Silicon Image Reports Q3 Results, Revenues Grow 13.1% Year over Year

Selected Q3 Highlights:

• Revenue of $24.2 million for the quarter, a 13.1 percent increase over the year ago quarter and down 0.6 percent from Q2
• GAAP net loss was $2.1 million, or $0.03 per basic and diluted share
• Pro-forma net loss* was $456,000, an improvement of $354,000 from the year ago quarter
• CE revenue grew 51 percent sequentially, and PC revenue grew 12 percent sequentially
• New orders increased over 40 percent sequentially, resulting in a book-to-bill ratio in excess of 1.3:1
• Added 15 new High-Definition Multimedia Interface™ (HDMI™) licensees; year-to-date HDMI licensees total 48
• First HDMI CE products debuted at CEDIA 2003; all use Silicon Image's PanelLink Cinema™ technology for HDMI
• Introduced one of the industry's first quad 3 Gbps SATA II host controller solutions
• New SiI 3114 quad 1.5 Gbps SATA 1 controller secures design wins from 20 motherboard manufacturers
• Announced IP Licensing Program and strategic partnership with Sunplus

SUNNYVALE, Calif., October 16, 2003 — Silicon Image, Inc. (NASDAQ: SIMG), a leader in high-bandwidth semiconductor and system solutions for mass markets, today reported financial results for its third quarter ended September 30, 2003.

Revenue of $24.2 million was achieved for the third quarter. This was down 0.6 percent from revenue of $24.3 million in the second quarter of 2003, and up 13.1 percent from revenue of $21.4 million in the third quarter of 2002. Year-to-date revenue totaled $73.2 million, an increase of 26.8 percent from revenue of $57.7 million in the first nine months of 2002.

Net loss under Generally Accepted Accounting Principles (GAAP), which includes stock compensation expense, amortization and impairment of goodwill and intangible assets, patent defense costs, acquisition integration costs, restructuring costs, in-process research and development expense, and a gain on escrow settlement, was $2.1 million, or $0.03 per basic and diluted share, for the quarter ended September 30, 2003. This compares to a net loss of $8.7 million, or $0.13 per basic and diluted share, for the previous quarter, and a net loss of $4.6 million, or $0.07 per basic and diluted share, for the third quarter of 2002.

On a year-to-date basis, the GAAP net loss was $7.5 million, or $0.11 per basic and diluted share, for the first nine months of 2003, compared to a net loss of $32.0 million, or $0.50 per basic and diluted share, for the first nine months of 2002.

Third quarter pro-forma net loss*, calculated excluding a non-cash charge for stock compensation ($1.1 million), a non-cash expense for the amortization of intangible assets ($0.4 million) and cash legal expenses associated with the patent litigation lawsuit against Genesis Microchip ($0.2 million), was $0.5 million, or $0.01 per basic and diluted share. This compares to pro-forma net income of $25,000, or $0.00 per diluted share, for the second quarter of 2003, and a pro-forma net loss of $0.8 million, or $.01 per basic and diluted share, for the third quarter of 2002.

Commenting on the results, David Lee, Silicon Image's chairman and chief executive officer, said, "By providing innovative solutions and leveraging our IP portfolio through licensing our technology to world-class partners, we continue to drive standards adoption and to position Silicon Image for long-term growth. During the third quarter, we announced several products and strategic alliances with industry leaders like Sunplus. In addition, we saw leading CE manufacturers launch the world's first HDMI-enabled products-all incorporating our PanelLink Cinema™ technology-and our overall product orders grew over 40 percent sequentially. We are extremely pleased with the momentum of our business entering the fourth quarter and are excited about the growth opportunities for our markets."

"Even though our total revenue was slightly down this quarter, we did achieve record new orders and double-digit sequential growth in product revenue for the third quarter," added Silicon Image's president Steve Tirado. "Our strong backlog position entering the fourth quarter, combined with the continued strength of new orders through the first half of October, positions us for expected sequential revenue growth of 20+ percent in the fourth quarter. The creation, distribution, storage and display of digital content in a secure environment are at the forefront of issues facing content providers and electronics manufacturers today. Silicon Image has the vision, products and partnerships to lead the industry transition to secure digital content delivery systems."

The company will host a conference call at 2:00 p.m. PST today to discuss its third quarter 2003 results and business outlook. The call will be broadcast over the Internet and can be accessed on the investor relations site located at www.siliconimage.com. A replay of the conference call will be available on this site until 12:00 p.m. PST on October 26, 2003.

Financial Tables
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* Pro-forma net income or loss represents net income or net loss, exclusive of stock compensation expense, amortization and impairment of goodwill and intangible assets, patent defense costs, acquisition integration costs, restructuring costs, in-process research & development expense, and gains on escrow settlement.

About Silicon Image Headquartered in Sunnyvale, Calif., Silicon Image, Inc. designs, develops and markets multi-gigabit semiconductor and system solutions for a variety of communications applications demanding high-bandwidth capability. With its proprietary Multi-layer Serial Link (MSL™) architecture, Silicon Image is well positioned for leadership in multiple mass markets including PCs, consumer electronics, and storage. Silicon Image is a leader in the global PC/display arena with its innovative digital interconnect technology and is now emerging as a leading player in the fields of storage and consumer electronics by offering robust, high-bandwidth semiconductors. For more information on Silicon Image, visit www.siliconimage.com

This news release contains forward-looking information within the meaning of federal securities regulations. These forward-looking statements include statements related to future financial results, product introductions and standards adoption rates. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. In particular, future demand in PC, display, consumer electronics and storage markets may differ from current expectations, adversely affecting expected future results for the company, new product introductions may not be timely or successful, and standards may not be adopted at the rates anticipated. In addition, see "Management's Discussion and Analysis of Financial Condition and Results of Operations - Factors Affecting Future Results" in the most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K filed by Silicon Image with the SEC. Silicon Image assumes no obligation to update this forward-looking information.