<PAGE>   1
                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.


                             CONFIDENTIAL TREATMENT
                       PDF SOLUTIONS, INC. HAS REQUESTED
                        THAT THE MARKED PORTIONS OF THIS
                       DOCUMENT BE ACCORDED CONFIDENTIAL
                      TREATMENT PURSUANT TO RULE 406 UNDER
                    THE SECURITIES ACT OF 1933, AS AMENDED.


                                                                   Exhibit 10.17

                                                             PROJECT: TOSHIBA --
                                                             *******************

                     YIELD IMPROVEMENT CONSULTING AGREEMENT

        This Yield Improvement Consulting Agreement dated as of ****** **, ****
(this "AGREEMENT") is entered into by and between Toshiba Corporation, a
corporation organized under the laws of Japan ("TOSHIBA") having its principal
place of business at 1-1 Shibaura 1-chome, Minato-ku, Tokyo 105-8001, Japan, and
PDF Solutions, Inc., a corporation organized under the laws of California
("PDF") having its principal place of business at 333 West San Carlos Street,
Suite 700, San Jose, California, U.S.A.

RECITALS

            A. PDF Solutions possesses technology and expertise useful in
discovering, analyzing, and fixing problems in the design and manufacturing
processes that cause low yields of useable integrated circuits.

            B. Toshiba desires to engage PDF Solutions and receive a license to
certain technology useful to analyze its internal integrated circuit
manufacturing process, identify problems therewith, and recommend solutions
thereto, by way of methodology or otherwise, upon the terms and conditions
contained herein.

            C. PDF Solutions desires to be so engaged upon the terms and
conditions contained herein.

DEFINITIONS

"Analysis" refers to all interpretations, recommendations, extractions,
statistical models or other yield and performance models developed by PDF
Solutions and derived in whole or in part from Toshiba's Raw Data; provided,
however, that Analysis does not include any information sufficiently detailed
that Raw Data could be feasibly re-constructed.

"Characterization Vehicle" or "CV" refers to the parameterized layout structures
or circuit elements, specific implementations of said structures or circuit
elements either in computer format or layout format (for example, GDS-II files),
and images of said structures or circuit elements, historically or hereafter
created or customized by PDF Solutions for the purposes of creating a test
vehicle used to characterize any given manufacturing process. Manufacturing
Designs are usually referenced in the process of generating CVs for the purposes
of optimizing or tuning the vehicle to the targeted designs and process. The CV
is used to create a Mask Set which is used by the fabrication facility to
generate test wafers.

"Foundry" refers to any facility Toshiba owns or operates to manufacture
products and any third party foundry with which Toshiba has a relationship that
manufactures products for Toshiba.


                                      -1-
<PAGE>   2

"Manufacturing Designs" refers to all non-public information relating to
Toshiba's manufacturing processes and integrated circuit designs (structures and
elements) used in connection with the CV to generate Raw Data.

"Mask Set" refers to translucent glass plates used as a light filter to transfer
designs onto a wafer.

"Proprietary Rights" shall mean all intellectual property rights including, but
not limited to, patents, patent applications, copyrights, copyright
registrations, moral rights, mask work rights, rights of authorship, industrial
design rights, trademarks, tradenames, know-how and trade secrets, irrespective
of whether such rights arise under U.S. or international intellectual property,
unfair competition or trade secret laws.

"PDF Technology" refers to all historically, or hereafter developed
methodologies, techniques, software, designs, CVs, problem solving processes and
practices utilized by PDF Solutions, and any modifications, compilations or
works derivative of the foregoing, excluding know-how, methodologies, techniques
or practices that are commonly known or that Toshiba independently has the right
to use. PDF Technology also refers to the CV layout and the Design of
Experiments used in creating the CV layout.

"Raw Data" shall mean the data generated by PDF Solutions using the CV in
conjunction with Toshiba's Manufacturing Design.

