SHELTON, CT – January 4, 2010 – TranSwitch® Corporation (NASDAQ: TXCC), a leading provider of semiconductor solutions for the converging data, video and voice wireline and wireless networks, announced today it has entered into a common stock purchase agreement with Seaside 88, LP, a private investment limited partnership. Under the terms of the agreement, Seaside has committed to purchase up to 1,950,000 TranSwitch common shares. Seaside will purchase 75,000 shares every two weeks for up to 26 purchases. Today, TranSwitch and Seaside closed the first sale of 75,000 shares for gross proceeds of approximately $120,000.

“The expected proceeds from this financing will be used for general corporate purposes, including to assist in the repayment of our debt,” said Mr. Robert A. Bosi, TranSwitch’s Vice-President and CFO. “The structure of the investment announced today provides us with a measured financing. We welcome Seaside’s investment and appreciate the continued support from all our shareholders.”

The price of the shares sold at today’s initial closing was $1.6025 per share, a 12.5% discount to the 10 day volume weighted average trading price (“VWAP”) of the Company’s common stock immediately prior to such closing.

At each subsequent closing, the price of the common stock to be sold will be an amount equal to the lower of (i) the VWAP for the ten consecutive trading days immediately prior to such closing multiplied by 0.875 and (ii) the VWAP for the trading day immediately prior to such closing multiplied by 0.90.

TranSwitch is offering the securities in this agreement pursuant to an effective shelf registration statement. The offering is being made only by means of a prospectus. Copies of the final prospectus supplement and accompanying base prospectus relating to the offering can be obtained from going to the Investors section of the Company’s website at www.transwitch.com and clicking on the SEC filings link or from the U.S. Securities and Exchange Commission’s website at www.sec.gov. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sales of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.