Tegal Settles Fee Dispute With Former Attorneys

PETALUMA, Calif.--(Business Wire)--Tegal Corporation (Nasdaq:TGAL), a leading designer and
manufacturer of plasma etch and deposition systems used in the
production of integrated circuits and nanotechnology devices, today
announced that it had settled a fee dispute with the second of its
former attorneys for $3.8 million.

On January 16, 2008, Tegal Corporation (the "Company") and its
wholly owned subsidiary, Sputtered Films, Inc. ("SFI"), received a
Notice of Acceptance of Written Offer to Compromise from Keker & Van
Nest LLP ("KVN"), one of the two law firms that had represented SFI in
its lawsuit against Sergey Mishin, Advanced Modular Sputtering
("AMS"), Agilent Technologies, Inc., Avago Technologies U.S., Inc.,
Avago Technologies Wireless (U.S.A) Manufacturing, Inc. and other
defendants, which was settled in November 2006 (the "AMS Settlement").
As previously disclosed in the Company's SEC filings, KVN and Gonzalez
& Leigh LLP ("G&L") claimed they were entitled, as a result of the AMS
Settlement, to receive contingent fees from the Company and SFI. KVN
had claimed it was owed fees in the amount of approximately $6.72
million; G&L had claimed that it was owed approximately $2.25 million.
As previously disclosed in a Form 8-K filed with the SEC on August 20,
2007, the Company executed a Mutual General Release and Settlement
Agreement dated August 15, 2007 with G&L and paid G&L $995,000
pursuant to that agreement. In connection with KVN's acceptance of the
Company's Written Offer to Compromise and the execution of a mutual
general release, dated as of January 18, 2008, the Company has paid
KVN $3.8 million.

As previously disclosed in the Company's SEC filings, the Company
had placed $19.5 million, representing the gross cash proceeds from
the November 2006 settlement, into suspense. As a result of the
developments described above, the Company will eliminate the suspense
along with other liabilities related to the AMS Settlement, and the
net proceeds will be taken to other income in the fiscal fourth
quarter ending March 31, 2008.

About Tegal

Tegal provides process and equipment solutions to leading edge
suppliers of advanced semiconductor and nanotechnology devices.
Incorporating unique, patented etch and deposition technologies,
Tegal's system solutions are backed by over 35 years of advanced
development and over 100 patents. Some examples of devices enabled by
Tegal technology are energy efficient memories found in portable
computers, cellphones, PDAs and RFID applications; megapixel imaging
chips used in digital and cellphone cameras; power amplifiers for
portable handsets and wireless networking gear; and MEMS devices like
accelerometers for automotive airbags, microfluidic control devices
for ink jet printers; and laboratory-on-a-chip medical test kits.

More information is available on the Internet at: www.tegal.com.

Tegal Corporation
Christine Hergenrother, VP and CFO, 707-763-5600
or
The Blue Shirt Group
Rakesh Mehta or Chris Danne, 415-217-7722

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