MIPS Technologies Announces Restructuring and Updates First Quarter Guidance

MOUNTAIN VIEW, Calif., October 7, 2002 - MIPS Technologies, Inc., (Nasdaq: MIPS, MIPSB) a leading provider of industry standard processor architectures and cores for digital consumer and business applications, today announced that in order to achieve essential cost savings it intends to consolidate its design activities and will transition out of the operations at its design center in Denmark. The company is also taking actions to reorganize its sales force and reshape its investment in marketing as key parts of the effort to achieve the company's stated strategic and economic business goals. Additionally, the company announced that both revenue and operating expenses for the first quarter of fiscal 2003 will be below the company's previous expectations. For the quarter ended September 30, 2002, the company expects to report revenue of approximately $9.4 million and a net loss per share of $0.09 to $0.10. Further details associated with the first quarter results, the Denmark design center actions and overall restructuring tactics will be detailed later in October during the company's quarterly earnings conference call.

"The current difficult business environment requires that we bring our expenses more closely into alignment with revenue expectations," stated Casey Eichler, chief financial officer of MIPS Technologies. "Therefore, it is important for our long term success that we develop an even greater focus on our market strengths while taking strong measures to control expenses in order to retain our cash and strong balance sheet positions."

"It has become increasingly apparent that the worst downturn in semiconductor history is not likely to end anytime soon," commented John Bourgoin, chairman and CEO of MIPS Technologies. "While we regret the decision related to our Denmark operations, we've concluded that a disposition of this site, coupled with certain other changes, are the most appropriate actions to take in order to retain our core performance opportunity, serve our growing customer base, and maintain our product differentiation."

MIPS Technologies will report results for the first quarter of fiscal 2003 on October 22, 2002 after the close of the market. The company invites you to listen to management's discussion of Q1 results and Q2 guidance in a conference call live on October 22, 2002 beginning at 1:45 p.m. Pacific. Conference call number is +1 (913) 981-5543. Replay number is +1 (719) 457-0820 and will be available for five business days, beginning shortly after the end of the conference call. The access code is 623368.

About MIPS Technologies
MIPS Technologies, Inc. is a leading provider of industry standard processor architectures and cores for digital consumer and business applications. The company drives the broadest architectural alliance that is delivering 32- and 64-bit embedded RISC solutions. The company licenses its intellectual property to semiconductor companies, ASIC developers, and system OEMs. MIPS Technologies and its licensees offer the widest range of robust, scalable processors in standard, custom, semi-custom and application-specific products. The company is based in Mountain View, Calif., and can be reached at +1 (650) 567-5000 or www.mips.com.

This press release contains forward-looking statements regarding future events or the future financial performance of MIPS Technologies, Inc. Actual events or results may differ materially. Many factors could cause the actual results to differ materially from those contained in such forward-looking statements, including but not limited to: that products will fail to achieve market acceptance, increases in our research and development expenses, the anticipated benefits of our partnering relationships may be more difficult to achieve than expected, the timing of or delays in customer orders, delays in the design process, the length of MIPS Technologies' sales cycle, MIPS Technologies' ability to develop, introduce and market new products and product enhancements, and the level of demand for semiconductors and end-user products that incorporate semiconductors. With respect to MIPS Technologies, we refer you to the documents that it files from time to time with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended June 30, 2002.

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