AG Associates Receives Order From Leading U.S. Semiconductor Manufacturer.

SAN JOSE, Calif.--(BUSINESS WIRE)--Oct. 15, 1996--AG Associates (NASDAQ: AGAI), the world's leading supplier of advanced, single-wafer rapid thermal processing (RTP) equipment used in the manufacture of integrated circuits (ICs), announced today that it has received an order for four of its Heatpulse(R) 8108 RTP systems from a leading U.S. semiconductor manufacturer.

The systems will be used within the chipmaker's newly expanded 8-inch fab in New England for volume production of application specific integrated circuits (ASICs) and logic devices with sub-micron design rules. AG Associates reports that all four systems will likely be upgraded to the company's new Heatpulse 8800 RTP system, which was introduced last July. Shipments are slated to begin in January 1997 and continue through the end of the year.

According to AG Associates' President and Chief Operating Officer Julio Guardado, the production-proven performance of AG Associates' Heatpulse RTP systems and the company's comprehensive customer service and support on the East Coast, along with AG Associates' preferred supplier status, played a critical role in the chipmaker's purchasing decision. "AG Associates' Heatpulse 8108 and 8800 systems meet chipmakers' current and next-generation process requirements for high throughput, reliability and temperature uniformity at a low cost-of-ownership. As a result, leading chipmakers continue to turn to AG Associates for our advanced thermal processing solutions," said Guardado.

AG Associates' Heatpulse 8108 is designed to meet the full range of RTP process challenges for devices featuring sub-half-micron design rules. For chipmakers migrating to production of devices with 0.25-micron feature sizes, AG Associates introduced the HeatPulse 8800. Meeting most 0.25-micron process requirements while enhancing chipmakers' existing 0.35-micron RTP applications, the Heatpulse 8800 incorporates a number of new, proprietary design features that dramatically improve temperature uniformity and repeatability, while significantly boosting throughput. As a result, this flagship RTP system enables chipmakers to achieve advances in both process performance and cost of ownership for today's most advanced IC production requirements.

AG Associates is the leading supplier of rapid thermal processing equipment to the worldwide semiconductor industry. Founded in 1981, AG Associates is headquartered in San Jose, Calif., and maintains customer service and support centers in the United States, Europe and Far East to support its global customer base. The company's common stock trades on the Nasdaq Stock Market under the symbol AGAI.

CONTACT: AG Associates

Cheri Salazar, 408/935-2088

or

MCA, Inc.

Marie Labrie, 415/968-8900