Agere Systems and RF Micro Devices Announce Strategic Alliance For Chip Manufacturing, Development, and Design.

Business Editors/High Tech Writers

ALLENTOWN, Pa. & GREENSBORO, N.C.--(BUSINESS WIRE)--May 17, 2001

Agere Systems (NYSE: AGR.A) and RF Micro Devices, Inc. (Nasdaq: RFMD) today announced they have signed definitive agreements to form a strategic alliance to develop, design and manufacture high-performance chips for next-generation, data-capable digital cellular phones and other communications products.

Under one part of the agreement, RF Micro Devices will invest approximately $58 million over two years to upgrade manufacturing clean room space and purchase semiconductor manufacturing equipment, which will be deployed within Agere's Orlando, Fla., manufacturing facility. RF Micro Devices anticipates no significant impact on fiscal year 2002 earnings, and capital expenditures related to the alliance have already been included in previous guidance for fiscal year 2002. Production from the purchased equipment will be allocated first to RF Micro Devices and then to Agere, thereby providing silicon capacity to RF Micro Devices while giving both companies the benefits of combined operations and increased manufacturing volumes. RF Micro Devices plans to deploy silicon manufacturing engineers in Orlando, Fla., as part of this alliance.

Agere Systems and RF Micro Devices will work together on a class of chips known as "radio frequency," or RF, which amplify and process signals transmitted by wireless devices. These RF chips will be based primarily on an emerging semiconductor materials technology called silicon germanium, which has excellent performance characteristics for certain wireless applications and can be economically produced using widely available silicon integrated circuit (IC) processing equipment and techniques. The alliance will also encompass Agere's other silicon processes.

The two companies also intend to create and staff an RF center of excellence to jointly advance RF chip process technology and design methodology. By combining Agere's silicon germanium process technology and wireless systems solutions with RF Micro Devices' expertise in the design and manufacture of highly integrated RF chips, the companies expect to be able to offer comprehensive solutions for multiple wireless technologies such as digital cellular phones, wireless local area networks, and Bluetooth(TM) short-range wireless connectivity.

The alliance expands the existing cooperation between the two companies to bundle power amplifiers with other wireless chips into a complete chip set for digital cellular handsets. The companies intend to continue to cooperate on future efforts to reduce component count and costs for handsets as well as other communications products.

"Working with RF Micro Devices, a leader in RF chip technology, gives us the opportunity to further advance our silicon germanium technology and develop more highly integrated wireless chips with better performance and lower power consumption," said Greg Waters, vice president of the Wireless Business Unit at Agere Systems. "Together, the two companies will work to accelerate the delivery of key semiconductors required for the deployment of next generation wireless multimedia services on public and private networks, and lower the overall cost of complete wireless component solutions to our customers."

"Agere has advanced chip process technology and manufacturing capability as well as extensive communications system expertise," said Jerry Neal, executive vice president of marketing and strategic development for RF Micro Devices. "This alliance provides us with the silicon manufacturing capacity we need to better serve our customers, and facilitates the expansion of our RF product portfolio beyond our market-leading power amplifiers. In addition, we believe the alliance will enable RF Micro Devices to help define and develop next-generation silicon processes for wireless applications, while providing a framework for our two companies to collaborate on the development of new wireless products. We are very eager to begin working with Agere immediately, and we look forward to commencing operations in Florida once final commitments from the city and state are in place."

RF Micro Devices will conduct a conference call at 11:00 a.m. (ET) today to discuss the above announcement. The conference call will be broadcast live over the Internet and can be accessed by any interested party at http://www.streetevents.com or http://www.rfmd.com.

Agere Systems Inc., formerly the Microelectronics Group of Lucent Technologies, is the world leader in semiconductors for communications applications. Lucent has announced it intends to spin off Agere Systems as an independent company. Agere Systems offers integrated optoelectronics and integrated circuits solutions to help customers reduce the time and expense of developing new communications equipment. It also provides wireless computer networking solutions through its ORiNOCO product line. More information about Agere Systems is available from its Web site at http://www.agere.com.

RF Micro Devices, Inc., an ISO 9001-certified manufacturer, designs, develops, manufactures and markets proprietary radio frequency integrated circuits (RFICs) for wireless communications applications such as cellular and PCS phones, wireless LANs and cable television modems. The Company offers a broad array of products -- including amplifiers, mixers, modulators/demodulators, and single-chip receivers, transmitters and transceivers -- representing a substantial majority of the RFICs required in wireless subscriber equipment. The Company's strategy is to focus on wireless markets by offering a broad range of standard and custom-designed RFICs in order to position itself as a "one-stop" solution for its customers' RFIC needs. In the September 4, 2000 issue of Fortune Magazine, RF Micro Devices was ranked second among Fortune's "100 Fastest Growing Companies." RF Micro Devices, Inc., is traded on the Nasdaq National Market under the symbol RFMD.

RF MICRO DEVICES(R)and RFMD(R) are trademarks of RF Micro Devices, Inc. All other tradenames, trademarks and registered trademarks are the property of their respective owners. For further information about RFMD, please visit our web site at http://www.rfmd.com.

BLUETOOTH is a trademark owned by Bluetooth SIG, Inc., U.S.A. and licensed to RF Micro Devices, Inc.

Agere Safe Harbor Statement

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 those 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, timely delivery and installation of manufacturing equipment, completion of the distribution of Agere stock by Lucent Technologies Inc., price and product competition, keeping pace with technological change, dependence on new product development, reliance on major customers and suppliers, customer demand for our products and services, availability of manufacturing capacity, components and materials, control of costs and expenses, general industry and market conditions and growth rates and general domestic and international economic conditions including interest rate and currency exchange rate fluctuations. For a further discussion of these and other risks and uncertainties, see the prospectus filed by Agere with the Securities and Exchange Commission on March 28, 2001. 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.

RF Micro Devices Safe Harbor Statement

This press release contains forward-looking statements that relate to RF Micro Devices' plans, objectives, estimates and goals. Words such as "expects," "anticipates," "intends," "plans," "projects," "believes," and "estimates," and variations of these words and similar expressions, identify these forward-looking statements. RF Micro Devices' business is subject to numerous risks and uncertainties, including probable variability in quarterly operating results, the rate of growth and development of wireless markets, risks associated with the operation of wafer fabrication facilities, its ability to manage rapid growth and to attract and retain skilled personnel, variability in production yields, raw material availability, manufacturing capacity constraints, dependence on a limited number of customers and dependence on third parties. These and other risks and uncertainties, which are described in more detail in RF Micro Devices' Annual Report on Form 10-K and its Prospectus dated December 19, 2000 included in its Registration Statement on Form S-3 (Registration No. 333-49432) filed with the Securities and Exchange Commission, could cause actual results and developments to be materially different from those expressed or implied by any of these forward-looking statements.