Altera Announces Second Quarter Results

EPS Up 43 Percent Year over Year

SAN JOSE, Calif.--July 15, 2008--Altera Corporation (NASDAQ:ALTR) today announced second quarter sales of $359.9 million, up 7 percent from the first quarter of 2008 and up 13 percent from the second quarter of 2007. Second quarter net income was $98.0 million, $0.32 per diluted share, up from net income of $83.9 million, $0.27 per diluted share, in the first quarter of 2008. Second quarter net income was up 22 percent and earnings per diluted share were up 43 percent compared with the second quarter of 2007.

First half cash flow from operating activities was $226.8 million. Altera repurchased 65,000 shares of its common stock during the second quarter at a cost of $1.4 million. To date during the third quarter, Altera has repurchased an additional 526,000 shares at a cost of $10.4 million. Altera ended the second quarter with $1.2 billion in cash and investments.

Altera's board of directors has declared a quarterly dividend of $0.05 per share payable on September 2, 2008 to shareholders of record on August 11, 2008.

"The second quarter exceeded our expectations for growth and profitability. Our 90-nm FPGAs were the largest growth drivers and 65-nm FPGA sales more than doubled sequentially, leading to FPGA growth of 18 percent year over year. The combination of solid top line growth, continued gross margin improvement, and lower than planned operating expense created significant operating leverage and a very strong operating margin," said John Daane, president, chief executive officer, and chairman of the board. "We are on schedule to ship the industry's first 40-nm Stratix IV FPGAs later this year, the result of work we began several years ago to accelerate the availability of 40-nm programmable logic devices. The architectural and process leadership that these products represent will further strengthen our competitive position and growth prospects over the next several years."

Several recent accomplishments mark the company's continuing progress.

• Altera has announced the industry's first 40-nm FPGAs and HardCopy(R) ASICs, and hundreds of early adopter customers have already begun designs with these devices. Stratix(R) IV FPGAs and HardCopy IV ASICs, both with a transceiver option, provide unprecedented densities, performance and low-power leadership. The Stratix IV family has twice the logic density of Altera's Stratix III family, currently the largest FPGAs on the market. The HardCopy IV ASIC family offers equivalent densities as the Stratix IV devices with up to 13.3 million gates. Manufactured on Taiwan Semiconductor Manufacturing Company's 40-nm process, the Stratix IV FPGA family is comprised of two variants: first, Stratix IV E FPGAs, a set of devices rich with memory and digital signal processing resources, and, in addition, Stratix IV GX FPGAs, an enhanced version with transceivers. To address the low-power demands of customers, the Stratix IV family members feature Altera's Programmable Power Technology.
  
  For the first time, Altera offers a transceiver-based ASIC option with the new HardCopy IV ASIC family. Stratix FPGAs deliver the benefits of FPGA-based hardware and software co-design and co- verification -- saving months in time to market -- and the use of HardCopy ASICs delivers the benefits of ASICs in production. Quartus(R) II development software fully supports these devices. First sample silicon for the Stratix IV GX family is expected in the fourth quarter.
  
  
• With Altera's re-entry into the military market and benefiting from the company's record of reliability and innovation, military market customers increasingly have selected Altera for their newest designs. Altera now has been recognized as the number-one supplier at Rockwell Collins, a top-tier government electronics contractor. Altera won the 2008 President's Award, making it the top supplier among the more than 10,000 Rockwell Collins suppliers. The award is based on quality, product excellence, delivery schedules, and a team-based partnership. Altera's devices are today used in a variety of military market applications including software defined radio, electronic warfare, secure communications, guidance, radar, and avionics systems.

Business Outlook for the Third Quarter 2008

Sequential Sales Growth	Flat to down 3%
Gross Margin	67% +/- .5%
Research and Development	$66 to 68 million
SG&A	$63 to 65 million
Other Income	Approximately $4 million
Tax Rate	16% to 17%
Diluted Share Count	305 to 310 million

Financial Tables

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About Altera

Altera's programmable solutions enable system and semiconductor companies to rapidly and cost-effectively innovate, differentiate and win in their markets. Find out more at www.altera.com.

Altera, The Programmable Solutions Company, the stylized Altera logo, specific device designations and all other words that are identified as trademarks and/or service marks are, unless noted otherwise, the trademarks and service marks of Altera Corporation in the U.S. and other countries. All other product or service names are the property of their respective holder.