DuPont Photomasks and Hyundai Sign Memorandum of Understanding for Strategic Alliance

Business Wire, March 11, 1998

ROUND ROCK, Texas--(BUSINESS WIRE)--March 11, 1998--DuPont Photomasks, Inc. (NASDAQ: DPMI), more commonly referred to as DPI, today announced that it has signed a Memorandum of Understanding to create a strategic alliance with Hyundai Electronics Industries Co., Ltd. whereby the two companies will jointly develop advanced photomask technology and DPI will enter into a long-term supply agreement to furnish photomasks to Hyundai's semiconductor operations. In addition, Hyundai has elected to discontinue operations of its internal photomask facility, and has agreed to sell the manufacturing equipment to DPI. Definitive agreements are expected to be completed by the end of March, subject to regulatory approval. Terms were not disclosed.

"We look forward to further strengthening our relationship with DPI as we expect their photomask technology combined with our wafer processing technology should shorten development periods for advanced products," noted Kye Hwan Oh, Ph.D., executive vice president, Hyundai Electronics Industries. "Hyundai's internal photomask facility has provided great value to our company, including the manufacture of leading-edge photomasks supporting the production of 64M DRAM devices and the development of 256M DRAM devices. By entering into a strategic alliance with DPI, the world leader in the photomask industry, Hyundai can better focus its internal resources on our core competencies -- the design and manufacture of industry-leading semiconductor devices."

Oh continued, "We expect that with DPI's technical photomask capabilities and responsive customer service, we will be able to decrease our own investment in R&D and fully focus on the semiconductor wafer technology. Together, we expect to maintain world leadership in the field."

"We highly appreciate the confidence Hyundai has placed in DPI's ability to meet the demanding requirements of its semiconductor manufacturing operations, including developing photomasks for their leading-edge needs," said J. Michael Hardinger, chairman and chief executive officer of DPI. "Hyundai has entrusted DPI to fulfill their advanced photomask production requirements going forward, and our work together to further develop deep sub-micron photomasks will be an important element of our ongoing relationship. At the same time this strategic alliance will allow us to expand our photomask business in Asia while strengthening our position in the global market."

Hardinger also said, "The advanced photomask production and inspection equipment we will acquire in this transaction is particularly valuable to DPI's growing asset base and to the collaborative development we will be conducting with Hyundai in our facility in Ichon." Included are an ALTA(R) 3000 laser pattern generation tool, a MEBES(R) 4500 electron beam pattern generation system, a KLA 351 and Orbot RT-8000 pattern inspection tools, and a KLA STARlight(tm) contamination inspection system, as well as numerous advanced process, metrology and robotic handling tools.

Hyundai is a leading producer of semiconductors worldwide, including DRAM memory devices. The DRAM market is migrating rapidly to 16M and 64M devices, and Hyundai is now in pilot production of 256M devices. A key to this rapid migration is the shrinking of design rules from 0.35 micron to 0.18 micron. DUV lithography and, in particular, advanced photomasks, including phase shift masks are essential ingredients to achieving these advancements in a timely and cost effective fashion.

Hyundai Electronics Industries

Hyundai Electronics Industries Co., Ltd. is a comprehensive electronics company and one of the core affiliates of Hyundai Business Group in Korea. Its head office and factory are located at a 270-acre complex in Ichon, Korea. The company employs over 20,000 people. Hyundai ranks as the fourth largest DRAM supplier worldwide. Hyundai is continuing its efforts to lead high-tech industries such as semiconductors, display devices including TFT LCD, multimedia and information systems, telecommunications systems and automotive electronics. Information in detail about Hyundai products can be found on the worldwide Web at http://www.hei.co.kr.

DuPont Photomasks, Inc.

DPI is the world's largest photomask manufacturer, operating globally from ten strategically located facilities in North America, Europe and Asia. The company produces and supplies photomasks as well as photoblanks (photomask substrates) and pellicles (protective covers for photomasks). Photomasks are critical components in the semiconductor manufacturing process because they are used to pattern precision microscopic images of integrated circuits onto silicon wafers. As semiconductor feature sizes have become progressively smaller, the task of manufacturing photomasks that will faithfully pattern the circuit design onto silicon has become increasingly challenging. DPI is the world's largest producer of photomasks that enable the production of semiconductor devices with design rules at or below 0.35 micron. DPI is headquartered in Round Rock, Texas, and had worldwide sales in fiscal 1997 of over $260 million. DPI maintains a Web site at http://www.photomask.com.