WaveSplitter and Matsushita Kotobuki Electronics (MKE) Announce Deal That Will Revolutionize Photonic Component Manufacturing

Applying Automation Expertise to Optical Components

FREMONT, CA -June 20, 2002 - WaveSplitter Technologies, Inc., a worldwide supplier of integrated optical components and modules for advanced optical networks, and Matsushita Kotobuki Electronics Industries, Ltd. (MKE), a subsidiary of Matsushita Electric Industrial Co., Ltd. (MEI) (NYSE: MC), a worldwide technology leader in electronics products today announced an agreement on manufacturing of photonic components. MKE will apply its superior quality manufacturing technology of automation, precision assembly and wafer processing skills to the full range of WaveSplitter's products, which include planar lightwave circuit, fused-fiber and micro-optic components. With this agreement MKE and WaveSplitter can attack key bottlenecks in the production process, reduce cycle time, reduce product variability and improve yield.

"The optical component market is expected to grow 20% per year for the next 5 years, presenting a very good opportunity for MKE to apply our precision process technology." said Takao Kanamura, Senior Managing Director of MKE. "Yield improvement with high production quality is a key factor for success in this business. By applying our automation expertise and other technologies, we can significantly reduce costs to stimulate market growth. Our design-for-manufacturing ideas will also be incorporated into future products. We have been impressed with the range of technologies WaveSplitter has developed, and look forward to working with them to radically improve the manufacture of optical components."

"While many companies have moved production off shore to take advantage of low labor rates, there is a limit to the cost benefits achieved and there is no particular improvement to the manufacturing process. WaveSplitter believes automation offers the next quantum leap in optical components," said Bill Diamond, CEO and President of WaveSplitter. "MKE brings tremendous depth of experience in quality manufacturing, process engineering and manufacturing automation, having driven down cost and increased production volumes and yields to become the quality leader for consumer electronics products. Together we can apply their manufacturing expertise to WaveSplitter's range of PLC, fused-fiber and micro-optics products to radically change the manufacturing cost structure of our industry."

Optical components are the building blocks of fiber optic telecommunication networks. Products range from transmitters to generate signals, attenuators and monitors to control the power level, multiplexers to combine multiple wavelengths, amplifiers to overcome transmission losses and receivers to detect the transmitted pulses. Together these products have significantly improved the price/performance ratio of long-haul and metropolitan networks.

WaveSplitter's product portfolio consists of active, dynamic and passive technologies, including highly integrated variable-optical-attenuator-multiplexers (V-Muxes) and V-Muxes with integrated monitoring, environmentally rugged transponders, small footprint arrayed waveguide gratings (AWGs), and low-dispersion interleavers. Other products include polarization beam combiners, pump laser combiners, couplers, isolators, and filters. WaveSplitter's intelligent hybrid integration solutions optimize system performance without compromising performance.

About Matsushita Kotobuki Electronics Industries
Matsushita Kotobuki Electronics Industries, Ltd. (MKE) is a subsidiary of Matsushita Electric Industrial Co., Ltd. (MEI) and is one of the world's largest manufacturers of hard disc drives and optical (DVD/CD-ROM) disc drives. MKE's other products include VCRs, combination TV/VCR units, video camcorders (DVC/VHS-C) and heating equipment.

Additional information is available at http://www.mke.panasonic.co.jp/en/index.html


About WaveSplitter Technologies, Inc.
WaveSplitter Technologies, Inc. is a leading provider of cost-effective active, dynamic and passive components and modules for advanced metropolitan and long-haul optical networks. WaveSplitter's intelligent integrated products offer system manufacturers greater functionality in smaller packages and at lower cost than incumbent discrete technologies. WaveSplitter was founded in 1996 and is headquartered in Fremont, California. For more information, visit the company's Web site at http://www.wavesplitter.com.

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Bob Shine, 510-651-7800 x 274, bob_shine@wavesplitter.com