Acquisition of MRC Batch Product Line From TEL Solidifies KDF's Position as a Leading Provider of PVD Equipment.

ORANGEBURG, N.Y.--(BUSINESS WIRE)--June 14, 1999--

Furthering its push into the market for physical vapor deposition semiconductor equipment, KDF Electronic & Vacuum Services, Inc. finalized the acquisition of all Materials Research Corporation (MRC) batch in-line sputter and etch system product lines from Tokyo Electron Limited (TEL). The financial terms of the agreement were not disclosed.

KDF now supports the MRC systems on a worldwide basis. More than half of the semiconductor fabs in the world now use a KDF system in wafer processing. KDF is now No. 3 in the market for physical vapor deposition equipment.

The worldwide market for batch in-line sputter and etch systems is worth approximately $200-$250 million per year. The systems are used in the production of gallium arsenide (GaAs) integrated circuits, primarily marketed to the telecommunications industry. KDF systems are used in the production of products across multiple markets. MRC batch in-line sputter and etch systems can remain in service for more than 20 years.

"KDF is committed to this market both now and in the future," said Kurt Flechsig, KDF president. "We are determined to add longevity to batch systems, supplying replacement parts, sputter targets and field service to more than 3,000 systems worldwide. We believe very strongly in the continued long term advantages of the batch product line. We have the established, worldwide infrastructure to support this product."

"The sale of the batch product line to KDF will serve our customers well both short and long term," said Robert Foster, president of Tokyo Electron Arizona, TEL's U.S. subsidiary. "TEL's vision and strategic focus, especially during the serious industry downturn we have experienced, must remain on advanced product development. The divestiture of the mature batch product line allows TEL to dedicate its resources to newer technological innovations that ultimately benefit our customers."

KDF has been manufacturing TEL's batch systems since 1996 and will now immediately assume all sales and service responsibilities for the batch systems. All resources supporting the sale of the batch systems, including key support personnel, have been transferred from TEL to KDF.

Today's announcement follows KDF's April 5 announcement, in which the company made the initial announcement of the acquisition. TEL originally acquired the batch product lines, which command about 10 percent of the market for physical vapor deposition equipment, from Sony MRC.

About KDF

KDF Electronic & Vacuum Services, Inc., produces batch inline-sputtering tools for the mainstream silicon, emerging materials and flat-panel display markets. KDF systems are used in the production of ink jet printers, photomasks, telecommunications networks, semiconductors, micromachines and others. KDF is located in Orangeburg, New York, and has representatives in Europe, Japan, Taiwan, Singapore, Malaysia, China and Korea.