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Altera Announces an Increase in its WaferTech Ownership

  • $37.5 million deal increases equity interest to 23 percent
  • Ensures quick ramp of upcoming Altera products
  • Transaction closes January 1999

San Jose, Calif., December 2, 1998 -- Altera Corporation (Nasdaq: ALTR) today announced that it has agreed to increase its ownership stake in WaferTech, a state-of-the-art joint venture semiconductor manufacturing facility in Camas, Washington. The joint venture's partners include TSMC, Altera, Analog Devices, and Integrated Silicon Solutions. WaferTech began initial volume production in the third quarter and is expected to ramp into commercial volume in 1999.

Under the terms of the agreement, Altera will pay $37.5 million to secure an additional five percent ownership interest in the venture, bringing its total equity position in WaferTech to 23 percent. The transaction is expected to close in January 1999.

"We are very satisfied with WaferTech's progress to date," said Rodney Smith, president and CEO of Altera. "The foundry's quality and yields have exceeded our expectations, and the proximity of the WaferTech facility has enabled us to quickly ramp our products into volume. These benefits will be of increasing importance as we accelerate the pace of new product introductions. Although the financial results of our investment will continue to be negative in the next several quarters, we are confident that over the long term this investment will make a positive financial contribution and will be an important strategic asset. Moreover, TSMC has been Altera's principal source of wafers for several years, and we are pleased with this opportunity to further strengthen our relationship."

Dr. Morris Chang, chairman and CEO of TSMC, commented, "Altera's support has been instrumental in getting WaferTech's processes qualified and into production. Over the years, they have been a strong and stable customer of TSMC and we are encouraged by their increased commitment to WaferTech."

Safe Harbor Notice

This press release contains "forward looking statements" which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements are generally preceded by words such as "expects," "believes," "anticipates," "projects," or "intends." Investors are cautioned that all forward-looking statements in this release involve risks and uncertainty, including without limitation the risks that the closing of the purchase transaction, WaferTech's ability to yield commercial volume production, and WaferTech's positive financial contribution to Altera, may be delayed or may not occur. Please refer to the Company's Securities and Exchange Commission filings, copies of which are available from the Company without charge, for further information.

About Altera Corporation

Altera Corporation, The Programmable Solutions Company, was founded in 1983 and is a worldwide leader in high-performance, high-density programmable logic devices and associated computer aided engineering (CAE) logic development tools. Programmable logic devices are semiconductor chips that offer on-site programmability to customers. The chips are programmed using tools that run on personal computers or engineering work stations. User benefits include ease of use, lower risk, and fast time-to-market. The company offers the broadest line of CMOS programmable logic devices that address high-speed, high-density, and low-power applications. Altera products serve a broad range of markets, including telecommunications, data communications, computer peripherals, and industrial applications. Altera common stock is traded on the Nasdaq Stock Market under the symbol ALTR.


Altera Editorial Contact
(888) 3-ALTERA

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