SanDisk Approves Divio Merger with ESS Technology

8/19/2003 - SanDisk Corporation (NASDAQ:SNDK) announced that it plans to support ESS Technology’s (NASDAQ: ESST) acquisition of Divio, Inc. SanDisk made a $7.2 million strategic investment in Divio, a privately held company based in Sunnyvale, and held a seat on Divio’s Board of Directors. The acquisition by ESS Technology, a leading supplier of silicon solutions for digital video and audio consumer electronics, was announced earlier.

Eli Harari, president and CEO of SanDisk, said, “We are very pleased with the acquisition of Divio by ESS Technology. We believe Divio’s engineering team has developed a top notch IC technology for low cost, highly efficient compression using their advanced MPEG-4 compression algorithms. As they are entering into the commercialization phase, we believe the Divio team will benefit greatly from the marketing, manufacturing and financial resources that will be available to them with ESS Technology. SanDisk and ESS Technology are committed to making the Divio MPEG-4 technology successful in the expanding digital video consumer markets. We expect that combining these compression technologies with SanDisk’s flash memory will allow the two companies to achieve cost-effective flash storage of digital video. We believe this, in turn, will stimulate consumer demand for digital consumer video (movie) products such as solid state camcorders and other applications in the next few years.”

Robert Blair, CEO of ESS Technology, Inc., said “We are excited about the acquisition of Divio as their exceptional digital compression and imaging technology complements and integrates well with our existing video, audio, and imaging technologies. These complementary technologies enable the development of exciting new digital consumer products in several fields including video players and recorders, digital cameras, solid state camcorders and cellular image/video phones. These technologies, when combined with the convenience and capacity of flash memory, have tremendous market opportunities for both ESS and SanDisk. We look forward to working with SanDisk to create these new products so consumers can enjoy the quality, convenience, and ease of operation that digital technology delivers.”

About ESS Technology
ESS Technology, Inc., is a leading supplier of high-performance feature-rich chips, applications and solutions for digital entertainment markets. ESS provides advanced products that enable the emergence of digital home systems that deliver and manage entertainment and information in the home. ESS, headquartered in Fremont, California, has R&D, sales, and technical support offices worldwide. ESS Technology’s common stock is traded on the Nasdaq National Market under the symbol “ESST”. ESS Technology’s web site address is:

SanDisk, the world’s largest supplier of flash memory data storage card products, designs, manufactures and markets industry-standard, solid-state data, digital imaging and audio storage products using its patented, high density flash memory and controller technology. SanDisk is based in Sunnyvale, CA.

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