Altera, Nortel Networks Sign Long-Term Strategic Relationship Agreements.

Business Editors/High-Tech Writers

SAN JOSE, Calif.--(BUSINESS WIRE)--May 30, 2001

With a focus on delivering world-class telecommunications network equipment, Altera Corporation (Nasdaq:ALTR) and Nortel Networks today signed a set of long-term strategic relationship agreements addressing cooperation on future products, technology, and research and development efforts.

Included is a five-year supply agreement that expands an existing relationship to ensure that Nortel Networks has long-term access to programmable logic devices (PLDs) and other system-on-a-programmable-chip (SOPC) solutions. These solutions can help Nortel Networks to be more competitive by reducing costs and speeding time to market for new products.

"This will establish Altera as one of our major semiconductor suppliers," said Ken Bradley, chief procurement officer, Nortel Networks. "The time-to-market and cost advantages of Altera's PLDs and SOPC solutions will position Altera to significantly increase its penetration into our product lines, and to move into a select group of key suppliers to Nortel Networks."

Collectively, the agreements signed today define a new operating model and tighter business integration, and are expected to result in better cost and inventory control management for both companies.

"As we work to redefine the economics and quality of networking and the Internet, taking our relationships with suppliers to a new level is important," said Chahram Bolouri, president, global operations, Nortel Networks. "Access to Altera's technology innovations will enhance our ability to remain a world leader in product performance."

"This relationship with a global Internet and communication leader such as Nortel Networks is proof of our commitment to share our customers' vision," said John Daane, president and CEO of Altera Corporation. "We are taking this first step toward something far more than just a buy-sell relationship."

The new strategic agreements bring together two companies who lead the industry in their respective fields to enable rapid definition and development of next generation Optical, Local and Wireless Internet equipment using programmable logic technology. Nortel Networks expects to enhance its leadership position through shorter development cycles and faster time-to-market by gaining early visibility and timely access to Altera's next generation SOPC solutions and MegaCore(R) Intellectual Property (IP) portfolio. Under a master design services agreement, Nortel Networks can use Altera's design service capabilities for future products. The agreement also enables Nortel Networks to leverage Altera's advanced programmable logic technology for forward integration of older or obsolete products and technologies to improve cost competitiveness.

About Altera

Altera Corporation, The Programmable Solutions Company(R), was founded in 1983 and is a leading supplier of programmable logic devices (PLDs). Altera's CMOS-based PLDs are user-programmable semiconductor chips that enhance flexibility and reduce time-to-market for companies in the communications, computer peripheral, and industrial markets. By using high performance devices, software development tools, and sophisticated intellectual property cores, system-on-a-programmable-chip (SOPC) solutions can be created with embedded processors, memory, and other complex logic together on a single PLD. Altera common stock is traded on The Nasdaq Stock Market under the symbol ALTR. More information on Altera is available on the Internet at http://www.altera.com.

Safe Harbor 

This press release contains "forward-looking statements" that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally preceded by words that imply a future state such as "expected" or that imply that a particular future event or events will occur such as "will." Investors are cautioned that all forward-looking statements in this release involve risks and uncertainty, including without limitation the risk that future performance is dependent on product development schedules, the design performance of software and other tools, as well as the company's and third parties' development technology and manufacture capabilities. Please refer to the company's Securities and Exchange Commission filings, copies of which are available from the company without charge.

Note to Editors: Altera, The Programmable Solutions Company, MegaCore, are trademarks and/or service marks of Altera Corporation in the U.S. and other countries. All other trademarks are the property of their respective holders.

Nortel Networks is a trademark of Nortel Networks.