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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16
of  the
Securities Exchange Act of 1934

October 21, 2008
Commission File Number: 333-142287

NXP B.V.
(Exact name of registrant as specified in charter)

The Netherlands
(Jurisdiction of  incorporation or organization)

60 High Tech Campus, 5656 AG, Eindhoven, The Netherlands
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1).

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7).

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Name and address of person authorized to receive notices
and communications from the Securities and Exchange Commission

Dr. Jean A.W. Schreurs
60 High Tech Campus
5656 AG Eindhoven – The Netherlands

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This report contains the quarterly report of NXP B.V. (the “Company”) for the three months ended September 30, 2008, as furnished to the holders of the Company’s debt securities on October 21, 2008. This report also contains a copy of the press release entitled “NXP Semiconductors Announces Third Quarter 2008 Results”, dated October 21, 2007.

Exhibits

1.                                       Quarterly report of NXP Semiconductors Group

2.                                       Press release, dated October 21, 2008

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Forward-looking statements

This document includes forward-looking statements which include statements regarding our business strategy, financial condition, results of operations, and market data, as well as any other statements which are not historical facts. By their nature, forward- looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. These factors, risks and uncertainties include the following: market demand and semiconductor industry conditions, our ability to successfully introduce new technologies and products, the demand for the goods into which our products are incorporated, our ability to generate sufficient cash or raise sufficient capital to meet both our debt service and research and development and capital investment requirements, our ability to accurately estimate demand and match our production capacity accordingly or obtain supplies from third-party producers, our access to production from third-party outsourcing partners, and any events that might affect their business or our relationship with them, our ability to secure adequate and timely supply of equipment and materials from suppliers, our ability to avoid operational problems and product defects and, if such issues were to arise, to rectify them quickly, our ability to form strategic partnerships and joint ventures and successfully cooperate with our alliance partners, our ability to win competitive bid selection processes to develop products for use in our customers’ equipment and products, our ability to successfully establish a brand identity, our ability to successfully hire and retain key management and senior product architects; and, our ability to maintain good relationships with our suppliers.

Except for any ongoing obligation to disclose material information as required by the United States federal securities laws, we do not have any intention or obligation to update forward-looking statements after we distribute this document. In addition, this document contains information concerning the semiconductor industry, our market segments and business units generally, which is forward-looking in nature and is based on a variety of assumptions regarding the ways in which the semiconductor industry, our market segments and product areas will develop. We have based these assumptions on information currently available to us, if any one or more of these assumptions turn out to be incorrect, actual market results may differ from those predicted. While we do not know what impact any such differences may have on our business, if there are such differences, our future results of operations and financial condition, and the market price of the notes, could be materially adversely affected.

Use of non-US GAAP information

In presenting and discussing the NXP Group’s financial position, operating results and cash flows, management uses certain non-US GAAP financial measures. These non-US GAAP financial measures should not be viewed in isolation as alternatives to the equivalent US GAAP measure(s) and should be used in conjunction with the most directly comparable US GAAP measure(s)

A discussion of the non-US GAAP measures included in this document and a reconciliation of such measures to the most directly comparable US GAAP measure(s) are contained in this document.

Use of fair value measurements

In presenting the NXP Group’s financial position, fair values are used for the measurement of various items in accordance with the applicable accounting standards. These fair values are based on market prices, where available, and are obtained from sources that we consider to be reliable. Users are cautioned that these values are subject to changes over time and are only valid as of the balance sheet date. When a readily determinable market value does not exist, we estimate fair values using valuation models which we believe are appropriate for their purpose. These require management to make significant assumptions with respect to future developments which are inherently uncertain and may therefore deviate from actual developments. In certain cases independent valuations are obtained to support management’s determination of fair values.

