Exhibit 99.1

News Release

Investor Relations Contact:	Corporate Communications Contact:
Rochelle Krause	Abbie Kendall
PDF Solutions, Inc.	Armstrong Kendall, Inc.
Tel: (408) 938-6437	Tel: (503) 672-4681
Email: rochelle.krause@pdf.com	Email: abbie@akipr.com

PDF Solutions^® Reports Second Quarter 2003
Financial Results

     SAN JOSE, Calif.—July 24, 2003—PDF Solutions, Inc. (Nasdaq: PDFS) the leading provider of process-design integration technologies to enhance IC manufacturability, today announced financial results for its second fiscal quarter ended June 30, 2003.

     Revenue for the second fiscal quarter of 2003 totaled $10.1 million, a decrease of 18% compared with revenue of $12.2 million for the second fiscal quarter of 2002. Pro forma net loss for the second fiscal quarter of 2003, excluding amortization of stock-based compensation and intangibles, totaled $265,000, or $0.01 per diluted share, compared with pro forma net income of $1.4 million, or $0.06 per diluted share, for the second fiscal quarter of 2002. Reported net loss for the second fiscal quarter of 2003 totaled $676,000, or $0.03 per diluted share, compared with a reported net income of $565,000, or $0.02 per diluted share, for the second fiscal quarter of 2002.

     “Financial results for the quarter were in the range of prior revenue and pro forma earnings per share guidance,” said John Kibarian, PDF’s President and Chief Executive Officer. “In addition, we see accelerated customer interest in our solutions earlier in both process- and design-development cycles. This highlights that process-design interactions are becoming critical issues as the industry continues to move toward nanometer processes.”

     As previously announced, the company will hold a live conference call beginning at 3:00 p.m. PDT/6:00 p.m. EDT today to discuss the quarterly results. A live

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webcast of this teleconference will be available on the company’s website at http://ir.pdf.com/medialist.cfm. A replay of the call will be available at the same website address beginning approximately two hours after completion of the live call. Further, a copy of this press release, including the disclosure and reconciliation of certain non-GAAP financial measures to the most directly comparable GAAP measure, which non-GAAP measures may be used periodically by the company’s management when discussing financial results with investors and analysts, will be available on the company’s website at http://www.pdf.com/news_archive.phtml following the date of this release.

About PDF Solutions

PDF Solutions, Inc. (Nasdaq: PDFS) is the leading provider of process-design integration technologies for manufacturing integrated circuits (ICs). PDF’s software, methodologies and services enable semiconductor companies to create IC designs that can be more easily manufactured using manufacturing processes that are more capable. By simulating deep sub-micron product and process interactions, the PDF solution offers clients reduced time to market, increased IC yield and performance, and enhanced product reliability and profitability. Headquartered in San Jose, Calif., PDF Solutions operates worldwide with additional offices in Europe and Japan. For more information, visit www.pdf.com.

PDF Solutions^® is a registered trademark of PDF Solutions, Inc.

Forward-Looking Statements

Some of the statements in this press release are forward looking, including the statements regarding the level of customer interest in PDF's solutions. The words “estimate”, “project”, “expect”, “believe” and similar expressions also identify forward-looking statements. Actual results could differ materially from those expressed in any forward-looking statements. Risks and uncertainties that could cause results to differ materially include risks associated with: any unforeseen industry changes; changes in general market conditions, difficulties in modifying PDF’s solutions on a timely basis; and changes in the marketplace for our solutions, including the introduction of products or services competitive with PDF’s products and services. Readers should also refer to the risk disclosures set forth in PDF’s Report on Form 10-K filed with the SEC on March 26, 2003 and Report on Form 10-Q filed with the SEC on May 14, 2003. The forward-looking statements contained in this release are made as of the date hereof, and PDF does not assume any obligation to update such statements nor the reasons why actual results could differ materially from those projected in such statements.

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PDF SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)

				June 30,			December 31,
				2003			2002
ASSETS
Current assets:
	Cash and cash equivalents			$	67,073		$	71,490
	Accounts receivable, net of allowances				6,584			7,924
	Prepaid expenses and other current assets				5,006			4,406
			Total current assets		78,663			83,820
Property and equipment, net					3,453			3,533
Goodwill					662			662
Intangible assets, net					4,195			220
Other assets					1,815			1,564
			Total assets	$	88,788		$	89,799
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable			$	1,370		$	499
	Accrued compensation and related benefits				1,910			1,143
	Other accrued liabilities				1,364			1,652
	Taxes payable				686			1,838
	Deferred revenues				2,163			4,496
	Billings in excess of recognized revenue				274			606
	Other liabilities				1,500			—
	Current portion of long-term debt				17			17
			Total current liabilities		9,284			10,251
Long-term debt					6			15
Deferred tax liability					753			752
Deferred rent					49			39
Stockholders’ equity:
		Common stock			3			3
		Additional paid-in-capital			100,641			99,884
		Deferred stock-based compensation			(545	)		(1,340	)
		Notes receivable from stockholders			(4,614	)		(4,998	)
		Accumulated deficit			(16,855	)		(14,845	)
		Cumulative other comprehensive income			66			38
			Total stockholders’ equity		78,696			78,742
			Total liabilities and stockholders’ equity	$	88,788		$	89,799

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PDF SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)

			Three Months Ended					Six Months Ended
			June 30,			June 30,		June 30,			June 30,
			2003			2002		2003			2002
Revenue:
	Design-to-silicon yield solutions		$	8,034		$	9,505	$	16,142		$	17,885
	Gain share			2,056			2,731		3,015			5,808
		Total revenue	$	10,090		$	12,236	$	19,157		$	23,693
Cost and expenses:
	Cost of design-to-silicon yield			3,514			4,110		6,958			7,974
	Research and development			4,453			3,964		8,785			7,154
	Selling, general and administrative			2,994			2,614		5,697			5,168
	Stock-based compensation amortization*			329			770		978			1,558
		Total costs and expenses		11,290			11,458		22,418			21,854
Income (loss) from operations				(1,200	)		778		(3,261	)		1,839
Interest and other income				345			338		720			697
Income (loss) before taxes				(855	)		1,116		(2,541	)		2,536
Tax (benefit) provision				(179	)		551		(531	)		1,391
Net income (loss)			$	(676	)	$	565	$	(2,010	)	$	1,145
Net income (loss) per share:
	Basic		$	(0.03	)	$	0.03	$	(0.09	)	$	.0.05
	Diluted		$	(0.03	)	$	0.02	$	(0.09	)	$	0.05
Weighted average common shares:
	Basic			22,614			21,814		22,551			21,726
	Diluted			22,614			22,943		22,551			23,192
* Stock-based compensation amortization:
	Cost of design-to-silicon yield solutions		$	86		$	223	$	216		$	486
	Research and development			155			366		563			804
	Selling, general and administrative			88			181		199			268
			$	329		$	770	$	978		$	1,558

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PDF SOLUTIONS, INC.
RECONCILIATION OF REPORTED GAAP NET INCOME (LOSS) TO PRO FORMA NET INCOME (LOSS)
(UNAUDITED)
(In thousands, except per share data)

	Three Months Ended
	June 30,			June 30,
	2003			2002
Net income (loss)	$	(676	)	$	565
Stock-based compensation amortization		329			770
Amortization of intangibles, net		82			28
Pro forma net income (loss)	$	(265	)	$	1,363
Pro forma net income (loss) per share – diluted	$	(0.01	)	$	0.06
Weighted average common shares – diluted		22,614			22,943

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