M-Systems Introduces Smart DiskOnKey as the Only First-Class Technology Platform for the USB Keychain Storage Category; Company's New Platform Delivers Application and Hardware Solutions to Partners

Business Wire, May 14, 2003

About M-Systems' Smart DiskOnKey Technology Platform

Smart DiskOnKey platform is a unique solution offering tier one brand partners the option to choose from M-Systems' existing product line or to differentiate themselves by designing their own form factor while still using M-Systems' internal architecture.

The award-winning DiskOnKey product line offers trusted quality, reliability and data protection. M-Systems substantiates this claim by submitting the DiskOnKey Classic, DiskOnKey Pro and DiskOnKey Classic 2.0 to rigorous testing for reliability and durability, earning Microsoft's Windows Hardware Quality Testing Lab (WHQL) certification, as well as receiving the certified-USB logo set by the USB-IF.

Smart DiskOnKey platform offers storage capacities ranging from 16MB to 1GB with the flexibility to support applications directly from the device.

Smart DiskOnKey is supported by numerous development tools, allowing the creation of both HW and SW extensions of the device beyond simple storage functionality.

It is offered globally, through major partners including IBM, Apple, Compaq, Fujifilm, Iomega, Verbatim and others.

About M-Systems

M-Systems is a leader and innovator of flash-based data storage products known as flash disks. M-Systems' flash disks provide the functionality of a mechanical hard drive in a silicon chip. M-Systems' products are based on its patented TrueFFS(R) technology and target applications in a vast array of markets, including connected devices, mobile and telecom.

M-Systems' products include the DiskOnChip(R), DiskOnKey(R) and Fast Flash Disk (FFD(TM)) product families. For more information, contact M-Systems at www.m-sys.com.

NOTE: This news release includes forward-looking statements as defined in the private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward- looking statements, as they are subject to various risks and uncertainties which may cause actual results to vary significantly. These risks include, but are not limited to, risks related to: the effect of global economic conditions in general and conditions in the company's industry and target markets in particular, shifts in supply and demand, market acceptance, the impact of competitive products and pricing, product development, commercialization and technological difficulties, and capacity and supply constraints including dependence on flash component suppliers; changes in the company's and its customers' inventory levels; timely product and technology development/upgrades and the ability to manage changes in market conditions as needed; market acceptance of new products and continuing product demand; the impact of competitive products and pricing on the company's and its customers' products and markets; development, release and sales of new products by strategic suppliers and customers; development and growth of anticipated markets for the company's and its customers' products; and other risk factors detailed in the company's most recent annual report and/or in any of its other filings with the Securities and Exchange Commission. The company assumes no obligation to update the information in this release. Reference to the company's Web site above does not constitute incorporation of any of the information thereon into this news release.