Applied Micro Circuits Corporation Announces Agreement to Acquire 3ware, Inc.
Acquisition Provides Early Entry Into One of the Fastest Growth Segments in Storage, Serial ATA RAID, Extending AMCC's Presence in the Storage Market

SAN DIEGO, Mar 2, 2004 /PRNewswire-FirstCall via COMTEX/ -- Applied Micro Circuits Corporation (Nasdaq: AMCC) today announced that it has signed a definitive agreement to acquire 3ware(R), Inc. 3ware provides high-performance, high capacity Serial ATA (SATA) storage solutions for emerging storage applications such as disk-to-disk backup, near-line storage, network-attached storage (NAS), video, and high-performance computing.

Under the terms of the agreement, AMCC will acquire all outstanding shares of 3ware for approximately $150 million in cash and will assume stock options based on an exchange ratio to be determined at closing. Based on yesterday's closing price, AMCC expects to assume options to purchase approximately five million AMCC shares. The transaction is subject to certain customary closing conditions and regulatory approvals, and is expected to close at or around April 1, 2004, and is therefore not expected to affect AMCC's March quarter results. AMCC expects this transaction to be non-dilutive to its pro-forma earnings per share for the June quarter. In connection with this transaction, AMCC expects to record certain acquisition-related charges, however the timing and magnitude have not yet been determined. The boards of directors of both AMCC and 3ware have approved the acquisition agreement.

"One of the fastest growth segments in storage today is SATA RAID and 3ware has achieved significant market penetration with a switched architecture that delivers performance, scalability and the economy of SATA," said Dave Rickey, chairman, president and CEO of AMCC. "3ware's customers and channel relationships complement our existing small and medium business Fibre Channel Host Bus Adapter (HBA) strategy, while extending our reach into the direct- attached (DAS) and network-attached storage (NAS) segments of the industry."

"AMCC's semiconductor leadership and its Fibre Channel SAN expertise from the recent acquisition of JNI allow us to broaden our market opportunity by leveraging valuable intellectual property and infrastructure," said Faye Pairman, president and CEO of 3ware. "Combining with AMCC will enable us to accelerate our complementary product roadmaps and penetration into higher-end storage applications."

3ware currently employs approximately 70 people, the majority of whom are in the Sunnyvale, CA headquarters. The 3ware team, including President and CEO Faye Pairman, will report to Brent Little.

AMCC Overview

AMCC designs, develops, manufactures, and markets silicon networking solutions for global wide area networks (WAN) and storage area networks (SAN). The company's proven design expertise, coupled with system-level knowledge and multiple silicon process technologies, provides integrated circuits that span the complete WAN PHY-to-fabric roadmap and a robust portfolio of networked storage products addressing Host Bus Adapters, storage array, switching and SAN extension requirements. The company's system solution portfolio addresses the high-performance needs of both transport and switching and routing applications within the evolving intelligent optical network, as well as Fibre Channel hardware and software products for high-growth Networked Storage markets. AMCC's corporate headquarters are located in San Diego, California. Sales and engineering offices are located throughout the world. For further information regarding AMCC, please visit our web site at www.amcc.com.

3Ware, Inc. Overview

Founded in 1997, 3ware, Inc., the technology leader in high-performance, high-capacity Serial ATA (SATA) RAID storage solutions, delivers reliable, enterprise class RAID storage using -- cost effective SATA drives. 3ware's StorSwitch(TM) architecture applies network packet switching to storage controllers, eliminating the bottleneck found in traditional storage architectures. 3ware solutions are designed to meet the explosive demand for cost-effective, scalable storage, driven by high-capacity enterprise applications. 3ware sells through VARs, OEMs and System Integrators. 3ware, Inc. is located in Sunnyvale, California with sales offices and distribution in the USA, Europe, Asia and Japan. 3ware is on the Web at www.3ware.com

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