LUCENT TECHNOLOGIES EXPANDS OPTOELECTRONICS COMPONENTS MANUFACTURING CAPACITY IN SOUTHERN CALIFORNIA

Expansion expected to increase component output 16 times current levels; create some 450 jobs in the San Gabriel Valley

MAY 18, 2000

ALLENTOWN, Pa. - Lucent Technologies (NYSE: LU) Microelectronics Group, the world leader in communications semiconductors, today announced a $40 million expansion of its manufacturing capacity in Southern California, to meet the growing demand for components used in high-speed optical communications networks. The expansion, planned by Lucent s recently acquired Ortel Corporation of Alhambra, Calif., is expected to increase the product output of the facilities by at least 16 times and create approximately 450 manufacturing jobs in the San Gabriel Valley over the next 18 months.

The expansion includes new construction in Irwindale and renovations to existing manufacturing sites in Alhambra and Irwindale. This comes just weeks after Lucent completed its $2.95 billion acquisition of Ortel, a leading developer of optoelectronics components for cable television networks. It also follows the recent completion of a $30 million expansion of Lucent s automated optoelectronics components operations in Pennsylvania. Product output from that expansion alone is expected to quadruple this year and create well over 500 jobs primarily in Pennsylvania and New Jersey.

Optoelectronics components produce and receive light signals that carry voice and data traffic across fiber-optic networks. The demand for these tiny semiconductor-based devices is increasing dramatically as system providers scramble to meet demand for next-generation services driven by the explosive growth of the Internet. According to industry analysts, the market for fiber-optic communications components was $5.5 billion in 1999 and grew more than 40 percent over the previous year. Lucent s optoelectronics business grew over 80 percent last year including sales to other business units within Lucent.

"Demand for optoelectronics components, especially those that enable access to the Internet, has grown tremendously in the last few years," said Jeff Rittichier, recently named general manager of access products in the optoelectronics components division of Lucent s Microelectronics Group. "The upgrades to our Alhambra facility and the expansion into Irwindale will help us bring those types of products to a capacity-constrained market faster through new and improved equipment and processes, including flexible production schedules, automated manufacturing capabilities, and reduced cycle times."

The expansion includes a new 20,000-square-foot state-of-the-art wafer fabrication and testing facility, now under construction in Irwindale, Calif., which is expected to begin producing optoelectronics components for cable television networks in the summer of 2001. In addition to the new facility, Lucent is renovating an existing 166,000-square-foot building also located on the Irwindale campus. That building will house administrative and some manufacturing operations and is expected to be operational by the end of this summer. The company also has enhancements under way to another 104,000-square-foot facility in Alhambra. That facility, which is expected to be completed shortly, will be equipped with increased levels of automation and higher precision manufacturing processes.

The capabilities Lucent acquired from Ortel enable cable television system suppliers to build high-capacity equipment that cable operators use to meet the demand for next-generation services to the home, such as Internet telephony and access. The Ortel acquisition gave Lucent the technology it needed to help system suppliers speed the transition of cable TV networks from a one-way broadcast capability to a two-way, fully interactive communications medium.

Lucent s Microelectronics Group designs and manufactures integrated circuits and optoelectronic components for the computer and communications industries. More information about the Microelectronics Group is available from its web site http://www.lucent.com/micro.

Lucent Technologies, headquartered in Murray Hill, N.J., USA, designs and delivers the systems, software, silicon and services for next-generation communications networks for service providers and enterprises. Backed by the research and development of Bell Labs, Lucent focuses on high-growth areas such as optical and wireless networks; Internet infrastructure; communications software; communications semiconductors and optoelectronics; Web-based enterprise solutions that link private and public networks; and professional network design and consulting services. For more information on Lucent Technologies, visit its Web site at http://www.lucent.com.

CONTACT:
Brian Bardwell
626-293-1153 (office)
626-422-5910 (cellular)
bbardwell@lucent.com

Tom Topalian
908-508-8673 (office)
908-507-6631 (cellular)
ttopalian@lucent.com