Document:

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                                                                   Exhibit 10.12

                               SUPPLY AGREEMENT
                               ----------------

     SUPPLY AGREEMENT dated as of June 29, 1997, between Multilink Technology
Corporation ("Multilink") a corporation organized in the State of California,
U.S.A, with offices at 2601 Ocean Park Boulevard, Suite 108, Santa Monica
California 90405 (hereinafter "Buyer") and TRW Inc., a corporation organized in
the State of Ohio, U.S.A., acting through its Space & Electronics Group, with
offices at One Space Park, Redondo Beach, California 90278, U.S.A.
(hereinafter "TRW").

     WHEREAS, Buyer desires to purchase, and TRW desires to provide, the
Products (as defined below) specified in Exhibit 1A to this Agreement, and the
parties desire to define the terms and conditions under which the same will be
furnished;

     NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the parties hereto agree as follows:

                                   Article 1
                           Definitions and Priority

1.1  Definitions: The following words and phrases shall have the meanings set
     -----------
forth below:

     Agreement:          This Supply Agreement between TRW and Buyer including
                         the following Exhibits, attached hereto and made a part
                         hereof:

                         Exhibit 1A: List of Products
                         Exhibit 1B: Price, Minimum Annual Quantities and Site
                         Exhibit 1C: HEMT and HBT Process Control Monitor
                                     Specifications
                         Exhibit 3:  Order Form

     Contract Price:     Defined in Section 5.1.

     Delivery Date(s):   Defined in Section 7.1.

     Effective Date:     Defined in Article 4.

     Products:           The products described in Exhibit 1A to be supplied by
                         TRW.

     Maskset:            Photolithographic plates used for precision etching and
                         material deposition processing of monolithic integrated
                         circuits as referenced in Exhibit 1A.

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     Site:          Buyer's facility or other location identified in Exhibit 1B
                    as the destination to which transportation is to be arranged
                    for deliverable items.

     TRW Plant:     Each of the factories or establishments of TRW and its
                    suppliers located in the United States.

     1.2  Priority: In case of any inconsistencies between this Agreement and
          --------
any of the Exhibits, the text of this Agreement shall prevail.

                                   Article 2
             Subject Matter of Agreement: Supply and Requirements
             ----------------------------------------------------

     2.1  Supply. TRW hereby agrees to sell to Buyer and Buyer hereby agrees to
          ------
buy from TRW, on and subject to the terms and conditions contained in this
Agreement, the Products listed in Exhibit 1A

     2.2  Requirements: Buyer shall buy from TRW no less than the annual minimum
          ------------
quantities of Products set forth in Exhibit 1B, and TRW agrees to sell Buyer the
annual quantities of Products set forth in such Exhibit.

     2.3  Deletion of Products: TRW reserves the right to discontinue the
          --------------------
manufacture or sale of, or otherwise render or treat as obsolete, any or all of
the products covered by this Agreement upon at least one hundred eighty (180)
days prior written notice to Buyer.

     2.4  Exception: The deletion of any Product pursuant to Section 2.3 will
          ---------
not relieve, however, TRW of its obligation to deliver any Product for which an
Order has been accepted by TRW pursuant to Article 3, specifically including
TRW's obligation to supply Products under Orders that provide for deliveries
over multiple years.

                                   Article 3
                           Basic Ordering Agreement
                           ------------------------

     3.1  Purchase Order: This Agreement shall serve as a basic ordering
          --------------
agreement under which Buyer may place orders to TRW. Buyer shall submit an order
in the form attached hereto as Exhibit 3 ("Order") for each Product or Service
hereunder in purchase order ("PO") form which references this Agreement. PO's
shall identify the Product(s) or Service(s) to be purchased by Buyer pursuant to
Exhibits 1A and 1B. If Services are to be purchased, Buyer shall also identify
funding in the PO.

     3.2  Acceptance of Orders: TRW shall use good faith reasonable efforts to
          --------------------
accept and supply all Orders for Products which Buyer submits hereunder, and
unless otherwise agreed, TRW shall deliver Products so ordered on or before the
delivery dates or during the performance periods specified in each Order. All
preprinted terms and conditions contained in any Order are superseded by the
terms and conditions of this Agreement. Notwithstanding the foregoing, TRW shall
have no

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obligation to accept and shall not be deemed to have accepted; unless signed by
TRW, any Order (i) for any Products not listed in Exhibit 1A hereto or revisions
thereof; or (ii) which specifies a delivery date which is less than that
specified in Exhibit 1B.

     3.4  Order Procedure: TRW shall give Buyer notice of its acceptance or
          ---------------
rejection of any Order within five (5) working days after receipt of such Order.
If TRW rejects any such Order, it shall specify in such notice the reasons for
rejection.

     3.5  Additional Products: The parties may, from time to time, amend
          -------------------
Exhibit 1A to add thereto any additional Products which TRW, during the term
of this Agreement, generally offers for sale and Buyer may purchase same under
this Agreement.

     3.6  Deletion of Products: Subject to TRW's obligations under Article 2
          --------------------
hereof, should TRW discontinue offering for sale any Products listed in Exhibit
1A, TRW may delete such Products from Exhibit 1A, effective one hundred eighty
(180) calendar days after giving Buyer notice of such deletion. Other
provisions hereof notwithstanding, the deletion of any Products pursuant to this
Section 3.6 shall not relieve TRW from its obligation to deliver Products for
which an Order has been accepted by TRW pursuant to Section 3.4.

     3.7  Sales Forecasts: Buyer shall submit to TRW on the Effective Date and
          ---------------
thereafter at thirty (30) days before the start of each calendar quarter during
the term hereof a written forecast of its best estimate of its requirements for
Products during the next four (4) calendar quarters. Such forecast shall list
separately for each quarter during the period covered by the forecast the amount
of Products which Buyer expects to require during such quarter. Such forecasts
are not intended to be binding on Buyer.

                                   Article 4
                            Effective Date and Term
                            -----------------------

     This Agreement shall be effective and binding on the parties as of the
first date noted above when signed by Buyer and TRW (the "Effective Date") and
shall remain in force and effect until December 31, 2002.

                                   Article 5
                             Contract Price Taxes.
                             --------------------
                     Transportation, Expenses and Charges
                     ------------------------------------

     5.1  Price: Buyer shall pay TRW for the performance of TRW's obligations
          -----
hereunder, the prices for Products and Services stated in Exhibit 1B in
accordance with the provisions of this Article 5. The aforementioned price is
hereinafter referred to as the "Contract Price."

     5.2  Taxes for Orders: Buyer will pay TRW the amount of any sales or use
          ----------------
taxes, or similar taxes, assessments or charges imposed by any governmental
entity

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and paid by TRW in respect of any Order. Buyer will pay such taxes with the
purchase price for Products, provided such taxes are separately stated by TRW in
invoices submitted pursuant to the provisions hereof. Buyer's liability
hereunder does not extend to taxes based on possession prior to delivery of
Products, or to income or corporate excise taxes assessed against TRW. Buyer
also will be responsible for the payment of any penalties charged TRW for the
late payment of taxes caused by Buyer's late payment. Buyer will provide TRW
with its resale certificate number.

     5.4  Resale Certificate: Where a resale certificate or document indicating
          ------------------
that Products are purchased for resale provides an exemption from liability of
either party for any taxes, assessments, or other charges incurred under this
Agreement, the other party will provide such certificate or evidence to the
first party in timely fashion and proper form if the second party wishes to take
the benefit of such exemption, and thereupon, the second party will have no
obligation hereunder to pay or reimburse the first party for any such exempted
taxes, assessment or charges.

     5.5  Transportation Expenses: TRW shall pay for all expenses of handling,
          -----------------------
freight, and other transportation expenses including, without limiting the
foregoing, all packing and special handling charges for air shipment incurred
in connection with the delivery of the Products from the TRW Plant to the Site.

                                   Article 6
                                    Payment
                                    -------

     Payment for Products and Services and all other obligations hereunder shall
be in United States dollars (U.S.D.) and shall be due and payable in the amounts
and at the time(s) as set forth as follows. Payment terms for Products and
Services are net thirty (30) days upon receipt of TRW's invoice. Payment of
other charges, if any, provided for in this Agreement shall be due and payable
within thirty (30) days after receipt of TRW's invoice thereof. Payments to TRW
shall be made to TRW's electronic funds transfer account which is as follows:

                                Bank of America
                                Telex - MCI #67652
                                ABA 121000358
                                TRW Space & Defense
                                TRW Account # 06005-04132

                                or via mail to:

                                TRW Space & Defense
                                File No. ______
                                Los Angeles, CA 90074-1818

Outstanding invoices remaining unpaid after thirty (30) days shall be subject to
a charge of one percent (1%) of the amount of the invoice per month or prorated
for a partial month.

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                                   Article 7
                       Shipment, Title, and Risk of Loss
                       ---------------------------------

     7.1  Delivery of Products: TRW shall arrange for and place the Products in
          -------------------
the possession of a common carrier on or before the period specified in Exhibit
1B for delivery to Buyer F.O.B. docks at the TRW Plant. TRW shall arrange for
shipment of the items by common carrier to the Site.

     7.2  Protection and Packing of the Products: TRW shall arrange to have all
          --------------------------------------
Products suitably packaged in accordance with good commercial practices. Unless
otherwise provided, all packing containers used by TRW shall be non-returnable.

     7.3  Risk of Loss and Title: Risk of loss to Products shall pass to Buyer
          ----------------------
on delivery to the carrier at the TRW Plant, notwithstanding any provisions for
payment of freight or insurance by TRW, or the form of shipping documents, or
the breach or default by TRW at the time of loss. Risk of loss of Products sent
to TRW for adjustment shall remain with Buyer until such are received by TRW at
the TRW Plant.

     7.4  Shipping Documents: After Products have been shipped, TRW shall
          ------------------
deliver to Buyer one (1) copy of the waybill.

     7.5  Access by Buyer: Subject to United States law and security
          ---------------
regulations, Buyer's representatives shall have the right, during reasonable
business hours, to enter the TRW Plant in order to inspect visually the
manufacturing progress of Products.

                                   Article 8
                                Factory Testing
                                ---------------

     Prior to delivery, TRW or its suppliers shall perform standard quality
control inspections and tests of Products as specified in Exhibit A. Records of
such tests shall be retained by TRW and remain available for review by Buyer for
at least one (1) year after the date(s) of delivery.

                                   Article 9
                                   Warranty
                                   --------

     9.1  Warranty: TRW warrants that immediately upon delivery but not
          --------
thereafter, each Product shall comply in all material respects with the PCM test
protocol, as it relates thereto. Promptly after receipt of written notice from
Buyer that any Products are non-conforming, TRW shall replace such non-
conforming Products. Any non-conforming Products must be returned for inspection
to the TRW Plant. Buyer shall repay all freight charges to return any such
products to TRW. TRW shall deliver replaced Products freight prepaid to the
Site.

                                      -5-
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     9.2  Exclusion: THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, WHETHER
          ---------
STATUTORY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, INCLUDING BUT NOT LIMITED TO
WARRANTIES OF MERCHANTABILITY EXCLUDED. TRW'S WARRANTY OBLIGATIONS AND BUYER'S
REMEDIES ARE SOLELY AND EXCLUSIVELY AS STATED IN THIS ARTICLE 9.

                                  Article 10
                                    Delays
                                    ------

     10.1 Force Majeure: The date on which each party's obligations (except the
          -------------
payment of money) are to be fulfilled shall be extended for a period equal to
any delay arising directly or indirectly from any cause beyond such party's
reasonable control. Such causes include, but are not limited to, acts of God;
the laws, actions, or inactions of any governmental authority in either its
sovereign or contractual capacity; civil or military conflicts; riot;
revolution; fires; floods; earthquakes; walkouts; strikes; labor disputes;
material shortages; epidemics; and embargoes. Such extension shall apply whether
or not there is another concurrent cause of delay.

