EDEN PRAIRIE, Minn.--January 26, 2004--NVE Corporation (NasdaqSC: NVEC) announced today that it has been awarded approximately $450,000 by the Defense Advanced Research Projects Agency (DARPA) Defense Sciences Office (DSO) for the next phase of development of advanced Bio-Magnetic Interfacing Concepts (BioMagnetICs). The additional funding brings total funding under the contract, which was announced in August 2002, to approximately $1.24 million.

The goal of the DARPA BioMagnetICs program is to demonstrate nanoscale magnetics at the cellular and ultimately molecular level. Under the contract, NVE will develop devices incorporating its proprietary spintronic materials, which are as thin as a few atoms. NVE has fabricated working BioMagnetIC sensors which have been independently tested, completing an important phase of work under the contract. The new phase, which is expected to take approximately one year, will tailor devices for laboratory-on-a-chip applications.

The commercial potential of spintronics has been estimated to be $100 billion per year. BioMagnetIC applications include ultra-miniature biological warfare agent detectors, real-time DNA testers, and laboratory-on-a-chip diagnostic systems.

"Our long-term goal is to put very low-cost, manufacturable devices in the hands of soldiers and consumers that are as easy to use as a digital thermometer. This technology could allow cabinet-sized instruments to be replaced by hand-held devices for a small fraction of the cost, and produce accurate results in minutes rather than hours," commented NVE Vice President of Development John K. Myers.

U.S. Rep. Jim Ramstad (R-MN) congratulated NVE on the award: "Minnesota is a world leader in biotechnology and is making a significant contribution in nanotechnology. This contract with a Minnesota company will allow NVE to make further advances in nanotechnology and help keep our country safe."

NVE is a leader in the practical commercialization of spintronics, a nanotechnology 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 sensing and transmission.

Information on the DARPA BioMagnetICs program can be found at http://www.darpa.mil/dso/thrust/biosci/biomagn.htm.

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 uncertainties relating to future government funding, risks relating to making commercially viable devices, as well as the risk factors listed from time to time in the company's SEC filings.

###