Power Paper Announces Availability of First Battery-Assisted UHF RFID Chips.

Business Editors/High-Tech Writers

TEL AVIV, ISRAEL & BURR RIDGE, ILLINOIS--(BUSINESS WIRE)--March 9, 2004

Power Paper Ltd.:

    High performance chips from EM Microelectronic and iPico to be
 used in PowerID(TM) smart label system, developed by Power Paper and
  Graphic Solutions, International; System provides greatly improved
   reading distance of up to 10 meters for supply chain management,
                 transport and logistics applications

Power Paper Ltd., a leading provider of thin and flexible micro-power source technology and devices, and Graphic Solutions, International, a global ISO QS9000-Certified custom print house specializing in printed circuitry and RFID antennas, announced today the availability of two new UHF-based Read-Only and Read/Write transponder ICs for battery-assisted Radio Frequency Identification (RFID) smart labels.

The ICs will be available in the PowerID(TM) System, a high performance, low-cost, turnkey RFID label system that vastly improves the reliability of remote monitoring, processing, and transmitting data in the supply chain. The PowerID(TM) System, which will be introduced via demonstrations and pilots in the coming quarter, was jointly developed by Power Paper and Graphic Solutions, International.

The new integrated circuits utilized in the PowerID(TM) System are powered by the thin and flexible Power Paper battery and transmit data back to a reader by means of modulated backscatter. The ICs implement the iP-X(TM) free running over-the-air protocol, a robust and fast anti-collision protocol. The chips are frequency independent and can be used for RF coupled applications from 300 MHz to 2.45 GHz. The ICs were designed by EM Microelectronic, the world's number one manufacturer of RFID ICs, and iPico, a leading developer of high performance UHF and Dual Frequency RFID technologies. These custom chips have the same air interface as the standard EM4222 UHF chips sold by EM Microelectronic.

The PowerID(TM) System contains UHF-based battery-assisted backscatter labels, readers and system software that integrates into and complements existing enterprise software. PowerID(TM) provides Read-Only and Read/Write ranges that are far superior to existing RFID systems. PowerID(TM) is compatible with EM4x22 series and compliant with EPC coding standard. Not only does it guarantees greater accuracy and reliability, but it can also read simultaneous multiple labels in the toughest of RF environments. PowerID(TM) also solves the problem of reading labels set at different angles and sandwiched between crates.

"With the PowerID(TM) System using battery-assisted RFID ICs, we achieve a reliability level and reading distances far beyond those attained by conventional, standard passive UHF devices," said Shalom Daskal, CEO of Power Paper. "We have already received a very warm initial market acceptance for the PowerID(TM) System."

About Power Paper

Power Paper Ltd., founded in 1997, is a leading provider of micro-power source technology, which addresses a growing trend across a wide range of industries towards ultra-thin and flexible micro-powered devices. Power Paper's patented, thin and flexible energy cells can be adapted to fit the size, thickness and form factors required for the design of any product. These environment-friendly, safe batteries require no metal casing, and can be printed cost-effectively directly onto paper, plastics or other surfaces by standard printing equipment. Licensing and know how agreements allow Power Paper's partners and customers in the United States, Europe and Asia to utilize the company's award-winning technology to produce millions of cells every year. Based on this technology, the company has developed a number of innovative applications for its PowerCosmetics, PowerNovelties, and PowerID product lines, as well as a line of PowerInks for authorized manufacturers. For more information, please visit www.powerpaper.com.

About Graphic Solutions, International

Graphic Solutions, International opened its doors in 1985 and is a National and International, ISO and QS9000-Certified custom print house specializing in pressure sensitive labels, aluminum nameplates and polycarbonate panels. GSI also manufactures electro-luminescent lamps (EL), RFID antennas, printed circuitry and thin flexible batteries for micro-electronics. Its label and polycarbonate overlay constructions are recognized by both UL and CSA standards and its aluminum nameplates meet military requirements. GSI also provides a variety of security label options including security thread. For more information please visit www.graphicsolutionsinc.com

About EM Microelectronic

EM Microelectronic is a semiconductor manufacturer designing and producing ultra low power, low voltage, digital, analog and mixed-signal integrated circuits (ICs) for battery-operated and field-powered devices in consumer, automotive and industrial applications. The company's RFID chips feature read/write, anti-collision, 125kHz, 13.56MHz, UHF and 2.45GHz operation for applications in security and access control, animal ID, logistics and immobilization in automotive. Other EM products include microprocessor supervisors and reset ICs, microcontrollers, smart card ICs, mixed analog and digital gate arrays, ASICs, LCD drivers and displays and optoelectronic ICs. EM also produces (LCD) modules and offers bumping services. EM Microelectronic was founded in 1975 with headquarters in Marin (Neuchatel), Switzerland. It is a company of The Swatch Group AG (VTX: UHR), the world's largest manufacturer of finished watches. Additional company and product information is available at www.emmicroelectronic.com.

About iPico

iPico has developed RFID Integrated Circuits since the early 1990's. Today its UHF, 2.45GHz and Dual Frequency RFID products excel at low cost, long read range, fast multi-read anti-collision and high thru-beam read-speeds of dynamic tag populations. iPico and manufacturers in Europe, Israel, Asia and Australasia produce smart labels and tags based on the iP-X(TM) communication protocol. iPico's low interference readers comply with regulatory requirements in major geographical regions, and allow for multi-reader roll-out in close proximity. The iPico DIMI(TM) middleware platform manages applications in large scale, distributed systems, while the DIMI(TM) data and connectivity architecture allows for effective device management, data switching and data security. iPico's RFID products are used to optimize the management of items, goods, people, animals and processes within the logistic supply chain and other values chains. For more information please visit www.ipico.co.za.