Altera Announces 2008 Results.

SAN JOSE, Calif. -- Altera Corporation (NASDAQ:ALTR) today announced 2008 sales of $1.37 billion, up 8 percent compared with $1.26 billion in 2007. New product sales increased 51 percent. Net income rose 24 percent to $359.7 million, $1.18 per diluted share, versus net income of $290.0 million, $0.82 per diluted share, in 2007.

Fourth quarter sales were $314.5 million, down 3 percent from the fourth quarter of 2007 and down 12 percent from the third quarter of 2008. Fourth quarter net income was $83.0 million, $0.28 per diluted share, up from net income of $65.5 million, $0.20 per diluted share, in the fourth quarter of 2007.

Altera repurchased 26.6 million shares of its common stock during 2008 at a cost of $473.2 million, with 9.0 million shares repurchased during the fourth quarter at a cost of $154.2 million. Altera ended the quarter with $1.2 billion in cash and short-term investments.

Altera's board of directors has declared a quarterly cash dividend of $0.05 per share payable on March 2, 2009 to shareholders of record on February 10, 2009.

"While we experienced the effects of a global economic-driven slowdown in the fourth quarter, we increased our market share in the programmable logic industry for the sixth year in a row. Net income growth substantially outpaced sales growth as a result of our sustained focus on improving efficiencies across the company. We will apply these simplification and cost reduction skills in this current challenging business environment to help protect shareholder value," said John Daane, president, chief executive officer, and chairman of the board." As previously committed, we shipped our first 40-nm Stratix IV FPGAs in the fourth quarter, placing us in a leadership position that will strengthen our competitive position in 2009 and beyond."

Several recent accomplishments mark the company's continuing progress.

* Following the introduction of development software in May 2008, Altera began shipping Stratix([R]) IV FPGAs in December. As the only supplier of 40-nm FPGAs in the industry, Altera's customers will benefit from the industry's largest density, highest performance, highest system bandwidth, and lowest power among high-end FPGA solutions. With increasing demand for services such as video over Internet, high-speed wireless data and digital TV, designers need to deliver solutions that provide higher data rates, higher interface bandwidths, and increased data processing all in a power-efficient manner. To address these design challenges, Stratix IV FPGAs leverage Altera's innovations in transceivers, memory interfaces, low-power technology and FPGA core architecture to offer new capabilities in its 40-nm devices. For designers faced with sharply increased ASIC design costs and otherwise limited to lagging node technology, the comparative economics and performance advantages of advanced-node FPGAs are compelling. As the industry leader at the 40-nm node, Altera is in a unique position to compete for these new design wins and gain increased share in the FPGA market, which will continue to be the fastest growing portion of the programmable logic industry.

* Even though just launched, the combination of process node and architectural leadership represented by Stratix IV FPGAs has already led to broad industry recognition:

- China Electronics News selected Stratix IV FPGAs as its "2008 Editor's Choice Award" winner in the FPGA category. Winners of this award demonstrated a significant leap in innovation.

- EDN named Stratix IV FPGAs to its annual list of "Hot 100 Electronic Products." This list encompasses the 100 most significant products of 2008, as determined by the magazine's editors and readers.

- Stratix IV FPGAs received EDN China's "Leading Products Award" in the digital IC and programmable logic category. Winners of this award were chosen by a panel of technical experts and professors that selects products having the greatest impact on the electronics industry.

- Stratix IV FPGAs received Electronic Products' 2008 "Product of the Year" award in the digital ICs category. Award winners are selected by the magazine's editors based on innovative design, significant advancement in technology or application and substantial achievement in price and performance.

* Recognizing Altera's overall business performance, Forbes.com identified Altera as the best managed company in the semiconductor category. Altera was selected from Forbes.com's Platinum 400 and chosen based on sales and earnings growth, debt to total capital, earnings outlook and stock market returns.

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Conference Call and Quarterly Update:

A conference call will be held today at 1:45 p.m. Pacific Time to discuss the quarter's results and management's current business outlook. The webcast and subsequent replay will be available in the Investor Relations section of the company's website at www.altera.com. A telephonic replay of the call may be accessed later in the day by calling [phone] and referencing confirmation code 258712. The telephonic replay will be available for two weeks following the live call.

Altera's first quarter business update will be issued in a press release available after the market close on March 2, 2009.

Forward-Looking Statements 

Statements in this press release that are not historical are "forward-looking statements" as the term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally written in the future tense and/or preceded by words such as "will," "expects," "anticipates," or other words that imply or predict a future state. Forward-looking statements include any projection of revenue, gross margin, expense or other financial items discussed in the Business Outlook section of this press release, as well as statements regarding future competitive position and shareholder value creation. Investors are cautioned that all forward-looking statements in this release involve risks and uncertainty that can cause actual results to differ from those currently anticipated, due to a number of factors, including without limitation, current global economic conditions, customer business environment, vertical market mix, market acceptance of the company's products, product introduction schedules, the rate of growth of the company's new products including the Arria([R]) GX, Cyclone([R]) II, Cyclone III, Stratix II, Stratix II GX, Stratix III, Stratix IV, MAX([R]) II and HardCopy([R]) device families, changes in the mix of our business between prototyping and production-based demand, as well as changes in economic conditions and other risk factors discussed in documents filed by the company with the Securities and Exchange Commission (SEC) from time to time. Copies of Altera's SEC filings are posted on the company's website and are available from the company without charge. Forward-looking statements are made as of the date of this release, and, except as required by law, the company does not undertake an obligation to update its forward-looking statements to reflect future events or circumstances.

About Altera

Altera([R]) programmable solutions enable system and semiconductor companies to rapidly and cost-effectively innovate, differentiate and win in their markets. Find out more at www.altera.com.

Altera, The Programmable Solutions Company, the stylized Altera logo, specific device designations and all other words that are identified as trademarks and/or service marks are, unless noted otherwise, the trademarks and service marks of Altera Corporation in the U.S. and other countries. All other product or service names are the property of their respective holder.

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