SST and Nanotech Corporation Sign Licensing Agreement for Advanced Flash Memory Solutions Foundry in China's Changzhou Hi-Tech Region to Manufacture and License

0.25 Micron SuperFlash Technology; SST Invests in Nanotech's Series B Round

of Funding



    SUNNYVALE, Calif., Jan. 31 /PRNewswire-FirstCall/ -- SST (Silicon Storage
 Technology, Inc., (Nasdaq:   SSTI)), a leader in flash memory technology, and
 Nanotech Corp., an emerging semiconductor foundry located in Changzhou, China,
 today announced the companies have entered into a multi-faceted investment,
 technology licensing and foundry relationship.  Under terms of the agreement,
 Nanotech, will license SST's 0.25micron self-aligned SuperFlash technology,
 thus providing Nanotech's foundry customers, who are developing programmable
 logic and embedded flash memory products, access to SST's high-performance
 flash memory technology.  Additionally, Nanotech's fabrication facility in the
 Changzhou National Hi-Tech District of the People's Republic of China (PRC)
 will serve as a foundry for SST, manufacturing SST's
     SuperFlash-based products at 0.25 micron process geometry.  This
 relationship significantly increases SST's access to low cost manufacturing
 capacity, enabling the company to continue its dominance in the low-density
 flash market.
     "Along with Shanghai, where we have foundry and technology licensing
 partnerships with Grace Semiconductor, Hua Hong NEC and TSMC, Changzhou is
 emerging as a critical center for microelectronics in China," said Bing Yeh,
 president and CEO of SST.  "We have received strong interest for our
 SuperFlash technology from fabless semiconductor suppliers and system
 designers throughout China, and this new relationship with Nanotech will help
 broaden the availability of our embedded flash memory to meet growing demand."
     As part of the agreement, SST, through its subsidiary SST International,
 has purchased Series B preferred shares of Nanotech Corporation, incorporated
 in Cayman Islands.  Proceeds from the Series B and a new round of Series C
 financing are expected to be used to build a new fabrication facility in
 Changzhou, Jiangsu Province, China.
     "SST's SuperFlash technology represents the gold standard in embedded
 flash memory and we are pleased to be able to provide this industry-leading
 technology to our customers," said James Koo, CEO of Nanotech.  "We thank SST
 for its participation in our Series B funding and look forward to working with
 the company for years to come as we serve the global market with a
 cost-optimized, technically robust foundry facility."
     SST was among the first U.S.-based flash memory companies to implement a
 strategy addressing China's rapidly growing semiconductor industry, and was
 the first embedded flash provider to serve the Chinese design community.  SST
 established its wholly owned subsidiary, SST China, in March 2001 to provide
 embedded flash memory design and manufacturing to Chinese design houses, as
 well as to develop and sell flash memory, flash/RAM ComboMemory and embedded
 controller products in the Chinese marketplace.
 
     Nanotech is an emerging semiconductor foundry with an innovative
 technology that will provide its customers with superior quality, cost and
 time to market.
 
     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 1st Silicon (Malaysia) Sdn. Bhd., Grace Semiconductor
 Manufacturing Corporation (Grace), IBM, Motorola, Inc., National Semiconductor
 Corporation, 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), Toshiba Corporation, Vanguard International Semiconductor
 Corporation and Winbond Electronics Corp.  TSMC offers embedded SuperFlash
 under its trademark Emb-FLASH. 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, 2003 and on Form
 10-Q for the quarter ended March 31, June 30 and September 30, 2004.
 
     For more information about SST and the company's comprehensive list of
 product offerings, please call 1-888/SST-CHIP.  Information can also be
 requested via email to literature@sst.com or through SST's Web site at
 http://www.sst.com .  SST's head office is located at 1171 Sonora Court,
 Sunnyvale, Calif.; telephone:  408-735-9110; fax:  408-735-9036.
 
     NOTE:  The SST logo and SuperFlash are registered trademarks of Silicon
 Storage Technology, Inc. Emb-FLASH is a trademark of TSMC. All other
 trademarks or registered trademarks are the property of their respective
 holders.
 
      For More Information Contact:
 
      Steve Gabriel
      Porter Novelli
      408-369-1500 ext. 27
      steve.gabriel@porternovelli.com
 
      Sohrab Kianian
      Sr. Director, Technology Licensing &
      Business Development
      Silicon Storage Technology, Inc.
      licensing@sst.com
      408-735-9110
 
      Stephen Chan
      VP Finance
      Nanotech Corp.
      schan@nanotech-corp.com
      852-3427-9400 (Hong Kong)
 
 

SOURCE Silicon Storage Technology, Inc.

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