CSFB Annual Technology ConferenceDecember 2, 2004

Safe Harbor Statement

Under the Private Securities Litigation Reform Act of 1995:

Except for historical information, the matters discussed in this presentation that may be considered forward-looking statements

may be subject to certain risks and uncertainties that could cause the actual results to differ materially from those projected, including uncertainties in

the market, pricing, competition, procurement and manufacturingefficiencies, and other risks detailed from time to

time in the Company’s SEC reports. The Company assumes no obligation to update the information in this presentation.

What is a Photomask?

Photomasks, or reticles, are a critical enabling technology in the fabrication of high performance semiconductors

Photomask demand is being accelerated by:• New design activity• Rapidly changing IC performance requirements• Shorter IC life cycles• Increased outsourcing & industry consolidation

IC designers incorporate sub 180 nanometer technologies into their products at a faster rate

Photomask Technology is Critical to Supporting Wafer Lithography ...Advanced wafer lithography strategies put photomasks into critical path

• Wafer lithography drives semiconductor fab strategy

High-end photomasks are essential in resolving shrinking features

• As well as being critical to maximizing the performance of maturing technologies

Advanced photomasks drive favorable investment returns

• Photomasks enhanced with phase shift or OPC reduce the cost of high performance chips and extend the life of installed lithography tools

Technology, economics

and time-to-market

forces are driving

global semiconductor

companies to become

increasingly more

selective in choosing

strategic suppliers

Increased willingness to release 180nm node designs

130nm transition proceeding steadily

Cross over to 90nm for leading-edge customers is starting

Pricing stable

Today’s Business Environment

Mask Cost only Represents 8% of Development Cost

Wafers1%

Boards2% Masks

8%

Software28%

Apps3%

Test Engineering

7%

Product Engineering

12%

I/O Design5%

Logic Design34%

But it is a critical enabling technology.

Source: Synopsys, Altera, 90nm development

The only way to bring the development cost down is to have all involved work together.

Key Global Objectives

Differentiate from competitors through core values – TECHNOLOGY, SERVICE, SPEED & COST

Consolidate high-end market share gains• 130nm – aggressive market penetration• 90nm – accelerate PoR quals to match customer transitions

NTL Mix & Match capability offers local (regional) support and faster cycle times matching into foundry processes

Relentless improvement in global manufacturing efficiency and intensified focus on profitability

Improve prototype efficiency – reduce cycle times• Extensive use of proprietary automation – CyberMask™ & MaskPilot™• Integrating the Lithography Plane

Key Regional ObjectivesAsia:

Expand foundry penetration in Korea, Taiwan & Singapore• Provide seamless support for customers in Europe, Japan and North America

Expand presence in China

Europe:Leverage strategic position at Crolles Alliance

• One of two mask suppliers• Leverage early role in supporting 65nm process development

Working with IMEC on 193nm Immersion

North America:Accelerate 90nm penetrationLeverage 65nm manufacturing line and early learning cycles

• PLAB is only US merchant with 65nm capability operating today!

Technology Overview

Immersion Lithography-What does it mean for masks?

Immersion lithography enables improved feature resolution of sub-wavelength features on the wafer

• Requires using a fluid (water) to increase the numerical aperture of a lens to a factor greater than 1

• Highest numerical aperture today is about 0.85

Initial use of immersion will temporarily lighten the burden placed on enhanced masks

Node shrinks and transition to next node then accelerate the need for enhanced masks for ultra critical and critical levels beginning with 65nm designs

Lithography Technology Landscape

Extension of 193nm assured with Immersion• Replacing 157nm for 45nm and 32nm nodes

Design complexity creating opportunities to proactively address Yield , Time-to-Market and Cost

• All data intensive systems need to be fully integrated with highlevels of automation

• Joint development arrangements critical to early learning cycle success

Emerging Nanotechnology applications built on lithographic processes open new markets

• Leveraging ways to apply core competencies in patterning, quartzetch, modeling/simulation

Corporate Technology as a Differentiator…

Masks are pivotal to the Design-to-Silicon realization flow• Need to compensate for process margin eroding effects throughout

the process from layout to wafer build

Customers increasingly rely on mask suppliers to define the best Reticle Enhancement Technology (RET) solution

