Dec. 11, 2001 – Hillsboro, OR, and Allentown, PA – Lattice Semiconductor Corp. and Agere Systems have signed a definitive agreement under which Lattice will acquire the FPGA business of Agere Systems for $250 million in cash. The acquisition will be financed through cash on hand.

Agere and Lattice anticipate closing the transaction in the 1Q02 subject to regulatory approval and other customary closing conditions. The transaction is expected to be accretive to Lattice’s calendar year 2002 pro forma earnings before goodwill.

The transaction includes Agere’s general-purpose ORCA FPGA product portfolio, its field programmable system chip (FPSC) product portfolio and all related software design tools.

FPSCs are advanced system-oriented products, which combine generic FPGA logic with embedded cores dedicated to the implementation of advanced communication protocols and high-speed input/output functions, according to Agere. As part of the transaction, approximately 100 Agere product development, marketing, and technical sales employees will join Lattice.

Lattice will also acquire certain IP cores and patents that are unique to Agere’s FPGA business. Additionally, the parties will enter into a cross-license agreement whereby Lattice will receive rights to Agere patents and certain IP for use in current and future FPGA and FPSC products and Agere will continue to have access to the ORCA FPGA technology for incorporation into its SoC ICs.

“This sale is one of a series of actions Agere is taking to better position our business for long-term profitable growth,” said Sohail Khan, executive VP of Agere’s infrastructure systems group. “While FPGAs have been a strong business for us, we are redirecting our resources to areas where we can focus our skills on system-level integration for advanced communications applications.”