Intel Extends Its Optical Networking Capabilities

Acquisition of Cognet and nSerial and Pending Acquisition of LightLogic Bring Intel Key Technology for Lower-Cost, More Integrated Components for Optical Networking Systems

SANTA CLARA, Calif., April 24, 2001 - Intel Corporation today announced it has agreed to acquire three companies with key capabilities and technologies for producing opto-electronic components - electrical components used in optical networking equipment.

The acquisitions will extend Intel's product portfolio to include a new breed of opto-electronic components that lower the cost and power consumption of optical networking equipment.

Intel has acquired Cognet Inc. and nSerial Corporation, two developers of high-speed electronic components for 10 Gigabit Ethernet optical modules. Cognet has developed components that process electrical signals within optical modules after those signals have been converted from light waves. nSerial is developing 10 Gigabit Ethernet components that convert those electrical signals into the protocols used by networking devices. Both companies are developing chipsets using a complementary metal oxide semiconductor (CMOS) manufacturing process that helps reduce the chipsets' cost and power consumption associated with more exotic manufacturing processes currently in use.

Intel has also agreed to acquire LightLogic Inc., a leading provider of highly integrated, high-speed optical transponders targeted at the rapidly growing metropolitan market segment. These transponders integrate high-speed optics and electronic components into a single device that converts optical signals into fully formatted digital signals helping to reduce development time for optical networking equipment manufacturers.

"The optical networking equipment industry is now segmenting in a way that requires unique solutions for different market segments," said Mike Ricci, vice president and general manager of Intel's Optical Products Group. "Our communications equipment customers are asking us to integrate high-speed electronic and photonic components into cost effective building blocks that help them reduce time-to-market.

"Despite the current slowdown in sales of networking and communications gear, we believe that the investments we're making to add key opto-electronic capabilities, together with the company's core strengths in semiconductor technology, will enable Intel to lead in this industry when the inevitable recovery occurs."

The acquisitions announced today are the latest actions taken by Intel to extend its opto-electronic capabilities. During the past year, Intel has become a leading provider of opto-electronic silicon components for communications equipment that sends data over long distances at 10 Gigabits per second (Gbps) - a speed known in the telecommunications industry as OC192. Intel's presence in this market segment is the result of its acquisition last year of Giga A/S. Intel is now developing its next generation of opto-electronic components, which will support data rates of 40 Gbps.

Intel has also begun investing in next-generation semiconductor manufacturing process technology targeted for the optical market segment. In February, Intel announced an investment in Communicant Semiconductor Technologies AG, based in Frankfurt, Germany. Communicant is building a manufacturing facility that will build semiconductor components based on a new Silicon-Germanium-Carbon process technology.

"To keep pace with the increasing bandwidth demands of our customers moving forward, it is essential that we have the ability to conduct parallel development efforts using multiple technologies and manufacturing processes," said Ricci. "Our customers will be able to count on Intel for first-generation building blocks for equipment that operates at the cutting edge of the speed curve and for lower cost, lower power consumption components for their more mainstream product lines."

About Cognet
Cognet, headquartered in Los Angeles, develops electronic components for use in the 10 Gigabit Ethernet modules. Its products can be found at any point in the network where fiberoptic signals are terminated and converted into the electrical domain such as switches, servers and edge routers used for very high-performance communication applications.

About nSerial
nSerial, headquartered in Santa Clara, Calif., develops high-speed physical layer components such as serializer/deserializer (SerDes) transceivers for the 10 Gigabit Ethernet market segment. These components are used in optical modules as well as a variety of copper media applications including chip-to-chip interconnects and equipment backplanes.

About LightLogic
LightLogic, headquartered in Newark, Calif., designs, manufactures and sells advanced integrated opto-electronic components to original equipment manufactures (OEMs) building next-generation optical communications systems. These opto-electronic components combine lasers, micro-optics and high-speed electronics into integrated devices called transponders.

The acquisition is subject to regulatory review and customary closing conditions. Intel expects the transaction to close in the second quarter of this year.

* Other names and brands may be claimed as the property of others.

Today's press release contains forward-looking statements based on current expectations or beliefs, as well as a number of assumptions about future events. These statements are not historical facts and are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The reader is cautioned not to put undue reliance on these forward-looking statements, which are not a guarantee of future performance and are subject to a number of uncertainties and other factors, many of which are outside the control of Intel, nSerial, Cognet and LightLogic. The forward-looking statements in this release address a variety of subjects including, for example, the expected date of closing of the LightLogic acquisition and the potential benefits of the acquisitions. The following factors, among others, could cause actual results to differ materially from those described in these forward-looking statements: the risk that nSerial, Cognet and LightLogic's businesses will not be successfully integrated with Intel's business; costs associated with the acquisitions; the successful completion of the LightLogic acquisition; matters arising in connection with the parties' efforts to comply with applicable regulatory requirements relating to the transaction; increased competition and technological changes in the industries in which Intel, nSerial, Cognet and LightLogic compete; impact of events outside the United States such as the business impact of fluctuating currency rates or unrest or political instability in a locale; finally, current negative trends in global economic conditions make it particularly difficult at present to predict product demand and other related matters. For a detailed discussion of these and other cautionary statements, please refer to Intel's filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended Dec. 30, 2000, for Intel.