Kopin Corporation Reports 33% Sequential Increase in Third-Quarter Revenue

CyberDisplay Business Reports Record Revenue

Company Expects Sequential Top-line Growth in Fourth Quarter to Exceed 20%

Taunton, MA. Kopin Corporation (Nasdaq: KOPN), a leading developer and manufacturer of III-V heterojunction bipolar transistor (HBT) products and miniature flat-panel displays, today reported financial results for the third quarter ended September 29, 2001.

Kopin s third quarter financial results exceeded the improved guidance provided by the Company on September 24, 2001. Revenue for the period was $12.3 million, compared with $9.2 million in the second quarter of 2001 and $23.8 million for the year-ago period. Kopin reported a net loss of $9.9 million, or $0.15 per share, for the third quarter of 2001, versus a net loss of $15.2 million, or $0.23 per share, in the immediately preceding quarter, and net income of $4.2 million, or $0.06 per share in the third quarter of 2000.

The net losses for the second and third quarters of 2001 exclude investment gains and an impairment charge. Including those items, the Company would have reported net income of $0.4 million, or $0.01 per share, in the second quarter and a net loss of $9.2 million, or $0.14 per share, in the third quarter.

Revenue from III-V products was $5.6 million in the third quarter, versus $17.9 million in the year-ago quarter and 47 percent higher than the $3.8 million reported in the second quarter of 2001. CyberDisplay revenue increased to $6.4 million in the third quarter of 2001 from $5.3 million in the third quarter of 2000 and up 23 percent sequentially from $5.2 million in the second quarter of 2001. III-V

``The wireless handset market began to rebound in the third quarter, fueling sequential revenue growth of 47 percent in our III-V business, said Dr. John C.C. Fan, Kopin s chairman and chief executive officer. ``Orders from our newer customers were steady throughout the quarter, and we are seeing a resurgence in business from our long-time customers. Our third-quarter results indicate that handset OEMs have worked through the excess inventory of the past several quarters. They are now focused on ordering components for new models being introduced in early 2002, so we again look for sequential top-line growth in the fourth quarter. CyberDisplay

``The third quarter was the strongest quarter to date for our CyberDisplay business, said Dr. Fan. ``Increasing demand from our camcorder customers - Matsushita, JVC and Samsung - combined with additional orders from our military and other consumer electronics customers, generated record CyberDisplay revenue of $6.4 million.

Earlier this month, Kopin took a major step toward achieving its goal of penetrating the next-generation mobile handset market when SANYO Electric Co., Ltd. demonstrated two next-generation wireless handsets featuring Kopin s CyberDisplay 640C at the Combined Exhibition of Advanced Technologies (CEATEC) show in Japan.

``Kopin s CyberDisplay was the first microdisplay to be demonstrated in a video-enabled wireless handset by a major Japanese OEM, said Dr. Fan. ``With 2.5 and 3G phone service being rolled out in Japan, we are particularly excited about our alliance with SANYO. We will continue exploring relationships with Japanese OEMs and telecommunications carriers as this market develops.

Kopin s CyberDisplay also was featured in several other next-generation applications at CEATEC: SANYO s mobile wearable TV featuring the CyberDisplay 320C; a version of the iCOM Personal Internet Browser from Interactive Imaging Systems, Inc.; and binocular HMD (head mounted display) optics systems from MicroOptical Corp. ``The show generated a great deal of interest from consumers and wireless OEMs, Dr. Fan said. ``The diverse group of applications showcased at CEATEC explains why the CyberDisplay s size, power efficiency, weight and resolution characteristics make it the ideal display solution for next-generation mobile devices.

Outlook ``In our III-V product line, increasing business from our long-time customers is an encouraging sign that the wireless handset market has begun to turn around. In our CyberDisplay business, the outlook continues to be positive. We expect CyberDisplay sales for camcorder applications to continue growing as our customers begin to introduce new models for 2002 and as we expand our market share. Military and consumer electronics applications also should drive CyberDisplay growth, continued Dr. Fan. ``As a result, in the fourth quarter we expect to achieve sequential total revenue growth in excess of 20 percent, with sales from both businesses increasing at a double-digit rate.

Third-quarter Conference Call Kopin will provide a live audio Webcast of its third-quarter conference call for investors at 5:00 p.m. ET today, . Investors who want to hear the call should log on to the investor relations section of Kopin s Web site, www.kopin.com, at least 15 minutes prior to the event s broadcast. Then, follow the instructions provided to assure that the necessary audio applications are downloaded and installed. The call will be available on the investor relations section for one week. After that, investors can access an archived version of the call on Kopin s Web site.

About Kopin Kopin is a leading developer and manufacturer of high-resolution, flat-panel display products and HBT wafers for telecommunications and digital imaging applications that enhance the delivery and presentation of video, voice and data. The Company has combined advanced AMLCD and integrated circuit technology to produce its CyberDisplay(TM) family of ultra-small, high-density imaging devices. The Kopin CyberDisplay family has won many international awards for innovation in the past two years, and now includes the CyberDisplay 1280, 640C, 640M, 320 and 320C - providing OEMs with powerful, high-quality display solutions for devices including consumer electronics such as camcorders, digital cameras and next-generation Internet wireless handsets. High speed, small size, power efficiency and signal quality make Kopin s HBT wafers the choice for power amplifiers used in current and next-generation wireless handsets. Telecommunication providers are using Kopin s HBT transistor wafers for power amplifier circuits used in wireless digital phones, and gigabit circuits for broadband and Internet data transmission. For more information, please visit Kopin s Web site at www.kopin.com.

CyberDisplay is a trademark of Kopin Corporation. For more information about Interactive Imaging Systems, Inc., please visit its Web site, located at www.iisvr.com. For more information about MicroOptical Corp., please visit its Web site, located at www.microopticalcorp.com.

Statements in this news release about Kopin Corporation s fourth-quarter 2001 financial results, its projection of a recovery in wireless demand, growth in its CyberDisplay business, increasing CyberDisplay orders from camcorder customers and the emergence of next-generation CyberDisplay applications may be considered ``forward-looking statements under the ``Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks and uncertainties that could materially affect future results. Among these risk factors are general economic and business conditions and growth in the flat panel display and gallium arsenide integrated circuit and materials industries, the impact of competitive products and pricing, availability of third-party components, availability of integrated circuit fabrication facilities, cost and yields associated with production of the Company s CyberDisplay imaging devices and HBT transistor wafers, loss of significant customers, acceptance of the Company s products, continuation of strategic relationships and other risk factors and cautionary statements listed from time to time in the Company s periodic reports and registration statements filed with the Securities and Exchange Commission, including but not limited to the Company s annual report on Form 10-K for the year ended December 31, 2000.

Contact: Kopin Corporation Richard Sneider Chief Financial Officer Tel: (508) 824-6696 rsneider@kopin.com or Sharon Merrill Associates, Inc. Ehren Lister Account Executive Tel: (617) 542-5300 elister@investorrelations.com