msystems' Security IP Selected by National Semiconductor for New Generation Secured Processor for Automotive Applications.

SUNNYVALE, Calif. -- msystems (Nasdaq:FLSH), a leader in smart personal storage, today announced that it has entered into an agreement with National Semiconductor Corporation, a high-performance analog company.

Under the terms of the agreement, National will enhance its product offerings for the automotive market by integrating msystems' mSafe(TM) SuperMAP(R)-III cryptographic coprocessors within a secure controller system for automotive applications.

msystems' mSafe SuperMAP family of cryptographic cores implements sophisticated public key cryptography such as RSA and Elliptic Curve, as well as conventional data encryption algorithms. These patented, state-of-the-art software and hardware-based cores are setting attack counter measures standards amongst the highest in the secure-chip industry, while maintaining a high level of performance and power consumption levels.

"We want to provide our automotive customers with the highest security level available, and we have chosen msystems' cores due to their silicon-proven experience," said Wolfgang Hoeld, engineering director, Cores Development Group at National Semiconductor. "With its mSafe technology and excellent support, msystems offers highly secured products that have passed all levels of certification."

"We are excited about this opportunity to work with National, a leading supplier of high-performance analog solutions," said Noam Kedem, vice president of marketing, msystems. "Automotive products today are extremely sophisticated, mission critical, and prone to security hazards of various kinds. By using mSafe, National is able to minimize its risk and reduce time-to-silicon with our field proven and smart-card certified technology. mSafe is truly security made smarter."

About msystems

msystems has been transforming raw flash material into smarter storage solutions since 1989. From embedded flash drives deployed in millions of mobile handsets to U3 USB smart drives designed for leading global brands, msystems creates, develops, manufactures and markets smart personal storage solutions for a myriad of applications targeting high growth markets. msystems' product lines include:

--mDrive (formerly DiskOnKey(R)) U3 USB smart drives for personal, portable computing

--mDOC embedded flash drives for mobile handsets and consumer electronics devices

--mSIM MegaSIM(R) series high-density SIM cards and mSIM M.MAR(R) series SIM cards and highly secure cards (available both from msystems and its subsidiary Microelectronica)

--mCard, high-quality memory cards for mobile handsets and digital cameras

--mTrust (formerly Xkey(R)) end-to-end enterprise access, control and management solution for USB flash drives and other removable media 

--mSSD (formerly FFD(TM)) rugged solid state disks for mission-critical applications

--mModule (formerly DiskOnChip(R) modular family) modular flash storage for embedded systems 

--mSafe (formerly SuperMAP(R) family) secure hardware and software crypto cores

More information is available online at www.m-systems.com. msystems. made smarter.

All company and product names mentioned may be trademarks or registered trademarks of their respective holders and are used for identification purposes only. msystems is incorporated as M-Systems Flash Disk Pioneers Ltd.

This press release includes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements, as they are subject to various risks and uncertainties which may cause actual results to vary significantly. These risks include, but are not limited to: the effect of global economic conditions in general and conditions in M-Systems' industry and target markets in particular, shifts in supply and demand, market acceptance, the impact of competitive products and pricing, product development, commercialization and technological difficulties, and capacity and supply constraints including dependence on flash component suppliers; changes in M-Systems' and its customers' inventory levels and inventory valuations; timely product and technology development/upgrades and the ability to manage changes in market conditions as needed; market acceptance of new products and continuing product demand; the impact of competitive products and pricing on msystems' and its customers' products and markets; the development, release and sale of new products by strategic suppliers and customers; the development and growth of anticipated markets for M-Systems' and its customers' products; and other risk factors detailed from time to time in M-Systems' filings with the Securities and Exchange Commission. M-Systems assumes no obligation to update the information in this press release and disclaims any obligation to publicly update or revise any such forward-looking statements to reflect any change in its expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements. Reference to M-Systems' website above does not constitute incorporation of any of the information thereon into this press release.