Intel Press Release

Intel Acquires Tunable Laser Technology For Optical Communications From New Focus Inc. For $50 Million

Technology Helps Intel Accelerate Development of Lower Cost Optical Communications Components

SANTA CLARA, Calif., May 23, 2002 - Intel Corporation has purchased the network tunable laser business and technology from New Focus Inc. in a cash transaction valued at approximately $50 million. As part of the agreement, approximately 40 employees from New Focus have joined Intel. Intel will also license technology and supply certain products to New Focus. New Focus will use these capabilities to continue supplying products to the test and measurement market segments.

When combined with Intel's existing optical packaging expertise, the acquisition of network tunable laser technology will enable Intel to offer small form factor, low-cost tunable optical transceivers to accelerate the deployment of dense wavelength division multiplexing (DWDM) equipment. DWDM equipment is used in optical communications networks to dramatically increase the available bandwidth of the existing fiber infrastructure.

In the future, this tunable laser technology will help redefine the economics of providing optical bandwidth by enabling service providers to rapidly shift the available capacity of their optical networks to quickly add bandwidth in response to customer needs - a process known in the communications industry as "dynamic provisioning."

In the current market environment, network service providers are struggling to meet the growing demand for bandwidth from customers while operating within very tight capital expense budgets. DWDM equipment provides a solution to this problem by separating light waves that travel over existing optical fibers into as many as 80 individual wavelengths, each capable of carrying 10 Gigabits of data per second, effectively expanding the available bandwidth of the current fiber infrastructure by up to 80 times.

One of the drawbacks of DWDM solutions is that each wavelength has typically required a separate "fixed wavelength" laser designed to drive a specific wavelength, or color, of light over the fiber. This means that a 40-channel DWDM solution would require equipment manufacturers to stock 40 different transceivers, each with a different laser. Tunable transceivers can be adjusted through software to send different wavelengths of light over a fiber. Therefore, original equipment manufacturers can lower their costs by only qualifying and stocking a single tunable transceiver rather than different fixed wavelength parts.

"This acquisition augments the significant optical networking business that Intel has built over the past several years and Intel's world class silicon design and manufacturing capabilities," said Gordon Hunter, vice president, Intel Communications Group, and general manager, Optical Products Group. "In particular, the addition of New Focus' tunable laser technology to the industry leading optical packaging technology we gained through the acquisition of LightLogic last year positions Intel as a leader in DWDM building blocks for the optical networking market segment."

"This transaction will also benefit New Focus by providing us with advanced tunable laser transponders from Intel that we will combine with our products to create more advanced test and measurement solutions for our customers," said Tim Day, chief technology officer and co-founder of New Focus.

The employees that have joined Intel are part of the Intel Communications Group and will be located in Intel facilities in Newark, Calif.

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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 that are not historical facts, 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. The forward-looking statements in this release address a variety of subjects including, for example the potential benefits of the acquisition. The following factors, among others, could cause actual results to differ materially from those described in these forward-looking statements: the risk that the acquired business will not be successfully integrated with Intel's business; costs associated with the 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 competes; business and economic conditions and trends in the computing and communications industries in various geographic regions; factors associated with doing business outside the United States, including currency controls and fluctuations, and tariff, import and other related restrictions and regulations; possible disruption in commercial activities related to terrorist activity or armed conflict in the United States, Israel and other locations, such as changes in logistics and security arrangements, and reduced end-user purchases relative to expectations; civil or military unrest or political instability in a locale; changes in customer order patterns; changes in the mix of microprocessor types and speeds sold as well as the mix of related chipsets, motherboards, purchased components and other semiconductor products; competitive factors, such as competing chip architectures and manufacturing technologies, competing software-compatible microprocessors, and acceptance of new products in specific market segments; pricing pressures; development and timing of introduction of compelling software applications; excess or obsolete inventory and variations in inventory valuation; continued success in technological advances, including development and implementation of new processes and strategic products for specific market segments; execution of the manufacturing ramp including the transition to 0.13-micron process technology; excess manufacturing capacity; the ability to sustain and grow new networking, communications, wireless and other Internet-related businesses and successfully integrate and operate any acquired businesses; unanticipated costs or other adverse effects associated with processors and other products containing errata (deviations from published specifications); litigation involving intellectual property, stockholder and other issues; and other risk factors listed from time to time in the company's SEC reports, including but not limited to the report on Form 10-K for the year ended Dec. 29, 2001 (Part II, Item 7, Outlook section).

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