Press release

< Acquisitions and divestitures

TI to Acquire Alantro Communications, a Leading Provider of Wireless Local Area Networking Semiconductor Technology

Acquisition Fuels TI's Broadband Strategy and Growth

Dallas (June 23, 2000) - Texas Instruments Incorporated (NYSE: TXN), the leader in digital signal processors (DSP) and analog semiconductors, announced today that it has reached a definitive agreement to acquire Alantro Communications, a privately held company that is shaping the development of IEEE 802.11 wireless local area networking technology.

"The acquisition of Alantro is one more step by TI to bring broadband into and throughout the home or office," said George Barber, TI vice president and manager of the company's broadband access group. "Digital subscriber lines (DSL) and cable modem chipsets from TI will deliver billions of bits of bandwidth to the home. Alantro's technology will distribute that bandwidth throughout the home or office without the need for wires."

Wireless home networks will connect multiple PCs, PDAs and other Internet appliances to a rich mix of content including voice, data and video information. According to industry analyst In-Stat, 20 million households will be networked by 2003. TI expects that wireless will be the preferred networking method due to its flexibility and ease of installation.

"Wireless networks will make Internet connectivity available throughout the home or office - untethered access to intelligent networks means you can be connected wherever you are, whenever you want, all at the speed that broadband offers," said Barber. "One broadband connection into the home can bring wireless personal information into every room connecting people, appliances and phones."

Alantro brings to TI world-class signal processing expertise, in-depth application knowledge and design implementation proficiency in the areas of wireless networking talent and capabilities. Alantro has been a leader in the development of technology that supports the rapidly emerging 802.11 wireless Ethernet standards. TI believes the use of Alantro's advanced signal processing techniques in this area will yield performance that is double that of current chipset offerings.

"The techniques embodied in this approach hold great promise in future generations of wireless Ethernet as well as other communications applications," said Barber. "Adding Alantro's talent and capabilities to our broadband portfolio makes us even stronger to serve our broadband customers."

"Alantro's expertise in wireless networking and TI's strengths in DSP, analog and broadband is a powerful combination," said Dr. Chris Heegard, Alantro Chairman, CEO and co-founder. "TI is known as a world leader in providing semiconductor technology for communications and broadband markets. Alantro's unique skills will increase that leadership and help provide unparalleled technology to the rapidly-growing home, office and enterprise wireless networking markets."

Development and deployment of cost-effective, easy-to-install home networks should provide further momentum to the already growing broadband market, added Barber. "The broadband pipe is critical but the wireless local network opens the door to some really exciting applications in your home or office. TI's established strengths in wireless systems engineering, chip design and process technologies, along with Alantro's expertise, will speed the development of wireless Ethernet."

This is the second acquisition by TI in the last two years in wireless networking. Last year, TI acquired Butterfly VLSI, Ltd., an expert in short distance wireless technology. Each of these technologies is expected to play an important and complementary role in the development of wireless home networking.

Alantro Communications is based in Santa Rosa, California with additional sites in San Diego and Raleigh, North Carolina. The company employs about 50 people. Alantro will become part of TI's Broadband Access Group and operate under the Texas Instruments name.

The acquisition is being made through a stock-for-stock transaction. Under the terms of the agreement, TI common stock will be exchanged for all outstanding shares of Alantro for an aggregate transaction value (including all stock options and warrants) of $300 million.

The boards of directors of both companies have approved the acquisition, which is expected to be completed by the end of the third quarter. The transaction will be accounted for using the purchase method of accounting and is intended to qualify as a tax-free exchange of shares under IRS regulations. Completion of the acquisition is contingent upon applicable regulatory reviews and other customary conditions. Excluding transaction costs and amortization of acquisition-related assets, the acquisition is not expected to be material to TI's earnings per share.

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Safe Harbor Statement: Statements contained in this press release regarding the proposed transaction and its effect on TI's earnings per share, expectations of technology performance and other statements of management's beliefs, goals and expectations may be considered "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995, and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. The expected earnings per share impact is based on assumptions with respect to TI's results of operations. The actual results of operations may differ. Expectations regarding technology performance are based on Alantro's simulations of signal processing techniques and assumptions regarding TI's ability to develop products using Alantro's technology following the acquisition; however, actual technology performance may differ. In addition, the following factors and those discussed in TI's most recent filing on Form 10-K could cause actual results to differ materially from the statements contained in this press release: the ability to consummate the acquisition; the ability of TI to successfully integrate Alantro's operations and capitalize on the combined technologies and the continued growth of the home networking market. We disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.

NOTE TO EDITORS: Texas Instruments Incorporated is the world leader in digital signal processing and analog technologies, the semiconductor engines of the Internet age. The company's businesses also include materials and controls, and education technology. TI is headquartered in Dallas, Texas, and has manufacturing or sales operations in more than 25 countries.

Texas Instruments is traded on the New York Stock Exchange under the symbol TXN. The company's web site is www.ti.com.

Alantro Communications specializes in high-performance, physical-layer communications technology. The company was founded in 1997 in Santa Rosa, California - part of California's burgeoning "Telecom Valley" and located in the heart of Sonoma County's beautiful wine country. Alantro Communications is currently developing extremely efficient, IEEE 802.11 compliant, wireless LAN technology with advanced performance and high-speed capabilities. Alantro has unique expertise in existing and emerging forward error control (FEC) and modulation/demodulation technology. Alantro also specializes in Turbo Coding, a next generation, very high performance FEC methodology. Additional information can be found on the web at www.alantro.com.