Immersion is an opportunity to apply RET integration models through 2009 and beyond

Rapid assessment of RET options enables cost effective Design-to-Silicon cycles

• Materials playing a larger role

Vector Tool Write Time ImpactD

esig

nV

ecto

r

Model-Based OPCRule-Based OPCNo OPC

12 Shots 27 Shots2 Shots

Impact of Model-Based OPC

Nominal design is shaded.OPC version is fractured into rectangles.Up to 10× increase in shape count when OPC applied.Several hundred billion geometries on mask at 100 nm node.

Corporate Technology Group-A Photronics Competitive Advantage

90nm process transferred to manufacturing ahead of volume ramp/demand curve for this node

Accelerating 65nm programs with customer focused RET implementation

Initiated advanced 45nm and 32nm research for 193nm immersion lithography

Modeling/Simulation, Rapid Prototyping, and Process Integration programs support the Integrated Lithography Plane strategy

What Is the Lithography Plane?

High K1 Environment

LogicalDesign

Design Capture

Simulation/Emulation

Synthesis

Physical Design

Place & Route

Verification, Extraction and Analysis

ResolutionEnhancement

Mask

Data Fracture

Mask write

Defect Inspect

Repair

Wafer ImageFormation

IlluminationStrategy

Resist

Etch

Logical Design

Design Capture

Simulation/Emulation

Synthesis

Physical Design

Place & Route

Verification, Extraction and Analysis

ResolutionEnhancement

Mask

Data Fracture

Mask write

Defect Inspect

Repair

Wafer ImageFormation

IlluminationStrategy

Resist

Etch

LogicalDesign

PhysicalDesign Mask

WaferImage

Formation

Integrating for Low K1 Environment

•Eliminate “throw over the wall” mentality

•Increase communication between vested interests •Eliminate the silos

Low K1 Environment Increases Feedback Need

LogicalDesign

PhysicalDesign Mask

WaferImage

Formation

Tested Devices

Financial Overview

Photronics Financial Highlights

Strategically scaled infrastructure• Intense focus on profitability across all levels of the organization

Benefit from technology driven demand

Multiple sources of margin leverage• Improving mix shift & stable pricing• Global presence

Increased global market share

Improved liquidity• $288 million working capital

Leverage, Leverage, Leverage

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

Q4-02 Q1-03 Q2-03 Q3-03 Q4-03 Q1-04 Q2-04 Q3-040%5%10%15%20%25%30%35%40%

Quarterly Revenue $M % High End (180nm & below)

Quarterly Revenue & High-End Mix

Operating Income..Most Recent Quarters(excludes consolidation & restructuring charges)

-$5.0

$0.0

$5.0

$10.0

$15.0

$20.0

Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04

$103.1

$103.7

Improving Liquidity Solid Financial Position

$ in millionsAugust 1,

2004Fiscal YearEnded 2003

Total Assets $865$882

Long Term Debt $368$356

Equity $308$330

Cash and Short Term Investments $250 $232

Working Capital $288 $258

Current Ratio 4.6:1 4.2:1

YTD 04August 1, 2004

Cash Flow$ in millions

Fiscal YearEnded 2003

Operations $83$ 81

Capital Expenditures (47)(53)

Free Cash Flow 3628

Net Repayment of Debt (87)(14)

Other, Net 64

Increase in Cash and Investments $100 $18

Net Issuance of Convertible Debt - 145

Free Cash Flow – Rolling Four Quarters

-$30

-$20

-$10

$0

$10

$20

$30

$40

$50

$60

$70

Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04

$3

$36

$ 63

Goal

Photronics…Strategically Positioned

Leverage global & knowledge infrastructure• Critical in differentiating suppliers at 130nm & 90nm• Emerging Nanotechnology applications (Microfluidics, photonics,

diffractive optics)

Commercialize 65nm & 45nm technology by establishing PLAB as the supplier with the Process of Record

Integrating the Lithography Plane is a crucial element in all activities below 90nm

Maintain profitability!

CSFB Annual Technology ConferenceDecember 2, 2004