Patriot Scientific's President Issues Newsletter Citing Recent Significant Processor Developments.

Business Editors/High-Tech Writers

SAN DIEGO--(BUSINESS WIRE)--July 25, 2000

In a letter to shareholders of Patriot Scientific Corp. (OTCBB:PTSC) issued this morning, Chairman, President and Chief Executive Officer Jim Lunney said that, in the past several months, Patriot has continued to aggressively position itself for the future.

He cited several important milestones, including engineering advancements, strategic partnering and design wins. Collectively, he said, they underscore and build upon the strength of the company's pioneering microprocessor technology for Java(TM) embedded applications.

"At our annual meeting," Lunney said, "I indicated that the state of the company is strong, and moving in the right direction." Among the highlights of the meeting: passage of a resolution to raise the total number of outstanding shares to 100 million to accommodate access to a new $30 million equity line of credit from Swartz Private Equity LLC. "This larger program, on even more favorable terms, will enable Patriot to have continuing access over the next several years to capital needed for a variety of corporate purposes. The registration statement was declared effective by the SEC in June," the CEO observed.

"It also was my great pleasure to announce at the meeting a major e-commerce design win for our PSC1000 microprocessor. It comes from Universal Payment Processing (Universal), a Milwaukee-based subsidiary of Universal Savings Bank, a member bank of Visa(R) and MasterCard(R), with more than 60,000 business customers nationwide. Universal has selected Patriot's technology to be incorporated into its design solution for a new generation of credit card validation terminals, currently under development," he said.

"This design win is a very strong validation of our business plan. Initially, it will require a very substantial number of PSC1000 microprocessors to be provided to Universal for early applications. In the second phase, Universal is anticipated to license the intellectual property of the chip to develop its own unique `systems-on-a-chip' architecture for its credit validation products. This could result in a continuing and significant revenue stream for Patriot," Lunney continued.

The CEO also said that, "I believe we have reached a point of fundamental reality that is critical to our continued growth: we need strategic partnerships with larger companies that can assist us in the marketing and distribution of our advanced technology. We also need potential acquisitions to fuel continued growth and maximize shareholder value."

In recently related developments, he said, Patriot allied with Synopsys' IP Catalyst program to enable end-system designers to more easily find and integrate high-quality intellectual property. Shortly after that announcement, the company made a second one, indicating Patriot and ProSyst USA had formed a strategic alliance to port its innovative mBedded Server Software to the PSC1000 processor family.

This marriage of technologies is expected to provide a hardware/software solution of substantial importance for the Java embedded marketplace, especially as it relates to home gateways and Internet appliances.

The PSC1000 is the fastest and most powerful microprocessor for embedded Java, and the mBedded server is the leader in server software for embedded systems. The combination of both products will provide customers with a powerful hardware and software platform that will be faster and more cost effective than the competition. "As part of our agreement, we will work closely together to aggressively penetrate the market with our combined solution. Patriot and ProSyst will also cooperate in marketing activities such as Web site cross-linking, lead sharing and referral, collaborative sales calls, and joint demonstrations at trade shows," Lunney noted.

He said ProSyst's mBedded server can be embedded in a variety of network devices, including enabling the networking of mobile devices such as PDAs, cellular phones and Java smart-cards. MBedded servers will also enable networking for the next generation of Jini-compliant household devices, like the refrigerator, oven, microwave, washing machine, climate control unit and security system console.

Lunney said Patriot also recently expanded its marketing efforts by reaching out to targeted customer audiences in five major technology-based cities in a 90-day period, including San Jose, Austin, Costa Mesa, San Francisco and Boston. "We are out there to sell the superior technology and intellectual property of our PSC1000 family of microprocessors, and to share the working examples of it with our targeted audiences. This is no longer a conceptual product, it is a compelling reality.

"In June," he reported, "We appeared at the JavaOne conference, sponsored by Sun Microsystems Inc., in San Francisco. Attendance at this year's event was more than 40,000, up 60% from last year's attendance of 25,000. More than ever, these conferences are focused on the Java embedded systems marketplace, the foremost market target for Patriot. During this year's event, the company had significant discussions with numerous potential customers, as well as initiated discussions with several potential strategic partners who were among this year's exhibitors," Lunney said.

"This month, at the Embedded Systems Conference -- Summer 2000 -- held in Boston, Patriot participated in a two-day conference. As with our appearance in San Francisco, this was another outstanding opportunity to display the versatility of our microprocessor technology," Lunney commented. "We look at this as a very important expansion because it ramps up our East Coast marketing efforts. In every conference, we have one key message: Patriot should power every Java embedded application in our marketplace."

In summation, the CEO said, "I would like to leave you with these other recent, very positive developments:

-- "Later versions of Wind River's VxWorks operating system and Sun's
personalJava(TM) software have been ported over to the PSC1000 adding more
performance and capability.

-- "The .35-micron version of the PSC1000 -- the PSC1000A -- has recently
completed production at our Taiwan partner's foundry, with an initial delivery
of 1,200 chips received right on schedule late last month. Prototype evaluation
has been outstanding, and inclusion of this version into evaluation kits is
underway.

-- "Development continues on a compact version of our evaluation kit

that will include a modular approach, allowing for more rapid

prototyping for prospective customers.

-- "Further development our soft-core version of the PSC1000

technology has resulted in improved performance for customers

wanting to license our technology for "systems on a chip"

applications.

"Consistent with our announcement of the creation of a position focused on business development," Lunney added, "We have been extremely fortunate to retain Dr. Patrick Nunally as a new business development consultant. His initial focus will be on developing value added strategic relationships for Patriot with other companies in the Java embedded marketplace.

"This is a terrific supplement to our senior management team's efforts. Pat's more than 17 years of entrepreneurial experience in semiconductor design and embedded processor design will be of tremendous benefit to us. He has exceptional skills in providing market driven strategies and business planning to new and established companies.

"He also is an internationally recognized technical leader, with a strong understanding of strategic product and technology development. We plan to draw upon all those skills as we move aggressively ahead, especially at first in building strategic partnerships.

"On balance," the CEO concluded, "I believe the state of our company is good, and getting better every day. I invite you to join us for the continuing journey.

Founded in 1987, Patriot Scientific Corp. designs, markets and manufactures: the PSC1000, based on the patented ShBoom technology, a 32-bit microprocessor targeted at Java and Internet appliances as well as the traditional embedded systems markets; high-performance ISDN Basic Rate and Primary Rate products for digital communications and ground penetrating radar. For more information on Patriot Scientific Corp., visit http://www.ptsc.com.

Java and personalJava are registered trademarks of Sun Microsystems Inc.

Safe Harbor statement under the Private Securities Litigation Reform Act of 1995: Statements in this news release looking forward in time involve risks and uncertainties, including the risks associated with the effect of changing economic conditions, trends in the products markets, variations in the company's cash flow, market acceptance risks, technical development risks, seasonality and other risk factors detailed in the company's Securities and Exchange Commission filings.