Strong Financial Performance Attributed to Commitment to Innovation

EL SEGUNDO, Calif. — October 15, 2007 — Applied Wave Research, Inc. (AWR®), the innovation leader in RF electronic design automation (EDA), today announced record sales and profits for the first half of its fiscal year, which ended September 30, 2007. Sales revenues for the first six months increased nearly 30% over the prior year, and more importantly, resulted in record profits for the fiscal second quarter (Q2). Achievements driving AWR’s strong performance include consistent growth across all products lines, and the addition of strategic new customer accounts, primarily in the Asia Pacific region. Significant AWR customers include Alcatel-Lucent, LG Electronics, and Flextronics.

“Sales in all geographical regions— North America , Europe , and Asia —are well ahead of expectations, with China and Germany experiencing the fastest growth,” said Ted Miracco, co-founder and executive vice president of AWR. “All market sectors, including wireless, semiconductor, and defense electronics, showed strong and consistent growth, attesting to the depth and breadth of our RF and microwave software offerings.”

The company attributes its robust financial performance not only to its founding principles of openness and interoperability, but also to its commitment to innovate new technologies in order to help customers meet the growing challenges of increasingly complex RF and microwave design. In the past 12 months alone, AWR has introduced three groundbreaking new technologies, the ACE™, RFA™, and AXIEM™ tools, which enable faster product development and significant cost benefits to the customer.

“To be halfway through the fiscal year and ahead on all of our financial goals and corporate objectives is wonderful news,” said Dane Collins, CEO of AWR. “Our third quarter is already off to a healthy start and business forecasts are very positive as customers respond favorably to our new innovations and product releases."

About Applied Wave Research, Inc.

Applied Wave Research is a leading supplier of high-frequency EDA products for the design of: wireless telecommunications equipment, semiconductors, high-speed computers, networking systems, automotive mobility systems, and a variety of other electronics-based products. AWR is a privately-held company with global development offices, sales offices, training centers, and distribution channels. In September 2005, AWR acquired APLAC Solutions, an emerging leader in simulation and analysis software for analog and radio-frequency (RF) design. APLAC's RF design technology has been used in designing over 30 percent of all mobile phone RF integrated circuits (ICs) worldwide. AWR today has over 700 companies deploying its software worldwide, including virtually every major high-frequency electronic component and system supplier. The company is headquartered at 1960 East Grand Avenue, Suite 430 , El Segundo , California 90245 . For more information about AWR and the company's products, please visit www.appwave.com or call 310-726-3000.

AWR, the AWR logo, ACE, RFA, and AXIEM are either registered trademarks or trademarks of Applied Wave Research, Inc.