MOSAID Acquires Virtual Silicon

MOSAID Technologies Incorporated
(TSX:MSD) today announced it has completed the acquisition of Sunnyvale,
California-based Virtual Silicon Technology Inc., an established supplier of
semiconductor intellectual property (SIP).
Under the terms of the definitive agreement, MOSAID has acquired Virtual
Silicon for the purchase price of US$5.35 million. In addition, a percentage
of the business' operating profit over an 18 month period, ending March 31,
2007, will be paid to current shareholders of Virtual Silicon.
Virtual Silicon, founded in 1997, offers complete SIP solutions including
standard cell libraries, basic and application specific I/Os, memory compilers
and programmable phase locked loops (PLLs). The Company licenses its silicon
proven SIP products to manufacturers and designers of complex system-on-chip
(SOC) semiconductors. Since its inception Virtual Silicon has received over
US$40 million in venture capital financing which it has invested in SIP
product development, most recently, for the development of its Mobilize(TM)
and PLL products.
Virtual Silicon's main product line, Mobilize, addresses a growing market
requirement for low power consumption in portable electronics to extend
battery life. Mobilize has been recognized by the industry, winning the
DesignCon 2004 Design Vision award and the 2005 EDN Innovation Award. Virtual
Silicon has also developed a PLL product line featuring best-in-class power
consumption and performance. These versatile PLLs are optimized for
applications such as high-speed networking and video that require
sophisticated and precise electrically programmable clock synthesis with
frequencies of up to 3.0 GHz.
"The acquisition of Virtual Silicon is a major step forward in our
strategy to broaden our product offering and extend our reach within the
semiconductor industry as a leading SIP supplier," said Peter Gillingham, Vice
President and General Manager of MOSAID's Intellectual Property Division.
"Virtual Silicon's design expertise, established product lines and sales
channels, as well as existing customer and foundry relationships, complement
MOSAID's memory controller business."
"In its fiscal year ended March 31, 2005, Virtual Silicon generated
revenues of approximately US$7 million," said Richard Boadway, Executive Vice
President and Chief Financial Officer. "In terms of guidance for the seven-
month balance of MOSAID's fiscal year 2006, we expect that the Virtual Silicon
addition to our SIP business will yield incremental revenues of CDN$4 to $5
million and an operating loss of CDN$1 to $1.5 million, as we complete the
roll out of the Mobilize and PLL products. This includes the normal
amortization of purchase price amounts. The contribution of Virtual Silicon's
business in our next fiscal year is expected to be accretive."
MOSAID will continue to operate the Virtual Silicon business in
Sunnyvale, California, with its full staff complement of 24 employees.
Existing Virtual Silicon products will continue to be fully supported as the
combined teams develop and market new products under the MOSAID brand in the
future.

------------------------------------------------------------------------
Conference Call and Webcast

Management will hold a conference call and webcast today, Tuesday,
October 11, 2005 at 10:00 a.m. (EST). Participants wishing to access the
conference call should dial 1-800-814-4859. The conference call will also
be webcast live at www.mosaid.com and www.newswire.ca , and subsequently
archived on MOSAID's web site. A rebroadcast of the conference call will
be available until midnight on Friday, October 21, 2005. To access the
rebroadcast, please dial 1-877-289-8525 and enter the passcode
21156977(pound key).
------------------------------------------------------------------------

About MOSAID
------------

MOSAID Technologies Incorporated makes memory better through the
development and licensing of intellectual property and the supply of memory
test and analysis systems to semiconductor manufacturers, foundries and
fabless semiconductor companies around the world.
Founded in 1975, MOSAID is based in Ottawa, Ontario, Canada, with offices
in Santa Clara, California; Newcastle upon Tyne, U.K; and Tokyo, Japan. For
more information, visit the Company's web site at www.mosaid.com .

Forward Looking Information

This document may contain forward-looking statements relating to the
Company's operations or to the environment in which the Company operates. Such
statements are based on current expectations that are subject to a variety of
risks and uncertainties that are difficult to predict and/or beyond MOSAID's
control. Actual results may differ materially from those expressed in any
forward-looking statements, due to factors such as customer demand and timing
of purchasing decisions, product and business mix, competitive products,
pricing pressures as well as general economic and industry conditions. MOSAID
assumes no obligation to update these forward-looking statements, or to update
the reasons why actual results could differ from those reflected in any
forward-looking statements. Additional information identifying risks and
uncertainties is contained in other public filings with the Ontario Securities
Commission.
%SEDAR: 00002240E

For further information: Investor Inquiries: Heidi Vincent, Director,
Investor Relations & Communications, (613) 599-9539 x 1205,
vincent@mosaid.com ; Media Inquiries: Sara Haskill, Communications
Specialist, (613) 599-9539 x 1228, haskill@mosaid.com

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