IDT Acquires IBM's Network Search Engine Product Designs; Deal Underscores IDT Commitment to Leadership in the Network Search Engine Market.

Business Editors/High-Tech Writers

SANTA CLARA, Calif.--(BUSINESS WIRE)--Sept. 2, 2003

IDT(TM) (Integrated Device Technology, Inc.)(Nasdaq:IDTI), a leading communications IC company and the market and technology leader of network search engine (NSE) semiconductor devices, today announced it has reached an agreement with IBM to purchase its NSE product designs. IBM had been developing full-ternary content addressable memory-based NSEs targeting next-generation platforms. With this acquisition, IDT further extends its leadership by offering the broadest and deepest portfolio of NSE solutions that accelerate packet processing. The financial terms of the agreement are not being disclosed.

"This acquisition reinforces our position as the market and technology leader of NSEs that enable differentiated network services. Our goal is to provide preeminent semiconductor solutions that accelerate packet processing," said Greg Lang, IDT president and CEO. "With the addition of these devices that complement our internal development efforts, we continue to extend our portfolio of next-generation packet-processing solutions."

"Acquiring these NSE product designs from IBM enhances the IDT product portfolio and market share for the enterprise switching market," said Jag Bolaria, senior analyst at The Linley Group. "More importantly, these complementary devices further strengthen IDT as the leader in the NSE market."

Specific to the transaction, the acquired product designs consist of 128Kx36 (4.5-Mbit) and 512Kx36 (18-Mbit) devices; no IBM employees will be transferred as part of this acquisition. As part of the agreement, IBM will serve as the foundry and will manufacture these NSEs in a 0.13-micron, copper process. Initial products are sampling now.

As the industry leader in NSEs, IDT accelerates packet processing in applications such as core, metro and access routers. The IDT product portfolio includes a pin- and software-compatible family of NSEs that are specifically targeted for application-specific integrated circuit (ASIC)-based packet-processing designs, as well as NSEs that seamlessly interface to network processor units (NPUs) from leading vendors including Intel and AMCC. IDT NSE devices aid in classification and offload the search functions from ASICs and NPUs, allowing for differentiated services such as policy-based routing, billing, access control lists (ACLs) and quality of service (QoS).

IDT IP Co-Processor Solutions

IDT provides a family of IP co-processor solutions, including industry-leading network search engines and content inspection engines that accelerate packet processing and enable intelligent application management in next-generation networking equipment. IDT is recognized by RHK, Inc. and International Data Corporation (IDC) as the technology leader, and as the volume shipment leader of network search engines. Based on the integration of ternary content addressable memory (TCAM) and high-performance logic, the IDT NSEs support NPUs and ASICs to accelerate packet classification and forwarding in core, metro and access networks. IDT offers the industry's highest-performance NSEs operating up to 250 MHz and the first NSE with an integrated LA-1 interface, and was the first vendor to introduce search widths up to 576 bits. The IDT NSE portfolio includes custom versions for Cisco Systems, as well as merchant versions with high-performance interfaces and glue-less interfaces to leading network processors. The IDT 256Kx36 (128Kx72) NSE received the EDN Top 100 Products Award of 2002.

About IDT

IDT enhances the global network with semiconductor solutions for communications companies that lead innovation and drive convergence in voice, data and wireless networks. IDT is focused on enhancing system bandwidth with communications-specific products including network search engines, content inspection engines, flow-control management devices and the Interprise(TM) family of integrated communications processors. The portfolio is also comprised of products optimized for communications applications, including telecom products, FIFOs, multi-ports, and clock management products. In addition, the product mix includes high-performance digital logic and high-speed SRAMs to meet the requirements of leading communications companies.

Headquartered in Santa Clara, Calif., the company employs approximately 3,100 people worldwide and has a wafer manufacturing facility in Oregon, and test and assembly facilities in the Philippines and Malaysia. IDT stock is traded on the Nasdaq Stock Market(R) under the symbol "IDTI." The company is included in the S&P 1000, which is a combination of the S&P MidCap 400 and S&P SmallCap 600 Indices, and is also part of the S&P SuperComposite 1500, which combines the S&P 500, MidCap 400, and SmallCap 600. Additional information about IDT is easily accessible at www.idt.com.

IDT and Interprise are trademarks and the IDT logo is a registered trademark of Integrated Device Technology, Inc. All other brands, product names and marks are or may be trademarks or registered trademarks used to identify products or services of their respective owners.