Exhibit 99.1

FOR ADDITIONAL INFORMATION:

Investor Relations Contact:	Media/Editorial Contact:
Applied Micro Circuits Corporation Scott Dawson	The Ardell Group Angela Edgerton
Phone: (858) 535-4217	Phone: (858) 792-2941
E-Mail: sdawson@amcc.com	E-Mail: angela@ardellgroup.com

Wednesday, January 25, 2006

Company Press Release

APPLIED MICRO CIRCUITS CORPORATION ANNOUNCES

THIRD QUARTER FISCAL 2006 FINANCIAL RESULTS

Selected Q3 Highlights:

• Q3 Net Revenues of $65.2 million and Q3 GAAP Net Loss of $534,000 or $0.00 per share

• Q3 Pro Forma Net Income improved to $4.8 million or $0.02 per share

• Generated cash flow from operations of $13.3 million nearly doubling last quarter’s $6.8 million

• Revenues from our embedded products grew 29% sequentially

• Repurchased and retired 9.5 million shares under our stock buyback program

SUNNYVALE—January 25, 2006—Applied Micro Circuits Corporation [NASDAQ: AMCC] today reported its financial results for the third quarter of fiscal 2006.

Net revenues for the third quarter of fiscal 2006 were $65.2 million compared to the $64.9 million reported in the second quarter of fiscal 2006 and $61.1 million reported in the third quarter of fiscal 2005.

The net loss on a generally accepted accounting principles (GAAP) basis for the third quarter of fiscal 2006 was $534,000 or $0.00 per share, compared with a net loss of $6.4 million or $(0.02) per share for the second quarter of fiscal 2006 and a net loss of $81.9 million or $(0.27) per share for the third quarter of fiscal 2005.

The pro forma net income for the third quarter of fiscal 2006 was $4.8 million or $0.02 per share, compared to the pro forma net income of $4.0 million or $0.01 per share in the second quarter of fiscal 2006 and the pro forma net loss of $4.1 million or $(0.01) per share in the third quarter of fiscal 2005.

Net revenues for the nine months ended December 31, 2005 were $194.9 million compared to $189.6 million reported for the nine months ended December 31, 2004.

The GAAP net loss for the nine months ended December 31, 2005 was $11.2 million or $(0.04) per share, compared to the net loss of $122.0 million or $(0.39) per share for the nine months ended December 31, 2004. The pro forma net income for the nine months ended December 31, 2005 was $11.8 million or $0.04 per share, compared with the pro forma net loss of $6.0 million or $(0.02) per share for the nine months ended December 31, 2004.

“The third quarter was a solid quarter, and we achieved our overall financial and operational goals,” said Kambiz Hooshmand, president and chief executive officer. “This is our fourth consecutive quarter of pro forma operating profitability, and also is our second straight quarter of positive cash flow from operations. While the revenues from storage and communications were down primarily due to product transitions and revenue declines in older products that are not core to our strategy, we saw stellar revenue growth in our Embedded Products business.”

Bob Gargus, chief financial officer commented, “Due to product revenue transitions, our environment for revenue growth remains challenging but nonetheless is improving. We did achieve our pro forma gross margin goals while continuing to bring down operating expenses. Additionally, we acquired 9.5 million shares under our stock buyback program and are entering the fourth quarter with an improved backlog position. Overall, we continue to make progress.”

AMCC reports its financial results in accordance with GAAP and additionally on a non-GAAP basis referred to as pro forma. These pro forma measures are not in accordance with, nor are they a substitute for, GAAP measures and they may not be consistent with the presentation used by other companies. AMCC uses the pro forma financial measures to evaluate and manage the Company’s operations. AMCC is providing this information to investors to allow for the performance of additional financial analysis and because it is consistent with the financial models and estimates published by analysts who follow the Company.

The pro forma results exclude certain items which are required by GAAP such as restructuring charges, amortization and impairment of purchased intangibles, acquired in-process research and development charges, stock-based compensation charges related to acquired companies, litigation settlement costs, and payroll tax on certain stock option exercises. Income taxes are adjusted to an estimated pro forma effective tax rate. See the attached reconciliation of the GAAP net loss to the pro forma net income (loss), which quantifies the amounts excluded from pro forma results.

For More Information

AMCC management will be holding a conference call today, January 25, 2006, at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time to discuss additional details regarding the Company’s performance for the third quarter of fiscal 2006 and to provide guidance for the fourth quarter of fiscal 2006. You may access the conference call via any of the following:

Teleconference:	913-981-4902
Conference ID:	7941147
Web Broadcast:	http://www.amcc.com
Replay:	719-457-0820
	(available for 7 days following the call)

AMCC Overview

AMCC provides the essential building blocks for the processing, moving and storing of information worldwide. The Company blends systems and software expertise with high-performance, high-bandwidth silicon integration to deliver silicon, hardware and software solutions for global wide area networks (WAN), embedded applications such as PowerPC and programmable SOC architectures, storage area networks (SAN), and high-growth storage markets such as Serial ATA (SATA) RAID. AMCC’s corporate headquarters are located in Sunnyvale, California. Sales and engineering offices are located throughout the world. For further information regarding AMCC, please visit our web site at http://www.amcc.com.

