SUNNYVALE, Calif. -- Applied Micro Circuits Corporation, or AppliedMicro (Nasdaq:AMCC) todayannounced that it has entered into a definitive stock purchaseagreement to acquire TPACK A/S of Copenhagen, Denmark. Applied MicroCircuits will pay $32 million in cash plus up to $5 million in cashearn-outs that are dependent primarily upon TPACK revenues and productdevelopment milestones scheduled over the next eighteen months. Thetransaction is expected to be profit neutral, excluding transactioncosts, for our fiscal year ending March 31, 2011 and to be accretivethereafter.

TPACK's SOFTSILICON(TM) products support the fastest deployment of newcarrier-class packet and optical network standards with the greatestflexibility for Tier 1 equipment vendors. Implemented in Altera FPGAdevices, TPACK's solutions address the unique requirements ofindividual equipment vendors and accelerate time-to-market for 10, 40and 100 Gbps OTN switching and routing solutions. As OTN standardsevolve and mature, AppliedMicro will use the early engagement work withcustomers and develop standard reference designs that maintain softwarecompatibility while offering lower cost and lower power.

"While the OTN silicon market is growing rapidly, OTN standards andimplementations are still evolving-- thereby offering system OEMs abroad field to uniquely differentiate their products with customfeatures and legacy support at various levels. This has led a largeproliferation of FPGA technology within our customers' platforms. TheseFPGA solutions sit beside our products and together provide a scalable,system solution for our customers," said George Jones, Head ofMarketing and Business Development for Transport products atAppliedMicro. "TPACK's IP implemented in Altera FPGAs will provide uswith the flexibility to meet our customers' special requirements andget to market quickly with leading-edge performance. We believe TPACK'steam of talented engineers will make AppliedMicro more nimble andresponsive to a greater range of market needs as system requirementscontinue to evolve and grow."

Applied Micro Circuits Corp. (Nasdaq: AMCC)