Terayon Spins Off Chip Business

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Backed by its success with Data Over Cable Service Interface Specification
2.0 certification by Cable Television Laboratories Inc., Terayon Communication
Systems Inc. is spinning out its semiconductor business in the hopes of cashing
in on cable's evolution toward more advanced data networks.

Terayon's spinoff of its Imedia Semiconductor subsidiary will help the
company to diversify its revenue streams beyond its cable-modem and
cable-modem-termination-system businesses, CEO Zaki Rakib said.

'Today's launch is a major milestone for the cable industry, as well as
Terayon shareholders,' Rakib said. 'The creation of Imedia Semiconductor
validates the success of our long-term investment strategy initiated with the
development of S-CDMA [synchronous code-division multiple-access]
technology.'

For the 2.0 market, Imedia is launching its 'IM6000' chip and 'IM96000'
manufacturing-ready reference design for cable modems. Both technologies are
DOCSIS 1.0-certified, DOCSIS 1.1-based and DOCSIS 2.0-based S-CDMA and A-TDMA
(asynchronous time-division multiple-access) technologies.

Pricing is $25 for the IM6000 in volume, Terayon said. The IM6000 chip sets
are currently in Terayon's 'TJ615' cable modems.

Rakib said Terayon will market its Imedia DOCSIS 2.0 chip sets to other
vendors. 'We're in discussions with vendors, and we have had very substantial
meetings all over the world,' he added. 'There is so much demand in
understanding 2.0 that we'll likely put together seminars next
month.'

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