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News Release
January 12, 1999

ZYGO AND IBM SIGN ADDITIONAL WORLDWIDE DISTRIBUTION AGREEMENT FOR IBM PRODUCTION LINE ATOMIC FORCE MICROSCOPE

MIDDLEFIELD, CONNECTICUT (January 12, 1999) …… Zygo Corporation (NASDAQ:ZIGO) announced today that it has signed an amendment to the worldwide distribution agreement with the IBM Manufacturing Technology Center (MTC) in Boca Raton, Florida. This amendment adds to the agreement announced in October an additional Atomic Force Microscope (AFM) line specifically targeted for automated production line applications. The amendment provides for ZYGO to market and sell worldwide the Magnascope SXM300 system under the ZYGO label. The Magnascope SXM300 is based on Scanning Tunneling Microscopy technology invented by IBM and recognized by a Nobel Prize in 1986. The system, specifically designed for automated production line applications, is a multimode scanning probe microscope designed for measurements of sub-micron features to near angstrom level resolution and for the most challenging AFM applications. The Magnascope SXM300 is designed for critical dimension measurements of height, width, roughness, and sidewall angles for wafers of up to 300mm in diameter and masks of up to 9 inches by 9 inches. The system has a proven track record of performance in leading wafer fabrication facilities throughout the world. The addition of the Magnascope SXM300 to the earlier announced Magnascope 2000 benchtop atomic force microscope systems creates a most powerful array of capability to solve high precision yield improvement problems in the high technology industries. This capability now includes ZYGO's automation and parts handling, scanning probe microscopes, confocal microscopes, interferometric microscopes, interferometric large aperture systems, machine vision, and interferometric micro positioning systems.

Commenting on the growing IBM relationship Gary K. Willis, ZYGO's chairman, president, and chief executive officer, stated "Not only does the Magnascope SXM300 round out our AFM family of products, but in addition the agreement strengthens our growing relationship with the MTC. Our strategy to continuously enhance our leadership position in providing yield enhancement solutions to production line applications is solidified by our MTC relationship."

Commenting on the agreement, D.E. (Mike) Davis, director of IBM's Manufacturing Technology Center, said "I am pleased to extend our relationship with Zygo Corporation. This addition to ZYGO's portfolio of measurement and inspection offerings gives our customers a comprehensive set of solutions for their critical measurement and inspection requirements."

Zygo Corporation designs, develops, manufactures, and markets high performance measurement and yield improvement instruments, systems, and accessories used in high technology industries. The Company is headquartered in Middlefield, Connecticut, and also has operations in Asslar, Germany; Longmont, Colorado; and in Newbury Park and Sunnyvale, California. ZYGO is traded on the Nasdaq National Market under the symbol ZIGO. Additional information on the Company is available on the Internet at www.zygo.com.

This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect the Company's current judgment on certain issues. Because such statements apply to future events, they are subject to risks and uncertainties that could cause the actual results to differ materially. Important factors which could cause actual results to differ materially are described in the Company's reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission.


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