Silicon Storage Technology (SST) announces embedded flash technology licensing agreement with Malaysia's 1st Silicon

Agreement Highlights Success of Company's SuperFlash Technology

SUNNYVALE, Calif. July 23, 2003 - SST (Silicon Storage Technology, Inc., NASDAQ: SSTI), a leader in flash memory technology, and 1st Silicon, Malaysia's leading semiconductor foundry, today announced that the two companies have entered into an agreement whereby 1st Silicon will license SST's 0.25µm SuperFlash technology to manufacture the embedded flash products of its foundry customers. The embedded flash is the first of several new technologies 1st Silicon will be adopting in order to differentiate itself from peer foundries and add value to its customers.

The agreement represents an expansion of SST's existing embedded flash licensing program and highlights the success of the company's high-reliability, high-performance SuperFlash technology as the technology-of-choice for embedded applications. To date, SST has more than a dozen worldwide licensees of its SuperFlash technology, including IBM, Motorola, NEC, Samsung and TSMC among others.

Under terms of the agreement, the two companies expect to have SST's SuperFlash technology in pilot production by next spring. This technology, in conjunction with its current offering of logic, mixed-mode, embedded SRAM, ROM and variety of IP, will place 1st Silicon in a competitive position and also enable the company to serve its customers' SoC demands.

"We selected SST's SuperFlash technology because of its high reliability, logic compatibility and low-cost structure. These qualities are essential for our targeted markets which include consumer (smart cards, SIM cards, STB), wireless applications (Bluetooth, cellular and cordless phones), and even some automotive applications," said Dr. W. John Nelson, CEO of 1st Silicon. "By accessing this well-proven and highly successful technology, we can serve the manufacturing demands of customers worldwide, as well as local design houses here in Malaysia. We look forward to a long-term relationship with SST."

"With more than 1 billion devices shipped based on SST's embedded flash technology by our worldwide licensees, we have seen incredible market acceptance for our SuperFlash technology. Today's agreement with 1st Silicon demonstrates our strong commitment to continue to provide broad availability of our industry-leading SuperFlash technology for embedded applications through leading foundries worldwide," said Bing Yeh, president and CEO of SST.

Yeh concluded, "1st Silicon is a well-established foundry with a reputation for providing cost-effective manufacturing services and a commitment to quality. We have high confidence that 1st Silicon and its foundry customers will benefit greatly from the SuperFlash technology."

About 1st Silicon (Malaysia) Sdn. Bhd.

1st Silicon (1Si) is a dedicated semiconductor foundry founded in 1998 by the Malaysian State of Sarawak. 1Si's 200mm wafer fab has a capacity in excess of 40,000 wafers per month when fully ramped. The Company is in volume production with 0.25µm and 0.18µm digital and mixed-signal CMOS technologies. 1Si's customers include integrated device manufacturers and fabless semiconductor companies from the U.S., Japan, Europe and Asia.

The Company has its headquarters in Kuching, Sarawak, Malaysia, and a U.S. registered subsidiary corporation located in San Jose, California. More information is available on the Company's Web site at www.1si.com.

1Si's world headquarters is located at 1 Silicon Drive, Sama Jaya Free Industrial Zone, 93350 Kuching, Sarawak, Malaysia. The Company can be reached by calling (T) +60 82 354 888 in Malaysia, or by calling US office at (T) +1 408 943 8131.

About SuperFlash Technology

SST's SuperFlash technology is a NOR type, split-gate cell architecture which uses a reliable thick-oxide process with fewer manufacturing steps resulting in a low-cost, nonvolatile memory solution with excellent data retention and higher reliability. The split-gate NOR SuperFlash architecture facilitates a simple and flexible design suitable for high performance, high reliability, small or medium sector size, in- or off-system programming and a variety of densities, all in a single CMOS-compatible technology.

About Silicon Storage Technology, Inc.

Headquartered in Sunnyvale, California, SST designs, manufactures and markets a diversified range of nonvolatile memory solutions, based on proprietary, patented SuperFlash technology, for high volume applications in the digital consumer, networking, wireless communications and Internet computing markets. SST's product families include various densities of high functionality flash memory components, flash mass storage products and flash microcontrollers.

SST also offers its SuperFlash technology for embedded applications through its world-class manufacturing partners and technology licensees including Grace Semiconductor Manufacturing Corporation (GSMC), IBM, Motorola, National Semiconductor, NEC Corporation, Oki Electric Industry Co. Ltd., Samsung Electronics Co. Ltd., SANYO Electric Co., Ltd., Seiko Epson Corp., Shanghai Hua Hong NEC Electronics Co., Ltd., Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), Vanguard International Semiconductor Corporation, and Winbond Electronics. Corp. Further information on SST can be found on the company's Web site at http://www.sst.com.

Forward-Looking Statements

Except for the historical information contained herein, this news release contains forward-looking statements regarding flash memory market conditions, the company's future financial performance, the performance of new products and the company's ability to bring new products to market that involve risks and uncertainties. These risks may include timely development, acceptance and pricing of new products, the terms and conditions associated with licensees' royalty payments, the impact of competitive products and pricing, and general economic conditions as they affect the company's customers, as well as other risks detailed from time to time in the company's SEC reports, including the Annual Report on Form 10-K for the year ended December 31, 2002 and on Form 10-Q for the quarter ended March 31, 2003.

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The SST logo and SuperFlash are registered trademarks of Silicon Storage Technology, Inc. All other trademarks or registered trademarks are the property of their respective holders.