OTI & Atmel Receive First Commercial Orders To Support Mastercard® Paypass™

OTI & Atmel Receive First Commercial Orders To Support Mastercard® Paypass™

OTI/Atmel Solution Receives MasterCard Certification

San Jose, CA, & Cupertino, CA, August 25, 2004–Atmel Corporation (Nasdaq: ATML), a leading provider of system-level integration semiconductor solutions, including secure microcontrollers and smart card ICs and On Track Innovations Ltd, (OTI) (NASDAQ: OTIV; Prime Standard [Frankfurt]: OT5), a global leader in contactless microprocessor-based smart card solutions, for homeland security, micropayments, petroleum payments and other applications, today announced that they have received the first commercial quantity orders of contactless microprocessors developed for the MasterCard PayPass contactless payment program.

Atmel and OTI were selected to supply the secure contactless micro controllers in addition to an overall contactless solution that includes the operating system, application support and inlay technology for contactless smart cards. OTI’s and Atmel’s solution has also recently received MasterCard certification after passing MasterCard’s PayPass Card Technology Approval. OTI also anticipates orders for its card readers that will be used in conjunction with the PayPass card rollouts expected later this year.

MasterCard PayPass provides a simpler way to pay for small value transactions where speed and customer flow are essential, such as in quick-serve restaurants, convenience stores, gas stations and toll roads. Since cardholders quickly pay with a simple tap or wave of the card, a PayPass card is more convenient to use than cash. MasterCard PayPass contains a secure contactless microprocessor chip and antenna inside the card, in addition to the card’s standard magnetic stripe.

The contactless chip used is an 8-bit secure microcontroller from Atmel’s AT05SC highly secure product family, currently used for banking applications. The chip features 40KB ROM, 2KB EEPROM, hardware DES and hosts Atmel’s high security mechanisms. The contactless chip is compliant with lSO-14443B and ISO-7816 industry standards. Atmel is one of the industry’s most experienced manufacturers of secure microcontrollers for electronic payment. The security of its ICs has been certified by independent authorities and the chips have been used without security issues in hundreds of millions of devices in use everyday in various applications.

OTI is a leading provider of secure contactless solutions and has worked with MasterCard on its PayPass program from early in its inception. OTI is providing the contactless solution expertise, including the operating system, application support and inlay technology. It has successfully integrated its inlay technology with leading U.S. card vendors and has already integrated its Saturn 5000 reader solutions with multiple point of sale providers to support MasterCard PayPass program.

Jeff Katz, Atmel’s Vice President of Marketing, commented, “It is very gratifying to see the first fruits of the close teamwork between Atmel and OTI in developing and bringing to market MasterCard PayPass. OTI’s proven technical capability and commitment in contactless technology were key to this success.”

Oded Bashan, President and CEO of OTI, commented, “Having worked with MasterCard since early in its inception of its exciting MasterCard PayPass program, we are proud to be involved in the launch of next generation payment cards. This represents of a great deal of hard work, technological development and creativity. By teaming together with an industry leader like Atmel, we have been able to provide our customers with a complete contactless solution. We look forward with great anticipation to the next and future stages of the rollout.”

About Atmel

Founded in 1984, Atmel Corporation is headquartered in San Jose, California with manufacturing facilities in North America and Europe. Atmel designs, manufactures and markets worldwide, advanced logic, mixed-signal, nonvolatile memory and RF semiconductors. Atmel is also a leading provider of system-level integration semiconductor solutions using CMOS, BiCMOS, SiGe, and high-voltage BCDMOS process technologies.