Tessera acquires FotoNation

Tessera Technologies, Inc. (Nasdaq:TSRA), a leading provider of miniaturization technologies for the electronics industry, today announced it has entered into a definitive agreement to acquire FotoNation, a leading provider of embedded imaging solutions for digital still camera and mobile phone applications.

Under the terms of the agreement, Tessera will pay $29 million in net cash with up to $10 million of additional consideration, contingent upon certain milestones over one year. This transaction is subject to various standard closing conditions, and is expected to close in February 2008.

Based in Burlingame, Calif., FotoNation is a privately-owned, 80-person company that develops innovative embedded solutions to improve image quality and enhance, extend and simplify picture taking for digital still cameras and mobile devices. The company’s extensive portfolio of patented solutions includes advanced hardware and firmware image processing solutions. Principal products encompass technologies for red-eye correction; face tracking; smile and blink detection; as well as other solutions for enhancing digital image quality. FotoNation’s technology is embedded in more than two out of three digital still cameras sold today.

“FotoNation’s solutions are a perfect complement to Tessera’s image enhancement technologies and the combined strengths of our two companies will help drive the proliferation of digital still camera functionality in mobile camera devices, as well as open new channels such as digital still cameras for our product portfolio,” said Bruce McWilliams, chief executive officer, Tessera. “With this acquisition, Tessera will further expand its broad portfolio of integrated consumer optics solutions, and be positioned to become a ‘one-stop shop’ for a full range of camera imaging technologies.”

“There is significant, untapped potential for sophisticated imaging solutions in the growing camera phone market, and Tessera’s close ties to this market will enable us to accelerate the commercialization of FotoNation’s rich portfolio of technology and products,” said Eran Steinberg, chief executive officer, FotoNation. “Through this acquisition, we see highly compelling opportunities resulting from combining FotoNation’s advanced image processing technologies with Tessera’s consumer optics products.”

About Tessera Technologies, Inc.

Tessera is a leading provider of miniaturization technologies for the electronics industry. Tessera provides a broad range of advanced packaging, interconnect, and consumer optics solutions which are widely adopted in high-growth markets including consumer, computing, communications, medical and defense electronics. Tessera’s customers include the world’s top semiconductor companies such as Intel, Samsung, Texas Instruments, Toshiba, Micron and Infineon. The company’s stock is traded on the Nasdaq National Market under the symbol TSRA. Tessera is headquartered in San Jose, California. For information call 1.408.894.0700 or visit www.tessera.com.

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