Gemplus reaches another major milestone for SIM cards in smart card history

• Deployment confirms Gemplus' position as the leader in providing smart cards and smart card-based solutions
• Figures illustrate that over 1 in 3 SIM cards currently deployed in the field is made by Gemplus
• In mature GSM environments, the role of the SIM is evolving, becoming an architectural control point for secure content delivery and mobile transactions

Luxembourg, 21 August 2002 - Gemplus (NASDAQ: GEMP), the world's leading provider of smart card-enabled solutions, announces today that it has passed the 500 Million mark in terms of SIM cards deployed in the field. Since the standardization of GSM in 1992, Gemplus has consistently been the leader in terms of smart card shipment for the telecom industry. To date, a total of 1.36 billion SIMs have been delivered globally with Gemplus providing more than one in every three SIM cards (Source: Gemplus Market Analysis).

With GSM reaching maturity, Gemplus has broadened its focus to include other telecom standards. For example, Gemplus has played a key role in the first card-based network for CDMA by supplying China Unicom with R-UIM's1, and in Japan, supplied USIMs2 for the first commercial launch of 3G by NTT DoCoMo. In the USA, Gemplus has introduced the SIM in non-GSM environments such as iDEN with Nextel. They have also been supporting the migration from TDMA to GSM across the board.

With the emergence of a new ecosystem wherein content providers have entered the relationship between the operator and the end-user, the role of the smart card has evolved. Gemplus' strategy is to lead the market by providing solutions based around the smart card, wherein the SIM reinforces its role as the unique direct link between the operator and the end-user, and also enables access for the content provider. As consumers drive operators to deliver new and better services, the SIM's role becomes an architectural control point for the download, upload and deletion of applications, as well as secure mobile transactions.

Philippe Vallée, president of the Telecom Business Unit, Gemplus said, "Reaching this major milestone is evidence that the SIM has become a fundamental component of mobile telephony. There are few companies who can say that they have delivered 500 million products. By consolidating our relationships with our clients and moving into the applications space, we are ready and looking forward to delivering the next 500 million".

To support this, Gemplus is creating strategic partnerships with various companies to provide different solutions such as mobile payment, self-care and other CRM applications, location-based services and mobile entertainment. It aims to bring to market a range of mobile data applications that can be easily deployed and managed over the air.

"Frost & Sullivan believes that Gemplus' recent move towards providing SIM-based solutions has allowed them to leverage on their existing experience and offer real value to their customers beyond simple smart card provisioning. Gemplus will continue to offer high-end solutions in the coming years as mobile operators realize the full security and CRM benefits that smart cards provide" said Anoop Ubhey, Senior Smart card Analyst, Frost & Sullivan.

"The Asian market is emerging as one of the strongest areas for dominant SIM growth. While growth in Western Europe is stabilizing, Asia is still on an upward curve. Of the 215 million new subscribers worldwide in 2001, 95 million were based in Asia Pacific (EMC database 2002)." Said Jean-Philippe Betoin, Chairman of the SIMalliance.

Passing the 500 million mark in SIM card shipments represents a substantial contribution to the overall growth of Gemplus, which has already delivered over 3 billion smart cards since its beginning in 1988. These cover the other growth markets of banking, ID, security, government, transport, retail and loyalty. Continued leadership has led Frost & Sullivan to award the prestigious Market Value Leadership to Gemplus in 2002.

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 smart 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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