Agere Systems Delivers World's First Production Qualified Communications Chip Using TSMC Low-K Dielectric, 130 Nanometer Technology

Lucent Technologies Using New DSP Chip That Runs 20 Percent Faster, Consumes 20 Percent Less Power Than Competing Chips

ALLENTOWN, Pa.-- Agere Systems (NYSE: AGR.A) today announced it is the world's first company to deliver a production-qualified, communications chip using groundbreaking, low-k dielectric 130 nanometer (nm) (.13 micron) technology. This ultra-high performance, all-copper semiconductor technology significantly accelerates chip speed, reduces power consumption, and lowers electronics costs. Lucent Technologies (NYSE: LU) is among the first companies to use Agere's new digital signal processor (DSP) chip for wireless base stations. Agere's DSPs are being used in nearly half of the world's base stations*.

The new chip has passed product and packaging qualifications at Taiwan Semiconductor Manufacturing Company (TSMC) (NYSE: TSM), the world's largest semiconductor foundry.

Agere's DSP16411 chip, which is available in high volumes now, processes voice, data and video signals 20 percent faster and consumes 20 percent less power than competing chips available. These speed and power benefits translate to lower cost, cooler, and higher channel capacity base stations. These benefits pave the way for rapid and dramatic improvements in the speed, connectivity, costs, and flexibility with which businesses and consumers communicate using wireless networks, cellular phones, and the Internet.

A DSP is a specialized semiconductor chip that performs high-speed mathematical computations for various types of voice, data, and video signal processing.

"Agere's DSP16411 benefits greatly from TSMC's technology innovation, expanding Agere's wireless market strength," said Will Strauss, president of Forward Concepts, a DSP market research firms. "The new DSP builds on the company's success with its previous-generation DSP chips for wireless base stations."

Agere and TSMC Implement Low-K Technology

Agere's new DSP is based on 130 nm process technology from TSMC. One-hundred thirty nanometers is about 1/700th the width of a human hair. The copper interconnect in the integrated circuit is separated by a thin layer of insulation dielectric film material. An integral part of each transistor, the material insulates the circuits from each other and minimizes the delay and "drag" on signals traveling through the wires. Chips produced with lower-k dielectrics are faster than chips with higher-k dielectrics. The dielectrics with low k-value are typically defined as those with constants below 3.

However, until now the integrated circuit industry in general has been unable to qualify a low-k dielectric chip for volume production. Agere's chip is among the first to use low-k to achieve dramatic performance improvements relative to the industry-standard, fluorinated silicate glass insulator.

"The ability to deliver a 130 nm process using copper and low-k dielectrics has become a defining achievement in the integrated circuit semiconductor industry," said Genda Hu, vice president of marketing for TSMC. "This product from Agere marks the beginning of an important transition in semiconductor technology, where low-k dielectrics will enable clear performance differentiation.

Agere Uses Research Breakthrough to Boost Performance by 20 Percent

As a result of an Agere research breakthrough announced in December 2002, the Agere DSP16411 can operate 20 percent faster than originally planned. Agere's research proved that chips could operate reliably at a higher voltage without circuit failure. Building on that research, critical circuits in the DSP16411 can run at 1.2 volts from its 1 volt nominal level.

Agere plans to use the TSMC 130 nm process technology with low-k dielectrics to produce several other types of chips, including applications specific integrated circuits (ASICs), network processors, switching chips, and framers.

"Agere will continue to work with leading-edge foundries such as TSMC to be an early user and driver of the most advanced technologies available anywhere," said Mark Pinto, vice president with Agere's Processing, Aggregation, and Switching Business Unit. "By doing so, we can deliver to our customers clearly differentiated, cost-effective products."

The chip is priced at $75 in quantities of 10,000.

For more product information, customers may call the Agere Systems Customer Response Center, 1-800-372-2447 (or direct dial: 610-712-4323). Customers may also email: docmaster@agere.com.

Agere Systems is a premier provider of advanced integrated circuit solutions for wireless data, high-density storage and multiservice networking applications. Agere's wireless data portfolio enables seamless network access and Internet connectivity through industry-leading WiFi/802.11 solutions for wireless LANs and computing applications, as well as its GPRS offering for data-capable cellular phones. The company also provides custom and standard multi-service networking solutions, such as broadband Ethernet-over-SONET/SDH components and wireless infrastructure chips, to move information across metro, access and enterprise networks. Agere is the market leader in providing integrated circuits such as read-channel chips, preamplifiers and system-on-a-chip solutions for high-density storage applications. Agere's customers include the leading PC manufacturers, wireless terminal providers, network equipment suppliers and hard-disk drive providers. More information about Agere Systems is available from its Web site at www.agere.com.

TSMC is the world's largest dedicated semiconductor foundry, providing the industry's leading process technology and the foundry industry's largest portfolio of process-proven library, IP, design tools and reference flows. The company operates one advanced 300mm wafer fab, six eight-inch fabs and one six-inch wafer fab. TSMC also has substantial capacity commitments at two joint ventures fabs (Vanguard and SSMC) and at its wholly-owned subsidiary, WaferTech. In early 2001, TSMC became the first IC manufacturer to announce a 90 nanometer technology alignment program with its customers. TSMC's corporate headquarters are in Hsin-Chu, Taiwan. For more information about TSMC to www.tsmc.com.