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Texas Instruments' New Voice-over-Internet Protocol (VoIP) Products Enable Next-Generation Telephony

New Products to Speed Delivery of Broadband Services to Homes and Businesses

DALLAS (January 29, 2001) - In a move designed to lead the emerging Voice-over-Internet Protocol (VoIP) market into mainstream use by businesses and consumers, Texas Instruments Incorporated (TI) (NYSE: TXN) today announced a new set of integrated silicon and software solutions for the converging voice and data markets. These solutions are designed to meet both the network demands placed on telecom carriers and equipment makers, as well as the price targets necessary for widespread adoption by consumer and small to medium-sized businesses. These new solutions for VoIP gateway equipment are expected to usher in a host of new broadband services, such as personalized high speed internet and voice services, telecommuter services, unified messaging, and integrated voice and web-enabled call center support. (See: http://www.ti.com/sc/gateway.)

The integration of TI's market leading Telogy VoIP Software™ and TI programmable digital signal processors (DSPs) enables the highest quality transmission of very high volumes of voice and fax traffic over the Internet and other packet networks. TI's comprehensive new product offering extends the company's leadership in the VoIP market and makes TI the only semiconductor vendor to offer a complete VoIP product portfolio with products for all three segments of the gateway market (customer premise equipment, small and medium enterprise equipment, and high density equipment), as well as enterprise IP phone, remote access, digital subscriber line (DSL) and cable applications. VoIP gateways are networking equipment which convert circuit switched voice signals to data packets, enabling voice signals to be transmitted across packet-based networks.

"While early questions about voice quality, interoperability, and standards have been answered by products on the market today, scaleability for large enterprises, service providers, and high traffic volume has remained problematic," said Bill Hills, Senior VoIP Analyst, Aberdeen Group. "TI's new VoIP solutions were designed to solve this last challenge, which has limited the deployment of VoIP-enabled switching equipment."

TI's new VoIP product suite combines hardware and software-based functionality on an optimized architecture - with the appropriate combination of programmable, low power TMS320C54x™ and TMS320C55x™ DSP engines, Telogy Software™ products, RISC processors, internal memory, hardware accelerated features, and system interfaces.

The key market differentiators for TI's new high density VoIP gateway products are their low power consumption and "solution density" - the capability to deliver the highest number of channels on a chip with the lowest power, while simultaneously maintaining the highest possible level of voice quality over next generation packet networks. TI's new OC-3 high density solution, with 2,016 channels on a chip, will provide OEMs from the benefit of a 42x increase in channel capacity per chip over TI's current VoIP solutions.

"With the introduction of the TNETV series of access communications processors -- my term -- it is clear that TI has the most comprehensive VoIP gateway solutions in the business," said Will Strauss of the DSP market analyst firm Forward Concepts. "Although the sheer breadth of chips and software offered by TI is amazing, I was blown away by their roadmap which leads to 2,016 channels on a chip in 2002."

For home use, broadband VoIP offers consumers:

  • Combined high-speed data and voice services through a single connection to the home;
  • Increasingly personalized services such as highly flexible, manageable multiple phone lines (i.e., "teen-age lines" that can be configured to shut off at specific times and to block certain incoming phone numbers);
  • Compatibility of Internet-enabled devices such as dual mode wireline/wireless phones and personal digital assistants (PDAs);

For businesses, broadband VoIP enables:

  • Operational cost-saving from bundling of voice and data services;
  • Universal message retrieval of any type of message (voice, fax or e-mail) from any type of device including personal digital assistants (PDAs), cellular phones or computers;
  • Web-based communications portals for remote access of a range of applications, including e-mail, fax and universal messaging;
  • Virtual private branch exchanges (PBXs) which treat telecommuters' home phone extensions like an office extension, eliminating long-distance calls and enhancing conferencing capabilities when working remotely;

For telecom and datacom carriers, broadband VoIP results in:

  • Operational cost savings by transporting voice and data traffic over the same network;
  • Reductions in cost for capital expenditures and maintenance compared to the public switched telephone network (PSTN) equipment in use today.

Approximately 80 percent of the VoIP products in use or in development today are based on TI technology. Industry giants 3Com, Alcatel, Cisco Systems, Ericsson, Nortel Networks, Nokia, Panasonic, and Sony, and some of the networking industry's hottest start-ups have chosen TI's low power, programmable digital signal processors (DSPs) and Telogy Software products for use in nearly 200 VoIP products.

The VoIP market is expected to grow from 7.7 billion minutes last year to 500 billion minutes by 2005, according to Probe Research. Probe Research also forecasts the market for VoIP gateway equipment to increase from $1.2 billion in 2000 to $10 billion by 2005. According to Cahners In-Stat Group, the market for VoIP-enabled customer premise equipment gateways is expected to increase from 491,000 units shipped this year to 14.1 million units expected to ship in 2005 with annual sales of $3.2 billion in 2005. Frost & Sullivan forecasts the small and medium enterprise equipment market to increase from 2.4 million ports in 2001 to 27 million ports in 2005, and the high density market to grow from 10.4 million ports expected to ship this year to 157.7 million ports projected to ship in 2005.

For more information about TI's VoIP gateway solutions, including product bulletins, application notes, product press release with detailed specifications, and white papers, please visit: http://www.ti.com/sc/gateway or http://www.telogy.com/gateway.

# # #

Safe Harbor Statement: Statements contained in this press release regarding product performance, the VoIP market 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. Statements regarding growth in the VoIP and VoIP gateway equipment markets are based on projections provided by Probe Research, an independent market analyst. Statements regarding growth in the VoIP-enabled CPE market are based on projections provided by Cahners In-State Group, an independent market analyst. Statements regarding growth in the SME and high density markets are based on projections provided by Frost & Sullivan, an independent market analyst. The following factors and the factors discussed in TI's most recent Form 10-K could cause actual results to differ materially from the statements contained in this press release: the accuracy of testing and simulation efforts; the ability of TI to manufacture products implementing the technology; the development and adoption of new and competitive technologies; TI's ability to meet manufacturing capacity demands; changes in customer intentions or preferences; and other factors affecting market growth or sales. 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.

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