SanDisk and Matsushita Announce Major Flash Technology Breakthrough -- Double Density Flash; First Products Employing the New Technology are 300 Megabyte Type III and 150MB Type II PC Cards, and 20MB CompactFlash Cards.

REDWOOD CITY, Calif.--(BUSINESS WIRE)--Nov. 6, 1996--SanDisk Corp. (NASDAQ:SNDK) and Matsushita Electronic Corp. (MEC) today announced that they have developed a revolutionary breakthrough flash technology called Double Density Flash (D2) that doubles the capacity of flash storage products and significantly reduces flash prices.

This Double Density Flash technology was achieved by integrating SanDisk's proprietary flash memory cell and design technology with MEC's 0.5 micron CMOS process technology. MEC has been collaborating with SanDisk on development of flash memory since 1990 and succeeded in production of 4Mbit and 8Mbit in 1992, 16Mbit in 1994 and 32Mbit in 1995. MEC is shipping 100 percent of its flash products to SanDisk.

The announcement of Double Density Flash, sometimes referred to as multi-state or multi-level flash technology, was made today in press conferences held in Redwood City and Osaka, Japan.

The two companies also announced that they have developed a 64Mbit flash chip, the highest density component produced with Double Density Flash technology. MEC will ship the 64Mbit flash chip to SanDisk by the end of this year. Sampling of SanDisk's products employing this chip to key OEM customers will begin in the first quarter of 1997. No significant revenues are expected to be generated from sales of 64Mbit products in the first half of 1997.

The chip works with SanDisk's intelligent controller chip to provide a complete storage system. Only three 64Mbit chips and one controller chip are required to build a 20MB formatted FlashDisk card, the industry standard PC ATA card. In addition, the Double Density Flash will also be employed in the 256Mbit flash memory which both companies are jointly developing.

Flash capacity is essentially doubled because Double Density Flash enables the storage of two bits of data, instead of the usual one bit, in each flash cell while the chip size increases only by approximately 10 per cent to accommodate the extra circuitry needed. The breakthrough has major implications for the flash data storage market and will result in the broader acceptance of flash data storage in many applications.

Both SanDisk and MEC believe that Double Density Flash provides significant competitive advantages in the rapidly growing market for flash data storage devices being used increasingly in PDAs, ruggedized handheld computers, organizers, cellular base stations, pay telephones, digital audio recorders, network routers, patient medical monitors, global positioning systems, transportation, industrial controllers and other products.

As the image storage requirements of digital cameras increase over the next several years, this new market also will benefit from the low cost and high capacity afforded by Double Density Flash.

The development of Double Density Flash results in immediate capacity increases in current flash storage products. SanDisk today announced a 300MB Type III flash storage PC ATA card, a 150MB Type II flash storage PC ATA card and a 20MB CompactFlash card. The industry's top capacity cards (all SanDisk products) had been 175, 85 and 15MB respectively. The 64Mbit-based flash cards will be shown at the COMDEX show in Las Vegas, Nov. 18-22, at the SanDisk booth (218-N, North Hall, Las Vegas Convention Center).

Eli Harari, SanDisk CEO and president, said, "The development of Double Density Flash represents an important technological breakthough for the flash memory industry. The most direct benefits to consumers will be significantly lower cost and higher achievable storage capacities in SanDisk products within the next 12 months.

"It is a great honor for SanDisk to have a development partner as excellent as MEC. Working together, our engineers succeeded in transforming an important concept into truly breakthrough storage products. The challenge over the next several quarters will be to qualify these products, begin production and achieve the yields required to make Double Density Flash a commercial success."

SanDisk and Matsushita have been cooperating for the past six years on the development of Double Density Flash. SanDisk filed its initial patents on the technology in 1988 and has been heavily involved in developing the technology since that time. The resulting 64Mbit chip is believed to be the industry's first Double Density Flash to go into commercial products. Several other flash memory suppliers have been engaged in the development of Double Density Flash for several years and have reported on experimental devices.

Dan Auclair, SanDisk's senior vice president of operations and technology, said, "Double Density Flash represents a new paradigm shift and a radical departure from the way flash storage products previously were designed. This new technology is very complex, requiring highly sophisticated algorithms to achieve reliable operation in virtually any harsh environment. The engineers at Matsushita and SanDisk can be very proud of bringing to fruition the result of years of hard work and close cooperation."

With the advent of Double Density Flash, SanDisk is splitting its product offerings into two distinct product lines -- Double Density Flash products and flash storage devices based on the company's existing 32Mbit flash. Double Density Flash enables the production of storage devices with much higher storage capacities having significantly faster read performance.

These products will be priced 25 to 30 percent lower than SanDisk's current products. Double Density Flash products will initially be targeted to storage applications which are read intensive (read mostly) and require high storage capacity at a low price.

Double Density Flash will initially be specified at relatively slow write speeds but significantly faster read speeds. The write speed will be approximately 1/4 the write speed of SanDisk's current flash products. This is because of the additional time required to program each flash memory cell to one of four distinct states rather than the traditional 0 and 1 states of binary storage flash memory.

Read speed will be approximately 50 percent faster than SanDisk's current products. This is due to concurrent sensing of all four states, a patented SanDisk innovation. Apart from the faster read and slower write, all new SanDisk products employing the Double Density 64Mbit chip will operate at 3.3 or 5.0 volts and will be 100 percent plug and play compatible with SanDisk's existing flash card products.

Nelson Chan, SanDisk's vice president of marketing, explained, "Double Density Flash is targeted specifically at the many applications that require high capacities and low cost in environments where the write speed is not critical. These are typically applications where read speeds are important.

"Examples of such applications are network routers, base stations and the storage of digital maps in global positioning systems. Future generations of SanDisk Double Density Flash technology will be designed to achieve a write performance which will match or exceed the write speed of SanDisk's current products."

He added that, "Double Density Flash allows us to continue offering the highest capacity flash data storage products on the market. The new technology also allows us to reduce the price of flash data storage by 25 to 30 percent and thereby gain wider and more rapid acceptance in existing and emerging market segments."

SanDisk Corp. designs, manufactures and markets industry- standard, solid-state data, image and audio storage products using proprietary, high density flash memory and controller technology. SanDisk has strategic alliances with Seagate Technology, Matsushita Electronic Corp., NEC Corp. and LG Semicon. Seagate holds a 25 percent equity stake in SanDisk. The company is based in Sunnyvale, Calif. -0-

Note to Editors: CompactFlash is a trademark of SanDisk Corp. and has been licensed to the CompactFlash Association (CFA). SanDisk's web site/home page address: http://www.sandisk.com

CONTACT: SanDisk Corp., Sunnyvale

Nelson Chan, 408/542-0456

Bob Goligoski, 408/542-0463