NeoPhotonics Acquires Major Stake in China’s Largest Supplier of Active Optical Components - Photon Technology Co., Ltd.

SAN JOSE, Calif. & SHENZHEN, China -- March 2, 2005 -- NeoPhotonics Corporation, a leading supplier of integrated optical, planar lightwave circuit (PLC) modules for optical networking applications, today announced the company has become the largest shareholder in Photon Technology Co., Ltd. (Shenzhen) following the acquisition of all of the formerly state-owned, shares, or approximately one-third of all outstanding shares, for consideration of cash and stock. Terms were not disclosed.

The combination of Photon Technologies and NeoPhotonics creates the broadest and deepest optical component capability in the industry today, with advanced solutions that combine active and passive components into products and modules. Specifically, the two companies combine the best next generation passive PLC technology with world-class high volume laser and transceiver manufacturing capability.

Numerous new product collaborations already are underway, including the integration of active lasers with passive filtering and alignment on a PLC substrate for low cost triplexers for FTTP, as well as transceiver modules and integrated ROADMs. Together the companies are forging the future of optical components by integrating multiple functions on a single chip to provide module and subsystem solutions, or optical “systems on a chip” (SoC).

Furthermore, the two companies will fully support each other’s sales and customer support activities while combining sales channels in many regions.

“In addition to the companies leveraging each other’s geographic and technological strengths to become a global force in optical components, this deal is unique in that it’s one of the first cases of a U.S. company acquiring a major position in a large Chinese state-owned enterprise in the high-tech sector,” said Tim Jenks, CEO of NeoPhotonics. “The combination of a Silicon Valley leader in advanced technology and a broad-based Chinese manufacturer allows us to develop our products more quickly and to leverage an in-place worldwide distribution network to help achieve greater market penetration with leading network equipment manufacturers.”

“We are excited about joining forces with NeoPhotonics,” said Dr. Zhangyong Huang, Photon’s President & CEO. “We have a strong heritage since we are the only company in China designated by the Chinese government as the recognized platform company for commercialization of high tech opto-electronic products, including photo diodes, laser diodes, bidi and triplexer transceivers. Such designation is rare, as only 51 companies in China have received it - but we are the only such opto-electronics company.”

Visitors to next week’s OFC/NFOEC 2005 conference and exhibition in Anaheim can meet representatives from the two companies at the NeoPhotonics booth, 1657.

About NeoPhotonics

NeoPhotonics Corporation is a leading developer and manufacturer of PLC-based (planar lightwave circuit) integrated optical modules and subsystems designed to improve the performance and lower the costs associated with backbone and access optical networks. They are at the forefront of the long sought-after integration of active and passive components. Backed by leading venture capital firms and institutional investors, NeoPhotonics maintains headquarters and ISO 9001:2000 certified manufacturing facilities in San Jose, California. www.neophotonics.com.

About Photon Technology Co. Ltd.

Founded in 1993 as a majority state-owned enterprise, Photon has become China’s largest manufacturer of “active” optical components for broadband access and backbone optical networks. Products include a vertically integrated line of cost effective component and subsystem solutions, from active component diodes and subassemblies through modules, subsystems and broadband equipment. Today, Photon records more than half of its sales outside China and has achieved a profit in each year of its existence. PTC has headquarters, R&D and ISO 9001:2000 certified manufacturing facilities in Shenzhen, China, a research center in Beijing, and sales offices in China, Germany and the U.S. The company has more than 1000 employees. www.photontec.com.

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