Agere Systems Reaches 25 Million Mark in total SOC Shipments for Data Storage Applications

Company ships third-generation system-on-a-chip design for Maxtor's hard disk drives

ALLENTOWN, Pa.- AUGUST 21, 2002 - Agere Systems (NYSE: AGR.A, AGR.B) today announced that it is the first supplier to ship in excess of 25 million storage system-on-a-chip (SoC) solutions for hard disk drives. In addition to reaching this milestone, Agere also has begun shipping in volume SoC solutions based on its latest read channel technology to Maxtor Corporation, a worldwide leader in hard disk drives for consumers, professionals and enterprise applications.

Agere began shipping storage SoCs in September 2001 and now ships six million units per month.

According to IDC, an industry analyst firm, the market for SoCs will experience a compound annual growth rate of 30 percent over the next five years. IDC points to SoCs as the key trend in the hard disk drive semiconductor business and read channels as the most critical technology for SoCs.

Agere's SoCs, with their integrated read channel technology, ensure data path integrity while converting analog signals read from magnetic platters into digital bits. Based on IDC's latest market share survey, Agere's read channel leadership makes it the best strategically positioned supplier as more CMOS functionality is integrated onto single-chip SoCs for hard disk drive applications. Disk drive makers rely on SoCs to simplify disk drive design, improve reliability, reduce power consumption and ease manufacturing without increasing drive costs.

"Armed with proven read channel expertise and a broad portfolio of disk drive electronics, Agere is a valuable SoC supplier and systems design consultant," said Cecil Macgregor, vice president of desktop electronics at Maxtor. "Agere's SoCs contribute to our ability to rapidly address user demand for high-performance, high-capacity drives at competitive prices. Maxtor continues to provide leading hard disk drives that use the latest technology to meet customer requirements for PC, consumer electronics and server applications."

"Reaching this shipment milestone combined with our third SoC engagement with Maxtor are two solid pieces of evidence that Agere is positioned to lead the SoC evolution taking over the hard disk drive market," said Joe O'Hare, vice president of Storage Products at Agere Systems. "Maxtor's leadership in incorporating highly integrated SoC solutions into its disk drives is clear and we are committed to continue supporting their efforts by delivering solutions that meet their need for unparalleled signal integrity, reliability and value."

Maxtor is incorporating the SoC, which is comprised of the MS55X read channel, a custom digital signal processor (DSP), memory, and controller electronics, into the DiamondMax® Plus line of high-performance 7200 revolutions-per-minute (RPM) disk drives equipped with the Ultra ATA/133 interface. This interface operates at 133 megabytes per second delivering high data throughput in desktop PCs. The SoC's embedded processing engine is based on a 100 MHz DSP. Its Harvard architecture and multi-stage pipeline assure high-speed performance. Implemented as a synthesizable core, the DSP engine can be retargeted to more advanced semiconductor processes, enabling rapid performance upgrades as process technology evolves. Buffering of high-speed data is done through a 16-bit synchronous dynamic random access memory (SDRAM) interface.

Agere also is providing Maxtor with a comprehensive suite of hardware and software development support tools, including the ARCTIC/SESAME read channel evaluation system. These design tools enable rapid set-up, data acquisition, analysis and optimization of SoC performance characteristics in a user-friendly manner. As more sophisticated testing is needed, ARCTIC/SESAME also allows Maxtor designers to build customized test and evaluation applications. To speed firmware development, Agere also provides a custom-developed hardware trace reconstructor ASIC (HRA) to enable high-speed software trace debug capability, including real-time internal processor bus monitoring and register state reconstruction.

Agere offers a complete product portfolio of storage ICs that, along with read channels and SoCs, also encompasses preamplifiers, motor controllers, and hard disk controllers. Agere's leading-edge solutions help hard disk drive manufacturers meet the growing need for storage in segments ranging from traditional hard-disk drives for desktop PCs, notebooks and servers, as well as for an increasing array of consumer products such as game consoles, personal video recorders, digital cameras, and MP3 players.

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 http://www.agere.com .

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Agere's Forward-Looking Statements
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.