Transaction Offers Carrier-Class Silicon Packet Transport
    Roadmap From Early Flexible Implementations Through Volume
                               ASSPs

Applied Micro Circuits Corporation, or AppliedMicro (Nasdaq:AMCC) today
announced that it has entered into a definitive stock purchase
agreement to acquire TPACK A/S of Copenhagen, Denmark. Applied Micro
Circuits will pay $32 million in cash plus up to $5 million in cash
earn-outs that are dependent primarily upon TPACK revenues and product
development milestones scheduled over the next eighteen months. The
transaction is expected to be profit neutral, excluding transaction
costs, for our fiscal year ending March 31, 2011 and to be accretive
thereafter.

TPACK's SOFTSILICON(TM) products support the fastest deployment of new
carrier-class packet and optical network standards with the greatest
flexibility for Tier 1 equipment vendors. Implemented in Altera FPGA
devices, TPACK's solutions address the unique requirements of
individual equipment vendors and accelerate time-to-market for 10, 40
and 100 Gbps OTN switching and routing solutions. As OTN standards
evolve and mature, AppliedMicro will use the early engagement work with
customers and develop standard reference designs that maintain software
compatibility while offering lower cost and lower power.

"While the OTN silicon market is growing rapidly, OTN standards and
implementations are still evolving-- thereby offering system OEMs a
broad field to uniquely differentiate their products with custom
features and legacy support at various levels. This has led a large
proliferation of FPGA technology within our customers' platforms. These
FPGA solutions sit beside our products and together provide a scalable,
system solution for our customers," said George Jones, Head of
Marketing and Business Development for Transport products at
AppliedMicro. "TPACK's IP implemented in Altera FPGAs will provide us
with the flexibility to meet our customers' special requirements and
get to market quickly with leading-edge performance. We believe TPACK's
team of talented engineers will make AppliedMicro more nimble and
responsive to a greater range of market needs as system requirements
continue to evolve and grow."

Founded in 2001, TPACK has 37 employees, including 28 design engineers,
and brings a track record of innovative product development and steady
financial growth as a privately-held company. Following the acquisition
closing, the company will continue to operate from its Copenhagen
office as a wholly-owned subsidiary of AppliedMicro.

"AppliedMicro shares our vision on how to meet the emerging OTN
standards, first with soft-FPGA solutions, and then extend the lessons
learned from early customer engagements to improve integration of our
Framer-Mapper and Carrier Packet Processor product lines," said Colin
L.M. Macnab, CEO of TPACK. "This acquisition delivers a partnership
providing customers with an industry-first, allowing OEMs to transition
from first-to-market solutions, through HardCopy(R) to volume
production while maintaining a unified hardware and software
architecture."

"TPACK's innovative SOFTSILICON(TM) solution extends the benefits of
low NRE and feature-rich flexibility of FPGA solutions into rapidly
emerging OTN market space," said Arun Iyengar, senior director of the
communications and broadcast business units at Altera Corporation.
"With this acquisition, we look forward to having the same
collaborative effort with AppliedMicro that we enjoyed with TPACK. The
packet optical transport space is a focused market for us and one that
we continue to build upon through our close work with AppliedMicro and
the TPACK design team."

The stock purchase transaction is subject to customary closing
conditions, and is expected to close within the next thirty (30) days.

AppliedMicro will host a conference call with analysts before the
opening of market at 5:30 a.m. PDT on Thursday, August 19, 2010. To
listen to the call, please use the following information: 866.277.1181
using passcode 78250794. A replay of the call will be available through
August 26, 2010 at 888-286-8010, passcode 63591805.

About TPACK

TPACK delivers cutting edge Silicon ICs providing core data transport
and switching functions to leading Telecom and Networking equipment
suppliers. TPACK's SOFTSILICON(TM) products support the fastest
deployment of new Carrier Class Packet and Optical Network standards,
providing the most flexible, cost and power effective implementations
throughout the life of the equipment. TPACK's customer base includes
Tier 1 equipment providers who account for more than 50% of the optical
transport equipment market.

AppliedMicro Overview

AppliedMicro is a global leader in energy conscious communications and
computing solutions for telco, enterprise, data center, consumer and
SMB applications. With a 30-year heritage as an innovator in high-speed
connectivity and high performance embedded processing, AMCC, now
AppliedMicro, employs patented transport and embedded processor SoCs to
provide high performance energy efficient products. AppliedMicro's
corporate headquarters are located in Sunnyvale, California. Sales and
engineering offices are located throughout the world. For further
information regarding AppliedMicro, visit the company's Web site at
http://www.apm.com.

Applied Micro Circuits Corporation, AMCC, AppliedMicro and the
AppliedMicro logo are trademarks or registered trademarks of Applied
Micro Circuits Corporation. All other product or service names are the
property of their respective owners.

This news release contains forward-looking statements that reflect the
Company's current view with respect to future events and financial
performance. These forward-looking statements are only predictions
based on current information and expectations and are subject to
certain risks and uncertainties, including, but not limited to, risk
that the sale will not close or will not close in the timeframe
anticipated or that the sale will have little or no positive impact on
the Company's business, and risks relating to general economic
conditions. More information about potential factors that could affect
the Company's business and financial results is included in the "Risk
Factors" set forth in the Company's Annual Report on Form 10-K for the
year ended March 31, 2010, and the Company's other filings with the
Securities and Exchange Commission. Actual results could differ
materially, as a result of such factors, from those set forth in the
forward-looking statements. You are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of
the date of this press release. All forward-looking statements are
qualified in their entirety by this cautionary statement, and the
Company undertakes no obligation to revise or update any
forward-looking statements to reflect events or circumstances after the
issuance of this press release.


CONTACT:  AppliedMicro
          Tally Kaplan Porat
          408.702.3139
          (c) 408.483.8370
          tkaplan@apm.com
         
          The Bernard Group
          Media Contact:
          Tom Murphy
          831-661-0260
          (c) 831-402-4142
          tmurphy@bernardgroup.com