Intel to Acquire GIGA A/S; Acquisition Targets High-Speed Optical Communications Market Segment - Company Business and Marketing

Cambridge Telcom Report, March 20, 2000

Intel Corporation Wednesday announced it has entered into a definitive agreement to acquire GIGA A/S, an NKT company, headquartered in Copenhagen, Denmark, in an all-cash transaction valued at approximately $1.25 billion.

Intel's acquisition of GIGA targets the market segment for high-performance networking chips enabling the rapid build-out of the fiber-optic infrastructure necessary to support the explosive growth of the Internet.

GIGA, founded in 1988, specializes in the design of advanced high-speed communications chips used in the optical networking and communications products that direct traffic across the Internet and corporate networks. GIGA is a leading supplier of OC-48 (2.5 gigabits-per-second) and OC-192 (10 gigabits-per-second) products to telecommunications and data communications customers, with applications based on IP, ATM, DWDM and SONET/SDH transmission standards. The company's optical networking products are targeted for a range of applications that speed transmission over the Internet backbone.

"New, higher-bandwidth access technologies such as xDSL and cable are being deployed at a rapid rate, creating the need for much greater capacity at the core of the network," said Mark Christensen, vice president and general manager, Intel Network Communications Group. "This new optical communications chip design capability, combined with our existing Level One Communications, Inc., design team, gives Intel key new products and expertise to address the rapidly growing demand for high-bandwidth communications infrastructure."

"GIGA has become one of the leading suppliers of communications ICs, and the only supplier shipping OC-192 silicon solutions in volume to customers," said Finn Helmer, GIGA managing director. "Our track record in high-frequency and mixed-signal design, coupled with Intel's strength in networking and communications, will provide Intel's customers with a complete and integrated silicon system solution."

Intel has had an engineering presence in Denmark since 1997 through its acquisition of Case Technology A/S and its hiring of employees of Olicom A/S in 1999. The expansion of Intel's networking and communications presence in Denmark is attributable primarily to the availability of engineering expertise in the country.

The acquisition is subject to any necessary regulatory approval and customary closing conditions. Upon close of the transaction, GIGA will become a subsidiary of Intel and will report within Level One Communications, Inc., a wholly owned subsidiary of Intel. Level One Communications, Inc., is part of Intel's Network Communications Group.

GIGA develops, manufactures and markets high-performance, high-bandwidth solutions for the world's communication infrastructure. The Company utilizes a combination of high-frequency and mixed-signal design expertise to offer IC products for telecommunications that address the SDH/SONET transmission standards and for data communications that address the Gigabit Ethernet transmission standards. Sales and application engineering offices are located throughout the world. Additional information is available at www.giga.dk.

FMI: www.intel.com.