PDF Solutions (PDFS) 8-K/A Results Represent 10thSequential Quarter of Revenue Growth

Exhibit 99.1

News Release

Investor Relations Contact:	Corporate Communications Contact:
Sonia Segovia, IR Coordinator	Abbie Kendall, Principal
PDF Solutions, Inc.	Armstrong Kendall, Inc.
Tel: (408) 938-6491	Tel: (503) 672-4681
Email: sonia.segovia@pdf.com	Email: abbie@akipr.com

PDF Solutions^®Reports Record

Second Quarter 2005 Revenue

Results Represent 10^thSequential Quarter of Revenue Growth

     SAN JOSE, Calif.—July 21, 2005—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, 2005.

     Revenue for the second fiscal quarter of 2005 totaled a record $18.4 million, an increase of 21%, compared with revenue of $15.2 million for the second fiscal quarter of 2004. On a GAAP basis, net income for the second fiscal quarter of 2005 totaled approximately $1.3 million, or $0.05 per diluted share, compared with a net loss of approximately $460,000, or $0.02 per diluted share, for the second fiscal quarter of 2004.

     In addition to using GAAP results in evaluating PDF Solutions’ business, management also believes it useful to measure results using a non-GAAP measure of net income or loss, which excludes amortization of stock-based compensation and acquired intangible assets. Using this non-GAAP measure, net income for the second fiscal quarter of 2005 totaled $2.9 million, or $0.11 per diluted share, compared with non-GAAP net income of approximately $1.0 million, or $0.04 per diluted share, for the second fiscal quarter of 2004.

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     As previously announced, PDF will hold a live conference call beginning at 3:00 p.m. Pacific Time/6:00 p.m. Eastern Time today to discuss these quarterly results. A live webcast of this conference call will be available on PDF Solutions’ 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 PDF Solutions’ management when discussing financial results with investors and analysts, will be available on PDF Solutions’ 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 Solutions’ 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^Ò is a registered trademark of PDF Solutions, Inc.

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PDF SOLUTIONS, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)

	June 30,			December 31,
	2005			2004
ASSETS
Current assets:
Cash and cash equivalents	$	51,862		$	45,660
Accounts receivable, net of allowances		18,852			15,978
Prepaid expenses and other current assets		2,436			2,685
Deferred tax assets		1,998			1,586
Total current assets		75,148			65,909
Property and equipment, net		3,614			3,321
Goodwill		39,886			39,886
Intangible assets, net		12,789			15,791
Other assets		608			500
Total assets	$	132,045		$	125,407
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,827		$	1,023
Accrued compensation and related benefits		3,012			3,209
Other accrued liabilities		2,036			2,593
Taxes payable		4,013			3,286
Deferred revenues		2,949			2,905
Billings in excess of recognized revenue		1,921			1,581
Total current liabilities		15,758			14,597
Long-term liabilities		290			311
Deferred tax liabilities		1,469			1,701
Total liabilities		17,517			16,609
Stockholders’ equity:
Common stock		4			4
Additional paid-in-capital		137,181			134,191
Treasury stock		(4,806	)		(4,806	)
Deferred stock-based compensation		(75	)		(148	)
Notes receivable from stockholders		(550	)		(550	)
Accumulated deficit		(17,239	)		(19,975	)
Accumulated other comprehensive income		13			82
Total stockholders’ equity		114,528			108,798
Total liabilities and stockholders’ equity	$	132,045		$	125,407

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PDF SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)

	Three Months Ended					Six Months Ended
	June 30,		June 30,			June 30,		June 30,
	2005		2004			2005		2004
Revenue:
Design-to-silicon-yield solutions:
Integrated solutions	$	12,267	$	13,352		$	24,824	$	22,858
Software licenses		3,197		161			6,646		2,350
Gain share		2,892		1,656			4,979		2,637
Total revenue		18,356		15,169			36,449		27,845
Cost and expenses:
Cost of design-to-silicon-yield solutions:
Direct costs of design-to-silicon-yield solutions:
Integrated solutions		5,766		5,308			11,516		9,660
Software licenses		101		61			258		63
Amortization of acquired core technology		1,266		1,327			2,532		2,677
Research and development		5,655		4,822			10,991		10,040
Selling, general and administrative		4,289		3,622			8,203		7,419
Stock-based compensation amortization*		32		292			74		547
Amortization of other acquired intangible assets		235		410			470		820
Total costs and expenses		17,344		15,842			34,044		31,226
Income (loss) from operations		1,012		(673	)		2,405		(3,381	)
Interest and other income, net		350		138			622		291
Income (loss) before taxes		1,362		(535	)		3,027		(3,090	)
Tax provision (benefit)		20		(75	)		291		(788	)
Net income (loss)	$	1,342	$	(460	)	$	2,736	$	(2,302	)
Net income (loss) per share:
Basic	$	0.05	$	(0.02	)	$	0.11	$	(0.09	)
Diluted	$	0.05	$	(0.02	)	$	0.10	$	(0.09	)
Weighted average common shares:
Basic		25,862		25,337			25,779		25,319
Diluted		26,986		25,337			27,057		25,319

* Stock-based compensation amortization:
Cost of design-to-silicon-yield solutions	$	—	$	9	$	—	$	37
Research and development		32		274		74		476
Selling, general and administrative		—		9		—		34
	$	32	$	292	$	74	$	547

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PDF SOLUTIONS, INC.

RECONCILIATION OF REPORTED GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME
(UNAUDITED)
(In thousands, except per share amounts)

	Three Months Ended
	June 30,		June 30,
	2005		2004
GAAP net income (loss)	$	1,342	$	(460	)
Stock-based compensation amortization		32		292
Amortization of intangibles, net of taxes		1,479		1,198
Non-GAAP net income	$	2,853	$	1,030
Non-GAAP net income per share –diluted	$	0.11	$	0.04
Weighted average common shares — diluted		26,986		26,136

Use of Non-GAAP Information

In addition to providing results that are determined in accordance with Generally Accepted Accounting Principles (GAAP), PDF Solutions also provides certain Non-GAAP financial measures that exclude certain charges as additional information relating to its operating results. PDF Solutions’ management believes that the presentation of these measures provides useful information to investors regarding certain additional financial and business trends relating to its financial condition and results of operations. PDF Solutions has also chosen to provide this information to investors to enable them to perform meaningful comparisons of PDF Solutions’ past, present and future operating results. These measures are not in accordance with, or an alternative to, GAAP and may be different from non-GAAP measures used by other companies. The calculations of non-GAAP financial measures have been adjusted to exclude the effects of amortization of stock-based compensation and acquired intangible assets.

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