Infineon Technologies and Agere Systems Announce Broad Alliance to Develop High-Speed Wireless Networking Solutions

Oct 15, 2002 | Market News

Joint News Release by Infineon Technologies and Agere Systems

Allentown, Pa. (USA) and Munich, Germany, October 15, 2002 - Agere Systems (NYSE: AGR.A, AGR.B) and Infineon Technologies AG (FSE/NYSE: IFX) today announced they have formed a broad alliance to jointly develop high-performance chips based on the 802.11 standard in order to offer next-generation wireless networking solutions. This technology offers 20 times higher bandwidth than current wireless networks and will reach up to 54 Mbit/s to support enterprise solutions, multimedia entertainment and home applications. The collaboration between Agere and Infineon includes intellectual property licensing and a mutual supply agreement. Both companies will independently market next-generation wireless LAN products.

The solution will be targeted to manufacturers of communication and computing equipment to meet the growing demand for high data rate wireless LAN systems that provide business and residential users with flexible access to email and the Internet. By developing a solution that leverages the respective strengths of each company, Agere and Infineon will help drive the deployment of wireless LAN.

According to IDC, an industry analyst firm, the total market for wireless LAN chips is expected to grow at a compound annual growth rate of nearly 30 percent from $331 million in 2001 to $1,200 million by 2006. Current applications are supported by today’s 11 Mbit/s 802.11b technology. However, as new services emerge and the number of end-users grows, the bandwidth required in enterprise networks will rise significantly. The market will increasingly migrate to multimode solutions which combine 802.11a, b, and g technologies, while operating in both the 2.4 and 5.2 GHz frequencies. Multimode solutions are projected to represent as much as 57 percent of the total wireless LAN chip market by 2006, according to IDC.

"This announcement shows a commitment by two wireless leaders to jointly accelerate the growth and evolution of the 802.11 WLAN market," said Ken Furer, IDC industry analyst. "Ultimately, the collaboration of resources will be necessary as established chip vendors bring complete solutions to market."

Under the agreement, Agere and Infineon will co-develop, supply and support reference designs that include all of the components required by network equipment, consumer electronics and PC manufacturers to offer end products with wireless networking capabilities.

“Together, Infineon and Agere will build advanced wireless LAN solutions that combine best-in-class RF capabilities with systems-level expertise to establish an undisputable leading force in the wireless LAN industry,” said Ulrich Hamann, CEO of Infineon Wireless Solutions.

“Our joint reference designs will allow manufacturers to offer high-speed wireless solutions at or below cost of today’s 802.11 b offerings,” said Ron Black, executive vice president of Agere Systems’ Client Systems Group. “Providing improved performance, while reducing system costs, will be a key factor in accelerating market deployment of high-speed wireless networking.”

Agere will provide its multi-mode media access controller (MAC) with software drivers to the joint solution, while Infineon will contribute its advanced dual-band radio technology and wide-band power amplifier chips. Agere and Infineon will co-develop the physical layer (PHY) component for the reference designs, combining intellectual property and experience from each company. Under the terms of the agreement, Infineon and Agere will cross-license patents and technology that will be jointly used. Agere and Infineon will offer to the market not only a highly competitive solution but also the security and flexibility in sourcing. The two companies will begin sampling to customers by second quarter 2003.

About Agere Systems

Agere Systems is a premier provider of advanced integrated circuit (IC) solutions that access, move and store network information. Agere’s IC solutions form the building blocks for a broad range of communications and computing applications. The company is the leader in providing storage solutions for hard disk drives with its read-channel chips, preamplifiers and system-on-a-chip solutions, and the No. 2 provider of Wi-Fi solutions for wireless LAN applications. For network equipment providers, Agere is a leading supplier of ICs for wired communications, network switching and access, and ATM and SONET/SDH solutions. In addition, Agere is the No. 2 supplier of application-specific ICs (ASICs) for communications applications. More information about Agere Systems is available from its Web site at

About Infineon Technologies

Infineon Technologies AG, Munich, Germany, offers semiconductor and system solutions for applications in the wired and wireless communications markets, for security systems and smartcards, for the automotive and industrial sectors, as well as memory products. With a global presence, Infineon operates in the US from San Jose, CA, in the Asia-Pacific region from Singapore and in Japan from Tokyo. In the fiscal year 2001 (ending September), the company achieved sales of Euro 5.67 billion with about 33,800 employees world-wide. Infineon is listed on the DAX index of the Frankfurt Stock Exchange and on the New York Stock Exchange (ticker symbol: IFX). Further information is available at

Contacts at Agere:

JoAnna Schooler
610-712-1746 (office)
908-872-3211 (cellular)

Glen Haley
610-712-1747 (office)
610-217-0781 (cellular)

This release contains forward-looking statements based on information available to Agere as of the date hereof. Agere's actual results could differ materially from the results stated or implied by such forward-looking statements due to a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, customer demand for our products and services, control of costs and expenses, timely completion of employment reductions and other restructuring and consolidation activities, price and product competition, keeping pace with technological change, dependence on new product development, reliance on major customers and suppliers, availability of manufacturing capacity, components and materials, general industry and market conditions and general domestic and international economic conditions including interest rate and currency exchange rate fluctuations. For a further discussion of these and other risks and uncertainties, see our annual report on Form 10-K for the fiscal year ended September 30, 2001, and report on Form 10-Q for the period ending June 30, 2002. Agere disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

This discussion includes forward-looking statements about our future business. These forward-looking statements include statements relating to future developments of the world semiconductor market, especially the market for memory products, Infineon’s future growth, the benefits of research and development alliances and activities, our planned levels of future investment in the expansion and modernization of our production capacity, the introduction of new technology at our facilities, the transitioning of our production processes to smaller structures, cost savings related to such transitioning and other initiatives, our successful development of technology based on industry standards, our ability to offer commercially viable products based on our technology, our ability to achieve our cost savings and growth targets. These forward-looking statements are subject to a number of uncertainties, including trends in demand and prices for semiconductors generally and for our products in particular, the success of our development efforts, both alone and with our partners, the success of our efforts to introduce new production processes at our facilities and the actions of our competitors, the availability of funds for planned expansion efforts, as well as the other factors mentioned herein. As a result, our actual results could differ materially from those contained in the forward-looking statements.

Infineon, the stylized Infineon Technologies design are trademarks and servicemarks of Infineon Technologies AG. All other trademarks are the property of their respective owners.

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