Tokyo, Japan, July 7, 2003 - Nikon Corporation today announced its agreement with Tokyo Electron Limited (TEL) to engage in joint development of liquid immersion exposure technology as it relates to exposure systems. Under the agreement, Nikon, with its leading-edge exposure technologies, and TEL, with its large market share for resist coater/developer and advanced technologies, will share their expertise in developing immersion exposure technology. This will allow them to complete the development in a short time, with the goal of further extending the useful lifespan of ArF exposure systems.

Since 2001, the two companies have been sharing their evaluation systems for joint activities to improve process performance. This new agreement marks a more advanced stage in this working arrangement.

The companies will verify basic technologies by the end of 2003, and aim to enter mass production as soon as possible, in order to meet the demand in the semiconductor industry for immersion exposure technology as a manufacturer of semiconductor production equipment. The companies will also draw on the cooperation of various resist material suppliers, as resist is a key element of the lithography process, and thus promote the use of liquid immersion technology in practical application.

Liquid Immersion Exposure Technology:
Normally, stepper resolution, R, is determined by the formula R = k x l/NA, where k is the process coefficient, l the wavelength of the light source, and NA the numerical aperture, indicating the brightness of the projection lens. The shorter the wavelength of the light source, and the larger the projection lens NA, the higher the resulting resolution. NA is given by the formula NA = n x sin q, where n is the refractive index of the medium through which the exposure light passes, and q the maximum incidence angle formed by the exposure light. Normal exposure occurs in the air, n = 1. By contrast, liquid immersion exposure technology uses a liquid with a refractive index of n > 1 to expand the value of n in the definition of NA used in projection optics: NA = n x sin q. With the same value for the exposure light's angle of incidence q, the minimum resolution dimension can be improved, or reduced, to 1/n, helping increase the optical NA by a factor of n.

Meanwhile, using the same value of NA as before makes it possible to reduce the value of q, with the result that the depth of focus can be improved, or enlarged, by factor n. Exposure using ArF laser light sources fills the space between the projection lens and wafer with purified water with a refractive index of 1.44. This method has traditionally been used with microscopes. In recent years, serious studies have commenced with regard to applying this method to liquid immersion exposure systems.

About Nikon
Since 1980, Nikon Corporation has been revolutionizing lithography with innovative products and technologies. The company is a worldwide leader in lithography equipment for the microelectronics manufacturing industry with more than 7,200 exposure systems installed worldwide. Nikon offers the most extensive selection of production-class steppers and scanners in the industry. These products serve the semiconductor, flat panel display (LCD) and thin-film magnetic head (TFH) industries. Nikon Precision Inc. provides service, training, applications and technical support, as well as sales and marketing for Nikon lithography equipment in North America.

About TEL:
TEL, commemorating its upcoming 40-year anniversary in November 2003, is a leading supplier of innovative semiconductor and FPD production equipment worldwide. Product lines include coater/developers, thermal processing systems, dry etchers, CVD systems, sputtering systems (PVD), wet cleaning systems, and test systems. In Japan, TEL distributes other leading edge semiconductor equipment tools, such as metrology tools or process control systems. In addition, TEL distributes high quality computer systems, semiconductor devices and electronic components of other leading suppliers, as well as computer network related products from around the world. To support this diverse product base, TEL has strategically located research & development, manufacturing, sales, and service locations all over the world. TEL is a publicly held company listed on the Tokyo Stock Exchange.

# # #

This press release contains forward-looking statements as that term is defined in the Private Securities Reform Act of 1995, which are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such statements are subject to risks, uncertainties and changes in condition, particularly those related to industry requirements and other risks. The Company undertakes no obligation to update the information in this press release.

Contacts:
Bernie Wood
Director of Marketing
Nikon Precision Inc.,
(650) 413-8533 phone
bwood@nikon.com