                                    AGREEMENT

            NOW, THEREFORE, in consideration of the mutual promises herein
contained, the above recitals and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Toshiba and PDF
Solutions, intending to be legally bound, hereby agree as follows:


1.      YIELD IMPROVEMENT SERVICES.

        1.1 PROVISION OF SERVICES. During the term of this Agreement, PDF will
provide to Toshiba development work and services with respect to integrated
circuit yield management issues. The services and the Deliverables to be
delivered as a result thereof (the "PROJECT") are described in detail on a
statement of work (the "STATEMENT OF WORK") attached hereto as Exhibit A. The
Statement of Work shall be governed by the terms of this Agreement, and
specifies:

               (a)    Deliverables. The specific deliverables (the
                      "DELIVERABLES") to be delivered under the Project and
                      relevant milestones for delivering the Deliverables;

               (b)    Team Structure. The team members from PDF and Toshiba who
                      are to work on the Project and the expected time
                      contributions for each such member;

                                      -2-
<PAGE>   3


               (c)    Tools. The required data, tools, hardware, software,
                      materials, access to personnel and facilities, and other
                      materials required for effectively completing the Project;

               (d)    Location. The geographic location where each component of
                      the Project will be completed;

               (e)    Fees and Expenses. The amount and structure of PDF's Fees
                      (as defined below) payable upon delivery of the
                      Deliverables and Expenses (as defined below).

        1.2 TOSHIBA INTELLECTUAL PROPERTY. Toshiba will disclose to PDF on a
timely basis such Proprietary Rights (as defined in Section 3.1) and such other
data and materials as PDF shall reasonably require in order to perform the
Project and/or prepare the Deliverables as defined in the Statement of Work.

        1.3 DELIVERABLES. In performing the Project, PDF shall develop and/or
make for Toshiba the Deliverables in accordance with any schedules set forth in
the Statement of Work. The Deliverables shall meet in all material respects the
description of the Deliverable (the "DELIVERABLE DESCRIPTION") set forth in the
Statement of Work.

        1.4 ACCEPTANCE. Upon delivery of any Deliverable by PDF to Toshiba,
Toshiba shall examine the Deliverable to determine whether it reasonably
conforms to the Deliverable Description. If the Deliverable does not reasonably
conform to such Deliverable Description, Toshiba shall have fifteen (15) days
from the date of delivery thereof to reject such Deliverable and specify in
writing why it does not reasonably conform to such Deliverable Description. Upon
such rejection the parties shall work together to determine what needs to be
done to bring such Deliverable up to such Deliverable Description. If the
Deliverable does not meet the Deliverable Description, PDF shall exercise
reasonable efforts to correct promptly such nonconformity of the Deliverable
with the Deliverable Description and redeliver the Deliverable to Toshiba upon
completion of such correction within one month following the parties' agreement
referenced in the preceding sentence but only if there are no limitations
outside of PDF's control. If there are limitations outside PDF's control, PDF
and Toshiba will negotiate in good faith a time for delivery of the Deliverable.
If a rejection of the Deliverable is not received by PDF within fifteen (15)
days after any delivery or redelivery of a Deliverable under this Section 1.4,
the Deliverable shall be deemed accepted. "ACCEPTANCE" (including with
correlative meaning the term "ACCEPT") shall mean any acceptance under this
Section 1.4. Toshiba agrees to deliver a notice of Acceptance (the "NOTICE OF
ACCEPTANCE") upon its decision to Accept any Deliverable hereunder within such
fifteen (15) days following such delivery or redelivery.

2.      FEES AND EXPENSES.

        2.1 SERVICES FEES AND EXPENSES. Upon delivery of each of the respective
Deliverables provided by PDF hereunder, Toshiba shall pay to PDF the fees
specified to the extent and in the manner set forth in the Statement of Work
("FEES"), and shall


                                      -3-
<PAGE>   4

reimburse PDF for its out-of-pocket expenses incurred in carrying out its
obligations under this Agreement including, but not limited to, travel, hotel,
meal, document production, equipment and other expenses directly related to the
services performed hereunder further subject to the terms and conditions set
forth in the Statement of Work ("EXPENSES"). In no event shall the Expenses for
which Toshiba shall be liable hereunder exceed any limitation on Expenses
specified in the Statement of Work without written agreement from Toshiba. PDF
shall use reasonable and diligent efforts to deliver the Deliverables hereunder
within the estimated expenses and time schedule specified in the Statement of
Work.

