SpatiaLight Successfully Ramping Up Customer Deliveries of T-3 Imagers

SpatiaLight Successfully Ramping Up Customer Deliveries of T-3 Imagers

NOVATO, Calif., March 30 /PRNewswire-FirstCall/ -- SpatiaLight, Inc. (NASDAQ:HDTV), a leading developer and manufacturer of ultra high-resolution Liquid Crystal on Silicon (LCoS) microdisplays for the high definition television market, today announced a recent significant increase in product shipments to LG Electronics, its largest OEM customer and to Thintek Optronics Corp. This delivery increase reflects SpatiaLight's successful mass production ramp up of its 1080p T-3 imagers that has occurred in March.

During SpatiaLight's fiscal year-end earnings call held on March 14, 2006, the company stated that it intended to deliver approximately 1,000 LCoS imager sets to its customers, including LG Electronics, over the following 30 days. In the past two weeks, SpatiaLight has delivered more than 350 imager sets toward that initial goal of 1,000. This is ahead of SpatiaLight's delivery schedule, which includes larger deliveries as production increases. Dave Hakala, SpatiaLight's Chief Operating Officer, commented, "As we continue to accelerate our volume production ramp, we expect to satisfy the balance of the initial delivery schedule within the forecasted 30-day time period and to continue to ramp toward larger production volumes going forward."

"We are able to build shipping volumes because of our improved and consistent test yields, as measured against fully agreed upon specifications with LG," he added. "The ramp up of our manufacturing is moving along smoothly and our yields continue to increase. We expect this growing production volume to not only enable us to fulfill our initial purchase order with LG, but to help generate, and fulfill, expanded demand from additional customers," concluded Dr. Hakala.

Each SpatiaLight chipset incorporates three proprietary imagEngine(TM) microdisplays. The third generation T-3 model -- which has an active matrix configuration of 1920 pixels by 1080 pixels, for a total of 6.2 million pixels -- provides the highest resolution in the industry and is expected to help drive greater sales of HDTV units. The first generation T-1 model, which is no longer in production, had an active matrix configuration of 1280 pixels by 960 pixels.

On March 17, 2006, SpatiaLight raised approximately $1 million from the sale of 500,000 of its common shares. In accordance with Nasdaq Rule 4350(b), SpatiaLight also announced that in its Form 10-K filed with the SEC on March 16, 2006, its independent registered public accounting firm, Odenberg, Ullakko, Muranishi & Co. LLP, issued an audit report that expresses an unqualified opinion and includes a matter of emphasis paragraph relating to the company's ability to continue as a going concern.

About SpatiaLight

SpatiaLight, Inc., founded in 1989, manufactures high-resolution LCoS microdisplays for use in high definition televisions and other display applications. Providing resolution of more than 6.2 million pixels, each SpatiaLight LCoS set incorporates three proprietary imagEngine(TM) microdisplays. The company manufactures its products at its production facility in South Korea. The company is committed to developing microdisplay technologies that will be the standard for the next generation of high definition televisions and to providing OEMs with the most cost effective, high-resolution microdisplays in the industry.

For more information about SpatiaLight, please visit the company's website at: http://www.spatialight.com/ .

Safe Harbor Statement

This news release includes forward-looking statements that reflect SpatiaLight's current expectations about its future results, performance, prospects and opportunities. SpatiaLight has tried to identify these forward-looking statements by using words and phrases such as "may," "will," "expects," "anticipates," "believes," "intends," "estimates," "plan," "should," "typical," "preliminary," "we are confident" or similar expressions. These forward-looking statements are based on information currently available to SpatiaLight and are subject to a number of risks, uncertainties and other factors that could cause SpatiaLight's actual results, performance, prospects or opportunities in the remainder of 2006 and beyond to differ materially from those expressed in, or implied by, these forward-looking statements. These risks and uncertainties are outlined in the company's filings with the U. S. Securities and Exchange Commission, including its most recent report on Form 10-K.

Source: SpatiaLight, Inc.

CONTACT: Mr. Ted Banzhaf, Executive Vice President, of SpatiaLight,
Inc., +1-415-883-1693, or ir@spatialight.com

Web site: http://www.spatialight.com/

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