Acer Capital America Invests;
Places Executive On Allayer Board

January 7, 1998 (San Jose, Calif.), -- Allayer Communications today announced that the company has received additional funding from Acer Capital America. Allayer -- pronounced "Aah-layer" -- was founded in August 1997 to be a "fabless" semiconductor maker, concentrating on design, marketing and support of advanced integrated circuit solutions for network equipment.

"Acer Capital America is a veteran venture capital firm, a division of a leading technology company," points out Dr. Cheng-chung Shih, Allayer President and CEO. "We are pleased that Acer has chosen to invest with us. It helps give us credibility with vendors and customers."

In addition to the financial investment, Acer has also placed an Acer Senior Executive on the Board of Allayer. Mr. Ronald Chwang, President of Acer Capital America became a board member in the fourth quarter of 1997. States Mr. Chwang, "We like what Allayer is planning in the communications arena. The company has a tightly focused approach that will yield advantages for networking applications based on advanced semiconductor and software technologies. With a minority investment in Allayer, Acer is in position to help fuel the growth of Allayer and hopefully offer helpful counsel to the firm as it grows."

David Wong, Director of Marketing for Allayer adds, "In the startup phase, it is not enough to just have advantageous technology, you also need credibility. This investment and the placing of a senior executive on our boards helps us in our sales and marketing efforts since it puts us in a more serious category. The Acer name is well known through the world, with a major presence in the Far East , the U.S. and Europe."

This investment in Allayer brings the total first round funding for the company to over $2 million. Other investors include VenGlobal Capital Fund, L.P. and other private investors. Lead investors have pledged additional funds as needed as Allayer moves into high volume production in mid-1998.

About Allayer

Allayer is concentrating on the highest performance Fast Ethernet and Gigabit Ethernet switches. The 10/100 Mbps Fast Ethernet market grew by 486 percent from 232,000 ports in 1995 to over 1.3 million ports in 1996, according to market research firm IDC. Competition among network equipment vendors is expected to accelerate as they scramble to meet the fast growing needs of the networking market. This opens a large potential for semiconductor firms like Allayer who can provide highly targeted solutions.

Allayer is led by Dr. Cheng-chung Shih, an experienced network systems executive and technical manager. Dr. Shih directed the growth of the New Technology Division at Allied Telesyn from 7 persons to over 25 engineers, with revenues growing from zero to over 8 million dollars. Dr. Shih directed the development of custom communications ASICs for applications including Ethernet Repeaters and Switches, mixed-signal Fast Ethernet Transceivers, Fast Ethernet Switches and Gigabit Switches. Prior to joining Allied Telesyn, Dr. Shih spent nearly five years leading the development of Ethernet circuits and ISDN interfaces at Level ONE Communications in Sacramento, California. He also spend several years at Rockwell Semiconductor Division where he designed data communications circuits for modems and T1 elements. Dr. Shih is an expert in CMOS and mixed-signal digital/analog ASIC design as well as communication standards and systems. Since 1992, he has served on the IEEE 802.3 Ethernet Standards Committee. He holds 7 communications technology patents.

Allayer's proprietary technology is not currently being released to the public, but when announced it will offer significant advantages in designing and implementing both low- and high-end systems. Initial products are aimed at the 10/100 Mbit Ethernet and Fast Ethernet IEEE 802.3 network systems and they will offer the OEM advantages in designing and manufacturing 8-port, 16-port, 24-port Fast Ethernet switches with data throughputs ranging from 10 Mbits/second to over one gigabit/second. Allayer semiconductor solutions will save the OEM time, reduce system costs and enable more flexible design options.

The company is headquartered in San Jose, Calif.

Editorial Contact:
David Wong (408) 570-0888 x108
Allayer Communications
107 Bonaventura Drive
San Jose, CA 95134