April 21, 2004



Alphion Corporation Closes Third Round of Funding to Support Expansion of the QLight™ Family of Photonic Integrated Circuit Products

PRINCETON JUNCTION, NJ (April 21, 2005) - Alphion Corporation, a leader in innovative integrated components for photonic regeneration, signal conditioning, wavelength management, and performance monitoring, announced today the first closing of a third round of funding with an investment of $10.6M, bringing the total company funding to $42.6M. The second closing is scheduled and the company is in discussions with interested investors.

Alphion’s third round of funding was led by Tallwood Venture Capital with participation from Goldman Sachs, Axiom Venture Partners, ICCP Venture Partners, Narra Venture Capital, and industry executives. This funding will be used to support the expansion of Alphion’s QLight™ family of photonic integrated circuit products and the ramp up of manufacturing operations.

Dado Banatao, Managing Partner of Tallwood Venture Capital, said “the continued investment by Tallwood in Alphion reflects our confidence in the company’s vision for the future of photonic networking and the team’s ability to build the business in tough market conditions.”

Sam McKay, General Partner at Axiom Venture Partners, added “Alphion is emerging as a leader in photonic integrated circuits. We are very excited about this investment. Alphion’s QLight™ technology platform addresses a broad spectrum of customer needs and is being deployed in a wide variety of applications.”

William Valtos Jr., Senior Managing Director of ICCP Venture Partners commented, “We are very enthusiastic about Alphion’s growth potential. The recent addition of Alphion’s QLight™ Amp and Switch product lines to the photonic transponder line, demonstrates the versatility of the QLight™ technology platform.”

“We have received extensive validation from metro, long-haul, CATV and defense customers,” said Dr. Bharat P. Dave, Alphion’s Chairman, President & Chief Executive Officer. “This strong endorsement from new and existing investors demonstrates the confidence they have in both the Alphion team and our vision for photonic integration. This funding will allow us to expand our QLight™ product family while addressing new applications in datacom, telecom and high performance networking.”

The QLight™ platform is based on breakthroughs in monolithic integration on InP and advanced packaging technologies. Alphion owns rights to over 35 issued and pending patents related to design, fabrication and applications of photonic integrated circuits.

ABOUT ALPHION CORPORATION Alphion Corporation, a privately held company, develops, manufactures and markets integrated photonic devices and subsystems based on its proprietary QLight™ technology. Alphion products are sold into telecom, datacom, CATV and defense system OEMs. The QLight™ family of products is used in photonic regeneration, signal conditioning, wavelength management, and performance monitoring applications. For more information about Alphion and its products, visit our website www.alphion.com

ABOUT TALLWOOD VENTURE CAPITAL Tallwood Venture Capital is a venture capital firm focusing on semiconductors and semiconductor related technologies. Tallwood raised its first institutional fund of $180 million in 2002. Investors include Stanford University and Harvard University.

Tallwood's practice is based on a deep understanding of markets, the impact technology will have on them and a hands-on, very active involvement post investment. Tallwood also utilizes a best in class team of consultants and advisors to help build our practice and work directly with our portfolio companies. Our vision is to actively help entrepreneurs to develop and grow technology-based start ups into world-class companies.

For more information visit their website, www.tallwoodvc.com

ABOUT GOLDMAN SACHS Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high net worth individuals. Founded in 1869, it is one of the oldest and largest investment banking firms. The firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world.

For more information visit their Website, www.gs.com

ABOUT ICCP VENTURE PARTNERS ICCP Venture Partners is an Asian-based venture capital firm, which supports strong management teams who desire to build world-class companies with leading-edge products and services. ICCP Venture Partners' investment portfolio includes fab-less integrated circuit design firms and semiconductor-related technologies, software, outsourced services and manufacturing, and traditional consumer goods and services.

For more information visit their website, www.iccpventurepartners.com

ABOUT NARRA VENTURE CAPITAL Narra Venture Capital was established in 2002 to invest in private high-technology companies with potential for strong growth. Narra focuses its investments on companies with defensible barriers to competition, which are normally based on cutting edge technology or their efficient deployment.

For more information visit their website, www.narravc.com

About Axiom Venture Partners L.P. Axiom Venture Partners provides capital and strategic assistance to rapidly growing high technology companies. Axiom's professionals bring substantial investing experience and industry expertise to the venture capital process. With over $200M in capital under management, the firm seeks to consider investment proposals in two main industry areas. The first is high technology, which includes communications, software, Internet infrastructure, and information technology. Biotechnology constitutes the second area. Through its office in Connecticut, Axiom invests actively throughout the United States in early or late stage companies. For more information, visit www.axiomventures.com