SHELTON, CT — January 07, 2009 — TranSwitch Corporation (NASDAQ: TXCC), a leading provider of semiconductor solutions for the converging voice, data and video network, today announced that on December 24, 2008 it purchased $15 million principal amount of its 5.45% Convertible Notes for $9.9 million, plus accrued interest. Prior to this transaction TranSwitch had approximately $25 million principal amount of outstanding 5.45% Convertible Notes that were issued in July 2007 and due September 30, 2010.

“TranSwitch was very active in the fourth quarter as we completed the acquisition of Centillium Communications and we took steps to lower the combined company’s operating expense levels to ensure near-term profitability,” stated Dr. Santanu Das, President and CEO of TranSwitch Corporation. “With this Convertible Note repurchase, we have strengthened the company’s balance sheet as we exit this year, and we will continue to consider such opportunistic steps as we build a stronger company for the future.”

After the transaction, TranSwitch will have approximately $10.0 million in principal amount of its Convertible Notes remaining on its balance sheet. The Company expects to record a $4.5 million gain from the transaction in the fourth quarter of 2008. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of these securities.



Contact:

Robert A. Bosi
Chief Financial Officer
Phone: 203.929.8810 ext. 2465