Zarlink Board of Directors Responds to Microsemi Corporation Announcement

Ottawa, Canada - July 20, 2011 -- Zarlink Semiconductor Inc. (TSX: ZL) acknowledges receipt of an unsolicited non-binding proposal from Microsemi Corporation ("Microsemi") to acquire all of the outstanding shares of Zarlink for CAD$3.35 per share in cash.

Zarlink had received two previous unsolicited, non-binding expressions of interest from Microsemi dated May 20, 2011 and June 17, 2011 for CAD$3.00 and CAD$3.25 per share.  The Zarlink Board carefully and thoroughly reviewed these non-binding expressions of interest and with the assistance of its financial advisors, RBC Capital Markets and Canaccord Genuity, and external legal counsel, unanimously concluded and advised Microsemi that the proposals significantly undervalued Zarlink and its future prospects and were not in the best interests of its stakeholders.

The latest non-binding proposal from Microsemi received July 20, 2011 at $3.35 per share does not change the conclusion of the Board.  The Board has considered the July 20, 2011 proposal and unanimously concluded with the assistance of its advisors that it significantly undervalues the Company.

"The Zarlink Board has always been prepared to consider and pursue strategic transactions or plans and will consider all appropriate alternatives which capture the true value of the Company for its stakeholders" said Adam Chowaniec, Chairman of Zarlink's Board of Directors.  "Zarlink continues to make strong progress as it focuses on growth opportunities in the communication and medical markets.  Our line circuit and network timing products are winning new designs with customers and gaining market share.  We have been aggressively investing to build a unique strategic position in the medical wireless market, and with our radio products now being designed in with the leading device manufacturers we are at a point of growth inflection with this segment of our business.  Microsemi's proposal clearly does not capture the value that has been created or that exists in the Company". 

About Zarlink Semiconductor

Zarlink Semiconductor delivers world-leading, mixed-signal chip technologies for a broad range of communication and medical applications. The Company's core capabilities include timing solutions that manage time-sensitive communication applications over wireless and wired networks, line circuits supporting high-quality voice services over cable and broadband connections, and ultra low-power radios enabling new wireless medical devices and therapies. Serving the world's largest original equipment manufacturers, Zarlink's highly integrated chip solutions help customers simplify design, lower costs and reach market quickly. For more information, visit www.zarlink.com.