     10.2 Termination: If the delays resulting from any of the causes stated in
          -----------
Section 10.1 extend in the aggregate for more than one hundred eighty (180) days
and the parties have not agreed upon a revised basis for continuing work on a
PO at the end of such delays, including adjustment of the Contract Price, then
either party, upon thirty (30) days written notice, may terminate such PO with
respect to the unexecuted portion of the work whereupon Buyer shall pay TRW its
termination charges as provided in Section 10.3 below.

     10.3 Termination Charges: Buyer may terminate a PO for any reason upon ten
          -------------------
(10) days written notice to TRW. In this event, TRW shall promptly submit to
Buyer a detailed written statement and supporting documentation (such as TRW
incurred cost report and vendor invoices) of TRW's total costs incurred in the
performance of work on such PO and the total cost resulting from such
termination as determined in accordance with TRW's standard accounting
practices and, if requested by Buyer, verified to Buyer by TRW's independent
auditors at Buyer's expense (hereinafter referred to as the "Total Verified
Termination Cost").

The Total Verified Termination Cost for a PO shall include the following:

     (1) one hundred percent (100%) of the total termination costs incurred by
TRW, including but not limited to any committed and/or termination costs
incurred by TRW's suppliers and vendors, less the amounts previously paid by
Buyer pursuant to the PO;

     (2) the list price of any completed Products and Services under the PO
pursuant to Exhibit B;

     (3) TRW's costs incurred in performing uncompleted work under the PO, plus
profit in the amount of fifteen percent (15%) of these Products and Services,
and;

     (4) any other appropriate charges incurred.

                                      -6-
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The Total Verified Termination Cost shall be paid by Buyer within thirty (30)
days after receipt of TRW's invoice therefor.

                                  Article 11
                           Transfers and Assignments
                           -------------------------

     11.1 Transfer by TRW: Neither party shall, without the consent in writing
          ---------------
of the other party, which shall not be unreasonably withheld, assign or
transfer this Agreement or any PO hereunder or the benefits or obligations
thereof or any part thereof to any other person other than a subsidiary wholly
owned by such party, provided that this shall not affect any right of such party
to assign, either absolutely or by way of charge, any moneys due or to become
due to it or which may become payable to it under this Agreement.

     11.2 Release of Obligations: No assignment or transfer of any right or duty
          -----------------------
hereunder by either party shall constitute a novation or otherwise release or
relieve such party of its obligations hereunder.

                                  Article 12
                                    Default
                                    -------

     12.1 Event of Default:  An Event of Default on the part of either party
          ----------------
shall exist under this Agreement or any PO hereunder if:

          (a)  Such party fails to pay the other party any amount required to
     be paid when due and payable and such failure continues for ten (10) days
     after written notice to such party; or

          (b)  Such party fails to perform any other material obligation
     required to be performed by it under any provision of this Agreement or a
     within thirty (30) days after notice from the other party that such
     performance has become due; provided, however, Buyer shall have no right to
     terminate this Agreement or a PO for TRW's default so long as corrective
     action is being diligently pursued by TRW in a manner that demonstrates
     that TRW's obligations hereunder shall be completed in sufficient time to
     allow Buyer to meets its end-use requirements for the Products.

     12.2  Remedies Available for Default: Subject to other provisions hereof
           ------------------------------
which expressly limit the remedies available hereunder, if an Event of Default
as defined in Section 12.1 exists on the part of either party, then the other
party may terminate this Agreement and/or the applicable PO hereunder upon
giving written notice of termination and pursue any other remedies available at
law or in equity.

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                                  Article 13
                           Limitation of Liability
                           -----------------------

     13.1 Infringement:  TRW agrees that it shall to the extent its GaAs HBT
          ------------
and HEMT process and associated monolithic components are concerned, at its own
expense and at its option, defend or settle any claim, suit, or proceeding
brought against Buyer, based on an allegation that a Product furnished under
this Agreement constitutes a direct or a contributory infringement of any claim
of any patent, mask work, or copyright, which exists, or for which application
exists, as of the date of this Agreement. This obligation shall be effective
only if Buyer shall have made all payments then due and if TRW is notified of
said allegation promptly in writing and given authority, information, and
assistance for the settlement or defense of such claim, suit, or proceeding. TRW
shall pay all damages and costs assessed in such suit or proceedings. In the
event of a final adjudication by a court of competent jurisdiction that its
Product infringes or violates any third party intellectual property right or if
the use or sale thereof is enjoined, or if the provisions of any negotiated
settlement agreement prohibit the use of the Product, TRW shall at its sole
option and its own expense, either: (a) procure for Buyer the right to continue
using the Product; or (b) replace it with a substantially equivalent non-
infringing product; or (c) modify it so it becomes non-infringing but
substantially equivalent; or (d) if none of the above is reasonably available
(i.e., if the costs/damages/royalties relating to (a) through (c) above exceed
eighty percent (80%) of the purchase price of the Products concerned), terminate
Buyer's right to use the Product and return to Buyer the price originally paid
by Buyer to TRW.

     13.2 Limitation of Liability: The total liability of TRW on all claims
          -----------------------
in total whether in contract, tort (including sole or concurrent negligence), or
otherwise, arising out of, connected with, or resulting from the manufacture,
sale, delivery, resale, repair, replacement, or use of Products or Services
shall not exceed in the aggregate [*] dollars ($ [*] ) or the Contract Price for
the Product or Services, whichever is less; provided, however, the limitation on
liability set forth in this Section 13.2 shall not apply to a material breach of
this Agreement resulting from a failure by TRW to honor its obligation to accept
and supply all Orders for Products from Buyer in accordance with Article 3
hereof, but shall, as noted herein, apply to claims by Buyer resulting from
TRW's manufacture, sale and delivery of Products as contemplated herein.

     13.3 Damages: In no event shall TRW be liable for any special, indirect,
          -------
incidental or consequential damages under this Agreement or any PO, however
caused, whether by TRW's sole or concurrent negligence or otherwise, including,
but not limited to costs and expenses incurred in connection with labor,
overhead, transportation, installation, or removal of the Products or substitute
facilities or supply sources.

     13.4 Indemnification: Buyer hereby agrees to defend, protect, hold
          ---------------
harmless, and otherwise indemnify TRW against any and all causes of action or
claims based on or arising out of infringement or alleged infringement by Buyer
of the copyright, mask works or patent laws and/or claims of unfair competition,
including, but

  Confidential materials omitted and filed separately with the Securities and
               Exchange Commission. Asterisks denote omissions.

                                      -8-
<PAGE>

not limited to, damages for past infringement and payment of royalties for
future use, and all costs incurred in preparing for and conducting the defense
of such litigation, including attorneys' fees, incurred by TRW by reason of, or
attributable to, directly or indirectly the manufacture of Products to Buyer's
design or specifications.

                                  Article 14
                                    Notices
                                    -------

     All notices, requests, consents, and other communications required or
permitted to be given under this Agreement must be in writing and mailed by
registered or certified mail to the other party at its respective business
address as follows:

If to TRW:                  TRW Inc.
                            Space & Electronics Group
                            Electronics Systems & Technology Division
                            One Space Park
                            Redondo Beach, California 90278
                            Attention: Mr. Chris Johnson
                            Mail Station: E2/5085
                            Phone:     (310) 814-2001
                            FAX:       (310) 813-6402

If to Buyer:                Multilink Technology Corp.
                            2601 Ocean Park Boulevard, Suite 108
                            Santa Monica, CA 90405
                            Attention: Dr. Richard Nottenburg
                            Phone:     (310) 581-6448, -6444
                            Fax:       (310) 581-6449

                                  Article 15
                          Contract Change Procedure
                          -------------------------

     15.1 Changes: Any changes to this Agreement after the effective date
          -------
hereof which relate to: (i) the deletion of Products or Services; (ii) adding
additional Products, or Services; (iii) changing or modifying Products or
Services; or (iv) making other changes which do not materially alter the scope
of this Agreement shall be made in accordance with the procedures set forth
in this Article 15.

     15.2 Contract Changes Requests: Either party hereto may, from time to
          -------------------------
time, and at any time during the term hereof request a change, as defined in
Section 15.1, in this Agreement. (The party requesting the change is hereinafter
referred to as the "Requesting Party.") Requests for changes shall be in writing
and shall be addressed and delivered to the other party (the "Notified Party").
Such writing shall be identified as a "Contract Change Request" (or "CCR"),
shall carry a sequential number for ease of tracking, shall set forth in detail
the nature of the change requested, and shall identify the Products to be
changed.

                                      -9-
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     15.3 Procedure: As soon as practical after receipt by the Notified Party
          ---------
of copies of the CCR, the parties shall as necessary meet to discuss the change
and to ascertain its cost and schedule impacts, if any.

     15.4 Contract Change Notice: If the parties decide to implement a change
          ----------------------
request, a standard form Contract Change Notice ("CCN") shall be prepared,
which CCN shall describe the change, delineate the cost, schedule, and other
impacts of the change and the payment terms for any price increase. Execution
of a CCN by both parties shall constitute a modification hereof and shall be
binding on both parties hereto.

     15.5 Exception: Substitutions relative to Products which are purchased
          ---------
items not manufactured by TRW may be made by TRW without the consent of Buyer if
such substitutes are of like quality.

                                  Article 16
                            Proprietary Information
                            -----------------------

     16.1 Proprietary Information: For the purpose of this Agreement:
          -----------------------

          (a) "Proprietary Information" shall mean all drawings, documents,
     ideas, know-how and other information supplied by one Party ("Disclosing
     Party") to another ("Recipient") (whether disclosed orally, or in
     documentary form, by demonstration or otherwise) for the purpose of
     achieving the objectives of this Agreement.

          (b) "Proper Use" shall mean use of the Proprietary Information solely
     by the recipient for the objectives of this Agreement.

     16.2 Nondisclosure: All Proprietary Infomation furnished shall remain the
          -------------
property of the Disclosing Party and shall be treated by the Recipient in strict
confidence, shall not be used except for Proper Use, shall be disclosed by the
Recipient only to persons within the Recipient's company (including companies
directly or indirectly more than fifty percent (50%) owned or controlled by the
Recipient) who are directly concerned in the Proper Use, and shall not be
disclosed to consultants or by the Recipient to any other party without the
Disclosing Party's prior written consent, except for Proprietary Information
which the Recipient can show was:

          (a) In the public domain at the time it was disclosed; or

          (b) Known to the Recipient without restriction at the time of receipt
     as evidenced by written records; or

          (c) Published or becomes available to others without restriction
     through no act or failure to act on the part of the Recipient; or

          (d) Disclosed inadvertently despite the exercise of the same degree of

                                      -10-
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     care as the Recipient takes to preserve and safeguard its own proprietary
     information; or

          (e)  Known to the Recipient from a source other than the Disclosing
     Party without breach of this Agreement by the Recipient; or

          (f)  Subsequently designated by the Disclosing Party in writing as no
     longer proprietary; or

          (g)  Independently developed by the Recipient prior to the date of
     disclosure; or

          (h)  Disclosed or in a proposal submitted to a customer in the
     performance of the obligations of a party under this Agreement; provided,
     however, that any such Proprietary Information disclosed to a customer in a
     proposal shall be marked with a restrictive legend limiting use thereof to
     evaluation of such Proposal; or

          (i)  Disclosed after five (5) years from the date of delivery by the
Disclosing Party to the Recipient, which five (5) year period shall survive the
termination of this Agreement.

If any portion of Proprietary Information falls within any one of these
exceptions, the remainder shall continue to be subject to the foregoing
prohibitions and restrictions. The Recipient of Proprietary Information shall
inform its employees of the confidential nature of the Proprietary Information
and shall prohibit them from making copies of any of it except where such copies
are necessary for the purposes of Proper Use, unless agreed upon by the
Disclosing Party.

