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Gemplus Strengthens Dominance in Burgeoning Brazilian Market

Gemplus lands 3 key contracts and reinforces its leadership in the South American smart card market

Sao Paulo, Brazil and Cartes 2003, Paris, 18 November 2003 -- Gemplus (Euronext Paris SA: GEPL.PA; Sicovam: 005768; NASDAQ: GEMP), the world’s leading provider of smart card solutions, today announced that its leadership position in Brazil has been strengthened by securing three major new contracts including Banco do Brasil for EMV migration, Sercomtel Celular for SIM cards and Telecom services, and SPTrans for smart card-managed transport systems.

Gemplus has led the Brazilian market since 1999 when it first entered into a joint venture with American BankNote. Gemplus BankNote produces over two million cards per month in Sao Paolo. Gemplus holds a leading position in Brazilian smart card market with key telecom clients: Telemar, Sercomtel Celular, TIM Brasil, and OI Celular, and within the financial services market: Banco do Brasil, Banco Bradesco, ITAU, SPTrans, TAM Airlines, Smart Club do Brasil, AOL.

The potential for smart cards in Brazil is very high. Although magnetic stripe cards are still dominant in the banking sector, smart cards are starting to gain considerable ground. In terms of EMV* migration, the country is one of the most advanced in the world and Gemplus is heavily involved with Brazilian banks and financial institutions in moving forward to meet EMV standards. To date, Gemplus BankNote has supplied more than 10 million smart cards to the Brazilian market and is currently the undisputed market leader.

Gemplus launched the world’s first smart card based on Java Card™ technology in 1997, and Gemplus’ GemXpresso card range is ranked the number one Java Card technology for banks and retailers worldwide. Gemplus will deliver Latin America’s largest bank, Banco do Brasil, 400,000 Java Card™ MasterCard to be the first company to roll out EMV smart cards based on Java Card technology in the Latin America region.

The GSM market in Brazil has seen explosive growth since 2002 when the market boasted an anticipated 1.5 million GSM subscribers by year-end¹. By August 2003, the market had expanded to more than 4 million² GSM subscribers and is predicted to reach 21 million GSM subscribers across Latin America by the end of 2005. Gemplus BankNote’s contract with Sercomtel Celular represents the eighteenth Latin American mobile operator to choose Gemplus’ S@T technology. Sercomtel’s SIM card solution uses 64K SIM cards for GSM produced by Gemplus BankNote. Sercomtel will benefit from Gemplus’ leading SIM Toolkit (STK) architecture based on the latest S@T specifications, and its Over the Air (OTA) platform, allowing the operator and user to remotely update the information and/or applications secured within the card. “SIM cards and STK present Sercomtel with a unique opportunity to offer a wide range of data and information services from day one,” says Wanderley Rezende Neiva, Director of Engineering for Sercomtel Celular. “The solution has allowed us to get closer to our subscribers and increase traffic on our mobile network.”

Gemplus is also working with SPTrans to help improve the speed and efficiency of the mass transit system in Sao Paolo. Gemplus’ GemEasy-8000 contactless smart card technology will facilitate fare collection on the over-stretched bus network and 2.5 million smart cards will be issued to students, pensioners, and employees.

“We are confident that our investment in Brazil will continue to pay dividends as the market matures. We have laid strong foundations since 1999 and have emerged as the dominant provider of smart card solutions in this region,” says Alex Mandl, CEO of Gemplus. “Securing these three significant contracts has demonstrated the capabilities of Gemplus in growing and retaining its international leadership status.”

About Gemplus
Gemplus (Euronext Paris SA: GEPL.PA; Sicovam: 005768; NASDAQ: GEMP) is the world's number one provider of smart card solutions.

Gemplus helps its clients offer an exceptional range of portable, personalised solutions that bring security and convenience to people's lives. These include mobile data services, inter-operable banking, identity, WLAN, m-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 2002, Gemplus was the worldwide smart card leader in both revenue and total smart card shipments (source: Gartner-Dataquest). Gemplus was also awarded Frost & Sullivan's 2002 Market Value Leadership Award for its exceptional performance.

Last year Gemplus shipped products & services to 460 bank customers in 67 countries. Gemplus' revenue in 2002 was 787 million Euros.

www.gemplus.com

1 Source: Gemplus
2 Source: Anatel
3 Source: GSM Association – EMC World Cellular Database

*:EMV – a smart card standard that was created in 1996 and developed by Europay (now MasterCard Europe), MasterCard, and Visa. EMV specifies that, by 2005, all debit/credit payment cards in Europe will be smart cards rather than magnetic stripe cards. Visa and MasterCard Europe have put in place a number of incentives to ensure that banks across Europe manage to meet the deadline. The EMV standard is recognized internationally, guaranteeing worldwide interoperability and security.

©2003 Gemplus. All rights reserved. Gemplus, the Gemplus logo, and GemXpresso are trademarks and service marks of Gemplus S.A. and are registered in certain countries. Java and Java Card are trademarks and service marks of Sun Microsystems, Inc., and may be registered in certain countries. All other trademarks and service marks, whether registered or not in specific countries, are the property of their respective owners.

Some of the statements contained in this release constitute forward-looking statements. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activities, performance, or achievements expressed or implied by such forward-looking statements. Actual events or results may differ materially. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Factors that could cause actual results to differ materially from those estimated by the forward-looking statements contained in this release include, but are not limited to: trends in wireless communication and mobile commerce markets; our ability to develop new technology, and the effects of competing technologies developed and expected intense competition generally in our main markets; profitability of our expansion strategy; challenges to or loss of our intellectual property rights; our ability to establish and maintain strategic relationships in our major businesses; our ability to develop and take advantage of new software and services; and the effect of future acquisitions and investments on our share price. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such forward-looking statements. The forward-looking statements contained in this release speak only as of this release. We are under no duty to update any of the forward-looking statements after this date to conform such statements to actual results or to reflect the occurrence of anticipated results.
For further information, contact:

Marielle Bricman
Gemplus SA
Tel: + 33 4 42 36 55 96
Marielle.bricman@gemplus.com

Natalia Martinez
Edelman
Phone: +54 11 4315 4020 ext. 33
Email: natalia.martinez@edelman.com