GIGOPTIX to acquire MAGNUM SEMICONDUCTOR

SAN JOSE, Calif. April 4, 2016 – GigOptix, Inc. (NYSE MKT:GIG), a leading supplier of advanced semiconductor communications components for use in Cloud connectivity, data centers, and high-speed optical and wireless networks, today announced the signing of a definitive agreement to acquire Magnum Semiconductor, Inc., a privately-held Milpitas, California-based provider of silicon ICs, SoCs, software, and IP for the professional video broadcast and IoT camera markets, in a cash and stock transaction valued at approximately $55 million net based upon the average closing price of GigOptix stock for the trailing thirty day period ended April 1, 2016. The acquisition is expected to become effective tomorrow, Tuesday, April 5, 2016, and upon the close, GigOptix, Inc. will be renamed GigPeak, Inc., beginning to operate under that name as of Wednesday, April 6, 2016. The Company will continue to trade on the NYSE MKT exchange under the symbol “GIG.”

Highlights of the Transaction Include the Following Expectations:
• Immediately accretive to GigOptix FY 2016 financial results
• When adding the 9 months of Magnum’s projected financial results left in FY 2016, the GigPeak post acquisition outlook for FY 2016, compared with GigOptix’s standalone results in FY 2015, includes: • Revenue in the range of $60 million to $62 million, up approximately 50% from $40.4 million in FY 2015
• Non-GAAP gross margin to increase to a range of 69% to 71%, up from 65% in FY 2015
• Adjusted EBITDA margin to increase to a range of 27% to 29%, up from 25% in FY 2015
• Non-GAAP earnings per diluted share to be in a range of $0.22 to $0.24, up from $0.19 in FY 2015. The projected increase in FY 2016 earnings per diluted share accretion is in spite of an approximately 20% increase in share count through the acquisition of Magnum and the recently announced direct investment by PDSTI
• Enhances footprint utilization and reduces total cost of ownership of existing network pipes from the core to the end user
• Expands and further differentiates the GigPeak product portfolio and addressable markets, providing additional growth opportunities, and expanding the current GigOptix addressable markets of approximately $1 billion to nearly $5 billion by adding the broadcasting, IoT, and consumer markets

We have a long and proven track record of acquiring and integrating cutting edge technology companies in the most financially prudent manner. The acquisition of Magnum Semiconductor, our eighth acquisition since inception, is another important step in realizing our initial 2007 roadmap vision and strategic plan to expand GigOptix through inorganic and organic growth. With the addition of Magnum Semiconductor, we have taken a meaningful step in expanding our product portfolio to further enhance our mission of enabling high-speed and high-quality information streaming end-to-end over the network, from the core to the consumer,” said Dr. Avi Katz, GigOptix’s Founder, Chairman of the Board of Directors and Chief Executive Officer. “We look forward to supporting Magnum’s continuing efforts as part of the newly rebranded GigPeak family to drive innovation through their proven and market accepted software-based solutions to deliver best-in-class video and data to the world’s leading broadcasting and IoT camera OEMs and customers. The exponential growth in video traffic will further expand the demand for GigOptix’s and Magnum’s solutions in real-time high-speed and high-quality information streaming, video compression in the cable, satellite, telco/IPTV and mobile/over the top (OTT) markets. The increasing need for powerful video analytics capabilities has also been driving significant interest in Magnum’s solutions in the IoT camera markets by major OEMs. We are impressed by Magnum’s technology, customers, growth profile, and the technical depth and experience of its engineering team. We are very excited by the many opportunities this combination offers that will enable us to expand our focus from the enterprise networking and cloud connectivity to broadcasting head-ends, IoT, and consumer markets. I also want to personally offer a warm welcome to the entire Magnum team that is joining our family today.”

Gopal Solanki, Chief Executive Officer and President of Magnum Semiconductor stated, “The combination of GigOptix’s leading edge wired and wireless high-speed communication technology, combined with Magnum’s professional quality video compression and SoC hardware and software expertise creates a unique and powerful platform for streaming video. The Magnum team is excited to join forces to develop solutions for a future where video presence is pervasive and widely deployed at both the consumer and commercial premises.”

Andy Rappaport, Partner Emeritus at August Capital, Magnum’s largest shareholder, said, “Magnum’s team has done an extraordinary job creating proven, industry leading video compression and analytics technology serving some of the most demanding customers in the world. By combining Magnum’s hardware and software experience and high-margin product portfolio with the complementary product, technology and market leadership, and solid balance sheet of GigOptix, GigPeak is well positioned to sustain both companies’ strong positions with their current customers and accelerate growth by developing new solutions for large emerging markets.”

Magnum Semiconductor, which generated approximately $19 million in revenue in FY 2015, based on unaudited results, brings a well-developed and comprehensive portfolio of video broadcasting and compression solutions to GigOptix, including silicon ICs, SoCs, software solutions, and a comprehensive library of IP.

“We have researched the market for a long time to identify the best-in-class video broadcasting, compression and analytics technology company that will allow us to complement our leading edge high-speed connectivity product portfolio for the telecom and datacom enterprise networking. This combination of products and technologies enable us to address both the speed of data transmission and the amount of bandwidth the data consumes within a network, driven in particular by video, which is a major source of data center traffic. We are poised to provide powerful solutions to enhance the footprint utilization and reduce total cost of ownership of existing network pipes from the core to the end user. GigPeak’s broad portfolio of cutting-edge products will serve the enterprise networking and broadcasting OEMs, as well as the IoT and consumer markets,” said Dr. Raluca Dinu, GigOptix’s Executive Vice President of Global Customer Operations.

About GigOptix, Inc.

GigOptix, Inc. (NYSE MKT:GIG) is a lead designer, developer, and global supplier of a broad range of analog, digital, and mixed signal components to enable high-speed information streaming over the telecom networks, datacom infrastructure, and consumer electronics links. Our ability to innovate and create differentiated products is based on deployment of various semiconductor technologies that span from III-V compounds to SiGe BiCMOS and CMOS-based device designs.
GigOptix’s product portfolio provides high-speed and low-power solutions in markets such as fiber-optics telecom, wireless backhaul, datacom and consumer electronics, mil-aero, instrumentation, and medical equipment, for applications such as linecards and transponders, active optical cables and pluggables, point-to-point wireless radios, military warfare, avionics electronics, GPS systems, and diverse medical equipment, such as ultrasound imaging, X-Ray, MRI, CT Scan, and Defibrillators.

About Magnum Semiconductor, Inc.

Magnum Semiconductor is a leading provider of silicon ICs, SoCs, software and IP for the professional video broadcast and IoT camera markets. Magnum provides top of the line products, tools and technologies for the entire video content creation and distribution chain, from contribution and production through distribution over cable, satellite and IPTV to OTT video streaming. Magnum Semiconductor is headquartered in Milpitas, California, with sales and engineering offices in Canada, China, and Korea.

Forward Looking Statements are omitted