American Superconductor Announces Shipment of HTS Coils for First 1,000 Horsepower Electric Motor.

BOSTON--(BUSINESS WIRE)--April 7, 1999--

Commercial-Scale Prototype Motor Slated for Beta Site by Year End

American Superconductor Corporation (Nasdaq:AMSC) announced today that it has shipped four coils, manufactured from its high temperature superconducting (HTS) wires, to Reliance Electric, a business unit of Rockwell Automation (NYSE:ROK). The coils will serve as the key component in the world's first commercial-scale HTS motor, which will have a 1,000 horsepower output.

"This shipment is a major milestone for our company and for the growth of the new superconductor industry," stated Greg Yurek, American Superconductor's president and CEO. "HTS motors with power outputs over 1,000 horsepower will be much smaller and lighter than conventional copper-wire motors of the same power rating, and they will be more efficient."

According to industry and government reports, the market for industrial electric motors with power rating of 1,000 horsepower and higher is currently $1.3 billion per year worldwide. This is expected to grow to about $2.4 billion over the next 10 years. Motors of these power ratings are used in industrial manufacturing operations and in power plants for driving pumps, fans and compressors. They are also used for ship propulsion. According to U.S. Department of Energy reports, these motors use 25 percent of all electricity produced in the United States.

Yurek added that the company is now manufacturing the HTS wire for the next prototype motor, which will have a power output of 5,000 horsepower. "We have continued to aggressively drive down the manufacturing cost of our HTS wire while continuing to increase its performance significantly. Based on our perspective of the needs for HTS wires in electric power applications over the next few years, we have already implemented plans for doubling our manufacturing capacity to 500,000 meters per year within the next 12 months, on our way to millions of meters per year over the next few years."

The first 1,000 horsepower motor, to be manufactured by Reliance Electric, will be an AC synchronous, air-core design. Four HTS coils will be mounted on the rotor, designed to rotate at 1,800 rpm. Cooling of the HTS rotor coils will be accomplished by a cryo refrigerator, which will also be supplied by American Superconductor.

"This first of a kind HTS motor will undergo extensive testing and evaluation in our laboratory over the next six to nine months," stated Paul T. Gorski, Vice President of Engineering at Rockwell Automation Power Systems group. "At the conclusion of these laboratory tests, we plan to place this motor in an industrial beta site while we manufacture the 5,000 horsepower motor which is being targeted as the commercial entry point for this product."

The 1,000 and 5,000 horsepower motors are being developed under the auspices of a U.S. Department of Energy program known as the Superconductivity Partnership Initiative. This program is a collaborative effort by government and private industry designed to accelerate the introduction of HTS electric power devices to the marketplace. The SPI brings together teams of researchers, manufacturers, systems integrators, and end users to develop and demonstrate a variety of HTS applications, including motors, generators, power cables and transformers.

American Superconductor

American Superconductor Corporation, headquartered in Westborough, Mass., was founded in 1987 and is an industry leader in developing, manufacturing and marketing products utilizing superconducting materials for electric power applications. The company's products are designed to improve power quality, conserve electricity and reduce operating costs for electric utilities and their customers. Products are sold directly or integrated into the advanced electric power equipment of major suppliers to electric utilities and industrial users of power. For more information, please see www.amsuper.com.

Certain statements in this press release, including statements containing the words "believes," "anticipates," "plans," "expects," "will" and similar expressions, constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. There are a number of important factors that could cause the company's actual results to differ materially from those indicated by such forward-looking statements. Such factors include the uncertainties that: the company will be able to obtain the anticipated funding from corporate and government contracts; the company will be able to successfully develop and manufacture commercial products; a robust market will develop for the company's products; and the company will secure anticipated orders. Additionally such factors include: the risk that certain technologies utilized by the company will infringe intellectual property rights of others; the competition encountered by the company, including several large Japanese companies; the amount and timing of the company's future cash requirements and the availability of satisfactory financing sources. Reference is made to these and other factors discussed in the "Management's Discussion and Analysis of Financial Condition and Results of Operation" section of the company's periodic reports filed with the Securities and Exchange Commission.