Zarlink Releases Fiscal 2009 Year End and Fourth Quarter Results

- Revenue between US$52 million and US$54 million;

- Gross margins between 49% to 51%, excluding supply chain harmonization costs of approximately US$1 million;

- Operating expenses between US$20 million to US$21 million excluding amortization of intangibles;

- Excluding any potential impact of foreign exchange gains/losses related to the Company's Canadian dollar denominated debenture, Zarlink expects Q1 results of break-even to US$0.01 per share.

New Chairperson of the Board

Zarlink announced that Dr. Adam Chowaniec has been appointed as Chairperson of the Board of Directors, following the retirement of Dr. Henry Simon. Dr. Simon joined Zarlink as a director in 1992, and served as chairperson since July 1994.

"We would like to thank Dr. Simon for his many years of service to Zarlink," said Dr. Chowaniec. "His knowledge, insight, expertise and leadership made him a valued asset to Zarlink, and we sincerely appreciate his contributions."

Zarlink announces recommencement of normal course issuer bid

Zarlink Semiconductor today announced that the Toronto Stock Exchange (TSX) had approved the recommencement of its common share buyback program authorizing the Company to repurchase up to 11,971,633 common shares, representing approximately 10 percent of its public float of 119,716,338 common shares as of May 25, 2009. As at May 25, 2009, Zarlink had 122,425,682 issued and outstanding common shares.

Zarlink plans to repurchase up to 10 percent of its public float of common shares using available cash during a 12-month period from May 29, 2009 to May 28, 2010. The timing and exact number of common shares purchased under the bid will be at Zarlink's discretion, will depend on market conditions, and may be suspended or discontinued at any time. All shares purchased by Zarlink under the bid will be cancelled.

Purchases under the bid will be made at the prevailing market price through the facilities of TSX. The average daily trading volume of Zarlink over the last six complete calendar months was 268,913 common shares (the "ADTV"). Under TSX rules, Zarlink may purchase up to 25% of the ADTV (or 67,228 common shares) per trading day. To the knowledge of Zarlink, after reasonable inquiry, no director, senior officer or any of their associates, or any person acting jointly or in concert with Zarlink, currently intends to sell common shares under the issuer bid.

Zarlink purchased, through the facilities of TSX, 4,920,000 common shares of a maximum amount of 12,272,384 common shares under a previous normal course issuer bid which expired May 25, 2009 at an average price of Cdn$0.59 per share. All common shares purchased by Zarlink under the bid were cancelled.

"We believe that the stock repurchase program emphasizes our belief in the long-term value of Zarlink and our commitment to unlock shareholder value," said Dr. Adam Chowaniec, Chairman of the Board, Zarlink Semiconductor.

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.

Certain statements in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and assumptions include, among others, the following: our dependence on the successful development and market introduction of new products; our ability to integrate any business, technologies, product lines or services that we have or will acquire; our dependence on revenue generation from our legacy products in order to fund development of our new products; current market conditions, including the lack of liquidity in the markets and economic slowdown, may increase our operating costs or reduce our revenue, thereby negatively impacting our operating results; our ability to operate profitably and generate positive cash flows in the future; the impact of the current economic crisis on our suppliers and customers and our ability to transfer parts to other suppliers; our dependence on our foundry suppliers and third-party subcontractors; order cancellations and deferrals by our customers; our substantial indebtedness could adversely affect our financial position; the cost and accounting implications of compliance with new accounting standards; and other factors referenced in our Annual Report on Form 20-F. Investors are encouraged to consider the risks detailed in this filing.

Zarlink and the Zarlink Semiconductor logo are trademarks of Zarlink Semiconductor Inc.

An open conference call for analysts will be held today beginning at 5:00 p.m. EDT. Access the call by dialing 1-800-731-6941. Investors, media and other parties are listen-only. For a replay, call 1-877-289-8525, passcode 21306080# or 416-640-1917, passcode 21306080#. The replay is available until midnight June 9th, 2009. A live audio webcast will be available through http://www.marketwire.com/ (Marketwire) or from the Company's website at www.zarlink.com/


                     Zarlink Semiconductor Inc.
             CONSOLIDATED STATEMENTS OF INCOME (LOSS) DATA
     (in millions of U.S dollars, except per share amounts, U.S. GAAP)
                           (Unaudited)

                                   Three months ended           Year Ended
--------------------------------------------------------------------------
                          Mar. 27,  Dec. 26,  Mar. 28,   Mar. 27,  Mar. 28,
                             2009      2008      2008       2009      2008
--------------------------------------------------------------------------
Revenue                     $51.1     $53.8     $54.8     $227.2    $183.6
Cost of revenue              26.8      27.3      30.3      118.2     100.5
--------------------------------------------------------------------------
Gross margin                 24.3      26.5      24.5      109.0      83.1
--------------------------------------------------------------------------

