Altera Reduces Leadtimes on Popular FLEX Devices; Standard Leadtimes on EPF81188A and EPF81500A Cut in Half; New 8-inch Wafers Dramatically Increase Supply; Move to 0.5 Micron Technology Is Accelerated.

SAN JOSE, Calif.--(BUSINESS WIRE)--Aug. 22, 1995--Altera Corporation (NASDAQ:ALTR) announced that effective immediately it has reduced leadtimes on its two most popular FLEX 8000 devices. The standard leadtime on Altera's top-selling FLEX 8000 device, the 12,000 gate EPF81188A, is being reduced from 20 weeks to 10 weeks. The reduction in leadtimes is a result of Altera working with its fabrication partners in securing additional wafer capacity and a technology change to larger 8-inch wafers. The planned move to 0.5 micron is also being accelerated to add capacity sooner to meet customer demand.

Explosive Growth Created Longer Leadtimes

The increased demand for Altera products has been dramatic, with the company's first half revenue over 80% higher than in the same period in 1994, mostly driven by growth in MAX 7000 and FLEX 8000 products. This surge in activity caused a lengthening of delivery schedules, up to 20 weeks from receipt of order to shipment of product, for certain FLEX 8000 devices. "FLEX 8000 devices have hit a pivotal price and performance point in the market where customers are now using them in higher volume production applications. The unprecedented demand created pressures on product leadtimes that we needed to address in order to maintain our growth momentum," stated Erik Cleage, Altera's vice president of marketing. "Our technology and manufacturing organizations have responded to this challenge by dramatically increasing our supply of devices."

8-Inch Wafers Increase Supply

A major factor that has contributed to the increase in supply, and resultant decrease in leadtimes, is shifting from 6-inch wafers to 8-inch wafers. For example, Altera is now producing the FLEX EPF81188A, its top-selling FLEX device, on 8-inch wafers. The area of 8-inch wafers is 78% greater than 6-inch wafers. This change to a larger wafer means that more good dice are available per wafer, significantly increasing shipment capacity and allowing leadtimes to be reduced. It is anticipated that the leadtimes on this device will be down to less than 8 weeks by the end of the current quarter. The leadtime on the EPF81500A, Altera's 16,000 gate FLEX device, is also being reduced from 20 weeks to 10 weeks due to wafer capacity increases. It is planned that this device will be manufactured on 8-inch wafers later this year. Leadtime reductions for other FLEX 8000 family members are expected to follow in the fourth quarter. Standard leadtimes are the delivery schedules applied to the majority of incoming orders for typical volumes. Individual customer leadtimes can vary up or down for exceptionally large or small quantities.

Migration to 0.5 Micron Technology 

In addition to producing larger wafers, the company has accelerated its move to a smaller geometry 0.5 micron process. The move from 0.6 to 0.5 micron allows chips to be shrunk by approximately 30 percent, reducing costs and allowing more finished devices to be shipped from each wafer. The result is a further increase in manufacturing capacity.

Increased Wafer Capacity Secured

Altera has also worked closely with its foundry partners to increase its supply of wafers. This effort has been successful and is a significant factor in allowing Altera to reduce leadtimes. "Our foundry partners have responded well to our increased demand," stated Denis Berlan, Altera's vice president of operations and product engineering. "The net effect of the increased wafer quantities, the larger 8-inch wafer size and the move to 0.5 microns, is expected to result in FLEX 8000 shipment capacity in 1996 being more than 3 times higher than in 1995, with further increases likely." MAX 7000 devices have also been on a rapid growth curve. The standard leadtimes on MAX 7000 products have already come down and currently range from 6 to 8 weeks. Production capacity on this family is expected to more than double in 1996.

About Altera

Altera Corporation, founded in 1983, is a world-wide leader in high-performance, high-density programmable logic devices and associated computer aided engineering (CAE) logic development tools. Programmable logic devices are semiconductor chips that offer on-site programmability to customers. The chips are programmed using tools that run on personal computers or engineering workstations. User benefits include ease of use, lower risk, and fast time-to-market. The Company offers the broadest line of CMOS programmable logic devices that address high-speed, high-density, and low-power applications. Altera products serve a broad range of market areas, including telecommunications, data communications, computers, and industrial applications. Altera common stock is traded on the Nasdaq Stock Market using the symbol ALTR.

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Note to Editors: Altera, MAX, and FLEX are registered trademarks, and MAX 7000, FLEX 8000 and specific device designations are trademarks of Altera Corporation. All other trademarks are the property of their respective holders.

CONTACT: Altera Corporation

Robert K. Beachler or Erik Cleage, 408/894-7000

or

Franson, Hagerty and Associates

Susan Cain, 408/291-2580