SAN JOSE, Calif., Jan. 16, 2002 - KLA-Tencor Corp. (NASDAQ: KLAC) today announced that Atmel ® Corporation (NASDAQ: ATML), a leading U.S.-based chip manufacturer of advanced semiconductors and system level integration solutions, has adopted its Klarity ACE root-cause and yield-analysis software across all of Atmel's fabs. According to Atmel executives, this decision was based on Klarity ACE's ability to reduce the yield-learning cycle on several of its advanced semiconductor processes from months to only a few weeks at Atmel's Colorado Springs, Colo. facility. In addition to providing faster time to results and faster root-cause analysis, Klarity ACE enabled Atmel to more accurately predict its yields on future wafer runs, resulting in improved inventory management and materials flow planning. Klarity ACE is the industry's leading yield-analysis software, and its current installed base includes more than 40 fabs and 34 fabless companies.

"During the initial ramp-up of some of our new Flash memory products, we encountered several low yield problems that appeared difficult to resolve," stated Dr. T. C. Wu, executive vice president of technology at Atmel. "Using Klarity ACE, we were able to track our biggest yield-killing electrical defect problems to their source. More importantly, Klarity ACE integrated the defect and yield data collected by our KLA-Tencor inspection and review systems from across the fab into a standardized fab-wide process control system that helped us to reduce our yield learning from months to just weeks. Due to its success in enabling us to achieve this huge leap forward in yield learning, we have installed Klarity ACE in all our fabs, where we expect it will further accelerate the development and transfer of our new processes into production."

Yield learning is the ability to find, characterize and fix the defects that limit yield on new semiconductor processes. As integrated circuit (IC) product lifecycles continue to accelerate, it becomes more critical for chipmakers to accelerate their yield learning in order to continue to hit their optimal market windows with their latest-generation products. Klarity ACE enables chipmakers to quickly determine the source and cause of electrical and physical defects that lead to device failure. It also helps chipmakers reduce the time needed to take corrective action and minimize the impact of these defects to their overall yield by automatically generating problem reports that detail the steps needed to resolve the defect or process problem. As a result, chipmakers can achieve the benefits of both increased baseline yields and higher average selling prices (ASPs) associated with earlier deliveries on their latest products.

"Defect management is not just about improving yields; it's about achieving your desired yields within a shrinking window of time in order to achieve a return on your investment before the industry moves to the next device generation," stated Tom Long, vice president of KLA-Tencor's Electrical and Parametric Solutions Group. "To get a ROI on a new $2 to 3 billion fab within 18 months requires a comprehensive defect management strategy that not only includes inspection and metrology tools, but also includes analysis software that reduces the vast quantities of acquired data to a level where you can quickly implement the right corrective action. That's the value that our comprehensive yield management solutions bring to advanced chip production. Companies like Atmel recognize that end-to-end solutions that encompass metrology, inspection and yield analysis can provide them with the competitive edge they need to accelerate their yield learning and achieve first-to-market success on their most advanced devices."

Klarity ACE 5.7, the latest version of KLA-Tencor's yield-analysis software, incorporates several new features that improve its capabilities over previous versions. Users can now quickly identify the source of their yield problems in minutes instead of days, resulting in significantly accelerated yield learning. This speed is achieved through Klarity ACE's ability to overlay wafer bitmap data onto a defect wafer map to visually identify the defects that kill yields and differentiate them from nuisance defects. An additional contributory factor is the ability to overlay electrical test parameters over the sort wafer map, resulting in spatial correlation of critical electrical test parameters that affect yield. With Klarity ACE 5.7, foundries can also export standard formatted yield data to their fabless customers, thus guaranteeing the integrity of the yield data.

About Atmel: Founded in 1984, Atmel Corporation is headquartered in San Jose, Calif. with manufacturing facilities in North America and Europe. Atmel designs, manufactures and markets worldwide, advanced logic, mixed-signal, nonvolatile memory and RF semiconductors. Atmel is also a leading provider of system-level integration semiconductor solutions using CMOS, BiCMOS, bipolar SiGe, and high-voltage BCDMOS process technologies. For more information go to http://www.atmel.com

About KLA-Tencor: KLA-Tencor is the world leader in yield management and process control solutions for semiconductor manufacturing and related industries. Headquartered in San Jose, Calif., the company has sales and service offices around the world. An S&P 500 company, KLA-Tencor is traded on the Nasdaq National Market under the symbol KLAC.

Contact:
Meggan Powers
Director Corporate Communications