Expenses:
  Research and development
  ("R&D")                    12.4      10.4      13.8       46.0      47.7
  Selling and
   administrative            13.7      11.0      15.5       50.7      55.8
  Contract impairment
   and other                  0.1       0.1       1.5        0.2       4.1
  Amortization of
   intangible assets          1.9       1.8       1.8        7.4       5.0
  Goodwill impairment        46.9         -         -       46.9         -
  Acquired in-process R&D         -                  -                  -                    -            20.3
    Loss  (gain)  on  sale
      of  business                              (1.0)                -            18.2              (1.0)          17.5
    Impairment  of  current
      asset                                                -              3.0                  -                3.0                  -
    Loss  (gain)  on  sale
      of  assets                                        -                  -              0.1              (0.9)          (2.3)
    Impairment  of  asset
      held  for  sale                                -              1.2                  -                1.2                  -
--------------------------------------------------------------------------
                                                          74.0            27.5            50.9            153.5          148.1

--------------------------------------------------------------------------
Operating  income  (loss)          (49.7)          (1.0)        (26.4)          (44.5)        (65.0)

Gain  on  repurchase  of
  long-term  debt                                  -              3.6                  -                3.6                  -
Amortization  of  debt
  issue  costs                                  (0.2)          (0.1)          (0.2)            (0.7)          (0.5)
Gain  on  sale  of  Mitel
  investment                                          -                  -                  -                    -            12.9
Gain  on  insurance
  settlement                                          -                  -              5.5                    -              5.5
Interest  income                              0.1              0.4              0.5                1.2              3.5
Interest  expense                          (0.8)          (1.0)          (1.2)            (4.1)          (3.1)
Foreign  exchange  gain
  (loss)                                              2.1            10.3              2.9              14.0            (1.5)
--------------------------------------------------------------------------
Income  (loss)  before
  income  taxes                              (48.5)          12.2          (18.9)          (30.5)        (48.2)
Income  tax  (expense)
  recovery                                        (1.5)          (0.1)          (0.2)              0.9            (0.2)
--------------------------------------------------------------------------
Net  income  (loss)                    $(50.0)        $12.1        $(19.1)        $(29.6)      $(48.4)
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Net  income  (loss)
  attributable  to
  common  shareholders              $(50.3)        $11.7        $(20.0)        $(31.7)      $(52.0)
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Net  Income  (loss)  per
  common  share:
    Basic                                        $(0.41)        $0.09        $(0.16)        $(0.25)      $(0.41)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
    Diluted                                    $(0.41)        $0.08        $(0.16)        $(0.25)      $(0.41)
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Weighted  average  number
  of  common  shares
  outstanding  (millions):
    Basic                                          122.4          123.9          127.3            124.8          127.3
--------------------------------------------------------------------------
--------------------------------------------------------------------------
    Diluted                                      122.4          154.3          127.3            124.8          127.3
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Percentage  of  revenue:
    Gross  margin                                  48%              49%              45%                48%              45%    Research  and  development          24%              19%              25%                20%              26%
    Selling  and  administrative      27%              20%              28%                22%              30%



                                                Zarlink  Semiconductor  Inc.
                                CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS  DATA
                                  (in  millions  of  U.S.  dollars,  U.S.  GAAP)
                                                              (Unaudited)

                                                                  Three  months  ended                          Year  Ended
--------------------------------------------------------------------------
                                            Mar.  27,      Dec.  26,      Mar.  28,      Mar.  27,        Mar.  28,
                                                  2009              2008              2008              2009                2008
--------------------------------------------------------------------------
CASH  PROVIDED  BY
  (USED  IN)
----------------
Operating  activities:
  Net  Income  (loss)          $(50.0)          $12.1          $(19.1)        $(29.6)          $(48.4)
  Depreciation  of
    fixed  assets                        1.1                1.2                1.5                4.7                  5.7
  Amortization  of
    other  assets                        2.1                1.9                2.4                8.1                  5.6
  Goodwill  impairment          46.9                    -                    -              46.9                      -
  Stock  compensation
    expense                                  0.5                0.6                0.6                2.1                  2.0
  Deferred  income  taxes        0.6                1.3                0.1                2.8                  3.4
  Other  non-cash
    changes  in
    operating  activities      (2.1)            (9.1)            15.0            (12.8)              24.7
  Gain  on  insurance
    settlement                                -                    -              (5.5)                  -                (5.5)
  Proceeds  from  insurance        -                    -              14.1                    -                14.1
  Flood  related
    expenditures                            -                    -            (10.9)                  -              (10.9)
  Contract  impairment
    and  other                                  -                    -                    -                    -                  4.2
  Decrease  (increase)
    in  working  capital            1.2              (2.0)              6.3              (6.8)              (7.0)
--------------------------------------------------------------------------
Total                                          0.3                6.0                4.5              15.4              (12.1)
--------------------------------------------------------------------------

