BSQUARE Optimizes Microsoft Windows CE for use of Matrix 3-D Memory with Next Generation Mobile Devices.

BELLEVUE, Wash. -- Future Windows-CE-based Smart Devices Will Be Ready For New, Ultra-Low-Cost Memory Products From Matrix Semiconductor

BSQUARE (Nasdaq:BSQR), a leading provider of smart device solutions, announced today that it has optimized the Microsoft(R) Windows(R) CE operating system to use Matrix 3-D Memory(R) (3DM) in the next generation of mobile devices.

Matrix 3DM is an inexpensive, high-capacity, write-once, permanent, non-volatile memory and the first product based on Matrix Semiconductor's technology innovations. By designing memory chips in three dimensions, Matrix Semiconductor is uniquely able to maximize the use of silicon and, therefore, achieve extremely low cost for memory products. The core scientific concepts of this semiconductor industry innovation were announced in December of 2001.

The initial market for Matrix 3DM is for publishing digital content (e.g. games, books, music, reference, etc.) on chips and standard memory card formats. With handheld devices and mobile phones adopting memory card slots at a rapidly increasing rate, Matrix Semiconductor offers Matrix 3DM as the portable device's analogue to the PC CD-ROM -- a standards-friendly, high-capacity multimedia delivery medium. Matrix Semiconductor also plans to offer Matrix 3DM as user-programmable blank media.

"BSQUARE became an integral part of the Matrix team as we worked to ensure that Matrix 3-D Memory was ready-to-use within the current mobile device infrastructure," said Dan Steere, vice president of sales and marketing at Matrix Semiconductor. "By working closely with the experts at BSQUARE, we were able to confidently offer Matrix 3DM as a solution for Windows CE-based devices."

"Matrix 3-D Memory is a new and promising technology that will uniquely enable consumer electronics devices to be inexpensive and easy to use," said Tracy Rees, senior vice president of sales, marketing and international operations at BSQUARE. "We are excited to be collaborating with Matrix Semiconductor on such an innovative project."

About BSQUARE

BSQUARE is a leading global provider of software, engineering services and consulting for the smart device market. Since 1994, BSQUARE has provided world-class device makers with the building blocks necessary to design, develop, and test innovative products quickly and cost effectively. A sample of BSQUARE customers includes Motorola, Hewlett-Packard, Texas Instruments, NEC, HTC, Microsoft and others. BSQUARE is one of Microsoft's largest value-added partners worldwide for Windows Embedded software, a Gold-level Systems Integrator of the year and a leading Windows Mobile solutions provider for Smartphone and Pocket PC. BSQUARE is a Texas Instruments-licensed Independent OMAP(TM) (Open Multimedia Application Platform) Technology Center. The company's SDIO Now! technology has been adopted by over 65 top-tier smart device makers. For more information, visit BSQUARE at www.bsquare.com or call 888-820-4500.

About Matrix Semiconductor

Founded in 1998, Matrix Semiconductor, Inc. (Santa Clara, Calif.) has developed the means to create three-dimensional semiconductors using standard manufacturing techniques and materials. By optimizing use of a semiconductor wafer's area -- building "up" rather than "out" -- Matrix's 3-D technology produces highly dense chips at much lower costs than existing technologies. Matrix's first product, Matrix 3-D Memory(R) (3DM), is a low cost, high density, non-volatile memory compatible with existing standards and targeted for use in millions of portable electronic devices. More information is available at http://www.matrixsemi.com.