     16.3   Marking: Proprietary Information made available in written form by
            -------
one party to another party shall be marked with the legend:

                           "MULTILINK PROPRIETARY INFORMATION"
                     or -  "TRW PROPRIETARY INFORMATION"

as the case may be, or an equivalent conspicuous legend. No sheet or page of any
written material shall be so labeled which is not, in good faith, believed by
the Disclosing Party to contain Proprietary Information. A Recipient of
Proprietary Information hereunder shall have no obligation with respect to any
portion of any written material which is not so labeled or any information
received orally unless it is identified as proprietary and a written summary of
such oral communication, specifically identifying the items of Proprietary
Information, is furnished to the Recipient within thirty (30) days of such
disclosure.

                                      -11-
<PAGE>

     The individuals identified below are the only persons authorized to receive
Proprietary Information on behalf of the parties:

     For Buyer:                   Dr. Richard Nottenburg

     For TRW:                     Mr. Bob Van Buskirk, Dr. Thomas Joseph

By written notice to the other party, these representatives may be replaced by
another person from the same party.

     16.4  Compensation: The parties shall not be obligated to compensate each
           ------------
other for the transfer of any Proprietary Information under this Agreement and
agree that no warranties of any kind are given with respect to such Proprietary
Information or any use thereof. No license is hereby granted under any patent,
trademark or copyrights with respect to any Proprietary Information.

     16.5  Survival: The obligations of the parties concerning confidentiality
           --------
set forth in this Article 16 shall survive termination or completion of this
Agreement.

     16.6  Remedies: Each of the parties agrees that the other would be
           ---------
irreparably injured by a breach of the provisions of this Article 16 by such
party, that monetary remedies would be inadequate to protect the other against
any actual or threatened breach of this Article 16 by the other, and without
prejudice to any other rights and remedies otherwise available to such party,
the other agrees to the granting of equitable relief, including injunctive
relief and specific performance, in the other's favor without proof of actual
damage.

                                  Article 17
                                 Miscellaneous
                                 -------------

     17.1  Headings: The headings and titles to the articles, sections, and
           --------
paragraphs of this Agreement are inserted for convenience only and shall not be
deemed a part hereof or affect the construction or interpretation of any
provision hereof.

     17.2  Remedies: Unless otherwise expressly provided herein, the rights
           --------
and remedies hereunder are in addition to, and not in limitation of, other
rights and remedies under the Agreement, at law or in equity, and exercise of
one right or remedy shall not be deemed a waiver of any other right or remedy.

     17.3  Modification and  Waiver: No cancellation, modification, amendment,
           ------------------------
deletion, addition, or other change in the Agreement or any provision hereof, or
waiver of any right or remedy herein provided, shall be effective for any
purpose unless specifically set forth in a writing signed by the part to be
bound thereby. No waiver of any right or remedy in respect of any occurrence or
event on one occasion shall be deemed a waiver of such right or remedy in
respect of such occurrence or event on any other occasion.

                                      -12-
<PAGE>

     17.4  Entire Agreement: With the exception of the Development Agreement
           ----------------
between the parties dated June 29, 1995, this Agreement supersedes all other
agreements, oral or written, heretofore made with respect to the subject hereof
and the transactions contemplated hereby and contains the entire agreement of
the parties.

     17.5  Severability: Any provision hereof prohibited by or unlawful or
           ------------
unenforceable under any applicable law of any jurisdiction shall as to such
jurisdiction be ineffective without affecting any other provision of the
Agreement. To the full extent, however, that the provisions of such applicable
law may be waived, they are hereby waived, to the end that the Agreement be
deemed to be a valid and binding agreement enforceable in accordance with its
terms.

     17.6  Controlling Law: All questions concerning the validity and operation
           ---------------
of this Agreement and the performance of the obligations imposed upon the
parties hereunder shall be governed by the laws of the State of California
applicable to contracts entered into and wholly to be performed in such
jurisdiction.

     17.7  Successors and Assigns: The provisions of this Agreement shall be
           ----------------------
binding upon and for the benefit of TRW and Buyer and their respective
successors and assigns. This provision shall not be deemed to expand or
otherwise affect the limitation on assignment and transfers set forth in Article
11 and no party is intended to or shall have any right or interest under this
Agreement, except, as provided in Article 11.

     17.8  Counterparts: This Agreement has been executed in several
           ------------
counterparts, each of which shall be deemed to be an original, and all such
counterparts together shall constitute but one and the same instrument.

     17.9  Inventions and Patents. Inventions conceived solely by employees of
           ----------------------
a party under this Agreement shall belong exclusively to such party. Inventions
conceived jointly by the parties in the course of work called for in this
Agreement shall be subject to the further agreement of the parties. Except as
expressly set forth in this Agreement, nothing contained in this Agreement shall
be deemed, by implication, estoppel or otherwise, to grant any party any right
or license in respect of any patents, inventions, Proprietary Information or
other technical data at any time owned by the party hereto. Irrespective of in
whose name(s) patent applications are filed, any party which is a co-inventor of
an invention shall be entitled to a non-exclusive, royalty-free, transferable
license in any patent(s) issued with respect thereto. The understandings set
forth in this Section 17.9 are subject to modification as may be required by
applicable government regulations. Notwithstanding the above, each party shall
have a non-exclusive, royalty-free, non-transferable, worldwide right and
license under any inventions, patents, Proprietary Information and technical
data owned by the other party and used in Products made under this Agreement,
but only to the extent such licenses are required for the limited purpose of
enabling a party to perform its obligations under this Agreement or to enable
Buyer to sell products incorporating Products made by TRW under this Agreement.

                                      -13-
<PAGE>

     17.10     Ownership of Masksets. Buyer shall retain sole ownership of
               ---------------------
all glass plates ("Masksets") utilized for photolithographic semiconductor
processing of MMIC (as defined in Section 17.11 below) designs, and TRW shall
retain sole possession of any and all Masksets developed or procured by TRW
under this Agreement. TRW shall store Buyer's Masksets at TRW for a maximum
period of two (2) years after delivery of all Products manufactured from such
Masksets to Buyer and after expiration of such two (2) year storage period may
destroy or dispose of such Masksets upon giving Buyer thirty (30) days prior
written notice thereof.

     17.11     Ownership of MMIC Designs. Buyer shall retain sole ownership
               -------------------------
rights to its designs for monolithic microwave integrated circuit ("MIMIC")
designs. TRW shall retain sole ownership rights to TRW MMIC designs, all
individual circuit elements, design libraries, design rule manuals, circuit
elements and MMIC fabrication processes for all MMIC designs.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first set forth above.

                                     Multilink Technology Corporation

                                     By:___________________

                                     Title:________________

                                     TRW INC.

                                     By:___________________

                                     Title:________________

                                      -14-
<PAGE>

                                  Exhibit 1A

                               List of Products
                               ----------------

1. PCM tested, [*] GaAs HBT processed wafers (from [*] micron process).

2. PCM tested, [*] GaAs HBT processed wafers (from [*] micron process).

3. PCM tested, [*] GaAs HEMT processed wafers (from [*] micron process).

  Confidential materials omitted and filed separately with the Securities and
               Exchange Commission. Asterisks denote omissions.
<PAGE>

                                  Exhibit lB

         Price, Minimum Annual Quantities, Delivery Schedule and Site
         ------------------------------------------------------------

A.  Price:
                                                        Standard      Reduced
                Product                                 Process       Process
                -------                                 -------       -------
1.   [*] GaAs HBT ([*] micron) processed wafers         $[*] /ea.     $[*] /ea.
2.   [*] GaAs HBT ([*] micron) processed wafers          [*] /ea.      [*]
3.   [*] GaAs HEMT processed wafers                      [*] /ea.      [*]

B.  Minimum Annual Quantities:

                                                   Number of Wafers per Year
        Product                            1997   1998   1999  2000   2001  2002
                                           ----   ----   ----  ----   ----  ----
1.   [*]GaAs processed wafers               [*]    [*]    [*]   [*]    [*]   [*]

C.  Site:
        Multilink Technology Corporation
        2601 Ocean Blvd., Ste. 108
        Santa Monica, CA 90405

D.  Delivery Schedule:

                                             Shipment of PCM Tested Wafers from
                                                     Release of Mask PG
HBT ([*]micron)                                          [*]  weeks
HBT ([*]micron standard process)                         [*]  weeks
HBT ([*]micron reduced process)                          [*]  weeks
HEMT                                                     [*]  weeks

(1)  [*]

  Confidential materials omitted and filed separately with the Securities and
               Exchange Commission. Asterisks denote omissions.
<PAGE>

                                  Exhibit 1C
             HBT/HEMT Process Control Monitor (PCM) Specifications

HBT Digital PCM Foundry Specifications                            9 January 1995

<TABLE>
<CAPTION>
Parameter                Units                    Min   Max  Tvp    # Sites   Criteria
---------                -----                    ---   ---  ---    -------   --------
<S>       <C>            <C>                      <C>   <C>  <C>  <C>         <C>
   [*]    ([*])          (nano amp)               [*]   [*]  [*]  [*]/wafer   wafer average
   [*]    Resistance*    (ohm)                    [*]   [*]  [*]  [*]/wafer   [*] pass
   [*]    Resistance*    (ohm)                    [*]   [*]  [*]  [*]/wafer   [*] pass
   [*]    Thickness      (amp)                    [*]   [*]  [*]  [*]/wafer
   [*]                                            [*]   [*]  [*]  [*]/wafer   [*] pass
   [*]    Thickness      (micro meters)           [*]   [*]  [*]  [*]/wafer
   [*]    Capacitance    (pica farads/millimeter] [*]   [*]  [*]  [*]/wafer   wafer average
   [*]    Resistance     (ohm/sq)                 [*]   [*]  [*]  [*]/wafer   wafer average
   [*]    Thickness      (micro meters)           [*]   [*]  [*]  [*]/wafer   [*] pass
   [*]    Thickness      (micro meters)           [*]   [*]  [*]  [*]/wafer
   [*]                   (volts)                  [*]   [*]  [*]  [*]/wafer   wafer average
   [*]                   (volts)                  [*]   [*]  [*]  [*]/wafer   wafer average
</TABLE>
* for a [*] (micro meter) HBT

/s/ Matthew M Hoppe 95-1-10
------------------------------------
Matt Hoppe, Production Line Manager

/s/ Aaron Oki 95-1-10
------------------------------------
Aaron Oki, HBT Product Engineering

  Confidential materials omitted and filed separately with the Securities and
               Exchange Commission. Asterisks denote omissions.
<PAGE>

                                  Exhibit 3
                               Sample Order Form

<TABLE>
<CAPTION>
                                                                                             -----------------------
                                                                                              P/Q NUMBER:       PAGE

                                                                                                                   1.
                                                                                          -------------------------------------
                                                                                          P/Q DATE:  ORDER TYPE:  CHANGE/CANCEL

                                                                                                        Normal
                                                                                          -------------------------------------

ORDERED                                                                           SHIP
   FROM                                                                             TO

------------------------------------------------------------------------------------------------------------------------------------
          BUYER                             TERMS                     ACKNOW-   CONFIRM      FOR:          SHIP VIA         COD
                                                                      LEDGE

                                                                                        Destination    Best Way
------------------------------------------------------------------------------------------------------------------------------------
             QUANTITY                  QUANTITY NUMBER                                                        REQUESTED    CHANGE/
 LINE         ORDERED         U / M   DESCRIPTION/COMMENTS          YOUR ITEM NUMBER         PRICE/UNIT          DATE      CANCEL
NUMBER      BLANKET TYPE
------------------------------------------------------------------------------------------------------------------------------------
<S>         <C>                <C>    <C>                           <C>                 <C>                   <C>         <C>
                                                                                           Ext Price =

--------------------------------------------------------------------------------------------------------------------------------
                              COMMENTS                                               Total Ext Price =

                              --------------------------------------------------------------------------------------------------
                                                                 ORDERED BY
</TABLE>

<PAGE>

                    Contract Change Notice Amendment No. 1
                                      to
       TRW/ Multilink Technology Corp. Foundry Services Sales Agreement
                              Agreement No. 68107

THIS AMENDMENT ("Amendment") is made and entered into by and between Multilink
Technology Corporation ("Buyer" or "Multilink") and TRW Inc. by and through its
Space and Electronics Group, a corporation organized and existing under the laws
of Ohio, having offices at Redondo Beach, California, USA ("TRW").

