Mentor Graphics Acquires Alcatel Intellectual Property Business to Broaden Portfolio of Standards-Based IP

WILSONVILLE, Ore., July 2, 2003 - Extending its position as the leading provider of standards-based Intellectual Property (IP), Mentor Graphics Corp. (Nasdaq: MENT) today announced that it has acquired Alcatel's complete line of Ethernet and media access control (MAC) IP. The move adds Alcatel's industry-leading Ethernet IP to Mentor's broadening portfolio of standards-certified cores, such as PCI Express, 802.11, Bluetooth, USB 2.0 and USB On-The-Go. Mentor Graphics will honor all existing support contracts for current licensees and will integrate the newly acquired engineering and marketing resources into its own IP division.

"For more than two years, Mentor Graphics has worked in tandem with Alcatel to provide customers with access to critical Ethernet MAC products for their System-on-Chip (SoC) applications," said Michael Kaskowitz, general manager of the Mentor Graphics IP division. "This acquisition adds some of the semiconductor industry's most popular communications IP cores to the Inventra portfolio. We are committed to serving the needs of Alcatel's current installed base and look forward to providing design teams with an extended technology roadmap for communications IP that will include embedded TCP/IP software, CPU bus wrappers, analog component and interface bridges."

Ethernet MAC IP products are the building blocks for System-on-Chip (SoC) designs used in today's highly integrated communications systems. They offer the high data transfer rates, up to 10Gigabit/s, which are needed to support bandwidth-intensive broadband applications, such as Internet equipment and networking devices such as routers, switches, broadband gateways, DSL and cable modems. Alcatel's Ethernet IP is widely recognized as the industry leader, being silicon-proven in multiple process technologies, and is currently used in approximately 80% of the 10/100 Mbit/s ports and over 50% of the Gigabit Ethernet ports shipping worldwide.

Mentor Graphics Corporation (Nasdaq: MENT) is a world leader in electronic hardware and software design solutions, providing products, consulting services and award-winning support for the world's most successful electronics and semiconductor companies. Established in 1981, the company reported revenues over the last 12 months of about $600 million and employs approximately 3,500 people worldwide. Corporate headquarters are located at 8005 S.W. Boeckman Road, Wilsonville, Oregon 97070-7777; Silicon Valley headquarters are located at 1001 Ridder Park Drive, San Jose, California 95131-2314. World Wide Web site: .