M-Systems and Digi-Key Sign Distribution Agreement

DiskOnChip® and FFD™ flash disk product soon to be available to Digi-Key's worldwide catalog and online customer base

THIEF RIVER FALLS, Minnesota, USA - October 6, 2005

M-Systems (Nasdaq: FLSH), an industry leader and innovator of flash-based data storage devices, and Digi-Key Corporation, a U.S.-based electronic component distributor, today announced that the companies have signed a worldwide distribution agreement.

M-Systems' embedded flash disk products will be featured in Digi-Key's printed and online catalog and will be available for purchase directly from Digi-Key.

"Many design engineers have a Digi-Key catalog and, with M-Systems inside, it will be a great outlet for us into new designs," said Scott Deutsch, M-Systems' vice president of sales for the Americas. "Digi-Key has a huge catalog and online customer base that will now have access to our DiskOnChip® and FFD™ products for all of their product development needs."

M-Systems' DiskOnChip and FFD products provide reliable and fast non-volatile memory (NVM) to store data and code locally. They are available in a wide range of capacities, form factors, and bus interfaces, targeting applications such as gaming machines, point of sale (POS), thin clients, servers, printers, single-board computers (SBCs) and computers used for military, telecom and aviation needs. Based on leading-edge NAND flash technology, an ultra-thin controller and advanced flash management software, M-Systems embedded flash drive products provide an optimized NVM solution with an ideal cost structure.

"We are pleased to be able to offer M-Systems' line of data storage products to our worldwide base of engineering and procurement customers," said Mark Larson, president of Digi-Key. "M-Systems' innovative products will help to broaden our line card offering and enable us to better serve the diverse electronic component needs of our customers."

About M-Systems

M-Systems develops, manufactures and markets innovative flash-based data storage solutions for consumer electronics and embedded markets. The Company targets the fast growing multimedia mobile handset market with its DiskOnChip® and MegaSIM™ solutions and the popular USB flash drive market with its DiskOnKey® product. More information about M Systems is available online at www.m-systems.com.

About Digi-Key Corporation

Digi-Key Corporation, based in Thief River Falls, Minn., is a global, full-service provider of both prototype/design and production quantities of electronic components, offering more than three million products from over 650 quality name-brand manufacturers. With over one million products in stock and an impressive selection of online resources, Digi-Key is committed to stocking the broadest range of electronic components in the industry and providing the best service possible to its customers. Additional information and access to Digi-Key's broad product offering is available on the Digi-Key website.