Cortina Systems Purchases Intel's Optical-Networking Components Business

Cortina has emerged as a leading supplier of advancedcommunications semiconductor solutions for the carrier infrastructuremarket segment. The acquisition will give Cortina a large portfolio ofenterprise and infrastructure communications products and willposition it to become a leading communications semiconductor company.The sale will enable Intel to focus its investments on its corecommunications and embedded businesses, including Intel(R)Architecture and network processors, modular communications platformsand optical modules. The transaction closed Friday after completingregulatory review.

Cortina has purchased a broad selection of Intel's Ethernet MediaAccess Controllers (MACs) and Physical Layer Devices (PHYs) portfolio,and its entire portfolio Transport and Service Framers, Opticaltransport Forward Error Correction (FEC) framers, and T1/E1 lineinterface products.

The purchase expands Cortina's product portfolio to provide a morecomplete offering to current Cortina and Intel customers. Cortinaplans to continue to work closely with Intel as an active member ofthe Intel(R) Communications Alliance.

Cortina also announced that, concurrent with the acquisition, ithas closed a funding round led by a new investor, InstitutionalVenture Partners (IVP), along with other new investors Alloy Ventures,Bridgescale Partners, DCM - Doll Capital Management and SofinnovaVentures. Existing Cortina investors Canaan Partners and MorgenthalerVentures also led the round, and all other existing venture investorsparticipated. As part of the transaction, and in addition to anundisclosed amount of cash, Intel received a minority equity positionin Cortina. Additional financial terms are not being disclosed.

"This acquisition positions Cortina to become the leadingpure-play communications semiconductor company," said Cortina CEO AmirNayyerhabibi. "It greatly broadens our offering to give Cortina acomprehensive portfolio of products for network infrastructureapplications while maintaining our reputation for leading-edgetechnology and outstanding customer service. The substantial customeroverlap was a key driver for this acquisition, and customers supportour decision to bring these products together under the Cortinabrand."

"We're honing Intel's focus in the communications and embeddedmarket segments to align with our core businesses," said BillChatwell, general manager of Intel's Optical-Networking ComponentsDivision. "The optical-networking components segment remains a strongmarket opportunity, and we believe this business and its assets are anoptimal fit for Cortina as it grows the business while maintainingcustomer commitments."

Intel's optical-networking components business includes employeesinvolved in a variety of functions, including engineering, operationsand marketing. Cortina has extended offers of employment to asignificant number of these employees. The two companies will beworking together during the coming months to complete a smoothtransition of the business in order to continue to offer high-qualityservice and support to customers.

About Intel

Intel, the world leader in silicon innovation, developstechnologies, products and initiatives to continually advance howpeople work and live. Additional information about Intel is availableat www.intel.com/pressroom.

About Cortina Systems

Cortina Systems is driving the evolution of multi-service carrierand enterprise networks with advanced analog and digitalcommunications ICs. Founded in 2001, Cortina is funded by leadingprivate venture capital organizations and is based in Sunnyvale,California. Additional information about Cortina is available atwww.cortina-systems.com.

Cortina Systems and the Cortina Systems logo are trademarks ofCortina Systems Inc.

Intel is a registered trademark of Intel Corporation or itssubsidiaries in the United States and other countries.

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