EUV LLC Enters Into Development Agreement With Newly Formed U.S. Advanced Lithography; Led by Ultratech Stepper, USAL to be first company to focus solely on post-optical lithography.

SAN JOSE, Calif.--(BUSINESS WIRE)--May 6, 1998--Newly formed United States Advanced Lithography Limited Liability Company (USAL) today announced that it has entered into a non-exclusive agreement with the Extreme Ultraviolet Limited Liability Company (EUV LLC) to develop EUV lithography tools -- a leading technology contender in the post-optical lithography era. The alliance marks the second such agreement made by the EUV LLC to license the development function of the EUV lithography effort to a U.S.-based lithography company.

USAL, managed by Arthur W. Zafiropoulo, chairman, CEO and president of Ultratech Stepper, Inc. (Nasdaq NM:UTEK), is the first company to focus solely on post-optical lithography, which experts see as one of the most promising gateways to next-generation integrated circuits (ICs). Chip manufacturers Intel Corp., Motorola and Advanced Micro Devices (AMD) founded EUV LLC to fund continued EUV lithography research and to commercialize the technology with early access for the EUV LLC participating companies. In this same vein, Zafiropoulo formed USAL to help U.S. semiconductor equipment manufacturers strengthen and expand their competitiveness in the world economy by producing the EUV tools on American soil.

According to Zafiropoulo, the formation of USAL and its alliance with the EUV LLC represents a firm step toward re-establishing a U.S. lead in the lithography market. "When the transition to post-optical lithography takes place, EUV lithography systems could command a selling price as high as $15 - $20 million each, representing a significant market opportunity -- clearly a valuable benefit to the U.S. economy. Many experts agree that EUV is emerging as a main contender in the post-optical lithography era, and as such we believe that USAL is well positioned to take advantage of what could be the future of the IC industry," said Zafiropoulo.

To ensure USAL's ability to meet EUV LLC's criteria, current plans require $50 million in capital funding to develop USAL's prototype EUV system. Zafiropoulo noted that, although now in its initial stages of development, USAL is designed to become a fully equipped company serving the primary functions of system integration, test, marketing, sales and service. USAL's primary charter is to produce a sufficient volume of systems to satisfy the domestic market, specifically the needs of the EUV LLC members.

Commenting on the EUV LLC's agreement with USAL, Director of EUV LLC Business Programs Sander H. Wilson noted, "The EUV LLC and its member companies -- Intel, AMD and Motorola -- have been aggressively developing EUV technology in a CRADA partnership with the Virtual National Laboratory, which has been formed among representatives from Lawrence Livermore, Lawrence Berkeley and Sandia National Laboratories. USAL's participation is logical and welcomed since Ultratech has been an early participant and advocate of this technology. The program will definitely benefit from USAL's participation," said Wilson. "We look forward to working together with USAL as they take on the integration of this evolving state-of-the-art technology to create EUV systems that can be used for volume IC production."

According to EUV LLC officials, the proof of concept test system for EUV lithography will be built at Sandia National Laboratories over the next two years and will be used to demonstrate the lithographic potential of the technology.

About EUV LLC: The Extreme Ultraviolet Limited Liability Company (EUV LLC) was formed for the purpose of developing an advanced lithography capability for use by the commercial semiconductor industry. Extreme ultraviolet technology will potentially allow its members to produce multiple generations of semiconductor chips with feature sizes of 0.1 micron and smaller. EUV lithography is expected to make smaller, more powerful computer chips possible and help keep EUV LLC members at the forefront of the worldwide semiconductor industry. The EUV LLC currently consists of U.S. semiconductor manufacturers: Advanced Micro Devices Inc., Intel Corp. and Motorola Inc.

CONTACT: EUV LLC

Howard High, 408/765-1488

Fax: [phone]

E-mail: [e-mail]

or

MCA, Inc. (for USAL)

Jean LeMoin, 650/968-8900

Fax: [phone]

E-mail: [e-mail]