Actel and TI Extend Successful Relationship; Actel Buys TI's FPGA Business; TI to Increase Current Foundry Support; Companies Work Jointly to Make Transition Seamless for Customers.

SUNNYVALE, Calif.--(BUSINESS WIRE)--Feb. 13, 1995--To focus on their strategic product areas, Actel Corporation and Texas Instruments Incorporated yesterday (Sunday) extended their seven-year relationship with changes in how they serve the market for antifuse field-programmable gate arrays (FPGAs). Actel announced it will expand its market presence by purchasing the antifuse FPGA business of TI. TI will no longer market FPGAs, and will increase the volume of FPGA manufacturing it does for Actel.

At closing, Actel will deliver to TI $10 million in cash and one million shares of a new series of Actel preferred stock. The preferred stock will have an aggregate liquidation preference of $25 million and will be convertible into 2,631,579 shares of Actel common stock. Closing of the transaction is conditioned only upon the expiration or termination of all applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Actel expects to book a significant, but at this time undetermined, one-time write off when the transaction closes. Actel also may pay to TI up to $15 million based on the achievement of certain 1995 performance targets.

TI and Actel entered into a seven-year agreement in 1988 under which TI was Actel's marketing partner and second source for the ACT 1 and ACT 2 families of FPGAs, the Designer Series of CAE development systems, and programming hardware. The objective of the agreement was to firmly establish antifuse technology in the FPGA market. That agreement, now in its seventh year, has been successful, said John East, president and CEO of Actel, and Rich Templeton, senior vice president of TI's Semiconductor Group.

Actel's East said, "We are pleased with this acquisition because it expands our share of the programmable logic market and allows us to directly support our growing worldwide customer base. TI was instrumental in helping us establish antifuse-based FPGAs as the best price and performance choice available to logic integrators."

TI's Templeton said, "TI is focusing its development and marketing on differentiated products such as digital signal processors and mixed-signal integrated circuits, areas where we are market leaders. Our continuing relationship enables both companies to concentrate on their strategic products areas." TI's antifuse-based FPGA business accounted for less than one-half of one percent of TI's semiconductor revenues in 1994.

TI and Actel are working together to make the transition smooth and seamless for customers. "Since TI will continue to foundry FPGAs for Actel, customers should see no interruption in the supply of FPGAs for their designs. We will fully support engineers as they move up to higher-level designs," East said.

Employees who had been with TI's FPGA business will be assigned to other areas of TI's growing semiconductor operations. The sale does not involve any TI manufacturing facilities.

Actel is the leading supplier of antifuse-based FPGAs and associated CAE software development systems and programming hardware. Actel antifuse FPGAs are used by designers of telecommunications, industrial, computer, and space systems to differentiate their products, reduce time to market and development costs, and improve system size and performance. The company is located at 955 East Arques Avenue, Sunnyvale, CA 94086. Telephone [phone].

Texas Instruments Incorporated, headquartered in Dallas, Texas, is a high-technology company with sales or manufacturing operations in more than 30 countries. TI products and services include semiconductors; defense electronics systems; software productivity tools; printers, notebook computers and consumer electronics products; custom engineering and manufacturing services; electrical controls; and metallurgical materials.

CONTACT: Actel

H. Buford Barr, 408/522-4368 (media)

David L. Van De Hey, 408/522-4213 (legal)

TI

Terri West, 214/995-3481

David Nieland, 214/830-2663