Quarterly report of the NXP Group

for the 3rd quarter ended September 30, 2008

Positive operational cash flow in the third quarter of 2008

o       Third quarter sales at USD 1,336* million compared to USD 1,644 million in the third quarter of 2007 and USD 1,524 million in the second quarter of 2008

o       Comparable year-on-year sales decrease of 4.2% and comparable sequential sales increase of 1.0%

o       Third quarter Adjusted EBITDA at a profit of USD 147 million, compared to USD 310 million in the third quarter of 2007 and USD 114 million in the second quarter of 2008

o       Cash position of USD 1,535 million at the end of the third quarter after repayment of the revolving credit facility of USD 450 million and following the closing of ST-NXP Wireless JV, compared to USD 660 million at the end of the second quarter of 2008

o       Cash management actions resulting in higher inventory turns, lower capex and positive net operational cash flow of USD 107 million

o       Completion of the acquisition of the Conexant Set-top Boxes operations

o       Considerable advances made towards the execution of the redesign plans announced during the third quarter for which USD 500 million has been provided

o       Factory loading 68% in the third quarter of 2008 compared to 78% in the second quarter of 2008 and 85% in the third quarter of 2007 as a result of softer demand

o       Book to bill ratio in the third quarter of 2008 at 1.00 compared to 1.03 in the second quarter of 2008

*   Including USD 120 million sales in July 2008 of the divested wireless business and excluding USD 38 million subsequent wafer sales to ST-NXP Wireless

Frans van Houten, President and CEO of NXP:

“Our sales for the Q3 period were broadly in line with guidance. The financial crisis and semiconductor market conditions have caused a rapid deterioration of demand towards the end of the third quarter especially in sectors like automotive and consumer. We are convinced of the necessity to act decisively to lower our cost base and to prepare for a difficult market. Our redesign announcement of September 12 to reduce our annual cost base by USD 550 million is timely given the developments in the market.

We are strongly focussed on our customers and see opportunities to sell existing products to a wider customer base. In this context we are pleased to note that we have made inroads with some new customers like HuaWei in China as a supplier of chips for their telecom infrastructure. Also the Home unit made progress in DTV driven by Japanese and European customers. I am confident that our focus on actively managing our costs, a prudent approach to cash management, and the rapid execution of our redesign plans will help ensure resilience through the cycle and create a stronger NXP well positioned for future growth.”

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Introduction

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), which are presented in footnote 3 of NXP’s Annual Report 2007.

As from January 1, 2008, the Company has changed its reporting currency from Euro to US dollar in order to be more aligned with the semiconductor market and for comparison reasons with its peers. The US dollar is the currency of the primary economic environment in which NXP operates; the worldwide semiconductor industry uses the US dollar as a currency of reference for actual pricing in the market. Furthermore, the majority of the Company’s transactions are denominated in US dollars, and revenues from sales in US dollars exceed revenues in any other currency. Labor costs are concentrated in the countries that have adopted the euro or are in the local currencies of the Asian countries. However, most of the Asian entities have the US dollar as their functional currency.

The functional currency of the various entities in NXP’s group consolidation has not changed.

For consolidation purposes, the financial statements of those entities, including the parent company NXP B.V., with a functional currency other than the US dollar, are translated into US dollar. Assets and liabilities are translated using the exchange rates on the respective balance sheet dates. Income and expense items in the statements of operations and cash flows are translated at monthly exchange rates. The effects of translating the financial position and results of operations from local functional currencies are reported as a component of ‘Accumulated other comprehensive income’ in the consolidated statements of changes in shareholder’s equity. Financial data of previously reported periods are recalculated and the consequential effect on the line items in the financial statements is recorded as a translation difference in ‘Accumulated other comprehensive income’.

The Company concluded that the (retrospective) change in reporting currency is justified under the provisions of SFAS No. 52.