        2.2 PAYMENT OF INVOICES If required by applicable law, PDF shall pay any
taxes and assessments levied or imposed by any Japanese tax or other
governmental body resulting from the services or the Deliverables to be provided
by PDF to Toshiba and the payment to be made by Toshiba to PDF hereunder,
including without limitation all personal property taxes on any of the foregoing
and any taxes or amounts in lieu of any of the foregoing paid or payable by PDF,
other than taxes based on PDF's net income. Toshiba agrees that PDF Solutions or
PDF Solutions' designated representative will have the right to participate and
negotiate in all discussions with the appropriate tax authorities regarding
taxes to be paid by PDF Solutions in the process of determining the required tax
burden, if any. The parties acknowledge that PDF Solutions shall be obligated to
pay any such tax at the reduced withholding income tax rate rather than the
ordinary rate by filing "Application Form for Income Tax Convention between the
United States and Japan" with the Japanese tax authorities. If applicable,
Toshiba shall send PDF the application form immediately after the execution of
this Agreement for PDF's signature and PDF shall promptly sign it and return it
to Toshiba so that Toshiba may file it with the applicable Japanese tax
authorities on behalf of PDF.

3.      PROPRIETARY RIGHTS

        3.1 OWNERSHIP. Toshiba and PDF Solutions acknowledge and agree that, as
between them, ownership shall be as follows:

                (a) PDF Solutions is the exclusive owner of all PDF Technology
and all Proprietary Rights in the PDF Technology;

                (b) Toshiba is the exclusive owner of all Analysis,
Manufacturing Designs, Raw Data and all Proprietary Rights in the Analysis,
Manufacturing Design and the Raw Data; and

                (c) Toshiba is the exclusive owner of Mask Sets.

        3.2 SOLELY DEVELOPED PROPRIETARY RIGHTS OWNERSHIP. Each party shall
solely own any Proprietary Rights solely developed by such party or the
employee(s) of such party, whether before, during or after the term of this
Agreement.


                                      -4-
<PAGE>   5
                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.


 3.3 GRANT OF LICENSE BY PDF SOLUTIONS. Subject to the terms and conditions of
this Agreement, including the timely payment of Fees, PDF Solutions hereby
grants to Toshiba and its Subsidiaries, a perpetual, non-exclusive, irrevocable,
worldwide, non-transferable license (with the right of Toshiba to sublicense its
Subsidiaries) to use, copy for internal use, modify and/or enhance the
Deliverables (as set forth in the Statement of Work), any PDF Technology and
associated Proprietary Rights disclosed by PDF Solutions under this Agreement,
but only to the extent PDF Solutions has the right to grant such license;
provided that such license is solely for the development, manufacture,
fabrication and sale of all Toshiba's semiconductor products associated with
Toshiba's ***********. The foregoing license includes all PDF Technology
disclosed by PDF Solutions in its work for Toshiba hereunder; provided, however,
that specifically excluded from this license of PDF Technology is any and all
software or software tools used by PDF in connection with or during the course
of such services, or software manuals and documentation relating to such
software or tools. Notwithstanding the foregoing, Toshiba shall not be limited
to the *********** with respect to PDF Technology that consists of methodologies
or practices observed by Toshiba personnel in the course of PDF Solutions' work
hereunder. In particular, Toshiba shall have the right to create any ***** *****
***** ***** ***** ***** for the purpose of transferring to other semiconductor
****** than ****** by using PDF's know-how of ***** ***** ***** ***** by PDF
under this Agreement ("******"); provided that Toshiba shall not violate any
PDF's copyright or patent. In the event that Toshiba reasonably determines that
there is a possibility of violating PDF's copyright or patent in connection with
the modification of ****** to be implemented by Toshiba, Toshiba shall consult
PDF and PDF shall provide Toshiba with its views thereon and/or alternative
solution to avoid such possible violation. Toshiba shall be bound by and shall
cause its sublicensees to be bound by the confidentiality obligations contained
in Section 6 or obligations at least as restrictive as the confidentiality
obligations contained in Section 6. Except as specifically provided herein,
Toshiba shall not disclose or license PDF Technology to any third party. Toshiba
understands that PDF Solutions will not disclose to Toshiba certain proprietary
methods or trade secrets in connection with the services to be rendered by PDF
Solutions hereunder. To this end, PDF Solutions retains the right to take
industry standard measures to keep such proprietary methods or trade secrets
from Toshiba, unless the same defeats or substantially impedes the Scope of
Services and Technology under this Agreement.

        3.4 PDF SOLUTIONS SERVICES. PDF Solutions may do the following:

                (a) to use, copy, compile, manipulate, analyze or reproduce Raw
Data and the Mask Sets solely for the purpose of performing under this
Agreement; and (b) to use and rely upon Raw Data and Analysis for the purpose of
supporting Toshiba's yield ***. PDF Solutions shall be bound by and shall cause
its sublicensees to be bound by the confidentiality obligations contained in
Section 6 or obligations at least as restrictive as the confidentiality
obligations contained in Section 6.

