SAN JOSE, Calif., June 14, 2004--Heralding a new era in wafer substrate and IC process tool qualification, KLA-Tencor (NASDAQ: KLAC) today unveiled the Surfscan SP2--its biggest breakthrough in wafer surface inspection since the company's landmark Surfscan product line was introduced more than 25 years ago. Incorporating proprietary ultraviolet (UV) illumination technology and offering throughputs of up to five times greater than the previous benchmark Surfscan SP1 DLS tool, the Surfscan SP2 provides the industry's lowest cost-of-ownership (CoO) surface inspection system for the 65-nm and below technology nodes. Capable of detecting defects as small as 30 nm, the Surfscan SP2 is the only production-worthy solution that provides consistently reliable and accurate defect detection on engineered substrates, such as silicon-on-insulator (SOI), strained silicon (sSi) and strained silicon-on-insulator (sSOI). Leading wafer and IC manufacturers are currently evaluating the Surfscan SP2 for use in their advanced development and production lines.

Soitec, the world's leading SOI wafer manufacturer, was the first company to evaluate the Surfscan SP2 for qualifying engineered substrates. "We're committed to providing the IC industry with the highest quality substrates that meet our customers' stringent manufacturing requirements," stated Andre Auberton-Herve, president of Soitec. "To achieve this goal, we're working in partnership with industry leaders like KLA-Tencor to make cost-effective
65-nm production a reality. Since we entered into our joint-development partnership with KLA-Tencor six months ago, the performance results on their new Surfscan SP2 inspection system have been extremely promising. This tool has demonstrated the ability to meet the sensitivity and CoO requirements for next-generation substrate production."

At the 65-nm node and beyond, transistor performance in high-end devices can no longer be improved by scaling alone. New materials, including inline process films and engineered substrates, are also being added to augment transistor performance. However, these new materials introduce new control parameters and challenges. For example, although surface uniformity is still an important specification for substrates, achieving a defect-free wafer is now necessary for optimum transistor performance. Different defect types, as well as smaller size defects, must be detected and correlated to yield.


Enables Next-Generation 65-/45-nm Node Substrate Qualification
With engineered substrates, traditional visible-wavelength wafer inspection systems are hampered by interference effects arising from multiple reflections from interfaces between silicon and buried oxide (BOX) layers. These cause false and inconsistent defect readings, and reduce overall defect sensitivity. The Surfscan SP2's unique UV laser emits at a specific wavelength that eliminates these interference effects--causing engineered substrates to behave like polished wafers during inspection, which improves inspection sensitivity and provides more consistent results.

Another inspection challenge with engineered substrates is that many more process steps are required to manufacture them compared to traditional silicon wafers. Three to four times as many inspections are required to ensure defect-free engineered substrates, making inspection throughput as important as sensitivity in ensuring cost-effective inspections. Surfscan SP2 incorporates advanced software algorithms, which provide faster data processing, as well as a new wafer handler. These and other features, combined with the new laser and optics design, enable the system to provide more than a five-fold increase in throughput for wafer final inspection compared to the Surfscan SP1 DLS. These enhancements also enable significant improvements in inspection CoO for traditional polished and epitaxial silicon wafers.

Enables 65/45-nm Node Process Tool Qualification and Monitoring
As product lifecycles grow shorter, chipmakers are under increasing pressure to accelerate their fab ramps in order to begin production and realize profit as quickly as possible. Wafer surface inspection has played a key role in qualifying new process tools quickly, as well as providing tool monitoring during production to ensure they remain within specification. At the 65-nm node, however, current surface inspection tools lack the sensitivity to find the smallest yield-killing defects on all critical layers, including at the gate module, where the heart of the device resides and where defect specs are at their tightest. With its UV laser, new darkfield optics and advanced algorithms, Surfscan SP2 finds defects as small as 30 nm--meeting the sensitivity requirements for all critical layers at the
65- and 45-nm nodes.

"The 65-nm node brings with it many new and unique manufacturing challenges that cannot be overcome with traditional inspection techniques. Without a major innovation in wafer surface inspection, the 65-nm node is at risk of never achieving cost-effective yield, "stated Mike Kirk, vice president and general manager of KLA-Tencor's Surfscan Division. "Surfscan SP2 leverages the 25-plus years of experience we've gained in defect management and wafer/process qualification, as well as several technology breakthroughs, to provide our customers with the industry-leading inspection sensitivity and throughput performance they need to keep pace with Moore's Law."

KLA-Tencor is now accepting orders for Surfscan SP2.


KLA-Tencor will showcase the Surfscan SP2 at the SEMICON West 2004 Exhibition, Wafer Processing Segment, July 12-14, in South Hall, booth #426 in the Moscone Center in San Francisco, Calif. A technical paper on the application of Surfscan SP2 technology for engineered substrate qualification, titled "nabling SOI Inspection for the 65-nm Technology Node and Beyond, "will be co-presented with Soitec at the SEMI Technology Symposium on Innovations in Semiconductor Manufacturing, to be held July 12-14 at the San Francisco Marriott Hotel.


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., with operations around the world, KLA-Tencor ranked #6 on S&P's 2002 index of the top 500 companies in the U.S. 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