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Third quarter 2008 compared to third quarter 2007

–                 all amounts in millions of US dollars unless otherwise stated; data included are unaudited

–                 financial reporting in accordance with US GAAP

–                 the total purchase price paid for the acquisition of all of NXP’s issued and outstanding shares by KASLION Acquisition B.V. on September 29, 2006 has been pushed down to NXP B.V. and allocated to the fair value of assets acquired and liabilities assumed. Reference is also made to footnote 1 of NXP’s Annual Report 2007. The impact on the 2008 financial results of the purchase price accounting (“PPA”) used in connection with this acquisition and subsequent acquisitions and divestments has been separately provided; adjusted financial results are also provided to eliminate the impact of these accounting effects. This presentation does not comply with US GAAP, however, the Company believes it provides investors with a useful basis of comparison with prior year results

–                 Earnings before Interest and Taxes (“EBIT”) as applied by the Company, has the same meaning as income from operations as presented in the accompanying consolidated financial statements

–                 Adjusted EBIT refers to EBIT adjusted for incidental items such as restructuring, litigation, IT system reorganization costs, exit of product lines, other non operations-related items, impairments and the effects of purchase price accounting

–                 comparable sales growth reflects relative changes in sales between periods adjusted for the effects of foreign currency exchange rate changes, material acquisitions, divestments  and reclassified product lines (consolidation changes)

–                 segment IC Manufacturing Operations has been renamed into Manufacturing Operations

Recent developments

Joint venture with STMicroelectronics

On July 28, 2008 NXP and STMicroelectronics (STM) announced the closing of their joint venture bringing the key wireless operations of both companies into ST-NXP Wireless. The joint venture, in which NXP holds a 20% shareholding, is incorporated in Switzerland and headquartered in Geneva and is a solid top three player with a complete wireless product and technology portfolio. All assets and liabilities involved in this transaction have been deconsolidated from the NXP’s group accounts accordingly. The 20% shareholding in the joint venture is recorded under investments in equity-accounted investees at its fair value at closing date. ST-NXP Wireless is a leading supplier to major handset manufacturers, and combines key design, sales and marketing and back-end manufacturing in its organization.

STM took an 80% stake in the joint venture and paid USD 1.55 billion in cash to NXP.

On August 20, 2008 STM announced an agreement to merge Ericsson Mobile Platforms and ST-NXP Wireless into a new joint venture. STM is expected to exercise its option to buy NXP’s 20% in ST-NXP Wireless before the closing of this transaction.

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*    Excluding additional PPA amortization and depreciation of assets as a consequence of the divestment, the result on the       transaction amounted to a profit of USD 970 million.

Redesign NXP

On September 12, 2008 NXP Semiconductors announced a large redesign program targeted to reduce its annual cost base by USD 550 million, through major reductions of the manufacturing base, rightsizing of central R&D, and reduction of support functions in order to improve our company’s financial strength, as well to position NXP for future growth in its core business. Meanwhile significant progress has been made in detailing the redesign program and deploying the measures in the organization for which USD 500 million has been provided for in the 3rd quarter of 2008. This program is expected to affect approximately 4,500 employees globally and will result in annualized savings of USD 550 million. The planned savings in the manufacturing base of USD 300 million on a run rate basis are expected to be realized by the end of 2010. The R&D and support functions costs will be reduced by approximately USD 250 million in 2009. The related cash out of the restructuring is estimated at USD 800 million, of which USD 600 million will be spent from now to the end of 2009 and the remainder in 2010. In the reporting period a restructuring charge of USD 500 million has been recognized. The two-year redesign program, which is subject to consultations with unions and employee representatives, is planned to be completed by the end of 2010. The redesign replaces all previously announced programs such as business renewal and others.

Impairment and write-down of tax assets

As part of the annual impairment test based on US GAAP, the Company has taken into account the current market environment, the divestiture of the wireless business and the implementation of the redesign program.

The impairment test resulted in the  write-down of goodwill and intangibles of USD 706 million. Furthermore, a write-down of deferred tax assets of USD 254 million was recorded in the 3rd quarter of 2008.

