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A conference call to discuss these results will be held today beginning at 9:00 AM EST. Interested participants may call 888-789-0089 for the teleconference or log on to http://www.kns.com/investors/webcast.asp to listen to the live audio or access the audio replay of this call, which will remain available on the company’s website.

Willow Grove, PA — January 21, 2004 — Kulicke & Soffa Industries, Inc. (Nasdaq: KLIC) today announced financial results for its first quarter of fiscal year 2004 ended December 31, 2003.

Revenue for the first fiscal quarter ended December 31, 2003 was $160.4 million compared to revenue in the quarter ended December 2002 of $111.4 million. The income from operations during the first fiscal quarter ended December 31, 2003 was $12.5 million versus a loss of $12.6 million during the quarter ended December 2002. The net income for the first fiscal quarter ended December 31, 2003 was $0.7 million or earnings of $0.01 per fully diluted share versus a net loss of $17.7 million or a loss of $0.36 per fully diluted share in the quarter ended December 2002.

Included in the results for the first fiscal quarter ended December 31, 2003 were charges of $6.2 million associated with the redemption of the Company’s 4 3/4% convertible subordinated notes due 2006. These charges included $2.6 million of non-cash expense related to the write-off of unamortized debt issuance costs and $3.6 million of call premium cost for the 4 3/4% notes.

C. Scott Kulicke, chairman and chief executive officer, commented on the quarter just ended, “The quarter’s results demonstrate both the power of the cyclical recovery of the semiconductor business, as well as the beneficial effect of our ongoing cost reduction efforts. We’re especially pleased with the quarter’s positive cash flow, in spite of funding the incremental working capital requirements associated with the increased revenue we’re experiencing.”

Net bookings for the first fiscal quarter ended December 31, 2003 were $206.0 million, an increase of $64.0 million, compared to $142.0 million recorded in the quarter ended September 30, 2003. Backlog at December 31, 2003 increased to $114.0 million compared to backlog at September 30, 2003 of $68.0 million.

About Kulicke & Soffa
Kulicke & Soffa (Nasdaq: KLIC) is the world’s leading supplier of semiconductor wire bonding assembly equipment. K&S is the only major supplier to the semiconductor assembly industry that provides customers with semiconductor wire bonding equipment along with the complimenting packaging materials and test interconnect products that actually contact the surface of the customer’s semiconductor devices. The ability to control all of these assembly related products is unique to Kulicke and Soffa, and allows us to develop system solutions to the new technology challenges inherent in assembling and packaging next-generation semiconductor devices. In addition, the company offers Flip Chip wafer bumping services and technology. Chip scale and wafer level packaging solutions include Ultra CSP® technology. Test interconnect products include a variety of

wafer probe cards, ATE interface assemblies, and ATE boards for wafer testing, as well as test sockets for all types of packaged semiconductor devices. Kulicke & Soffa’s web site address is http://www.kns.com. The full text of this earnings release and summary financial statements are available at http://www.investors.kns.com/

This press release contains forward-looking statements which are found in various places throughout the press release. While these forward-looking statements represent our judgments and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, those listed or discussed in Kulicke & Soffa Industries’ 2003 Annual Report on Form 10-K and: the risk of failure to successfully manage our operations; the risk that anticipated orders may not materialize or that orders received may be postponed or canceled, generally without charges; the risk that anticipated cost savings will not be achieved; the volatility in the demand for semiconductors and our products and services; acts of terrorism and violence; overall global economic conditions; risks, such as changes in trade regulations, currency fluctuations, political instability and war, associated with a substantial foreign customer and supplier base and substantial foreign manufacturing operations; potential instability in foreign capital markets; and other key factors that could adversely affect our businesses and financial performance contained in past and future filings and reports, including those with the SEC. Kulicke & Soffa Industries is under no obligation to (and expressly disclaims any obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.

