SANTA CLARA, Calif. - January 15, 2004 - Sun Microsystems, Inc. (NASDAQ: SUNW), a leader in systems and solutions that make the Net work, reported results today for its fiscal 2004 second quarter, which ended December 28, 2003.

Revenues for the second quarter of fiscal 2004 were $2.888 billion, a sequential increase of 13.9 percent and a year-over-year decline of 0.9 percent as compared with $2.915 billion for the second quarter of fiscal 2003. Total gross margin for the quarter as a percent of revenues was 41.8 percent, an increase of 1.7 percentage points sequentially and a decrease of 1.5 percentage points as compared with the second quarter of fiscal 2003. Net loss for the quarter was $125 million or $0.04 per share as compared with a net loss of $2.283 billion or a net loss of $0.72 per share for the second quarter of fiscal 2003.

"FY04Q2 was a quarter of progress for us," said Scott McNealy, Chairman, President and Chief Executive Officer, Sun Microsystems, Inc. "We announced over 20 new products at our sold-out SunNetworkSM conference in Berlin and a significant alliance with AMD that will continue our strategy of using industry economics to deliver extreme performance at compelling price points and puts Sun in a strong product position for calendar year 2004. We continue to be confident that these investments, along with our ongoing focus on operating efficiency and quality, will deliver increasing value to our customers and partners worldwide."

Steve McGowan, Sun's Chief Financial Officer and Executive Vice President, Corporate Resources, said "Our sequential revenue growth was the highest Q1 to Q2 revenue growth since fiscal year 1998. Despite competitive pressures, we improved gross margin sequentially due to an ongoing focus on cost management. We ended the quarter with a cash and marketable debt securities position of $5.161 billion after funding the growth of the business this quarter."

Sun has scheduled a conference call today to discuss its earnings for the second quarter of fiscal year 2004 at 1:30 p.m. (PT), which is being broadcast live at www.sun.com/investors.

About Sun Microsystems, Inc.

Since its inception in 1982, a singular vision -- "The Network Is The Computer" -- has propelled Sun Microsystems, Inc. (Nasdaq: SUNW) to its position as a leading provider of industrial-strength hardware, software and services that make the Net work. Sun can be found in more than 100 countries and on the World Wide Web at http://sun.com

This news release contains forward-looking statements regarding the future results and performance of Sun Microsystems, Inc., including statements that the new products announced and the alliance with AMD will continue our strategy of using industry economics to deliver extreme performance at compelling price points and puts Sun in a strong product position for calendar year 2004 and that we continue to be confident that these investments, along with our ongoing focus on operating efficiency and quality, will deliver increasing value to our customers and partners worldwide. Such statements are just predictions and involve risks and uncertainties such that actual results and performance may differ materially. Factors that might cause such a difference include risks associated with increased competition, continued adverse macroeconomic conditions in the U.S. and internationally, including adverse business conditions in the specific markets for Sun's products, lack of success in the timely development, production and acceptance of new products and services and in technical advancements, and the failure to manage costs and improve operating efficiencies. These and other risks are detailed from time to time in Sun's periodic reports that are filed with the Securities and Exchange Commission, including Sun's annual report on Form 10-K for the fiscal year ended June 30, 2003 and quarterly report on Form 10-Q for the fiscal quarter ended September 28, 2003.

Sun, Sun Microsystems, the Sun logo, and The Network Is The Computer are trademarks or registered trademarks of Sun Microsystems, Inc. in the United States and in other countries.