Volkswagen of America Continues to Support Development of Microvision Head-Up Display; New MicroHUD designed to meet size and performance specifications for future car generations

BOTHELL, Wash.--Sept. 2, 2004--Microvision, Inc. , a leader in light scanning technologies, announced today that it has received another order from Volkswagen of America Electronics Research Laboratory (ERL) to deliver an advanced prototype of the "MicroHUD" head-up display system. The new development contract, which is the third awarded by Volkswagen of America, continues prior efforts and supports the development of a compact head-up display designed to meet specific size and performance specifications for future car generations. The company also expects to receive an order from a major European Tier 1 automotive supplier to support the MicroHUD development program. The company expects to culminate the program with the installation of a MicroHUD display in a test vehicle later this year.

The "MicroHUD" combines Microvision's unique MEMS-based micro display technology with a novel optical design to create a high-performance HUD module that is significantly more compact than other products on the market today. Installed in the dashboard, the MicroHUD reflects a virtual image off the windscreen that appears to the driver to be close to the front of the car. The unique laser-scanning display outperforms existing products based on miniature flat panel display screens because it can be clearly viewed in the brightest conditions and also dimmed to the very low brightness levels required for safe night-time driving. The high-resolution MicroHUD display is completely reconfigurable, enabling virtually any content to be displayed, including video or animated icons and graphics.

According to Todd McIntyre, senior vice president for Microvision, "Over the last several months Microvision has had a series of very successful deliveries of MicroHUD demonstrators to automotive OEMs and Tier 1 suppliers for evaluation purposes. This new advanced prototype, however, is the first designed to fit within the smaller volume requirement that is being specified for future cars. We believe this order demonstrates the confidence that major automotive companies have in the potential of our laser scanning technology to deliver a unique and compelling HUD solution."

"We believe the reduced package size of our new MicroHUD offers the potential for compatibility with a wide range of vehicle makes and models. We have designed the unit as a standard module that can be easily reconfigured for different vehicles simply by replacing the final mirror. This should eliminate the expensive customization currently needed for alternative solutions. Another powerful feature is the display's unique ability to pre-distort the image to compensate for the varying shapes of different windscreens. This allows the image to be squared and aligned electronically, further reducing the cost of system design and installation.

"For the driver," said McIntyre, "MicroHUD is fundamentally about enhancing safety. As the level of information content in the car increases -- especially in navigation and telematics systems -- the challenge for automotive companies is to provide a safe means for a driver to access this content. The true win for MicroHUD is that it augments the driver's vision while simultaneously ensuring that the driver's eyes stay focused on the road ahead.

"Applications of MicroHUD extend beyond automotive and are expected to include package delivery and trucking services, police, fire and other public services, light aircraft and a wide variety of defense land and maritime vehicles as well as training aircraft and helicopters. For these applications, the benefits of MicroHUD's augmented vision are expected to include increased safety, precision and productivity."

About Microvision: www.microvision.com

Headquartered in Bothell, Wash., Microvision Inc. is the world leader in the development of high-resolution displays and imaging systems based on the company's proprietary silicon micro-mirror technology. The company's technology has applications in a broad range of military, medical, industrial, professional and consumer products.

Forward-Looking Statements

Certain statements contained in this release, including future product performance, product applications, product benefits, potential opportunities, as well as words such as "expects" and "believes," are forward-looking statements that involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from those projected in the company's forward-looking statements include the following: our ability to raise additional capital when needed; market acceptance of our technologies and products; our financial and technical resources relative to those of our competitors; our ability to keep up with rapid technological change; our dependence on the defense industry and a limited number of government development contracts; government regulation of our technologies; our ability to enforce our intellectual property rights and protect our proprietary technologies; the ability to obtain additional contract awards; the timing of commercial product launches and delays in product development; the ability to achieve key technical milestones in key products; dependence on third parties to develop, manufacture, sell and market our products; potential product liability claims and other risk factors identified from time to time in the company's SEC reports, including the Company's Annual Report on Form 10-K filed with the SEC.