Altera Corporation (NASDAQ: ALTR) today announced second quarter 2007 sales of $319.7 million, up 5 percent from the first quarter of 2007 and down 4 percent from the second quarter of 2006. New products grew 26 percent sequentially.

Second quarter 2007 net income was $80.5 million, $0.22 per diluted share, compared with net income of $77.3 million, $0.21 per diluted share, in the second quarter of 2006.

Altera repurchased 14.1 million shares of its common stock during the quarter at a cost of $316 million. Altera ended the quarter with $1.3 billion in cash and investments. Year to date, Altera has repurchased 21.2 million shares at a cost of $462 million.

The company is currently negotiating a financing commitment letter to provide a long-term credit facility of up to $750 million. If finalized, the company’s current intention is to draw $500 million from this facility and use the proceeds to repurchase its common stock. The company would then intend to repurchase up to $1.5 billion of its common stock from the beginning of 2007 through the first half of 2008, up $500 million from the previous $1 billion repurchase plan.

Altera’s board of directors has declared a quarterly cash dividend of $0.04 per share payable on September 4, 2007 to shareholders of record on August 10, 2007.

“All of our new programmable devices and our HardCopy® structured ASICs contributed to the new product strength we saw in the quarter. Following a two quarter industry correction, we are very pleased to see the resumption of sequential growth in the second quarter,” said John Daane, president, chief executive officer, and chairman of the board. “The third quarter will see the roll-out of the Stratix® III high-end FPGA devices, the arrival of production-qualified low-cost Cyclone® III FPGAs, and the remainder of the Arria™ GX FPGA family, all of which will add to our growth potential in the coming quarters.”

Several recent accomplishments mark the company’s continuing progress:

• Introduced in software in May, the first production-qualified low-cost Arria GX FPGAs are now shipping. All members of this new family will be available on a production-qualified basis by September. These new transceiver-based devices are built on proven Altera transceiver technology delivering a comprehensive transceiver solution at an unparalleled price. Designed to provide the best levels of signal integrity, the family supports the three interface standards that are emerging as mainstream protocols – PCI Express, Gigabit Ethernet, and Serial RapidIO. The Arria GX family addresses the rapidly growing need for FPGAs with transceivers in cost-sensitive, high-volume communications, computer, storage, and industrial applications.
• Altera is now shipping the EP3C120 FPGA, the largest member of its newly introduced Cyclone III family, the industry’s only low-cost FPGA family manufactured on a 65-nm process technology. Product roll-out began in March and production-qualified devices will start shipping in August. The EP3C120 FPGA consumes only a fraction of the power required by other FPGAs of comparable capacity. It is ideal for a broad range of applications requiring both high integration and low power, such as wireless communications infrastructure, software defined radio, and video processing and imaging.
• For the second year in a row, Altera has been named to the Business Week Hot 100, a listing of the best performing growth companies with sales less than $1.5 billion. To be included in the list, Business Week ranks eligible companies based on three year sales growth, earnings growth and return on invested capital. Altera was one of only three semiconductor companies included in this year’s rankings.

Business Outlook for the Third Quarter 2007

Sequential Sales Growth    Flat to up 3%
Gross Margin               64% to 65%
Research and Development   mid-$70 million range
SG&A                       high-$60 million range
Other Income               approximately $13 million
Tax Rate                   13% to 15%

Conference Call and Quarterly Update:

A conference call will be held today at 2:00 p.m. Pacific Time to discuss the quarter's results and management's outlook for the third quarter of 2007. The web cast and subsequent replay will be available in the investor relations section of the company's web site at http://www.altera.com. A telephonic replay of the call may be accessed later in the day by calling (719) 457-0820 and referencing confirmation code 258712. The telephonic replay will be available for two weeks following the live call.

Altera's third quarter business update will be issued in a press release available after the market close on September 5, 2007.

Forward-Looking Statements

Statements in this press release that are not historical are "forward-looking statements" as the term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally written in the future tense and/or preceded by words such as "will," "expects," "anticipates," or other words that imply or predict a future state. Forward-looking statements include any projection of revenue, gross margin, expense or other financial items discussed in the Business Outlook section of this press release as well as comments relating to new products, initial shipment dates, anticipated product rollout schedules, intentions to secure financing, and share repurchase plans. Investors are cautioned that all forward-looking statements in this release involve risks and uncertainty that can cause actual results to differ from those currently anticipated, due to a number of factors, including without limitation, customer business environment, market acceptance of the company's products, product introduction schedules, the rate of growth of the company's new products including the Arria GX, Cyclone II, Cyclone III, Stratix II, Stratix III, Stratix II GX, MAX® II and HardCopy device families, changes in the mix of our business between prototyping and production-based demand, the continuance of suitable financial market conditions and the ability of the company to secure desired financing, as well as changes in economic conditions and other risk factors discussed in documents filed by the company with the Securities and Exchange Commission from time to time. Copies of Altera's SEC filings are posted on the company's web site and are available from the company without charge. Forward-looking statements are made as of the date of this release, and, except as required by law, the company does not undertake an obligation to update its forward-looking statements to reflect future events or circumstances.

About Altera

Altera’s programmable solutions enable system and semiconductor companies to rapidly and cost-effectively innovate, differentiate and win in their markets. Find out more at www.altera.com.

Altera, The Programmable Solutions Company, the stylized Altera logo, specific device designations and all other words that are identified as trademarks and/or service marks are, unless noted otherwise, the trademarks and service marks of Altera Corporation in the U.S. and other countries. All other product or service names are the property of their respective holder.

Contacts:

Altera Corporation
Scott Wylie, Vice President – Investor Relations
408-544-6996 (Investors)
swylie@altera.com
Anna Del Rosario, Director – Corporate Communications
408-544-6397 (Media)
anna.delrosario@altera.com