WHEREAS, Buyer and TRW entered into a Sales Agreement No. 68107 ("Agreement")
with an effective date of 29 June 1997, and;

WHEREAS, TRW and Buyer desire to amend the Agreement in order to implement
certain administrative revisions;

NOW THEREFORE, the parties agree to amend the Agreement as follows:

Article 5.1. Method of Payment - address for payments sent via mail is amended
------------------------------
to read as follows:
TRW Space and Defense, File No.41818, Los Angeles, CA 90074-1818

Article 6. Payment - revise payment terms to net forty-five (45) days.
------------------

Article 14. Notices - revise TRW point of contact to Mr. Edward Cornejo.
-------------------

Add section 17.12. "Non-Solicitation of TRW Employees" - In consideration of the
-----------------------------------------------------
extended payment term implemented above in Article 6 amendment, Multilink agrees
that during the term of this Agreement, it shall not solicit for employment nor
hire any TRW employees.

Add section 17.13. "Waivers" - It is understood TRW's election not to enforce
---------------------------
any provision hereof or of any order issued hereunder shall not be construed to
be a continuing waiver and TRW reserves the right subsequently to enforce such
provision.

Exhibit 4 -- Payment Schedule -- Multilink's 6 January, 1999 correspondence,
-----------------------------
"Payment Plan for open invoices", is incorporated into the Agreement by this
reference. The parties hereto agree that as of 3 April 1999, Multilink shall pay
its current and future TRW invoices within 45 days of the invoice date. For the
purposes of the Agreement, any receivables not paid within 45 days of invoice
date shall be considered past due and assessed the 1% per month late payment fee
indicated in the Agreement.

The above changes constitute Contract Change Notice Amendment No. 1 to the
Agreement. Except as expressly provided hereinabove, all other terms and
conditions of the Agreement shall apply herein and remain in full force and
effect as previously agreed to between Buyer and TRW. In the event of any
conflict between the terms of this Amendment and those of the Agreement, the
terms of this Amendment will be deemed to have superseded those of the Agreement
and exclusively will govern the matter in question.

IN WITNESS WHEREOF, duly authorized representatives of the undersigned parties
have executed this Contract Amendment as of 13 January 1999.

Multilink Technology Corp.                        TRW Inc.

By: /s/ Richard N. Nottenburg                     By: /s/ Patrick Reynolds
    -------------------------                         ------------------------
Names: Richard N. Nottenburg                      Name: Patrick Reynolds
      -----------------------                          -----------------------
Title: President                                  Title: Contracts Manager
      -----------------------                          -----------------------
Date: 1/18/99                                     Date: 13 January 1999
      -----------------------                          -----------------------
<PAGE>

                     [LETTERHEAD OF TRW TELECOMMUNICATION]

June 30, 1999

Dr. Richard Nottenburg
Multilink Technology Corp.
2601 Ocean Park Blvd., Suite 108
Santa Monica, CA 90405

Re:  Supply Agreement dated June 29, 1997 by and between TRW Inc. ("TRW") and
     Multilink Technology Corporation ("MTC")

Dear Rich:

I very much enjoyed our dinner last night, and I am certainly pleased that we
are on a solid path to continue to build the strategic relationship between TRW
and Multilink. As we discussed, both companies need the flexibility to adjust
the products and technologies in response to market dynamics, and we need to
structure our agreements to provide this flexibility. At the same time, we need
to make sure that we support this year's rapid growth of Multilink, as that is
key to demonstrating the company's performance to enable future financing. I
believe the following modification to the Supply Agreement captures this intent.

Add to the end of the existing section 2.2 of the Supply Agreement:

"; provided, however, that in 1999, TRW will accept all wafer orders from Buyer
that TRW can reasonably supply; further provided, that in each of the years
2000, 2001 and 2002, notwithstanding any other provision herein, Buyer shall not
be obligated to purchase from TRW, and TRW shall not be obligated to sell to
Buyer, more than [*] wafers."

If you agree with this modification, please sign below and fax a copy to me so
that we can immediately process the outstanding orders you have placed. I am
also sending by mail two originals of this letter. Please sign them, retain one
for your records, and send me the other copy.

Sincerely,                                   AGREED AND ACCEPTED

/s/ Wes Bush                                 AS OF July 01, 1999
Wes Bush
                                             /s/ Richard N. Nottenburg
                                             -------------------------
                                             Dr. Richard Nottenburg

  Confidential materials omitted and filed separately with the Securities and
               Exchange Commission. Asterisks denote omissions.<PAGE>

                                                                   Exhibit 10.13

                                 SEMICONDUCTOR
                              DEVELOPMENT AGREEMENT

                                    between

                        MULTILINK TECHNOLOGY CORPORATION

                                      and

                  INTERNATIONAL BUSINESS MACHINES CORPORATION

IBM/MTC CONFIDENTIAL

Page 1
<PAGE>

                      SEMICONDUCTOR DEVELOPMENT AGREEMENT

     This Semiconductor Development Agreement ("Agreement") is entered into as
of May 18, 2000 (the "Effective Date") by and between International Business
Machines Corporation, a corporation incorporated under the laws of the State of
New York, having an office for the transaction of business at 1580 Route 52,
Hopewell Junction, NY ("IBM"), and Multilink Technology Corporation, a
corporation incorporated under the laws of California and having an office for
the transaction of business at 2850 Ocean Park Boulevard, Suite 335, Santa
Monica, CA 90405 ("MTC"). ("IBM" and "MTC" are hereinafter jointly referred to
as the "Parties" or individually as a "Party").

     Preamble: This Agreement is shall provide MTC with early Access (as defined
below) to one or more of IBM's unqualified and unfinished SiGe and CMOS
fabrication processes solely for early development of prototypes and does not
cover manufacture and sale of completed products.

     NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as follows:

1.   DEFINITIONS
     -----------

1.1  "Access" means the activities specified in Task 1 and Task 3B of Section
2.2 hereof.

1.2  "Affiliate" of a Party means a Person: (a) at least fifty percent (50%) of
whose outstanding shares or securities (representing the right to vote for the
election of directors or other managing authority) or (b) if the Person does not
have outstanding shares or securities, other ownership interest (representing
the right to make the decisions for such Person) are, now or hereafter, owned or
controlled, directly or indirectly, by such Party hereto, but such corporation,
company or other entity shall be deemed to be an Affiliate only so long as such
percentage of ownership or interest remains at least fifty percent (50%).

1.3  "Change of Control" means a change in ownership or control of a Person
effected through any of the following transactions:

     (i)  a merger, consolidation or reorganization approved by the Person's
     equity holder unless securities representing more than sixty percent (60%)
     of the total combined voting power of the voting securities of the
     successor entity are immediately thereafter beneficially owned, directly or
     indirectly and in substantially the same proportion, by the persons
     beneficially owned such Person's outstanding voting securities immediately
     prior to such transaction,

IBM/MTC CONFIDENTIAL

Page 2
<PAGE>

     (ii)   any transfer or other disposition of all or substantially all of the
     Person's assets, or

     (iii)  the acquisition, directly or indirectly by any person or related
     group of persons (other than the Person that is the subject of a Change of
     Control or an Affiliate of such Person) or any Person currently owning,
     beneficially or of record, equity securities of such Person), of beneficial
     ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act
     of 1934, as amended) of securities possessing more than forty percent (40%)
     of the total combined voting power of the Person's outstanding securities.

1.4  "Confidential Information" means IBM Confidential Information, MTC
Confidential Information, or both if the context so indicates.

1.5  "Design Review" shall mean a meeting between IBM and MTC, either at an IBM
facility or a MTC facility, or via telecon, lasting for up to two (2) days, to
be attended by up to four (4) IBM Employees, who will review MTC's Prototype
designs with MTC Employees to help MTC conform its Prototype designs to the
applicable IBM Fabrication Process.

1.6  "Disclosing Party" means either Party hereunder that discloses its
Confidential Information to the other Party.

1.7  "Fabrication Process" for a particular RIT hereunder shall mean IBM's
unqualified (as of the Effective Date) [*] IC fabrication process, or IBM's
unqualified (as of the Effective Date) BiCMOS7HP SiGe IC fabrication process, or
the next follow-on to IBM's BiCMOS7HP SiGe IC fabrication process, or IBM's
unqualified (as of the Effective Date) [*] IC and [*] IC fabrication process, if
and when they become available during the term of this Agreement.

1.8  "IBM Confidential Information" means any and all information and items
disclosed or delivered by IBM to MTC hereunder, that is identified by IBM as
confidential, whether written, oral or both, in whatever form disclosed or
delivered, whether tangible or intangible (including software). With respect to
the IBM Confidential Information referenced in the preceding sentence, IBM
agrees (i) to coordinate and control the disclosure thereof with MTC's Technical
Coordinator, (ii) if such IBM Confidential Information is disclosed in tangible
form, IBM will stamp or otherwise clearly mark such information as IBM
Confidential Information, and (iii) if such Confidential Information is
disclosed orally, IBM agrees to identity the Confidential Information as
confidential at the time of disclosure, and provide to MTC written confirmation
thereof within thirty (30) days after such disclosure. Notwithstanding the
foregoing, the term "IBM Confidential Information" shall also include the
following information and items disclosed hereunder, whether or not identified
by IBM as confidential, whether written, oral or both, in whatever form
disclosed or delivered, whether tangible or intangible (including software): all
product or circuit designs (including schematics, GDS II data, net lists, VHDL
code, RTL code, block diagrams and simulation techniques), deliverables,
manufacturing processes and techniques, and product plans.

IBM/MTC CONFIDENTIAL

   Confidential materials omitted and filed separately with the Securities and
               Exchange Commission. Asterisks denote omissions.

Page 3
<PAGE>

1.9  "IBM Deliverable Items" shall mean those items prepared by IBM as a part of
the scope of work performed pursuant to a Task, and which items are defined with
respect thereto.

1.10 "Integrated Circuit" or "IC" means an integral unit including a plurality
of active and passive circuit elements formed at least in part of semiconductor
material arranged on or in a single chip.

1.11 "Invention" means any idea, design, concept, technique, invention,
discovery or improvement, whether or not patentable, made solely or jointly by
one or more Representatives of either IBM or MTC, provided that either the
conception or reduction to practice occurs in the performance of work hereunder
and during the term of this Agreement.

1.12 "Joint invention" means any idea, design, concept, technique, invention,
discovery or improvement, whether or not patentable, made jointly by one or more
Employees of IBM with one or more Representatives of MTC, provided that either
the conception or reduction to practice occurs in the performance of work
hereunder.

1.13 "Person" shall mean any individual, corporation, partnership, joint
venture, trust, limited liability company, business association, governmental
entity or other entity.

1.14 "Product" shall mean the completed ("production-ready") version of any IC
manufactured in a qualified IBM fabrication process having three (3) levels of
metal, wire bond pads, and non-military, non-medical and non-nuclear uses,
designed by MTC as part of the scope of the work performed pursuant to Task 3.
"Product" may also include the additional and/or different features listed in
Attachment B. "Product" does not include Prototypes.

1.15 "Prototype" shall mean a preliminary version of a Product under development
by MTC, fabricated by IBM using the Fabrication Process, which may or may not be
functional.

1.16 "Mask" shall mean a glass reticle containing a series of related images
having or representing the predetermined pattern of metallic, insulating or
semiconductor material present in or removed from a Prototype, and in which
series the relation of the images to one another is that each image has the
pattern of the surface of one form of the Prototype.

1.17 "Mask Set" shall mean a complete set of Masks necessary to manufacture a
Prototype in the Fabrication Process.

