FOOL CONFERENCE CALL SYNOPSIS*
By Debora Tidwell (TMF Debit)

Motorola, Inc.
<% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MOT)") else Response.Write("(NYSE: MOT)") end if %>
1303 E. Algonquin Road
Schaumburg, IL 60196
(847) 576-5000
http://www.mot.com

UNION CITY, CA (July 1, 1997)/FOOLWIRE/ --- Motorola, Inc. announced today that they are exiting the commodity DRAM market where they have had limited participation for several years. The profit performance of the DRAM product line was severely depressed as was true of the DRAM industry generally. They had a sharp reduction in their DRAM sales in 1996 versus 1995 and an even sharper reduction in the profitability performance of that business in 1996 versus 1995. It was not profitable and, in fact, accounted for a significant majority of the company's operating profit decline year-to-year. The market continues to be relatively depressed, as they think is commonly known, in terms of the pricing in the marketplace. Memory products in total for their semiconductor business in 1996 represented about 11% of semiconductor revenues. Of that 11%, somewhat more than half was fast static RAM sales. Somewhat less than half was DRAM sales. Motorola consumes very little DRAM internally. A very significant portion of their DRAM production is sold outside the company.

NO SUDDEN SHIFT IN DRAM REVENUES. There will not be a sudden shift in their DRAM revenues, necessarily, as a result of this announcement. They are proceeding with a phaseout of their participation in this market going forward. The profitability of these sales is going to be influenced by the overall supply and demand situation of not only the 16-megabit generation for the rest of this year, but the 64-megabit generation as it begins to ramp up during the balance of 1997 and into 1998.

PLAN TO REDEPLOY PERSONNEL AND FACILITIES. There will be no impact on employment in their Semiconductor Product sector or to any of the existing manufacturing facilities that they currently operate. They are redeploying resources to higher value technology, especially fast static RAMs. They are maintaining their participation in joint ventures with Toshiba and Siemens and are going ahead with the White Oak joint venture in Richmond, Virginia. They are proceeding with the construction of their White Oak facility as originally planned. That facility should start manufacturing 64-megabit product in the middle of 1998. There is no change to their plans to, with Siemens, bring that facility up with 64-megabit production. Their sales of 64-megabit product will start with the start of commercial production in the White Oak facility about the middle of 1998 and then continue for two years through the middle of 2000 until the facility has reached volume production at which point they will stop making 64-megabit DRAMs in their portion of the White Oak facility and convert to fast static RAMs. Clearly, however, their participation in 64-megabit DRAMs as a percent of the market is going to be well below even the small participation they currently have in the 16-megabit generation.

16-MEG PRODUCTION WILL CEASE THIS YEAR. They will be ceasing 16-megabit production by the end of this year. In terms of what is going on in the Tohoku facility, they would be in a phaseout period of 16-megabit production in that facility under normal circumstances as the industry evolves from the 16-meg to 64-megabit generation and as they have done in their other two factories that are part of the Toshiba joint venture, converted that capacity to logic products. What they will be doing here is somewhat accelerating the conversion of the newest factory in the Toshiba joint venture to logic production as they more quickly wind down 16-megabit production by the end of 1997. That will necessitate adding equipment into the facility to equip it for logic products.

SOME DRAM REVENUES THROUGH 2000. They will continue to have some DRAM sales through the middle of the year 2000 utilizing a phase-out approach, with Siemens selling Motorola's share of 64-megabit production from the White Oak joint venture, for which Motorola will pay Siemens a selling and distribution fee. Motorola will have no visible presence in the DRAM market.

SECOND QUARTER CHARGE. The charge of about $170 million that Motorola will record in the second quarter is composed of two elements: the first is that they are writing off more than 50% of the technology fees related to 64-megabit RAM which Motorola agreed to pay Siemens as part of their original joint venture agreement. The remainder of these fees will be amortized over a two year period. These fees, had Motorola decided to remain a long term participant in the DRAM market, would have been amortized over 5 years. Second, they will be writing off unrecoverable book value as of December 31, 1997 of 16-megabit DRAM manufacturing and test equipment that they currently own and are operating in their joint venture with Toshiba.

NO IMPACT ON OPERATING COST STRUCTURE. This decision has no material impact on Motorola's ongoing operating cost structure. There will be no impact on employment levels. They are redirecting their DRAM personnel to other areas. Additionally, manufacturing capacity is being converted to other products.

BENEFITS OF THIS DECISION. The anticipated benefits of this decision are the following. Their semiconductor results will be subject, to a much lesser degree, to the commodity DRAM market through the middle of the year 2000. Their semiconductor results will not be affected by the DRAM market after the middle of the year 2000 at all. Motorola will be focusing their efforts in memory products in two higher value technologies -- the first being proprietary fast static RAMs, a market they already lead, and the second being the rapidly growing flash memory market, where they are committed to become a market leader.

FLASH MEMORY ANNOUNCEMENTS AND PLANS. As far as the flash memory market, Motorola's involvement has already begun. They made an announcement of a relationship with Mitsubishi to enter the low-voltage (3.3 and 2.7 volt) flash market. That announcement was made late in 1996 or early in 1997. They are also working on developing their own leading-edge flash technology and they have not made any specific announcements as to when products from that effort might come to the marketplace.

* A Fool conference call synopsis represents an effort to highlight the salient points of a conference call and should not be taken as an authoritative accounting or transcription of the entire event. Note: Statements made by a company other than historical information may constitute forward-looking statements for which the company can claim protection under the Safe Harbor Act. Please consult the company's filings with the SEC for information on risk factors which might cause actual results to differ materially from the information contained in these forward-looking statements.