Microelectronica's M.MAR(R) TEMD Smart Card Obtains CNI Security Certification; The World's First Card to Have Obtained This Security Certification.

MADRID, Spain -- msystems(TM) (Nasdaq:FLSH), a leader in smart personal storage, today announced that Microelectronica, a subsidiary company specializing in the development and manufacture of smart cards, operating systems and applications for smart cards, has received certification by Spain's Centro Nacional de Inteligencia (CNI) for its M.MAR(R) TEMD (Electronic Card for the Ministry of Defense) product. As a result, this card, developed by Microelectronica for use in environments and on applications with special security requirements, is the first of its kind to receive this certification from Spain's National Cryptographic Center (CCN) for high security applications.

With the accreditation, Microelectronica is able to provide cards which comply with high security standards for the generation of signature creation data, the creation of qualified electronic signatures and enciphering data.

Development of the TEMD is a part of the activities defined within the context of the Ministry of Defense Information and Telecommunications Systems Master Plan. Recently the TEMD card has begun to be marketed outside the Ministry of Defense for use by Public Authorities and private businesses.

The digital signature generated by this Secure Signature-Creation Device has the same legal validity as a handwritten signature according to the Spanish law of digital signature (Law 59/2003). The TEMD card is framed within a range of M.MAR PKI high security cryptographic solutions and is certified as a Secure Signature Creation Device level EAL4+. The main applications of the M.MAR TEMD card notably include the secure storage of data, access to equipment, Windows logon, execution of secure electronic transactions, creation of the Recognized Electronic Signature (RES), and its encoding, decoding and verification.

The TEMD card supports public key algorithms -RSA 1024 and 2048 bits-, symmetric key -3DES, AES- and Hash -SHA1, SHA256 and MD5- and complies with the protection profile defined in CWA 14169 -type 3.

"This certification represents our ongoing commitment to Microelectronica's traditional security and smart card markets," said Simone Cavallo, general manager of msystems' mobile network operators (MNO) division. "Although issued in Spain, this Common Criteria certification is a well known, globally-recognized rule for security certifications. With CCN's certification under the Mutual Recognition Arrangement, our M.MAR TEMD product is expected to be recognized worldwide as a secured smart card."

"Nowadays, many countries are starting national electronic ID projects," continued Cavallo. "Many governments are moving to provide their citizens with smart cards like M.MAR TEMD for authentication, electronic signature, and a platform for other applications like drivers license, health card, social security, etc. The certification awarded to our M.MAR TEMD is typically a mandatory requirement for these types of projects. Considering the objective to provide people with electronic identification, the potential of this market may be in the millions."

About msystems

msystems has been transforming raw flash material into smarter storage solutions since 1989. From embedded flash drives deployed in millions of mobile handsets to U3 USB smart drives designed for leading global brands, msystems creates, develops, manufactures and markets smart personal storage solutions for a myriad of applications targeting high growth markets. msystems' product lines include:

--mDrive (formerly DiskOnKey(R)) U3 USB smart drives for personal, portable computing

--mDOC embedded flash drives for mobile handsets and consumer electronics devices

--mSIM MegaSIM(R) series high-density SIM cards and mSIM M.MAR(R) series SIM cards and highly secure cards (available both from msystems and its subsidiary Microelectronica)

--mCard, high-quality memory cards for mobile handsets and digital cameras

--mTrust (formerly Xkey(R)) end-to-end enterprise access, control and management solution for USB flash drives and other removable media

--mSSD (formerly FFD(TM)) rugged solid state disks for mission-critical applications

--mModule (formerly DiskOnChip(R) modular family) modular flash storage for embedded systems

--mSafe (formerly SuperMAP(R) family) secure hardware and software crypto cores

More information is available online at www.m-systems.com. msystems. made smarter.

All company and product names mentioned may be trademarks or registered trademarks of their respective holders and are used for identification purposes only. msystems is registered as M-Systems Flash Disk Pioneers, Ltd.

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 msystems' 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 msystems' 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 msystems' 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 msystems' and its customers' products; and other risk factors detailed from time to time in msystems' filings with the Securities and Exchange Commission. msystems 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 msystems' website above does not constitute incorporation of any of the information thereon into this press release.