Talks Re. Newton Aycliffe

Filtronic PLC 22 May 2001 For Immediate Release 22 May 2001 FILTRONIC PLC: - PROPOSED JOINT VENTURE FOR NEWTON AYCLIFFE PLANT Filtronic plc ('Filtronic'), a leading global designer and manufacturer of a broad range of microwave and millimetre wave radio frequency components and subsystems, announces that it is in ongoing discussions with a leading international aerospace and defence OEM to form a joint venture company based upon the infrastructure located at Filtronic's Newton Aycliffe compound semiconductor facility. The proposed new company will offer to both shareholders the supply of advanced compound semiconductors and the use of an automated microwave factory, capable of supplying cost effective microwave electronic subsystems in volume manufacturing quantities. Key products for Filtronic would include high power gallium arsenide transistors for power amplifiers in 3G base stations, customised microwave monolithic integrated circuits for millimetre wave broadband wireless products and photonic components. It is intended that the microwave factory will supply Filtronic with complete amplifier and transceiver subsystems for both commercial and defence requirements. Further development for defence systems requirements will lead to the production of compound semiconductor devices suitable for both phased array radars and electronic countermeasure systems. Additional capacity in the microwave factory would enable the production of high performance, cost effective, microwave electronic subsystems for various defence systems in addition to Filtronic's own supply to EuroDass and Euroradar for embodiments in the Typhoon avionics system. It is also envisaged that there will be one or more selected third party customers for the compound semiconductor products, which do not compete with the principal shareholders' businesses. Overall, this would lead to a significant proportion of the manufactured output for both compound semiconductor products and the microwave factory being for commercial applications. This, in turn, would enable the products within the defence related business to be produced to a high quality in a very cost effective manner, which normally could not be achieved due to the relatively limited level of demand for defence products. It is further proposed that the new company will benefit from an equity injection by the OEM which will enable it to expand the types of compound semiconductors which can be manufactured and increase the capacity in the microwave factory. This would result in the new company having sufficient capital to fund current and future working capital requirements until it becomes profitable and self-sustaining. The board of Filtronic plc will make a further announcement regarding the proposed joint venture at a later date as appropriate. Enquiries: Filtronic plc Tel: 01274 530622 Professor David Rhodes Executive Chairman & CEO, Filtronic plc John Samuel Finance Director, Filtronic plc Binns & Co PR Ltd Tel: 020 7786 9600 Peter Binns/Paul McManus