M-Systems to Team Up with RSA Security to Provide Strong Two-Factor Authentication for Online-Based Services

Combination of M-Systems’ smart personal storage solutions and RSA® SecurID® technology to enable broader access to strong authentication

SUNNYVALE, Calif., Feb. 14, 2006, M-Systems (Nasdaq: FLSH), a leader in smart personal storage, and RSA Security today announced a partnership pursuant to which M-Systems expects to utilize RSA SecurID® two-factor authentication technology across multiple personal storage products, platforms and markets. From M-Systems’ MegaSIM platform to its USB-based secure storage token platform, in the mobile, consumer and enterprise markets, the amalgamation of the companies’ respective technologies is set to increase data security while keeping end-user implementation intuitive and simple.

Two-factor authentication solutions are strongly recommended to combat the growing epidemics of identity theft, phishing and other security breaches and are particularly important for industries such as banking, telecommunications and transportation where sensitive data is being used, accessed, carried and transmitted.

“At a time when identity and corporate data theft are on the rise, users are looking for smarter products offering the maximum level of security and personal value to the end user without impacting convenience or ease-of-use. Adding RSA SecurID technology to our smart personal storage solutions will provide a high level of protection and peace of mind across multiple platforms,” said Noam Kedem, vice president of marketing, M-Systems. “Our partnership with RSA Security can enable M-Systems to offer strong two-factor authentication ensuring users can securely access and control their online accounts, data and services wherever and whenever they choose. It is a perfect example of how we make personal storage smarter.”

“We are very pleased to be working with M-Systems in order to provide increased flexibility for organizations utilizing smart personal storage, as well as two-factor authentication,” said Toffer Winslow, vice president of product marketing and management at RSA Security. “Embedding our strong authentication technology into M-Systems’ product lines can deliver phenomenal advantages to end-users and application providers alike. There is a strong synergy between our companies in multiple markets – mobile, consumer and enterprise, and we look forward to what the future holds for our joint efforts.”

The companies plan to jointly approach their existing and new customers to promote the fruits of their collaboration. As guidance from agencies such as FFIEC drive broader interest in two-factor authentication options, this joint solution is expected to provide an attractive option to organizations seeking to ensure compliance and improved security.

About M-Systems
M-Systems has been transforming raw flash material into smarter storage solutions since 1989. From embedded flash drives deployed in millions of mobile handsets to U3 USB smart drives designed for leading global brands, M-Systems creates, develops, manufactures and markets smart personal storage solutions for a myriad of applications targeting high growth markets. M-Systems’ product lines include:

* M-Drive (formerly DiskOnKey®) U3 USB smart drives for personal, portable computing
* M-DOC embedded flash drives for mobile handsets and consumer electronics devices
* M-SIM MegaSIM® series high-density SIM cards and M-SIM M.MAR® series SIM cards and highly secure cards (available both from M-Systems and its subsidiary Microelectronica)
* M-Card, high-quality memory cards for mobile handsets and digital cameras
* M-Trust (formerly Xkey®) end-to-end enterprise access, control and management solution for USB flash drives and other removable media
* M-SSD (formerly FFD™) rugged solid state disks for mission-critical applications
* M-Module (formerly DiskOnChip® modular family) modular flash storage for embedded systems
* M-Safe (formerly SuperMAP® family) secure hardware and software crypto cores

More information is available online at www.m-systems.com. M-Systems. Made smarter.

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RSA Security, RSA and SecurID are either registered trademarks or trademarks of RSA Security Inc. in the United States and/or other countries. All company and product names mentioned may be trademarks or registered trademarks of their respective holders and are used for identification purposes only.

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: the effect of global economic conditions in general and conditions in M-Systems’ 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 M-Systems’ and its customers’ inventory levels and 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 M-Systems’ and its customers’ products and markets; the development, release and sale of new products by strategic suppliers and customers; the development and growth of anticipated markets for M-Systems’ and its customers’ products; and other risk factors detailed from time to time in M-Systems’ filings with the Securities and Exchange Commission. M-Systems assumes no obligation to update the information in this press 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 M-Systems’ website above does not constitute incorporation of any of the information thereon into this press release.

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