STOCKREPORTS

Trident Microsystems, Inc.

NASDAQ Symbol TRID

Recent Price 11.75 52 Wk Range 22.75 - 10.13

Yield Nil 12-Mo. P/E 11.0

Quantitative Evaluation: Outlook (1 Lowest - 5 Highest) NA Fair Value NA Risk HIGH Earn/Div Rank NR
Technical Evaluation: BEARISH since 03/97 Rel. Strength Rank (1 Lowest - 99 Highest) 9 Insider Activity NA

Business Profile 15-JUN-97

While new product introductions have provided the impetus for the company's rapid growth in recent years, this has been outweighed in recent periods by declining prices for certain of the company's products. Since a substantial portion of the company's revenues has been and is expected to continue to be generated from customers in Asia, it is likely that the company's operating results will also fluctuate with changes in the Asian economies, particularly those of Taiwan and Hong Kong. In April 1997, directors authorized the company to repurchase from time to time at management's discretion up to600,000 shares of TRID common stock for an aggregate price not exceeding $9,000,000 at prevailing market prices over the next six months.

Operation Review 15-JUN-97

Net sales rose 16% year to year in the nine months ended March 31, 1997, reflecting increases in unit volume of higher performance GUI accelerator products primarily for both desktop and portable computers. Lower prices for certain products led to a 13% decline in net income, to $13,422,000, from $15,242,000. Share earnings were $0.95, on 5.2% more shares, down from $1.14.

Stock Performance 03-JUL-97n

In the past 30 trading days, TRID's shares have declined 18%, compared to a 8% rise in the S&P 500. Average trading volume for the past five days was 327,625 shares, compared with the 40-day moving average of 281,011 shares.

Key Stock Statistics

Fiscal Year Ending Jun. 30

Dividend Data: No dividends have been paid, and the company does not expect to pay any in the foreseeable future.

Business Summary 15-JUN-97

With a customer list that includes Acer, Fujitsu, Hewlett-Packard, IBM, Matsushita, Olivetti and Sharp, Trident Microsystems (TRID) has produced over 45 million ICs (integrated circuits) since it was founded in 1987. These ICs are in the form of very large scale integrated circuit graphics and multimedia products for IBM-compatible personal computers (PCs), including Graphical User Interface (GUI) accelerators, graphics controllers and video processing products.

TRID's customers have been primarily Asian adapter card manufacturers. The company has made a major effort to design products to fill the needs of leading PC systems manufacturers as well as the needs of adapter card manufacturers.

The company's strategy is to apply its design expertise, which helped it succeed in the market for Super Video Graphics Array (SVGA) graphics controllers and GUI accelerators, to other high volume graphics and multimedia markets such as flat-panel LCD controllers for notebooks, acceleration of CD-ROM based live-video playback, and three-dimensional (3D) display for gameand entertainment applications.

The overall PC marketplace is characterized by extreme pricecompetition and rapid technological change as leading PC systems manufacturers compete among themselves and other PC clone makers for market share. As a result, PC systems manufacturers require low-cost, feature rich, advanced graphics and multimedia solutions. The company believes that the systems manufacturers are moving toward reducing system cost by purchasing IC graphicsand multimedia solutions that integrate functions formerly performed by several separate components. Moreover, as CD-ROM and video processing capabilities become more popular, an increasing percentage of computer users require a high-performance, low-cost graphics system that can display photo-realistic imagesor display full-motion video on a PC.

TRID believes that prices of semiconductor products will decline over time as availability and competition increase and advanced products are introduced. It expects to see particularly intense pressure over the next few months leading to added pressures on gross margins in desktop graphics products. However, the company expects that the effect of this pressure will be more than offset by new product introductions, if they are successful, beginning in the fourth quarter of FY 97. TRID continues its strategy based on maintaining gross margins through the introduction of new products with higher margins, reducing manufacturing costs through its custom design methodology and migrating to the newest process technology.

Capitalization

Long Term Debt: None (3/97).

Curr. Ratio	2.6	3.7	3.6	5.2	NA	NA	NA	NA	NA	NA
% LT Debt of Cap.	Nil	Nil	Nil	Nil	NA	NA	NA	NA	NA	NA
% Net Inc.of Revs.	10.0	7.5	2.1	13.1	NA	NA	NA	NA	NA	NA
% Ret. on Assets	15.6	9.8	2.1	20.7	NA	NA	NA	NA	NA	NA
% Ret. on Equity	21.6	13.1	2.7	28.7	NA	NA	NA	NA	NA	NA

Data as orig. reptd.; bef. results of disc. opers. and/or spec. items. Per share data adj. for stk. divs. as of ex-div. date. E-Estimated. NA-Not Available. NM-Not Meaningful. NR-Not Ranked.

Office--189 N. Bernardo Ave., Mountain View, CA 94043-5203. Tel--(415) 691-9211. Fax--(415) 691-9260. Website--http://www.tridentmicro.com Chrmn, Pres & CEO--F. C. Lin. VP, CFO & Secy--J. T. Lindstrom. Dirs--G. M. Antle, S-J. P. Chien, Y. Chikagami, C. A. Dickinson, F. C. Lin, L. Y. Liu, M. Phelps. Transfer Agent--ChaseMellon Shareholder Services, NYC. Incorporated--in California in 1987; reincorporated in Delaware in 1992. Empl-- 0. S&P Analyst: C.F.B.

This report is for information purposes and should not be considered a solicitation to buy or sell any security. Neither S&P nor any other party guarantee its accuracy or make warranties regarding results from its usage. Redistribution is prohibited without written permission. Copyright © 1997