New Applications in High-end Markets

Our traditional high-end markets of telecommunications, networking, and data processing continue to be among the fastest growing areas within the electronics industry. Moreover, Xilinx's share in these markets has increased over the past year, largely due to the success of the XC4000X product families and the introduction of the Virtex family. With ever-increasing density, speed and functionality, these product families are finding broad new applications.

Introduced two years ago, our XC4000XL family is now the principal driver of Xilinx revenues. In fact, we believe many of our customers using these devices are only now moving into volume production. Networking companies have contributed significantly to the success of this product family, as these chips are becoming more widely used in the equipment that is building the Internet's foundation. During the year, we introduced the XC4000XLA family, an enhanced version of the XC4000XL family that is half the die size and 30% faster. With the addition of the XC4000XLA family, the XC4000X product families will continue to be the key contributors to Xilinx revenues for many years to come.*

* These are forward-looking statements that include certain risks and uncertainties including timely introduction and availability of new products, the impact of competitive pricing and products, customer acceptance of new products, the dependence upon third-party wafer suppliers and other subcontractors, the economic health of our end markets and the geographies that we serve, and other risks that are discussed in the attached Form 10-K.