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AMCC Sells Patents

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7/15/2008
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SUNNYVALE, Calif. -- Applied Micro Circuits Corporation (NASDAQ: AMCC - News), a global leader in embedded Power Architecture® processing, optical transport and storage solutions announced it recently signed an agreement for the sale of certain patents which provides the Company with an "intellectual property revenue stream” totaling $33 million that will be payable over the next 3 years. A total of $3 million of this amount is to be received by the Company and reflected in its September quarter revenues. We believe this transaction validates AMCC’s IP Monetization Program and further enhances AMCC’s leadership position with key players in the industry.

AMCC is a company rich in intellectual property. During the last three years the strategic direction of the Company has changed in such a way that certain valuable patents are no longer core to its strategic direction. These patents relate to non-core products, foundry and other items that are not relevant to the Company's product road maps. As such, AMCC has embarked on a program to monetize this intellectual property and to consider further productization of its strategic and non-strategic patents and related patent rights.

The specific terms of the transaction are confidential, but the Company retains a right to continue using the claimed inventions in the transferred patents in conducting its current and future business. The Company's Chief Financial Officer, Bob Gargus, stated: "As a company, we have invested a large percentage of our revenues on research and development and this is a great way to improve our overall return from these investments. This is a project we started back in calendar 2006 when we broke out the non-focus revenues and began to analyze our patent portfolio in detail. This contract boosts our IP Monetization Program; a program that we hope will result in a sustainable long-term IP revenue stream in the next three-to-five years."

Applied Micro Circuits Corp. (Nasdaq: AMCC)

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