EDEN PRAIRIE, Minn.--February 22, 2005--NVE Corporation (NasdaqSC: NVEC) announced today that it has been awarded a one-year contract for approximately $400,000 by the Defense Advanced Research Projects Agency (DARPA) to develop ultra-sensitive spin-dependent tunneling (SDT) sensor systems.

Under the contract, NVE will develop systems to detect very small magnetic fields. Potential applications include detection of submarines, homeland security, and compasses for cellphones.

SDT junctions are key spintronics building blocks used in magnetoresistive random access memory (MRAM), ultra-sensitive sensors, and biomagnetic sensors. SDT sensors have high sensitivity without the cost, size, or cooling requirements of conventional magnetometer systems.

Relying on structures as thin as a few atomic layers, SDT junctions produce a large change in resistance through a normally insulating layer depending on the spin of the electrons in a sensing layer. In SDT sensors, an external magnetic field changes the spin of electrons in the sensing layer, producing a change in junction resistance. In January 2004 NVE reported it had achieved a record for SDT junction sensitivity.

"Ultra-sensitive tunnel junctions is one of our strategic research thrusts," said NVE President and Chief Executive Officer Daniel A. Baker, Ph.D. "SDT sensors have a number of potential military, homeland security, and commercial applications, and this contract will allow us to continue to advance the technology."

NVE is a leader in the practical commercialization of spintronics, a nanotechnology that many experts believe represents the next generation of microelectronics. NVE licenses its MRAM intellectual property and sells spintronic products, including sensors and couplers, to revolutionize data sensing and transmission.

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 uncertainties related to the awarding of future government contracts, risks associated with our reliance on several large customers, as well as the risk factors listed from time to time in our filings with the SEC, including our Annual Report on Form 10-KSB and other reports filed with the SEC.

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