1.18 "MTC Confidential Information" means any and all information and items
disclosed or delivered by MTC to IBM hereunder, that is identified by MTC as
confidential, whether written, oral or both, in whatever form disclosed or
delivered, whether tangible or intangible (including software). With respect to
the MTC Confidential Information referenced in the preceding sentence, MTC
agrees (i) to coordinate and control the disclosure thereof with IBM's Technical
Coordinator, (ii), such MTC Confidential Information is disclosed in tangible
form, MTC will stamp or otherwise clearly mark such information as MTC
Confidential Information, and (iii) if such Confidential

IBM/MTC CONFIDENTIAL

Page 4
<PAGE>

Information is disclosed orally, MTC agrees to identity the Confidential
Information as confidential at the time of disclosure, and provide to IBM
written confirmation thereof within thirty (30) days after such disclosure.
Notwithstanding the foregoing, the term "MTC Confidential Information" shall
also include the following information and items disclosed hereunder, whether or
not identified by MTC as confidential, whether written, oral or both, in
whatever form disclosed or delivered, whether tangible or intangible (including
software): all product or circuit designs (including schematics, GDS II data,
net lists, VHDL code, RTL code, block diagrams and simulation techniques),
deliverables, manufacturing processes and techniques and product plans, cost
data relating to a Joint Project.

1.19 "MTC Deliverable items" shall mean those items prepared by MTC as part of
the scope of work performed pursuant to a Task, and which items are defined with
respect thereto.

1.20 "Multi-Project Wafer (MPW) Run" shall refer to a RIT which allows for
design verification, circuit evaluation and testing by multiple customer designs
on the same Wafer in IBM's Fabrication Process. Each Wafer from a MPW Run
consists of multiple Sandbox sites and MTC shall be provided one (1) such
Sandbox site. All Prototypes on each Wafer from a MPW Run shall include up to
five (5) levels of metal and wire bond pads. However, the number of levels of
metal associated with each MPW Run will be defined solely and exclusively by IBM
prior to that run.

1.21 "Person" shall mean any individual, corporation, partnership, joint
venture, trust, limited liability company, business association, governmental
entity or other entity.

1.22 "Receiving Party" means either Party hereunder that receives the other
Party's Confidential Information.

1.23 "Representative" means, with respect to a Party, that Party's agents,
representatives and employees (including attorneys, accountants, consultants,
contract employees and advisors).

1.24 "Sandbox" shall refer to a circuit evaluation site on an Wafer from a MPW
Run that can accept single or multiple experimental customer designs with very
minimal release support from IBM.

1.25 "RIT" shall mean a procedure in which: (1) MTC provides IBM error-free GDS2
formatted data representing a Prototype design; (2) IBM fabricates, or has
fabricated, a Mask Set corresponding to the error-free GDS2 formatted data; (3)
IBM schedules a corresponding set of [*] Wafer Starts; and (4) IBM processes
Wafers as described in Task 3 of Section 2.2.

1.26 "Task" shall mean a development activity defined in Section 2.2.

1.27 "Wafer" shall mean an eight inch (8") wafer as required for the Fabrication
Process.

1.28 "Wafer Start" shall mean the release of one (1) Wafer to the Fabrication
Process for processing.

IBM/MTC CONFIDENTIAL

  Confidential materials omitted and filed separately with the Securities and
               Exchange Commission. Asterisks denote omissions.

Page 5
<PAGE>

1.29 "$" shall mean United States dollars.

2.   STATEMENT OF WORK
     -----------------

2.1  Objectives
     ----------

     This Agreement relates only to development activities for Prototypes to be
     manufactured in the Fabrication Process.

2.2  Development Activities (Tasks)
     ------------------------------

     The development program to be conducted by IBM and MTC under this Agreement
     will be conducted by executing the following Tasks. In the case of MTC, all
     work performed in connection with these Tasks shall be performed solely and
     exclusively by Representatives of MTC. In the case of IBM, all work
     performed in connection with these Tasks shall be performed solely and
     exclusively by Representative of IBM. The description of Tasks below
     includes work items and prime responsibility therefor. Although prime
     responsibility is assigned to one Party, the other Party will participate
     and use commercially reasonable efforts to cooperate fully in any
     particular work item as required by the relevant Task.

Task 1:   IBM shall provide MTC with models and design kits created by IBM for
          use in conjunction with the Fabrication Process, but only for the
          purposes of evaluating the technology, assessing future product
          development by MTC and developing and designing Prototypes to be
          manufactured solely by IBM if MTC elects to have such Prototypes
          manufactured. Such models and design kits are hereby licensed to MTC
          under the terms of the IBM Design Kit License attached hereto as
          Exhibit A. IBM may modify or alter the models and design kits and/or
          the Fabrication Process. IBM will promptly notify MTC of any such
          modifications or alterations to the design kits. Modifications or
          alterations to IBM's Fabrication Process may cause the corresponding
          Prototype designs to be unuseable for the manufacture of Products.

Task 2A:  MTC shall use the models and design kits provided by IBM solely to
          evaluate the technology, assess future product development by MTC and
          develop Prototype designs adapted to the Fabrication Process and
          Prototypes to be manufactured solely by IBM if MTC elects to have such
          Prototypes manufactured. MTC shall use commercially reasonable efforts
          to develop designs which take advantage of the unique attributes of
          the Fabrication Process in order to maximize performance and
          manufacturing yield and to minimize manufacturing cost.

Task 2B:  IBM shall provide MTC with up to a cumulative total of   [*]   RITs,
          [*]  per contract year, subject to the payment provisions in sections
          3.2 and attachment B. In addition, MTC, at its sole option, can
          substitute a RIT for a MPW Run, subject to availability from IBM. As
          part of the Prototype design(s) developed, MTC shall perform all

IBM/MTC CONFIDENTIAL

  Confidential materials omitted and filed separately with the Securities and
               Exchange Commission. Asterisks denote omissions.

Page 6
<PAGE>

         needed circuit design and modeling functions to produce GDS2 formatted
         data containing such circuits to be fabricated in the Fabrication
         Process. Fabrication of Prototypes having the additional and/or
         different features listed in Attachment B shall be subject to the
         additional payments listed therein. The Parties shall hold a Design
         Review in connection with each RIT. These Design Reviews will address
         electrical and physical design issues and release procedures.

         In connection with each RIT, IBM will accept from MTC's Technical
         Coordinator (as identified in Section 6.2) a GDS2 formatted data set
         produced by MTC during the term of this Agreement. IBM will perform
         additional ground rule checking and may provide consultation to MTC as
         to where optimization for the Fabrication Process may be possible.
         Should changes to any such GDS2 formatted data be required to correct
         ground rule errors or to optimize the Fabrication Process (pattern
         density, for example), MTC will make these changes and resubmit the
         GDS2 formatted data set. Under no circumstances will IBM make any
         (intentional) changes to any GDS2 formatted data set submitted by MTC.

         Should MTC request IBM to fabricate a Mask Set corresponding to any of
         the GDS2 formatted data sets, IBM will forward all corresponding,
         required data and supporting documentation to an internal or third
         party, where a Mask Set, will be created. Should changes to any GDS2
         formatted data set submitted by MTC be required to conform to Mask
         fabrication rules, MTC will make these changes and resubmit the GDS2
         formatted data set. Under no circumstances will IBM make any
         (intentional) changes to any GDS2 formatted data set submitted by MTC.

         Upon completion of the fabrication of each Mask Set for Prototype
         design(s) by or on behalf of IBM, IBM will schedule [*] Wafer Starts.
         IBM will use commercially reasonable efforts to complete their
         manufacture. Upon request by MTC for each RIT (and not for any MPW
         Run), just prior to the passivation and metallization steps associated
         with each such set of [*] Wafer Starts, IBM will hold up to [*] Wafers
         and complete the processing of the rest. At the request of MTC, IBM
         will then (a) scrap the held Wafers; or (b) process the held Wafers in
         the same manner as those previously processed; or (c) MTC will submit
         new GDS2 formatted data set for the wiring layers, IBM will create or
         have created a corresponding Mask Set (subject to the payments
         discussed immediately hereafter), and IBM will then process the held
         Wafers using this Mask Set. In step (c), if MTC so requests, IBM will
         modify wiring masks (not transistor masks) in any Mask Set, subject to
         a payment for the modified masks plus a one-time engineering payment
         for the corresponding RIT as referenced in Attachment B.

          Upon Wafer run completion, IBM shall initially test certain test
          structures on processed Wafers and shall thereafter deliver Prototypes
          to MTC in Wafer form or diced if requested by MTC in addition to a
          copy of data from the test structures which IBM, in

IBM/MTC CONFIDENTIAL

  Confidential materials omitted and filed separately with the Securities and
               Exchange Commission. Asterisks denote omissions.

Page 7
<PAGE>

          its sole discretion, deems appropriate to disclose to MTC. MTC shall
          perform all Prototype test and characterization measurements specific
          to MTC's unique circuit designs.

Task 3:   IBM and MTC shall each provide a Technical Coordinator to coordinate
          development activities under this Agreement. The responsibilities of
          these Technical Coordinators are listed in Section 6.1 and their
          identities are given in Section 6.2.

Task 4:   MTC and IBM will meet to assess MTC's technology requirements relative
          to the Fabrication Process for the purpose of discussing future plans
          and providing inputs to the technology development plan. The further
          purpose of these meetings is to provide feedback on the technology and
          to exchange technical ideas for the development of the technology. Any
          MTC Confidential Information received under this Task 4 (i) may be
          used by IBM in the Fabrication Process; including future versions
          thereof, for any purpose, (ii) may be disclosed by IBM to licensees of
          the Fabrication Process, including future versions thereof and (iii)
          shall include the unrestricted, royalty-free right of IBM to grant
          licenses thereunder to licensees of the Fabrication Process, including
          future versions thereof.

2.3    Uncertainty of Results
       ----------------------

       Although IBM and MTC will use reasonable efforts in performing the
       development activities under this Agreement, each Party acknowledges that
       the results of the work to be performed hereunder are uncertain and
       cannot be guaranteed by either Party. The Parties also acknowledge that
       any key milestones and other checkpoint dates made in connection with
       such work are target dates only and failure to achieve any such target
       dates shall not constitute a breach of this Agreement.

2.4    Shipment and Use of Prototypes
       ------------------------------

2.4.1  IBM shall ship all items to be delivered to MTC under this Agreement FOB
       plant of manufacture.

2.4.2  MTC agrees to use all Wafers delivered by IBM to MTC under this Agreement
       for internal testing, evaluation and demonstration purposes only. MTC may
       deliver Prototypes derived from such Wafers to MTC's customers at MTC's
       discretion for testing, evaluation and demonstration purposes only,
       provided that: (i) MTC notifies such customers in writing that the
       Prototypes are preliminary versions of a Product and are intended for
       internal testing, evaluation and demonstration purposes only.

2.5    Progress Reviews
       ----------------

IBM/MTC CONFIDENTIAL

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<PAGE>

     Reviews of the activities in this Section 2 will be held quarterly and will
     be scheduled by the Technical Coordinators set forth in Section 6.2.

2.6  MTC agrees that no Prototypes delivered to IBM hereunder shall be work
     product jointly created by IBM and MTC.

3.   PAYMENT
     -------

3.1  Compensation
     ------------

     In consideration for IBM's development efforts and for Access to the
     Fabrication Process as described in Section 2, MTC agrees to perform its
     development efforts described in Section 2, and to make the payments set
     forth in Section 3.2 below.

     In addition, in consideration of IBM entering into this Agreement with MTC,
     concurrently upon the execution of this Agreement by the Parties, MTC shall
     issue to IBM a warrant in the form of Attachment C attached hereto and made
     a part hereof by this reference (the "Warrant"). The Warrant shall be
     exercisable upon the terms and subject to the conditions set forth therein,
     including, but not limited to, payment of the exercise price set
     forththerein for the shares of capital stock issuable thereunder; provided,
     that the Warrant shall not under any circumstances be subject to forfeit by
     IBM prior to its exercise or expiration accordance with its terms.

3.2  Schedule of Payments
     --------------------

     For each RIT or MPW Run MTC requests, MTC shall pay the fees listed in
     Attachment B.

