SAN DIEGO, April 9 /PRNewswire-FirstCall/ -- Applied Micro Circuits Corporation (Nasdaq: AMCC) today announced a realignment of its global operations in the face of continued softness in its end markets. The Company will move from a business unit structure to an organization based along functional lines.

As of January 1, 2003, the Company had 912 employees in its worldwide workforce. The Company expects to have approximately 626 employees by the end of the calendar year, a 31% reduction. This realignment, combined with consolidation of certain facilities and the previously announced closure of AMCC's wafer fab will reduce ongoing operating expenses by $35-40 million annually and fixed cost of sales overhead by $15-17 million annually.

The realignment will largely be completed by the end of June 2003 and fully completed by the end of this calendar year. The Company expects that costs and charges related to the corporate restructuring, which include severance costs related to workforce reduction and consolidation of excess facilities and other related fixed assets, will be recorded in the financial statements for the March 2003, June 2003 and September 2003 quarters. The Company has not yet determined the amount of the aggregate costs and charges associated with the restructuring, as it is currently finalizing its plans.

"AMCC is dedicated to providing our customers with solutions that reduce their development costs and time to market. The initiatives announced today eliminate the overhead associated with business units without sacrificing major product development or critical customer relationships," said Dave Rickey, AMCC's chairman of the board, president and chief executive officer. "The extended industry downturn has led AMCC to take action which will enable the Company to return to profitability more quickly."

For More Information

Financial results for the quarter and fiscal year ended March 31, 2003 will be reported on April 24, 2003. Management will provide more details on the restructuring plan and related accounting charges during the Company's fourth quarter conference call scheduled for April 24, 2003, at 2:00 pm PDT. You may access the conference call via one of the following:

Teleconference: (719) 457-2601
Conference ID: 528194
Web Broadcast: http://www.amcc.com .
Replay: (719) 457-0820 (available for 7 days following the call)

AMCC Overview

AMCC designs, develops, manufactures, and markets high-performance, high-bandwidth silicon solutions empowering intelligent wide area networks. AMCC utilizes a combination of digital, mixed- signal and high-frequency analog design expertise coupled with system-level knowledge and multiple silicon process technologies to offer integrated circuit products that enable the transport of voice and data over fiber optic networks. The company's system solution portfolio includes switch fabric, traffic management, network processor, framer/mapper, PHY and PMD devices that address the high- performance needs of the evolving intelligent optical network. AMCC's corporate headquarters is located in San Diego. Sales and engineering offices are located throughout the world. For further information regarding AMCC, please visit our Web site at http://www.amcc.com or call our shareholder information line at (888) 982-AMCC (2622).

This news release contains forward-looking statements, including, but not limited to, statements regarding the company's restructuring plan, the amount and timing of the restructuring charges, the timing and impact of the reduction in force and the extent to which the restructuring will reduce ongoing operating expenses and fixed costs of sales overhead and affect the company's financial performance. These forward looking statements are subject to certain risks and uncertainties, including, but not limited to, the company's ability to implement the restructuring plan according to the timetable and to the extent currently anticipated, possible changes in the size and components of the restructuring charges and cost savings, the impact of personnel reductions on product development efforts, the company's ability to project accurately cost savings from the plan and general economic conditions. More information about potential factors that could affect the company's business and financial results is included in the "Risk Factors" set forth in the company's Annual Report on Form 10-K for the year ended March 31, 2002, and the company's other filings with the Securities and Exchange Commission. Actual results could differ materially, as a result of such factors, from those set forth in the forward-looking statements.

SOURCE Applied Micro Circuits Corporation

CONTACT:
Investor Relations, Debra Hart of Applied Micro Circuits Corporation, +1-858-535-4217, dhart@amcc.com; or Media/Editorial, Angela Edgerton of The Ardell Group, +1-858-792-2941, angela@ardellgroup.com, for AMCC

Web site:
http://www.amcc.com
(AMCC)