Innovative Kodak Imaging Technology Integrated with IBM's Advanced Semiconductor Manufacturing Process

ROCHESTER, N.Y. -- (BUSINESS WIRE) -- Sept. 16, 2004 -- Eastman Kodak Company (NYSE: EK) and IBM (NYSE: IBM) will collaborate on the development and manufacture of image sensors to power mass-market consumer products, such as digital still cameras and camera phones.

The multi-year agreement will leverage Kodak's broad portfolio of image sensor technology and IBM's leading-edge complementary metal oxide semiconductor (CMOS) processing expertise to allow Kodak to commercialize a new family of CMOS image sensor (CIS) devices, another milestone in the company's effort to accelerate the growth of its digital businesses. This powerful combination - merging the strengths of two of the world's leading technology companies - will allow Kodak to supply image sensors that offer higher performance, improved image quality and more innovative features than current CIS devices. IBM will expand its value-added foundry offerings to include the design and high-volume production of image sensors for rapidly growing digital consumer imaging applications.

"Worldwide demand for image sensor devices is expanding at an explosive pace," said Chris McNiffe, General Manager of Kodak's Image Sensor Solutions business. "Today, Kodak is a worldwide leader in charged coupled device (CCD) image sensors serving the high-performance needs of the professional and industrial imaging markets. Our partnership with IBM now allows Kodak to deploy our core competencies in image science and sensor research into high-volume consumer applications, thereby significantly expanding the market opportunities for our products."

A critical component in any digital imaging device, image sensors act as the "eye" of a digital camera by converting light into electric charges to begin the capture process. Today, two of the highest growth markets for digital imaging are consumer digital still cameras and camera phones, segments that are ideal for CIS devices because of the design simplification and power savings offered by this technology. CIS devices currently on the market, however, often fall short of the image quality customers have come to expect from consumer digital products based on traditional CCD image sensors. Kodak and IBM will collaborate on the manufacture of CIS devices with proprietary designs from Kodak that will significantly improve image quality and take advantage of the power, integration and cost benefits of CMOS-based sensors.

"IBM has a long history of extending the reach of its semiconductor technology and manufacturing innovation into new and emerging markets," said Tom Reeves, vice president of semiconductor products and solutions, IBM Systems & Technology Group. "By combining our chip technology capability with Kodak's sensor expertise, we are able to tailor our semiconductor manufacturing processes to produce industry-leading image sensors for Kodak. This collaboration highlights the advantages of IBM's semiconductor foundry offering, and we look forward to helping Kodak establish a presence in the growing market for consumer imaging devices."

A key element of the joint Kodak/IBM CIS process is Kodak's unique CIS pixel technology, including its proprietary pinned photodiode and 4T cell architectures. These technologies, licensed to IBM as part of this agreement, permit the manufacture of CIS pixels that approach the size of the smallest CCD pixels offered today, with improved photosensitivity and lower noise. The new process also will leverage innovative IBM manufacturing technologies, such as the 0.18um CMOS copper manufacturing process already present at IBM's semiconductor facility in Burlington, Vermont, where the image sensors will be produced. When combined with Kodak's recent acquisition of additional design resources and intellectual property from National Semiconductor Corp., these next generation CIS devices will enable development of consumer products that can capture high-quality, multi-megapixel still images as well as 30-frame per second videos under low light photographic conditions.

The companies are not disclosing the terms of the agreement. For more information, please contact Image Sensor Solutions, Eastman Kodak Company at (585) 722-4385, by email at [email protected], or visit our website at www.kodak.com/go/imagers. More information about IBM semiconductors can be found at: www.ibm.com/chips.

About Eastman Kodak Company and infoimaging

Kodak is the leader in helping people take, share, print and view images - for memories, for information, for entertainment. The company is a major participant in infoimaging, a $385 billion industry composed of devices (digital cameras and flat-panel displays), infrastructure (online networks and delivery systems for images) and services & media (software, film and paper enabling people to access, analyze and print images). With sales of $13.3 billion in 2003, the company comprises several businesses: Health, supplying the healthcare industry with traditional and digital image capture and output products and services; Graphic Communications Group, offering on-demand color printing and networking publishing systems consisting of three wholly owned subsidiaries: Encad, Inc., NexPress Solutions, and Kodak Versamark; Commercial Imaging, offering image capture, output and storage products and services to businesses and government; Display & Components, which designs and manufactures state-of-the-art organic light-emitting diode displays as well as other specialty materials, and delivers imaging sensors to original equipment manufacturers; and Digital & Film Imaging Systems, providing consumers, professionals and cinematographers with digital and traditional products and services.

About IBM

IBM is the world's largest information technology company, with 80 years of leadership in helping businesses innovate. IBM is also a recognized innovator in the semiconductor industry, having been first with advances like more power-efficient copper wiring in place of aluminum and faster SOI and silicon germanium transistors. These and other innovations have contributed to IBM's standing as the number one U.S. patent holder for 11 consecutive years. More information about IBM semiconductors can be found at: http://www.ibm.com/chips.