3.3  Method of Payment
     -----------------

     For the payments listed in Section 3.2, MTC shall submit a corresponding
     purchase order to IBM, identifying the RIT and option requested. Any such
     purchase order shall be subject to IBM's acceptance, which shall not be
     unreasonably withheld. If IBM accepts any such purchase order, then IBM
     shall submit a corresponding invoice to MTC, which MTC shall pay within
     sixty (60) days of receipt. All payments shall be made by electronic funds
     transfer in United States dollars, to the following bank wire address.
     Payments shall be made free all banking charges.

                    IBM, Director of Licensing
                    The Bank of New York
                    1 Wall Street
                    New York, New York 10286
                    United States of America

IBM/MTC CONFIDENTIAL

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<PAGE>

                    Credit Account No. 890-0209-674
                    ABA No. 0210-0001-8

     The following information should be included in the wire detail:

          IBM/MULTILINK SEMICONDUCTOR DEVELOPMENT AGREEMENT
          Reason for Payment: MULT1LINK Development Services

3.4  Delinquencies
     -------------

     If MTC's account becomes in arrears IBM, in addition to its right to hold
     MTC in default under the terms of Section 11.1 of this Agreement, may
     notify MTC in writing of such arrears and MTC will cure the condition
     within thirty (30) days. If not cured within such period, IBM reserves the
     right to stop shipment to MTC until MTC's account is again current, or to
     terminate this Agreement pursuant to Section 11.1

3.5  Taxes
     -----

     Each Party shall bear and pay any and all taxes imposed on such Party by
     any jurisdiction in which such Party is operating.

4.   TERM
     ----

     This Agreement shall commence on the Effective Date and will continue for
     five (5) years thereafter, unless earlier terminated pursuant to Section
     11.

5.   NOTICES
     -------

5.1  Any notice or other communication required or permitted to be made or given
to either Party hereto pursuant to this Agreement shall be sent to such Party by
facsimile (with written mailed confirmation), or by certified or registered
mail, postage prepaid, addressed to the person named below and shall be deemed
to have been made, given or provided on the date of facsimile transmission or
mailing.

     IBM: Steve Woodham
          IBM Microelectronics Division
          1000 River Street
          Department W0MA 29
          Essex Junction, VT 05452
          Tel: (802) 769-7745
          Fax: (802) 769-9731
          E-mail: woodham@us.ibm.com
          With a copy to:

IBM/MTC CONFIDENTIAL

Page 10
<PAGE>

              IBM Corporation
              Drop 92B
              1580 Route 52
              Hopewell Junction, NY 10533
              Fax:  (914)-892-5358
              Attention:  Division Counsel, Microelectronics Division

     MTC:  MultiLink Technology Corporation
           300 Atrium Drive
           Somerset, NJ 08873
           Fax: (732) 805-9177
           Attention:  President

          With a copy to:

              Allen Matkins Leck Gamble & Mallory LLP
              1999 Avenue of the Stars, Suite 1800
              Los Angeles, CA 90067
              Fax: (310) 788-2410
              Attention: Mark J. Kelson

5.2   A Party hereto may change its address for the purposes of this Section 5
by giving ten (10) days prior written notice of such change of address to the
other Party.

6.    TECHNICAL COORDINATORS
      ----------------------

6.1   Responsibilities
      ----------------

      Work done under this Agreement, including day-to-day activities, shall be
      under the general direction of the Technical Coordinators who shall be
      responsible for:

6.1.1 in the case of MTC's Technical Coordinator, providing monthly forecasts of
      RITs to be requested of IBM;

6.1.2 overseeing work pursuant to the statement of work as set forth in Section
      2, including objectives, technical specifications, delivery and receipt of
      all IBM and MTC Deliverable Items, performance of responsibilities,
      milestones, Tasks, development schedules, and acceptance dates and
      criteria; and in the case of the Technical Coordinator for MTC, the
      collection of design data from MTC, verifying its adherence to all IBM
      design rules delivered to MTC by IBM;

IBM/MTC CONFIDENTIAL

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<PAGE>

6.1.3  identifying new IBM and MTC technical goals related to the Tasks,
       prioritizing such goals and approving desired changes to the statement of
       work;

6.1.4  approving any change to work, including extensions of time which do not
       affect payment due under Section 3.2 or the term of this Agreement;

6.1.5  establishing the initiation date of a Task and advising the other Party's
       Technical Coordinator in writing of the completion of a Task;

6.1.6  communicating, for each item delivered by one Party to the other Party,
       whether such item meets any applicable acceptance criteria;

6.1.7  reviewing current progress reports;

6.1.8  coordinating Wafer shipments from IBM to MTC pursuant to Section 2.3;

6.1.9  communicating together on a regular basis to satisfy their obligations
       hereunder and preparing minutes of each meeting; such meetings shall be
       subject to mutual agreement in terms of frequency, location,
       participants, etc., and each Party shall bear its related costs; and

6.1.10 managing the proper exchange of Information pursuant to Section 8.4.

All the above-listed actions or decisions shall be duly recorded in a document
by each Technical Coordinator. If the Technical Coordinators are unable to reach
a unanimous decision on any of the above-listed matters, they will promptly
refer such matter to the following contact executives:

     For IBM:                                    For MTC
      Ms. Chris King                                 Dr. Richard Nottenburg
      Vice President, Wired Communications           President
      Drop 92X                                       300  Atrium Drive
      1580 Route 52                                  Somerset, NJ 08873
      Hopewell Junction, NY 12533                    Phone (732)-537-3700
      Phone 914-892-5610                             Fax: (732) 805-9177
      Fax:(914)892-5542

6.2  Technical Coordinators
     ----------------------

     The Technical Coordinators for the Parties are:

          For IBM:                   For  MTC:

IBM/MTC CONFIDENTIAL

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<PAGE>

       Jack Taylor                           Bill Reinisch
       IBM Microelectronics Division         300 Atrium Drive
       1000 River Street                     Somerset, NJ 08873
       Department WZ4A 29                    Phone: (732) 537-3747
       Essex Junction, VT 05452              Fax: (732) 537-9177
       Tel: (802) 769-6923                   E-mail: breinisch@mltc.com
       Fax: (802) 769-9731
       E-mail: jacktayl@us.ibm.com

Each Party may change its Technical Coordinator at any time and from time to
time during the term of this Agreement by notifying the Technical Coordinator
for the other Party in writing at the designated address. Such change is
effective upon receipt of the notice of change.

7.     TRADEMARK
       ---------

Nothing in this Agreement grants either Party any rights to use any trademark(s)
or trade name(s), directly or indirectly, of the other Party in connection with
any product, service, promotion or publication without prior written approval of
the trademark owner.

8.     INTELLECTUAL PROPERTY RIGHTS AND CONFIDENTIALITY
       ------------------------------------------------

8.1    Copyrights, Mask Works Rights and Prototype or Product Designs
       --------------------------------------------------------------

8.1.1  MTC shall own all copyrights and Mask work rights associated with, and
       all circuitry and all Prototype design information generated by MTC in
       connection with, its performance of Tasks and with Prototypes, their
       design, development or manufacture, including but not limited to the MTC
       Deliverable Items subject to IBM's rights as specified in Section 8.2.2
       of this Agreement.

8.1.2  IBM or its licensors shall own all copyrights associated with, and all
       circuitry design components furnished to MTC by IBM in connection with,
       its performance of Tasks and with Prototypes, their design, development
       or manufacture, including, but not limited to: (i) the IBM Deliverable
       Items; (ii) all base array layers; (iii) all IBM-furnished library
       elements (including without limitation, any megafunctions or macrocells);
       and (iv) all IBM-furnished modifications of any such library elements.
       IBM shall have custody of any Masks provided by MTC and any Masks made by
       or on behalf of IBM using tangible netlist tape(s), and tangible GDS2
       tape(s) received from MTC hereunder, but shall use such tapes and any
       Masks made therefrom only to manufacture for the benefit of MTC. IBM
       shall own all copyrights associated with the

IBM/MTC CONFIDENTIAL

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<PAGE>

       Fabrication Process, including the IBM Deliverable Items developed by or
       on behalf of IBM and delivered to MTC under this Agreement.

8.2    Invention Rights
       ----------------

8.2.1  Representatives of IBM or MTC performing Tasks under this Agreement who
       make an Invention, whether solely or jointly with others, agree to make
       and shall promptly make a complete written disclosure to their employer
       for patent review of such Invention, in the normal course, specifically
       pointing out those features or concepts believed to be new or different.

       Each Party agrees to promptly submit to the other Party copies, marked as
       IBM Confidential Information or MTC Confidential Information, as the case
       may be, of any written disclosures pertaining to Joint Inventions
       submitted exclusively to it, which submissions shall be subject to the
       provisions of Section 8.3 of this Agreement. Also, MTC shall promptly
       submit to IBM copies of all written disclosures submitted exclusively to
       MTC relating to the Fabrication Process.

8.2.2  Each Invention, other than a Joint Invention, shall be the property of
       the Party whose Representatives made the Invention.

8.2.3  Joint Inventions shall be jointly owned, title to all patents issued
       thereon shall be joint, all expenses incurred in obtaining and
       maintaining such patents, except as provided hereinafter, shall be shared
       equally and each Party shall have the unrestricted right to license third
       parties thereunder without accounting to the other Party. In the event
       that one Party elects not to see patent protection for any Joint
       Invention in any particular country or not to share equally in the
       expense thereof with the other Party, the other Party shall have the
       right to seek or maintain such protection at its own expense in such
       country and shall have full control over the prosecution and maintenance
       thereof even though title to any patent issuing therefrom shall be joint.

8.2.4  Each Party shall give the other Party all reasonable assistance in
       obtaining patent protection and in preparing and prosecuting any patent
       application filed by the other Party, and shall cause to be executed
       assignments and all other instruments and documents as the other Party
       may consider necessary or appropriate to carry out the intent of this
       Section 8.2.

8.2.5     All MTC Inventions relating to the Fabrication Process shall be owned
       by MTC, subject to a worldwide, irrevocable, perpetual, nonexclusive,
       nontransferable, fully paid-up and royalty-free license which MTC hereby
       grants to IBM under all such Inventions. This license includes the
       right of IBM to make, have made, use, have used, lease, import, offer to
       sell, sell and/or otherwise transfer, any apparatus, and to practice and
       have practiced any method. This license further includes the right of IBM
       to sublicense third parties to do any or all of the foregoing. MTC agrees
       that for a period of five (5) years from the Effective Date of this
       Agreement, MTC shall treat such MTC Inventions relating to the
       Fabrication process as

IBM/MTC CONFIDENTIAL

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<PAGE>

       Confidential Information and shall not license such MTC Inventions
       relating to the Fabrication Process to any other entity.

8.2.6  No license, immunity or other right is granted herein to either Party,
       whether directly or by implication, estoppel or otherwise, with respect
       to any other patent, trademark, copyright, mask work, trade secret or
       other intellectual property right of the other Party,

8.3    Confidential Information:
       -------------------------

       8.3.1 For a period of seven (7) years from the date of disclosure of
       Confidential Information, the Receiving Party agrees to use the same
       degree of care and discretion to keep the Disclosing Party's Confidential
       Information confidential as it uses with its own similar information that
       it wishes to keep confidential. The Confidential Information received by
       a Receiving Party shall not be used for any purpose other than in
       connection with exercising the rights and licenses granted to it under
       this Agreement, subject to the obligation of confidentiality and subject
       to the terms and conditions of the licenses granted herein. Each Party
       agrees to inform its Representatives of the confidential nature of the
       other Party's Confidential Information, and each of such Representatives
       shall agree in writing to act in accordance with the terms and provisions
       of this Article 6. Each Receiving Party shall be responsible for any
       breach of this Agreement by any of its Representatives.

