Agere Systems to Provide Industry's Most Integrated, Cost Effective Chip Set Enabling Seamless 802.11 Wireless Connections

• Highly integrated 802.11a/b/g solution delivers industry's lowest bill of materials with a chip set die-size that is a fraction of competitors' 802.11b designs
• Company to demonstrate dual-band, single-chip radio transceiver at CeBIT 2003

MARCH 10, 2003  - ALLENTOWN, Pa.-- Agere Systems (NYSE: AGR.A, AGR.B) today announced the industry's most integrated multimode wireless local area networking (LAN) solution aimed at protecting network investments by enabling seamless connectivity to 802.11a, b, and soon-to-be deployed 802.11g networks. The multimode chip set, which includes a single-chip, dual-band radio frequency (RF) transceiver, delivers the industry's lowest bill of materials with half the number of components of competitors' products. In addition, the chip set's die-size is a fraction of competitors' 802.11b designs.

Agere will demonstrate the new dual-band RF transceiver, which will be part of its next-generation WaveLAN™ portfolio, during the CeBIT 2003 Show in Hannover, Germany, March 12-19. With the ability to operate in both the 5 GHz and 2.4 GHz frequency bands, the RF chip supports IEEE® 802.11a, 802.11b and the draft standard for 802.11g. This solution delivers superior performance by exceeding all industry standards for range, sensitivity, transmission and robustness.

The radio is coupled with a multimode media access controller (MAC), a multimode baseband processor and a dual-band power amplifier to form a fully interoperable, single platform for both 802.11a/b/g and 802.11g wireless LAN solutions. Agere's complete multimode solution includes evaluation boards, reference designs, firmware and software drivers, certification utilities, manufacturing test software and full customer support.

The solution, which is capable of achieving data transmission speeds of up to 54 Mbits/s, enables manufacturers of networking, computing and multimedia equipment to address the growing demand for high data rate wireless LAN systems. Agere expects to deliver silicon samples of its multimode solution in the second quarter of 2003.

Solution Enables Seamless Connectivity

"Through our integrated, low-cost solution, we are collapsing the cost barrier to widespread adoption of multimode 802.11 technology and truly seamless wireless connectivity," said Stan Swearingen, vice president of computing connectivity at Agere. "We have timed the introduction of our solution to align with the anticipated market ramp for standards-compliant multimode products that are interoperable with the millions of systems already deployed."

Agere's WaveLAN multimode solution was developed as a result of a joint development agreement with Infineon Technologies, AG. In October of 2002, Agere and Infineon agreed to co-develop, supply and support 802.11 multimode reference designs that include all of the components required by network equipment, consumer electronics and PC manufacturers to offer end products with wireless networking capabilities. Each company is independently marketing its next-generation wireless LAN products. Agere and Infineon will offer the industry's first dual-source model, which gives equipment manufacturers greater flexibility to meet accelerating market demand.

"Our multimode solution comes just five months after the formation of the Infineon alliance and draws on Agere's extensive patent portfolio, as well as our more than 15 years of experience in the development of 802.11 technology," Swearingen added.

Agere, with a 30 percent share of the Wi-Fi® chip set market *, is a leading provider of wireless LAN solutions for Original Equipment Manufacturers (OEM) and Original Design Manufacturers (ODM). Its WaveLAN, Wi-Fi-compliant chips, PC cards and modules have been incorporated into the current products manufactured by virtually all of the top PC makers. Agere also continues to be at the forefront of standards development and deployment.

According to IDC, an industry analyst firm, the total market for wireless LAN chips is expected to grow at a 30 percent compound annual growth rate, from $331 million in 2001 to $1.2 billion by 2006. Forecasts indicate 802.11b technology will dominate the market through the remainder of this year, with the demand for multimode solutions rapidly increasing in 2004, once the industry's 802.11g interoperability testing program is finalized.

Much like the cellular industry, which has adopted multimode technology to enable broad network roaming, the wireless LAN industry rapidly is moving towards multimode technology to ensure interoperability and seamless connectivity in the home, office and public hotspots. Multimode solutions deliver the best user experience and performance because they are able to dynamically select transmission modes depending on the network and user environment. Supporting all of the standards for 802.11, Agere's WaveLAN multimode solutions are designed to ensure reliable data transmissions for the widest range of applications whether it is accessing e-mail, downloading large files from the Internet or real-time, multimedia streaming. Multimode products will allow users to connect seamlessly to all 802.11 networks using a single PC card or embedded-client solution.