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Group performance

In millions of USD unless otherwise stated

(1) Includes wafer sales to ST-NXP Wireless of USD 38 million

(2) The incidental items of USD 1,007 million consist of:

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In millions of USD

In millions of USD unless otherwise stated

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Sales

In millions of USD unless otherwise stated

(1) Not meaningful

Sales

Sales were USD 1,374 million for the period July through September 2008 compared to USD 1,644 million for the 3rd quarter of 2007, a decrease of 4.2% on a comparable basis.

The nominal sales decline in the Mobile & Personal business is mainly caused by deconsolidation of the wireless activities as from August 2008. These wireless activities contributed USD 120 million sales in the 3rd quarter 2008. On a comparable basis sales of Sound Solutions and Amplifiers increased by 1.9%.

The Home business sales decreased on a comparable basis by 20.5%. The market continues to be weak for  mainstream (retail) Set-Top Boxes and Can Tuners, and with a limited seasonal uptake.

The Automotive & Identification business showed a 4.8% comparable sales decline related to the weakening of the automotive market. MultiMarket Semiconductors had a flat sales development on comparable basis.

In the 3rd quarter USD 38 million wafer sales were recognized to the deconsolidated wireless activities.

The sequential quarter-on-quarter comparable sales increased by 1.0% compared to the 2nd quarter of 2008. Both the MultiMarket Semiconductors business and the remaining activities of Mobile & Personal business realized a comparable growth of 3.5% and 10.5% respectively. Automotive & Identification sales decreased with 7.2%, largely reflecting the weakening automotive market. The Home business showed a comparable decline of 0.7%. In the 3rd quarter USD 38 million wafer sales were recognized to the deconsolidated wireless activities.

Gross margin

Excluding PPA, incidental items and the redesign provision related to the restructuring in Manufacturing Operations, the gross margin was affected by the lower sales volume and lower factory loading (68% in the 3rd quarter of 2008 compared to 85% in the 3rd quarter of 2007). As a consequence, gross margin as a % of sales decreased in the 3rd quarter of 2008 to 31.0%, compared to 39.7% in the same period of 2007. Furthermore, the 3rd quarter gross margin of 2008 includes translation effects of USD 20 million compared to the same period in 2007 and currency contract losses of USD 42 million. In the corresponding period of 2007 the currency contract gains were USD 16 million.

Excluding PPA, incidental items and the redesign provision, the gross margin sequentially decreased from 36.5% in the 2nd quarter of 2008 to 31.0% in the 3rd quarter of 2008 and was related to the lower factory loading of 68% in the 3rd quarter of 2008 compared to 78% in the 2nd quarter of 2008. Furthermore, the 3rd quarter of 2008 includes a positive translation effect of USD 22 million

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compared to the 2nd quarter of 2008 and currency contract losses of USD 42 million. The 2nd quarter included currency contract losses of USD 15 million.

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Selling expenses

Selling expenses, excluding incidentals, as a % of sales for the 3^rd quarter of 2008 were 6.7% versus 5.7% in the same period of last year. The higher selling expenses as a % of sales are caused by lower sales and the effect of unfavorable currencies amounting to USD 6 million compared to the corresponding period in 2007.

Selling expenses, excluding incidental items, decreased by 19% compared to the 2^nd quarter of 2008. The lower selling expenses were mainly caused by the disentanglement of the wireless activities and ongoing restructuring efforts in the sales organization.

General and administrative expenses

The Company periodically reviews the carrying value of all intangible assets such as goodwill and other intangibles. In conjunction with the annual impairment tests based on US GAAP and taking into account the current market environment, the divestiture of the wireless business and the implementation of the redesign program, NXP has written down intangible assets by USD 706 million.

