SI Diamond wins three contracts for commercialization of Russian technology; Defense conversion program channels technology from leading Russian labs into development of new flat panel display.

HOUSTON--(BUSINESS WIRE)--March 23, 1995--SI Diamond Technology Inc. (NASDAQ:SIDT) (PSE, BSE:SDI) Thursday announced that it has received notice of three Cooperative Research and Development Agreements (CRADAs) totaling approximately $933,000 under a U.S. Department of Energy (DOE) program sponsoring technology commercialization projects at leading technical institutes in Russia.

Each project will be administered jointly by SI Diamond and Argonne and Sandia National Laboratories, with the program funding going to the NIS institutes and the national laboratories. Resulting technology will benefit SIDT in the development of its innovative Diamond Field Emission (flat panel) Display (DFED).

The DOE program is administered through the United States Industry Coalition (USIC), a consortium of 70 U.S. companies and universities (including SIDT). USIC works with member companies and DOE national laboratories to further U.S. government policies that support converting the technical capabilities at leading institutes in Russia and other of the Newly Independent States (NIS) of the former Soviet Union to civilian market uses.

The three separate Cooperative Research and Development Agreements (CRADAs), expected to begin in the first quarter of 1995 and continue for up to 14 months, are developing new types of phosphor materials, vacuum sealing technology, and diamond thin films:

-- The vacuum sealing project will be administered with the Glass Laboratory at Sandia and will involve two Russian companies -- VITIM of Krasnoyarsk and Institute Volga of Saratov.

-- The diamond thin film project will pair SI Diamond with Argonne National Laboratories; the two will jointly develop and evaluate new types of diamond thin films with the General Physics Institute in Moscow, Moscow State University, the Institute of Physical and Chemical Research and the Institute of Crystallography.

-- The phosphors project will team SI Diamond with the Phosphor Characterization Facility of the Sandia National Laboratories for the evaluation of phosphors to be supplied by several research institutes and production companies in Russia and the Ukraine.

For over a year, SIDT has been investigating technical capabilities in Russia that could help advance the development of its DFED technology, a new type of flat panel display the company expects will challenge foreign makers of liquid crystal displays, who now dominate this $4.5 billion market.

The flat panel market is expected to grow to $15 billion by the year 2000, according to industry experts, as flat panels are applied in a wide range of devices such as portable computers, consumer electronics, automotive displays and many others.

"The technical talent we have accessed in Russia will help us to get to market faster with a field emission display," according to Dr. Howard Schmidt, chairman and chief executive officer of SI Diamond.

"SIDT is committed to technological excellence, and an important part of our strategy is creating strategic alliances with the best technical teams in the world. We were excited at how much excellent technology we have found in Russia. These three USIC projects get us deeply involved in joint development with some of the most brilliant, well-trained technical minds in the world."

Michael W. Deegan, president and CEO of USIC, agrees with Schmidt's assessment of the technical talent in Russia. He indicated, "The technical skills and business involvement opportunities USIC has been involved with through projects, such as these with SI Diamond, are a clear indication of the near term potential for getting U.S. projects to market quickly with shared investment risks."

"SI Diamond is exemplary in its technical investment strategies for partnering with the Russian technical community to foster stabilization while enhancing product development. USIC, through the DOE's Industrial Partnering Program, is pleased to be working with SI Diamond and the Newly Independent States of the former Soviet Union," Deegan concluded.

SI Diamond's DFED operates on fundamentally different principles from the currently dominant liquid crystal display. As an emissive display, it requires no backlight, and has inherent advantages over LCDs in terms of power consumption, performance, and manufacturability. The DFED uses small patches of a diamond-like material as the emissive cathodes which illuminate phosphors and create the tiny dots ("pixels") that form the display image.

Houston-based SI Diamond is engaged in the development and commercialization of novel products based on the company's proprietary man-made diamond technologies, including thin film diamond coatings and flat panel displays utilizing a patented diamond technology.

The company has been awarded over 40 Small Business Innovation Research awards since 1989. SI Diamond is traded on the NASDAQ exchange with the symbol SIDT and also on the Pacific and Boston stock exchanges with the symbol SDI. -0-

NOTE: Company address: SI Diamond Technology Inc., 2345 North Blvd., Houston, Texas 77098.

CONTACT: SI Diamond Technology Inc., Houston

Marijane Ensminger, 713/529-9040 (Editors)

or

Tom Laughran, 708/564-5610 (Investor Relations)