HAYWARD, CA, JULY 28, 2008 / PRNewswirre / — Ultra Clean Holdings, Inc. (Nasdaq: UCTT), a leading developer and supplier of critical subsystems for the semiconductor capital equipment, flat panel, solar, and medical device industries, today reported its financial results for the second quarter of 2008. Revenue for the second quarter of 2008 was $67.4 million, a decrease of 27% from the first quarter of 2008 and a decrease of 36% from the same period a year ago. The company recorded a net loss of $162,000 or $0.01 per diluted share, during the second quarter of 2008, compared to net income of $1.9 million or $0.09 per diluted share, for the first quarter of 2008 and net income of $5.1 million, or $0.23 per diluted share, for the same period a year ago. Gross margin for the second quarter of 2008 was 11.2%, compared to 13.1% for the first quarter of 2008, and 15.1% for the same period a year ago.

Clarence Granger, Ultra Clean's Chairman and Chief Executive Officer commented: "We view the current challenging business environment as an opportunity to increase our market share and to realize the operational efficiencies made possible by consolidation of our Silicon Valley based assembly operations into a single facility in Hayward, CA. For the quarter, we met our guidance range for revenue and earnings per share by focusing on activities to reduce costs, while continuing to increase our non-semiconductor businesses. Solar, flat panel, and medical device revenues grew by 18% sequentially to 22% of total revenues and we received follow-on awards in the solar and flat panel markets. By streamlining our operations and continuing to increase our activity in these adjacent markets, we lessened the impact of this cyclical decline in semiconductor capital equipment demand and positioned ourselves for enhanced levels of profitability when the industry cycle returns to growth."

Cash at the end of the second quarter of 2008 was $32.6 million, an increase of $7.6 million from $25.0 million at the end of the first quarter of 2008, and an increase of $12.7 million from $19.9 million at the end of the second quarter of 2007. Third party debt at the end of the second quarter was $20.5 million, a decrease of $900,000 from $21.4 million at the end of the first quarter of 2008 and a decrease of $8.3 million from $28.9 million at the end of the second quarter of 2007.

Ultra Clean also announced that its Board of Directors has authorized the repurchase of up to $10 million shares of the company common stock. The share repurchase is expected to commence at the end of July 2008.

Granger continued, "I am pleased to announce that, during the quarter, we secured significant follow-on awards from two key customers. We have been contracted to design and build a next-generation solar tool gas-abatement module. Deliveries are expected to commence in 2009. We also have been awarded the contract for production of Photon Dynamics' (Nasdaq: PHTN) turn-key, Gen-8, flat panel display test systems. The products for both customers will be manufactured in our Shanghai, China facilities and delivered directly to the customers in Asia. Incremental revenue from these two awards is estimated to be $1 million in 2008 and $6-$8 million in 2009. These new wins reflect further progress toward our stated objectives: to grow faster than the semiconductor capital equipment industry, in part by increasing the portion of our revenue derived from the adjacent markets of the solar, flat panel and medical device industries, and to continue to expand our presence in Asia."

Commenting on Ultra Clean's corporate outlook, Granger noted, "While we remain very confident in our strategic direction, we remain cautious about the near term outlook, due to continued declines in semiconductor capital equipment demand, partially offset by our growth in non-semiconductor markets. We expect that revenue for the third quarter of 2008 will be in the range of $60 million to $66 million, and loss per share will be in the range of $0.03 to $0.10 per share, on a GAAP basis, inclusive of an expected $0.01 per share charge for amortization of intangibles, and a $0.03 per share charge related to SFAS 123(R)."

Ultra Clean will conduct a conference call today, Monday, July 28, 2008, beginning at 2:00 p.m. PDT at 888-561-5097 (domestic) and 706-679-7569 (international). A replay of the webcast will be available for fourteen days following the conference call at 800/642-1687 (domestic) and 706/645-9291 (international). The confirmation number for the live broadcast and replays is 55630779 (all callers). The conference call will also be webcast live and be available for fourteen days on our website.

About Ultra Clean Holdings, Inc.
Ultra Clean Holdings, Inc. is a developer and supplier of critical subsystems for the semiconductor capital equipment, flat panel, solar and medical device industries. Ultra Clean offers its customers an integrated outsourced solution for gas delivery systems and other subassemblies, improved design-to-delivery cycle times, component neutral design and manufacturing and component testing capabilities. Ultra Clean's customers are primarily original equipment manufacturers for the semiconductor capital equipment, flat panel, solar and medical device industries. Ultra Clean is headquartered in Hayward, California. Additional information is available at www.uct.com.

Safe Harbor Statement
The foregoing information contains, or may be deemed to contain, "forward- looking statements" (as defined in the U.S. Private Securities Litigation Reform Act of 1995) which reflect our current views with respect to future events and financial performance. We use words such as "anticipates," "believes," "plan," "expect," "future,"' "intends," "may," "will," "should," "estimates," "predicts," "potential," "continue" and similar expressions to identify these forward-looking statements. Forward looking statements included in the press release include estimates made with respect to our third quarter revenue and diluted earnings per share. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, our actual results may differ materially from the results predicted or implied by these forward- looking statements. These risks, uncertainties and other factors include, among others, those identified in "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations'' and elsewhere in our annual report on Form 10-K for the year ended December 28 2007 and quarterly report on Form 10-Q for the quarter ended March 28, 2008, filed with the Securities and Exchange Commission. Ultra Clean Holdings, Inc. undertakes no obligation to publicly update or review any forward-looking statements, whether as a result of new information future developments or otherwise.