Company Sees Expanding Market Applications For Its LCoS Imagers

May 3, 2006

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 that it is working with a global designer and manufacturer of next generation 3-D eyeglass-type display applications. These eyeglasses, powered by SpatiaLight's existing 1080p microdisplays, will provide users with a visual experience comparable to that of a large screen high definition television. SpatiaLight has agreed not to disclose the name of the developer at this time and the parties have not entered into any written agreements. The product line under development is a 3-D eyeglass-type display device for use with wireless phones, personal digital assistants and personal media players, which enable the viewing of broadband content, cable and satellite television, music videos as well as playing of video games, all with the experience of high definition large screen television. The device is designed to minimize the weight and maximize the comfort of the eyeglasses by locating the LCoS microdisplays and control functions in the wireless phone, PDA or personal media player, with the video signal transmitted to the eyeglass through optical fiber. SpatiaLight is developing a new dual imager solution for this display application, which will boast a 4.2 million pixel image and provide an unparalleled high definition picture. Near-to-eye products represent a rapidly growing segment of the consumer electronics sector. SpatiaLight intends to actively pursue opportunities in the fast growing 3-D near-to-eye display market as the company continues its production ramp for its high definition television OEM customers. "This new strategic initiative is designed to expand the use of our T-3 LCoS imagers into a significant growth market," commented Don Suh, SpatiaLight's Senior Vice President of Marketing and Sales and a former LG Electronics executive. "We believe that our ability to enter the 3-D near-to-eye display market will ideally complement our growing high definition television business and may lead to other applications for our LCoS imagers across the consumer electronics and telecommunications markets." About SpatiaLight SpatiaLight, Inc., founded in 1989, manufactures high-resolution LCoS microdisplays for use in high definition televisions and other display applications. 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. Each SpatiaLight LCoS Set for high definition television 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. SpatiaLight expects that the dual imager solution that it is developing for 3-D near-to-eye display applications will provide resolution of 4.2 million pixels. For more information about SpatiaLight, please visit the company's website at: http://www.spatialight.com.

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