SST not in Compliance for Nasdaq Continued Listing

SST (Silicon Storage
Technology, Inc.) has received a NASDAQ
Staff Determination letter dated January 2, 2008 indicating that SST is not in
compliance with the filing requirements for continued listing as set forth in
Marketplace Rules 4350(e) and 4350(g) because SST did not solicit proxies nor
hold an annual meeting of shareholders during 2007.

In addition, as
previously announced SST is not in compliance with Marketplace Rule
4310(c)(14) as it has not filed its Annual Report on Form 10-K for the year
ended December 31, 2006 nor its Quarterly Reports on Form 10-Q for the
quarters ended March 31, June 30 and September 30, 2007. SST plans to file
its delinquent periodic reports with the Securities and Exchange Commission by
January 15, 2008 and submit a compliance plan with respect to Marketplace
Rules 4350(e) and 4350(g) to the NASDAQ Listing Qualifications Panel as soon
as possible thereafter. Pending a decision by the Panel, SST’s shares will
remain listed on the NASDAQ Global Market.

In March 2007, the Company announced it was conducting a voluntary review
of its historical stock option grant practices covering the time from its
initial public offering in 1995 through 2007. As a result, SST’s filings with
the Securities and Exchange Commission were delayed while the chairman of the
Audit Committee conducted an independent review. In July 2007, the Company
announced the chairman of the Audit Committee had reached a preliminary
conclusion that SST will need to restate its historical financial statements
to record additional non-cash stock-based compensation expense related to
stock option grants as a result of errors in recording the measurement date
for certain stock option grants. Since that time SST has been working to
determine those compensation charges and their related impact and prepare its
delinquent filings.

Silicon Storage Technology, Inc.