Alchemy Semiconductor Secures $15 Million in Funding to Enter Internet Edge Device Market.

Business/Technology Editors

AUSTIN, Texas--(BUSINESS WIRE)--May 1, 2000

Microprocessor Design Group Spins Off from Cadence, Projects June

Product Launch

Alchemy Semiconductor, Inc., an Austin-based fabless semiconductor company targeting the Internet Edge Device market, today announced a $15 million first-round of venture capital financing from US Venture Partners, Austin Ventures and Telos Ventures. Winston S. Fu, Ph.D. with US Venture Partners, and Jim Clardy, Venture Partner, Austin Ventures, join Alchemy's board of directors.

Fu applauded Alchemy for targeting the burgeoning Internet Edge Device market. "Alchemy has the technology to enable next generation applications for the Internet Edge Device market," said Fu. "Other companies are scrambling to adapt their technology to the spectrum of applications and devices in this market--Alchemy already has that advantage."

Alchemy Semiconductor will utilize the funds to complete development and marketing of its first product and to create a corporate infrastructure as the company spins off from Cadence Design Systems. Cadence provided seed money for the microprocessor design firm in 1999 when Alchemy Semiconductor was founded by several members of the former StrongARM design team. The company licensed the 32-bit MIPS architecture to develop high performance, very low power, integrated systems-on-a-chip (SOCs), leveraging the MIPS technology with Alchemy's proven design implementation. Alchemy is set to make their first product announcement at the Embedded Processor Forum in San Jose, California, June 12-16, 2000. Alchemy will continue to utilize Cadence's leading edge EDA software tools. After the spin out, Cadence will remain an Alchemy shareholder.

"We are very proud of the company's ability to secure this financing," said Eric Broockman, CEO, Alchemy Semiconductor. "It reflects on the technological and management strengths of the company that firms of such financial strength and market position believe in our product, our market and our ability to attract customers. We see a growing market in the edge of the network products, and our team has been working steadfastly to make a low power, high output chip to satisfy the requirements of this product arena."

Broockman also noted that with the funding comes additional expertise and experience of the board members.

"These notable gentlemen are investing their talents and energies into Alchemy Semiconductor," said Broockman. "That will considerably raise our exposure as we seek to attract additional business alliances and partnership opportunities."

The board appointments will take effect immediately. Each board member brings experience in the semiconductor and communications industries. Jim Clardy was a co-founder and CEO of Crystal Semiconductor, following years of experience with Harris Semiconductor and Texas Instruments. Winston Fu, the 1997-99 Ewing Marion Kauffman Fellow in Venture Capital and Entrepreneurship has expertise in communications, semiconductors and optics.

About Alchemy Semiconductor

Founded in Austin, Texas, in 1999, Alchemy Semiconductor is a fabless semiconductor company that designs, develops and markets high performance, yet very low power systems-on-a-chip (SOCs) for the Internet Edge Device market. The company's founding team includes several of the most prominent embedded microprocessor architects and developers in the world, allowing for a combination of proven design execution and MIPS performance technology to achieve high performance, low power dissipation and system integration in its Internet Edge Processor(tm). Alchemy's headquarters are at 7800 Shoal Creek Blvd., Suite 222W, Austin, Texas 78757; or go to www.alchemysemi.com.

About US Venture Partners

US Venture Partners (USVP) is one of the largest and most active early stage venture capital firms in the country with approximately $1 billion raised partnerships since 1981. USVP invests in a diversified portfolio of technology and health care related companies with a focus on the Internet, communications, semiconductor and software industries. Notable USVP investments include Sun Microsystems, Ask Jeeves, Nuance Communications, Stratacom, Checkpoint Software, Minerva Networks, New Focus, Packetcom and Procket. More information can be obtained from www.usvp.com.

About Austin Ventures

Austin Ventures is the largest venture capital firm in Texas and among the largest in the U.S., with more than $1.6 billion of capital under management. The investment in Alchemy Semiconductor is funded by Austin Ventures through their Semiconductor practice area, a core focus of the firm's investment strategy, which is intended to be a catalyst for entrepreneurship in semiconductor-related industries in Austin and the Southwest. Other semiconductor companies in Austin Ventures' portfolio include: Silicon Laboratories (NASDAQ: SLAB), Agere, Extreme Devices, Cygnal Integrated Products, Interactive Silicon, and INH Semiconductor. For more information, go to www.austinventures.com.

About Telos Venture Partners

Telos Venture Partners is a leading, early stage venture capital firm located in the Silicon Valley. Telos invests in Internet software, services, and infrastructure companies, including silicon and intellectual property providers whose products enable the continued growth of the Internet infrastructure or the creation of Internet edge access devices. A focus on providing its portfolio companies with business guidance and executive staff mentoring leverages the considerable high-tech senior management experience of the Telos partners. More information can be found at www.telosvp.com.