Unique Chip Set Architecture Drives Performance

Agere uses a multi-faceted approach to deliver a multimode 802.11 chip set with the flexibility to address a wide variety of applications including enterprise networking, home applications and multimedia entertainment. Agere's 802.11 solutions separate the MAC from the baseband and RF chips to provide additional flexibility for systems manufacturers. Unlike all-CMOS implementations, Agere's multimode solution combines advanced BiCMOS, CMOS and SiGe technologies to create a highly integrated, low-cost solution that delivers designs that are optimized for cost and performance.

The WaveLAN RF transceiver (WL54040) is designed in 0.25-micron BiCMOS technology. It is capable of automatically switching between low-intermediate frequency conversion (Low-IF) for OFDM and direct-down conversion for CCK modulation, enabling the device to achieve optimal throughput for all of the 802.11 standards. Specifically, Low-IF conversion guards against dynamic range degradation, an inherent limitation of direct-down OFDM architectures, to provide improved system performance.

Agere's WaveLAN Multimode MAC (WL60040) is fabricated in a 0.2-micron CMOS technology and provides the access controller and data management functions for the chip set. Based on Agere's previous generation MACs, which are the most widely deployed in the industry, the WaveLAN Multimode MAC is compliant to the 802.11a, b and draft-g and h standards, while also supporting the draft 802.11i and e standards for security and quality of service.

Hardware-based AES encryption, combined with software support for WPA (Wi-Fi Protected Access), provides the strongest combination of security enhancements available in the industry. In addition, the multimode MAC delivers added flexibility with a broad range of interfaces for PC, consumer electronics and networking applications including Cardbus, MiniPCI, PC Card, PCI, Compact Flash and USB.

The WaveLAN Multimode Baseband Processor (WL64040), which is developed in 0.13 micron advanced CMOS technology, contains the complete signal processing functionality for both OFDM and CCK modulation. It also supports Agere's patented antenna diversity implementation, which provides enhanced data throughput and improved signal coverage. The baseband uses a 1.5V internal power supply to dramatically reduce the power dissipation of high-speed OFDM signal processing, significantly improving battery life. In addition, the baseband uses a novel method of iterative channel estimation to digitally enhance the tolerance of weak radio signals, ensuring reliable connections. The WL64040 baseband supports a digital interface to the WL60040 MAC, enabling system integration of the MAC with a simple interface to a single-chip radio module. The WaveLAN WL54240 SiGe-based, dual-band power amplifier includes analog power control for the 2.4 and 5 GHz frequency bands and an on-chip power detector.

For more product information, customers may call the Agere Systems Customer Response Center, 1-800-372-2447, Dept. #B05 (in Canada, 1-800-553-2448, Dept. #B05, fax number 1-610-712-4106, especially for callers outside of North America) or write to Agere Systems, Room 10A-301C, 1110 American Parkway NE, Lehigh Valley Central Campus, Allentown, Pa. 18109. Customers may also go to the following web site: www.agere.com or 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.

* IDC 2001 WLAN Semiconductor Market Share Report - September 2002
IEEE® - IEEE is a registered trademark of The Institute of Electrical and Electronics Engineers, Inc.
Wi-Fi® - Wi-Fi is a registered trademark of the Wi-Fi Alliance
WaveLAN™ - WaveLAN is a trademark of Agere Systems, Inc.

This release contains forward-looking statements based on information available to Agere as of the date hereof. Agere's actual results could differ materially from the results stated or implied by such forward-looking statements due to a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, satisfactory outcome of our upcoming union contract negotiations, keeping pace with technological change, dependence on new product development, price and product competition, availability of manufacturing capacity, customer demand for our products and services, general industry and market conditions, timely completion of employment reductions and other restructuring and consolidation activities, limits on our ability to issue equity to raise capital and reliance on major customers and suppliers. For a further discussion of these and other risks and uncertainties, see our annual report on Form 10-K for the fiscal year ended September 30, 2002, and our quarterly report on Form 10-Q for the period ended December 31, 2002. Agere disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.