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Press Release

Atheros Communications Ships its 20-Millionth Wireless Chipset

High-Performance Single-Chip 802.11g and 802.11a/g Solutions Create Strong Market Demand

SUNNYVALE, Calif., Jan. 31, 2005—Atheros Communications, Inc. (NASDAQ: ATHR), a leading developer of advanced wireless LAN (WLAN) chipsets, today announced it shipped its 20-millionth chipset during the fourth quarter of 2004. In just under three years, the company has delivered six generations of WLAN silicon, each with greater features, better performance and competitive prices.

Atheros has achieved numerous industry milestones in its six-year history. The company introduced the world’s first 802.11a chipset in 2001, the first dual-band 802.11a/b chipsets in 2002 and 802.11a/b/g chipsets in 2003. In 2004, it also rolled out the industry’s first single-chip 802.11g and 802.11a/b/g solutions for client devices, as well as a single-chip 802.11g Access Point (AP) device. Atheros’ move to single-chip integration is part of its strategy to provide the industry with high-performance, low-cost wireless solutions, in order to drive ubiquitous wireless connectivity. 

“Surpassing the 20-millionth chipset milestone is a remarkable achievement, made possible through the innovation and dedication of our employees as well as the continued support of our customers,” said Craig Barratt, president and chief executive officer of Atheros. “Since the shipment of our first products in late 2001, we have continuously introduced new and innovative chipsets that demonstrate our ability to do high levels of integration and provide industry-leading performance in a standard digital CMOS manufacturing process. All of us at Atheros will continue providing our customers with innovative, cost-effective wireless solutions that improve the overall wireless user experience.”

Demand for Atheros solutions is at an all-time high. During the fourth quarter of 2004, Atheros shipped more than 4.7 million chipsets to its customers, further demonstrating the widespread adoption of its products in the WLAN market. During 2004, Atheros experienced increased demand for WLAN products using dual-band 802.11a/b/g technology. These products provide greater capacity and throughput than single-band 2.4-GHz WLAN devices that contend with interference from neighboring WLAN networks and non-wireless networking products also operating in the 2.4-GHz band. A wide variety of products – access points, routers, CardBus cards, digital media adapters and media extenders – have been introduced into the market to meet the demands of consumers. The introduction of the world’s first low-cost, highly integrated single-chip 802.11a/b/g chip in Q4 will accelerate the adoption of dual-band technology.

In 2004, there was high demand for the Atheros 802.11g single-chip solution, which enables manufacturers to incorporate inexpensive but high-performance wireless connectivity into a wider array of products. This single-chip product includes “Atheros only” features – Super G® and eXtended Range – that enable customers to achieve significantly greater throughput and range compared to other 802.11g-based products. The solution has been adopted by industry-leading retail providers such as D-Link and NETGEAR, as well as premier PC OEMs including Lenovo, NEC, Sony and Toshiba.

  “We saw a tremendous amount of growth in the wireless LAN space in 2004,” said Mike Feibus, principal analyst of TechKnowledge Strategies. “Key market drivers included rising consumer awareness and adoption of Wi-Fi, growth in the attach rate of Wi-Fi capabilities as a standard feature in laptops, and an increase in enterprise deployments of wireless LAN products with multi-band and advanced security features such as WPA and AES encryption. At the same time, a core driver of WLAN adoption has been the availability of low-cost, innovative solutions.”

Atheros has received numerous accolades for its leadership and continued innovation, including an Outstanding Financial Performance Award from the Fabless Semiconductor Association and #1 ranking on the Silicon Valley / San Jose Business Journal’s Fast 50 list of fastest growing private companies in Silicon Valley. Additionally, Atheros has been selected as a finalist for Company of the Year – Small/Medium category in Electronic Engineering Times' 2005 ACE Awards. The Atheros AR5006X single-chip 802.11a/b/g WLAN solution was recently named a MobileTrax Mobility Award Winner for 2004, and has also been selected as an EDN Innovation Awards finalist in the ASSP/SOC category.

About Atheros Communications, Inc.

Atheros Communications is a leading developer of semiconductor system solutions for wireless communications products. Atheros combines its wireless systems expertise with high-performance radio frequency (RF), mixed signal and digital semiconductor design skills to provide highly integrated chipsets that are manufacturable on low-cost, standard complementary metal-oxide semiconductor (CMOS) processes. Atheros technology is being used by a broad base of leading customers, including personal computer and networking equipment manufacturers. For more information, visit www.infor@atheros.com  or send email to info@atheros.com

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Atheros, the Atheros logo and Super G are registered trademarks of Atheros Communications, Inc. All other trademarks mentioned in this document are the sole property of their respective owners.

FORWARD-LOOKING STATEMENTS:

Except for the historical information contained herein, the matters set forth in this press release, including statements regarding the features, performance, capabilities and benefits of Atheros’ products, Atheros’ ability to continue to innovate and develop new and cost-effective solutions, and the expected acceleration of the adoption of dual-band technology, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, including, but not limited to, the difficulties inherent in developing new and enhanced products; the effects of competition; the rate of growth of the market for WLAN solutions; the effects of the potential adoption of wireless solutions and standards other than Wi-Fi; general economic conditions; and other risks detailed in Atheros’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 as filed with the SEC and in other reports filed with the SEC by Atheros from time to time. These forward-looking statements speak only as of the date hereof. Atheros disclaims any obligation to update these forward-looking statements.


For press and analyst inquiries contact: Cheryl Patstone, 408-773-5344, cheryl@atheros.com or Greg Wood, A&R Partners, 650-762-2838, gwood@arpartners.com.