SAN JOSE, Calif. and MOUNTAIN VIEW, Calif. -- Cypress Semiconductor Corp. (NYSE:CY) and NetLogic Microsystems, Inc. (Nasdaq:NETL) today announced they have entered into a definitive agreement whereby NetLogic Microsystems will acquire all of the assets and intellectual property associated with Cypress's standard Network Search Engine products.

Under the agreement, NetLogic Microsystems will acquire the Ayama(TM) 10000, Ayama 20000, and NSE70000 Network Search Engine families as well as the Sahasra(TM) 50000 Algorithmic Search Engine family. Cypress, meanwhile, will retain and continue to support its custom TCAM1 and TCAM2 products. NetLogic Microsystems will pay approximately $50 million in NETL common stock upon closing, and, if certain revenue targets are achieved in a 12-month time period, up to an additional $10 million in cash and approximately $10 million in NETL stock.

"This acquisition is positive in numerous ways," said Ron Jankov, president and CEO of NetLogic Microsystems. "The Sahasra algorithmic technology is synergistic with our recently announced Layer 7 processing initiative. We see this algorithmic technology as a critical component in driving towards low-cost Layer 7 applications acceleration and security processing solutions. This acquisition gives us a four-year head start in the development of products to address this low-cost requirement, based on Cypress's leadership position in developing this advanced technology. Second, the NSE70000, Ayama 10000 and Ayama 20000 will expand our customer base and accelerate the diversification of our revenue. Third, acquisition of the Ayama line will expand our product offering and customer engagements in the new high-volume, entry-level Layer 2/3 switch market, where Cypress has a strong, well-established presence."

"After a careful evaluation of options for the Network Search Engine business over the last several months we believe this agreement enables us to achieve our key objectives of supporting our customers and maximizing shareholder value," said TJ Rodgers, president and CEO of Cypress.

The acquisition is targeted to close late in the first quarter of 2006, or early in the second quarter, subject to government approval and certain closing conditions.

NetLogic Microsystems Inc. (Nasdaq: NETL)