Cronos Integrated Microsystems Secures $8 Million in First-Round Financing.

RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--Dec. 8, 1999--

Cronos Integrated Microsystems Inc., a leader in the emerging market for micro-electro-mechanical systems (MEMS) technology, announced today it has raised $8 million in its first round of venture capital financing.

The financing was led by SpaceVest II L.P. Other investors are Intel Corporation and Knickerbocker LLC.

Cronos, which designs and fabricates MEMS components, will use the funding to help further its growth and expansion in markets in which MEMS devices are gaining rapid acceptance - primarily in telecommunications and microinstrumentation.

"The growth we're seeing in key market segments, especially in optical communications, is reminiscent of the early years in the semiconductor industry," said Robert L. Bratter, President and Chief Executive Officer of Cronos. "Completion of our first round of financing underscores our commitment to meet the growing demand for MEMS devices in our markets."

Commenting on Cronos' completion of its financing, David Bishop, head of micro-mechanics research at Lucent Technologies' Bell Labs, said, "MEMS in lightwave systems is potentially a killer application and Cronos is well positioned to participate. The securing of this funding is an important next step that will help to guarantee the existence of the necessary infrastructure for MEMS-based communications devices and products."

Cronos was incorporated as a wholly-owned subsidiary of MCNC, a technology incubator in Research Triangle Park, N.C., in February l998 and will complete its spin-off with this first round of funding.

MEMS technology uses well-established semiconductor fabrication techniques to build mechanical structures on the surface of a microchip. For many design applications, MEMS devices take up less space, consume less power than traditional electrical and electro-mechanical components, and are less costly to produce in large volumes.

"Because of these unique characteristics, MEMS has emerged as a critical platform technology for creating the next generation switching fabric for optical communications and other networks, specifically the Internet backbone," said Bratter.

Initial commercial applications of MEMS technology have included MEMS-based sensors in automobile airbag systems and inkjet printer nozzles. In the telecommunications industry, MEMS components are being used to enhance the capacity of fiber-optic networks. Market researchers, including Systems Planning Corp. and SRIC, project the MEMS component industry will generate more than $5 billion in sales by 2002, with the greatest growth occurring in telecommunications and instrumentation.

Remarked Ransom J. Parker, Managing Director of SpaceVest, a venture capital fund based in Reston, Va., "With its history of R&D and manufacturing, Cronos is the leading company in the MEMS industry, providing the most comprehensive set of products and services of any company that considers itself a player in MEMS. Cronos works in conjunction with customers to provide the MEMS-based solutions they need. This approach has already demonstrated success in optical communications, an extremely fast-moving market that is enabled by MEMS technology."

About the Investors

SpaceVest II L.P. was formed in December 1998 by SpaceVest, the space industry's leading venture capital fund. SpaceVest, a unique equity capital organization supported by leading financial institutions, diversifies its investments across four distinct sectors of the space industry: telecommunications, infrastructure, emerging applications and support services. More information is available at http://www.spacevest.com .

Knickerbocker LLC is a private management firm based in Gladstone, N.J., which oversees and administers the investments of various trusts, foundations and individuals. Additional information about Knickerbocker is available at http://www.knickerbockerllc.com .

About Cronos

Cronos Integrated Microsystems Inc., the industry leader in the emerging MEMS marketplace, develops and supplies proprietary MEMS components and component technologies in communications, microinstrumentation and other emerging markets. Cronos engages in virtually all aspects of MEMS development and manufacturing, from initial concept to fully fabricated devices, including both prototyping and volume production. As a result, Cronos is the gateway to MEMS application development for corporations in a wide variety of consumer and industrial markets.

Cronos can be reached at P.O. Box 13942, Research Triangle Park, NC 27709; by phone at 1-877-GET-MEMS (1-877-438-6367); by fax at 919-465-0486, or on the Web at http://www.memsrus.com .