Flextronics Acquires Operations from TeraForce

Flextronics (Singapore) and TeraForce Technology Corp. (Richardson, TX) today announced an agreement in which Flextronics Design, a business unit of Flextronics, has acquired the engineering design service operation from TeraForce's wholly owned subsidiary, DNA Enterprises, Inc. (Richardson, TX), a provider of hardware, software, systems engineering and embedded digital signal processing applications. As part of the agreement, initial cash proceeds and additional credit to TeraForce and its subsidiaries will be issued to which TeraForce will assess Flextronics Design's vast resource of engineering services. The deal will provide Flextronics Design with 25 engineers, who will be integrated with the company's current 42 engineers in Richardson, TX.

"With significant expertise in electrical engineering and embedded software design, this talented team enables Flextronics Design to extend our capabilities to meet the growing demand for these services from our customers," stated Ron Snyder, president of Flextronics Design. "We welcome the new engineers to the group and their expertise in the area of hardware and software design capabilities."

"Our arrangement with Flextronics Design provides important strategic and financial benefits for our company, since we will be transferring an organization associated with a design services operation that has become inconsistent with TeraForce's new product initiatives," commented Herman Frietsch, chairman and chief executive officer of TeraForce Technology Corp. "We will now be able to concentrate on expanding opportunities for the growing defense electronics business conducted by DNA Computing Solutions while continuing to have access to engineering design services from Flextronics Design to supplement the engineering staff of DCS."