PDF Solutions Acquires SIA, Fault Detection and Classification Software

PDF Solutions, Inc. (Nasdaq:PDFS), the leading provider of process-design integration technologies to enhance IC manufacturability, today announced that it has signed a definitive agreement to acquire Si Automation S.A. (SIA), a privately held Fault Detection and Classification (FDC) software and services provider, based in Montpellier, France.

Under terms of the agreement, PDF Solutions will acquire SIA for approximately $26.6 million in cash and approximately 715,000 shares of PDF Solutions common stock, resulting in aggregate consideration of approximately $35.7 million, based upon the closing price of PDF Solutions common stock on the Nasdaq National Market yesterday of $12.68 per share, or approximately $30.4 million, net of expected net cash-on-hand at SIA, as of the close date of this transaction. PDF currently expects the transaction to close within a few days.

At 90-nanometer production and beyond, process control software plays a critical role in enabling superior yield and equipment utilization in IC manufacturing operations. The advent of 300-mm fabrication facilities, with their associated higher capital costs, further exacerbates the risks and financial consequences of undesired process variations and excursions. Fault Detection and Classification (FDC) software provides fabs with the data collection and analysis capabilities required to rapidly identify the sources of process variations and excursions by monitoring equipment parameters.

With an installed base that includes a majority of the top 20 semiconductor manufacturers around the world, SIA is a technical and market leader in FDC software. SIA’s Maestria(R) offering combines best-in-class data collection, processing, and analysis capabilities.

Together with SIA, PDF Solutions will expand from its current strength in yield ramps and offline production data analysis to further address the sources of yield loss in volume production. The combination and integration of Maestria, dataPOWER(R), and PDF’s complete silicon characterization infrastructure will provide fabs with an unparalleled integrated yield optimization system. “Our customers have expressed their dream to use equipment data to identify and anticipate sources of yield loss,” stated John Kibarian, chief executive officer of PDF Solutions. “Until now, this dream has gone largely unfulfilled. By integrating FDC software with the yield resolution provided by PDF Solutions’ short flow CVs, we are creating a new era in process control software that will unleash the full power of using equipment data for variability reduction and excursion control. We have already begun client engagements in this space and we will work with SIA’s experienced management and engineering teams to deliver the integrated solutions that are required to realize this vision.”

“SIA is extremely pleased by the opportunity to become part of PDF Solutions,” stated Richard Mousties, president and founder of SIA. “By joining with an industry leader, we are accelerating our ability to launch the next era of yield aware process control.”

Upon closing of the transaction, PDF Solutions intends to continue to sell the Maestria software as a stand-alone product, in addition to offering the software as an option in PDF Solutions’ integrated yield ramp engagements.

Conference Call
As previously announced, PDF Solutions will hold a live conference call beginning at 3:00 p.m. Pacific Time/6:00 p.m. Eastern Time today to discuss this acquisition along with its third quarter 2006 financial results and its outlook. A live webcast of this conference call will be available on PDF Solutions’ website. A replay of the call will be available at the same website address beginning approximately two hours after completion of the live call.

About SIA
SIA, based in Montpellier, France, is a privately held corporation founded in 1987. SIA’s products and services provide unique, real time, automatic fault detection, classification, identification and correction capabilities. The Maestria product integrates in a single package the logistics and algorithms required to perform equipment engineering and to build advanced process control models, which are executed on-line. Maestria was named “Best Product of the Year” by Semiconductor International in 2002. Since that time, SIA has been enhancing Maestria’s capabilities and ease of use, as well as encapsulating Maestria to serve as a platform for other advanced yield management applications.

Maestria(R) is a registered trademark of Si Automation S.A.

About PDF Solutions
PDF Solutions, Inc. (Nasdaq:PDFS) is the leading provider of process-design integration technologies for manufacturing integrated circuits (ICs). PDF Solutions’ software, methodologies and services enable semiconductor companies to create IC designs that can be more easily manufactured using manufacturing processes that are more capable. By simulating deep sub-micron product and process interactions, the PDF solution offers clients reduced time to market, increased IC yield and performance, and enhanced product reliability and profitability. Headquartered in San Jose, Calif., PDF Solutions operates worldwide with additional offices in Europe, Japan and China.

PDF Solutions(R)and dataPOWER(R) are registered trademarks of PDF Solutions, Inc.