MOSAID Announces First Quarter Results for Fiscal Year 2006

OTTAWA, Ontario – August 25, 2005 – MOSAID Technologies Incorporated (TSX:MSD) today announced financial results for the first quarter of fiscal 2006, ended July 31, 2005.

Revenues for the first quarter of fiscal year 2006 were $14,233,000, an increase of 54% over the revenues of $9,255,000 in the first quarter of fiscal year 2005. Net income for the quarter was $4,433,000 or $0.38 per diluted share, compared to a net income of $92,000 or $0.01 per diluted share a year ago.

"We are pleased with our results and operational achievements in the first quarter," said George Cwynar, President and Chief Executive Officer of MOSAID. "Net income was higher than planned, primarily due to reduced litigation activity in the quarter, resulting in lower legal expenses than expected. Organizationally, we increased headcount to further bolster the breadth and strength of our patent licensing team. On the development side, our Systems and Semiconductor IP businesses made significant progress towards release of new products in the second half of this fiscal year. Finally, we continue to be active in selectively investigating acquisition opportunities that would contribute to our strategic plans to grow MOSAID."

"During the quarter, we made our first, ever, quarterly dividend payment to shareholders, totaling approximately $1.4 million," said Richard Boadway, Executive Vice President and Chief Financial Officer. "Our cash balance has continued to grow, to stand at $66.9 million in cash and marketable securities at the end of the quarter. The Company remains committed to our previously announced intent to buy shares under a normal course issuer bid but we have been precluded from doing so, to date."

Operating Highlights

The Intellectual Property Division was highly profitable during the first quarter of fiscal year 2006, recording revenues of $9,288,000, with a segment profit of $5,936,000 or 64% of segment revenues.

Litigation Against Infineon Advances

On July 26 and 28, 2005, United States District Judge Davis issued orders establishing the schedule for the proceedings in MOSAID's Texas patent case against Infineon Technologies. The Court also ordered mediation between the two parties to take place between January 6 and February 24, 2006. The Markman hearing is set to commence on April 6, 2006, and the jury trial is scheduled to begin on October 10, 2006.

On August 4, 2005, MOSAID filed an opposition to Infineon's motion to transfer the Texas case to the Northern District of California.

Within the next week, MOSAID intends to file a motion in the Infineon California case requesting the Court to certify the District Court of New Jersey’s summary judgement ruling as being ready for appeal. If this motion is granted, MOSAID plans to immediately appeal the summary judgement ruling.

SIP Group Collaborates with World Leading Semiconductor Foundry, UMC

During the first quarter, MOSAID's SIP (Semiconductor Intellectual Property) group began to collaborate with UMC to develop comprehensive DDR/DDR2 SDRAM memory controller solutions for UMC's 90nm and 130nm processes. UMC has an extensive customer base of semiconductor companies and has identified their need for DDR/DDR2 SDRAM memory interface and controller SIP. MOSAID's solution for the 90nm UMC process is expected to be available to customers in the Fall of 2005, followed by the 130nm version in early 2006. MOSAID believes it is the only supplier offering a fully integrated memory interface and controller solution, incorporating hard and soft IP.

Systems Division on Track with Next Generation Tester Development

The Systems Division achieved healthy returns on the sale of its MS4205 and MS4205ex test systems in the first quarter of fiscal year 2006, recording revenues of $4,945,000, with a segment profit of $786,000 or 16% of segment revenues. The Division continues to focus the majority of its development efforts on a next generation product, the first in a new line of testers targeting requirements for increased data width and pin count, larger bit-map capacity and more logic test capability. The first model in the new tester line is expected to be available in the second half of fiscal year 2006.

Guidance

Guidance for the Company's revenues in Q2 of fiscal year 2006 is $15.5 to $16.5 million and net earnings of $3.7 to $4.2 million. Revenues for fiscal year 2006 are forecast to range between $58 to $62 million and net earnings between $13 to $15 million. It is expected that approximately 70% of the fiscal 2006 revenues will stem from the Intellectual Property Division.

Financial Tables

Click here to read financial tables

Conference Call and Webcast

Management will hold a conference call and webcast on Thursday, August 25, 2005 at 5:00 p.m. (EST). Participants wishing to access the conference call should dial 1-800-814-4859. The conference call will also be webcast live at www.mosaid.com and www.newswire.ca, and subsequently archived on MOSAID’s web site. A rebroadcast of the conference call will be available until midnight on Thursday, September 1, 2005. To access the rebroadcast, please dial 1-877-289-8525 and enter the passcode 21133524#.

About MOSAID

MOSAID Technologies Incorporated makes memory better through the development and licensing of intellectual property and the supply of memory test and analysis systems to semiconductor manufacturers, foundries and fabless semiconductor companies around the world.

Founded in 1975, MOSAID is based in Ottawa, Ontario, Canada, with offices in Santa Clara, California; Newcastle upon Tyne, U.K; and Tokyo, Japan. For more information, visit the Company’s web site at www.mosaid.com.

Forward Looking Information
This document may contain forward-looking statements relating to the Company’s operations or to the environment in which the Company operates. Such statements are based on current expectations that are subject to a variety of risks and uncertainties that are difficult to predict and/or beyond MOSAID’s control. Actual results may differ materially from those expressed in any forward-looking statements, due to factors such as customer demand and timing of purchasing decisions, product and business mix, competitive products, pricing pressures as well as general economic and industry conditions. MOSAID assumes no obligation to update these forward-looking statements, or to update the reasons why actual results could differ from those reflected in any forward-looking statements. Additional information identifying risks and uncertainties is contained in other public filings with the Ontario Securities Commission.