M-Systems and Analog Devices Collaborate to Deliver NAND-Based Multimedia Data Solutions for Feature Phones.

CANNES, France -- M-Systems' DiskOnChip(R) and Analog Devices SoftFone(R) Chipsets Provide Enhanced Cost Structure, Reliability, Performance and Time-to-Market

M-Systems (Nasdaq:FLSH) and Analog Devices, a global leader in high-performance semiconductors for signal processing applications, today announced a collaboration that allows Analog Devices to deliver cost-effective multi-level cell (MLC) NAND-based flash memory storage solutions to the feature phone market. As part of the collaboration between the companies, Analog Devices has verified full compatibility between the SoftFone family of baseband processors and M-Systems' DiskOnChip products.

Analog Devices is a leading supplier of baseband processors for GSM/GPRS/EDGE cellular phones and its SoftFone chipsets power many well known handset brands. Analog Devices SoftFone chipset allows cellular handset manufacturers to easily customize user features and options entirely in software for a wide range of modules, while incorporating breakthrough advancements in power consumption, cost, and size. The chipset includes the processing speed, interfaces, and analog functionality necessary for a variety of applications such as voice, data, Web browsing and multimedia audio and video.

With the fast proliferation of megapixel cameras into the cellular handset market and as music finds it way onto feature phones, M-Systems' DiskOnChip is a fast and reliable on-board non-volatile memory (NVM) solution for managing the increased storage requirements of these next-generation multimedia-rich handsets.

DiskOnChip delivers a unique combination of low cost, high capacity MLC NAND flash along with unmatched reliability and high performance, delivered through M-Systems' patented x2 technology and TrueFFS(R) flash file system.

"350 million feature phones are slated to reach the market in 2005 and we're seeing a major demand for advanced multimedia applications such as video, MP3 and high-resolution picture storage in the next generation of handsets," said Chris Ambrosio, analyst at Strategy Analytics. "NAND-based flash memory solutions such as DiskOnChip are penetrating the market as cost effective and reliable storage solutions for the feature phone segment."

"Analog Devices SoftFone chipset is an extremely flexible solution that is able to meet a variety of needs and functions. As the demand for multimedia applications on a cellular handset has increased, there is also a need for a fast, cost-effective high-capacity NVM solution," said Mark Martin, product line director, Analog Devices Inc. "The combination of Analog Devices SoftFone chipset and M-Systems' DiskOnChip enables an extremely cost-effective and mature NAND-based solution, thereby eliminating new technology adoption risks and offering designers and vendors extremely fast time-to-market."

"With its SoftFone chipset, Analog Devices is one of the world's leading providers of baseband processors," said David Tolub, general manager of M-Systems' mobile division. "By implementing DiskOnChip technology, Analog Devices customers are getting a proven memory solution right out of the box. M-Systems is dedicated to catering to the memory requirements of the feature phone market and our collaboration with Analog Devices is an important step towards achieving this goal."

About M-Systems' DiskOnChip

DiskOnChip is a range of high-capacity, easy-to-integrate NVM solutions, optimized for the needs of feature-rich, data-centric mobile handsets and PDAs. It is based on NAND flash technology and an on-die ultra-thin controller, to deliver reliability and performance unmatched by any other flash solution.

DiskOnChip is available in a wide range of capacities ranging from 32 megabytes (256Mbits) up to 1 gigabyte (8Gbits). Robust TrueFFS-based software and a NOR-like interface support fast and easy integration. In addition, a built-in XIP boot block enables it to completely replace NOR Flash, further reducing total memory cost.

About Analog Devices

Innovation, performance, and excellence are the cultural pillars on which Analog Devices has built one of the longest standing, highest growth companies within the technology sector. Acknowledged industrywide as the world leader in data conversion and signal conditioning technology, Analog Devices serves over 60,000 customers, representing virtually all types of electronic equipment. Celebrating 40 years as a leading global manufacturer of high-performance integrated circuits used in analog and digital signal processing applications, Analog Devices has headquarters in Norwood, Mass., with design and manufacturing facilities throughout the world. Analog Devices' common stock is listed on the New York Stock Exchange under the ticker "ADI" and is included in the S&P 500 Index.

About M-Systems

M-Systems designs, develops and markets innovative flash data storage solutions for digital consumer electronics markets. M-Systems primarily targets two fast-growing digital consumer electronics markets: the USB (universal serial bus) flash drive market with its DiskOnKey(R) product and the multimedia mobile handset market with its DiskOnChip products. For more information, please contact M-Systems at www.m-systems.com.

Note to Editors: High-resolution photo images of M-Systems' products can be found on the Internet at www.m-systems.com/content/news/photos.asp.

SoftFone is a registered trademark of Analog Devices Inc. All other company and product names mentioned may be trademarks or registered trademarks of their respective holders and are used for identification purposes only.

This press release includes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements, as they are subject to various risks and uncertainties which may cause actual results to vary significantly. These risks include, but are not limited to: the effect of global economic conditions in general and conditions in M-Systems' industry and target markets in particular, shifts in supply and demand, market acceptance, the impact of competitive products and pricing, product development, commercialization and technological difficulties, and capacity and supply constraints including dependence on flash component suppliers; changes in M-Systems' and its customers' inventory levels and inventory valuations; timely product and technology development/upgrades and the ability to manage changes in market conditions as needed; market acceptance of new products and continuing product demand; the impact of competitive products and pricing on M-Systems' and its customers' products and markets; the development, release and sale of new products by strategic suppliers and customers; the development and growth of anticipated markets for M-Systems' and its customers' products; and other risk factors detailed from time to time in M-Systems' filings with the Securities and Exchange Commission. M-Systems assumes no obligation to update the information in this press release and disclaims any obligation to publicly update or revise any such forward-looking statements to reflect any change in its expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements. Reference to M-Systems' Web site above does not constitute incorporation of any of the information thereon into this press release.