SST: Fiscal 1Q08 Financial Results

SST (Silicon Storage Technology, Inc.) announced results for the first quarter ended March 31, 2008.

Net revenues for the first quarter were $81.1 million
compared with $107.4 million in the fourth quarter of 2007 and with
$97.5 million in the first quarter of 2007. Product revenues for the
first quarter of 2008 were $69.7 million, compared with $95.6 million
in the fourth quarter of 2007 and with $88.2 million in the first
quarter of 2007. Revenues from technology licensing for the first
quarter were $11.4 million, down slightly from $11.7 million in the
fourth quarter of 2007. Technology licensing revenues in the first
quarter of 2007 were $9.3 million.

Net income for the first quarter of 2008 was $1.5
million, or $0.01 per share, based on approximately 104.0 million
diluted shares. By comparison, the company recorded a net loss of $23.5
million, or a loss of $0.23 per share in the fourth quarter of 2007,
based on approximately 104.2 million diluted shares. For the first
quarter of 2007, SST reported a net loss of $1.3 million, or a net loss
of $0.01 per share on approximately 103.9 million diluted shares.
Included in net income for the first quarter of 2008 were tax refunds
and interest thereon of approximately $8.0 million.

SST finished the first quarter of 2008 with $146.4
million in cash, cash equivalents and short-term investments, down
approximately $15.8 million from $162.2 million on December 31, 2007.
During the first quarter of 2008, the company experienced some
non-operating items impacting cash including: a stock repurchase of 2.2
million shares of its common stock at an aggregate cost of
approximately $6.2 million, a repayment of a $6.9 million line of
credit for the company’s China subsidiary, the receipt of the above
mentioned $8.0 million tax refund and the investment of $16.0 million
in long term marketable debt securities.

Management Qualitative Comments
"During the first quarter, in addition to
seasonality, we experienced some softness in our business as several
high-volume customers pushed out shipments of their orders and others
have been slow to reengage following our capacity shortage at the end
of last year that necessitated our turning away certain opportunities,"
said Bing Yeh, president and CEO. "We do expect to ship to some of
those customers in the current quarter but ongoing volatile
macroeconomic conditions are prompting us to plan and guide
conservatively for our business. However, despite difficult current
market conditions, we are pleased by the growth prospect of our
high-ASP product platforms that we have been developing over the past
few years. We are very proud of the acknowledgement that our newest
products are receiving from the industry and we believe that they will
be a key component of our growth over the next several years."

Second Quarter 2008 Outlook
SST expects revenues of between $75 million and $85
million, assuming a slowdown in the U.S. and international economies.
Gross margin is expected to be between 25 percent and 28 percent,
subject to changing competitive market conditions. Total operating
expenses are expected to be between $29 million and $32 million
including non-cash stock-based expense. Net loss per share for the
second quarter of 2008 is expected to be between $0.08 and $0.12.

Silicon Storage Technology, Inc.