American Superconductor Wins New U.S. Navy Contract for HTS Motor Design and Optimization.

WESTBOROUGH, Mass. -- * Contract Focuses on Meeting Specifications of the Navy's DDG-1000 Class Destroyers

* Company's 36.5 MW Motor Currently Undergoing Initial Component Testing and Final Assembly at Northrop Grumman Facility within Philadelphia Naval Business Center

American Superconductor Corporation (NASDAQ:AMSC), a leading energy technologies company, announced today it has signed a cost-plus-fee contract valued at $5.3 million with the United States Navy's Naval Sea Systems Command (NAVSEA) for the design and optimization of high temperature superconductor (HTS) ship propulsion motors and power electronic drives. The first $1.9 million increment of funding that has been allotted for this contract will focus on motor, drive and electrical system options that are optimized for possible system integration into later flights of DDG-1000 and CG(X) surface combatant ships. This initial stage of the contract is expected to be completed in the next six months.

American Superconductor is currently performing final assembly and component testing of its 36.5-MW HTS propulsion motor for the Office of Naval Research at a Northrop Grumman Marine Systems facility within the Philadelphia Naval Business Center. The motor weighs approximately 75 tons and is one-half the size and one-third the weight of traditional copper-based propulsion systems. Factory testing is expected to be completed prior to the Navy taking possession of the motor around the end of calendar 2006. The company anticipates that the new contract award will be the first in a series of contracts with the U.S. Navy that, when carried forward, will yield a militarized class standard HTS production propulsion motor suitable for U.S. and allied navy warships.

"This first in what we are confident will be a series of contracts from the United States Navy, will enable us to continue optimizing HTS motors and power electronic drives for use in future surface combatants as well as other classes of naval vessels. It will also strengthen the foundation for adoption of these revolutionary advanced motors in a broad set of commercial ship types," said Greg Yurek, chief executive officer and founder of American Superconductor. "American Superconductor's technology offers significant and compelling benefits over conventional solutions, and we are committed to bringing these benefits to the Navy."

About American Superconductor's HTS Motors

The 36.5-MW HTS motor undergoing factory testing in Philadelphia has the potential to change the way naval warships fight due to the dramatic reductions in size and weight it offers. The motor weighs approximately 75 metric tons and is about one-third the weight and one-half the size of conventional copper-based propulsion motors of the same power and torque rating. This enables Navy ships to carry more fuel and war fighting capabilities as well as expanded crew's quarters. The HTS motor offers a significant reduction in noise, and thus a smaller acoustic signature, compared to current motors. In addition, HTS motors operate with higher fuel efficiency over the entire mission profile of a warship. American Superconductor expects the motor to have lower maintenance costs than their conventional copper and permanent magnet motor counterparts. The substantial advantages offered by HTS ship propulsion motors are expected to be provided at a price equivalent to conventional motors of the same power and torque rating.

About American Superconductor Corporation (NASDAQ:AMSC)

AMSC is the world's principal vendor of high temperature superconductor (HTS) wire and large rotating superconductor machinery, and it is a world-leading supplier of dynamic reactive power grid stabilization products. AMSC's HTS wire and power electronic converters are at the core of a broad range of new electricity transmission and distribution, transportation, medical and industrial processing applications, including dynamic reactive power grid stabilization solutions, large ship propulsion motors and generators, smart, controllable, superconductor power cables and advanced defense systems. The company's products are supported by hundreds of patents and licenses covering technologies fundamental to Revolutionizing the Way the World Uses Electricity[R]. More information is available at www.amsuper.com.

American Superconductor and design, Revolutionizing the Way the World Uses Electricity, AMSC, Powered by AMSC, SuperVAR, D-VAR, DVC, PQ-IVR and PowerModule are trademarks or registered trademarks of American Superconductor Corporation.

Any statements in this release about future expectations, plans and prospects for the Company, including the timing of motor shipments and revenue recognition, the company's ability to secure additional U.S. Navy contracts and other 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 actual results to differ materially from those indicated by such forward-looking statements. Such factors include: uncertainties regarding the Company's ability to obtain anticipated funding from corporate and government contracts, to successfully develop, manufacture and market commercial products, and to secure anticipated orders; the risk that strategic alliances and other contracts may be terminated; 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. 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 most recent quarterly or annual report filed with the Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent the Company's views as of the date of this release. While the Company anticipates that subsequent events and developments may cause the Company's views to change, the Company specifically disclaims any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to the date this press release is issued.