WAVESPLITTER TECHNOLOGIES COMPLETES $21 MILLION EQUITY FINANCING

Company targets rapidly emerging metro access market for its leading-edge all- fiber DWDM devices

FREMONT, CA, September 21, 1999 - WaveSplitter Technologies, Inc., a leading developer of advanced, all-fiber DWDM devices for high-bandwidth optical networks, today announced the completion of a $21 million equity financing round which was led by CDIB Venture Management, the U.S. venture capital investment arm of Taiwan's largest industrial bank, China Development Industrial Bank.

The investment opportunity attracted a consortium of venture investors from around the world. Participants in addition to CDIB Venture Management included Mayfield Funds and Lucent Venture Partners, both of whom had previously made significant investments in the company, and new investors Goldman Sachs, Star Ventures from Germany, Newbury Ventures, NIF Ventures (the venture arm of Japan's Daiwa Securities), Sumitomo Electric Industries, and TDF/SsangYong from Singapore.

"WaveSplitter has made great progress since Mayfield's initial investment a year ago and is well-positioned to capitalize on the potentially vast metropolitan access market opportunity for DWDM devices," according to David Ladd, a Mayfield partner and WaveSplitter director. "All the right ingredients are there: a strong market focus, an experienced executive team that clearly understands the market's requirements, and - probably most significant - high performance, low cost all-fiber technology that can deliver the solutions the metropolitan access market needs to realize its potential," Ladd said.

According to Dr. Sheau Chen, president and CEO of WaveSplitter, the hefty capital infusion reflects the global investment community's bullish view of the DWDM market and WaveSplitter's prospects for becoming a preeminent supplier of modular, highly reliable DWDM components and subsystems, particularly for the rapidly emerging metropolitan access market.

"Everyone knows about the insatiable worldwide demand for more bandwidth. Up to now, this has been fueled primarily by the long haul networks. However, the growing demand for bandwidth in the metropolitan access market is creating another major growth opportunity, " Chen said. "We intend to use the proceeds of our financing round to accelerate our penetration of this very attractive new market."

"The only way metropolitan access market services providers can head off bandwidth bottlenecks and still keep DWDM system costs, and hence network costs, in line is to employ modular DWDM architectures. This will enable them to increase network capacity incrementally as demand grows without having to install prohibitively expensive new fiber-optic infrastructure, or continually replace their DWDM systems with next-generation systems to obtain the necessary bandwidth expansion.

"During the past 18 months, WaveSplitter has translated its innovative DWDM technology into a family of DWDM products consisting of WaveXpander(tm), WaveSplitter(tm) and WavePump(tm) which are designed to meet the industry's most stringent reliability standards and to provide a unique combination of modularity, narrow channel spacing and low insertion loss, " Chen said. "These products and those that will follow are precisely the cost-effective network elements that will enable metropolitan access carriers to deploy all-optical networks on a massive scale."

About WaveSplitter Technologies, Inc.

WaveSplitter Technologies, Inc. develops, manufactures and markets highly scalable, cost effective DWDM solutions that increase network bandwidth and eliminate the last major barrier to the large-scale deployment of fiber-based metropolitan area networks. WaveSplitter's high performance all-fiber DWDM devices offer a unique combination of low signal loss and modular expandability. WaveSplitter was founded in 1996 and is headquartered in Fremont, California.