SanDisk Denies Accusations Filed by Lexar Media in Court Complaint

SanDisk Corporation today denied all allegations in a complaint filed by Lexar Media Inc. in U.S. District Court charging SanDisk with unfair competition, false advertising, trade libel and interference with Lexar's business.

Nelson Chan, SanDisk vice president of marketing, said, "The complaint has absolutely no merit and we will ask the court to dismiss the case. Despite its significant advertising campaign, Lexar has been unable to successfully compete against SanDisk in the marketplace so it is trying to succeed against SanDisk in the courts."

Among the allegations, Lexar cited a test conducted in the SanDisk compatibility lab in which the performance and speed of Lexar and SanDisk CompactFlash(TM)(CF(TM)) cards was compared in various new digital cameras. The SanDisk cards were faster than the Lexar cards in all five consumer cameras tested. Lexar claimed that the results, which were made public, are false.

Chan said, "Our testing is valid. It seems like Lexar is ignoring the fact that we have significantly improved the performance of our CompactFlash cards over time. We stand by our test results."

Lexar also claimed that a new type of CompactFlash card that it has recently introduced has been unable to get certification and approval from the CompactFlash Association (CFA) and hence cannot carry the CFA logo. Lexar claimed that the organization "is effectively controlled by SanDisk."

Chan said, "The whole purpose of the CFA is to establish an independent body representative of all industry participants to ensure complete compatibility of all CompactFlash products so that consumers can feel protected from purchasing non-compliant cards. Lexar is seeking to bypass the CFA standard process. SanDisk is just one of 133 companies that belong to the association. Just last week, the CFA executive membership voted overwhelmingly not to allow any products to carry the CFA compliance logo until the products have been properly reviewed by the CFA."

SanDisk Corporation, the world's largest supplier of flash data storage 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, Calif.

The matters discussed in this news release contain forward looking statements that are subject to certain risks and uncertainties as described under the caption "Factors That May Affect Future Results" in the company's annual report on Form 10-K and quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission. The company assumes no obligation to update the information in this release.

CompactFlash and CF are trademarks of SanDisk Corporation.