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SUNNYVALE, Calif.--(BUSINESS WIRE)--July 30, 2001--Virtual Silicon Technology Inc., a leader in semiconductor intellectual property, today announced that Alcatel Microelectronics (Paris:CGEP. and NYSE:ALA.N) will use Virtual Silicon's latest 0.13-micron family of Systems on Chip (SoC) intellectual property (IP) in their most advanced product designs. The new family of low-power components are targeted to the Worldlogic®``Fusion(TM)'' process from UMC (NYSE:UMC). (See related July 9 release ``Virtual Silicon Introduces Industry's First Low-Power 0.13-Micron Product Line'')

Today's announcement is the result of a multi-million dollar technology development and licensing agreement established late last year between Alcatel and Virtual Silicon. Under the agreement, the two companies collaborated on the specifications of a comprehensive family of standard cells, I/O pads, memory compilers, PLL compilers, and high-speed interfaces designed for the UMC Fusion process. The Fusion process supports both high-speed and low-power logic transistors in the same designs thereby enabling users to attack a wide range of applications without switching between different manufacturing processes.

``Virtual Silicon's 0.13-micron IP portfolio, targeted to the UMC Fusion process, allows Alcatel to develop products with a longer battery life without sacrificing performance,'' said Rudi Lannoo, CAD and library manager for Alcatel Microelectronics. ``We chose Virtual Silicon because of their process expertise in 0.13-micron technologies, their reputation for great customer support and project management, and for their innovative technologies such as their PLL compilers. We are rapidly employing Virtual Silicon's IP in our newest product developments.''

``Early access to a comprehensive IP solution is mandatory for companies aspiring to get innovative SoC designs into volume production before their competitors,'' said Doug Lyons, Virtual Silicon's vice president of sales for North America and Europe. ``Virtual Silicon's product offering at 0.13-micron technology enables Alcatel to lengthen its impressive market lead in building next generation networks and delivering integrated end-to-end voice and data networking solutions worldwide.''

About Virtual Silicon Technology

Virtual Silicon is a leading supplier of semiconductor intellectual property to manufacturers and designers of complex systems-on-chip (SoC). Headquartered in Sunnyvale, CA, the company provides process-specific embedded components that serve the wireless, networking, graphics, communication and computing markets. Customers include leading fabless semiconductor companies, integrated semiconductor manufacturers, foundries, and SoC developers who demand leading edge technology for their semiconductor innovations. For more information, call 408/548-2700 or visit Virtual Silicon online at www.virtual-silicon.com.

Note to Editors: eSi-Route, eSi-Pad, eSi-RAM, eSi-ROM, eSi-PLL, The Heart of Great Silicon, Silicon Ready, and Virtual Silicon are trademarks of Virtual Silicon Technology, Inc. Fusion is the trademark of UMC.

     Virtual Silicon Technology
     John Ford, 408/548-2737
     johnf@virtual-silicon.com
        or
     VitalCom Marketing and PR
     Karen Tyrrell, 650/637-8212 ext. 204
     karen@vitalcompr.com