Sst Reaches Settlement Of Lawsuit With Winbond - Company Business and Marketing

EDP Weekly's IT Monitor, Oct 9, 2000

SST (Silicon Storage Technology, Inc.) (Nasdaq:SSTI) has reached a settlement in its lawsuit with Winbond Electronics of Taiwan. The original suit was filed in the U.S. Distryct Court in San Jose, Calif. in July 1998 pursuant to the termination of its SuperFlash technology licensing agreement with Winbond. The settlement agreement also contains binding terms relating to a new license agreement to be entered into between the parties, which upon execution will be deemed effective as of October 1, 2000.

As part of the settlement, Winbond has agreed to a consent judgment and does not contest the validity and appropriateness of SST's termination of the licensing agreement in June 1998. Winbond will also pay past due and ongoing royalties.

Under the new license, Winbond is permitted to pursue the fast growing embedded flash market but is constrained by certain technology limitations and volume reduction for the memory products. In particular, SST's license to Winbond does not include SST-owned intellectual property after 1997. Winbond also will not be permitted to engage third parties for wafer foundry based on SST's technology, and will be allowed to continue foundry sales for a pre-existivg customer only through March 2001.

SST expects that the future royalties from this new licensing agreement will contribute significantly to SST's licensing income, due to Winbond's revenue size in nonvolatile memory and other embedded applications such as speech synthesizers, speech recognition devices, microcontrollers and personal communication devices.

Headquartered in Sunnyvale, California, SST designs, manufactures and markets a range of nonvolatile memory solutions, based on proprietary, patented SuperFlash technology, for high volume applications in the digital consumer, networking, wireless communications and Internet computing markets. SST's product families include high-functionality flash memory components, flash mass storage products and 8-bit microcontrollers with on-chip flash memory.

SST also offers its SuperFlash technology for embedded applications through its world-class manufacturing partners and technology licensees IBM, National Semiconductor, Motorola, Samsung Electronics Co. Ltd., SANYO Electric Co., Ltd., Seiko Epson Corp. and Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC). TSMC offers SuperFlash under its trademark Emb-FLASH.