Excluding PPA and incidental items, the G&A expenses have been reduced from USD 116 million in the 3^rd quarter of 2007 to USD 110 million in the same period of 2008, resulting from the ongoing restructuring, efforts to reduce IT costs and the disentanglement of the wireless activities. Furthermore, G&A expenses were impacted by unfavorable currency effects of USD 11 million and by the non-cash charges for the share-based compensation program of USD 14 million. For the 3^rd quarter in 2007 these charges were nil.

Excluding incidental items the G&A expenses in the 3^rd quarter of 2008 decreased from USD 137 million in the 2^nd quarter of 2008 to USD 110 million in the reporting period, a reduction of 20%. The G&A expenses were impacted by favorable currency effects of USD 2 million compared to the 2^nd quarter of 2008 and by the non-cash charges for the share-based compensation program of USD 14 million versus USD 17 million in the 2^nd quarter of 2008.

Research and development expenses

Excluding PPA and incidental items, R&D expenses amounted to USD 235 million (17.6% of sales) versus USD 316 million (19.2% of sales) in the same period of 2007. The decrease is primarily related to the ongoing redesign and the disentanglement of the wireless activities. Unfavorable currency translation effects of USD 23 million compared to the same period last year increased the R&D expenses.

Excluding PPA and incidental items the R&D expenses in the 3^rd quarter decreased to USD 235 million (17.6% of sales) from USD 339 million (22.2% of sales) in the 2^nd quarter of 2008, mainly due to the disentanglement of the wireless activities.

Other income

Other income amounted to a loss of USD 378 million mainly related from the loss on the ST-NXP Wireless transaction amounting to USD 402 million. Other income in the corresponding period in 2007 amounted to USD 119 million, primarily consisting of the gain related to the divestment of the Cordless & VoIP Terminal operations. Excluding incidental items, other income amounted to a profit of USD 28 million compared to USD 3 million in 2007.

Other income in the 2^nd quarter of 2008 amounted to a loss of USD 7 million and related to the net loss from disposals of fixed assets.

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In millions of USD unless otherwise stated

(1) Not meaningful

EBIT

EBIT in the 3^rd quarter of 2008 was a loss of USD 1,937 million compared to a loss of USD 3 million in the same period of last year. Included are PPA effects of USD 231 million (2007: USD 202 million), incidental items of a loss of USD 1,007 million (2007: profit of USD 69 million) and impairment of goodwill and other intangibles of USD 706 million. Incidental items relate to restructuring charges of USD 529 million, result on the ST-NXP Wireless transaction of USD 402 million, USD 25 million M&A costs, USD 7 million process transfer costs, USD 9 million obsolescence of an exited product line and various other incidental items of USD 35 million.

The adjusted EBIT in the 3^rd quarter of 2008 was a profit of USD 7 million (2007: profit of USD 130 million). The adjusted EBIT was impacted by lower sales, lower factory loading and unfavorable currency impact. The impact from the lower margin was only partly offset by reduced operational expenses. The 3^rd quarter of 2008 include a non-cash charge for the share-based compensation program of USD 15 million, the charge in the same period of 2007 was nil.

Adjusted EBITA

Excluding the PPA effects, adjusted EBITA was a profit of USD 15 million, compared to a profit of USD 136 million for the 3^rd quarter in 2007. Next to the adjustments mentioned below in the adjusted EBITDA, the difference of USD 121 million is mainly explained by lower EBIT.

Adjusted EBITDA

Adjusted EBITDA amounted to a profit of USD 147 million, compared to USD 310 million in the 3^rd quarter of 2007. Lower sales and gross margin, impacted by unfavorable currency effects, were partly offset by the lowered operating expenses. The 3^rd quarter of 2008 includes a non-cash charge for the share-based compensation program of USD 15 million, the charge in the same period of 2007 was nil.

In millions of USD

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Financial income and expense

Financial income and expense amounted to an expense of USD 324 million in the reporting period and included a loss of USD 209 million as a result of currency rates, predominantly related to our USD denominated notes and cash position. Net interest expense amounted to USD 125 million.

