Saudi Arabia Specifies the 'Smart Optical Card' for Its Planned Ten Million Card National ID Card Program.

Business Editors and Technology Writers

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--June 21, 2001

Drexler Technology Corporation (Nasdaq:DRXR) said that its Smart/Optical(TM) cards will be offered in response to the Government of Saudi Arabia's RFP (request for proposal) calling for a national ID card program utilizing a "Smart Optical Card," which is a card with an optical memory and an IC chip.

The request for proposal includes the following card specifications and requirements:

-- Cards must support the capability to insert an IC chip within the card
("Smart Optical Card") that meets the relevant ISO/IEC 7810 standards.

-- Data capacity of the optical card must be at least 2M bytes with Error
Detection and Error Correction (EDEC) for burst errors.

-- Cards must meet the general characteristics for optical memory cards as
specified in ISO/IEC 11693.

-- Cards must comply with the linear recording methods specified in ISO/IEC
11694 parts 1, 2, 3, and 4.

-- Cards must have ThermaPrint backing to support dye diffusion printing.

-- The contractor must provide the necessary software to produce a unique
personalized embedded hologram (a visible image, laser encoded into the optical
media on the card that is eye-readable under normal office light, permanent,
and unalterable). The hologram should also support the use of covert machine
readable verification by interleaving the digital data version of the hologram
with the visible hologram image.

According to the RFP issued by the Kingdom of Saudi Arabia Ministry of Interior, the intent of this project is to produce ID cards that fulfill exact requirements as to clarity, durability, and life expectancy. Two card types will be required -- differing in security features, lifetime requirements, and quantities. "Secure Cards" with a five-year lifetime (denoted as Type T5) calls for a quantity of 4,500,000 cards, and "Enhanced Security Cards" with a ten-year lifetime (denoted as Type T10) calls for a quantity of 5,500,000 cards. The RFP states that "These cards will be issued by the Ministry of Interior and distributed through its many offices to the citizens and legal residents of the Kingdom of Saudi Arabia."

Although Drexler Technology will be submitting a response to the RFP through one or more Saudi Arabian companies, there is no assurance that the program will proceed or that the bid will be successful. As a matter of corporate policy, the Company will not publicly disclose the status or estimate the period of time required for the potential contract award.

Drexler Technology's chip-ready Smart/Optical(TM) cards already have been selected for the Government of Italy's national ID and social services card and for use as motor vehicle registration cards in the State of Gujarat, India.

Headquartered in Mountain View, Drexler Technology Corporation (www.lasercard.com) develops and manufactures optical data storage products and systems, including LaserCard(R) optical memory cards and chip-ready Smart/Optical(TM) cards. Its wholly owned subsidiary, LaserCard Systems Corporation, makes optical card read/write drives, develops optical card system software, and markets card-related data systems and peripherals. LaserCard(R) optical memory cards are used for "digital governance" applications such as immigration, visas, cargo manifests, motor vehicles, import-duty collection, pay-per-use systems, and ID/access; and for healthcare and other digital read/write wallet-card applications.

Forward-Looking Statements: Certain statements made above relating to plans, objectives, and economic performance go beyond historical information and may provide an indication of future results. To that extent, they are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and each is subject to factors that could cause actual results to differ from those in the forward-looking statement. Such factors are described in the Report on Form 10-K and other documents filed by Drexler Technology Corporation (the "Company") from time to time with the Securities and Exchange Commission. The Company's business plan depends upon the initiation and growth of new programs utilizing the Company's optical memory card products and is subject to adverse economic and technological developments. There is no guarantee that Saudi Arabia, India, or Italy will purchase the Company's products in material quantities.