Press Release January 26, 2005
NVE Awarded DoD Contract to Develop Next-Generation Tunnel Junctions

EDEN PRAIRIE, Minn.--January 26, 2005--NVE Corporation (NasdaqSC: NVEC) announced today that it has been awarded a contract for approximately $520,000 by the Defense Advanced Research Projects Agency (DARPA) to develop next-generation spin-dependent tunneling (SDT) junctions.

The two-year contract was awarded under DARPA's Small Business Technology Transfer Research (STTR) program, which funds cooperative projects between businesses and research institutions. Under the contract, NVE will optimize and demonstrate high-sensitivity SDT junction designs using computerized nanostructure characterizations and atomic simulations to be developed by the University of Virginia and Oxford University (England).

SDT junctions are key spintronics building blocks used in magnetoresistive random access memory (MRAM), ultra-sensitive sensors, and biomagnetic sensors.

SDT junctions produce a large change in resistance through a normally insulating layer, depending on the predominant electron spin in a data storage layer. This allows electron spin to be sensed as electrical resistance. SDT junctions rely on structures as thin as a few atomic layers.

In January 2004 NVE reported it had achieved a record for SDT junction sensitivity, which is measured as tunneling magnetoresistance (TMR). TMR is the change in junction resistance between two stable states.

"Better SDT junctions will mean faster, cheaper MRAM, driving more widespread MRAM adoption," said NVE President and Chief Executive Officer Daniel A. Baker, Ph.D. "This contract utilizes some of the world's finest nanostructure modeling expertise to help us continue our leadership in spintronics."

NVE's technology is protected by more than 100 patents worldwide either issued, pending or licensed from others. The company has approximately 18 patents related to MRAM, some with dozens of claims.

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.