931059--6/29/2007--TEGAL_CORP

related topics

{product, market, service}

{customer, product, revenue}

{stock, price, operating}

{condition, economic, financial}

{regulation, change, law}

{property, intellectual, protect}

{operation, international, foreign}

{stock, price, share}

{personnel, key, retain}

{cost, regulation, environmental}

{control, financial, internal}

{system, service, information}

The semiconductor industry is cyclical and may experience periodic downturns that may negatively affect customer demand for our products and result in losses such as those experienced in the past. Our competitors have greater financial resources and greater name recognition than we do and therefore may compete more successfully in the semiconductor capital equipment industry than we can. Our customers are concentrated and therefore the loss of a significant customer may harm our business. Our potential customers may not adopt our products because of their significant cost or because our potential customers are already using a competitor s tool. We depend on sales of our advanced products to customers that may not fully adopt our product for production use. We have incurred operating losses and may not be profitable in the future and our plans to maintain and increase liquidity may not be successful. Our quarterly operating results may continue to fluctuate. Some of our sales cycles are lengthy, exposing us to the risks of inventory obsolescence and fluctuations in operating results. Because technology changes rapidly, we may not be able to introduce our products in a timely enough fashion. Our financial performance may adversely affect the morale and performance of our personnel and our ability to hire new personnel. We may not be able to protect our intellectual property or obtain licenses for third parties intellectual property and therefore we may be exposed to liability for infringement or the risk that our operations may be adversely affected. We are exposed to additional risks associated with international sales and operations. Evolving regulation of corporate governance and public disclosure may result in additional expenses and continuing uncertainty. Our stock price is volatile and could result in a material decline in the value of your investment in Tegal. The exercise of outstanding warrants, options and other rights to obtain additional shares will dilute the value of our shares of common stock and could cause the price of our shares of common stock to decline. Potential disruption of our supply of materials required to build our systems could have a negative effect on our operations and damage our customer relationships. Any failure by us to comply with environmental regulations imposed on us could subject us to future liabilities.

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931059--6/29/2007--TEGAL_CORP_/DE/