EDEN PRAIRIE, Minn.--August 26, 2002--NVE Corporation (OTCBB: NVEC) announced today that it has been awarded a contract by the Defense Advanced Research Projects Agency (DARPA) Defense Sciences Office (DSO) to develop advanced "BioMagnetICs." The initial phase is approximately $365,000 for the first contract year. With future phases and additional identified contracts, biomagnetics could generate several million dollars in NVE revenues over the next several years.

Biomagnetic applications include hand-held detectors of pathogens such as anthrax or smallpox, real-time DNA microarray testers, and "laboratory on a chip" diagnostic systems. Under the contract, NVE will be developing devices incorporating its unique Giant Magnetoresistor (GMR) "spintronics" materials, which are made of exotic metals as thin as a few atoms.

Unlike conventional electronics which rely on electron charge, spintronics use electron spin to store and transmit information, resulting in devices which are smaller, faster, and more accurate. The commercial potential of spintronics has been estimated to be $100 billion per year.

Commenting on the award, Daniel Baker, Ph.D., NVE's president and CEO, said: "This is the largest contract we have ever received in this area. In addition to the commercial potential of biomagnetics, all of us at NVE are proud that our technology will be used to help keep America safe."

NVE is a leader in the practical commercialization of "spintronics," which many experts believe represents the next generation of microelectronics. NVE's products include sensors and couplers which revolutionize data acquisition and transfer.

Statements used in this press release that relate to future plans, events, financial results or performance are forward-looking statements that are subject to certain risks and uncertainties including, among others, such factors as industry economic trends, our reliance on government contracts for a large percentage of our revenues, uncertainty relating to the awarding of future government contracts, as well as the risk factors listed from time to time in the company's filings with the SEC, including the company's Annual Report on Form 10-K and other periodic reports filed with the SEC.

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