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Nikon and KLA-Tencor Announce New Overlay Solution

Tokyo, Japan – December 3, 2007 – Nikon Corporation (Michio Kariya, President) and KLA-Tencor, the world leader in semiconductor wafer inspection/metrology tools (President & COO John Kispert: Nasdaq GS: KLAC) today announced that they will launch Scanner Match Maker (SMM), a system for improving overlay accuracy, in the First Quarter of 2008. The SMM system successfully demonstrated over 30% improvement in overlay accuracy in a jointly conducted baseline assessment. The system is currently being evaluated and validated at a major chip maker on real processes.

Sales Summary
Product name: Scanner Match Maker (SMM) System
Target tools: NSR-S610C, NSR-S609B, NSR-S310F, NSR-S308F, NSR-S210D, NSR-S208D
(The product will be available both from Nikon and KLA-Tencor.)
Sales launch term First Quarter, 2008

Development Background
As design rules shrink to 45 nm and beyond, tens of layers of circuit patterns need to be exposed with a single nanometer level accuracy, which, in turn, makes it critical to improve overlay accuracy. The 2005 ITRS required tighter lithography overlay budgets. To respond to this, Nikon and KLA-Tencor have studied a system that utilizes each other’s strength and know-how in view of actual customer production sites. The SMM System is an integration of a scheme for integrating and managing wafer layer data from a lithocluster including lithography tools other than NSR and a technology for improving accuracy based on Nikon’s proprietary overlay correction technology.

The system will enable flexible and efficient utilization of NSR at customer production sites and will become a solution for chip defect rate improvement, cost reduction and accelerated ramp-up time for new process technology in the future.

Main Characteristics
1 . Automated management of vast amount of tool data required for overlay
2 . Automation of complex overlay accuracy improvement previously done manually
3 . Quick and efficient automated overlay accuracy improvement among lithography tools, including tools other than NSR
4 . System introduction using only software and management server made possible by simple configuration.

System Configuration
Careful consideration was given to enhancing features of the systems already available from Nikon and KLA-Tencor in introducing SMM. Overlay logic and overlay database/automatic correction software were jointly developed and offered with a connectivity license for easy introduction of the system into existing production lines to enhance Nikon’s LEES Server, a self diagnostics information management system, and KLA-Tencor’s K-T Analyzer (KTA), an information integration management server integrated with K-T’s Archer overlay metrology platform.

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, California, the Company has sales and service offices around the world. An S&P 500 company, KLA-Tencor is traded on the NASDAQ Global Select Market under the symbol KLAC. Additional information about the Company is available at http://www.kla-tencor.com.

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 7,800 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. For more information about Nikon, access our web site at www.nikonprecision.com

Forward Looking Statements
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.

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