For the corresponding period in 2007 the financial income and expense amounted to an income of USD 52 million, comprising USD 121 million for net interest expense, offset by USD 163 million related to a positive effect from currency rate results.

Income tax (expense) benefit

Excluding PPA effects, the Company recognized an income tax expense of USD 344 million. For the same period of 2007 income tax expenses amounted to USD 51 million. The increased tax expense relates to a write-down of USD 254 million of deferred tax assets in the Netherlands, Germany, France and USA. Furthermore, the additional tax expenses are mainly the result of the establishment of the ST-NXP Wireless joint venture.

Result equity-accounted investees

The equity-accounted investees resulted in a loss of USD 9 million (2007: USD 6 million) and partly related to an impairment charge in our shareholding in ASMC of USD 3 million.

Minority interests

The loss of USD 7 million was related to the share of minority shareholders in the profits of consolidated companies, predominantly Systems on Silicon Manufacturing Company (SSMC). In the 3^rd quarter of 2007, the share of minority shareholders amounted to a loss of USD 15 million.

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Performance by segment

Mobile & Personal

In millions of USD unless otherwise stated

The nominal sales decline is mainly caused by the deconsolidation of the wireless activities as from August 2008, which contributed USD 120 million sales in the 3^rd quarter 2008 and 19% negative EBIT contribution. The remaining M&P activities (Sound Solutions, Mobile Infrastructure and Amplifiers) showed a comparable sales increase of 1.9% compared to the 3^rd quarter of last year. The stronger sales in Sound Solutions were partly offset by the weaker sales in the other activities. The divestment of Cordless & VoIP Terminal operations in the 3^rd quarter of 2007 has negatively impacted the nominal comparison to last year.

On a comparable basis the remaining M&P activities delivered a sequential sales increase of 10.5%, mainly driven by Sound Solutions.

Adjusted EBIT in the 3^rd quarter of 2008 was a profit of USD 21 million (2007: profit of USD 38 million). The lower profit was mainly driven by the lower sales and an unfavorable currency effect of USD 6 million.

Compared to the 2^nd quarter of 2008 the adjusted EBIT improved as consequence of the disentanglement of the wireless business.

On July 28, 2008 NXP and STMicroelectronics announced the closing of their agreement, bringing the key wireless operations of both companies into the joint-venture  ST-NXP Wireless. Subsequently, the related assets and liabilities have been deconsolidated.

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Home

In millions of USD unless otherwise stated

Sales, on a comparable year-on-year basis, decreased 20.5% mainly caused by the continued decline in the CRT TV market. Sequentially, on a comparable basis, the sales declined by 0.7%, reflecting the current weak economic environment and the limited seasonal uptake. The sales development is caused by the continued decline in the CRT market and the weakness in the mainstream (retail) STB and Can Tuner markets. Improvements were achieved particularly in the Digital TV System on Chip market where the Home business won market share after having started mass production for a major Japanese OEM.

EBIT in the 3^rd quarter of 2008 amounted to a loss of USD 704 million compared to a loss of USD 60 million in the same period last year. Included are PPA effects of USD 39 million (2007: USD 28 million) and incidental items of a profit of USD 5 million (2007: a loss of USD 6 million). The 2008 incidental items were mainly related to the merger result in connection with the formation of the NuTune joint venture. Incidental items in 2007 were related to restructuring charges in the R&D organization. An impairment loss of USD 656 million is recognized in the 3^rd quarter of 2008.

Adjusted EBIT improved from a loss of USD 26 million in the 3^rd quarter of 2007 to a loss of USD 14 million in the reporting period. Despite lower sales, the adjusted EBIT improved due to better margins and lower operational expenditures resulting from the ongoing restructuring in the Home business. The translation difference on adjusted EBIT was a loss of USD 6 million compared to the same quarter of last year.

Sequentially the adjusted EBIT improved from a loss of USD 19 million in the 2^nd quarter of 2008 to a loss of USD 14 million, attributable to the higher sales and improved product mix.

