BSQUARE Selected by Infineon Technologies to Port Windows CE 3.0 to New TriCore Processor.

Business Editors/Technology Writers

Embedded Systems Conference 2000

SAN JOSE, Calif.--(BUSINESS WIRE)--Sept. 25, 2000

BSQUARE will bring Windows CE 3.0 to Infineon processor aimed at

automotive, industrial, and communications applications

BSQUARE Corporation (Nasdaq:BSQR) has signed agreements with Infineon Technologies (NYSE:IFX) and Microsoft to provide software development services to enable the support of Windows(R) CE on the TriCore(TM) Unified processor Core architecture.

The multi-year contract is one of the largest single service contracts awarded to BSQUARE.

"We are honored that Infineon came to BSQUARE for the software expertise on such a significant development project," said Don Whitt, General Manager of BSQUARE Corporation. "The Infineon TriCore technology will be an important factor in the creation of future intelligent devices for multiple business and consumer markets, and we are pleased to provide a foundation with Windows CE 3.0 for their success. We look forward to working with Infineon over the next few years."

"Adding Windows CE 3.0 to the portfolio of operating systems that run on TriCore-based embedded solutions is an important component of our business strategy, and we are pleased to work with BSQUARE to achieve this in the fastest time frame possible," stated Tony Webster, senior vice president and general manager, Cores and Modules Group, at Infineon Technologies. "BSQUARE's reputation in this industry is unmatched, and we look forward to their expertise in further ensuring the success of the TriCore architecture."

"BSQUARE's in-depth engineering resources, expertise with Windows CE, and commitment to top-quality project management are the reasons it is a premier porting partner with Microsoft," said Bill Veghte, vice president, Embedded and Appliance Platforms Group at Microsoft. "We are confident that working together with Infineon and Microsoft, BSQUARE will yet again deliver a successful project."

BSQUARE's agreement to provide services to port Windows CE 3.0 to the TriCore processor is a key component in BSQUARE's stated strategy of providing comprehensive solutions for the rapidly growing classes of intelligent devices. BSQUARE works with microprocessor vendors such as Infineon to enable Windows CE-compatible processors. Those processors are utilized by BSQUARE's OEM customer segment to power intelligent devices, and BSQUARE provides these OEMs with additional products and services that aid in the development and deployment of devices. Recently BSQUARE extended its reach to new customer segments of service providers and corporate IT departments with new offerings that will be used to now connect these deployed intelligent devices to central servers. In the final stage of providing value to intelligent devices, BSQUARE is providing software applications such as voice over IP for use by the device's eventual end-user. Intelligent devices include web pads, set-top boxes, industrial computers, handheld computers, automotive computers and other mobile, wireless or Internet-enabled devices.

Under the terms of the agreement, BSQUARE will port Windows CE 3.0 to the TriCore(TM) Unified processor Core architecture which will include the Windows CE Platform Builder 3.0 development tools and support services. The project has already been commenced by BSQUARE, which has been closely working with Infineon.

About the TriCore Architecture

The TriCore Unified Processor architecture, which is well suited for applications that previously required separate MCU and DSP components, has already been implemented in processors for industrial computer control, automotive engine controls, and telecommunications. Infineon introduced Version 1.3 of the TriCore Unified Processor, which includes the integrated Memory Management Unit (MMU), that is required to support the Windows CE operating system, in June 2000. Availability of TriCore Unified Processor-based products supporting Windows CE is expected beginning in the third quarter of 2001.

About BSQUARE

BSQUARE (Nasdaq:BSQR) is innovating tomorrow's devices through software solutions for the development of intelligent computing devices. Specializing in the Microsoft Windows family of operating systems, BSQUARE supplies software products and services for the development and use of PC Companions, Internet appliances, industrial automation devices, Windows-based terminals, and other mobile and wireless intelligent devices. From development tools to software infrastructures to end-user applications, the BSQUARE touch is on many embedded Windows-based devices available in the market today. For more information, visit BSQUARE at http://www.bsquare.com or call 888/820-4500.

About Infineon

Infineon Technologies AG, Munich, Germany, offers semiconductor solutions for applications in the wireless and wired communications markets, for the automotive and industrial sectors, for security systems and chip cards as well as memory products. With a global presence, Infineon operates in the US from San Jose, CA, and in the Asia-Pacific region from Singapore. In the fiscal year 1999 (ending September), the company achieved sales of Euro 4.24 billion (US $ 4.51 billion) with about 26,000 employees worldwide. Infineon is listed on the DAX index of the Frankfurt Stock Exchange and on the New York Stock Exchange (ticker symbol: IFX). Further information is available at www.infineon.com.

BSQUARE is a registered trademark of BSQUARE Corporation. All names, product names, and tradenames are trademarks or registered trademarks of their respective holders.

This release contains forward-looking statements relating to our sales that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Factors that could affect BSQUARE's actual results include adverse changes in BSQUARE's relationship with Microsoft, a decline in the market for Windows CE-based intelligent computing devices or the failure of such market to develop as anticipated, delays or announcements of delays by Microsoft of Windows CE product releases, the failure of BSQUARE to attract microprocessor vendors and to secure contracts on sufficiently profitable terms, factors that may affect BSQUARE's ability to complete work under contract, competition and intellectual property risks. A more detailed description of certain factors that could affect actual results include, but are not limited to, those discussed in BSQUARE's Quarterly Report on Form 10-Q, in the section entitled "Risk Factors." Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. BSQUARE undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.