Agere Systems Acquires TeraBlaze

ALLENTOWN, Pa. and CUPERTINO, Calif., Jan. 5 -- Agere Systems announced Friday it has acquired TeraBlaze Inc., a Cupertino, Calif.-based private developer of Gigabit Ethernet switching solutions.

Agere acquired TeraBlaze in a stock transaction for approximately 6.92 million shares of Agere Class A common stock, valued at about $21 million based on a Dec. 31 closing price of $3.05.

All 16 TeraBlaze employees will join Agere, including TeraBlaze founder and CEO Shankar Mukherjee. In August 2003, Agere acquired Massana, a privately held provider of Gigabit Ethernet physical layer device (PHY) technology.

Agere said TeraBlaze's switch-on-a-chip technology will enable it to provide single-chip Gigabit Ethernet solutions to equipment providers addressing small office, home office (SOHO) and enterprise applications.

"The acquisition of TeraBlaze advances our strategy to take share in the fast-growing Gigabit Ethernet market," said Sohail A. Khan, executive vice president of Agere's Infrastructure Systems Group. "TeraBlaze together with TruePHY technology is a very powerful combination, which gives us early-mover advantage in bringing integrated Gigabit Ethernet switch and PHY solutions to this market."

"The surge in Gigabit Ethernet-over-copper PHY shipments in the client device market will drive a rapid deployment of Gigabit Ethernet switches in 2004 and 2005," said Ed Roberts, vice president and general manager of Agere's Ethernet Division. "We now have the core technology to deliver a broad family of PHY and switch solutions that scale from SOHO all the way to 48-port enterprise applications. Our architecture and integration capabilities will enable system manufacturers to offer the most competitive price-per-port Gigabit Ethernet products in the market."

Agere said it expects to deliver switch solutions bundled with multiport TruePHY products in the second half of 2004.

For more information, visit: www.agere.com