SOMERSET, N.J. -- EMCORE Corporation (Nasdaq: EMKR - News), a leading provider of compound semiconductor-based components and subsystems for the broadband, fiber optic, satellite, and wireless communications markets, today announced that it has acquired privately-held K2 Optronics, Inc. of Sunnyvale, CA in a merger transaction. The transaction closed on Thursday, January 12, 2006. EMCORE, an investor in K2, paid approximately $4.8 million in EMCORE common stock (based on a 20-trading day weighted average price) to acquire the remaining part of K2 Optronics that EMCORE did not already own. EMCORE management anticipates that sales of K2 products and EMCORE direct modulated transmitters incorporating K2 Optronics' lasers will generate approximately $7 million of revenue for calendar year 2006 and $14 million of revenue for calendar year 2007. EMCORE management believes that upon integration K2 Optronics will be operationally profitable.

EMCORE anticipates continuing design and production operations in K2 Optronics' Sunnyvale facility for a six-month transition period, and, thereafter, the engineering design team and prototype production team will be integrated with EMCORE's Silicon Valley Design Center in Santa Clara, CA. Volume manufacturing is already outsourced to the same overseas contract manufacturer used by EMCORE.

Founded in 2000, K2 Optronics specializes in designing, developing, and manufacturing analog and digital transmission lasers for the cable television (CATV), telecommunications, sensing, and test and measurement industries. K2 Optronics was the first company to commercialize the concept of external cavity lasers (ECLs) into industry standard 14 pin butterfly packages. K2 Optronics' products are used in the following applications:

"EMCORE has been a long-time believer in the revolutionary potential of directly modulated transmitters based on K2 Optronics' ECL technology. We expect to see our CATV and FTTx customers insist on the performance and cost advantages that directly modulated transmitters can offer over traditional laser technology," said Dr. Hong Hou, Vice President and General Manager of EMCORE's Ortel division. "In addition to complementing our existing 1550 nm and 1310 nm analog product offerings, and allowing us to penetrate new markets where cost and performance are key drivers, K2 Optronics' ECL technology will deliver new product possibilities for our datacom and telecommunications customers."

Emcore Corp. (Nasdaq: EMKR)