        3.5 NO OTHER RIGHTS. Except as otherwise set forth in this Section 3,
neither this Agreement nor performance and delivery of the Services and
Technology shall give


                                      -5-
<PAGE>   6
                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.


either PDF Solutions or Toshiba any ownership, interest in, or rights to, the
Proprietary Rights owned or provided by the other party.

        3.6 DEFINITION OF SUBSIDIARY. For the purpose of this Agreement and the
Statement of Work, the term "SUBSIDIARY" of any party shall mean any corporation
or other entity more than fifty percent (50%) of the Voting Stock of which is
beneficially owned or controlled, directly or indirectly, by such party;
provided that such corporation, company or other entity shall be deemed to be a
Subsidiary only so long as such ownership or control exists. "VOTING STOCK" of
any entity shall mean any stock or other equity interest entitled to vote for
the election of directors or any equivalent governing body of such entity.
Notwithstanding the above, ********** ********** ********* ************* *******
************* ************ *********** ********** ********** ******** ********
******** ********* *** **********.

4.      TERM AND TERMINATION.

        4.1 COMMENCEMENT. This Agreement shall commence as of the date first set
forth above and shall continue in force until completion of the Project, unless
sooner terminated as provided in this Section 4.

        4.2 TERMINATION.

            (a) If either party defaults in the performance of any material
obligation hereunder the non-defaulting party may give the defaulting party
written notice of such default within twenty (20) days following the
non-defaulting party's discovery of such default. If the defaulting party fails
to cure such default within forty-five (45) days (or such other time period as
the parties shall mutually agree) after the defaulting party's receipt of such
notice of default, then the non-defaulting party, at its option, may, terminate
this Agreement by giving the defaulting party written notice of termination of
this Agreement within ten days following the end of such 45-day period. If such
notice of default or notice of termination is not given within such period, then
the default shall no longer constitute cause for termination of this Agreement.

            (b) Either party may terminate this Agreement effective upon written
notice to the other party in the event the other party becomes the subject of a
voluntary or involuntary petition in bankruptcy or any proceeding relating to
insolvency, or assignment for the benefit creditors, if that petition or
proceeding is not dismissed within sixty (60) days after filing. Such written
notice of termination must be delivered no later than ten (10) days following
the expiration of such 60-day period. If such notice of termination is not given
within such 10-day period, then the default shall no longer constitute cause for
termination of this Agreement.

            (c) Either party may terminate this Agreement effective upon written
notice to the other party in the event that the other party is merged with or
into, or all or substantially all or the other party's assets are sold to, a
third party corporation or other entity, unless such acquiring corporation or
entity expressly agrees to assume the other



                                      -6-
<PAGE>   7

party's obligations under this Agreement. Such written notice of termination
must be delivered no later than ten (10) days following the consummation of such
transaction. If such notice of termination is not given within such 10-day
period, then the default shall no longer constitute cause for termination of
this Agreement.

            (d) Toshiba shall be entitled to terminate this Agreement upon
forty-five (45) days prior written notice if (i) Toshiba reasonably rejects the
Deliverables due to their material nonconformity with the Deliverable
Description set forth in the Statement of Work (and clearly and properly
specifies the reason for such nonconformity), the Acceptance procedure set forth
in Section 1.4 shall have been exhausted without an Acceptance, and PDF does not
reasonably cure such material nonconformity within forty-five (45) days
following the final written rejection of such Deliverable, or (ii) Toshiba
reasonably and in good faith judges that the expected progress for the services
to be performed by PDF necessary to deliver the Deliverables hereunder cannot be
achieved within the mutually agreed time frame, and within forty-five (45) days
following such notice PDF cannot reasonably establish that such progress can be
achieved. This Agreement may then be terminated by a written notice of
termination delivered within ten (10) days following the applicable foregoing
forty-five (45) day period. If such written notice of termination is not given
within such 10-day period, then the default under this Section 4.2(d) shall no
longer constitute cause for termination of this Agreement.

        4.3 TERMINATION OF RIGHTS. Upon expiration or termination of this
Agreement, all rights and licenses granted and all obligations undertaken
hereunder shall forthwith terminate except the following:

            (a) Any and all licenses granted by PDF to Toshiba and its
Subsidiaries under this Agreement as to previously delivered, Accepted and paid
for Deliverables shall survive the expiration or termination of this Agreement
unless this Agreement is terminated by PDF in accordance with the provisions of
Section 4.2(a), (b) or (c) in which case none of such licenses shall survive and
all copies of such Deliverables shall be returned to PDF.

