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AMCC’s Pemaquid Driving Adoption of Cost-Effective Carrier Ethernet Services in Metro and Long-Haul Networks

September 15, 2008

Applied Micro Circuits Corporation (NASDAQ: AMCC), a global leader in optical transport, embedded Power Architecture(R) processing and storage solutions, today announced it has shipped several thousand units of its Pemaquid/S19258 10-Gigabit Metro-Ethernet Mapper device to more than 20 customers since the product’s January 2008 launch. The chip is achieving the fastest design-in rate of any transport integrated circuit in the company’s history. The rapid adoption of this new device is being driven by the large increases in Internet traffic and the need by telecommunication service providers and equipment vendors to cost-effectively transport Ethernet traffic directly over metro area and long-haul optical networks at 10Gbps speed.

AMCC will demonstrate its Pemaquid 10GbE Framer/Mapper/PHY device, Sept. 22-24, in booth #602 at ECOC, Europe’s largest optical communications conference. The demonstration will show Pemaquid’s interoperability with Marvell’s Prestera(R) Ethernet switching solutions. AMCC’s 10 Gigabit Metro Ethernet PHY devices combined with Marvell(R) Prestera are designed to provide the industry with a clear roadmap for next-generation Metro-Ethernet systems adoption.

AMCC’s Pemaquid is now in volume production after its introduction in sample quantities earlier this year. Companies have adopted Pemaquid in their carrier Ethernet offerings because it offers the cost-effective, high-performance, high-capacity delivery of enterprise and telecom traffic for both access and data center applications.

“AMCC’s Pemaquid has achieved a quick and high design-win rate with leading optical platforms of major manufacturers – it has the capabilities and functions that compel service providers to invest in new equipment,” said Michael Howard, Principal Analyst at Infonetics Research. “The demand for new carrier Ethernet-optical equipment was robust in the first half of 2008 and Infonetics sees strong demand continuing for the next several years, and this bodes well for AMCC’s Pemaquid.”

Pemaquid features integrated 10GbE to OTU2 mapping modes, EDC, FEC, XAUI and serial 10G Interfaces. It enables the direct connection between 10G MACs, network processors, or 10GbE switches and XFP/SFP+ optical modules. A single Pemaquid can take the place of up to three devices: an FEC/Framer/Mapper, an SFI4.1 to Serial 10G Physical layer, and a bridge connecting the 10G MAC to the FEC/FRAMER/Mapper.

“As the growth in Internet traffic continues to explode, service providers are seeking to migrate from traditional SONET/SDH transmission equipment to carrier-grade Ethernet equipment and Ethernet-to-Optical Transport Network (OTN) services,” said Neal Neslusan, Director of Marketing, AMCC Transport Products. “The migration requires cost-effective silicon and Pemaquid is the first physical layer device on the market to enable Ethernet-to-OTN convergence. AMCC is addressing the market needs right as demand for these services starts to grow.”

AMCC’s industry-leading components provide innovative capabilities such as electronic dispersion compensation (EDC), forward error correction (FEC), serializer/deserializer (SerDes), CDR (clock and data recovery) and FRACn. These features enable efficient, high-performance building blocks for the highly integrated components that AMCC provides to system vendors, OEMs and ODMs worldwide. These devices enable systems to communicate faster and transport higher densities of data traffic, allowing businesses to innovate, create a competitive edge, and significantly reduce time-to-market.

About AMCC

AMCC provides leadership semiconductor solutions to process, transport, and store digital information for the world’s wired and wireless networks. As a leading supplier of Power Architecture(R) based processors and with world-class expertise in SONET and Ethernet protocol processing, PHY technology, Storage processors, and RAID controllers, our products are the foundation of the IP Communications Revolution. AMCC’s 3ware SAS and SATA RAID controllers deliver cost-effective, high-performance, high-capacity storage for enterprises and consumers worldwide in applications like disk-to-disk backup, near-line storage, network-attached storage (NAS), video, and high-performance computing. For further information regarding AMCC, please visit our website at http://www.amcc.com

Forward Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as expects, anticipates, plans, believes, estimates, will or words of similar meaning. Such forward-looking statements, including statements relating to the products discussed in this press release, are subject to a number of risks and uncertainties, including the risk that the products may not be successfully or timely developed, completed or manufactured or achieve market acceptance, risks relating to general economic conditions, as well as the risks and uncertainties set forth in the Company’s Annual Report on Form 10-K, and in the Company’s other SEC filings. As a result of these risks and uncertainties, actual results may differ materially from these forward-looking statements. The forward-looking statements contained in this press release are made as of the date hereof and AMCC does not assume any obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise.

AMCC is a registered trademark of APPLIED MICRO CIRCUITS CORPORATION. Power Architecture is a registered trademark licensed by Power.org. All other trademarks are property of their respective owners.




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