Tegal Receives Order for 6510 Series Critical Silicon Etch System from Leading Japanese Opto Device Maker.

Business Editors/High-Tech Writers

PETALUMA, Calif.--(BUSINESS WIRE)--Jan. 8, 2004

First-time customer chooses Tegal etch tool for

photo-semiconductor device production

Tegal Corporation (Nasdaq: TGAL) today announced the sale of a Tegal 6510 Series critical silicon etch system to a leading maker of opto and photo-semiconductor devices in Japan. This first-time order by the Japanese customer was based on the superior performance demonstrated over a home market competitor by the Tegal system during a side-by-side process evaluation of silicon trench and polysilicon gate etch applications. Tegal expects the etch system to be installed at the device maker's fab in early May 2004.

Opto and photo-semiconductor components are used extensively in optical-based storage devices for commercial and consumer applications, such as data and music CDs and DVDs, and they continue to be essential building blocks for the optical communications infrastructure. Improved manufacturing processes, in terms of both device performance enhancements and manufacturing cost decreases, are essential in continuing the adoption of these families of devices. The production-proven critical silicon etch processes demonstrated by the Tegal 6510 will help this customer meet current and future-generation photo-semiconductor performance and manufacturing goals.

"Our new Japanese customer selected the 6510 plasma etch system because of the superior results we demonstrated in a head-to-head comparison of silicon trench isolation and polysilicon gate etch manufacturing capabilities. The 6510 system here will join the long-established installed base of Tegal 6500 production systems already being utilized in the Japan market for manufacturing important consumer products like video game chips and CCD imaging devices," said Jim McKibben, Tegal's vice president of worldwide sales and marketing. "Tegal continues to increase its presence in a diverse range of markets, and welcomes the opportunity here to work in partnership with one of Japan's leading producers of optoelectronic components."

Safe Harbor Statement

The statements in this news release are forward-looking statements that involve a number of risks and uncertainties. As discussed in Tegal's annual report on Form 10-K for the fiscal year ended March 31, 2003, assumptions relating to the foregoing involve judgments with respect to, among other things, the ability of Tegal to successfully implement its business strategy; future economic, competitive and market conditions, including those in Europe and Asia and those related to Tegal's strategic markets; whether the products offered by Tegal will continue to achieve customer acceptance, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of Tegal. Although Tegal believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realized. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by Tegal or any other person that Tegal's objectives or plans will be realized. Tegal undertakes no obligation to revise the forward-looking statements contained herein to reflect such events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

About Tegal

Tegal Corporation, headquartered in Petaluma, California, is a leading designer and manufacturer of plasma etch, physical vapor deposition, and nano layer deposition systems used in the development and commercial production of devices based on nanotechnology and microfabrication technology. Tegal's suite of processing applications is used extensively for data storage, MEMS, microfluidics, smart cards, opto-telecom devices, integrated circuits (ICs), Radio Frequency Identification Devices (RFID's) and other related products. Both etching and deposition are key process steps and must be repeated multiple times in the production of these devices. Tegal markets and services its systems in all major IC-producing regions of the world. More information is available on the Internet at: www.tegal.com.