       8.3.1.1 Either Receiving Party may use the "Residuals" of the Disclosing
       Party's Confidential Information for any purpose, royalty-free, subject
       to the obligation of confidentiality. "Residuals" means the ideas,
       concepts, know-how and techniques, related to the Receiving Party's
       business activities, which are contained in the Disclosing Party's
       Confidential Information and retained in the unaided memories of the
       Receiving Party's employees who have had rightful access to the
       Disclosing Party's Confidential Information pursuant to this Agreement.

       8.3.2 The Receiving Party may disclose the Confidential Information of
       the Disclosing Party only to: the Receiving Party's Representatives on a
       need-to-know basis, subject to the requirements of Section 8.3.

       8.3.3 Notwithstanding any other provisions of this Agreement, the
       nondisclosure and use obligations specified herein shall not apply to any
       Confidential Information which:

       8.3.3.1 is already lawfully in the possession of the Receiving Party
       prior to being furnished the Receiving Party by the Disclosing Party,
       provided that the source of such information was not and does not become
       known, prior to disclosure, by the Receiving Party to be prohibited from
       disclosing the information to the Receiving Party by legal, contract or
       fiduciary obligation to the Disclosing Party;

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<PAGE>

     8.3.3.2 is independently developed by employees (without use of
     Confidential Information) of the Receiving Party or any of its
     Subsidiaries;

     8.3.3.2 becomes generally publicly available without breach of this
     Agreement;

     8.3.3.3 is rightfully received by the Receiving Party on a nonconfidential
     basis from a third party that is not known by the Receiving Party to be
     prohibited from disclosing the information to the Receiving Party by legal,
     contract or fiduciary obligation to the Disclosing Party;

     8.3.3.4 is released for disclosure by the Disclosing Party with its written
     consent; or

     8.3.3.6 is inherently and appropriately disclosed in the use, lease,
     marketing, sale, or other distribution of Prototypes, or Products, as the
     case may be and publicly available supporting documentation therefor by or
     for the Receiving Party or any of its Affiliates.

     8.3.4 Disclosure of Confidential Information shall not be precluded if such
     disclosure is:

     8.3.4.1 in response to a valid order of a court or other governmental body;
     provided, however, that the Receiving Party shall first promptly provide
     the Disclosing Party prompt notice of the order and provide the Disclosing
     Party the opportunity to make a commercially reasonable effort to obtain a
     protective order or other appropriate remedy; provided that if such
     protective order is not obtained, or if the Disclosing Party waives
     compliance with the provisions of this Section 8.3.4.1 in writing, the
     Receiving Party will furnish only that part of the Confidential Information
     that the Receiving Party is legally required to be so disclosed and the
     Receiving Party shall exercise its best commercially reasonable efforts to
     obtain reasonable assurance that confidential treatment will be accorded to
     the Confidential Information so disclosed; or

     8.3.4.2 otherwise required by law (prior to such disclosure, however, the
     Receiving Party will provide written notification to the Disclosing Party,
     signed by an executive of the Receiving Party, stating that the Receiving
     Party believes in good faith that the disclosure is required by law); or

     8.3.4.3 necessary to establish the Receiving Party's rights under this
     Agreement.

     8.3.4.5 If any Confidential Information falls under an exception set forth
     in Sections 8.3.4.1 through 8.3.4.6 the Receiving Party shall not disclose
     that the Disclosing Party hereto was the source of that Confidential
     Information.

     8.3.4.6 All Confidential Information not reasonably necessary or useful for
     the Receiving Party to exercise the rights and licenses granted in this
     Agreement shall be returned to the Disclosing Party or destroyed by the
     Receiving Party upon termination of this Agreement. Any

IBM/MTC CONFIDENTIAL

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<PAGE>

     oral Confidential Information shall continue to be kept confidential and
     subject to the terms of this Agreement.

9.   LIMITATION OF LIABILITY
     -----------------------

9.1  In no event shall either Party be liable to the other Party for incidental
damages, lost profits, lost savings or any other consequential damages,
regardless of whether the claim is for breach of contract, warranty, tort
(including negligence), failure of a remedy to accomplish its purpose or
otherwise, even if such Party has been advised of the possibility of such
damages.

9.2  In no event shall either Party be liable to the other Party for actual
damages resulting from any claim relating to this Agreement in excess of $ [*]
regardless of the form of action, provided that this limitation will not apply
to claims for bodily injury or damage to real property or tangible personal
property for which the Party is legally liable.

9.3  Neither Party will be liable for any damages claimed by the other Party
based on any third party claim.

10.  WARRANTIES
     ----------

10.1 Subject to Section 2.2, any item, including any products, services,
information or technology furnished by one Party to the other Party, and any
Wafers furnished by IBM to MTC, pursuant to this Agreement, are furnished on an
"AS IS" basis without warranty of any kind

10.2 Neither Party warrants that any products, services or deliverable items
provided to the other Party under this Agreement is free of infringement of
third-party intellectual property rights.

10.3 THE FOREGOING WARRANTIES ARE LIMITED AND ARE IN LIEU OF ALL OTHER
WARRANTIES EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTY OF MERCHANTABILITY
OR FITNESS OR USEFULNESS FOR A PARTICULAR PURPOSE.

11.  TERMINATION
     -----------

11.1 Material Breach, Either Party Either Party may terminate this Agreement
     -----------------------------
for material breach of this Agreement by the other, provided that the Party in
breach is given written notice of and fails to cure such breach within thirty
(30) days, or in the event:

     11.1.1 the other Party files a petition in bankruptcy, undergoes a
     reorganization pursuant to a petition in bankruptcy, is adjudicated a
     bankrupt, becomes insolvent, becomes dissolved or liquidated, files a
     petition for dissolution or liquidation, makes an assignment for the
     benefit of creditors, or has a receiver appointed for its business.

IBM/MTC CONFIDENTIAL

   Confidential materials omitted and filed separately with the Securities and
               Exchange Commission. Asterisks denote omissions.

Page 17
<PAGE>

11.2 Material Breach, IBM If IBM materially breaches this Agreement and the
     --------------------
Agreement is terminated by MTC pursuant to Section 11.1, then MTC's payment
obligations pursuant to Section 3 due after the effective date of said
termination shall cease.

11.3 Material Breach, MTC If MTC materially breaches this Agreement and the
     --------------------
Agreement is terminated by IBM pursuant to Section 11.1, MTC shall make all
payments due or past due and payments associated with any work in progress, and
IBM shall be entitled to retain all payments made by MTC.

11.4 IBM shall have the right to immediately terminate this Agreement by giving
     written notice of termination to MTC if MTC undergoes a Change of Control
     and MTC shall have the right to immediately terminate this Agreement by
     giving written notice of termination to IBM if the IBM Microelectronics
     Division undergoes a Change of Control.

11.5 Effect of Expiration or Termination Upon the earlier of MTC's written
     -----------------------------------
request or within a reasonable period of time (as solely determined by IBM)
after expiration or termination of this Agreement, IBM will destroy all Masks
fabricated by or on behalf of IBM, or provided by MTC to IBM, under this
Agreement. Notwithstanding the above, if, MTC has not requested IBM to destroy
the masks, and, in IBM's judgement there is a reasonable likelihood that any
such Masks might be used by IBM to manufacture Product for MTC under a separate
contract, to be negotiated between the Parties, then IBM may retain such Masks
for such use and may then destroy such Masks within a reasonable period of time
after expiration or termination of said separate contract.

Unless otherwise agreed to by the Technical Coordinators of Record, IBM will
stop all work in process for MTC upon expiration or termination of this
Agreement and deliver the same to MTC "AS IS".

12.  MISCELLANEOUS
     -------------

12.1 Nothing contained in this Agreement shall be construed as conferring any
right to use in advertising, publicity or other promotional activities any name,
trade name, trademark or other designation of any Party hereto (including any
contraction, abbreviation or simulation of any of the foregoing); and each Party
hereto agrees not to disclose to other than its Affiliates the existence of or
the terms and conditions of this Agreement, except as required by law or
government rule or regulation, without the express written consent of the other
Party except as may be required by law or government rule or regulation, or to
establish its rights under this Agreement; provided, however that if one Party
is seeking to disclose such information for reasons not requiring written
consent, then the Disclosing Party shall limit the disclosure to the extent
required, shall allow the other Party, to review the information to be disclosed
prior to such disclosure, and shall apply, where available, for confidentiality,
protective orders, and the like. Such review under this Section shall not be
construed to make the reviewing Party responsible for the contents of the
disclosure, and the Disclosing Party shall remain solely responsible for such
contents.

IBM/MTC CONFIDENTIAL

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<PAGE>

12.2 Nothing contained in this Agreement shall be construed as conferring on any
Party any license or other right to copy the exterior design of any product of
the other Party.

12.3 No license or immunity is granted by this Agreement by either Party to the
other Party, either directly or by implication, estoppel, or otherwise, under
any patent or other intellectual property right now owned or hereafter obtained,
except as expressly provided herein.

12.4 Neither this Agreement nor any activities hereunder will impair any right
of IBM or MTC to design, develop, manufacture, market, service or otherwise deal
in, directly or indirectly, any products or services. Each Party may pursue
activities independently with any third party even if similar to the activities
under this Agreement.

12.5 Each Party is an independent contractor and is not an agent of the other
Party for any purpose whatsoever. Neither Party will make any warranties or
representations on the other Party's behalf, and it will not assume or create
any obligation on the other Party's behalf.

12.6 IBM may, upon written notice to MTC, assign its rights or obligations to a
third party without the prior written consent of MTC only in connection with a
merger or a sale of all or substantially all of the assets of IBM relating to
the subject matter of this Agreement. In all other instances, neither Party
shall assign its rights or delegate or subcontract its obligations under this
Agreement without prior written permission from the other Party and any attempt
to do so without such permission shall be null and void.

12.7 Each Party will comply with all applicable federal, state and local laws,
regulations and ordinances of the U.S. Government including, but not limited to,
the regulations of the U.S. Government authorities relating to the export of
commodities and technical data insofar as they relate to activities under this
Agreement. Each Party agrees that Deliverables, design information, test results
and any other technical data provided under this Agreement may be subject to
restrictions under the export control laws and regulations of the United States
of America, including but not limited to the U.S. Export Administration Act and
the U.S. Export Administration Regulations. Neither Party shall export any
design information or other technical data without appropriate government
documents and approvals.

12.8 All monetary amounts that become due hereunder are in U.S. dollars.

12.9 This Agreement will not be binding upon the Parties until it has been
signed herein below by or on behalf of each Party, in which event it shall be
effective as of the date first written above. This Agreement and its Attachments
constitute the entire agreement between the Parties with respect to the subject
matter hereof and shall supersede all previous communications, representations,
understandings and agreements, whether oral or written, between the Parties or
any officer or representative thereof with respect to the subject matter of this
Agreement. No amendment or modification of this Agreement shall be valid or
binding upon the Parties unless made in writing and signed on

IBM/MTC CONFIDENTIAL

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<PAGE>

behalf of each Party by their respective representatives thereunto duly
authorized. The requirement of written form may only be waived in writing.

12.10 Any waiver by either Party of any breach of, or failure to enforce at any
time, any of the provisions of this Agreement, shall not be construed as or
constitute a continuing waiver of such provision, or a waiver of any other
provision of this Agreement, nor shall it in any way affect the validity of this
Agreement or any part thereof, or the right of either Party thereafter to
enforce each and every provision of this Agreement.

12.11 If any provision of this Agreement is found by competent authority to be
invalid, illegal or unenforceable in any respect for any reason, the
availability, legality and enforceability of any such provision in every other
respect and the remainder of this Agreement shall continue in effect so long as
it still expresses the intent of the Parties. If it no longer expresses the
intent of the Parties, the Parties will negotiate a satisfactory alternative to
such provision; if, after reasonable efforts, such alternative cannot be found,
this Agreement shall be terminated.

12.12 This Agreement and all exhibits or attachments hereto shall be executed in
English, and such English text shall prevail over any translation thereof. All
notices referred to hereunder shall also be written in English, or joined to an
English translation made under the sender's responsibility and at its cost,
which English translation shall then prevail over the corresponding original,
each Party being entitled to disregard any document sent under this Agreement in
any language other than English.

