Tegal Reports Strong Q4 Revenue Growth In Fiscal 2000

Threefold Increase on Q3 Bookings: Losses Narrow 34% on Q3FY00

Petaluma, CA. Tegal Corporation (Nasdaq: TGAL), a leading designer and manufacturer of plasma etch systems used in the production of integrated circuits today announced operating results for its fourth quarter and fiscal year ended March 31, 2000.

The highlights of the quarter include: · Q4 revenues of $8.5 million, increases of 41% and 31% over Q4FY99 and Q3FY00 · Losses narrow to $1.9 million, improvements of 59% and 34% over Q4FY99 and Q3FY00 · Bookings up 3-fold on Q3FY00; Q4 book-to-bill of over 2 · Follow-on orders received for 900 and 6500 series systems · Balance sheet strengthened by sale of shares raising $7.5 million net of expenses

"Market acceptance of and demand for our unique solutions has continued to grow during the quarter, with particularly strong gains experienced in telecommunications applications," commented Chairman, President and Chief Executive Officer Michael L. Parodi. "We have also continued to win further capacity expansion orders for our 900 series systems in more traditional semiconductor areas and anticipate continued growth opportunities within our core markets. We are now expecting a return to profitability in the September quarter. With the successful closure of our recent fundraising with Acqua Wellington, Tegal is well positioned to capitalize on the opportunities ahead and support further growth."

Revenues for the fourth quarter increased 41 percent to $8.5 million, compared to revenues of $6.1 million for the fourth quarter of fiscal 1999 and up 31 percent from revenues of $6.5 million in the third quarter of fiscal 2000. The Company reported a reduced net loss of $1.9 million, or $0.17 per share compared with a net loss of $4.7 million, or $0.44 per share in the fourth quarter of the prior year.

For fiscal 2000, revenues totaled $26.4 million compared to $29.0 million in fiscal 1999. The net loss for the year was $12.6 million, or $1.15 per share compared to a net loss of $15.1 million or $1.42 per share in fiscal 1999. Bookings were up nearly 3-fold from the prior quarter and from the same quarter a year ago. Tegal s book-to-bill ratio for the fourth quarter was 2.04.

During the quarter, Tegal announced follow-on orders for 6500 series etch systems from a leading North American telecommunications equipment company for gallium arsenide applications and additional follow-on orders from another leading North American wireless telecommunications device manufacturer for multiple 900 series etch systems for gallium arsenide etch applications. The latter order will result in a doubling of that customer s installed base of Tegal etchers once shipped and installed in fiscal 2001.

Tegal netted $7.5 million from the sale of 1.3 million shares of the Company s common stock during the quarter pursuant to an S-3 registration statement filed with the SEC in January, 2000. The shares were purchased by the Acqua Wellington North American Equities Fund, part of a family of funds managed by Acqua Wellington Asset

Management.

Tegal Corporation, headquartered in Petaluma, California, is a leading designer and manufacturer of plasma etch systems used in the production of integrated circuits (ICs), opto-telecom devices and other related microelectronics devices. Etching is a key process 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 or dial 1-800-PRO-INFO, code TGAL.

Acqua Wellington Asset Management targets investment opportunities among mid-cap and small-cap companies in domestic and global equity markets. The family s largest fund is its diversified North American Equities Fund, focusing primarily on companies in the technology and life sciences sectors.

Safe Harbor Statement Except for historical information, the matters discussed in this news release are forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties including, but not limited to industry conditions, economic conditions, acceptance of new technologies, the growth of the wireless market, as well as other risks set forth in the Company s periodic filings with the Securities and Exchange Commission.

Contact:
David Curtis, Vice President, Finance and Administration and Chief Financial Officer of Tegal Corporation,
Tel: 707-765-5630, dcurtis@tegal.com,
or
General Info, Stephanie Mishra, Analysts, Susan Katz of The Financial Relations Board, 415-986-1591