            (b) If Toshiba terminates this Agreement for the reason as stated in
Section 4.2, Toshiba shall pay to PDF, within thirty (30) days after the date of
termination, (i) the actual amount of unreimbursed Expenses incurred by PDF
through the date of termination by Toshiba, (ii) the amount of the Deliverables
Fees with respect to Deliverables delivered or otherwise accrued, and unpaid
through the date of termination; provided that payment of such Fees and Expenses
shall be subject to the provisions of Section 2.


            (c) If Toshiba terminates this Agreement for the reason specified in
Section 4.2, Toshiba shall pay to PDF:


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<PAGE>   8
                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.


                (i) the amount of any unpaid Product Fees accrued prior to the
date of termination; and

                (ii) the amount of any future Product Fees in accordance with
Paragraph (e)(iii) of the Statement of Work. Such Product Fees shall be payable
through the term of payment specified in such Paragraph (e)(iii); provided that
Product Fees to be accrued and paid following a date of termination shall
terminate only if the basis for termination of this Agreement shall be (A) an
involuntary bankruptcy under Section 4.2(b) or (B) the material default under
PDF's confidentiality obligations under Section 6 of this Agreement; provided
that payment of such Product Fees under this Section 4.3(c) shall be subject to
the provisions of Section 2.

            (d) The provisions of Sections 2 (including by reference Toshiba's
obligations to pay Fees and Expenses set forth in the Statement of Work but
subject to Section 4.3(b) and (c)), 3.1, 3.2, 3.4 (with respect to Deliverables
delivered by PDF to Toshiba and Accepted and paid for by Toshiba), 4, 6, 7, 8.4,
8.7 and 8.8 shall survive any expiration or termination of this Agreement.

5. INDEPENDENT CONTRACTORS. The relationship of PDF and Toshiba established by
this Agreement is that of independent contractors, and nothing contained in this
Agreement shall be construed to (i) give either party the power to direct or
control the day-to-day activities of the other, (ii) constitute the parties as
agents, partners, joint venturers, co-owners or otherwise as participants in a
joint or common undertaking, or (iii) allow either party to create or assume any
obligation on behalf of the other for any purpose whatsoever.

6. CONFIDENTIALITY. Except as otherwise provided herein, each party agrees, at
all times during the term of this Agreement and for ** years after receipt of
Confidential Information, to hold in strictest confidence (and to cause its
Subsidiaries to hold in strictest confidence), and not to use, except for the
purposes contemplated herein, or to disclose to any person, firm or corporation
without written authorization of the other party, any Confidential Information
of the disclosing party. As used in this Agreement, "CONFIDENTIAL INFORMATION"
means any proprietary information, technical data, trade secrets or know-how,
including, but not limited to, research, software, developments, inventions,
processes, formulas, technology, designs, drawings, engineering, hardware
configuration information, yield data or other information disclosed by one
party to the other, which is marked as "Confidential," and/or orally or in other
tangible form identified as confidential at the time of disclosure and confirmed
as Confidential Information in writing within thirty (30) days of its initial
disclosure, provided that any methodologies, practices or procedures used by PDF
and observed by Toshiba shall constitute "Confidential Information" within the
meaning of this Agreement without any such notification. Confidential
Information does not include any of the foregoing items which have become
publicly known and made generally available through no wrongful act of the
receiving party, or which is already known by the receiving party as evidenced
by the receiving party's files immediately prior to such disclosure, or which
the receiving party proves was independently developed, prior to the receiving
party's receipt of such


                                      -8-
<PAGE>   9

Confidential Information, by employees or other representatives of such
receiving party who have not had access to such information or the ideas or
theories underlying such Confidential Information. Each party receiving
Confidential Information of the other party agrees to limit disclosure of
Confidential Information to only those of its officers and employees the
receiving party considers necessary to complete its services contemplated in
this Agreement and then only after such officers and employees have undertaken
by employment agreement or otherwise to comply with the obligations undertaken
by Recipient under this Agreement. Except as otherwise agreed by both parties,
PDF shall return to Toshiba all Confidential Information of Toshiba owned by
Toshiba and not licensed to PDF or jointly owned by PDF and Toshiba and copies
thereof, within thirty (30) days after completion of the Project or after
expiration or termination of this Agreement. Except as otherwise agreed by both
parties, Toshiba shall return to PDF all Confidential Information of PDF owned
by PDF and not licensed to Toshiba or jointly owned by PDF and Toshiba and
copies thereof, within thirty (30) days after completion of the Project or after
expiration or termination of this Agreement.

