EDEN PRAIRIE, Minn.--November 21, 2003--The following is a transcript of an interview of Daniel A. Baker, NVE Corporation president & CEO, by Rita Maloney of KCCO (AM 950), Minneapolis, Minn., which aired November 21, 2003 from 8:45 to 8:52 a.m.

Maloney: Gary Oldman says you spin it around, and it makes memory.

So we'll see if we can understand all that by the end of this interview. I am joined by the president and CEO of NVE Corporation--Daniel Baker is joining me here on KCCO Business Focus.

Dan, welcome; good to talk to you.

Baker: Good morning, Rita.

Maloney: Now did Gary get that right? You spin it around and it makes memory?

Baker: He did. He did get it right. Actually, we use the spin of electrons in our products--rather than their charge--to store and transmit information, and that's unique.

Maloney: So you develop this at NVE? You developed this technology?

Baker: Yes we did. We pride ourselves on making spintronics practical. It's a property of electrons that's been known for some time, but until relatively recently nobody had been able to figure out a way to make devices that take advantage of this property.

Maloney: So you use memory for what? Would this be, like, computer memory as an example?

Baker: It could be. Right now, it's memory that's under development. The memory that the results from this technology is called MRAM. It's a new type of memory. It's been called the Holy Grail because it combines all of the best attributes of existing types of memory: the speed of SRAM, the density or capacity of DRAM and the non-volatility of Flash, meaning that the data stays put when the power is removed.

Maloney: Amazing. Now tell me, how long NVE Corporation has been in development of this?

Baker: The company was founded in 1989. Our original name was "Nonvolatile Electronics," which captured our mission of making MRAM, and actually it's been under development prior to that. Jim Daughton, our founder, and Art Pohm were working on this technology prior to that. Jim ran Honeywell's SSEC operation here in the Twin Cities, and this has been a dream of his, and many of our employees, for many, many years.

Maloney: Is this MRAM... is it being used today anywhere?

Baker: Not yet. Motorola just announced late last month that they were beginning to sample it. Motorola has licensed our intellectual property. And Cypress Semiconductor is also working on it, and they demonstrated prototypes, but it's not yet available in production.

Maloney: I'm speaking with the president and CEO of NVE Corporation. Daniel Baker is joining me on the KCCO Business Focus. Daniel Baker is joining me on KCCO Business Focus. So it's spintronics, or the spinning of electrons, that creates this MRAM, or this memory. Tell me what this could this possibly mean to us in the future.

Baker: Well it could truly revolutionize a lot of the devices that we use every day:

You could envision ultra-miniature cell phones, because the various types of memory that we need now in a cell phone could be combined into one that would be very small; use much less power. So you could see something like Dick Tracy watch phones.

We can envision cell phones in places where they won't fit now--you can imagine a dog collar that the call to when the dog if the dog runs away, and because the memory would be small and wouldn't use a lot of power, it could be on standby mode for long time.

And it could eliminate boot-up cycles and crashes in computers that are the bane of our lives caused by having to transfer data back and forth between nonvolatile memory and working memory.

Maloney: Yes, in fact I was going to ask you about that, because you know, especially after 9/11, we all learned about this back up, and we would get everything completely, in every business, backed up. Would it eliminate that? Would it cut that need to back up? How would that work?

Baker: Yes it would, because the data, the working memory in the computer is in DRAM, and of course that goes away when the power is removed. And that's what causes a memory crash. And with MRAM, the data would be inherently persistent in the working memory, and that would certainly reduce the need (or eliminate the need) for backups.

The military is particularly interested in this type of memory, because, first of all it's inherently nonvolatile, meaning that the data doesn't have to be backed up or is less susceptible to data loss, and also it's very, very rugged memory. It can survive extremes of radiation and other abuse, and that's obviously very important for military applications in a post-9/11 world.

Maloney: Dan, I'm going to ask you a question that might be an easy one to answer or difficult one, I don't know. But what are we looking at? Ten years down the line? Five years down the line? Fifty years down the line?

Baker: Well, hopefully much sooner than that. Motorola has said that they hope to be in production with this type of memory by late 2004, and Cypress has the schedule to get samples--they have an internal deadline--of March 31, 2004. And we are seeing samples and prototypes of devices. Cypress recently demonstrated prototypes. So they're not available yet, but hopefully in the not-too-distant future. Motorola's also announced plans to show a cell phone-on-a-chip architecture, and that would be in the second half of 2004, so it's getting pretty close.

Maloney: Just a couple of housekeeping moves: you're a public company traded on the NASDAQ, correct?

Baker: That's correct.

Maloney: "NVEC," the ticker. Where does NVE Corporation call home?

Baker: We're based here in Eden Prairie, in what we call "Silicon Prairie."

Maloney: Silicon Prairie?
And can give me an estimate on the number of employees you have there?

Baker: We have approximately 70 employees, including ten Ph.D.'s.

Maloney: And can give me an idea of how you look going forward? You sound very optimistic about this MRAM.

Baker: Well, we are very optimistic--

We have licensed our technology to industry leaders including Motorola and Cypress as I mentioned.

We also have a license agreement with Agilent on another product type of product;

and we've been profitable for a while, and we plan to continue to be profitable;

and our sales are growing rapidly: our commercial product sales have doubled year-over-year in each of the past two quarters, so we're pleased with that;

and we see a bright future ahead of us as well.

Maloney: Daniel Baker, president and CEO of NVE Corporation, we appreciate your time.

Baker: My pleasure, Rita.

Prairie, MN 55344-3617
Phone: 952-996-1636; Fax: 952-829-9189