Intel Agrees To Acquire Basis Communications For $450 Million

Agreement to Expand Intel's Network Processor Product Line

SANTA CLARA, Calif., March 21, 2000 - Intel Corporation today announced it has entered into a definitive agreement to acquire privately held Basis Communications Corporation in a transaction valued at approximately $450 million in cash and assumed options. The acquisition supplements Intel's lineup of leadership communications component and software products and immediately expands Intel's network processor line.

Basis designs and markets advanced semiconductors and other products used in equipment that directs traffic across the Internet and corporate networks. The company's Service-Specific Network Processors™ and related software are targeted for a range of "network access" systems (such as switches linking local area networks to the Internet) and customer premise equipment (CPE) used in homes and small to medium-size offices.

Growth rates for communications equipment used in homes and small to medium-size businesses are expected to increase significantly with the widespread deployment of digital subscriber line (DSL) technologies and data-over-cable services. Intel plans to incorporate Basis' network processor technology into the Intel® Internet Exchange™ (IX) architecture in order to pursue these opportunities.

"The acquisition of Basis allows us to supplement the IX architecture with a network processor specifically designed for customer premise equipment, such as residential gateways and routers built to take advantage of DSL deployment," said Tom Franz, Intel vice president and general manager, Network Processing Group. "Intelligent systems based on this technology will help enable businesses and homes to take full advantage of new services made possible by high bandwith connections to the Internet."

In September, Intel unveiled the Intel IX architecture, a blueprint for building networking and communications equipment using programmable silicon technology. The flagship of the IX architecture is Intel's IXP 1200 network processor, an advanced "packet" processing device that allows new features and functions to be quickly added to communications gear. Intel's network processor is designed to allow equipment vendors the ability to upgrade their offerings rapidly - avoiding the up to 18-month design cycles current custom chip solutions require.

"Combining Basis and its expertise in communications with Intel and its leadership IX architecture will help create the next generation of Internet equipment," said Mike Shealy, Basis Communications chief executive officer. "We look forward to working with Intel to shape the future of networking and communications."

In addition to network processors, Basis offers a portfolio of wide area network (WAN) and serial communication semiconductor products, as well as PC card and "interface" controller devices targeted at the communications equipment market segments. Basis has built on this portfolio of innovative "narrowband" communications devices in order to create leadership products for WAN applications using its network processor platform.

Basis, with headquarters in Fremont, Calif., also operates engineering and business centers in Westford, Mass., Clearwater, Fla. and Shannon, Ireland.

The acquisition is subject to regulatory approval and customary closing conditions. When complete, Basis will become a wholly owned subsidiary of Intel operating within Intel's Network Communications Group.

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