SDL Announces Two Significant Facility Expansions

Increases Capacity for New Product Line Additions

San Jose, CA. SDL, Inc. (Nasdaq: SDLI) announced today plans to build two new facilities that will expand its North American operations by 183,000 square feet to meet demand for SDL s Raman amplifier product line and emerging transmitter and receiver products. These additions include a 50,000 square foot facility at its Santa Clara, California campus and a 133,000 square foot facility in Piscataway, New Jersey. These moves follow recent manufacturing facility expansions for semiconductor lasers, lithium niobate modulators, 980 nm pump modules and doped specialty optical fibers. SDL plans to occupy the new facilities and begin production at both sites by the end of the fourth quarter of this year.

The new Santa Clara facility will house the design and production of SDL s growing Raman amplifier product line. "In 1999, SDL was the first company to introduce Raman pumps for amplifiers," according to Donald R. Scifres, chief executive officer of SDL. "The market for Raman amplifiers is growing rapidly and we are increasing our production capability in anticipation of our customer needs for 2001."

The facility in Piscataway, New Jersey will become SDL s east coast headquarters including the company s east coast sales base. SDL expects to move its recent Veritech acquisition out of its current 18,000 square foot location and will initially occupy approximately 70,000 square feet in the new building. The new facility will house the design and production of SDL s 10 and 40 Gb/s electronic circuits and be the headquarters for SDL s emerging transmitter and receiver products. "The market for high performance 10 Gb/s electronics is growing rapidly and SDL Veritech s leading edge product line has resulted in customer orders and interest which drive this dramatic expansion," said Gregory P. Dougherty, chief operating officer of SDL, Inc. "We intend to leverage our lithium niobate and electronics capabilities to address the emerging market for high-speed modules with increased functionality."

Dougherty added, "These expansions reinforce SDL s commitment to our customers as we drive to expand our product lines with leading edge products."

About SDL

SDL s products power the transmission of data, voice, video and Internet information over fiber optic networks to meet the needs of telecommunications, dense wavelength division multiplexing (DWDM), cable television and satellite communications applications. They enable customers to meet the bandwidth needs of increasing Internet, data, video and voice traffic by expanding their fiber optic communications networks much more quickly and efficiently than would be possible using conventional electronic and optical technologies. SDL s optical products also serve a variety of non-communications applications, including materials processing and printing. Additional information about SDL, Inc. is available on the Internet at www.sdli.com. Statements in this press release which are not historical including statements regarding SDL s or management s intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include statements regarding the company s need for increased manufacturing facilities to meet growing customer demand, the company s plans to expand its North American operations in California and New Jersey to house the design and production of its Raman amplifier product and its 10 and 40 Gb/s electronic circuits, respectively, the schedule for completing these expansions, the anticipated growth in demand for both Raman amplifiers and high performance 10 Gb/s electronics, the technological capabilities and market acceptance of SDL Veritech s products, the company s plans to leverage its lithium niobate and electronics capabilities to address the emerging market for these products, and the company s leading edge products. It is important to note that the Company s actual results could differ materially from those in any such forward-looking statements. Factors that could cause actual results to differ materially include risks related to uncertainties in market growth, the company s inability to expand its manufacturing facilities successfully to meet customer demand, uncertainties in competition and customer demand for the company s products, and the risk factors listed from time to time in the Company s SEC reports including but not limited to, the annual report on Form 10-K for the year ended December 31, 1999, and the quarterly report on Form 10-Q for the quarter ended March 31, 2000.

Contact: SDL, Inc. Donald R. Scifres, Chairman and CEO Michael L. Foster, VP Finance and CFO Tel: (408) 943-9411 Fax: (408) 943-1258 or Financial Relations Board Lisa Horn Chainey/Marcia Nakamura(general info) Susan Katz (investor contact), Chris Wood (media) Tel: (415) 986-1591