Tegal Corporation Complies with Nasdaq Rule 4350b-1-B

Business Wire, July 2, 2004

PETALUMA, Calif. -- Tegal Corporation (Nasdaq:TGAL), a leading designer and manufacturer of plasma etch and deposition systems used in the production of integrated circuits and nanotechnology devices, today disclosed, in compliance with Nasdaq Marketplace Rule 4350 (b)(1)(B), that the independent audit report filed with the Company's Annual Report on Form 10-K for the year ended March 31, 2004, included a qualification for a going concern. The disclosure in this press release is required under the above Nasdaq rule and does not represent any change to the Company's recently filed Annual Report on Form 10-K.

About Tegal

Tegal provides process and equipment solutions to leading edge suppliers of advanced semiconductor and nanotechnology devices. Incorporating unique, patented etch and deposition technologies, Tegal's system solutions are backed by over 35 years of advanced development and over 100 patents. Some examples of devices enabled by Tegal technology are energy efficient memories found in portable computers, cellphones, PDAs and RFID applications; megapixel imaging chips used in digital and cellphone cameras; power amplifiers for portable handsets and wireless networking gear; and MEMS devices like accelerometers for automotive airbags, microfluidic control devices for ink jet printers; and laboratory-on-a-chip medical test kits.

More information is available on the Internet at: www.tegal.com.