Monolithic System Technology, Inc. Reports Q2 2002 Net Income up 95% over Q2 Last Year


IP Revenue up 161% over second quarter last year

Sunnyvale, CA, July 18, 2002 €“ Monolithic System Technology, Inc., ("MoSys,") (NASDAQ:MOSY) today reported financial results for its second quarter ended June 30, 2002. Net revenue in the quarter of $6.5 million was an increase of 21% over the second quarter of last year and consisted of licensing revenue of $2.6 million, royalty revenue of $3.3 million and product revenue of approximately $648,000. Licensing revenue of $2.6 million in the quarter represented a 37% increase over the $1.9 million recorded in the second quarter of 2001. Royalty revenue in the second quarter was $3.3 million compared to $301,000 in the second quarter of 2001. Product revenue in the quarter was $648,000 and declined from $3.2 million in the second quarter of 2001, due to continuing weakness in the markets of MoSys' communications equipment OEM customers.

The gross margin percentage in the second quarter of 2002 was 89%, up from 75% in the second quarter of 2001 due to the high proportion of royalty revenue, which was 50% of total revenue. Net income in the second quarter of 2002 was $2.7 million, up 95% from net income of $1.4 million in the second quarter of 2001. Net income in the second quarter of 2002 was equal to 42% of total revenue. Diluted earnings per share in the quarter were $0.09 compared to $0.05 in the second quarter of 2001. Second quarter 2002 diluted earnings per share were computed using 31,318,000 shares.

Dr. Fu-Chieh Hsu, CEO of MoSys stated, "We are pleased that our overall second quarter results were on target in spite of the continuing difficult economic environment for electronics manufacturers. Our combined licensing and royalty revenue continued to grow in the second quarter due to the success of the 1T-SRAM technology in high volume production. We are particularly proud that many licensees are returning to us for new embedded memory designs that will be used in new development projects."

Dr. Hsu further stated, "This quarter we made further progress in licensing our 1T-SRAM technology and we have recently announced several new licensees that include Hudson Soft, Motorola, and SwitchCore. Our 1T-SRAM technology is now serving an increasing broad base of applications."

Q2 2002 Financial Results Webcast

MoSys will host a live webcast to discuss Q2 2002 financial results beginning at 2:15 P.M. (PT) on Thursday, July 18, 2002. Access to the webcast is provided in the MoSys website at http://www.mosys.com.

About MoSys

Founded in 1991, MoSys develops, licenses and markets innovative memory technology for semiconductors. MoSys' patented 1T-SRAM . technology offers a combination of high density, low power consumption, high speed and low cost unmatched by other available memory technologies. The single transistor bit cell used in 1T-SRAM technology results in the technology achieving much higher density than traditional four or six transistor SRAMs while using the same standard logic manufacturing processes. 1T-SRAM technology also offers the familiar, refresh-free interface and high performance for random address access cycles associated with traditional SRAMs. In addition, this technology can reduce operating power consumption by a factor of four compared with traditional SRAM technology, contributing to making it an ideal technology for embedding large memories in System on Chip (SoC) designs. 1T-SRAM technology is in volume production both in SoC products at MoSys' licensees as well as in MoSys' standalone memories. MoSys is headquartered at 1020 Stewart Drive, Sunnyvale, California 94085. More information is available on MoSys' website at http://www.mosys.com.

Forward Looking Statements

This press release may contain forward-looking statements about the Company including, without limitation, benefits and performance expected from use of our 1T-SRAM . technology.