Candescent Raises $125 Million Toward Flat-Panel Display Manufacturing Plant.

SAN JOSE, Calif.--(BUSINESS WIRE)--May 18, 1998--

Private High-Technology Convertible Debenture Will Help Finance

Initial Volume Manufacturing Facilities and Equipment

Candescent Technologies Corporation today announced it has raised $125 million through the sale of Senior Subordinated Convertible Notes to advance its bid to become the first ever high-volume manufacturer of flat-panel displays (FPDs) in the U.S.

Today's announcement represents one of the largest private convertible debentures ever closed by a privately held high-technology company. The offering closed on May 15, 1998. The seven percent notes are due in the year 2003 and are convertible into common stock of the company at any time at a conversion price of $13.00 per share, subject to adjustment based on the price at which the company sells its common stock in an initial public offering and the timing of that offering.

"This is the largest financing a U.S. flat-panel display company has ever completed for the purpose of establishing domestic volume manufacturing, representing a significant milestone for both Candescent and the U.S. display industry," stated Harry Marshall, chairman, president and CEO, Candescent Technologies Corporation. "The successful development of our ThinCRT display technology has enabled us to move to the next phase in our plan to become the first U.S.-based volume manufacturer of displays with global partners for global markets."

Today, approximately 95 percent of flat-panel display (FPD) volume manufacturing facilities are located in the Far East. As a result of this financing, Candescent is now considering options to build its first volume manufacturing plant in the Bay Area. The total cost for a typical state-of-the-art, fully equipped, FPD manufacturing plant capable of producing 12-15-inch diagonal displays for notebook PCs exceeds $400 million.

Candescent will use the proceeds for working capital and general corporate purposes, including product development.

Candescent is transitioning its ThinCRT display technology from initial product and customer development to volume manufacturing for a wide range of computer and video display product markets through the design and construction of a new manufacturing facility and the purchase of long lead-time equipment.

UBS Securities LLC served as the managing underwriters for the offering, with SBC Warburg Dillon Read Inc., BancAmerica Robertson Stephens and Salomon Smith Barney Inc. acting as co-managers. The offering was made to qualified institutional buyers in accordance with Rule 144A.

This announcement is neither an offer to sell nor a solicitation to buy any of these securities.

The securities have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

Candescent Technologies Corporation was founded in 1991 to develop, manufacture and market the world's first ThinCRT. ThinCRTs deliver full-motion, true color video image quality in a low-power, low-cost flat-panel display. Candescent intends to become a major supplier of flat-panel displays for notebook and desktop computers, communications and consumer products, and will deliver its first ThinCRTs in 1998. Candescent's corporate offices are located at 6320 San Ignacio Avenue, San Jose, Calif., 95119. Other information about Candescent is available on the Internet via the World Wide Web at http://www.candescent.com.

CONTACT: Candescent Technologies

Dawn Morse, 408/360-2610 (investor contact)

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Stewart Hough, 408/360-2658 (press contact)

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or

Tsantes & Associates (press contact)

Evelyn Hart, 408/369-1500

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