Tundra Semiconductor Signs Product Acquisition Agreement

    Tundra Announces First Step in Smart Interconnect Solutions Strategy

    OTTAWA, Aug. 16 /CNW Telbec/ - Tundra Semiconductor Corporation
(TSX:TUN), a leader in System Interconnect, signed an agreement today to
acquire a new product from a leading global solutions and engineering services
    The agreement is a significant first step in executing Tundra's
previously announced smart interconnect solutions strategy. This product
represents a new product line and new market opportunity for Tundra. Based on
strong I/O management experience, Tundra intends to use its existing design
teams to develop future products in this new product line and in the broader
smart interconnect solutions product portfolio.
    "We are excited to announce this major milestone today. The acquisition
of this highly competitive product is a positive step forward for Tundra and
strongly positions the Company for future growth," said Daniel Hoste,
President and Chief Executive Officer, Tundra Semiconductor. "Tundra's new
product strategy will deliver intelligent interconnect products, to provide
our customers with a competitive edge in their system designs where
performance depends more and more on the I/O and interconnect architecture
solutions," continued Hoste.
    Tundra will acquire the product for a total purchase price of
$15.4 million USD, with payments impacting the next 3 fiscal years. Tundra
expects revenue associated with this product acquisition to begin to impact
fiscal year results in 2010 and expects that lifetime revenue will represent
approximately 8 to 12 times the total investment cost.

    About Tundra

    Tundra Semiconductor Corporation (TSX:TUN) supplies the world's leading
communications, computing and storage companies with smart System Interconnect
products, intellectual property (IP) and design services backed by world-class
customer service and technical support. Tundra's track record of product
leadership includes over a decade of bridges and switches enabling key
industry standards: RapidIO(R), PCI, PCI-X, PCI Express(R), PowerPC(R), VME,
HyperTransport(TM), Interlaken, and SPI4.2. Tundra's products deliver high
functional quality and simplified board design and layout, with specific focus
on system level signal integrity. Tundra's design services division, Silicon
Logic Engineering, Inc., offers industry-leading ASIC and FPGA design
services, semiconductor intellectual property and product development
consulting. Tundra's smart technology connects critical components in high
performance embedded systems around the world. For more information, please
visit www.tundra.com.

    Forward Looking Information

    Tundra cautions that forward-looking information in this release is based
on certain assumptions and expectations made by Tundra that may prove to be
inaccurate. Assumptions made include the ability of Tundra to successfully
integrate and exploit this new product, Tundra's ability to develop future
products in this new product line in a timely manner to address market
opportunities, customer demand for Tundra's products and services including
this new product line, Tundra's ability to maintain and enhance existing
customer relationships.
    Furthermore, Tundra cautions that forward-looking statements in this
release are based on current assumptions and expectations that are subject to
risks and uncertainties. Actual results may differ due to factors such as
customer demand for the new product and other products within the new product
line, market risks and trading prices, customer relationships, new product
development, new services offerings, product shipping schedules, competitive
products and services, pricing pressure, and changes in the embedded systems
market specifically. The Company assumes no obligation to update or revise any
forward-looking statements. Additional information identifying risks and
uncertainties is contained in the Company's filings with the various
provincial securities commissions which are available online at www.sedar.com.

    TUNDRA and the Tundra logo are registered marks of Tundra Semiconductor
Corporation in Canada, the United States, the European Union and the People's
Republic of China. Design.Connect.Go. is a trademark of Tundra Semiconductor
Corporation. Other registered and unregistered trademarks are the property of
their respective owners.

    (C) Copyright 2007 Tundra Semiconductor Corporation. All rights reserved.
    Information subject to change without notice.

For further information:

For further information: David Long, Chief Financial Officer, (613)
592-0859, ext. 1704, David.long@tundra.com; Keri Zeran, Director, Marketing
Communications, (613) 697-6788, Keri.zeran@tundra.com

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