NXP successfully completed the acquisition of Conexant’s Broadband Media Processing (BMP), with industry-leading products for satellite, cable and IPTV applications, with effect of August 8, 2008. The BMP business is consolidated within BU Home.

Effective September 1, 2008, NXP completed the formation of a joint venture for can tuner module operations with Thomson, called NuTune. NXP owns 55% in this JV, Thomson owns the remaining 45%. The JV is consolidated in NXP’s BU Home as per September 1, 2008.

Both activities contributed to sales in the quarter.

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Automotive & Identification

In millions of USD unless otherwise stated

Sales decreased by 4.8% on a year-on-year comparable basis. The comparable sales decrease followed the declining automotive market in the 3^rd quarter. Identification showed year-on-year growth, particularly in the e-Government business. The overstock situation in the transport business had a negative impact on the Identification sales.

Sales on a quarterly sequential basis showed a comparable decrease of 7.2%. The normal seasonal effect intensified due to extended factory closures during holidays at major car manufacturers in Europe and the USA, due to the challenges facing the Automotive industry.

EBIT in the 3^rd quarter of 2008 amounted to a profit of USD 25 million compared to USD 35 million in the same period last year. Included are PPA effects of USD 39 million (2007: USD 39 million) and incidental items of USD 8 million (2007: USD nil). Incidental items mainly refer to process transfer cost.

Adjusted EBIT in the 3^rd quarter was a profit of USD 72 million (2007: USD 74 million). Additional expenses in R&D were mainly offset in EBIT by improved margins at year-on-year comparable basis.

MultiMarket Semiconductors

In millions of USD unless otherwise stated

Sales were flat on a year-on-year comparable basis. Most activities, except for lighting and discretes, showed higher year-on-year sales. Lighting and discretes showed declines in sales caused by lower end customer demand.

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EBIT in the 3^rd quarter of 2008 amounted to a profit of USD 38 million compared to USD 50 million in the same period last year. Included are PPA effects of USD 36 million in the reporting period (2007: USD 38 million).

Adjusted EBIT in the 3^rd quarter was a profit of USD 74 million compared to USD 88 million in the same period of 2007. EBIT was mainly influenced by higher expenses in R&D and increased selling expenses.

Compared to the 2^nd quarter of 2008, adjusted EBIT improved from USD 63 million to USD 74 million in the reporting period. The improved margins were the result of increased sales and lower R&D expenditures.

Manufacturing Operations

In millions of USD unless otherwise stated

(1)  Not meaningful.

(2)  Excluding internal sales to other Business Units

The sales increase mainly relates to the wafer sales to ST-NXP Wireless and sales to the DSP Group in connection with the sale of our Cordless & VoIP Terminal operations in the 3^rd quarter of 2007.

EBIT in the 3^rd quarter of 2008 amounted to a loss of USD 453 million compared to a loss of USD 12 million in the same period last year. Included are PPA effects of USD 86 million (2007: USD 33 million) and incidental items of USD 324 million, largely related to restructuring charges resulting from the NXP Redesign program. Incidental items in the 3^rd quarter of 2007 amounted to USD 8 million.

Adjusted EBIT was a loss of USD 43 million (2007: profit of USD 29 million). EBIT was strongly impacted by the lower utilization rate (68% in the 3^rd quarter of 2008 versus 85% in the same period of 2007), the impact of the weaker dollar on the organization costs and lower prices. This was partly offset by the realized cost savings in the manufacturing organization.

Compared to the 2^nd quarter of 2008, adjusted EBIT improved from a loss of USD 55 million to a loss of USD 43 million. The improvement in the 3^rd quarter was primarily driven by cost reductions, higher integral yield and the positive cost effect from the closure of Boeblingen. The positive dollar effect was approximately USD 4 million.

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Corporate and Other

In millions of USD unless otherwise stated