Electroglas to Move Manufacture of Wafer Probers to Singapore.

Business Editors/High-Tech Writers

SAN JOSE, Calif.--(BUSINESS WIRE)--Jan. 24, 2002

Electroglas, Inc. (Nasdaq:EGLS), a leading supplier of process management tools for the semiconductor industry, today announced plans to move manufacture of its technology-leading wafer probers from San Jose, Calif. to Singapore. Initial production in Singapore is anticipated to begin mid-year 2002, with full production for all released probers by mid-year 2003.

"As we look to the future, we anticipate that one of the fastest developing regions of the world for our products will be in Southeast Asia and China," said Curt Wozniak, chief executive officer of Electroglas. "The move to Singapore will give us a strategic presence in the region that demonstrates our long-term commitment to this growing marketplace."

Many, including Dan Hutcheson, president and chief executive officer of VLSI Research, support the promise of Southeast Asia and China for expansion in semiconductor manufacturing. Hutcheson notes there is an identifiable trend within the industry to move test and assembly functions to Asia to take advantage of its established experience base and lower cost of doing business. According to VLSI statistics, the chip equipment consumption for test and assembly operations in Southeast Asia and China increased from $1,757 billion in 1998 to $5,546 billion in 2000, a 78% compounded annual growth rate over this period. Hutcheson sees this trend being driven by an increasing number of chipmakers and fabless chip designers outsourcing to foundries and test houses to produce their products, and believes that suppliers with a strong presence in this region stand to gain considerable competitive advantage.

Wozniak commented, "We operate in a global economy and we compete around the world. To be successful, we must meet our customers' expectations in technology, performance, price, and after sales support. We believe that the move to Singapore underscores our commitment to continuous improvement of customer satisfaction."

STMicroelectronics (NYSE:STM), the world's third largest independent semiconductor company and an Electroglas customer for over 20 years in Singapore, expressed their appreciation and support for the Singapore move. Said Jeffrey See, vice president, Asia-Pacific, and general manager, STMicroelectronics' Ang Mo Kio, "STMicroelectronics is very pleased to see this expansion by Electroglas into Singapore. It is important for our supply chain to be situated close to the customer base, and we welcome Electroglas' increased presence in the region."

The Company has spent the past year evaluating the supply chain and planning the move, and has a dedicated team that is closely managing the transition process. This process includes keeping the San Jose manufacturing operations viable through the transition period in order to provide customers with an uninterrupted supply of new probers and spare parts. The Company plans to retain some manufacturing capability in San Jose, which will be focused primarily on new product introduction activities.

Wayne Woodard, vice-president and general manager of the Electroglas Prober Products Division, commented on the Company's timeline to full production, "Because Singapore has an available, talented workforce and a supply base with the latest technology capabilities, we should be able to ramp to full volume production as quickly as qualified process steps come online."

Choon Shian Tan, director of Electronics and Precision Engineering, Singapore Economic Development Board, highlighted the value that Singapore can add to Electroglas' global operations, "Singapore's pro-business environment and extensive connectivity provide Electroglas with a secure foothold in Asia from which it can launch into regional markets. Our strong supporting base of subcontractors and component suppliers deliver a comprehensive manufacturing solution for Electroglas to offer greater production efficiency and faster turnaround to its customers."

Woodard concluded, "By adding the Singapore operations, we are increasing the list of competitive advantages that can come from working with Electroglas. Foremost of these advantages is a responsive, global company prepared to meet the growing demands of our customers around the world."

Company headquarters will remain in San Jose, Calif., along with corporate administration, finance, sales, marketing, engineering, product design and new products introduction activities. Manufacturing operations of the Company's Inspection Products Division, located in Corvallis, Oregon, will be unaffected by the move. EGsoft, the Company's collaborative process management software division, with operations in San Jose, Corvallis Oregon, and Mumbai, India, will remain unchanged as well.

About Electroglas

Electroglas delivers essential tools for process management to enhance the profitability of semiconductor manufacturers. The company's wafer probers, inspection systems and software solutions serve as data collection, management and analysis tools that semiconductor manufacturers depend upon to improve their productivity and process control by optimizing sort-floor efficiency. Electroglas has been a leading supplier of wafer probers for over 40 years and has an installed base of more than 15,000 systems. The company's stock trades on the Nasdaq National Market under the symbol "EGLS". The company's World Wide Web site is located at www.electroglas.com.

Forward-Looking Statements 

The statements in this news release regarding the Company's future plans to move manufacture of its wafer probers to Singapore and the anticipated benefits are forward-looking statements that are subject to risks and uncertainties that could cause actual results to materially differ, either better or worse, from those projected. Such risks and uncertainties include, but are not limited to, the following: the risk of delays or withdrawal of final approval by the Singapore Economic Development Board; the risk of delays in outfitting the selected site; the risk of delays in hiring satisfactory personnel; the risk of order postponements or cancellations; the risks associated with a substantial foreign customer base; the risks associated with instability in foreign capital markets and foreign currency fluctuations; the upward and downward volatility in the demand for semiconductors and for the Company's products and services; competitive pricing pressures; the risk of delays in introduction and customer qualification of new products and services; and the Company's ability to manufacture and ship its products on a timely basis. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the Company's business in general, see the risk disclosures in the Company's SEC filings, including its most recent Annual Report on Form 10-K for the year ended December 31, 2000 and its quarterly reports on Form 10-Q filed from time to time with the SEC.