12.13 No action, regardless of form, arising out of this Agreement may be
brought by either Party more than [*] years after the later of the date the
cause of action has arisen or termination of this Agreement, except with respect
to a claim for payment.

12.14 Either Party hereto shall be excused from the fulfillment of any
obligation under this Agreement with the exception of payment obligations for so
long as and to the extent such fulfilment may be hindered or prevented by any
circumstance of force majeure, such as but not limited to, acts of God, war
whether declared or not, riot, lockout, fire, shortages of materials or
transportation, power failures, national or local government regulations, or any
other circumstances outside its control.

12.15 Headings used in this Agreement are for convenience of reference only and
are not intended to be part of, or to affect the meaning or interpretation of
this Agreement. References to any given section of this Agreement are intended
by the Parties to include any subsections of such section.

12.16 This Agreement may be executed in two (2) counterparts, each of which
shall deemed an original, but both of which together shall constitute one and
the same agreement.

                  ARTICLE 13 - GOVERNING LAW AND JURISDICTION
                  -------------------------------------------

IBM/MTC CONFIDENTIAL

   Confidential materials omitted and filed separately with the Securities and
               Exchange Commission. Asterisks denote omissions.

Page 20
<PAGE>

This Agreement shall be construed, and the legal relations created herein
between the Parties shall be determined, in accordance with the laws of the
United States of America and, specifically, the State of Delaware, as if said
agreement were executed in, and to be fully performed within, the State of
Delaware. Any proceeding to enforce or to resolve disputes relating to this
Agreement shall be brought before a court of competent jurisdiction in the
United States. In any proceedings no Party shall assert that such a court lacks
jurisdiction over it or the subject matter of the proceeding. The Parties
hereby expressly waive any right to a jury trial and agree that any proceeding
hereunder shall be tried by a judge without a jury.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized representatives as of the
day and year first above written.

<TABLE>
<S>                                                 <C>
INTERNATIONAL BUSINESS MACHINES                     MULTILINK (TECHNOLOGY CORPORATION
CORPORATION

By: /s/ Christine King                              By: /s/ Richard N. Nottenburg
   -----------------------------------                 -------------------------------------
Name: Christine King                                Name: Richard N. Nottenburg
     ---------------------------------                   -----------------------------------
Title: VP Networking and Optical Communications     Title:  President and CEO
      --------------------------------                    ----------------------------------
Date:   5/18/00                                     Date:  May 12, 2000
      --------------------------------                    -----------------------------------
</TABLE>

IBM/MTC CONFIDENTIAL

Page 21
<PAGE>

                                 ATTACHMENT A
                                 ------------

                          (A&MS Design Kit License)

This IBM Design Kit License ("Attachment A") is an attachment to the Silicon-
Germanium Development Agreement ("Agreement"), dated as of March 31, 2000
between International Business Machines Corporation ("IBM") and Multilink
Technology Corporation ("MTC), (collectively the "Parties") and sets forth the
terms and conditions applicable to the IBM Design Kit, as defined below.

The Parties agree that the following terms and conditions will apply to any IBM
Design Kit provided to MTC under the Agreement. Capitalized terms used herein
that are not herein defined shall have the meaning set forth in the Agreement.

The IBM Design Kit is licensed and not sold. IBM retains all the right and title
to all copies of any IBM Design Kit provided to MTC and any copy that MTC makes.

The term "IBM Design Kit" includes the following information and materials as
may be listed in a separate document accompanying the IBM Design Kit:

 .  design automation software, and related support documentation (individually
   and collectively "ASIC Tool Kit");
 .  design-tool specific logical and physical design data and design rules (e.g.,
   NDR, EDIF, GL/1, or GDS2 models) for all library and data path elements,
   macros, hard cores, soft cores, synthesizable cores, and MTC Licensed
   Products of such soft cores and synthesizable cores, and related support
   documentation (individually and collectively "ASIC Model Kit"); materials
   sent to MTC separately as documented in one or more Addendum's to the IBM
   Design Kit License ("Addendum"); and
 .  machine-readable and printed related materials, including training materials,
   and listings as may be provided by IBM to MTC under this Agreement.

The "IBM Design Kit" includes all copies and derivatives of such IBM Design Kit;
and may include information, materials, and/or designs owned or provided by
third parties, including but without limitation SSM. The "IBM Design Kit" also
includes any semiconductor manufacturing process information and any
semiconductor packaging information delivered to MTC pursuant to the Agreement.

"SSM" shall mean Swift Simulation Models or any portion which is an output of a
Verilog Foundry Model tool (a Synopsys, Inc. product).

"Use", when referring to the machine-readable portion of the IBM Design Kit,
means copying any portion of the IBM Design Kit into a machine for processing,
transmitting it to a machine for processing, or performing such processing; and
when referring to the printed portion of the IBM Design Kit, means use solely in
furtherance of the Licensed Use set forth below.

LICENSE

IBM/MTC CONFIDENTIAL

Page 22
<PAGE>

The IBM Design Kit is provided to MTC as an IBM customer solely for MTC's Use.
Under IBM's intellectual property rights in the IBM Design Kit, (including know-
how, trade secrets, and other information, copyrights and mask works, but
excluding patents, trademarks and trade names), IBM hereby grants to MTC a non-
exclusive, non-transferable, revocable, limited license to use, perform,
display, and make copies of the IBM Design Kit, solely and exclusively in
accordance with this Agreement.

MTC may:

   .  use the IBM Design Kit only for purposes of(i) conducting an evaluation of
     the IBM Design Kit solely for the purpose of determining whether or not to
     carry out the design activities of (ii) below, and/or (ii) designing MTC
     Prototypes to be manufactured solely by IBM (both(i) and (ii) collectively
     referred to hereafter as "Licensed Use");
   . create MTC Prototypes of any soft cores or synthesizable cores provided to
     MTC as part of an ASIC Model Kit, solely for the purpose of creating a
     derivative design to be included in MTC Prototypes to be manufactured
     solely by IBM; and
   .  copy or translate the IBM Design Kit's machine-readable portion into any
     machine-readable or printed form to provide sufficient copies only to
     support MTC's Licensed Use as well as reasonable storage and backup of the
     IBM Design Kit, and copy the printed related materials to support MTC's
     Licensed Use.

MTC may not

   . reverse assemble or reverse compile any portion of any machine-readable
     representation of the IBM Design Kit elements without IBM's prior written
     consent;
   . create any derivatives of the IBM Design Kit other than the derivative soft
     cores or synthesizable cores as set forth above; nor
   . sublicense, lease, or otherwise distribute the IBM Design Kit to any other
     persons, including other licensees, without IBM's prior written consent.

MTC acknowledges that IBM retains all ownership rights in and to the
intellectual property licensed pursuant to this Attachment A, and that no
license, immunity, or other right is hereby granted under any IBM intellectual
property rights, express or implied, other than as specifically set forth
herein.

SUPPORT AND SUBSEQUENT RELEASES

IBM may provide support to MTC by answering reasonable technical questions MTC
may have regarding the IBM Design Kit. Such support is not applicable to any
derivative soft cores or synthesizable cores MTC creates pursuant to this
Attachment. All such questions should be coordinated through the IBM contact
person designated by IBM for this purpose.

IBM/MTC CONFIDENTIAL

PAGE 23
<PAGE>

IBM may make a subsequent IBM Design Kit release available to MTC for MTC's
Licensed Use. While MTC may continue Licensed Use of a previous release, IBM may
not continue support for previous releases of the IBM Design Kit.

PROTECTION AND SECURITY, CONFIDENTIALITY

Any information required to be exchanged in connection with the performance of
this Agreement which either party desires to have treated as confidential shall
be exchanged and treated in accordance with the terms and conditions of Section
X of the Agreement.

Notwithstanding the foregoing, MTC agrees that any logical and physical design
data, design rules, macros, hard cores, soft cores, synthesizable cores, MTC's
derivatives of such soft cores and synthesizable cores, and training materials
supplied to MTC by IBM are IBM Confidential, and MTC agrees to protect such
information and materials for seven (7) years from the date of disclosure to MTC
as provided in Section X of the Agreement.

MTC agrees to use the training materials provided by IBM with the IBM Design Kit
only for MTC's internal training requirements and for those Respresentatives who
require training in order to carry out MTC's Licensed Use. The training
materials shall not be used to train any other third party in the use and
operation of the IBM Design Kit.

MTC agrees that SSM and information in SSM provided under this Agreement may
contain or be derived from information or portions of materials owned or
provided by a third party supplier, and shall be treated as IBM Confidential.
MTC acknowledges and agrees that Synopsys as such a third party supplier is an
intended third party beneficiary of this Agreement, having all the rights to
enforce the terms and conditions of this Agreement that govern the use and
protection of Synopsys' intellectual property rights contained in the SSM.

MTC agrees that it will not make IBM Confidential materials available to any
third party. In addition, MTC agrees to take the following precautions with
respect to the IBM Design Kit components licensed under this Agreement:

 .  MTC will take appropriate action, by instruction, agreement or otherwise,
   with any persons permitted access to any IBM Design Kit, to satisfy its
   obligations under this Attachment.
 .  MTC will reproduce and include the copyright notices and any other legend on
   all copies, modifications or portions merged into any other IBM Design Kit;
   no such copyright notices, legend, or other marking or in any materials
   distributed under this Attachment shall be tampered with or removed from any
   licensed item, and
 .  MTC will ensure, before disposing of any media, that the IBM Design Kit or
   any portion contained thereon has been erased or destroyed.

For purposes specifically related to MTC's Licensed Use of the IBM Design Kit,
MTC may make the IBM Design Kit available to any of the following: (1) its
Affiliates; (2) Representatives off MTC or MTC Affiliates; (3) Subcontractors of
MTC or its Affiliates; and (4) IBM's Representatives (a) during the period they
are

IBM/MTC CONFIDENTIAL

 Page 24
<PAGE>

on MTC's premises, or (b) whom MTC authorizes to have remote access to the IBM
Design Kit. For purposes of this paragraph, "Subcontractors" shall mean, and
shall be limited to, those persons who are contractually engaged full time on a
temporary basis by MTC to perform the same semiconductor device design services
as MTC's regular employees who have rightful access to the IBM Design Kit(s)
hereunder and who perform such services only on the premises of MTC or its
Affiliates.

Before making the IBM Design Kit available, all such employees, Affiliates, and
Subcontractors must be obligated to protect the IBM Design Kit(s) according to a
prior written agreement of confidentiality with MTC having terms which are no
less restrictive than set forth herein.

TERM

The license granted herein is effective for so long as the Agreement is in
effect. Upon termination or expiration of the Agreement, the licenses set forth
herein shall terminate. MTC agrees upon such termination to destroy (and certify
to such destruction) the IBM Design Kit together with all elements (including
SSM), copies, modifications and merged portions in any form.

IBM/MTC CONFIDENTIAL

Page 25
<PAGE>

                                 Attachment B
                                 ------------
                             (RIT and MPW Charges)

    Year 2000 charges RIT and MPW's (200mm wafers, wire bond)

     [*]
          RIT:
          3LM: $ [*]
              4LM: $ [*]
              5LM: $ [*]
              C4:  $ [*] additional charge
              RITB mask Charges: $ [*]/mask
              RITB one time engineering charges: $ [*]
          MPW:

              5LM: $ [*]

         Target Cycle Time: [*]

    BiCMOS 7HP
          RIT:

              4LM: $  [*]
              5LM: $  [*]
              C4:  $  [*] additional charge
              RITB mask Charges: $[*] /mask
              RITB one time engineering charges: $ [*]
          MPW:

               5LM: $ [*]

          Target Cycle Time:  [*]

         [*] and Follow-on [*] Process Prices to be determined at a later time

IBM/MTC CONFIDENTIAL

  Confidential materials omitted and filed separately with the Securities and
               Exchange Commission. Asterisks denote omissions.

Page 27

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