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Lexar's logo. Click here to visit the Lexar website! Lexar, Samsung announce partnership deal!
(Thursday, April 19, 2001 - 14:45 EDT)

Californian flash manufacturer and Korean semiconductor company to cooperate...

Lexar Media Inc. and Samsung Electronics Co. Ltd. have today announced the formation of a partnership with the signing of licensing and supply agreements. Under the terms of the agreements Lexar will provide Samsung with a non-exclusive worldwide license for its patented controller technology; the company will also purchase a 'substantial' portion of its flash memory needs from the Korean semiconductor company. In return, Lexar will receive royalties on the controller technology license, and will be guaranteed an unspecified allocation of flash memory from Samsung on a consignment basis (meaning that Lexar pays for the memory as it uses it, and doesn't pay for memory that is sitting in a warehouse waiting to be used).

The deal looks to be good for both companies - Samsung gaining access to Lexar's speedy controller technology for use in its own flash products, and Lexar gaining a guaranteed supply of flash which it will essentially have instant access to, whilst being 'insulated' from fluctuations in flash pricing that it would otherwise have to contend with.

Dave's Note: The memory business has gotten tight as a drum over the last quarter, with customers like camera companies working down excess inventory bought before the consumer slowdown hit. Competition is incredibly fierce too, so companies like Lexar are looking for every advantage. This relationship with Samsung looks like an effective leveraging of Lexar's controller technology to secure excellent terms for a supply of memory components. - Check out that deal: Samsung will supply large quantities of memory to Lexar on a *consignment* basis! - That means Lexar can have piles of chips sitting on their shelves and doesn't have to pay for them until they actually use them. (!) A great deal for Lexar - 100% availability, and NO inventory costs!

Source: Lexar Media Inc.

Original Source Press Release:

Lexar Media and Samsung Electronics Sign Major Partnership Agreements

FREMONT, Calif., and Seoul, Korea – April 19, 2001 – Samsung Electronics Co., Ltd. (KS: 05930), a world leader in the electronics industry and the leading supplier of memory chips, and Lexar Media, Inc. (NSDQ: LEXR), a leading designer, developer and marketer of award-winning digital film and connectivity products for the digital photography market, announced today that they had signed a landmark licensing agreement.

Under terms of the agreement, Samsung will have a non-exclusive, worldwide, non-transferable, royalty-bearing license for Lexar Media’s patented controller technology. Lexar Media’s controller-based technology will enable Samsung to develop a wide variety of innovative flash-based products that will drive the growth of the flash memory market in the coming years. Samsung will also have the right to purchase Lexar Media’s flash memory controllers for resale and agreed to license its patents pertaining to flash controller technology to Lexar Media.

In addition to the licensing deal, the companies have signed a supply agreement, whereby Lexar Media will purchase a substantial portion of its flash memory needs from Samsung. Samsung, in turn, has guaranteed a certain allocation of flash memory and agreed to provide flash memory to Lexar Media on a consignment basis, insulating Lexar Media from potential fluctuations in pricing and availability.

“Samsung Electronics chose to license Lexar Media’s unparalleled technology because controller-based solutions are critical to the future of new applications,” said Chang-Gyu Hwang, President of Samsung Electronics. “We anticipate that the Samsung-Lexar Media partnership will greatly expand Samsung’s penetration into this quickly emerging market and allow us to offer our customers the best flash solutions.”

“This licensing agreement is a defining moment for Lexar Media,” said John Reimer, Lexar Media president and CEO. “Samsung is the number one supplier of DRAMs in the world and they have recently stated their goal to become the leading supplier of flash memory. Samsung is already demonstrating technical and cost leadership in its flash products and has an extremely impressive product roadmap. By integrating Lexar Media's patented controller technology into their products, Samsung will be able to produce a variety of low-cost, complex semiconductor devices, particularly those that demand high performance.”

Analysts estimate that the market for flash media will grow to more than $5 billion by 2004. Flash media is commonly used in many of today’s digital cameras, PDAs, cell phones, video recorders and portable music players. The ever increasing file sizes used by these devices is driving the requirements for high speed media, making Lexar Media’s technology critical to enabling future flash memory based products.

“Lexar Media is extremely pleased to enter into this license agreement with Samsung Electronics,” said Eric Whitaker, Lexar Media’s Vice President of Technology Licensing. “Samsung becomes the third licensee of Lexar Media’s patents. Sony was the first licensee of Lexar Media’s technology for adaptation in Sony’s Memory Stick format. SanDisk was the second licensee of Lexar’s patented technology for the production of Smart Media products. Samsung’s license covers SmartMedia as well as other flash products. We are pleased that Samsung has recognized the value of Lexar Media’s patents in producing flash-based products.”

The financial details were not disclosed.

About Samsung Electronics Co., Ltd.

Samsung Electronics Co., Ltd., with 2000 sales revenue of US$27 billion is a world leader in the electronics industry. The Korea-based company has operations in about 50 countries with 66,000 employees worldwide. The company consists of three main business units: Digital Media, Semiconductors and Information & Communications Businesses. For more information, please visit our website, http://www.samsungelectronics.com

About Lexar Media

Lexar Media, Inc. (NSDQ: LEXR) is a leading designer, developer and marketer of award-winning digital film and connectivity solutions for the professional, commercial and amateur digital photography markets. The adoption of our digital film and connectivity products for use with digital cameras and other digital devices is driven by Lexar Media’s innovation in write speed technology, which is the cornerstone of our patented controllers. Lexar Media's other digital photography related products include “Shoot & Share” image browsing and editing software, an online photofinishing service at Printroom.com, and a web-based educational digital photography site at SayCheese.com. Headquartered in Fremont, California, Lexar Media also has offices in London and Tokyo. For more information, please call 1-800-789-9418 or visit www.digitalfilm.com

Cautionary Note Regarding Forward-Looking Statements

This news release contains forward-looking information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and is subject to the safe harbor created by those sections. These forward-looking statements include statements related to the potential value of our patent portfolio and the need to use our technology in flash memory products. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. These risks include that Lexar Media could become subject to intellectual property claims that could divert management’s time and attention, could be time consuming and expensive to defend and could limit our access to important technology and that if we are unable to adequately protect our intellectual property, our competitors may gain access to our technology which could harm our ability to successfully compete in our market. Readers should also refer to the risk factors described in Lexar Media’s filings with the Securities and Exchange Commission including its Annual Report on Form 10-K for its fiscal year ended December 31, 2000, filed with the Commission on April 2, 2001. Lexar Media assumes no obligation to update the forward-looking information contained in this news release.

Lexar Media, SayCheese.com, Shoot & Share and the Lexar Media logo are trademarks of Lexar Media, Inc. Lexar Media Inc. is an authorized licensee of the CompactFlash trademark. All other brand or product names are trademarks or registered trademarks of their respective holders.

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