Trident Microsystems Receives Nasdaq Extension and Notice Regarding Failure to Hold Annual Meeting

Trident Microsystems Inc., a provider of digital TV technology for the consumer digital video marketplace, announced that on July 2, 2007 it received a letter from The Nasdaq Stock Market, stating that the company has failed to hold an annual meeting of shareholders, to solicit proxies and to provide proxy statements to Nasdaq as required by Marketplace Rule 4350(e) and 4350(g). Accordingly, the letter states that the failure to hold an annual meeting of shareholders, to solicit proxies and to provide proxy statements to Nasdaq serve as an additional basis for delisting the company's securities from The Nasdaq Stock Market. In addition, on July 6, 2007, the Company received the decision of the Nasdaq Listing and Hearing Review Council (Listing Council) granting the Company an extension, until July 16, 2007, to demonstrate compliance with all of the Nasdaq continued listing requirements previously announced by the company. The Listing Council decision indicated that the company's failure to hold an annual meeting of shareholders is considered a separate and new deficiency that is still subject to review if the company regains compliance with its filing requirements.

As previously announced, Nasdaq initially informed the company on October 2, 2006 that its securities were subject to delisting for failure to timely file its Form 10-K for the fiscal year ended June 30, 2006. The company subsequently received three additional notices from the Nasdaq Stock Market stating that its failure to timely file its quarterly reports on Form 10-Q for the quarters ended September 30, 2006, December 31, 2006 and March 31, 2007 serve as an additional basis for delisting the company's securities.

Trident Microsystems requested and subsequently attended a hearing before the Nasdaq Listing Qualifications Panel (Listing Panel), which was held on November 16, 2006, to appeal the staff determination and presented a plan to cure the filing deficiencies and regain compliance. On January 16, 2007, Nasdaq notified the company that an exception had been granted, and that it would continue to list its shares on the Nasdaq Global Market, provided that the it file its Form 10-K for fiscal 2006, its Form 10-Q for the first quarter of fiscal 2007, and all required restatements on or before April 2, 2007. The company appealed this decision to the Listing Council, which decided to review the decision of the Listing Panel, and stayed the decision to suspend the company's securities from trading, pending further action by the Listing Council.

On July 6, 2007, Trident Microsystems received the decision of the Listing Council concerning its appeal of the Listing Panel's decision described above. In its decision, the Listing Council exercised its maximum discretionary authority and according to the limits of its authority, under Marketplace Rule 4802(b), granted the Company an extension to demonstrate compliance with all of the Nasdaq continued listing requirements until July 16, 2007. The company has submitted a request to the Nasdaq Board of Directors for a further short extension of time, beyond July 16, 2007, by which it must come into compliance with all of the listing requirements, and requested a continued stay of the decision to delist its common stock. Trident Microsystems is aware that recently other companies have successfully appealed Listing Council decisions to the Nasdaq Board of Directors. However, there can be no assurance that the outcome of an appeal to the Nasdaq Board of Directors, if heard, will be favorable to the company.

Trident Microsystems has also requested an extension of time from the Listing Panel within which to comply with the requirement to hold an annual meeting of shareholders, to solicit proxies and to provide proxy statements to Nasdaq.

Trident Microsystems is working diligently to bring itself current with its periodic filing responsibilities by the deadline imposed by Nasdaq, however, not all factors affecting the date of filing of its restatement are within the company's control, and it does not expect to file its outstanding periodic reports by July 16, 2007. However, if the Nasdaq Board of Directors does not hear the company's appeal prior to July 16, 2007, or denies its request for an extension beyond July 16, 2007, its stock will be delisted from the Nasdaq Global Market as of the opening of trading on July 18, 2007.

Trident Microsystems