Exhibit 99.1

    Drexler Technology to Raise $10.1 Million in Private Placement

   MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Dec. 26, 2003--Drexler
Technology Corporation (Nasdaq:DRXR) announced today that it has
entered into an agreement with a group of institutional investors to
conduct an equity private placement with anticipated gross proceeds to
the Company of approximately $10.1 million. The private placement
involves approximately 791,000 shares of the Company's Common Stock at
a price of $12.76 per share, and closings are anticipated to occur on
or before Monday, December 29, 2003. Assuming the full $10.1 million
is received, the investors will also receive a nine-month option to
purchase approximately 121,000 additional shares at $16.51 per share
and five-year warrants to purchase approximately 158,000 shares,
exercisable for cash only, at a purchase price of $17.26 per share.
Morgan Keegan & Company, Inc. is acting as the Company's exclusive
placement agent for this transaction. The securities offered have not
been registered under the Federal Securities Act of 1933, as amended,
and may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements.
   The Company presently intends to use the net proceeds from this
private placement (1) to purchase capital equipment and make leasehold
improvements to further expand Drexler's LaserCard(R) optical memory
card production capacity, (2) for the planned cash purchase of Cards &
More GmbH and Challenge Card Design Plastikkarten GmbH, and (3) for
general corporate purposes.
   Drexler Technology Corporation (www.drexlertechnology.com) and its
wholly owned subsidiary, LaserCard Systems Corporation
(www.lasercard.com) are based in Mountain View. Drexler Technology
manufactures LaserCard(R) optical memory cards and chip-ready
Smart/Optical(TM) cards. LaserCard Systems Corporation manufactures
optical card read/write drives; develops optical card system software;
and markets optical memory cards, card-related data systems, and
peripherals.

   Forward-Looking Statements: All statements contained in this press
release that are not historical facts are forward-looking statements
that are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. They are not historical
facts or guarantees of future performance or events. Rather, they are
based on current expectations, estimates, beliefs, assumptions, and
goals and objectives and are subject to uncertainties that are
difficult to predict. As a result, our actual results may differ
materially from the statements made. Often such statements can be
identified by their use of words such as may, will, intends, plans,
believes, anticipates, visualizes, expects, and estimates.
Forward-looking statements made in this release include statements
regarding the Company's anticipated receipt of investment proceeds of
$10.1 million and its intended use of such proceeds. These
forward-looking statements are based upon our assumptions about and
assessment of the future, which may or may not prove true, and involve
a number of risks and uncertainties including, but not limited to,
whether there is a material adverse change to the Company prior to
closing which would allow the investors to elect not to proceed with
their investment, whether the investors honor their commitment to
invest assuming all closing conditions are fulfilled, and whether the
Company conducts its planned production capacity expansion and planned
acquisition of Cards & More GmbH and Challenge Card Design
Plastikkarten GmbH, as well as other risk factors detailed in the
Company's Form 8-K, 10-K, and 10-Q filings with the Securities and
Exchange Commission. Due to these and other risks, the Company's
future actual results could differ materially from the Company's
expectations. These forward-looking statements speak only as to the
date of this release, and, except as required by law, we undertake no
obligation to publicly release updates or revisions to these
statements whether as a result of new information, future events, or
otherwise.

    CONTACT: Drexler Technology Corp., Mountain View
             Steven G. Larson, 650-335-4307