New Flash Disk Standard for Embedded Single Board Computers Created by Industry Leaders Advantech, M-Systems and PQI.

Business Editors/High-Tech Writers

TAIPEI, Taiwan--(BUSINESS WIRE)--Oct. 22, 2003

The High Performance of USB 2.0 Standardized for Widespread Adoption

within the Industry

Advantech, M-Systems (Nasdaq:FLSH) and PQI today announced the creation of a new USB 2.0-based flash disk standard for embedded single board computers (SBCs).

The advantages of the high-speed performance of the USB 2.0 bus are currently used for a wide set of applications. Well known and highly successful is the key-chain flash disk drive used for personal, portable storage devices which plug into the USB port.

The embedded world is now moving to take advantage of the USB bus for flash storage as well. Internal USB 2.0 flash disks, which have been designed for embedded applications, are now available.

In order to assist quick and smooth penetration of an internal USB based storage device, Advantech, PQI and M-Systems have agreed on a world-wide industry standard connector and form factors for the Single Board Computer (SBC) market and eventually for mother board manufactures.

The new Embedded USB standard connector was carefully built to enable board manufactures to design an optimal provision for internal USB flash disks. Both horizontal and vertical form factors were defined to take into consideration the wide variety of needs of the single board computer market. Factors such as the need for ruggedness and optimal space usage, and a variety of capacities were taken into account.

"The new standard is a big step towards the fast adoption of USB in the SBC market. It reduces the design cost and minimizes the risk by securing second source for current and future products," said K.C. Liu, CEO, Advantech. "It is a win-win situation for all parties involved in the standard definition and particularly good news for the embedded SBC market."

The embedded market is currently suffering from the performance limitation imposed by the IDE and CompactFlash-based flash disks. The market now requires higher performance and higher capacity to support larger OSs, heavier, GUI-based applications, a wide variety of installed applications and local data storage.

"The ease and comfort of adopting internal USB flash disks opens up the opportunities for embedded applications, which can now enjoy the high speed USB 2.0 performance. With M-Systems' new USB-based uDiskOnChip, which leverages the proven TrueFFS flash file system for maximum reliability and enables security enabling functions, we expect an expansion of the total available market for M-Systems DiskOnChip products," said David Tolub vice president and co-manager of M-Systems' DiskOnChip business unit.

"While the legacy IDE bus frequently cannot deliver to the requirements of today, embedded systems designers are looking to USB 2.0 as the next breakthrough in embedded flash storage," said Jance Lu, chairman, PQI. "PQI's USB DiskOnModule is therefore expanding our traditional offering to the market."

With the new world-wide standard for embedded USB flash products defined and jointly promoted by Advantech, PQI and M-Systems, the companies expect greater market focus to be on product merits rather than on standards.

About Advantech

Aiming to improve peoples' quality of life in the Internet Age, Advantech is positioned at the forefront of ePlatform Services. We tailor our products and services in order to deliver fast time-to-market, time-to-revenue, and time-to-service solutions. In satisfying the needs of our customers, we help create products and solutions which make life easier, safer, and simpler.

About PQI

Power Quotient International had created its own brand name "PQI" since its establishment in 1987 and marked it through its complex channels worldwide via its subsidiaries in the United States, The Netherlands, Hong Kong and Mainland China. With these resources, PQI reacts to the industry situation rapidly and markets its products accordingly and maintains its market-leading position worldwide with a future vision of becoming "World Class IC Storage Specialists." PQI's flash cards, DOM and USB Card Readers, through solid and diligent product management, have become brand name products throughout the world.

About M-Systems

M-Systems (Nasdaq:FLSH) is a leader and innovator of flash-based data storage products known as flash disks. M-Systems' flash disks provide the functionality of a mechanical hard drive in a silicon chip. M-Systems' products are based on its patented TrueFFS(R) technology, and target applications in a vast array of markets, including connected devices, mobile and telecom. M-Systems' products include the DiskOnChip(R), DiskOnKey(R) and Fast Flash Disk (FFD(TM)) product families. For more information, contact M-Systems at www.m-sys.com.

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

Note to Editors: All 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, risks related to: the effect of global economic conditions in general and conditions in the company's 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 the Company's and its customers' inventory levels; 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 the company's and its customers' products and markets; development, release and sales of new products by strategic suppliers and customers; development and growth of anticipated markets for the company's and its customers' products; and other risk factors detailed in the Company's most recent annual report and/or in any of its other filings with the Securities and Exchange Commission. The company assumes no obligation to update the Information in this release. Reference to the company's Web site above does not constitute incorporation of any of the information thereon into this press release.