7.      WARRANTY. PDF warrants to Toshiba that PDF's Intellectual Property
utilized by PDF in performing the Project does not infringe any patent,
copyright, trade secret, and any other proprietary rights of any third party.
EXCEPT FOR THE FOREGOING, NOTHING UNDER THIS AGREEMENT, OR THE STATEMENT OF WORK
OR PROJECT SHALL BE DEEMED TO BE A WARRANTY OR REPRESENTATION AS TO THE OUTCOME
OF ANY PROJECT OR THE EFFICACY OF ANY RECOMMENDATIONS MADE BY PDF. NOTHING UNDER
THIS AGREEMENT OR THE STATEMENT OF WORK SHALL BE DEEMED TO CREATE ANY LIABILITY
ON THE PART OF PDF WITH RESPECT TO THE OUTCOME OF A PROJECT OR ANY ACTIONS TAKEN
BY TOSHIBA AS A CONSEQUENCE OF PDF'S RECOMMENDATIONS.

8.      MISCELLANEOUS.

        8.1 AMENDMENTS AND WAIVERS. Any term of this Agreement or any Statement
of Work may be amended or waived only with the written consent by the
representatives of the parties.

        8.2 SOLE AGREEMENT. This Agreement and the Statement of Work constitute
the sole agreement of the parties and supersede all oral negotiations and prior
writings with respect to the subject matter hereof.

        8.3 NOTICES. Any notice required or permitted by this Agreement shall be
in writing and shall be deemed sufficient upon receipt, when delivered
personally or by an internationally-recognized delivery service (such as Federal
Express or DHL), or after being deposited in the U.S. mail as certified or
registered mail with postage prepaid, if such notice is addressed to the party
to be notified at such party's address as set forth above or as subsequently
modified by written notice.

        8.4 CHOICE OF LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California,


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<PAGE>   10

without giving effect to the principles of conflict of laws.

        8.5 SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of this
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of this Agreement shall be enforceable in accordance with its other
terms.

        8.6 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together will constitute
one and the same instrument.

        8.7 ARBITRATION. The parties shall attempt in good faith to resolve any
dispute arising under this Agreement. If the parties are unable to resolve
dispute within a reasonable period then the dispute shall be finally settled by
binding arbitration (a) if brought by Toshiba, in San Jose, California, in
accordance with the Commercial Rules of the American Arbitration Association
and, (b) if brought by PDF, in Tokyo, Japan in accordance with the rules of the
International Chamber of Commerce. In either case such arbitration shall be
conducted by one arbitrator appointed in accordance with said rules. The
arbitrator shall apply California law, without reference to rules of conflicts
of law or rules of statutory arbitration, to the resolution of any dispute.
Judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. Notwithstanding the foregoing, the parties may
apply to any court of competent jurisdiction for preliminary or interim
equitable relief, or to compel arbitration in accordance with this paragraph,
without breach of this arbitration provision.

        8.8 EXPORT CONTROL. Neither party shall, directly or indirectly export
or re-export any technical data or information or data received from the other
party hereunder or the direct products thereof to any destination prohibited or
restricted by export control regulations of Japan and the United States,
including U.S. Export Administration Regulations, without proper authorization
from the appropriate governmental authorities. In addition, the parties agree
that no technology furnished to the other will be used for any purpose to
develop and/or manufacture nuclear, chemical or biological weapons and/or
missiles.

        8.9 NON-SOLICITATION. Toshiba shall not solicit or influence or attempt
to influence any person employed by PDF to terminate or otherwise cease his or
her employment with PDF or become an employee of Toshiba or any competitor of
PDF. A company's status as a competitor of PDF shall be determined by PDF in its
sole discretion.

