Finisar and Infineon modify terms of acquisition agreement

October 12, 2004 Sunnyvale, CA -- Finisar Corp. and Infineon Technologies AG have agreed to modify the terms of a previously announced agreement under which Finisar is to acquire Infineon's Fiber Optics Business Unit based in Berlin, Germany. The terms were modified in part due to the operating results for this business unit during the past six months.

October 12, 2004 Sunnyvale, CA -- Finisar Corp. and Infineon Technologies AG have agreed to modify the terms of a previously announced agreement under which Finisar is to acquire Infineon's Fiber Optics Business Unit based in Berlin, Germany. The terms were modified in part due to the operating results for this business unit during the past six months.

Per the modified agreement, Finisar will issue approximately 110 million shares of Finisar common stock to Infineon compared to approximately 135 million shares that would have been issuable under the original agreement. Following the transaction, Infineon will hold a 33% equity interest in Finisar. In addition, Infineon has agreed to provide financial assistance with respect to the costs of restructuring the operations of the Fiber Optics Business Unit and integrating those operations with Finisar's following the closing.

The transaction is subject to approval by Finisar's shareholders, applicable regulatory approvals, and other customary closing conditions. Jerry Rawls, president and CEO of Finisar, and Frank Levinson, chairman and chief technology officer of Finisar, who own an aggregate of approximately 16% of the outstanding Finisar shares, have entered into agreements with Infineon to vote their shares in favor of the transaction. The companies have already received the required antitrust clearances in the U.S. and Europe.

As previously announced, the acquisition will involve the transfer of Infineon's fiber-optic development, manufacturing, and certain marketing activities and approximately 1,200 employees. The Infineon Fiber Optics Business Unit develops, manufactures, and markets a broad range of fiber-optic datacom and telecom modules supporting the common MSA standards; BIDI components that allow bi-directional transmission on a single fiber for fiber-to-the-home (FTTH) applications; and plastic optical fiber (POF) components that are used in automotive applications.

Pending the approval of Finisar's shareholders, the transaction is now expected to close in the fourth calendar quarter of this year.

At closing, Mr. Thomas Seifert, CEO of Infineon's Memory Products Group, is expected to join the Finisar Board of Directors.

Deutsche Bank Securities is acting as sole financial advisor to Finisar. Citigroup Global Markets is acting as sole financial advisor to Infineon.

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