Investing  activities:
  Acquisition  of  business        -                    -                    -                    -            (136.0)
  Matured  short-term
    investments                          0.2                    -                    -                0.2                  3.3
  Expenditures  for
    fixed  assets                      (0.5)            (0.8)            (1.7)            (3.6)              (7.6)
  Proceeds  from
    insurance  for
    fixed  assets                            -                    -                1.1                    -                  4.5
  Proceeds  from  sale
    of  fixed  assets                      -                    -                    -                1.0                  2.7
  Proceeds  from  sale
    of  investment                          -                    -                    -                    -                12.9
  Proceeds  from  the
    sale  of  business                1.0                    -                0.6                1.0                  0.6
  Payment  for  sale
    of  foundry                                -                    -              (3.6)                  -                (3.6)
--------------------------------------------------------------------------
Total                                          0.7              (0.8)            (3.6)            (1.4)          (123.2)
--------------------------------------------------------------------------

Financing  activities:
  Issuance  of
    long-term  debt                        -                    -                    -                    -                74.5
  Repurchase  of
    long-term  debt                        -              (2.6)                  -              (2.6)                    -
  Debt  issue  costs                      -                    -                    -                    -                (3.7)
  Decrease  (increase)
    in  restricted  cash          (0.5)                  -              (0.5)            (0.5)              (0.3)
  Payment  of  dividends
    on  preferred  shares        (0.4)            (0.4)            (0.7)            (1.9)              (2.4)
  Repurchase  of
    preferred  shares              (0.2)            (0.3)            (0.5)            (1.4)              (2.6)
  Repurchase  of
    common  shares                          -              (0.9)                  -              (2.7)                    -
--------------------------------------------------------------------------
Total                                        (1.1)            (4.2)            (1.7)            (9.1)              65.5
--------------------------------------------------------------------------

Effect  of  currency
  translation  on  cash          (0.2)            (1.6)            (0.5)            (2.3)                0.9
--------------------------------------------------------------------------

Increase  (decrease)  in
  cash  and  cash
  equivalents                          (0.3)            (0.6)            (1.3)              2.6              (68.9)

Cash  and  cash
equivalents,  beginning
  of  period                              45.3              45.9              43.7              42.4              111.3
--------------------------------------------------------------------------
Cash  and  cash
equivalents,
  end  of  period                    $45.0            $45.3            $42.4            $45.0              $42.4
--------------------------------------------------------------------------
--------------------------------------------------------------------------



                                                Zarlink  Semiconductor  Inc.
                                            CONSOLIDATED  BALANCE  SHEET  DATA
                                  (in  millions  of  U.S.  dollars,  U.S.  GAAP)
                                                              (Unaudited)

                                                                              Mar.  27,            Dec.  26,            Mar.  28,
                                                                                    2009                    2008                    2008
--------------------------------------------------------------------------
ASSETS

Current  assets:
  Cash  and  cash  equivalents                              $45.0                  $45.3                  $42.4
  Short-term  investments                                            -                      0.2                      0.2
  Restricted  cash  and  cash  equivalents          13.1                    12.8                    17.3
  Trade  accounts  receivable  -  net                    24.6                    24.9                    23.4
  Other  accounts  receivable  -  net                      4.3                      4.6                    10.0
  Inventories                                                            27.8                    28.1                    28.8
  Prepaid  expenses  and  other                                2.7                      2.3                      8.2
  Deferred  tax  assets  -  current  portion              -                      1.0                      1.3
  Current  assets  held  for  sale                            1.9                      1.9                      3.1
--------------------------------------------------------------------------
                                                                                  119.4                  121.1                  134.7
Fixed  assets  -  net                                                12.5                    13.2                    14.7
Deferred  income  tax  assets  -  net                      5.8                      5.4                      7.5
Goodwill                                                                          -                    46.9                    46.9
Intangible  assets  -  net                                      49.1                    51.0                    56.5
Other  assets                                                              2.7                      2.7                      3.6
--------------------------------------------------------------------------
                                                                                $189.5                $240.3                $263.9
--------------------------------------------------------------------------
--------------------------------------------------------------------------

