Infineon Technologies, the semiconductor company and one of the leading broadband access IC providers, today announced that it has signed an agreement to acquire ADMtek Inc., a fabless, integrated circuit (IC) design company based in Hsinchu, Taiwan, for around Euro 80 million in cash, which includes an earn out portion of about Euro 20 million if certain performance and development milestones are achieved within two years after completion.

Infineon will establish a new company, Infineon-ADMtek Co. Ltd, headquartered in Hsinchu, which will focus on developing broadband customer premise equipment (CPE) ICs and enable Infineon to enter the home gateway market. This is Infineon's first acquisition of a controlling stake in an Asian semiconductor company.

Combining ADMTek's expertise in CPE products with Infineon's strong position and expertise in the central office, along with the complementary customer-base of both companies, will further strengthen Infineon's leading position in the fast-growing, broadband access market segment. The company will be able to offer its customers a complete IC solution package for feature-rich, multimedia home gateways that support high-speed wireline and wireless advanced services. The acquisition will fuel Infineon's activities in the access segment of the Wireline Communications business group by allowing the company to reach a broader market and to generate new business in key segments such as ADSL and Voice over Internet Protocol (VoIP).

As part of the transaction, Infineon has also signed a supply agreement to provide products to Accton Technology Corporation and its affiliate companies for broadband CPE solutions, creating a mutually beneficial, long-term partnership between the companies. Accton Technology Corporation, together with its affiliates, is presently the largest shareholder of ADMtek.

The acquisition also provides Infineon with a strong R&D center, favorable cost structure and close proximity to leading Taiwanese ODM (Original Design Manufacturing) companies that account for more than 70 percent of the broadband modem and router CPE market in the world. Based in Taiwan, Infineon-ADMtek Co. Ltd is near many of the world's fastest growing broadband markets today such as China and Japan. This is in line with Infineon's growth strategy, which includes increasing its already strong presence in Asia.

The acquisition, which will be structured as a statutory merger under Taiwan law, is expected to be completed in April 2004, and is subject to approval by the shareholders of ADMtek, as well as to various government approvals, including the competent antitrust authorities.

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