Silicon Valley, along with the general management, operations and administrative functions of the Company, where its worldwide sales and marketing function is already located. This will increase our visibility in the networking community and enable us to better serve our key customers now and in the future." aisadc To the employees affected by these decisions in New Jersey, the Board expresses its appreciation of the efforts, and regrets the necessity of this difficult decision. To shareholders, the Board wishes to clarify that this action taken today represents the latest in a series of restructuring actions announced since the end of March of this year, to restore (MUSIC) financial and operational health. LLjur MUSIC Semiconductors, Inc. will book a 2nd quarter 1999 restructuring provision of $2.5M in connection with this decision. On the matter of the patent infringement suit with Netlogic we wish to inform our shareholders that the same has been mutually and voluntarily settled. (SGD.) MITOS TANTUICO-ZSHORNACK Corporate Secretary