January 17, 2005, Santa Clara, CA--Coherent says its Lambda Physik subsidiary is discontinuing future product development and investments in the semiconductor lithography market. Lambda will continue to support its installed lithography base.

As a result of this decision, the company expects to take an after-tax charge of between $3 and $6 million during the first quarter ending January 1, 2005. These charges are primarily related to excessive and obsolete inventories.

"Based upon careful analysis of market conditions, Lambda management concluded its new 193-nm LithoTex laser will not generate a satisfactory economic return and its deployment has been cancelled," said John Ambroseo, Coherent president and CEO. "The anticipated savings resulting from these transactions, which will begin in calendar 2005, will be disclosed during the upcoming first fiscal quarter earnings conference call January 25, 2005."

Mon Jan 17 09:41:00 CST 2005