Arasor Signs $175 Million Joint Venture Agreement in Guangzhou, China, to Build a State-of-the-Art Facility.

Business Editors/High-Tech Writers

OFC 2004

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

Company's New 200,000 Sq. Ft. R&D, Production, and Testing

Facility Will Be Operational in Q4

Arasor Corporation announced today that it has entered into multi-year joint venture (JV) agreement valued at $175 million with Nansha High Technology Investment Ltd., the investment arm of the Guangzhou government, to build a 200,000 sq. ft. facility in the municipality's new Nansha IT Park. Arasor, a developer and manufacturer of communications integrated circuits, components, and subsystems that collectively revolutionize wired and wireless communications, will use the facility for R&D, production, testing, and customer support. The company will move from its current 25,000 sq. ft. facility to the new facility in Q4 2004.

"The support of the Guangzhou government gives us a major advantage in building a world-class component and subsystem powerhouse," said Simon Cao, PhD, founder and CEO of Arasor. "The Nansha location places us near many of the members of the Greater China Photonic Solutions (GCPS) consortium, allowing us easy access to high-quality, Chinese-made materials and supplies at low prices. The consortium integrates the sales and customer support process to better service customers such as Huawei Technologies."

"Guangzhou fully supports the joint venture with Arasor; this Joint Venture will create the largest production facility built in Guangzhou since 2000," said Chen Mingde, vice mayor of Guangzhou.

Arasor is a founding member of Greater China Photonic Solutions (GCPS), and Cao is its chairman. GCPS is a consortium that offers the first China-based integrated component and subsystem supply chain for communications companies that manufacture their products in China. Companies that previously purchased supplies in the U.S. and Japan and shipped them to China can now reduce their costs by outsourcing their supplies in China.

Facility is in heart of burgeoning Chinese telecom market

Arasor expects to gain many other benefits from locating in the Nansha IT Park. "We are well placed to take advantage of China's huge and rapidly expanding telecommunications market," said Cao. "Guangzhou has emerged as a leading center of photonics research and manufacturing. Nansha IT Park is only an hour from the center of Guangzhou, Hong Kong, and Macau, and more than 40 percent of China's spending in telecommunications takes place in this area."

"The goal is to create a world-class high-tech center at the Nansha IT Park, and to gain Arasor as the anchor company in the park is a real boost to reaching that goal. Simon Cao is one of the world's leading figures in optics, and he has an impressive record of developing important new technologies and building successful companies around them," said Chen. Guangzhou is heavily spending in the Nansha development zone, which has attracted more than 200 international companies, including General Electric, BASF, Toyota, Nissan, and Hyundai. Nansha is at the mouth of the Pearl River Delta, and Guangzhou is building a deep-water port to serve companies in the area.

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.