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SatCon Subsidiary Film Microelectronics, Inc Introduces New Product for the $Billion Smart Card Industry

29 June 1999

SatCon Subsidiary Film Microelectronics, Inc Introduces New Product for the $Billion Smart Card Industry

    CAMBRIDGE, Mass.--June 29, 1999--SatCon Technology Corporation(R) (Nasdaq NM:SATC), today announced that its subsidiary Film Microelectronics, Inc., (FMI), has developed a low-cost version of a Radio Frequency Identification (RFID) card, the next generation of smart card. Using proprietary thin film technology and a patent pending interconnect concept, FMI will be able to sell the 125kHz category card for about 25% less than current methods. FMI is presently negotiating with several manufacturers to enter into manufacturing agreements.
    The RF identification tags work like the white ID pads attached to CDs and other items in stores that send a signal to an electronic reader somewhere near the door if the item has been taken out of the store without being purchased. The tags, or cards, can be the size of a credit card similar to the ones used for access control into apartments, office buildings, hotel rooms, and parking lots, but can also be made into something the size of a postage stamp. These tags will include information in their imbedded computer chips such as the product name, value, and location. The process can also be used to make picture identification cards, smart credit cards, and security access tags that could fit on a key chain.
    RFID systems will allow users to tag and track items such as consumer products on store shelves, product movement throughout a factory, finished inventory in a distribution center, livestock, or anything that needs to be identified, counted and/or tracked. The advantage of these RFID tags is that they allow tagging and tracking without physical or visual contact, making it far less expensive to conduct inventories or manage assets. In fact, the tags could also eliminate optical scanners and bar codes so that goods can be purchased with minimal handling by store personnel. The opportunity for credit cards, health history cards, and personal data cards is even bigger.
    "This is a unique opportunity for SatCon and FMI," said David Eisenhaure, SatCon's President and Chief Executive Officer. "Using their experience in manufacturing wireless communication devices, FMI designed a low-cost approach to manufacture the imbedded circuit within the card with fewer parts. In so doing, they created a proprietary solution which can be used in a number of applications. With our low cost structure and proprietary technology, FMI is well prepared to become a major player in the RFID industry."
    "We're very excited at FMI," said Gary Colello, FMI's General Manager. "This product could represent $5 million in annual sales in a year and growing. These RFID tags have many applications and the lower cost of this new design will make them more affordable. That is the key to expanding their use. With over 1 billion cards shipped per year*, we are positioning FMI to be a choice supplier of RFID components to this rapidly growing market. (*Source Smart Card Industry Association at www.scia.org)
    Wireless communications devices are rapidly becoming a significant share of FMI's product base. FMI has several wireless communications products including power resistors for cellular telephones, and satellite data uplinks for the Mobil speed pass. Most recently, FMI announced that it would be supplying components for the RF amplifier electronics for Hughes Spaceway(TM) Satellite TV and data transmission service for residential and commercial use. FMI estimates the annual sales opportunity for these substrates and the modules built with the substrates will exceed $80 million in four years.
    SatCon Technology Corporation(R) manufactures and sells power and energy management products for telecommunications, silicon wafer manufacturing, factory automation, aircraft, satellites and automotive applications. These products include advanced electric motors, high-density power electronics, suspension systems, satellite control systems, propulsion systems, and flywheel energy-storage systems for a variety of commercial and government customers. SatCon has four subsidiaries: Film Microelectronics, Inc. designs and manufactures microelectronic circuits and interconnect products. Magmotor manufactures motors and suspension systems. Beacon Power manufactures flywheel energy storage devices and the Technology Center is responsible for new technology and product development.
    Note: This release contains forward-looking statements that involve a number of risks and uncertainties. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," "intends" and similar expressions are intended to identify forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth under the caption "Factors Affecting Future Results" in the Company's Annual Report on Form 10-K for the year ended September 30, 1998, which factors are incorporated herein by reference. Please note that the Company's future growth opportunities are dependent on the introduction of new products that must penetrate commercial market segments. No assurance can be given that new products can be developed, or if developed, will be successful; that competitors will not force prices to an unacceptably low level or take market share from the Company; or that the Company can achieve or maintain profits in these markets.