Sunnyvale and San Francisco, CA, January 23, 2006 – Applied Micro Circuits Corp.(AMCC)[NASDAQ: AMCC] and Nimbus Data Systems, Inc. today announced the establishment of a strategic partnership to develop IP storage reference designs for leading server and storage OEMs. These new products will enable AMCC’s customers to accelerate their development of industry-leading iSCSI storage systems built around AMCC’s embedded PowerPC® processors and Nimbus storage software. According to IDC, a leading provider of market intelligence, the iSCSI storage systems market is experiencing exponential growth, from $216 million in 2003 to an expected $4.7 billion by 2007. Nearly 1 million terabytes of storage will be connected via iSCSI SANs by 2008. Gartner, a leading provider of research for the information technology industry, estimates that 1.5 million servers will be connected to storage systems using iSCSI by 2006.

Today’s announcement signifies AMCC’ s commitment to establishing a leadership position with its PowerPC processors in this high-growth market. Under the terms of this strategic partnership, Nimbus will develop hardware/software reference designs for IP storage using AMCC processors. The combination of advanced AMCC PowerPC processors and comprehensive Nimbus storage software will yield robust storage platforms that deliver superior performance, power efficiency, and high-availability features when compared to off-the-shelf microprocessor alternatives. AMCC will provide these reference designs to customers worldwide as an open storage platform so they can quickly bring to market leading-edge IP storage products. AMCC and Nimbus expect to introduce the first reference design resulting from this partnership in mid-2006.

Nimbus Data Systems is an established leader in iSCSI storage systems and software for IP SANs. A clear choice for this strategic partnership, Nimbus was selected due to the strength of its iSCSI software and vision for developing products that accelerate the adoption of IP storage technology.

“We believe that next generation iSCSI storage systems will demand greater performance, lower power utilization, and the flexibility of a single-board design,” said Thomas Isakovich, CEO and founder of Nimbus Data Systems. “Our partnership with AMCC will enable storage and server OEMs to quickly develop iSCSI storage systems with exceptional performance, power efficiency, and software features.”

“We are delighted to announce this strategic partnership with Nimbus Data Systems,” said Charlie Ashton, director of PowerPC software at AMCC. “We recognize that the emerging IP storage market is well-served by our high-performance PowerPC embedded processors. This partnership will provide our customers with optimized hardware and software reference designs that minimize their time-to-market and enable them to quickly introduce unique, market-leading solutions for this fast-growing product segment.”

About AMCC

AMCC is a global leader in network and embedded PowerPC processing, optical transport and storage solutions. AMCC products enable the development of converged IP-based networks offering high-speed secure data, high-definition video and high-quality voice for carrier, metropolitan, access and enterprise applications. AMCC provides networking equipment vendors with industry-leading network and communications processing, Ethernet, SONET and switch fabric solutions. AMCC is also the leading vendor of high-port count SATA RAID controllers enabling low-cost, high-performance, high-capacity storage. AMCC’s corporate headquarters are located in Sunnyvale, California. Sales and engineering offices are located throughout the world.

About Nimbus Data Systems

Nimbus Data Systems is a leader in IP storage solutions for today’s rapidly-growing businesses. Nimbus develops industry-leading products that simplify storage management and improve the availability and security of digital information. Nimbus solutions include high-performance and scalable IP SAN storage systems, innovative iSCSI server software, and a ground-breaking line of IP storage controllers designed for global OEMs. Headquartered in San Francisco, California, Nimbus products are available through a worldwide network of authorized system integrators, distributors, and OEMs. For more information, visit www.nimbusdata.com.