SAN JOSE, Calif., Mar. 15, 2001 - KLA-Tencor Corp. (Nasdaq: KLAC) today announced the appointment of Gerald Li as president of KLA-Tencor China. Li, who has more than 17 years experience in the semiconductor industry, will oversee the expansion of KLA-Tencor's operations in the People's Republic of China (PRC). This expansion is driven by the growing service and support needs of this region's rapidly emerging market for semiconductor equipment.

Paul Davis, senior vice president of international operations for Semiconductor Equipment and Materials International (SEMI), says that industry analysts estimate the market for semiconductor equipment in the PRC will be about $4 billion in 2001 and will grow to $7 billion by 2003. "By 2010, China could become one of the world's largest markets for semiconductors and semiconductor capital equipment," said Davis. "With such rapid growth, process diagnostic systems such as wafer inspection and metrology tools will become increasingly important in helping fabs accelerate their yields and ramp to full production to meet market demand."

"Strengthening economic ties between the PRC and the U.S. have opened a tremendous opportunity for KLA-Tencor to tap into one of the highest growth-potential markets in the world," stated Ken Schroeder, president and CEO of KLA-Tencor. "With more than ten wafer fabs currently in operation or on the drawing board in China, it is vital that chipmakers based in the region have access to comprehensive customer service and support from their tool suppliers in order to help them sustain such rapid growth. With our new operations in China, KLA-Tencor can more readily anticipate its customers' needs and provide the breadth of services available in other regions. This will enable them to introduce new manufacturing processes into production more quickly, as well as maximize yields and profitability."

At present, KLA-Tencor China service and support personnel are staffed at its headquarters in Shanghai. By the end of this year, the organization is expected to add a satellite office in Tianjin and include a fully staffed sales, service and applications organization totaling more than 40 employees.
Commenting on Li's appointment as president of KLA-Tencor China, Schroeder added, "Gerald's extensive knowledge of semiconductor manufacturing, coupled with his experience in Asian markets and his in-depth understanding of Chinese culture, will prove invaluable as we expand our operations into this important market."

Prior to joining KLA-Tencor, Li was president of Grand Pacific Optoelectronics, a Taiwan-based manufacturer of flat panel displays. He also founded Precision Semiconductor Mask Corp. (PSMC), a leading Taiwanese photomask manufacturer, and was president of the company until its acquisition by Photronics last year. In addition, he held a number of management roles at other leading companies, including Intel, Varian Associates, AMD and National Semiconductor. Li earned his master's degree in materials science and engineering from the Massachusetts Institute of Technology.

KLA-Tencor China is located at King Tower 1902, No. 28, Xinjinqiao Road, Shanghai 201206, PRC. For more information, please contact the office by phone at +86 (21) 50311540 or fax +86 (21) 58346654.


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.

Contact:
Meggan Powers
Director Corporate Communications