This news release contains forward-looking statements, including, but not limited to, statements regarding revenue growth. These forward looking statements are only predictions based on current information and expectations and are subject to certain risks and uncertainties, including, but not limited to, customer demand for the Company’s products, the businesses of the Company’s major customers, reductions, rescheduling or cancellation of orders by the Company’s customers, successful and timely development of products, market acceptance of new products, and general economic conditions. More information about potential factors that could affect the Company’s business and financial results is included in the “Risk Factors” set forth in the Company’s Annual Report on Form 10-K for the year ended March 31, 2005, and the Company’s other filings with the Securities and Exchange Commission. Actual results could differ materially, as a result of such factors, from those set forth in the forward- looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and the Company undertakes no obligation to reuse or update any forward-looking statements to reflect events or circumstances after the issuance of this press release.

-Financial Tables Follow-

APPLIED MICRO CIRCUITS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in thousands)

	Dec 31, 2005		March 31, 2005
	(unaudited)
ASSETS
Current assets:
Cash, cash equivalents and short-term investments	$	350,810	$	423,392
Accounts receivable, net		22,390		28,601
Inventories		20,648		18,014
Other current assets		14,999		51,448
Total current assets		408,847		521,455
Property and equipment, net		38,237		44,461
Other assets		8,269		1,965
Goodwill and purchased intangibles		517,014		534,514
Total assets	$	972,367	$	1,102,395
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	28,268	$	24,016
Other current liabilities		34,290		101,147
Current portion of long-term debt & capital leases		—		34
Total current liabilities		62,558		125,197
Stockholders’ equity		909,809		977,198
Total liabilities and stockholders’ equity	$	972,367	$	1,102,395

APPLIED MICRO CIRCUITS CORPORATION

GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share data)

	Three months ended									Nine months ended
	Dec 31, 2005			Sept 30, 2005			Dec 31, 2004			Dec 31, 2005			Dec 31, 2004
Net revenues	$	65,243		$	64,935		$	61,081		$	194,851		$	189,552
Cost of revenues		30,017			31,093			30,159			91,943			93,180
Gross profit		35,226			33,842			30,922			102,908			96,372
Operating expenses:
Research and development		22,775			23,161			31,411			68,910			94,103
Selling, general and administrative		14,239			14,344			15,887			44,133			45,563
Stock-based compensation:
Research and development		654			674			752			2,024			2,699
Selling, general and administrative		783			783			876			2,351			4,401
Amortization of purchased intangibles		1,107			1,107			1,833			3,481			5,352
Impairment of purchased intangibles		—			—			27,330			—			27,330
Acquired in-process research and development		—			—			—			—			13,400
Restructuring charges		1,339			3,559			8,079			4,898			8,389
Litigation settlement, net		—			—			28,900			—			28,900
Total operating expenses		40,897			43,628			115,068			125,797			230,137
Operating loss		(5,671	)		(9,786	)		(84,146	)		(22,889	)		(133,765	)
Interest and other income, net		4,940			3,537			4,780			11,881			14,591
Loss before income taxes		(731	)		(6,249	)		(79,366	)		(11,008	)		(119,174	)
Income tax expense (benefit)		(197	)		175			2,526			154			2,861
Net loss	$	(534	)	$	(6,424	)	$	(81,892	)	$	(11,162	)	$	(122,035	)
Basic and diluted loss per share:
Loss per share	$	(0.00	)	$	(0.02	)	$	(0.27	)	$	(0.04	)	$	(0.39	)
Shares used in calculating basic and diluted loss per share		297,119			305,476			307,729			302,974			309,792

APPLIED MICRO CIRCUITS CORPORATION

PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share data)

