Isola Analyzing the Impact of Recent Raw Material Increases

CHANDLER, ARIZONA, October 19, 2005 – Isola today announced that they are analyzing the impact of cost increases in various materials basic to the manufacture of laminate and prepreg products produced and sold in North America. “Recent increases in the prices of all hydrocarbon-based products are having a significant impact on the cost structure throughout the Isola product line. In addition, rising oil prices have increased operating costs through higher natural gas prices and freight surcharges. Copper prices continue at record levels in the commodity markets, driving recent increases from the producers of electrodeposited copper foil”, stated Tim McCloskey, Vice President Sales, Americas.

Isola remains committed to minimizing the impact of any increase through cooperative efforts with the vendor community and through ongoing efforts to optimize operating efficiencies through lean/six sigma disciplines.

“Isola Operations’ is taking a comprehensive look at the very significant progress made to drive cost out of our process as well as our Supply Chain professionals; our goal is to keep any potential increase in the 8 to 10% range. While we regret that this action may be necessary, it is quite clear that the entire supply chain in electronics manufacturing is similarly affected”, stated McCloskey.

Following the completion of a cost impact analysis, an announcement detailing the pricing for Isola products is anticipated in the coming weeks.

19 October 2005

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