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Ultra Clean Technology and FEI have signed a global supplier agreement under which Ultra Clean will provide hosted manufacturing services in FEI's Hillsboro, OR, facility. The companies also anticipate that Ultra Clean's Asia operations will be used to produce some FEI subassemblies. The first quarter of 2009 has been targeted for transfer of current product lines to Ultra Clean operations.

Ultra Clean will provide turnkey manufacturing for products currently manufactured at FEI's Oregon site, as well as for new tools under development. This includes the mechanical and electrical testing of several different modules and final integration, the companies said.

"This agreement is an important part of the restructuring program we announced last spring," said Brian Pierson, FEI's senior VP of worldwide operations, FEI. "Our overall goals include material cost reduction, more effective use of our fixed assets, increased flexibility, and currency balance. Working with high-quality partners such as Ultra Clean will help us reach those goals, while FEI focuses its energy on further technology leadership in growing life sciences, research, and electronics markets."

"We are very excited to be working with FEI as their new outsourcing partner," said Clarence Granger, Ultra Clean's chairman/CEO. "This is an excellent opportunity to utilize our capabilities to extend into new markets."

"At Ultra Clean, we use our core skills to produce high quality, complex, electromechanical assemblies at a cost that rivals offshore manufacturers," added David Savage, Ultra Clean's president/COO. "FEI highly values finding a U.S. outsource partner that could meet their cost targets while providing close, local coordination and business efficiencies."