LUXCORE ADOPTS OPTICAL SUBSYSTEM STRATEGY

OEM demand for Luxcore’s proprietary wavelength converter drives change

ATLANTA, GA, July 9, 2001 Gerald P. Ramdeen, chairman and chief executive officer of Luxcore Networks, Inc., today announced that the company will redirect its strategic focus to an optical subsystems manufacturer.

“We’ve seen increasing demand from telecom carrier and optical system manufacturers for our proprietary, all-optical wavelength conversion technology,” said Mr. Ramdeen. “To meet this demand, we will market our products to OEM manufacturers of optical systems that support switch and transport systems. These OEM manufacturers need optical wavelength conversion technology to deliver the next generation, all-optical switch to their telecom carrier customers.”

The strategic change, approved by Luxcore’s board of directors this week, will begin immediately, and includes the following major initiatives to achieve earlier revenue visibility:

• Sell OC-48, OC-192 and OC-768-ready, all-optical wavelength conversion transponder units, based on Luxcore proprietary SWORDTM (Semiconductor Waveguide Optical Regenerative Device) and optical performance monitoring technology.

• Advance delivery schedule: beta end-of-year 2001; customer deliveries first quarter 2002.

• Streamline and restructure human resources to reflect different requirements of this new business model, including the elimination of 30 percent of the current workforce, and the planned creation of new jobs in the areas of fabrication, opto-electronics packaging and manufacturing within the next 12 months.

• Move to a new engineering and manufacturing facility by the end of 2001.

“We are excited about the sharper focus on Luxcore’s unique, value-added technology and core competency,” said Mr. Jeffrey C. Tung, managing partner, Timberline Venture Partners, a Draper Fisher Jurvetson affiliate, which led Luxcore’s interim venture funding. “Early revenue generation makes Luxcore more attractive to the investment community in today’s capital environment.”

“Our goal now is to ramp up our wafer fabrication, opto-electronics packaging and subsystem manufacturing capabilities so that we can quickly meet the growing demand for advanced all-optical switching components,” said Mr. Ramdeen. “Our three year partnership with Solectron will further enable us to meet the worldwide manufacturing volumes we anticipate.

“Luxcore’s first product, the optical wavelength converter – based on our proprietary SOA-based SWORDTM technology – is the first transponder unit to provide complete protocol and bit rate transparency in one simple package,” Mr. Ramdeen continued.

This optical transponder can support 10GE, SONET, Fiber Channel, ESCON, FICON, etc. at approximately 25 percent of the cost and footprint of currently available, OEO-based transponder solutions. The device also supports bit rates from 2.5Gb/s to 40Gb/s.

“Telecom carriers are focused on obtaining more cost-effective and scalable equipment in their capital expenditure budgets,” Mr. Ramdeen said. “Luxcore’s wavelength conversion transponder enables OEM’s to replace costly DWDM transponders that currently account for up to 50 percent of carrier purchasing expenditures.”

Other subsystems based on Luxcore’s SWORDTM technology, including an all-optical cross-connect sub system with optical performance monitoring, and a fiber protection subsystem with gain equalization and tunable dispersion compensation, are planned for release next year. These additional products, which include imbedded software modules, will enable carriers to offer new revenue generation services, such as time-of-day routing and bandwidth-on-demand.

About Luxcore Networks
Luxcore Networks is a world leader in all-optical wavelength conversion, regeneration, and integrated transport. The company engineers, manufacturers and markets third-generation, all-optical internetworking systems based on advanced photonic technologies and innovative IP routing and software management systems. Founded in June of 1999, Luxcore Networks is based in Atlanta, Georgia, and is led by a team of seasoned optical physicists, engineers and software developers.

Contact:
Ashley J. Bell
Director of Communications
770.274.2708
abell@luxcore.com