BROOKFIELD, Conn.–(EMWNews)–Photronics, Inc. (Nasdaq:PLAB), a worldwide leader in supplying

innovative imaging technology solutions for the global electronics

industry, announced preliminary financial results for the third quarter

of fiscal 2008. The Company also announced that it will be recording a

third quarter, non-cash, goodwill and long-lived asset impairment

charge, as well as a charge related to the separation agreement with its

former chief executive officer.

Photronics expects that revenues for the third quarter ended July 27,

2008, will be approximately $105 million to $106 million compared with

previous guidance of $112 million to $118 million. “Our lower than

expected third quarter revenue was primarily related to reduced demand

for IC photomasks, principally high-end,” stated Constantine (“Deno”)

Macricostas, Photronics’ chairman and interim chief executive officer.

“Our customers have implemented aggressive cost reduction programs as

demand for IC products has slowed. As a result of the industry-wide

slowdown, we are accelerating our cost reduction programs.”

In light of a sustained decline in market capitalization for Photronics

and its peer group companies, the Company determined that an interim

impairment test was necessary at the end of the third fiscal quarter as

required under FASB Statement No. 142 “Goodwill and Other Intangible

Assets”. Additionally, the recent assessment of Photronics’

existing global manufacturing network identified an impairment related

to certain underutilized assets in Europe and Asia. As a result,

Photronics’ financial results for the third quarter will include a

non-cash, goodwill and long-lived asset impairment charge. The Company

is in the process of evaluating the total charge, but estimates that it

will be in the range of $190 million to $210 million, net of tax. The

combined charge is expected to consist of all of the Company’s goodwill

and certain underutilized manufacturing assets located principally in

Europe and Asia. While the impairment charge will reduce reported

results under U.S. generally accepted accounting principles (“GAAP”), it

will be non-cash in nature and will not affect Photronics’ liquidity,

cash flow from operating activities, or debt covenants.

Photronics also will record a $1.0 million cash charge in the third

quarter for severance and other benefits related to the separation

agreement with its former chief executive officer.

As a result of the lower revenue and the above mentioned charges,

Photronics expects that its GAAP net loss per share will be in the range

of $4.75 to $5.23 compared with prior guidance in the range of a net

loss of $0.11 per share to net income of $0.01 per diluted share. On a

non-GAAP basis, excluding the impact of the impairment charge and

severance costs, the Company’s net loss per share is expected to be in

the range of $0.17 to $0.15.

Photronics will announce its fiscal third quarter financial results

after the market closes on Wednesday, August 13, 2008. A conference call

with investors and the media to discuss these results can be accessed by

logging onto Photronics’ web site at www.photronics.com,

then clicking on the “Conference Calls” button on the top right corner

of the home page. The call is scheduled for 8:30 a.m. Eastern Daylight

Time on Thursday, August 14, 2008. The live dial-in number is

719-325-4846. The call will be archived for instant replay access until

the Company reports its fiscal fourth quarter results after the market

closes on Tuesday, December 9, 2008.

Photronics is a leading worldwide manufacturer of photomasks. Photomasks

are high precision quartz plates that contain microscopic images of

electronic circuits. A key element in the manufacture of semiconductors

and flat panel displays, photomasks are used to transfer circuit

patterns onto semiconductor wafers and flat panel substrates during the

fabrication of integrated circuits, a variety of flat panel displays

and, to a lesser extent, other types of electrical and optical

components. They are produced in accordance with product designs

provided by customers at strategically located manufacturing facilities

in Asia, Europe, and North America. Additional information on the

Company can be accessed at www.photronics.com.

The Private Securities Litigation Reform Act of 1995 provides a “safe

harbor” for forward-looking statements made by or on behalf of

Photronics, Inc. and its subsidiaries (the Company). The forward-looking

statements contained in this press release and other parts of

Photronics’ web site involve risks and uncertainties that may affect the

Company’s operations, markets, products, services, prices, and other

factors as discussed in filings with the U. S. Securities and Exchange

Commission. These risks and uncertainties include, but are not limited

to, economic, competitive, legal, governmental, and technological

factors. Accordingly, there is no assurance that the Company’s

expectations will be realized. The Company assumes no obligation to

provide revisions to any forward-looking statements.

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