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To: Binx Bolling who wrote (8578)	1/5/2000 2:13:00 AM
From: Binx Bolling	Read Replies (1) \| Respond to of 60323

BlueStone Capital Partners, L.P. Announces Investment Opinion on Silicon Storage Technology, Inc. BlueStone Capital Partners, L.P. Upgrades Silicon Storage Technology, Inc.(1) (SSTI) to a 2-1 from 1-1; Company Outlook Remains Exceptionally Strong Updated 3:46 PM ET January 4, 2000 NEW YORK (BUSINESS WIRE) - Senior Analyst Steve Loewengart upgraded Silicon Storage Technology, Inc.'s (SSTI-NASDAQ-$33.38) rating to 1-1 from 2-1. Analyst's Summary We are raising our investment opinion on Silicon Storage Technology to 1-1 from 2-1. We believe that the recent share price decrease to $33.38 today makes the current valuation attractive. We continue to believe that our current estimated price targets are still valid, and we believe that fundamental indicators appear to be strengthening. Our price target remains at $50 over the next 12 months, and we expect the shares to attain the $56 level over the longer term. These levels represent P/E multiples of 30 times and 33 times, respectively, our $1.68 EPS projection for 2002. We expect revenue growth to reach $387 million by 2002 from $69 million in 1998. During this period, we believe that gross margins will improve to the mid-30% range. We anticipate a two-year period of rising chip demand accompanied with limited increase in production capacity for nonvolatile flash memory devices at other manufacturers. The impact will be a firming of selling prices for the duration of this period, or a substantially lower rate of price erosion. Silicon Storage Technology with its emphasis on expanded customer service, relationships, and balanced growth to support its research and development/product design programs, has reinforced its strong competitive position. Its close collaborative relationships with Motorola (MOT-NYSE-$138.38-Not Rated) and Qualcomm (QCOM-NASDAQ-$164.50-Not Rated), the two acknowledged leaders in wireless communications, should help the company maintain its leadership position. It is within the realm of possibility that other strategic collaborations will be established over the next two years. The number of different chips in production now stands at 40 products compared with four a year ago. The intellectual property possessed by SSTI based on its design experience and investment in R&D constitutes a hidden asset. SSTI has wisely (in relation to its present revenue size), in our opinion, chosen to target as its core market the mid- to large-scale memory segment of the flash market. This is the segment in which end-use applications include cell phones with internet access, fax transfer, e-mail, transactions such as security purchases and airline tickets, and speech recognition among the advanced features. Further applications for SSTI designs are in set-top boxes, which can translate HDTV signals to quality pictures on an ordinary TV set or to download digital signals directly to a TV. SSTI has created a position of technological leadership in its core-market sphere. This is based on the strategy to concentrate in the 0.25 micron and system on a chip-design areas. These enable SSTI to offer more memory on a smaller chip and/or to combine logic and memory on the same device. (1) BlueStone Capital Partners, L.P. makes a market in this security. BlueStone Capital Partners, L.P. is a full-service investment banking and brokerage firm that delivers financial services to emerging growth and medium-size companies worldwide. BlueStone Capital assists clients in maximizing their growth by providing sophisticated investment strategies that are designed to achieve clients' strategic, operating and financial goals. Contact: BlueStone Capital Partners, L.P. Steve Loewengart, 212/850-0870