Sales Up 13 Percent Year over Year

Altera Corporation (NASDAQ: ALTR) today announced third quarter sales of $356.8 million, down 1 percent from the second quarter of 2008 and up 13 percent from the third quarter of 2007. Third quarter net income was $94.7 million, $0.31 per diluted share, down from net income of $98.0 million, $0.32 per diluted share, in the second quarter of 2008. Third quarter net income was up 37 percent and earnings per diluted share were up 58 percent compared with the third quarter of 2007.

Year-to-date cash flow from operating activities was $341.4 million. Altera repurchased 2.1 million shares of its common stock during the third quarter at a cost of $42.3 million. Altera ended the third quarter with $1.3 billion in cash and investments.

Altera’s board of directors has declared a quarterly dividend of $0.05 per share payable on December 1, 2008 to shareholders of record on November 10, 2008.

“Our sales came in toward the higher end of our expectations for this seasonally slow quarter. Our 65-nm FPGAs had another extremely strong growth quarter with sales once again more than doubling sequentially,” said John Daane, president, chief executive officer, and chairman of the board. “We remain on track to ship during this quarter our next generation Stratix IV FPGAs, the programmable industry’s first 40-nm devices.”

Additional Stratix IV FPGA Highlights

Altera has successfully taped-out the first member of its 40-nm Stratix^® IV family. This new family was engineered with the same highly reliable, test chip-centered development process used for prior FPGA families. Altera’s Stratix IV family is the industry’s first 40-nm FPGA and, when shipped later this quarter, will be one of the few 40-nm devices offered across the entire semiconductor industry. This new family extends the industry-leading density, performance, low-power, and software efficiency of prior-generation Stratix III FPGAs and, in addition, adds the industry’s best available transceiver speed and bandwidth.

Altera has gained share in the FPGA market in recent years with products noted for their architectural innovation. With the Stratix IV family, Altera can offer customers even more attractive benefits based on a combination of both architectural and process-node leadership. The Stratix IV early adopter program has attracted more than twice the number of customers as any previous program. Nearly 600 customers are now part of this Stratix IV program and able to use Altera’s Quartus^® design software to design Stratix IV FPGAs into applications across all of Altera’s market segments.

As development costs for competing ASICs climb and engineers are forced to use older process technology, the economics and performance of leading-edge programmable logic become significantly more attractive. By moving quickly to the 40-nm node, Altera has placed the company in a strong position to compete for designs that previously were the exclusive domain of an ASIC-based solution.

Conference Call and Quarterly Update

A conference call will be held today at 1:45 p.m. Pacific Time to discuss the quarter's results and management's outlook for the fourth quarter of 2008. The web cast and subsequent replay will be available in the investor relations section of the company's web site at /www.altera.com. A telephonic replay of the call may be accessed later in the day by calling (719) 457-0820 and referencing confirmation code 258712. The telephonic replay will be available for two weeks following the live call.

Altera’s fourth quarter business update will be issued in a press release available after the market close on December 8, 2008.

Forward-Looking Statements

Statements in this press release that are not historical are "forward-looking statements" as the term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally written in the future tense and/or preceded by words such as "will," "expects," "anticipates," or other words that imply or predict a future state. Forward-looking statements include any projection of revenue, gross margin, expense or other financial items discussed in the Business Outlook section of this press release as well as comments describing expected 40-nm shipment timing, future competitive position and sales growth prospects. Investors are cautioned that all forward-looking statements in this release involve risks and uncertainty that can cause actual results to differ from those currently anticipated, due to a number of factors, including without limitation, current global economic conditions, customer business environment, vertical market mix, market acceptance of the company's products, product introduction schedules, the rate of growth of the company's new products including the Stratix IV, Arria^® GX, Cyclone^® III, Stratix III, MAX^® II and HardCopy^® device families, changes in the mix of our business between prototyping and production-based demand, as well as share repurchase amounts, and other risk factors discussed in documents filed by the company with the Securities and Exchange Commission from time to time. Copies of Altera's SEC filings are posted on the company's website and are available from the company without charge. Forward-looking statements are made as of the date of this release, and, except as required by law, the company does not undertake an obligation to update its forward-looking statements to reflect future events or circumstances.

About Altera

Altera’s programmable solutions enable system and semiconductor companies to rapidly and cost-effectively innovate, differentiate and win in their markets. Find out more at www.altera.com.

Altera, The Programmable Solutions Company, the stylized Altera logo, specific device designations and all other words that are identified as trademarks and/or service marks are, unless noted otherwise, the trademarks and service marks of Altera Corporation in the U.S. and other countries. All other product or service names are the property of their respective holder.

Altera Corporation
Scott Wylie – Vice President
Investor Relations
408-544-6996 (Investors)
swylie@altera.com
Mark Plungy – Senior Manager
Corporate Communications
408-544-6397 (Media)
newsroom@altera.com