Agere Systems to Reorganize Business into Two Market-Focused Groups - Infrastructure Systems and Client Systems

New Infrastructure Systems Group Will Position Agere to Lead Optoelectronics And Integrated Circuits Convergence in Systems for High-Speed Communications Networks

Allentown, PA. Agere Systems (NYSE: AGR.A), the world leader in communications components, today announced it will align its products under two new market-focused groups, Infrastructure Systems and Client Systems, that target the network equipment and consumer communications markets respectively.

The Infrastructure Systems group will leverage Agere s dual expertise in optoelectronics components and integrated circuits, positioning the company to lead the convergence of these two technologies in high-speed communications systems. The Client Systems group will build on Agere s leadership in wireless data, computer communications and storage solutions to address the dynamic end-user applications market.

In addition, the company will combine the supply chain management and manufacturing activities of both optoelectronics components and integrated circuits devices under a new Operations group to bring a full-systems perspective to its manufacturing processes. This group will manage manufacturing and the full supply chain across both the Systems groups.

Sohail Khan, who currently leads the company s Integrated Circuits division, will become vice president of the Infrastructure group. Ron Black, currently the strategy leader, will become vice president of the Client Systems group. Peter Kelly, Integrated Circuits operations leader, will be the vice president of the new Operations group.

Agere s Worldwide Sales group will support customers across the two Systems groups, and will continue to be led by Ahmed Nawaz, vice president. Khan, Black, Kelly and Nawaz will report to John Dickson, president and CEO. In addition, Greg Waters, who currently heads up the company s Wireless division, will replace Black as the vice president, strategy, and will also report to Dickson.

Infrastructure Systems Group Agere will consolidate research and development, as well as marketing, for both optoelectronics and integrated circuits devices aimed at communications systems under the Infrastructure group. This will allow the company to design, develop and deliver complete, interoperable solutions to equipment manufacturers for advanced enterprise, access, metropolitan, long-haul and undersea applications.

"Many of our customers are already buying both optoelectronics and integrated circuits from us as they develop increasingly sophisticated systems for advanced networks. Integrated solutions allow them to deploy their systems more quickly, easily, and cost-effectively," said Dickson. "Combining our dual expertise under one group will enable us to create even tighter synergies between the two technologies, and more rapidly provide integrated solutions to our customers."

Agere already provides integrated subsystems such as transponders, which combine lasers, light detectors and high-speed integrated circuits in a module slightly larger than a credit card. This enables communications systems manufacturers to reduce the overall costs of their systems, while improving performance and time to market.

Client Systems Group The Client Systems group will focus primarily on wireless data and computer communications applications. The group will deliver semiconductor solutions for a variety of end-user applications such as modems, Internet-enabled cellular terminals and hard-disk drives for computers. In addition, the group will offer semiconductor, software, systems and wireless local area network (LAN) solutions through the ORiNOCO™ product family.

"The ability to wirelessly access, and store data from, the network has become increasingly important. We are currently the market leader in wireless LAN with our ORiNOCO line of products, and in storage with our read-channel and pre-amplifier devices, where we serve the top four disk-drive manufacturers," said Dickson. "With the Client group focused sharply on end-user applications, we ll be able to better meet the unique scale, price and performance needs of our customers in this market."

Agere Systems is the world s No. 1 provider of components for communications applications with leadership in optical components and integrated circuits. This dual capability uniquely positions Agere to deliver integrated solutions that form the building blocks for advanced wired, wireless, and optical communications networks. Agere also designs and manufactures a wide range of semiconductor solutions for communications-related devices used by consumers such as cellular phones, modems, and hard disk drives for personal computers and workstations. In addition, the company supplies complete wireless computer networking solutions through the ORiNOCO™ product line. More information about Agere Systems is available from its Web site at http://www.agere.com.

This release contains forward-looking statements based on information available to Agere as of the date hereof. Agere s actual results could differ materially from the results stated or implied by such forward-looking statements due to a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, completion of the distribution or sale of Agere stock by Lucent Technologies Inc., customer demand for our products and services, control of costs and expenses, timely completion of employment reductions and other restructuring activities, price and product competition, keeping pace with technological change, dependence on new product development, reliance on major customers and suppliers, availability of manufacturing capacity, components and materials, general industry and market conditions and general domestic and international economic conditions including interest rate and currency exchange rate fluctuations. For a further discussion of these and other risks and uncertainties, see the prospectus filed by Agere with the Securities and Exchange Commission on March 28, 2001, and Agere s subsequent reports on Form 10-Q. Agere disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact: Vibha Agrawal Tel: 908-508-8638 Cellular: 908-256-6234 vagrawal@agere.com or JoAnna Schooler Tel: 908-508-8234 Cellular: 908-872-3211 jschooler@agere.com