Oberthur Card Systems Unveils GIGAntIC

The World's First Fully Operational USIM Card Combining 128 MB of Secure High-Capacity Flash Memory and High Speed Data Protocols for Multimedia Data Management

Oberthur Card Systems, a global leader in smart card technology, and M-Systems (Nasdaq:FLSH), the leading developer of innovative flash data storage solutions for digital consumer electronics markets, have joined forces to revolutionise the telecommunications sector by announcing Oberthur Card Systems' new GIGAntIC(TM) card, the first fully functional 128Mbyte USIM(1) card empowered by M-Systems' MegaSIM(TM) technology.

With the GIGAntIC(TM), a new generation of USIM cards with unlimited device interoperability has arrived -- one that can offer security and programmability, combined with a totally new level of USIM card performances. Compared to current USIM cards available today in the field, Oberthur's GIGAntIC(TM) increases the memory capacity by one thousand and the communication speed far and beyond any current industry performance.

This augurs a new area for the increasingly ubiquitous smart cards -- as today found in telecommunications, banking, transport and ID segments -- while taking a gigantic step forward in bridging the security, telecoms, multimedia and IT industries.

The new card provides a standardised and easily accessible and transferable memory resource, alleviating the need to design additional card slots in handsets and for the bundling of memory cards that is commonplace in many of today's smart-phones.

Fundamentally, the MegaSIM(TM) empowered GIGAntIC(TM) card's secure large flash memory enables operators to offer considerably more revenue-generating services, with advanced crypto-functionality for digital content protection -- allowing storage and secured access to MP3 files (several albums), Java Games, video clips, pictures and personal settings.

With the advent of this new card, M-Systems and Oberthur Card Systems are once again at the forefront of smart card design for the telecoms market, leveraging an optimal combination of the most innovative and proven technologies.

GIGAntIC cards will be available from Oberthur Card Systems starting with the second half of 2005.

More details on Oberthur Card Systems' new GIGAntIC card and M-Systems' MegaSIM technology will be revealed at the 3GSM Congress in Cannes, in February 2005.

Key Features:

-- Smart card security applications, including DRM, encryption, random number generator, PKI and RSA

-- High speed data protocols including USB and MMC

-- Backwards compatibility to industry standards for end-user convenience

-- Cost and size economies compared to other memory offerings

-- Scalability, transferability, interoperability

-- Programmability

About Oberthur Card Systems

With sales of 430.1 million Euros in 2003, Oberthur Card Systems is one of the world's leading providers of card-based solutions, software and applications including SIM and multi-application smart cards as well as services ranging from consulting to personalization.

Innovative products, security expertise and high quality services ensure Oberthur's strong positioning in its main target markets:

-- Payment & Services: 54% of 2003 revenues. World leader and number one supplier of Visa and MasterCard payment cards.

-- Mobile Communications: 33% of 2003 revenues, with open and interoperable solutions based on Java(TM) technology.

-- Identity: strong positions in ID projects throughout the world.

-- Multimedia: leading position in the Pay-TV market with an end-to-end expertise in the value chain: software development, manufacturing and personalization.

-- Transit: focus in the high-end segment with a microprocessor-based offer.

Close to its customers, the company benefits from an industrial and commercial presence across all five continents. Listed on the Euronext Stock Exchange (ISIN:FR0000124133) since July 2000, Oberthur Card Systems is a subsidiary of the Francois-Charles Oberthur Group. For more information, visit www.oberthurcs.com.

About M-Systems' MegaSIM Technology

M-Systems' MegaSIM(TM) technology provides the foundation for a universal subscriber identity module card that combines high capacity flash-based storage -- with densities reaching 128 Megabytes -- and advanced security features to enable a variety of compelling mobile applications. As mobile handsets increase their multimedia capabilities, and service providers begin implementing broadband mobile service, the need for secured, scalable and configurable high capacity storage becomes acute. The MegaSIM chipset will enable USIM card vendors to provide their mobile operator customers with a USIM card enabling a variety of advanced mobile services such as MMS, MP3 and video clips downloading, full PIM functionality, and high resolution picture storage.

NOTE: This press release includes forward-looking statements as defined in the private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements, as they are subject to various risks and uncertainties which may cause actual results to vary significantly. These risks include, but are not limited to, risks related to: the effect of global economic conditions in general and conditions in the Company's industry and target markets in particular, shifts in supply and demand, market acceptance, the impact of competitive products and pricing, product development, commercialization and technological difficulties, and capacity and supply constraints including dependence on flash component suppliers; changes in the Company's and its customers' inventory levels and in inventory valuations; timely product and technology development/upgrades and the ability to manage changes in market conditions as needed; market acceptance of new products and continuing product demand; the impact of competitive products and pricing on the Company's and its customers' products and markets; development, release and sales of new products by strategic suppliers and customers; development and growth of anticipated markets for the Company's and its customers' products; and other risk factors detailed in the Company's most recent annual report and/or in any of its other filings with the Securities and Exchange Commission. All forward-looking statements included in this release are based upon information available to the company as of the date hereof. The Company assumes no obligation to update the Information in this release and disclaims any obligation to publicly update or revise any such forward-looking statements to reflect any change in its expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.. Reference to the Company's website above does not constitute incorporation of any of the information thereon into this press release.

(1) universal subscriber identity module

Contacts

Editorial Contacts for M-Systems:
Harvard Public Relations
Stephen Gaynor/Lindsey Brookes, +44 (0)208 759 0005
Msystems@harvard.co.uk
or
Investor Contacts for M-Systems:
KCSA Worldwide
Jeff Corbin, 212-896-1214
jcorbin@kcsa.com
or
Lee Roth, 212-896-1209
lroth@kcsa.com
or
Oberthur Card Systems
Stephanie CAU, +33 (1) 47 85 56 57
s.cau@oberthurcs.com
or
EuroRSCG
Odile Rebattet, +33 (1) 58 47 95 06
Odile.rebattet@eurorscg.com
or
Marie-Carole de Groc, +33 (1) 58 47 95 07
marie-carole.de-groc@euroscg.com

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