Beta Squared to Develop Inductively Coupled Plasma Technology for Microelectronic Mechanical Systems; Cooperative Research and Development Agreement Signed with the U.S. Army.

ALLEN, Texas--(BUSINESS WIRE)--June 28, 1999--

Beta Squared, Inc., a subsidiary of Photronics, Inc. (Nasdaq:PLAB), and the U.S. Army's Missile, Research, Development and Engineering Center (MRDEC) agreed to jointly research and develop plasma etch processes and enhanced chamber designs utilizing Beta's Inductively Coupled Plasma Source (ICP).

MRDEC and Beta Squared are working toward developing advanced ICP technologies and processes required to support the fabrication of high performance Microelectronic Mechanical Systems (MEMS) and other related semiconductor technologies. Financial terms of the multi-year agreement were not disclosed.

According to the agreement, Beta Squared will have the responsibility for designing, building and testing etch chambers equipped with their proprietary ICP plasma source. This high-density source is the product of a joint development agreement with the University of Texas at Dallas and has a patent pending. MRDEC will focus its expertise on developing processes for etching a variety of semiconductor and polymer materials, as well as provide Beta Squared with data and feedback on the performance of their ICP system.

"The engineering team at Beta Squared has been actively developing an ICP source which we believe will address MRDEC's technology and performance requirements. This technology will be fitted to an existing etch system platform currently installed at the MRDEC facility located at the Redstone Arsenal, Huntsville, Alabama. This offers Beta Squared a unique opportunity to gain valuable intellectual property rights for process chemistries which can be used for deep silicon trench etching," stated John J. Festa, Vice President of Beta Squared's Plasma Division. "Furthermore, this agreement strengthens Beta Squared's reputation among the leading plasma research institutions. We have been identified as an organization capable of providing innovative and exciting new plasma-based solutions for the purpose of etching and cleaning all manner of substrates. This includes PLASMAX(TM), Beta Squared's revolutionary dry cleaning technology that the Company is presently developing for cleaning NeXT Generation Lithography masks with funding assistance from International SEMATECH."

William C. McCorkle, Technical Director for USAAMCOM added, "Changes in our Country's military strategies have brought about higher performance standards for the MEMS technologies now playing increasingly critical roles in today's aerospace and smart weapons systems. Together with Beta Squared, MRDEC is actively engaged in identifying and implementing improvements in ICP technology and processes that are necessary to meet these requirements."

PLASMAX(TM) was developed jointly by Beta Squared and Los Alamos National Labs (LANL). It is an in-situ dry plasma cleanER designed to remove sub-micron particles in an environmentally friendly process step by utilizing inert gases, mechanical vibration and inherent forces present in a plasma environment. The technology is capable of cleaning either a semiconductor wafer or mask substrate mask within 25 seconds. The Company is examining ways in which it can incorporate this organic contaminate cleaning technology into a truly integrated cleaning solution by developing a proprietary particle contaminate cleaning system for both semiconductor wafers and masks.

Beta Squared is a wholly owned subsidiary of Photronics, Inc., a leading global supplier of photomask manufacturing technology and services. Beta Squared is headquartered in Allen, Texas, where it designs, builds and services a large installed base of plasma etch and wafer dry cleaning systems.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Except for historical information, the matters discussed in this news release that may be considered forward-looking statements may be subject to certain risks and uncertainties that could cause the actual results to differ materially from those projected, including uncertainties in the market, pricing competition, procurement and manufacturing efficiencies, and other risks detailed from time to time in the Company's SEC reports. The Company assumes no obligation to update the information in this release.