Company Contact: Michael Sheaffer, 215-784-6411, 215-784-6167 fax, msheaffer@kns.com

KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share and employee data)
(Unaudited)


	Three months ended
	December 31,

	2002			2003

Net revenue	$	111,371		$	160,398
Cost of sales		84,040			111,932

Gross profit		27,331			48,466

Selling, general and administrative		28,326			25,271
Research and development, net		9,643			8,406
Resizing		(205	)		—
Asset impairment		(121	)		—
Amortization of intangibles		2,308			2,315

Operating expense		39,951			35,992

Income (loss) from operations		(12,620	)		12,474
Interest, net		(4,009	)		(4,225	)
Charge on early extinguishment of debt		—			(6,152	)

Income (loss) before income taxes		(16,629	)		2,097
Income taxes		1,026			1,350

Net income (loss)	$	(17,655	)	$	747

Net income (loss) per share:
Basic	$	(0.36	)	$	0.01

Diluted	$	(0.36	)	$	0.01

Weighted average shares outstanding:
Basic		49,514			50,392
Diluted		49,514			56,932

KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEET
(In thousands)


				(Unaudited)
	September 30,			December 31,
	2003			2003

ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	65,725		$	91,797
Restricted cash		2,836			3,257
Short-term investments		4,490			7,914
Accounts and notes receivable (less allowance for doubtful accounts: 9/30/03 - $5,929; 12/31/03 - $5,714)		94,144			119,792
Inventories, net		37,906			40,307
Prepaid expenses and other current assets		11,187			11,836
Deferred income taxes		10,700			11,044

TOTAL CURRENT ASSETS		226,988			285,947
Property, plant and equipment, net		61,238			64,463
Intangible assets, (net of accumulated amortization:
9/30/03 - $26,187; 12/31/03 - $28,502)		66,249			63,935
Goodwill		81,440			81,440
Other assets		6,946			8,886

TOTAL ASSETS	$	442,861		$	504,671

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Debt due within one year	$	36		$	223
Accounts payable		45,844			63,144
Accrued expenses		41,885			44,430
Income taxes payable		13,394			14,078

TOTAL CURRENT LIABILITIES		101,159			121,875
Long term debt		300,338			335,737
Other liabilities		9,865			10,130
Deferred taxes		31,402			31,149

TOTAL LIABILITIES		442,764			498,891

SHAREHOLDERS’ EQUITY
Common stock, without par value		203,607			207,632
Retained deficit		(195,792	)		(195,045	)
Accumulated other comprehensive loss		(7,718	)		(6,807	)

TOTAL SHAREHOLDERS’ EQUITY		97			5,780

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	442,861		$	504,671

KULICKE & SOFFA INDUSTRIES, INC.
OPERATING RESULTS BY BUSINESS SEGMENT
(In thousands)
(Unaudited)

Packaging

Advanced

Equipment

Materials

Packaging

Test

Quarter ended December 31, 2003:

Segment

Corporate

Consolidated

Net revenue

81,080

49,508

6,529

23,281

—

160,398

Cost of sales

49,124

38,090

5,425

19,293

—

111,932

Gross profit

31,956

11,418

1,104

3,988

—

48,466

Operating costs

14,668

5,224

785

10,783

4,532

35,992

Income (loss) from operations

17,288

6,194

319

(6,795

)

(4,532

)

12,474

Fiscal 2003:

Packaging

Advanced

Equipment

Materials

Packaging

Test

Quarter ended December 31, 2002:

Segment

Corporate

Consolidated

Net revenue

44,895

39,557

4,247

22,672

—

111,371

Cost of sales

30,616

29,284

5,418

18,722

—

84,040

Gross profit

14,279

10,273

(1,171

)

3,950

—

27,331

Operating costs

17,523

7,291

1,618

10,464

3,381

40,277

Resizing costs

—

(102

)

(103

)

—

(205

)

Asset Impairment

—

(121

)

—

(121

)

Income (loss) from operations

(3,244

)

2,982

(2,566

)

(6,411

)

(3,381

)

(12,620

)


	Three months ended
	December 31,

Additional financial data:	2002		2003

Depreciation and amortization	$	9,801	$	8,351
Capital expenditures	$	2,349	$	2,928
Backlog of orders	$	60,000	$	114,000
Number of employees		3,219		3,372