Terayon Ships One Millionth Cable Modem; Terayon Reinforces its Broadband Leadership.

Business Editors/High Tech Writers

SANTA CLARA, Calif.--(BUSINESS WIRE)--Sept. 5, 2000

Terayon Communication Systems, Inc. (Nasdaq:TERN), a leader in broadband access systems, announced today that it has shipped its one millionth cable modem. Since producing its first cable data system in 1997, Terayon has quickly become the second-leading cable modem supplier in the world(a) . The company has also expanded its broadband portfolio to include solutions for delivering advanced voice, data and video services over cable, telco and satellite networks.

"This is a significant milestone for Terayon, our shareholders, our employees and our customers. Reaching the one million benchmark not only denotes a level of achievement to be proud of, but highlights the explosive growth of broadband and the success our customers have had with our systems," said Zaki Rakib, Terayon's chief executive officer and co-founder. "Their recognition of our quality products has been key to our growth and reaching this milestone."

Terayon's cable modems enable cable television subscribers to access the Internet many times faster than possible with dial-up modems. Recognized for their performance and reliability, Terayon's cable data systems are in use by many of the world's largest cable operators, including Adelphia Communications, Cablevision Systems, Globocabo, Jupiter Communications, Rogers Cablesystems, Shaw Communications and United Pan-Europe Communication (UPC).

"Terayon is the only vendor that continues to significantly increase sales of proprietary cable modem products. In the second quarter, Terayon controlled 51 percent of the North American market for proprietary cable modem products and 39 percent of the worldwide market. Its robust S-CDMA technology continues to offer a unique value proposition to cable operators," said Michael Harris, president of broadband research firm Kinetic Strategies, Inc. "Terayon has also emerged as a key player in the market for standards-based cable modem products by embracing DOCSIS, EuroDOCSIS and DVB specifications."

To continue its strong growth in cable data systems, Terayon continues to expand its broadband data product line. In addition to its widely deployed system based on the company's S-CDMA (Synchronous Code Division Multiple Access) technology, Terayon offers systems which meet the North American DOCSIS and the European DVB cable data standards. Terayon is committed to international standards and will soon offer a system based on EuroDOCSIS, another major European cable data standard.

To meet the growing demand for broadband services, Terayon has expanded its broadband portfolio, and now offers system solutions for delivering advanced voice, data and video services over cable, telco and satellite networks. To build its presence in these markets, Terayon has acquired several established companies with complementary products or technologies.

Terayon Communication Systems provides innovative broadband systems and solutions for the delivery of advanced voice, data and video services over cable, telco and satellite networks. The company's systems and solutions are deployed by the world's leading cable and telecommunications carriers. Terayon, headquartered in Santa Clara, California, has sales and support offices worldwide, and is traded on the Nasdaq under the symbol TERN. Terayon can be found on the web at www.terayon.com.

"Safe Harbor" Statements under the Private Securities Litigation Reform Act of 1995:

Except for the historical information contained herein, this news release contains forward-looking statements, estimates, and assumptions by the Company and other parties that involve risks and uncertainties, including the Company's ability to gain new business, the expansion of operations by the Company's customers and the deployment of the Company's products in specific markets, as well as the other risks detailed from time to time in the Company's filings with the SEC.

Note: Terayon, the Terayon logo, TeraPro, TeraLink, and TeraComm are registered trademarks of Terayon Communication Systems, Inc. TeraView, CherryPicker, HighLink, IPTL, IPAIR , VDAS3000 and VDAS300 are trademarks of Terayon Communication Systems, Inc. All other trademarks are property of their respective owners.

(a) Source: Cahners In-Stat market research firm