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ZyXEL Achieves Top 3 in Worldwide DSL CPE Market

DSL Router Leads the Market with 20 Percent Share

Hsinchu, Taiwan, August 6, 2001 -- ZyXEL Communications Co., (TAI: 2391.TW), a pioneer manufacturer and supplier of broadband access solutions, today announced that it has aggressively doubled its market share in the worldwide DSL CPE market, according to the first quarter 2001 report from Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB). The results also show that ZyXEL has strengthened its position as world's largest DSL router supplier and the third largest DSL CPE vendor.

Dataquest's latest survey reported that the worldwide DSL CPE market experienced a fair first quarter, with shipments growing by only 4 percent, reaching 3,041 thousand units. Revenue from shipments was about $1.5 billion, down about 15 percent. While the market finished with a slowdown quarter, ZyXEL's market share aggressively doubled from 4% in the last quarter to the current 8%, with ZyXEL ranking as the world's third largest CPE vendor.

Turning to form factor, the market share of DSL modems in the first quarter of 2001 was about 73 percent while that of business-class routers was about 23 percent. In a segment particularly important for small to medium sized businesses, ZyXEL lead the market by an impressive 22 percent and 18 percent market share in business-class router and residential gateways, respectively, during first quarter.

" Last year we set out to deliver the most affordable, feature-rich DSL solutions allowing our customers to deploy high-speed, fully interoperable broadband networks," said Tony Hsu, Vice President of DSL CPE Business Unit at ZyXEL. "Dataquest's latest market analyst figures demonstrate that we have achieved our objective successfully. Our innovation has moved us beyond price wars - while other vendors have tried to beat us on dollars, they have not been able to compete with our complete solutions and performance. Through several successfully partnerships with worldwide leading telcos and service providers, our growing customer base further lead us to the success."

About Gartner Dataquest
Gartner Dataquest is the recognized leader in providing the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the global information technology industry. For more information, visit www.gartner.com.

About ZyXEL Communications
ZyXEL Communications Co. (TAI:2391.TW), located in Hsinchu, Taiwan, is Taiwan's leading broadband access solution provider. Products developed by ZyXEL over the years are not only industry leaders, but consistently win acclaim and are selected by worldwide telecommunications companies, ISPs, and other major businesses. ZyXEL now serves Chunghwa Telecom (TAI:2412.TW), Deutsche Telekom, EarthLink (NASDAQ: ELNK), France Telecom (NYSE:FTE), Sprint, Telefonica Brazil, Telenor, Verizon (NYSE: VZ) and many others. For more information on ZyXEL Communications, visit company's Website at http://www.zyxel.com.