March 31, 2005 01:00 ET

Axalto Adds U.S.-based Smart Card Microelectronics Module Production at its Maryland Advanced Card Center




MARCH 31, 2005 - 01:00 ET

Axalto Adds U.S.-based Smart Card Microelectronics
Module Production at its Maryland Advanced Card Center

AUSTIN, Texas--(CCNMatthews - Mar 31, 2005) -

High-technology investment significantly bolsters U.S. presence

Axalto (EURONEXT:AXL) and (EURONEXT:NL0000400653), the world's leading
provider of microprocessor smart cards, today announced that the new
microelectronics module fabrication operation at its Advanced Card
Center production facility outside Baltimore, Maryland, has achieved
full qualification in keeping with the company's highest standards for
quality and productivity. This marks the first time in the United States
that all of the smart card production technologies will be integrated
into a single production process.

The new production line will supply smart card modules, the high-value
core of Axalto's products. Modules contain the microprocessor, memory
and other software and security features that power these tiny,
mass-produced computers. Smart cards deliver secure, portable and
convenient access to personalized services while protecting each user's
privacy and identity.

"As the smart card leader in the mobile communications, banking, public
sector - especially with the US government - and enterprise markets,
Axalto needs to make the investments in innovation and production
technology necessary to meet the rapidly expanding smart card market
requirements in the region. This state-of-the-art facility is the
embodiment of our commitment to high-volume, leading-edge production
capacity. It positions us to bring groundbreaking Axalto innovations
first introduced in the Americas to the world market," said Paul
Beverly, Axalto president for the Americas.

A number of industry watchers have stated that the area is the fastest
growing regional smart card market in several sectors, and Axalto's
recently announced results attest to that outlook. The Americas achieved
full-year revenue growth of 29%, the strongest increase among Axalto's

The clean room based fabrication is now operational, and the company
plans to ramp capacity up to full production capability by mid-year. The
new microelectronics line is already producing modules for North and
South American customers.

The microelectronics module fab is contained in a new high-tech "clean
room" and uses some of the industry's most advanced production
technologies and techniques. The operation starts with integrated
circuits delivered in bulk from semiconductor manufacturers on eight
inch round wafers, each containing thousands of these microchips. A
series of high volume electronics production processes transform each
tiny individual chip into a module, which is the heart of the company's
smart cards, tokens, electronic passports and other form factors. A wide
variety of Axalto developed smart card software is then added by loading
features such as secure operating systems, applications and security
keys, along with customized graphical and security elements incorporated
into the body of each card.

"We made the commitment to manufacture these semiconductor-based modules
in the United States to reduce our overall production cycle time and to
increase our local value add for the anticipated market requirements in
the Americas," said Beverly.

Axalto uses a world class production model called "Lean Sigma,"
combining two world class manufacturing processes called Lean
Manufacturing and Six Sigma. Lean Manufacturing centers on improved
efficiency throughout the production value stream and Six Sigma on
continuously improving production process quality. The Axalto plant in
Maryland has been producing secure cards continuously since 1964.

About Axalto

Axalto (Euronext:NL0000400653 AXL) is the world's leading provider of
microprocessor cards (Gartner Dataquest 2004) -- the key to digital
networks -- and a major supplier of point-of-sale terminals. Its 4500
employees come from 70 nationalities and serve customers in more than
100 countries, with worldwide sales reaching 3 billion smart cards to
date. The company has 25 years' experience in smart card innovation and
leads its industry in security technology and open systems.

Axalto continuously creates new generations of products for use in a
variety of applications in the telecommunications, finance, retail,
transport, entertainment, healthcare, personal identification,
information technology and public sector markets. Microprocessor cards
provide convenience, security and privacy to public and private services
operators, their customers and end users.

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