        8.10 PUBLICITY. Neither party shall disclose the terms of this Agreement
to any third party, or in any manner advertise or publish statements to such
effect, without the prior written consent and mutual agreement as to the
content, medium, and manner of the public announcement of the other party.
Customer agrees during the term to work in good


                                      -10-
<PAGE>   11

faith with PDF Solutions to produce mutually acceptable public announcements by
PDF Solutions of PDF Solutions' engagement with Customer under this Agreement.
Notwithstanding the above, should one of the parties be required to disclose
either the existence or terms of this Agreement to a court of law, a
governmental agency, an auditor or a bank, such party may do so without the
prior written consent of the other party provided that the disclosing party: (i)
notifies the recipient of the confidential nature of the information, (ii)
requests confidential treatment of such information, (iii) limits the disclosure
to only such information as is required under the circumstances, and (iv)
delivers prompt notice to the other party of such requested or actual
disclosure.



IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.



PDF SOLUTIONS, INC.                         TOSHIBA CORPORATION


By:                                         By:
   ----------------------------                ---------------------------------

Name:    John K. Kibarian                   Name:         Yasuo Morimoto



Title:       President                      Title:     President & CEO,
                                                     Semiconductor Company

DATE:                                       DATE:
     --------------------------                  -------------------------------


                                      -11-
<PAGE>   12
                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.


                                    EXHIBIT A

                                STATEMENT OF WORK
                                  ************
                                       **
                                ****************

        This Statement of Work is made between PDF Solutions, Inc. ("PDF") and
Toshiba Corporation ("TOSHIBA") pursuant to and attached as an exhibit to that
certain Yield Improvement Consulting Agreement dated as of ****** **, **** (the
"AGREEMENT") between PDF and Toshiba. All terms and conditions contained in this
Statement of Work are subject to the terms and conditions set forth in the
Agreement. The date of commencement of services under this Agreement was ******
**, **** (the "ENGAGEMENT COMMENCEMENT DATE").

PROJECT DESCRIPTION & GOALS

        PDF Solutions agrees to provide Toshiba with ************ services for
Toshiba's **** developed as ************ ******* ******. Services in support of
this project described in this contract is consists with one major components:

            (1) ******* PROJECT

                (a) PROJECTS, DELIVERABLES AND FEE

            The section is outlined below that review the project services. The
section has Project Phases and Deliverables.



                                     SOW-1
<PAGE>   13
                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.


        ***** PROJECT

                Two phases are included in this project;

                (i)   *****************************************

                (ii)  *****************************************

                ****  deliverables are included in this project;

                (i)   *****************************************

                (ii)  *****************************************

                (iii) *****************************************

                (iv)  *****************************************

                (v)   *****************************************

        (a) DESCRIPTION OF PHASES FOR EACH *** (START DATE: ******)

<TABLE>
<CAPTION>
-----------------  --------------------------------------  ---------------
  PROJECT PHASE        PDF SOLUTIONS WORK STEPS                DURATION
-----------------  --------------------------------------  ---------------
<S>                <C>                                     <C>
***************        - *******************************   **************
*                        ************                      *****

-----------------  --------------------------------------  ---------------

***************        - *******************************   **************
*                        *******************************   ***
                         ****
-----------------  --------------------------------------  ---------------
</TABLE>

        (b) DELIVERABLES

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
                                                                              MAINTENANCE    ESTIMATED
                                                      PLANED                      FEE        PERIOD OF
                                                     DELIVERY    DELIVERABLE    (per 6      MAINTENANCE
PHASE       DELIVERABLE          DESCRIPTION           MONTH        FEE         months)         FEE
---------------------------------------------------------------------------------------------------------
<S>         <C>                  <C>                <C>          <C>          <C>           <C>
****        *****                ***********        **********   ***********        *****   *************
                                 ***********
                                       *****
            -----------          -----------        ----------   -----------  -----------   -------------
            ***********          ***********        *********            **
---------------------------------------------------------------------------------------------------------
*****       *****                ***********        **********   ***********        *****   *************
                                 ***********
                                       *****
            -----------          -----------        ----------   -----------  -----------   -------------
            ***********          ***********        *********            **
---------------------------------------------------------------------------------------------------------
*****       *****                ***********        **********   ***********        *****   *************
                                 ***********
                                       *****
            -----------          -----------        ----------   -----------  -----------   -------------
            ***********          ***********        *********            **
---------------------------------------------------------------------------------------------------------
****        *****                ***********        **********   ***********        *****   *************
                                 ***********
                                       *****
            -----------          -----------        ----------   -----------  -----------   -------------
            ***********          ***********        *********            **
---------------------------------------------------------------------------------------------------------
******      *****                ***********        **********   ***********        *****   *************
     *                           ***********
                                       *****
---------------------------------------------------------------------------------------------------------
</TABLE>



                                     SOW-2
<PAGE>   14
                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.


