March 17, 2003 – Minneapolis, MN – FSI International Inc., a manufacturer of capital equipment for the microelectronics industry, said that it intends to discontinue its microlithography business operations and focus exclusively on its surface conditioning business.

For the FY02 ended August 31, 2002, the microlithography business revenue represented $61 million, or 43%, of the company’s total revenue of $143 million. Approximately 292 of the company’s 710 employees work in this business and will be affected by this decision.

“The combination of a weak global economy, weak demand for technology products, and the uncertain world situation contributed to this difficult decision,” stated Don Mitchell, FSI’s chairman and CEO. “As we wind down the microlithography operation, we will continue to support the installed base of products at customers and provide transition assistance for the displaced employees.”

In a prior press release the company stated that it was pursuing strategic partners for its microlithography business. During the past several months, FSI’s management evaluated partnering opportunities with other frontend equipment manufacturers and financial institutions. In addition, the company pursued multiple unit orders from customers that might have an interest in the long-term survival of the business and considered scaling down the business until industry conditions showed signs of improvement. None of these efforts achieved the goals identified by the company going into this process.