Arasor Acquires Lightbit and IOA; Lightbit CEO Joins Arasor Board.

Business Editors/High-Tech Writers

OFC 2004

FREMONT, Calif.--(BUSINESS WIRE)--Feb. 25, 2004

Arasor Also Expands Management Team as Company Starts to Move

from Development to Customer Engagements and Production

Arasor Corporation, a developer and manufacturer of communications integrated circuits, components, and subsystems that collectively revolutionize wired and wireless communications, announced today that it has acquired Lightbit Corporation. Lightbit, an optical telecommunications subsystem provider, manufactures purely optical processors that reduce the system cost for handling multiple channels over optical fiber networks. In addition, the company produces a line of lasers employed in color copiers and optical chips that sell to the biotechnology industry. As part of its agreement with Lightbit, Arasor has also acquired Intelligent Optical Amplifier (IOA), which makes next-generation amplifiers. The acquisitions were completed in exchange for an undisclosed amount of cash and preferred stock.

"Lightbit and IOA give Arasor a number of strategic benefits," said Simon Cao, PhD, founder and CEO of Arasor. "First, Arasor and Lightbit both leverage Arasor's revolutionary 3D wafer processing and packaging platform, creating strong synergies and efficiencies. While Arasor strengths include signal processing, wireless, and broadband access components, Lightbit's focus is on switching and routing, using dynamic wavelength conversion to provide flexibility in wavelength connectivity. Second, with Lightbit and IOA we can expand our product line with intelligent optical routers, amplifiers, and industrial lasers. These acquisitions are a strong validation of Arasor's strategy to leverage a common technology platform to address multiple market segments."

"The combination of Arasor and Lightbit technologies creates a powerful new class of products that harness the power of photonic integrated circuits to deliver exceptional value to communications customers," said Larry Marshall, PhD, CEO of Lightbit. "This overwhelming synergy enabled Arasor to craft a purchase agreement that beat out competitive bids from several other companies. Simon has a powerful vision and the means to propel Arasor to great commercial success."

Marshall will become a member of Arasor's board of directors, where he will help leverage Arasor's technology into products that extend beyond telecommunications. In addition to Lightbit, Marshall has founded four successful photonics startups during the past 16 years, including Iridex Corporation, which went public on the NASDAQ (Nasdaq:IRIX).

Arasor will retain the existing Lightbit and IOA teams and Lightbit's optical fabrication facility, and will consolidate at Lightbit's headquarters in Mountain View, Calif.

Arasor adds to management team

Arasor also announced today that it has added three executives to its management team. "Arasor is expanding sales, marketing, and business development in the U.S. and China as well as our development and production capabilities in China," said Cao. "Our three new team members are well-known in the field of communications and bring a wealth of experience that will benefit Arasor as it moves into a period of sustained growth."

Charles Mao, PhD, has been appointed president and vice-chairman of the Board of Directors. Dr. Mao adds expanded leadership to Arasor and will focus on sales and marketing to increase the company's share in the dynamic worldwide market for wired and wireless communications. A member of the founding team for Avanex Corporation, Mao was the company's senior vice president of sales and marketing and helped launch the Avanex IPO.

Jessy Chao is Arasor's new senior vice president of business development. He was formerly founder and CFO of Avanex Corporation. Earlier in his career, Chao was head of accounting and finance at E-TEK Dynamics, Inc.

Aibing Gong is now vice president of China operations for Arasor. He brings to his new position 21 years of experience in opto-electronics packaging and high-volume manufacturing development. Gong was formerly general manager of Lasertron-Shanghai, where he oversaw all aspects of operations from initial setup to full product deliveries.

About Lightbit and IOA

Lightbit makes purely optical processors that use light to directly process light one million times faster than silicon, without creating any waste heat. The company's WaveXchange product processes multiple dense wave division multiplexing (DMDW) channels simultaneously, without electronic conversion. A single Lightbit optical processor can replace multiple expensive optical-electrical-optical (OEO) transponders in today's fiber-optic networks, dramatically reducing the cost of deploying 10Gbps DWDM systems. Investors in Lightbit included Mayfield Fund, Accel Partners, and other significant institutional and private investors.

IOA, which Lightbit acquired in 2002, makes next-generation intelligent amplifiers that are dynamically controllable. IOA uses smart electronics to improve amplifier performance and eliminate external optical elements, thereby reducing the cost and complexity of amplifiers. Arasor plans to continue and expand on the IOA product line, which includes narrow-band, c-band, and l-band amplifiers. IOA was funded in 2001 by Mayfield Fund and U.S. Venture Partners.

About Arasor

Arasor Corporation, headquartered in Fremont, CA., develops and manufactures communications integrated circuits, components, and subsystems that collectively revolutionize wired and wireless communications. The company's proprietary technology platform significantly reduces system costs and extends photonics technology to a wide variety of leading-edge applications, including wireline and wireless communications and defense. Based on the world's most advanced passive and active optical technologies, Arasor's end-to-end component and subsystem solutions are fabricated using a revolutionary 3D wafer-processing technology. With their substantially reduced drive voltage, greatly increased bandwidth, and the smallest form-factor in the industry, Arasor products enable customers to create efficient, simple, and low-cost business models. Arasor, which was founded in 2001, is privately funded and has facilities in Yokohama, Japan; Shanghai, China; and Nansha, China.