EMCORE Corporation to Acquire Intel's Enterprise and Storage Optical Assets, Intel Connects Cables Business

SANTA CLARA, Calif. & ALBUQUERQUE, N.M.--(BUSINESS WIRE)--

EMCORE Corporation (NASDAQ:EMKR) announced a definitive agreement with Intel Corporation to acquire the enterprise and storage assets of Intel's Optical Platform Division as well as the Intel(R) Connects Cables business. EMCORE will issue 3.7 million shares of restricted stock for the acquisition, with certain adjustments based on EMCORE's stock price twelve months after the closing of the transaction. The assets include intellectual property, inventory, fixed assets and technology relating to optical transceivers for enterprise and storage customers, as well as optical cable interconnects for high-performance computing clusters. The transaction is expected to close in the second quarter of this year.

The acquisition further enhances EMCORE's presence in the optical communications market segments, especially in the areas of 10 Gigabit Ethernet and storage area network transceivers. This allows EMCORE to provide a more complete product offering to a broad range of customers.

"Following the successful acquisition of the telecom-related assets of Intel's Optical Platform Division, this second acquisition from Intel enables EMCORE's Fiber Optics to be a significant supplier for both telecom and datacom products," said Reuben F. Richards, Executive Chairman, EMCORE. "This acquisition will provide additional manufacturing efficiencies through economies of scale and vertical integration, benefiting our enterprise, storage, telecom, cable and high-performance computing customers. EMCORE projects this asset will add $45 million in revenue for the next 12 months, increase gross margin from 23 to 29 percent and be accretive to earnings. The Intel Connects Cables business provides an innovative solution for high-performance computing cluster interconnect applications, using embedded parallel optical transceivers with a multi-mode fiber ribbon. EMCORE expects this business to have gross margins exceeding 50% and to be the fastest growing segment of the acquired assets."

"Customers are driving consolidation and vertical integration in the optical communications market segments," said Doug Davis, Vice President, Intel Digital Enterprise Group, and General Manager, Embedded and Communications Group. "We will work together to complete a smooth transition of these businesses, building upon the experience in the telecom optical components acquisition."

The sale of these optical-related assets will enable Intel to focus its investments on core communications and embedded market segments in line with its platform strategies. Intel will continue its efforts on the universal serial bus 3.0 specification, which is slated to support optical, and silicon photonics research and development.

About Intel

Intel, the world leader in silicon innovation, develops technologies, products and initiatives to continually advance how people work and live. Additional information about Intel is available at www.intel.com/pressroom.

About EMCORE

EMCORE is a leading provider of compound semiconductor-based components and subsystems for the broadband, fiber optic, satellite and terrestrial solar power markets. EMCORE has two operating segments: Fiber Optics and Photovoltaics. EMCORE's Fiber Optics segment offers optical components, subsystems and systems that enable the transmission of video, voice and data over high-capacity fiber optic cables for high-speed data and telecommunications, cable television (CATV) and fiber-to-the-premises (FTTP) networks. EMCORE's Photovoltaics segment provides solar products for satellite and terrestrial applications. For satellite applications, EMCORE offers high-efficiency compound semiconductor-based gallium arsenide (GaAs) solar cells, covered interconnect cells (CICs) and fully integrated solar panels. For terrestrial applications, EMCORE offers its high-efficiency GaAs solar cells for use in solar power concentrator systems. For specific information about EMCORE, its products or the markets it serves, please visit www.emcore.com.

Forward-looking statements:

The information provided herein may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, any statement or implication that the transaction described herein will actually close and will produce the anticipated results described for EMCORE. Such forward-looking statements involve risks and uncertainties that, if realized, could materially impair EMCORE's results of operations, business, and financial condition. These risks and uncertainties include, but are not limited to, (a) the ability of both parties to satisfy the conditions necessary for the closing of the transaction; (b) the ability of EMCORE to successfully integrate the purchased business into its operations; (c) the ability of EMCORE to retain critical employees of the purchased business; the acceptance by INTEL's customers of EMCORE as a supplier; (d) the ability to transition certain key agreements, including lease arrangements; (e) cancellations, rescheduling or delays in product shipments; (f) manufacturing capacity constraints; (g) possibly lengthy sales and qualification cycles; (h) changes in telecom industry growth or product or technology requirements; (i) increased competition; (j) delays in developing and commercializing new products; and (k) other factors discussed from time to time in reports filed by the Company with the Securities and Exchange Commission. The forward-looking statements contained in this news release are made as of the date hereof and EMCORE does not assume any obligation to update the reasons why actual results could differ materially from those projected in the forward-looking statements.

Intel and the Intel logo are trademarks of Intel Corporation in the United States and other countries.

-- Other names and brands may be claimed as the property of others.

Source: Intel Corporation

Released Apr 10, 2008 • 8:00 AM EDT