MOSAID Announces First Quarter Results for Fiscal Year 2007

• Revenue Jumps 61% Year-over-Year; Net Income Up 50%
• MOSAID Breaks Into "Top Ten" List of Semiconductor IP (Intellectual Property) Companies

OTTAWA, Ontario – August 24, 2006 – MOSAID Technologies Incorporated (TSX:MSD) today announced financial results for the first quarter of fiscal 2007, ended July 31, 2006.

Revenues for the first quarter of fiscal 2007 were $23.0 million, up 61% from $14.2 million in the first quarter of fiscal 2006. Revenues for the current quarter increased primarily due to the license with PortalPlayer, Inc. Net income for the first quarter rose 50% to $6.7 million or $0.58 per diluted share, from $4.4 million or $0.38 per diluted share in the first quarter of fiscal 2006. Net income for the first quarter was adversely impacted by an unusual income tax expense of $1.0 million.

The Company's cash balance and marketable securities at the end of the first quarter totaled $68.7 million, compared with $71.3 million at the end of the fourth quarter of fiscal 2006. Working capital at the end of the first quarter was $78.1 million, up from $75.4 million at the end of the fourth quarter.

"The Company recorded an excellent first quarter, marked by the important licensing agreement with Infineon, improved bookings from our Semiconductor IP products group, and the revenue from PortalPlayer, which extends our patent reach beyond the DRAM and embedded DRAM markets," said George Cwynar, President and Chief Executive Officer, MOSAID. "Driven by our patent licensing franchise and the increasing traction of our Semiconductor IP group, we are establishing MOSAID as one of the world's premier intellectual property companies."

According to Gartner's annual ranking of companies that derive revenues from both Semiconductor IP circuit designs and patent licenses, in 2005, MOSAID ranked as the world's seventh largest Semiconductor IP company, up from #18 in 2004. (Gartner: Market Share: Semiconductor Intellectual Property Worldwide, 2005, May 2006.)

"We are firmly committed to our goal of balancing continued investment in the Company, to achieve our long-term growth and profitability objectives, with actions that provide direct returns to shareholders," said Richard Boadway, Executive Vice President and Chief Financial Officer, MOSAID. "In fiscal 2006, dividend payments to shareholders totaled $7.5 million and we estimate that, based on the current quarterly dividend of $0.25 per share, we will return approximately $11.0 million to shareholders in fiscal 2007. In addition, through our normal course issuer bid, this year we intend to purchase up to 4% of MOSAID's outstanding common shares."

Operating Highlights

The Intellectual Property Division was highly profitable during the fiscal 2007 first quarter, recording revenue of $19,952,000, with a segment profit of $12,838,000 or 64% of segment revenues. During the quarter, the circuit design products developed by the Semiconductor IP group continued to gain traction with customers. Semiconductor IP bookings in the quarter resulted in the highest backlog since the acquisition of Virtual Silicon Technology, Inc.

As previously guided, results in MOSAID's Systems Division were affected by weaker customer demand and ongoing research and development costs, offset partially by lower labour, materials, and marketing expenses. Systems Division revenues were $3,027,000, with a segment loss of $1,108,000. The Company continues to invest in new product development to maintain and enhance its market position.

The Company also made two senior management appointments. Peter Gillingham, formerly Vice President and General Manager, Intellectual Property Division, was named to the new position of Vice President and Chief Technology Officer. Michael Kaskowitz, an industry veteran with 25 years of technology and management experience in the embedded processing, IP, and electronic design automation industries, was named to the new position of Senior Vice President, Semiconductor IP. Mr. Kaskowitz was formerly President of the VSI Alliance, the leading Semiconductor IP standards body, and before that, General Manager of Mentor Graphics' IP and embedded software divisions.

MOSAID Signs Infineon, Enters Into Litigation with Micron, Builds Patent Portfolio
On June 14, 2006, MOSAID announced the settlement of all patent litigation with Infineon Technologies AG, and that both Infineon and its memory products spin-off, Qimonda AG, had licensed the MOSAID patent portfolio for a six-year term. MOSAID also expanded its patent portfolio with the purchase of 50 patents from Infineon and Qimonda, broadening the Company's licensing reach beyond semiconductor memories into areas such as power management and semiconductor process technology.

On July 25, 2006, Micron Technology, Inc. filed a Complaint for Declaratory Judgment in the Northern District of California, San Jose Division, seeking a declaration of non-infringement and invalidity with respect to 14 of MOSAID's U.S. patents. The following day, MOSAID initiated litigation in the Eastern District of Texas, Marshall Division, against Micron, Powerchip Semiconductor Corporation and ProMOS Technologies for infringement of nine of its U.S. patents. MOSAID claims that Micron, Powerchip and ProMOS have infringed and are infringing MOSAID's patents in the U.S.

At the end of the first quarter, MOSAID's portfolio grew to 654 patents issued or pending, up from 584 at the end of the fourth quarter. Approximately 40% of MOSAID's patents relate to memory technology and 60% to other technology areas. The geographic distribution of the portfolio is 40% in North America, 40% in Asia-Pacific, and 20% in Europe.

MOSAID has 14 companies on notice for patent infringement and is currently in discussions with several of these companies.

Guidance

"I am very confident that we will deliver on our business plan for fiscal 2007," said Mr. Cwynar. "Our patent licensing program continues to deliver excellent results, we are making good progress in the Semiconductor IP product group, and anticipate a recovery in the Systems Division in the second half."

Guidance for the Company's revenues in the second quarter of fiscal 2007 is $20.0 million to $21.0 million and for net earnings is $4.5 million to $5.0 million. Guidance for fiscal 2007 is unchanged, with revenues for fiscal 2007 forecast to range between $83.0 million and $88.0 million, with net earnings between $21.0 million and $23.0 million. The Company anticipates that approximately 80% of fiscal 2007 revenues will be generated by the Intellectual Property Division.

Financial Tables
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Conference Call and Webcast
Management will hold a conference call and webcast on Thursday, August 24, 2006 at 5:00 p.m. (EST). Participants wishing to access the conference call should dial 1-800-814-4941. 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, August 31, 2006. To access the rebroadcast, please dial 1-877-289-8525 and enter the passcode 21196030#.

About MOSAID
MOSAID Technologies Incorporated makes semiconductors better through the development and licensing of intellectual property and the supply of memory test and analysis systems. MOSAID counts many of the world's largest semiconductor companies among its customers. Founded in 1975, MOSAID is based in Ottawa, Ontario, with offices in Santa Clara, California; Newcastle upon Tyne, U.K; and Tokyo, Japan. For more information, visit www.mosaid.com.