Aug. 28, 2002 – Willow Grove, PA – Kulicke & Soffa Industries Inc. will close its substrate operations in Milpitas, CA, due to the extended downturn in the semiconductor industry.

K&S acquired the X-LAM substrate technology in January 1999, opened a development facility in Milpitas later that year, and renamed it K&S Substrates. The technology, while still in development, has yielded promising results with good customer interest due to its potential to address the semiconductor industry roadmap well into the future.

C. Scott Kulicke, chairman and CEO, stated, “While our substrate operation was intended to be a key component in the company’s strategy of supplying assembly solutions in the advanced interconnect space, it is highly capital intensive and requires on-going cash infusions.”

He continued, “In today’s volatile semiconductor industry, the most pressing issue is assuring the long term financial strength of K&S. Therefore, the fiscally prudent course of action is to terminate the venture at this time.”

The pre-tax charge for the closure is estimated at approximately $17 million and will be incurred in 4Q September 30, 2002.

The decision to close the operation is the most recent step in the company’s actions to cut costs and reduce cash usage. It had previously announced other measures aimed at returning the company to profitability, including a functional reorganization, reductions in force, and manufacturing moves to Singapore and China.