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Italian Utility Edison Orders SMES Units for use at STMicroelectronics Chip Manufacturing Plant; American Superconductor and Edison Sign SMES Distribution Agreement.

Business/Technology Editors

WESTBOROUGH, Mass.--(BUSINESS WIRE)--Jan. 24, 2000

American Superconductor (Nasdaq:AMSC) announced today an order for two of its proprietary superconducting magnetic energy storage (SMES) units from Edison, the largest private utility in Italy, and a new distributor for American Superconductor's SMES product line. American Superconductor expects to install the units in the summer of 2000 for Edison at a STMicroelectronics (NYSE:STM) chip manufacturing plant in Agrate, Italy. ST will lease the units from Edison.

The two SMES units for ST are designed to provide protection to critical processes in the ST chip manufacturing facility from momentary sags in voltage that occur on power delivery lines and which can interrupt a chip manufacturing operation for hours. The cost of downtime due to these momentary voltage sags can be very high for chip manufacturers, in terms of damaged product, decreased yield and lowered productivity. Thus, payback periods on this investment can be very attractive in many cases.

&uot;ST is dedicated to continual improvement in productivity, yield and reliability of delivery of products to its customers in its chip fabrication facilities worldwide,&uot; said Dr. Giuseppi Mariani, General Manager of ST's Agrate facility. &uot;Following an in-depth analysis of SMES, we believe that this product can significantly help increase our productivity and reliability by providing protection from voltage sags.&uot;

&uot;The increasing recognition by chip manufacturers of their need for full solutions to power quality problems is growing as competition in the semiconductor industry continues to increase,&uot; said Greg Yurek, American Superconductor's chief executive. &uot;We believe the power quality solution we are providing for ST, which incorporates the latest technology from our D-SMES product line, is the lowest cost, most effective solution on the market today.&uot;

American Superconductor and Edison also announced today the signing of a distribution agreement by which Edison will be a distributor of American Superconductor's SMES products.

&uot;The deregulation of the European power market has created an intensely competitive environment for power sales,&uot; stated Enzo Gatta, Managing Director of Edison Power Sector. &uot;American Superconductor's SMES solutions provide a way for us to strongly differentiate our power offerings from the competition.&uot;

Technical Background

The SMES units to be installed at the ST facility will protect 10 MW of critical processes at the facility from voltage sags up to 55% for times exceeding one second. One of the SMES units will be American Superconductor's standard PQ VR(TM), while the other will be a new offering known as the PQ IVR(TM). The IVR (industrial voltage restorer) is based on new technology developed for the company's D-SMES solution for power grid reliability.

American Superconductor

American Superconductor Corporation, headquartered in Westborough, Mass., was founded in 1987 and is a world leader in developing and manufacturing products utilizing superconducting materials for electric power applications. The company's products, and products sold by electrical equipment manufacturers that incorporate its products, can dramatically increase the capacity and reliability of power delivery networks, significantly reduce the manufacturing costs of electrical equipment such as motors and generators, lower electrical operating costs and conserve resources that are used to produce electric power. For more information, please see www.amsuper.com.

Edison

Edison, the lead company of Montedison's Energy Sector, is Italy's second largest energy producer and is the only domestic corporation with fully integrated operations in the production, transmission and distribution of electricity and natural gas. www.montedisongroup.com

STMicroelectronics

STMicroelectronics (formerly SGS-THOMSON Microelectronics) is a global independent semiconductor company, whose shares are traded on the New York Stock Exchange (NYSE: STM), on the Bourse de Paris and on the Milan Stock Exchange. The Company designs, develops, manufactures and markets a broad range of semiconductor integrated circuits (ICs) and discrete devices used in a wide variety of microelectronics applications, including telecommunications systems, computer systems, consumer products, automotive products and industrial automation and control systems. Further information on ST can be found at: www.st.com.

Certain statements in this release, including statements containing the words &uot;believes,&uot; &uot;anticipates,&uot; &uot;plans,&uot; &uot;expects,&uot; &uot;will&uot; and similar expressions, constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. There are a number of important factors that could cause actual results to differ materially from those indicated by such forward-looking statements. Such factors include the uncertainties that : the company will be able to obtain the anticipated funding from corporate and government contracts; the company will be able to successfully develop and manufacture commercial products; a robust market will develop for the company's products; and the company will secure anticipated orders. Additionally such factors include: the risk that strategic alliances and other contracts may be terminated; the risk that certain technologies utilized by the company will infringe intellectual property rights of others; the competition encountered by the company, including several large Japanese companies; the amount and timing of the company's future cash requirements and the availability of satisfactory financing sources. Reference is made to these and other factors discussed in the &uot;Management's Discussion and Analysis of Financial Condition and Results of Operation&uot; section of the company's periodic reports filed with the Securities and Exchange Commission.
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Publication:Business Wire
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Date:Jan 24, 2000
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