SAN JOSE, Calif., Nov. 29, 2004--KLA-Tencor (NASDAQ: KLAC) and Dainippon Screen Manufacturing Company, Ltd today announced they are partnering to commercialize advanced process solutions designed to address key manufacturing challenges associated with next-generation semiconductor devices. This partnership involves Blue29, a Silicon Valley start-up that has developed an innovative electroless film deposition technology for copper interconnects. Originally a KLA-Tencor venture capital investment, Blue29 has now become a wholly-owned joint venture between KLA-Tencor and Dainippon Screen.

"As a company focused on solving chip manufacturers' most pressing yield challenges, KLA-Tencor is committed to delivering solutions that help our customers to achieve better control over their critical production processes," stated Ken Schroeder, chief executive officer (CEO) of KLA-Tencor. "Blue29's patented electroless film deposition technology has enormous potential for improving copper electro-migration and stress migration--a key ingredient for achieving high reliability in copper devices. By combining our strengths and resources with Dainippon Screen, an industry-leading process tool manufacturer, we intend to make this technology a commercially viable solution that will enable our IC customers to deliver the full performance and cost potential of copper interconnects at future technology nodes."

"We are pleased to have the opportunity to enter the electroless metal deposition market," stated Takashige Suetake, chief operating officer (COO) of Dainippon Screen and president of its Semiconductor Equipment Company. "The increase in our wet clean market share over the last six years is validation that we offer significant advantages in the market place. With the understanding that copper is fundamentally a wet process, we expect to extend our know-how related to fluid management and single wafer platform design and manufacturing into this market. The business model allows for Blue 29 to benefit from the strengths of Dainippon Screen and KLA-Tencor to provide a differentiated product."

Under terms of the joint venture, Dainippon Screen will leverage its strengths in wet process tools and factory automation to provide a system embodying Blue29's technology that meets customer production requirements. KLA-Tencor, with its extensive customer support network, process integration expertise, and thin-film metrology and inspection knowledge, will be responsible for global sales, distribution and support.


About Dainippon Screen: Dainippon Screen Mfg. Co., Ltd was established in 1943 and is a top 10 supplier of semiconductor fabrication equipment. The company specializes in wafer cleaning systems, lithography tracks, and next generation flash anneal tools. All of the company's production sites are certified for ISO9001 as well as for ISO14001 Environmental Management System. Dainippon Screen is a public company quoted on the Tokyo stock exchange. Homepage at http://www.screen.co.jp/

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. Additional information about the company is available on the Internet at http://www.kla-tencor.com

Contact:
Meggan Powers
Director Corporate Communications