Bo Andersson Appointed Managing Director of RAE Systems Europe; Telecom Vet Sigrun Hjelmquist Tapped to Fill Board Seat Vacated by Andersson

SUNNYVALE, Calif. March 15, 2004 RAE Systems Inc. (AMEX: RAE), a leading global developer and manufacturer of rapidly-deployable, multi-sensor chemical and radiation detectors, monitors and networks for homeland security and industrial applications, today announced that Bo Andersson has been appointed managing director for RAE Systems Europe ApS, a wholly-owned subsidiary of the company based in Copenhagen, Denmark. Mr. Anderssons duties will include shaping the companys sales and marketing strategies, overseeing operations, and aligning the companys growth path with the regions sensing and monitoring needs. RAE Systems concurrently announced that telecommunications veteran Sigrun Hjelmquist has been selected to fill the board of directors seat that is being vacated by Andersson. Ms. Hjelmquist is one of the founding partners of the industrial venture capital company BrainHeart Capital, which is focused on investments in wireless communications.

We are fortunate to welcome industry leaders Sigrun to RAE Systems and Bo to our operational team. They are both seasoned executives with excellent backgrounds and broad experience in the industrial wireless technology, said Robert I. Chen, CEO of RAE Systems. Bos track record for growing technology businesses is outstanding and he brings the strategic sales and marketing credentials critical for a company of RAE Systems size and diversity. Sigruns background and experience in emerging technologies are excellent additions to the board of RAE Systems, and we look forward to her leadership and strategic vision.

Prior to assuming the position of managing director, Mr. Andersson served as a member of the RAE Systems board of directors. In September 2002, he was appointed president of Ericsson Micro Components, and from May 2000 to August 2002, served as president and CEO of Ericsson Microelectronics. In 1998, Mr. Andersson was appointed head of the Microelectronics Business Unit and from 1994 to 1998, he was the general manager for the Power Modules Business within the Ericsson Components AB. In 1994, Mr. Andersson was the project manager for the building of the sub micron facility in Kista, Sweden, and in 1977, he joined Ericsson where he was the head of process technology development.

Mr. Andersson is chairman of the board of Ericsson Power Modules AB and chairman of the board of Shanghai Ericsson Simtec Electronics Co., Ltd. He is also chairman of the steering committee for the Microtechnologies Centre at Chalmers University in Sweden. Mr. Andersson received a M.S. degree in Physical Engineering from the Royal Institute of Technology in Stockholm, Sweden in 1977.

Telecommunications veteran Sigrun Hjelmquist has been selected to fill the board seat that is being vacated by Andersson. Ms. Hjelmquist is one of the founding partners of the industrial venture capital company BrainHeart Capital, which is focused on investments in wireless communications. In 1979, Ms. Hjelmquist joined Ericsson and has until 2000 held various management positions in product planning, quality engineering, technical support and marketing. In 1998, she was appointed president and CEO of Ericsson Components, a global business including development, manufacturing and sales of microelectronic components, energy systems and distribution of electronic devices. Ms. Hjelmquist left Ericsson in 2000 and serves on the boards of Svenska Handelsbanken AB, Sandvik AB, IBS AB, Sydkraft AB, and the Confederation of Swedish Enterprise. Ms. Hjelmquist received an MSc degree in 1979 and a Licentiate of Technology in 1984 in physical engineering from the Royal Institute of Technology in Stockholm, Sweden.

About RAE Systems
RAE Systems is a leading global developer and manufacturer of rapidly-deployable, multi-sensor chemical detection monitors and networks for homeland security and industrial applications. In addition, RAE Systems offers a full line of portable single-sensor chemical and radiation detection products. RAE Systems’ products enable the military and first responders such as firefighters, law enforcement and other emergency management personnel to detect and provide early warning of weapons of mass destruction and other hazardous materials. Industrial applications include the detection of toxic industrial chemicals, volatile organic compounds and petrochemicals. RAE Systems’ products are used by many U.S. government agencies, including the Department of Homeland Security, the Department of Justice, and the Department of State, as well as all branches of the U.S. military, and by numerous city and state agencies. Our end users also include many of the world’s leading corporations in the airline, automotive, computer and oil industries. Our products are used in civilian and government atmospheric monitoring programs in over 50 countries. For more information about RAE Systems, please visit www.RAESystems.com.

Safe Harbor Statement
This press release may contain “forward- looking” statements, as that term is used in Section 21E of the Securities Exchange Act of 1934. These types of statements address matters that are subject to risks and uncertainties, which could cause actual results to differ materially. Factors that could cause or contribute to such differences include, but are not limited to, the general economic and industry factors and receptiveness of the market to RAE and its products. In addition, our forward-looking statements should be considered in the context of other risk factors discussed in our filings with the Securities and Exchange Commission, including but not limited to our annual report on Form 10-K and 10-Q filings, available online at http://www.sec.gov. All forward-looking statements are based on information available to the company on the date hereof, and the company assumes no obligation to update such statements.