Press Release August 4, 2003
NVE Wins Government Contract to Develop Magneto-Thermal MRAM:
Technology promises one-gigabyte low-power non-volatile memory

EDEN PRAIRIE, Minn.--August 4, 2003--NVE Corporation (NasdaqSC: NVEC) announced today that it has been awarded a contract by the Defense Advanced Research Projects Agency (DARPA), administered by the U.S. Army Aviation and Missile Command, to develop magneto-thermal Magnetic Random Access Memory (MRAM). The contract is for $750,000 over two years and represents a continuation of NVE's government funding to advance and commercialize MRAM.

MRAM uses spintronics--electrons' spin rather than their charge--to store data, and is fabricated using nanotechnology. MRAM has the potential of combining the speed of semiconductor memory with the nonvolatility of magnetic disk drives, and could eventually replace conventional memories. MRAM is inherently nonvolatile, meaning the data remain even when power is removed.

Magneto-thermal MRAM would use a combination of magnetic fields and ultra-fast heating from electrical current pulses to shrink the stability-limited cell size and reduce the energy required to write data. The project is to be compatible with a chip capacity of one gigabit with 100-nanometer lithography, which would allow MRAM to be fabricated at bit densities comparable to Dynamic Random Access Memory (DRAM). DRAM is currently most common and largest capacity semiconductor memory type.

"For MRAM to supplant DRAM in mainstream applications, both cell size and write current need to be reduced," commented NVE President and Chief Executive Officer Daniel A. Baker, Ph.D. "Magneto-thermal MRAM addresses both issues, strengthening the promise of MRAM as the ideal memory. This contract will help bolster our intellectual property portfolio in this important area."

NVE has licensed MRAM intellectual property to several companies. Current NVE licensees include Cypress Semiconductor Corporation, Honeywell International, Union Semiconductor Technology Corporation, and Motorola, Inc. Cypress and Motorola both demonstrated prototype MRAMs in the past year, and both announced plans for product introductions this calendar year. NVE has an agreement for Motorola to pay NVE royalties, and a contract for Cypress to manufacture MRAMs for NVE.

NVE is a leader in the practical commercialization of spintronics, which many experts believe represents the next generation of microelectronics. NVE licenses its MRAM intellectual property and sells spintronic products including sensors and couplers to revolutionize data acquisition and transfer.

Statements used in this press release that relate to future plans, events, financial results or performance are forward-looking statements that are subject to certain risks and uncertainties including, among others, such factors as the rate of adoption of MRAM, adoption of our intellectual property, our ability to enforce our intellectual property rights, the awarding of future government contracts, as well as the risk factors listed from time to time in the company's filings with the SEC, including the company's Annual Report on Form 10-KSB and other periodic reports filed with the SEC.