JMAR Receives $7.8 Million to Ready Its X-Ray Lithography Source for Integration Into SAL Stepper.

Business Editors/High-Tech Writers

SAN DIEGO--(BUSINESS WIRE)--July 31, 2001

Funding Will Accelerate Completion of Beta System for GaAs Wafer

Processing; Also Will Finance Next Generation X-Ray Collimator Development and Will Further Increase JMAR's X-Ray Source Power Output

JMAR Technologies Inc. (Nasdaq:JMAR), a provider of precision micro- and nanotechnology products, announced Tuesday that it had received $7,796,259 to continue the financing of its X-ray lithography (XRL) program from the U.S. Army Robert Morris Acquisition Center in Adelphi, Md., sponsored by the Defense Advanced Research Projects Agency (DARPA).

The funds will be used to construct an engineering prototype, or "beta" system, of an integrated X-ray-powered lithography system designed to cost-effectively produce advanced high-speed semiconductors for the optical networking and high performance military and commercial wireless telecommunications markets.

John S. Martinez, Ph.D., JMAR's chairman and CEO commented, "With DARPA's financial support and guidance, JMAR has become the world's leading developer of compact X-ray lithography sources. The timely availability of these additional funds will accelerate our efforts to complete, in 2002, a fully integrated engineering prototype XRL system capable of handling the first of what we believe will ultimately become a wide-range of high-performance semiconductor manufacturing applications.

"Specifically, this added financing will enable us to complete several key incrementally-funded contract tasks that were initially awarded to JMAR over the past three years," Dr. Martinez said. "They include the detailed engineering analysis of a lithography stepper test-stand by SAL Inc. in South Burlington, Vt.; continued development of an advanced large-field X-ray beam collimator to replace the second-generation collimator used in JMAR's current X-ray source; further upgrading of the power output of JMAR's modular X-ray source to a minimum of 45 watts; and completion of the initial integration phase of JMAR's laser plasma X-ray source into the SAL Model 5 stepper in preparation for installing a fully-integrated XRL system at a gallium arsenide (GaAs) wafer processing facility that has yet to be designated. Before the end of 2001, we expect DARPA will award a separate new contract to JMAR to complete the purchase of a Model 5 stepper from SAL, install JMAR's X-ray source into the stepper and perform the final installation and checkout of the fully-integrated XRL system."

Recent industry studies suggest that the projected costs of competing advanced optical or electron-beam lithography technologies, also aimed at producing many of the finer circuit features required to support the future product needs of the microelectronics industry, are soaring dramatically as researchers gain greater familiarity with the technical difficulties involved in implementing them commercially.

JMAR believes that, as the trend toward smaller circuit sizes continues, lithography systems based on integrated systems using JMAR X-ray light sources and SAL NanoPulsar(TM) steppers, which do not require expensive optics, could become increasingly attractive to manufacturers as they strive to produce their chips within an economically-constrained cost structure.

"The mating of JMAR's world-leading point-source X-ray technology with that provided by SAL, the world's most experienced X-ray lithography system provider, offers great near-term promise for improvements in the manufacturing throughput and economics of high bandwidth GaAs semiconductor device production," Dr. Martinez stated. "As we continue to increase the wafer processing throughput capabilities of our X-ray sources, we believe the opportunities to broaden our markets will expand rapidly to encompass an important segment of the silicon processing industry, as well," he said.

"The additional financing we have announced today will do much to enable JMAR and SAL to create an advanced lithography system that will provide the semiconductor industry with a lower cost, more flexible approach to manufacturing the very high performance chips needed to operate a range of future military and commercial electronic systems and components," Dr. Martinez added. "This integration of our two technologies will be a major step forward for the advanced lithography industry."

JMAR Technologies Inc., a semiconductor industry-focused company, is a leading developer of proprietary advanced laser and X-ray light sources for high-value microelectronics manufacturing and metrology. It is also a fabless provider of high performance integrated circuits for the rapidly growing broadband communications market and other microelectronics applications. In addition, JMAR manufactures precision measurement, positioning and light-based manufacturing systems for inspection and repair of semiconductors and continues to play an important role in adapting its precision semiconductor manufacturing technology to the fabrication of advanced biomedical and optical communications products.

The statements regarding JMAR's expectations for the successful development and introduction of new products and future sales and potential business opportunities are forward-looking statements based on current expectations that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. These risks include the failure of future orders to materialize as expected, delays in shipment or production, parts and labor shortages, dependence on semiconductor foundry capacity and timing, cancellation or re-scheduling of orders, delay in funding of third-party contracts, failure of acceptance of new products or technologies, failure of advanced technology and new intellectual property to perform as predicted, the failure of pending patents to be issued, and the other risks detailed in the company's 2000 Form 10-K and other reports filed with the SEC.