Vimicro Subsidiary (VIMC) Receives Major Video-Surveillance Contract

BEIJING, Nov. 1, 2012 /PRNewswire-FirstCall/ — Vimicro International Corporation (NASDAQ: VIMC) (“Vimicro” or the “Company”), a leading PC-camera processor and IP-based surveillance solution provider, today announced that its subsidiary Vimicro Electronics Corporation has secured a major government purchase contract (the “Contract”) from the Jinzhong City Public Security Bureau of Shanxi province to provide Surveillance Video and Audio Coding (SVAC)-based security surveillance products and services (the “Project”).

Vimicro Electronics Corporation, together with local partners, including Jinzhong Broadcast and TV Network Co., Ltd., will develop the Project.  Vimicro Electronics Corporation will supply the products and services for the Project, including key video surveillance-related hardware and software.  Vimicro Electronics Corporation’s portion of the contract value will be US $6.23 million (RMB 39.49 million), out of a total contract value of US $13.1 million (RMB 82.5 million), which will be shared by all partners.  Work on the Project is expected to be completed by the end of February 2013.

“We are pleased to receive this significant contract from a local government entity,” said David Tang, Chief Financial Officer of Vimicro.  “The award of this project shows that Vimicro’s surveillance technology is achieving recognition by the market, especially by the important public security sector we are targeting. We look forward to working with our partners to implement a surveillance system centered on our SVAC-based products and services.  The success of this implementation should enable Vimicro to secure additional surveillance contracts in the future.”

About Vimicro International Corporation

Vimicro International Corporation is a leading multimedia semiconductor and solution provider that designs, develops and markets mixed-signal semiconductor products and system-level solutions that enable multimedia capabilities in a variety of products for PC/Notebook, consumer electronics and surveillance markets. Vimicro is aggressively expanding business into the surveillance market with system-level solutions and semiconductor products to capitalize on China’s domestic demand. Vimicro’s ADSs, each of which represents four ordinary shares, are currently trading on the NASDAQ Global Market under the ticker symbol “VIMC.”

Forward-Looking Statements

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Among other things, the quotations from management in this announcement, as well as Vimicro’s expectations and forecasts, contain forward-looking statements. Vimicro may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 20-F and 6-K, etc., in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Vimicro’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the company’s ability to develop and sell new mobile multimedia products; the expected growth of the mobile multimedia market; the company’s ability to increase sales of notebook camera multimedia processors; the company’s ability to retain existing customers and acquire new customers and respond to competitive market conditions; the company’s ability to respond in a timely manner to the evolving multimedia market and changing consumer preferences and industry standards and to stay abreast of technological changes; the company’s ability to secure sufficient foundry capacity in a timely manner; the company’s ability to effectively protect its intellectual property and the risk that it may infringe on the intellectual property of others; and cyclicality of the semiconductor industry. Further information regarding these and other risks is included in Vimicro’s annual report on Form 20-F filed with the Securities and Exchange Commission. Vimicro does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release is as of the date hereof, and Vimicro undertakes no duty to update such information, except as required under applicable law.