Ottawa, Canada and Boca Raton, FL – June 23, 2004 — Zarlink Semiconductor (NYSE/TSX:ZL) and Axerra Networks today announced the completion of interoperability testing for E1/T1 circuit connectivity over Ethernet/IP networks. The companies’ products now work together to efficiently transport legacy TDM-based voice and data services over increasingly pervasive IP/Ethernet/MPLS networks.

Interoperability was extensively tested between Zarlink’s ZL™50111 TDM-over-IP packet processor and Axerra Networks’ AXN Multiservice Packet Concentrator with Circuit Emulation Service over Packet (CESoP™) support. Support for T1 and E1 traffic was verified across a PSN (Packet Switched Network).

The testing confirms that both companies’ technologies comply with emerging standards: ITU-T (International Telecommunications Union-Telecommunications) recommendation Y.1413; and the IETF (Internet Engineering Task Force) draft standards for SAToP (Structure Agnostic TDM-over-Packet) and CESoPSN (Circuit Emulation Services over Packet Switched Networks). Y.1413 was ratified in April 2004, while the IETF is in the final stages of ratifying the SAToP and CESoPSN standards. Axerra and Zarlink have been at the forefront in developing these standards for open, multi-vendor interoperability of TDM and circuit emulation services.

"By achieving interoperability between our packet processor and the Axerra platform, customers can more rapidly design IP-based access and enterprise products,” said Jeremy Lewis, product line marketing manager, Zarlink Semiconductor. “Interoperability with Axerra is important because it is the leader in scalable, carrier-class products that support the emerging circuit emulation standards.”

“Zarlink’s single-chip TDM-over-IP packet processor is the only device capable of sending high volumes of TDM traffic over the PSN with the same quality and reliability as circuit-switched networks,” said Steve Byars, vice president of Marketing, Axerra Networks. “Interoperability between Axerra and Zarlink will help accelerate the migration of TDM services and applications onto emerging packet networks.”

Powerful Pseudo-Wire products
Zarlink’s ZL50111 series of processors utilize CESoP technology to cost-effectively “tunnel” TDM traffic through any type of IP/Ethernet/MPLS network. The devices transport or aggregate up to 32 T1/E1 TDM circuits or two T3/E3 TDM circuits across a PSN.

Axerra Networks’ AXN Multiservice Packet Concentrators and Access Devices are easy-add solutions that utilize powerful pseudo-wire technology to provide a multi-service on-ramp to IP and MPLS networks. These pseudo-wire solutions enable the most comprehensive set of services available in the industry, including TDM services, IP, Frame Relay, and ATM over the widest range of transport technologies, such as POS, Ethernet, MPLS, DOCSIS HFC, and fixed wireless (WiMAX).

About Zarlink Semiconductor
For almost 30 years, Zarlink Semiconductor has delivered semiconductor solutions that drive the capabilities of voice, enterprise, broadband and wireless communications. The Company’s success is built on its technology strengths, including voice and data networks, consumer and ultra low-power communications, and high-performance analog. For more information, visit www.zarlink.com.

About Axerra Networks, Inc.
Axerra Networks, "The Pseudo-Wire Company™," is the leading provider of IP aggregation, service interworking, and legacy multi-service delivery solutions over IP and MPLS networks. Axerra's pseudo-wire solutions enable incumbent carriers, competitive service providers, mobile/wireless operators, and cable MSOs to extend IP + legacy voice & data services over IP and MPLS networks. Axerra Networks' pseudo-wire solutions are already carrying revenue traffic for service providers on three continents. For more information, please visit: www.axerra.com.

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Certain statements in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of Zarlink Semiconductor to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and assumptions include, among others, the risks discussed in documents filed by Zarlink Semiconductor with the Securities and Exchange Commission. Investors are encouraged to consider the risks detailed in those filings.

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