Contact:
Soo Chung Patterson
408-955-7783
soo@televideo.com

DiskOnChip® Selected for TeleVideo's Latest Windows-Powered Thin Client

Flash Disk Supports Operating System and Networking Needs for Terminal Used Throughout Hospitality, Healthcare and Education Industries

FREMONT , Calif., Sep. 5, 2001- M-Systems (Nasdaq: FLSH), a leader in flash disk data storage products, today announced that TeleVideo Inc. (OTC: BB TELV) has integrated DiskOnChip into their second generation LCD Windows-based thin client, the TeleCLIENT™ TC7370.

TeleVideo's TC7370 is a fully-integrated, all-in-one terminal with a built-in high performance 15.1-inch digital LCD display that is powered by Microsoft's latest Windows CE 3.0 embedded operating system. The terminal is used in healthcare, education, hospitality and general office applications that require a space-saving design along with networking capabilities.

DiskOnChip enables TeleVideo to reduce cost and save valuable time to market by providing a reliable, cost-effective and local storage solution with built-in support for Windows CE. By using DiskOnChip, which is instantly recognized and supported as a disk drive, TeleVideo cuts down on its integration costs and accelerates delivery time-to-market. DiskOnChip's small form factor further supports Televideo's small footprint requirements needed for the thin client's versatile product placement, such as wall mounting.

"DiskOnChip local storage solutions give us the added flexibility of easy integration so that we can deliver higher performing and more cost-effective thin clients like our latest TeleCLIENT TC7370 sooner to market," said Dr. K. Philip Hwang, TeleVideo Inc.'s Chairman and CEO.

"I am happy that TeleVideo has chosen to utilize DiskOnChip in its second generation Windows-based thin client product," said Chuck Schouw, president of M-Systems, Inc. "For TeleCLIENT's TC7370 high performance needs, DiskOnChip offers among the highest read and write speeds, ideal for networking applications where data is frequently written and updated."

TeleVideo's TeleCLIENT is currently available on the market.

About M-Systems

M-Systems (Nasdaq: FLSH) is a leading developer, manufacturer and marketer of innovative data storage products, known as flash disks. The Company's flash disks provide the functionality of a mechanical hard drive on a solid-state silicon chip. M-Systems was first to bring to market a complete flash disk in a single die, using breakthrough DiskOnChip Millennium technology. The Company's products are based on its patented TrueFFS technology and include the DiskOnChip®, DiskOnKeyTM, and Fast Flash Disk (FFD) product families. DiskOnChip is targeting the markets of set-top boxes, thin clients and mobile phones, while the FFD product line is targeting the markets of video and audio servers, telecommunications systems and military/rugged applications. The DiskOnKey product family is targeted at the PC and laptop markets. For more information, please contact M-Systems at 8371 Central Avenue, Suite A, Newark, Calif. 94560. Telephone: 1-510-494-2090. E-mail: info@m-sys.com; and, on the Internet, http://www.m-sys.com.

About TeleVideo

A leader in network computing since 1975, TeleVideo (OTC BB: TELV) is developing and introducing the next generation in Windows-based terminals. TeleVideo's TeleCLIENT family of stand-alone and integrated LCD thin clients and TeleMANAGER Remote Management Software enable IT professionals to reduce costs by remotely delivering and managing business-critical applications to many environments such as hospitality, healthcare, financial, education and point-of-sale. TeleVideo is empowering these environments to put into place thin client solutions to deliver business-critical applications by reducing total cost of ownership and enhancing return on investment through labor- and energy-saving technology. For more information, please call us at 1.408.954.8333, or visit at www.televideo.com. Note to editors: A high-resolution photo image of TeleVideo's TeleCLIENT™ TC7370 Windows-based thin client with M-Systems' DiskOnChip flash disk is available on the Internet at
http://www.msys.com/images/prs/Image01w_flowers.jpg .

All company and product names mentioned may be trademarks or registered trademarks of their respective holders and are used for identification purposes only. The matters discussed in this news release include forward-looking statements that are subject to risks and uncertainties that may cause actual results to vary significantly. These risks include market and competitive factors, and other risks described in the Company's registration statement dated March 7, 2000 and other periodic reports filed with the Securities and Exchange Commission. The Company assumes no obligation to update the information in this release. Reference to the Company's website above does not constitute incorporation of any of the information thereon into this press release.