Endwave Increases Manufacturing Capacity to Meet Growing Demand for 2G/3G Cellular Backhaul Products

Source: Endwave

Endwave to Reduce Costs by Moving Transceiver Production to Expanded Diamond Springs, Calif.-Based Volume Manufacturing Facility

Sunnyvale, CA. Endwave Corporation (Nasdaq:ENWV), the leading provider of radio frequency (RF) subsystems for ultra-broadband wireless access networks, today announced the opening of a second volume manufacturing facility in Diamond Springs, Calif. Designed to expand production of Endwave s transceivers, the core component of broadband wireless systems, this expansion prepares the company to fulfill recent orders from leading providers of next-generation (2G/3G) networks. This move increases Endwave s manufacturing capacity to over 100,000 transceivers per year.

This expansion follows the announcement of a multi-year, multi-million dollar agreement with Allgon AB earlier today [Ed: see press release below] and a multi-year, multi-million dollar agreement with Nokia announced in November, 2000. Under both agreements, Endwave will deliver its Millimeter Wave (MmW) transceivers, operating in 18-40 GHz frequency ranges, in volume to these customers for use in new and existing cellular backhaul networks.

The expansion reinforces Endwave s efforts toward cost reduction and margin improvement and underscores the company s path to achieve profitability. Endwave will concentrate volume manufacturing for all of its electronic products -- RF modules, MmW transceivers and Outdoor Units (ODUs) -- at the new Diamond Springs facility, thereby reducing overhead and allowing the company to achieve greater efficiencies associated with higher volume, automated production and reduced labor costs. The company s headquarters, sales and marketing, product development, and prototyping operations will remain in Sunnyvale, Calif.

"The opening of our second Diamond Springs operation is an important milestone in our growth, particularly as we focus on achieving profitability," said Ed Keible, president and chief executive officer, Endwave Corporation. "This expansion allows us to execute on our cost reduction plan, and to fulfill our recent volume production agreements with Allgon and Nokia while maintaining additional capacity for future growth."

The Diamond Springs facility will employ Endwave s three discrete semiconductor processes: the company s patented Flip-Chip Integrated Circuit (FCIC), Monolithic Microwave Integrated Circuit (MMIC), and Hybrid Microwave Integrated Circuit (HMIC) process. This variety of processes provides wireless system integrators a migration path to higher-volume, lower-cost manufacturing as they look to develop and scale next-generation products.

Endwave Signs Multi-Million $, Multi-Year Contract With Allgon Endwave s Broadband Wireless Technology to Power 2G and 3G Cellular Networks

Sunnyvale, CA. Endwave Corp. (Nasdaq:ENWV), the leading provider of radio frequency (RF) subsystems for ultra-broadband wireless access networks, today announced that is has signed a three year, multi-million dollar agreement with Allgon Microwave, a business area of Allgon AB and leader in wireless products for telephony and data communications. Under the terms of the agreement, Endwave will supply Allgon Microwave with RF transceivers, the core component of next generation cellular infrastructure, for deployment in second and third generation (2G and 3G) cellular networks throughout Europe, North America, Latin America, Asia and Australia.

Endwave will supply Allgon with a variety of its AllegrA(TM) transceivers in the 23, 26, 29, and 38 GHz frequency bands, enabling traffic capacities up to 34+2 Mbps and satisfying both European and American standards. As a follow-on to a previous contract, the agreement calls for a considerable increase in shipment quantity in calendar year (CY) 2001. Subsequently, Endwave will deliver products in increasing annual quantities to support Allgon s rapid growth in demand for microwave radios.

"Allgon s goal is to provide advanced broadband wireless systems that satisfy the global demand in the rapidly-growing mobile communications market," said Stefan Wellenstam, head of Microwave Business Area, Allgon AB. "Staying ahead of market demands is a key strategy for Allgon. Endwave is one of the companies with the volume manufacturing capability and technical expertise to help us meet our needs."

AllegrA, the industry s first family of standard-architecture transceivers, forms the core component of Allgon s high-performance point-to-point (PTP) microwave broadband radios, which offer a more compact design than ever before. These radios are used primarily as backhaul links in cellular networks, connecting the cellular base station to cellular antenna farms, but can also be used in public and private voice/data communications networks.

"This agreement further demonstrates Endwave s 3G market leadership and reinforces our key role in supplying the core technology needed to power next-generation wireless networks," said Ed Keible, president and CEO of Endwave Corp. "Our investment in volume manufacturing capability has enabled us to supply leading cellular infrastructure companies like Allgon with RF subsystems essential to the build-out of 2G and 3G networks."

With approximately 300 million wireless appliance users expected to be accessing the Internet by 2004, existing wireless mobile networks will not be able to sustain the demand for multi-media and m-commerce applications. The increasing use of these high-bandwidth Web applications creates an immediate need for higher-capacity wireless infrastructure. With significant new deployments of 2G and 3G cellular systems planned throughout Europe and the rest of the world, the need for these products is expected to accelerate.

About Endwave s Transceivers

Endwave provides a complete line of high-performance, low-cost transceivers, the primary building blocks of microwave and millimeterwave radios. Endwave transceivers enable systems integrators to rapidly build point-to-point and point-to-multipoint radios for high-bandwidth connectivity and broadband Internet access to businesses. Endwave transceivers are also essential to the build-out of 2G and 3G cellular infrastructure for the emerging mobile Internet market, meeting the growing requirement for data and graphic-intensive mobile Internet applications. Leveraging the company s state-of-the-art MMIC (Microwave Monolithic Integrated Circuit) and revolutionary Flip-Chip MCIC (Multi-Chip Integrated Circuit) technology, Endwave transceivers contain all the necessary RF functions, such as multipliers, amplifiers, up and down converters, frequency sources, IF and control circuitry.

About Endwave

Endwave Corp. is a provider of radio frequency (RF) subsystems that enable the transmission and reception of data signals in broadband wireless systems. The company develops and manufactures products used in high-speed cellular backhaul, point-to-point access and point-to-multipoint access applications. These products include RF modules, integrated transceivers, broadband antennas and outdoor units. Endwave has more than 30 issued patents covering its core technologies including semiconductor, circuit and antenna designs as well as its Flip-Chip GaAs MCIC technology. Endwave Corp. is headquartered in Sunnyvale. Additional information about the company can be accessed from the company s web site at http://www.endwave.com.

Contact: Endwave Corp., Sunnyvale Gary Gray Tel: 408/522-3100 gary.gray@endwave.com or Walt & Company Communications Reena Spektor Tel: 408/496-0900 rspektor@walt.com Reena Spektor Tel: 408/496-0900 rspektor@walt.com