LIABILITIES  AND  SHAREHOLDERS'  EQUITY

Current  liabilities:
  Trade  accounts  payable                                    $12.0                  $13.5                  $13.3
  Employee-related  payables                                  9.5                      8.8                    12.7
  Income  and  other  taxes  payable                        0.5                      0.2                      0.4
  Current  portion  of  provisions
    for  exit  activities                                            3.6                      0.9                      3.5
  Other  accrued  liabilities                                  6.5                      7.6                      9.6
  Deferred  credits                                                    0.9                      1.4                      0.6
  Deferred  income  tax  liabilities  -
  current  portion                                                          -                          -                      0.1
--------------------------------------------------------------------------
                                                                                    33.0                    32.4                    40.2
Long-term  debt  -  convertible  debentures      57.2                    58.5                    77.4
Long-term  portion  of  provisions
  for  exit  activities                                              0.2                      0.2                      0.4
Pension  liabilities                                              14.7                    14.7                    19.9
Deferred  income  tax  liabilities  -
  long-term  portion                                                      -                          -                      0.2
Long-term  accrued  income  taxes                          2.4                      2.4                    10.9
Other  long-term  liabilities                                0.8                      0.9                      0.8
--------------------------------------------------------------------------
                                                                                  108.3                  109.1                  149.8
--------------------------------------------------------------------------

Redeemable  preferred  shares,
  unlimited  shares  authorized;
  1,059,200  shares  issued  and
  outstanding  as  at  Mar.  27,  2009                    13.6                    13.8                    14.7
--------------------------------------------------------------------------

Shareholders'  equity:
Common  shares,  unlimited  shares
  authorized;  no  par  value;
  122,425,682  shares  issued  and
  outstanding  as  at  Mar.  27,  2009                  738.8                  738.8                  768.5
Additional  paid-in  capital                                34.0                    33.4                      5.1
Deficit                                                                  (669.9)              (619.5)              (638.4)
Accumulated  other  comprehensive  loss          (35.3)                (35.3)                (35.8)
--------------------------------------------------------------------------
                                                                                    67.6                  117.4                    99.4
--------------------------------------------------------------------------
                                                                                $189.5                $240.3                $263.9
--------------------------------------------------------------------------
--------------------------------------------------------------------------



                                                Zarlink  Semiconductor  Inc.
                                                  SUPPLEMENTARY  SCHEDULES
                                  (in  millions  of  U.S.  dollars,  U.S.  GAAP)
                                                              (Unaudited)

Geographic  Information:
-----------------------

Revenue,  based  on  the  geographic  location  of  Zarlink's  customers,  was
distributed  as  follows:

                    Three  Months                      Three  Months                    Three  Months
                                  Ended      %  of                      Ended      %  of                    Ended      %  of
                  Mar.  27,  2009    Total      Dec.  26,  2008    Total    Mar.  28,  2008    Total
--------------------------------------------------------------------------

Asia  -  Pacific      $24.3          47%                    $27.0          50%                  $26.7          49%Europe                        12.7          25                        14.5          27                      15.1          27
Americas                    14.1          28                        12.3          23                      13.0          24
--------------------------------------------------------------------------
                                  $51.1        100%                    $53.8        100%                  $54.8        100%
--------------------------------------------------------------------------
--------------------------------------------------------------------------


                                                                      Year  Ended      %  of          Year  Ended      %  of
                                                                            Mar.  27,  Total                Mar.  28,  Total
                                                                                  2009                                    2008
--------------------------------------------------------------------------
Asia  -  Pacific                                                  $113.6          50%                  $84.9          46%
Europe                                                                      59.3          26                      53.4          29
Americas                                                                  54.3          24                      45.3          25
--------------------------------------------------------------------------
                                                                              $227.2        100%                $183.6        100%
--------------------------------------------------------------------------
--------------------------------------------------------------------------



Product  Group  Information:
--------------------------

Revenue,  based  on  product  group,  was  distributed  as  follows:

                    Three  Months                      Three  Months                    Three  Months
                                  Ended      %  of                      Ended      %  of                    Ended      %  of
                  Mar.  27,  2009    Total      Dec.  26,  2008    Total    Mar.  28,  2008    Total
--------------------------------------------------------------------------
Communication        $27.5          54%                    $33.7          63%                  $35.8          65%
Products
Medical  Products      9.5          19                          8.2          15                        7.5          14
Optical  Products      4.2            8                          5.5          10                        4.9            9
Custom  &  Other          9.9          19                          6.4          12                        6.6          12
--------------------------------------------------------------------------
                                  $51.1        100%                    $53.8        100%                  $54.8        100%
--------------------------------------------------------------------------
--------------------------------------------------------------------------


                                                                      Year  Ended      %  of          Year  Ended      %  of
                                                                            Mar.  27,  Total                Mar.  28,  Total
                                                                                  2009                                    2008
--------------------------------------------------------------------------
Communication                                                    $140.0          62%                $115.4          63%
Products
Medical  Products                                                  34.7          15                      28.0          15
Optical  Products                                                  22.7          10                      16.0            9
Custom  &  Other                                                      29.8          13                      24.2          13
--------------------------------------------------------------------------
                                                                              $227.2        100%                $183.6        100%
--------------------------------------------------------------------------
--------------------------------------------------------------------------

 




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