SST and TSMC Collaborate on Development and Licensing of Next-Generation 90nm SuperFlash Technology

Technology Addresses Growing Demand for Embedded Memory; Companies Commemorate 10 years of Strategic Licensing Partnership

SUNNYVALE, Calif. and HSINCHU, Taiwan -- Aug. 21, 2006 -- SST (Silicon Storage Technology, Inc.), a leader in flash memory technology, and TSMC (Taiwan Semiconductor Manufacturing Company) today announced the two companies have signed a new technology development and licensing agreement that will offer the first licensable 90nm embedded flash technology. Under terms of the agreement, TSMC will license SST's next-generation 90nm SuperFlash technology as part of TSMC's embedded flash memory portfolio.

The embedded flash market is experiencing tremendous growth. According to the market research firm WebFeet Research, the value of the embedded flash market is expected to reach $6.7 billion by 2011. This represents a 14.4 percent compounded annual growth rate.

"The popularity of today's consumer and mobile electronics devices has created strong demand for many types of embedded memories," said Alan Niebel, CEO, WebFeet Research. "As these applications continue to increase functionality, the demand for more advanced embedded flash technologies, like SST's 90nm SuperFlash technology, will be at a premium."

SST's advanced 90nm SuperFlash technology addresses the needs of applications, such as 64-bit MCU cores, high-speed ASICs, and multimedia ICs. This high-performance, high reliability technology utilizes a split gate, source-side injection, poly-erase memory cell that is capable of true logic VDD read operation to address the demand for lower power and higher density applications. Samples will be available in 2007. The agreement is the latest between SST and TSMC and marks 10 years of collaboration.

"Our 90nm SuperFlash technology represents a significant extension to our reach in the embedded flash market," said Bing Yeh, president and CEO of SST. "The development of this next-generation memory cell is consistent with our roadmap of scaling the SuperFlash technology to finer process geometries. TSMC has been an invaluable and strategic partner for SST."

"TSMC is committed to provide the foundry industry's most advanced technologies offers to our customers," said Jason Chen, vice president of corporate development at TSMC. "Over the years, TSMC & SST's cooperation in the embedded flash technology area has been well accepted. We believe the advancements to 90nm embedded flash technology will meet the growing requirements for embedded memory business."

About TSMC

TSMC is the world's largest dedicated semiconductor foundry, providing the industry's leading process technology and the foundry industry's largest portfolio of process-proven library, IP, design tools and reference flows. The company operates two advanced 300mm wafer fabs, five eight-inch fabs and one six-inch wafer fab. TSMC also has substantial capacity commitments at its wholly-owned subsidiary, WaferTech and TSMC (Shanghai), and its joint venture fab, SSMC. In early 2001, TSMC became the first IC manufacturer to announce a 90-nm technology alignment program with its customers. TSMC's corporate headquarters are in Hsinchu, Taiwan. For more information about TSMC please see http://www.tsmc.com .

About Silicon Storage Technology, Inc.

Headquartered in Sunnyvale, California, SST designs, manufactures and markets a diversified range of memory and non-memory products for high volume applications in the digital consumer, networking, wireless communications and Internet computing markets. Leveraging its proprietary, patented SuperFlash technology, SST is a leading provider of nonvolatile memory solutions with product families that include various densities of high functionality flash memory components and flash mass storage products. The Company also offers its SuperFlash technology for embedded applications through its broad network of world-class manufacturing partners and technology licensees, including TSMC, which offers it under its trademark Emb-FLASH. SST's non-memory products include NAND controller-based products, smart card ICs, flash microcontroller and radio frequency ICs and modules. Further information on SST can be found on the company's Web site at http://www.sst.com .