ZARLINK SUPPLY CONTRACT ANNOUNCED

The following is a press release from Zarlink Semiconductor.

SWINDON, UK, February 6, 2007 – Zarlink Semiconductor (NYSE/TSX:ZL) today announced that it has been awarded a contract from Silicon Sensing Systems Ltd., a BAE Systems and Sumitomo Precision Products joint venture company, for the supply of the JFETs (junction gate field-effect transistor) for Silicon Sensing Systems' next-generation capacitive gyro system.

Silicon Sensing Systems' gyro technology is used in a range of automotive and industrial applications. Today, the company's silicon MEMS (Micro-Electro-Mechanical Systems) are found at the heart of advanced chassis control systems designed by the world's leading automobile manufacturers. Silicon Sensing Systems' inertial sensor technology is enabling significant advances in automobile safety and vehicle dynamics controls, including advanced cruise control, accident avoidance, crash data recording, roll-over protection, and next-generation air bag, in-car navigation and transmission and suspension control systems.

The JFET process is a proprietary process developed by BAE Systems. This process is being implemented at the Zarlink Analog Foundry facility in Swindon for high-volume manufacturing.

"Our combined process technology capabilities and TS16949 automotive quality certified foundry are ideally suited for this JFET product," said Dr. Peter Osborne, chief technology officer, Zarlink Analog Foundry. "This process set-up and assimilation is an example of the end-market we can aggressively pursue. Our technology advantages in terms of die size, quality of product and yield will provide Silicon Sensing with a real system cost advantage."

"We could not find a foundry that matched Zarlink's analog bipolar design, manufacturing experience and production capabilities," said Richard Leithall, director of procurement, Silicon Sensing. "We are looking forward to working with their engineers as we ramp-up this process at the Zarlink Foundry and realize increased product volumes for this growing market. This will place us in a good position to ensure supply and deliver an attractive solution for both our existing and potential customers."

Zarlink Analog Foundry

The Zarlink Analog Foundry uses state-of-the art 150 mm technology to provide end-to-end foundry service, from design expertise and engineering support to leading processes and technologies. The silicon solutions provide customers a system and sub-system cost advantage with processes that support designs with the smallest die, highest yielding wafers, highest functional integration and highest operating frequency at high voltage.

The Foundry's Design Services group is a broad-based team with significant experience and expertise in silicon IC design. These include a comprehensive autographics service, front-to-back end design capability on state-of-the-art, third-party CAD software tools, and ESD (electrostatic discharge) consultation. A complete "plug and play" design environment is offered, comprising schematic capture, layout and comprehensive DRC and LVS (layout versus schematic) design verification.

About Silicon Sensing Systems Ltd.

Silicon Sensing Systems is a joint venture formed by Sumitomo Precision Products (SPP) in Japan and BAE Systems. The company draws on more than 80 years of experience in the design and development of gyroscopes and accelerometers. Silicon Sensing Systems develops, manufactures and markets rate sensors and accelerometers for a wide range of applications including automotive vehicle dynamics, navigation, stabilisation, and seismic activity detection. With the production facilities in Japan and offices in Japan and England, Silicon Sensing Systems is able to deliver solutions to stabilisation, orientation and alignment requirements.

About Zarlink Semiconductor

For over 30 years, Zarlink Semiconductor has delivered semiconductor solutions that drive the capabilities of voice, enterprise, broadband and wireless communications. The Company's success is built on its technology strengths including voice and data networks, optoelectronics and ultra low-power communications. For more information, visit www.zarlink.com.

Shareholders and other individuals wishing to receive, free of charge, copies of the reports filed with the U.S. Securities and Exchange Commission and Regulatory Authorities, should visit the Company's web site at www.zarlink.com or contact Investor Relations.