STMicroelectronics Announces Further Advances in Corporate Responsibility During 2007

Geneva, June 2008 – STMicroelectronics (NYSE: STM), one of the world’s leading semiconductor manufacturers, has announced the publication of the Company’s 2007 Corporate Responsibility Report, which is available for download at www.st.com/cr. The report, which covers all of ST’s activities and sites in 2007, contains detailed indicators of the Company’s performance across the full range of Social, Environmental, Health & Safety, and Corporate Governance issues and reaffirms ST’s long-established commitment to serving its stakeholders with integrity, transparency and excellence.

The report clearly demonstrates the scope and success of ST’s Sustainable Excellence program, an evolution of TQM (Total Quality Management) culture designed to embed Corporate Responsibility at every level of the Company’s activities. The term ‘Sustainable Excellence’ reflects ST’s belief in its ability to balance and respond to stakeholders’ expectations in the short and long term to make the Company ‘sustainable’ – successful now and in the future – and enable it to contribute to sustainable development at a global level.

Performance highlights in 2007
Comprehensively deployed throughout the Company’s sites around the world in 2007, the Sustainable Excellence program has contributed to ST’s ability to grow faster than the other top ten semiconductor manufacturer in 2007 while continuing to make significant progress in multiple areas of Corporate Responsibility, including:

Around 95% of employees were trained in Corporate Responsibility and all managers have received additional training in compliance and ethics;
A Corporate Ethics Committee was established in July 2007 and a Chief Compliance Officer was appointed in December 2007;
Further reductions in energy consumption per unit produced means that energy per unit is now 50% of the baseline 1994 level. In water consumption, ST also continued to make excellent progress and has reduced its water consumption per unit of production by an average of 9% per year since 1994;
In greenhouse gas emissions, 2007 was a record-breaking year, with ST achieving an impressive 20% reduction in net greenhouse gas emissions. Direct net emissions due to the use of PFCs also decreased by 33%;
The Company has deployed its health plan worldwide so that every ST employee, wherever they are located in the world, now has access to the same medical follow-up;
In the field of Health & Safety, ST’s severity rate for work-related injuries and illnesses decreased by 24% in 2007 compared with 2006, well above the Company’s 10% target;
The ST Foundation provided IT training for over 10,000 people in deprived city areas or remote settlements in Morocco alone, in addition to its operations in countries such as India, Malaysia, Ethiopia and Uganda.
“We are delighted, although not unduly surprised, at the enthusiasm with which our Sustainable Excellence program has been embraced by all of our people worldwide,” said Georges Auguste, Executive Vice President, Total Quality and Corporate Responsibility. “We were proud to play a pioneering role in demonstrating that ‘Green is Black;’ environmental responsibility delivers real financial benefits. Now we are demonstrating that the same is true of every aspect of Corporate Responsibility.”

In fact, the report shows that ST not only maintained its continuous improvement in all of the Company’s traditional areas of excellence in Corporate Responsibility, such as environment, product responsibility, employee well-being, and community involvement, but is also performing strongly in newer aspects that are becoming increasingly important to stakeholders. These include Health & Safety, implementation of human rights, responsible restructuring and management of Corporate Responsibility in the supply chain.

For example, ST is an active participant in the Electronic Industry Citizenship Coalition (EICC), in which leading electronics companies collaborate to help ensure safe conditions, worker rights and environmental responsibility in the global electronics supply chain. In 2007 ST also deepened its focus on human rights in business as a participant in Entreprises pour les Droits de l’Homme (EDH), an initiative inspired by the Business Leaders Initiative on Human Rights (BLIHR).

Product Responsibility
The report also highlights how Sustainable Excellence is embedded in ST’s core business through advances in the area of Product Responsibility, which covers both quality and responsible environmental and social applications of ST products, including, in particular, energy-saving products and healthcare; the chemical content of our products; and restricted military use of ST products.

ST is a world leader in power management and has developed many products that help reduce residential and industrial energy consumption, which together represent 74% of overall energy consumption worldwide. The Company is also taking advantage of its strong position in the automotive market segment to develop applications for improved fuel consumption.

Some concrete examples provided in the report include:

Refrigerators: Replacing a traditional thermostat with an ST electronic sensor, and driving the compressor with ST’s intelligent power management device, can reduce energy consumption by 40%, which is equivalent (on average) to 250 kWh/year.
Electric power steering: ST has solutions to replace hydraulic pumps in car steering systems that will result in energy savings with zero consumption when no force is applied to the steering wheel. The fuel saving impact is about 0.17 litres of fuel per 100 km.
Electrical heating: Here, again, intelligent power management devices provided by ST can help reduce consumption by 30%, resulting in savings of 500 to 600 kWh/year for each electrical heater.
Start and stop: ST has developed a solution in a new combined starter and alternator that will start and stop a car engine and save fuel when driving in an urban environment. The impact on consumption is quite high, with fuel savings of up to 15% in some cases.
ST is also capitalizing on its broad technology portfolio to develop innovative solutions for the healthcare market. These will improve the efficiency of medical diagnosis and treatment, but also– thanks to the lower cost of these new technologies– will help bring state-of-the-art medical equipment to less-developed countries.

ST’s Principles for Sustainable Excellence clearly state that the Company will not sell products to a customer if it knows that they are to be included in weapons. In 2007 the Corporate Ethics Committee widened the definition of weapons to include not only “any instrument or application whose primary purpose is to kill human beings” but also any associated launch devices or guidance systems.

“The link between ethics and operations is not always simple and straightforward: it takes a lot of work to design the processes and the systems to ‘lock’ the two worlds of high-level values and actual practices together, but this work is necessary to build robust management systems,” noted Auguste. “We are glad and encouraged to see that our society has reached a turning point where the need for Corporate Responsibility is no longer questioned. Being responsible is a matter of personal dignity and it is a prerequisite for doing sustainable business.”