Gemplus leads the smart card industry for fourth consecutive Year

Analysts confirm Gemplus' industry leadership during a pivotal year for smart card technology

Luxembourg, May 30, 2002 - Gemplus (Euronext: Sicovam 5768 and NASDAQ:GEMP), the world's leading provider of smart card solutions, today announced that industry analysts have confirmed the company's market-leading position for the fourth year running. This news reflects a year when the company delivered such technology breakthroughs as Target Corporation's smartVisa card, China Unicom's first smart card-based CDMA network, NTT DoCoMo's 3G Launch, and the shipment of the ten millionth Java™ technology-based smart card to the Financial Services market in the US.

According to Gartner Dataquest's "Worldwide Chip Card Market Share, 2001: Card Vendors and Semiconductor Vendors" report, Gemplus led chip card shipments in 2001 with 594 million chip cards, securing it the leadership position with a market share of 30.4%.

"Gemplus continues to play a leading role in the industry" states Clare Hirst of Gartner Dataquest. "Although this has generally been a difficult year for this sector, our analysis shows that worldwide chip card shipments grew 10.4%, and that Gemplus shipped more chip cards than any other player".

Analysts Frost and Sullivan also rank Gemplus in the number 1 position. "In my opinion, I believe that Gemplus has retained its global leadership of the chip card industry, in both shipments and market value," says Anoop Ubhey. In June, Frost and Sullivan will produce their annual report analysing the smart card industry.

In April, a report analysing chip card shipments was released by Eurosmart, the largest smart card industry association comprising more than 90% of global smart card manufacturers. Based on these figures Gemplus has a 34% share of the global market

A key factor behind Gemplus' dominance of the smart card industry lies in its close relationship with its clients. This allows it to deliver the optimum solution to meet their needs, especially in the telecommunications sector where Gemplus leads the field working with 90% of the world's top operators. In 2001, wireless operators suffered from increasing churn rates and diminishing revenues. To help its customers combat these issues, Gemplus pursued a strategy that emphasized more sophisticated cards and the applications they support. In February 2002, Gemplus launched its 'ARPU Factory *' suite of solutions to provide operators with back-end infrastructure integration, customer profiling, Over-The-Air delivery and end-user applications development.

"The emphasis Gemplus places on delivering real value to its customers, beyond cards and chips, is one of the main reasons for the company's continuing success. We will continue to offer high-end solutions in the coming years as more and more non-GSM operators realize the intrinsic security and CRM benefits which smart cards provide, and as major operators in the Americas migrate to GSM/GPRS," explained Philippe Vallee, president of Gemplus' Telecommunications Business Unit.

In the banking and financial services sector, Gemplus works closely with its customers to simplify their migration paths to EMV , a trend which is expected to drive smart card adoption in Europe, Asia Pacific and Latin America. Earlier this year, Gemplus launched its 'EMV **Prime' suite of solutions, aimed at reducing EMV migration risk, complexity and time to market for its customers. Gemplus continues to lead in the development of cost-effective multi-application Java Card™ technology for North American banks that need to deliver differentiating services to cardholders. Gemplus also works with government and military institutions around the world to plan, develop and implement secure identity and authentication systems based on Gemplus' highly secure Java Card technology-based platform.

"The banking and retail sector is looking at the smart card industry not only to provide the level of security needed to combat issues such as fraud, but also to help them build valuable and trusted relationships with their customers," commented Gilles Michel, President of Gemplus Financial and Security Services Business Unit. "Our recent success in securing EAL 5+ security certification before all other market players, along with our experience in delivering EMV migration solutions, flexible card issuance services and value-adding applications, help strongly position Gemplus as these markets continue to adopt smart card technology."

*-ARPU - Average Revenue Per User This is the term used within the telecommunications industry to calculate the expected revenue an operator can derive from each customer
**- EMV - Europay/MasterCard/Visa set of international common standards for credit and debit smart cards

About Gemplus

GEMPLUS: the world's leading provider of smart card solutions.
Gemplus helps its clients offer an exceptional range of portable, personalized solutions that bring security and convenience to people's lives. These include mobile Internet access, inter-operable banking facilities, e-commerce and a wealth of other applications.
Gemplus is the only completely dedicated, truly global player in the Smart Card industry, with the largest R&D team, unrivalled experience, and an outstanding track record of technological innovation.
In 2001, Gemplus was the world number one in chip card shipments according to Gartner-Dataquest. Based on Eurosmart estimates, Gemplus shipped 34% of the worldwide market.
Gemplus trades its shares on Euronext Paris S.A. First Market and on the NASDAQ Stock Market as GEMP in the form of ADSs. Its revenue in 2001 was 1.0 billion Euros.

Gemplus: Beyond Smart
www.gemplus.com

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Vanessa Wong
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Vanessa.wong@edelman.com

©2002 Gemplus All rights reserved. Gemplus and the Gemplus logo are trademarks and service marks of Gemplus S.A. and are registered in certain countries. All other trademarks and service marks, whether registered or not in specific countries, are the property of their respective owners. Java and Java Card are trademarks or registered trademarks of Sun Microsystems, Inc. in the United States and other countries.