MOSAID Acquires Virtual Silicon

OTTAWA, Ontario – October 11, 2005 – MOSAID Technologies Incorporated (TSX:MSD) today announced it has completed the acquisition of Sunnyvale, California-based Virtual Silicon Technology Inc., an established supplier of semiconductor intellectual property (SIP).
Under the terms of the definitive agreement, MOSAID has acquired Virtual Silicon for the purchase price of US$5.35 million. In addition, a percentage of the business’ operating profit over an 18 month period, ending March 31, 2007, will be paid to current shareholders of Virtual Silicon.

Virtual Silicon, founded in 1997, offers complete SIP solutions including standard cell libraries, basic and application specific I/Os, memory compilers and programmable phase locked loops (PLLs). The Company licenses its silicon proven SIP products to manufacturers and designers of complex system-on-chip (SOC) semiconductors.  Since its inception Virtual Silicon has received over US$40 million in venture capital financing which it has invested in SIP product development, most recently, for the development of its Mobilize™ and PLL products.

Virtual Silicon’s main product line, Mobilize, addresses a growing market requirement for low power consumption in portable electronics to extend battery life.  Mobilize has been recognized by the industry, winning the DesignCon 2004 Design Vision award and the 2005 EDN Innovation Award.  Virtual Silicon has also developed a PLL product line featuring best-in-class power consumption and performance. These versatile PLLs are optimized for applications such as high-speed networking and video that require sophisticated and precise electrically programmable clock synthesis with frequencies of up to 3.0 GHz.

“The acquisition of Virtual Silicon is a major step forward in our strategy to broaden our product offering and extend our reach within the semiconductor industry as a leading SIP supplier,” said Peter Gillingham, Vice President and General Manager of MOSAID’s Intellectual Property Division. “Virtual Silicon’s design expertise, established product lines and sales channels, as well as existing customer and foundry relationships, complement MOSAID’s memory controller business.”

“In its fiscal year ended March 31, 2005, Virtual Silicon generated revenues of approximately US$7 million,” said Richard Boadway, Executive Vice President and Chief Financial Officer. “In terms of guidance for the seven-month balance of MOSAID’s fiscal year 2006, we expect that the Virtual Silicon addition to our SIP business will yield incremental revenues of CDN$4 to $5 million and an operating loss of CDN$1 to $1.5 million, as we complete the roll out of the Mobilize and PLL products. This includes the normal amortization of purchase price amounts.The contribution of Virtual Silicon’s business in our next fiscal year is expected to be accretive.”

MOSAID will continue to operate the Virtual Silicon business in Sunnyvale, California, with its full staff complement of 24 employees.  Existing Virtual Silicon products will continue to be fully supported as the combined teams develop and market new products under the MOSAID brand in the future.

Conference Call and Webcast
Management will hold a conference call and webcast today, Tuesday, October 11, 2005 at 10:00 a.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 Friday, October 21, 2005.                        

To access the rebroadcast, please dial 1-877-289-8525 and enter the passcode 21156977#.

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.