SanDisk to Ship Units of Its First ''U3 Smart'' Flash Drive That Creates a Portable Secure Personal Workspace; U3-Powered SanDisk Cruzer Micro USB Smart Drive Will Be Distributed to U.S. Retailers in October.

HUNTINGTON BEACH, Calif. -- SanDisk(R) Corporation (NASDAQ:SNDK) today introduced its first USB smart drive using U3(TM) technology, a powerful new platform that enables users to store and manage their "personal workspace" -- including files, programs, passwords and settings -- on a tiny device the size of a pack of gum. The announcement was made at DEMOfall, where SanDisk's first U3 production units were demonstrated. The event at the Hyatt Huntington Beach is showcasing 70 of the world's most promising new technologies.

SanDisk Cruzer(R) Micro smart drives will offer a private, securely protected experience on any PC with Microsoft Windows XP or 2000 without leaving the user's personal information on the host machine at the end of a session when the drive is removed. These smart drives will be able to launch a variety of U3-compatible (called "U3 smart") software programs, including anti-virus, security, communications, audio, video, gaming and photo-editing, to name a few.

"U3 technology provides a new dimension in personal mobility," said Yoram Cedar, SanDisk's senior vice president of engineering and the emerging markets business unit. "Now, anyone who moves between different locations and PCs can carry their personal files and programs, in a pocket or purse, and work with them in a highly protected environment," he said. "SanDisk's U3-powered smart drives also provide private computing on any PC, whether the user is at home, in a hotel or at an Internet cafe."

Private computing, said Cedar, means that after a user disconnects the U3 smart Cruzer Micro from a computer, no personal data is left behind. For example, with a U3 smart Internet browser, cookies are stored on the Cruzer Micro smart drive instead of on the computer.

Cruzer Micro capacities are large enough to accommodate numerous U3 smart software programs as well as large files such as music, digital images, charts, graphics presentations and word documents, said Wes Brewer, SanDisk vice president of consumer products marketing. "We think that the U3 platform will have wide appeal to users of all kinds, from businesspeople to soccer moms," he said. "You gain an extraordinary level of freedom and productivity when you can carry your programs and content together, on a single U3 smart drive, and access them on any PC." The U3 smart drives, he added, create a viable alternative to traveling with laptops or PDAs.

SanDisk Cruzer Micro smart drives with U3 technology, which are identified by the U3 smart logo on the product as well as on the package, will be available from most U.S. retailers in October in capacities of 512 megabytes and 1 gigabyte(1). Suggested retail prices are $54.99 and $99.99, respectively, and the devices will be sold in markets outside the U.S. later this year and in the first quarter of 2006.

The first SanDisk Cruzer Micro smart drives will be shipped with two pre-installed U3-compatible programs. One is a U3-smart version of CruzerSync(TM), which synchronizes the user's Outlook email, attachments, calendar, contacts and personal documents -- such as word, image, audio and video files -- on the device. It allows users to edit and send and receive emails from any PC even if Outlook is not pre-installed on it. And, with a single click, CruzerSync can do a full restore of the user's mailbox and personal data to a brand new computer. CruzerSync was created by Dmailer, a French-based company.

The second program is SignupShield Password Manager, which stores fully encrypted passwords and supports browsers such as Internet Explorer and Mozilla's Firefox. Unlike "simple" password managers, this program saves passwords and related data from registration, log-in and password forms. When a user returns to a recognized site, SignupShield automatically fills out sign-in and password change forms. Also, with a feature called 1-Click Sign-in, a user can make a single click from a list of saved sites and SignupShield visits the site, fills out the password and logs in by submitting the password. SignupShield was developed by Protecteer of Bedford, New Hampshire.

In addition to providing a portable workspace, the U3 platform makes it easy for consumers to link to the U3 Download Central website, where all U3 smart programs produced by independent third-party developers are available. The U3 smart Cruzer Micro also will work as a standard flash memory drive on PCs that run older Microsoft operating systems and on Apple Macintosh computers.

The SanDisk Cruzer Micro smart drive can be controlled through the U3 Launchpad. This is a screen menu that displays all U3-compatible programs installed on the drive and offers functions for consumers to manage their programs. Other benefits of the U3 Launchpad include easy Internet access to U3 smart programs, one-click downloads of programs from U3 Download Central, the ability to easily add and remove programs, and support for English, French, German, Italian, Spanish and Japanese languages.

U3 LLC of Redwood City, Calif. is an independent company that licenses its platform to USB drive manufacturers. U3 has developed an innovative platform to make USB smart drives that host a "personal workspace" -- not only data and files but also software programs, personal user preferences and the means for managing them. U3-powered smart drives transform a PC into a truly personalized computer, quickly, easily and securely, and exit transparently when done. For more information see www.U3.com.

SanDisk is the original inventor of flash storage cards and is the world's largest supplier of flash data storage card products, using its patented, high-density flash memory and controller technology. SanDisk is headquartered in Sunnyvale, Calif., and has operations worldwide, with more than half its sales outside the U.S.

SanDisk's product and executive images can be downloaded from http://www.sandisk.com/corporate/media.asp.

SanDisk's web site/home page address: http://www.sandisk.com.

SanDisk, the SanDisk logo and Cruzer are trademarks of SanDisk Corporation, registered in the United States and other countries. CruzerSync is a trademark of SanDisk Corporation. U3 is a trademark of U3 LLC. Other brand names mentioned herein are for identification purposes only and may be the trademarks of their respective holder (s).

This press release contains certain forward-looking statements, including expectations for new product introductions, applications, markets, and customers that are based on our current expectations and involve numerous risks and uncertainties that may cause these forward-looking statements to be inaccurate. Risks that may cause these forward-looking statements to be inaccurate include among others: market demand for our products may grow more slowly than our expectations, competing products may overtake our products or there may be a slower adoption rate for these products in new markets that we are targeting and the other risks detailed from time-to-time in our Securities and Exchange Commission filings and reports, including, but not limited to, Form 10-K and our quarterly reports on Form 10-Q. We do not intend to update the information contained in this press release.

(1) 1 megabyte (MB) = 1 million bytes; 1 gigabyte (GB) = 1 billion
bytes.