	Three months ended							Nine months ended
	Dec 31, 2005		Sept 30, 2005		Dec 31, 2004			Dec 31, 2005		Dec 31, 2004
Net revenues	$	65,243	$	64,935	$	61,081		$	194,851	$	189,552
Cost of revenues		26,371		25,874		23,761			77,856		72,219
Gross profit		38,872		39,061		37,320			116,995		117,333
Operating expenses:
Research and development		22,774		23,161		31,411			68,909		94,103
Selling, general and administrative		14,239		14,344		15,887			44,133		45,561
Total operating expenses		37,013		37,505		47,298			113,042		139,664
Operating income (loss)		1,859		1,556		(9,978	)		3,953		(22,331	)
Interest and other income, net		4,268		3,537		4,780			11,209		14,591
Income (loss) before income taxes		6,127		5,093		(5,198	)		15,162		(7,740	)
Income tax expense (benefit)		1,348		1,120		(1,144	)		3,335		(1,703	)
Net income (loss)	$	4,779	$	3,973	$	(4,054	)	$	11,827	$	(6,037	)
Diluted income (loss) per share:
Income (loss) per share	$	0.02	$	0.01	$	(0.01	)	$	0.04	$	(0.02	)
Shares used in calculating diluted income (loss) per share		299,049		307,156		307,729			304,521		309,792

The above pro forma statements are based on the Company’s consolidated statements of operations for the periods presented. This pro forma information is not prepared in accordance with generally accepted accounting principles and may not be consistent with the presentation used by other companies. The pro forma operating results are used by the Company’s management to evaluate the operating performance of the Company and are also consistent with the financial models and estimates published by analysts who follow the Company. See the schedule of pro forma adjustments for a reconciliation of the pro forma results to the GAAP basis results.

APPLIED MICRO CIRCUITS CORPORATION

RECONCILIATION OF GAAP NET LOSS TO PRO FORMA NET INCOME (LOSS)

(unaudited)

(in thousands)

	Three months ended									Nine months ended
	Dec 31, 2005			Sept 30, 2005			Dec 31, 2004			Dec 31, 2005			Dec 31, 2004
GAAP net loss	$	(534	)	$	(6,424	)	$	(81,892	)	$	(11,162	)	$	(122,035	)
Adjustments:
Stock-based compensation related to acquired companies		1,458			1,478			1,975			4,443			7,731
Amortization of purchased intangibles		4,732			6,305			7,884			17,500			25,682
Impairment of purchased intangibles		—			—			27,330			—			27,330
Restructuring charges		1,339			3,559			8,079			4,898			8,389
Litigation settlement, net		—			—			28,900			—			28,900
Realized gain on sale of strategic equity investment		(672	)		—			—			(672	)		—
Acquired in-process research and development		—			—			—			—			13,400
Payroll taxes on certain stock option exercises		1			—			—			1			2
Income tax adjustments		(1,545	)		(945	)		3,670			(3,181	)		4,564
Total GAAP to pro forma adjustments		5,313			10,397			77,838			22,989			115,998
Pro forma net income (loss)	$	4,779		$	3,973		$	(4,054	)	$	11,827		$	(6,037	)

APPLIED MICRO CIRCUITS CORPORATION

SCHEDULE OF SELECTED PRO FORMA ADJUSTMENTS

(unaudited)

(in thousands)

The following schedule reconciles selected line items from the GAAP basis statements of operations to the pro forma statements of operations:

	Three months ended								Nine months ended
	Dec 31, 2005			Sept 30, 2005		Dec 31, 2004			Dec 31, 2005			Dec 31, 2004
GROSS PROFIT:
GAAP gross profit	$	35,226		$	33,842	$	30,922		$	102,908		$	96,372
Amortization of purchased intangibles		3,625			5,198		6,051			14,019			20,330
Stock-based compensation related to acquired companies		21			21		347			68			631
Pro forma gross profit	$	38,872		$	39,061	$	37,320		$	116,995		$	117,333
OPERATING EXPENSES:
GAAP operating expenses	$	40,897		$	43,628	$	115,068		$	125,797		$	230,137
Amortization of purchased intangibles		1,107			1,107		1,833			3,481			5,352
Impairment of purchased intangibles		—			—		27,330			—			27,330
Acquired in-process research and development		—			—		—			—			13,400
Stock-based compensation related to acquired companies		1,437			1,457		1,628			4,375			7,100
Restructuring charges		1,339			3,559		8,079			4,898			8,389
Litigation settlement, net		—			—		28,900			—			28,900
Payroll taxes on certain stock option exercises		1			—		—			1			2
Pro forma operating expenses	$	37,013		$	37,505	$	47,298		$	113,042		$	139,664
INTEREST AND OTHER INCOME, NET
GAAP interest and other income, net	$	4,940		$	3,537	$	4,780		$	11,881		$	14,591
Realized gain on sale of strategic equity investments		(672	)		—		—			(672	)		—
Pro forma interest and other income, net	$	4,268		$	3,537	$	4,780		$	11,209		$	14,591
INCOME TAX EXPENSE (BENEFIT):
GAAP income tax expense (benefit)	$	(197	)	$	175	$	2,526		$	154		$	2,861
Income tax adjustments		1,545			945		(3,670	)		3,181			(4,564	)
Pro forma income tax expense (benefit)	$	1,348		$	1,120	$	(1,144	)	$	3,335		$	(1,703	)