Saifun Semiconductors Reports Second Quarter 2006 Results

Saifun's management believes the Non-GAAP information is useful because it can enhance the understanding of the Company's ongoing economic performance and Saifun therefore uses internally the Non-GAAP information to evaluate and manage the Company's operations. Saifun has chosen to provide this information to investors to enable them to perform comparisons of operating results in a manner similar to how the Company analyzes its operating results.

[2] These non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP. A reconciliation of GAAP statements of operations to Non-GAAP statements of operations is included in the financial statements portion of this release as well as on our website in the Investors section at www.saifun.com.

Saifun's management believes the Non-GAAP information is useful because it can enhance the understanding of the Company's ongoing economic performance and Saifun therefore uses internally the Non-GAAP information to evaluate and manage the Company's operations. Saifun has chosen to provide this information to investors to enable them to perform comparisons of operating results in a manner similar to how the Company analyzes its operating results.



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