Mr. Raouf Halim reports

SPECTRA7 ANNOUNCES PRELIMINARY SECOND QUARTER 2023 REVENUE AND SECOND HALF OF 2023 OUTLOOK

Spectra7 Microsystems Inc. has released preliminary unaudited revenue results for the three months ended June 30, 2023, and its outlook for second half of 2023. Unless otherwise indicated, all dollar amounts in this press release are expressed in US dollars.

"We expect to report second quarter revenues of $3.3 million, resulting in record revenue for the first half 2023 of $6.4 million, further building upon our exceptional growth in 2022. Additionally, we expect to report a strong gross margin for the quarter of 63%, which is consistent with a gross margin of 63% in first quarter of 2023.2 While these results demonstrate exciting progress, we believe even more important opportunities lie ahead as our hyperscale data center partners and customers ready for the necessary upgrade to 800G and 1.6TB products needed to support increasingly advanced data intensive applications such as AI and ChatGPT. These technologies are expected to drive a new upgrade cycle in data centers," 1 said Raouf Halim, Chief Executive Officer.

"Our customers are intensifying their test and qualification activities centered around new switches that require 800G and 1.6TB data rate interconnects - a perfect environment for Spectra7's power and cost-efficient Active Copper Cable solutions (ACC) designed specifically to meet top-of-the-rack and short-run connectivity requirements. This build out is expected to result in an estimated $1 billion ACC connectivity market by 2027.3 We continue to expect this process will generate orders from key data center customers in North America and outside the U.S. in late 2023."1

"Spectra7 is currently engaged with one of the major data center operators to deploy Active Copper Cable solutions for their AI clusters. While the data center operator is charting its plan, we are preparing for the upcoming supply needs. We expect that this will drive revenue growth in the coming quarters."1

2H FY 2023 Outlook 1

The Company anticipates revenue for second half of 2023 to be in the range of $5.5 million to $7.0 million. The Company also anticipates maintaining its efficient operating expense structure and non-IFRS operating expenses4 for the 2H 2023 at a range of $4.5 million and $4.9 million (non-IFRS operating expenses for 2H 2022 were $3.9 million).

RSU Grants

The Company announced the grant of such number of RSUs to certain directors of the Company as is equal to C$43,474 divided by the closing price of the common shares on the TSX Venture Exchange on the trading day after publication of the Company's financial statements for the three and six months ended June 30, 2023.

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ABOUT SPECTRA7 MICROSYSTEMS INC.

Spectra7 Microsystems Inc. is a high-performance analog semiconductor company delivering unprecedented bandwidth, speed and resolution to enable disruptive industrial design for leading electronics manufacturers in virtual reality, augmented reality, mixed reality, data centers and other connectivity markets. Spectra7 is based in San Jose, California with a design center in Cork, Ireland and a technical support location in Dongguan, China. For more information, please visit www.spectra7.com.

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