Lucent to Acquire Ethernet LAN Business Of Enable Semiconductor -- Combined Team To Become Leading Supplier Of Fast

ALLENTOWN, PA. (March 2) BUSINESS WIRE -March 2, 1999--Lucent Technologies' Microelectronics Group, the world's leading communications semiconductor business, today announced an agreement to acquire the Ethernet local area network (LAN) component business of Enable Semiconductor, a privately held company based in Milpitas, Calif., for about $50 million in cash.

As part of the agreement, Lucent gains Enable's portfolio of Fast Ethernet ICs and technology and its experienced team of some 40 Ethernet integrated circuit (IC) developers. The combined group will become a leading provider of standard-product and custom Fast Ethernet and Gigabit Ethernet components for networking systems that range from small-office network hubs to sophisticated local-area and wide-area network switches.

"Enable Semiconductor's depth of experience in Fast Ethernet and Gigabit Ethernet transceivers, along with its LAN systems expertise, complements our leadership in Fast Ethernet switching ICs," said Greg Waters, vice president of Networks and Communications at Lucent's Microelectronics Group. "And Enable's market focus on makers of small-office networking systems dovetails with our customer base of major networking systems manufacturers. Together, we will provide the networking industry with more Fast Ethernet technology, component design, applications and marketing experience than any other semiconductor company.

"Going forward, our team will deliver powerful new capabilities that change the way businesses deploy local- and wide-area networks," Waters continued. "For example, we'll be positioned to put small-office routing functionality on a single chip and also throw in high-bandwidth wide-area network access. Such a chip could displace hub technology and promote LAN/WAN convergence in this high-volume, price-sensitive market."

The combined Lucent and Enable Semiconductor team will be headed by Enable's current CEO, Robert Shen. He will report to Waters. Shen and the Enable employees joining Lucent will remain in the San Francisco Bay area. Development teams will continue to work within their current reporting structures. Enable's sales function will be integrated into the Lucent sales force.

According to Dataquest, the semiconductor market for LAN switches is growing at a 24 percent annual rate, from $558 million in 1997 to a projected $1.6 billion in 2002, and the semiconductor market for LAN routers is growing at a 12 percent annual rate, from $819 million in 1997 to a projected $1.4 billion in 2002.

"By joining Lucent, we will extend the reach of Enable Semiconductor's technology into new products and markets," said Shen. "Our combined Ethernet experience, coupled with Lucent's strength in IP, ATM and other broadband wide-area networking technologies, will result in components that speed LAN and WAN convergence and simplify the way these networks are built and maintained. And that, in turn, means more connectivity and better service for both small and large businesses."

The purchase is expected to result in a one-time charge against earnings. The charge involves an accounting writeoff assigned to in-process research and development and will be taken in the quarter in which the transaction is completed, expected in the quarter ending March 31, 1999. Excluding the one-time charge, the impact of the purchase to earnings is expected to be immaterial.

Lucent Technologies designs, builds and delivers a wide range of public and private networks, communications systems and software, data networking systems, business telephone systems and microelectronics components. Bell Laboratories is the research and development arm for the company. For more information on Lucent Technologies, headquartered in Murray Hill, N.J., USA, visit its web site at http://www.lucent.com

Lucent's Microelectronics Group designs and manufactures integrated circuits and optoelectronic components for the computer and communications industries. More information about the Microelectronics Group is available from its web site at http://www.lucent.com/micro.

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CONTACT: Lucent Technologies

         Carl Blesch 

908-508-8412 (office)

         908-875-4137 (mobile) 

cblesch@lucent.com

                   or 

Gary Bonham

         925-815-8223 (office) 

925-484-5688 (home)

         gbonham@lucent.com 

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