        (b) TEAM STRUCTURE

        The team is structured to divide the decision-making, project leadership
and analysis management between three bodies in the form of "TEAM STRUCTURE" in
the form attached to this Statement of Work as Exhibit C.

        Toshiba will establish a Steering Committee (the "STEERING COMMITTEE")
which will consist of (a) ****** ******* and any other Toshiba manager who is
necessary in order for yield improvement decisions to be made, and (b) ******
******* or another senior executive of PDF. The Steering Committee will be
limited to four representatives of Toshiba and one representative of PDF. The
Steering Committee will have sufficient authority to make the relevant decisions
concerning this Project. The Steering Committee is responsible for giving the
team its charter, deciding which yield improvement actions to take and who in
the Toshiba organization will be responsible for carrying out the improvement.

        Project leadership responsibility will be shared by ****** ******* (the
"TOSHIBA PROJECT MANAGER") on behalf of Toshiba, and ****** ******* (the "PDF
PROJECT MANAGER"), on behalf of PDF. Their primary responsibility will be to
ensure overall project status include delivery timing and the deliverables of
the work chartered by the Steering Committee. In order to maximize the
likelihood that the team is making good progress, the Project Managers will
monitor the team's work on a monthly basis and help reduce any organizational
obstacles which may impede the team's progress.

        Technical responsibility will be shared by the personnel assigned by
Toshiba and PDF(the "TOSHIBA ENGAGEMENT MANAGER", on behalf of Toshiba, the "PDF
ENGAGEMENT MANAGER", on behalf of PDF, respectively). Their primary
responsibility will be to ensure that the team is making good progress toward
delivery of the work. Engagement Managers will monitor the team's work on a
weekly basis and ensure the project from technical view point.

        The day-to-day analyses will be conducted by a ******** ******* Team
("******") of engineers from Toshiba and PDF. A PDF Engagement Manager will
manage the activities of the ****. The PDF Engagement Manager will be
responsible for directing all team members in their analyses as well as
aggregating and synthesizing the results of all the analyses conducted by the
entire team. In addition, the Engagement Managers will be the principal point of
contact for any technical questions regarding the project.

        ********** Toshiba engineers will be asked to participate actively with
the **** Toshiba team members should be assigned to **** and be skilled at
******* ******* ******* ******* *******. Toshiba engineers will be placed on the
Team after approval by PDF for the purpose of gathering data and conducting
analyses. The Toshiba team members will work at the direction of the Engagement
Managers.

        (c) TOOLS


                                     SOW-3
<PAGE>   15
                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.


        Toshiba will provide PDF with office space and other reasonable and
customary business resources. In particular, Toshiba will provide PDF with
secure office space large enough to accommodate the required PDF personnel in
addition to the Toshiba engineers assigned to work on the ****. Toshiba will
provide PDF with office equipment reasonably requested by PDF from time to time
including **** international access telephones (including such analog lines as
PDF shall request), an international access Facsimile machine and line, and a
photocopier. Toshiba will provide PDF with 24-hour access to the team office so
work can continue at night and on weekends.

        Toshiba will provide PDF with computing resources that PDF reasonably
deems necessary to ***** ***** ***** *****. The details of such request will be
sent in a separate document to the Toshiba Engagement Manager but in general,
Toshiba will provide ******** engineering workstations connected to both the
Toshiba network and the Internet. Toshiba will also provide such other
accessories as PDF shall reasonably request including, but not limited to, a
removable data storage device, such as a tape drive, and a printer.

        (d) LOCATION

        The Project will be conducted by Toshiba's and PDF's personnel at
Toshiba's **** ********* in ************ and Toshiba's **** ********* in
*************, and PDF's facilities in San Jose, CA. In certain cases, PDF may
require Toshiba engineers to work at the PDF facility in San Jose, California.
PDF engineers may also work in ***** and ********* when the engagement manager
believes this is necessary to achieve progress. If Toshiba shall provide PDF
employees with an English version of the employee rules and regulations in force
at the Toshiba facilities, then PDF employees shall comply with such rules and
regulations in all material respects in an equivalent manner as other Toshiba
employees generally. Any failure to comply with such rules and regulations shall
not constitute a default of a material obligation constituting a basis for
termination of this Agreement unless (A) Toshiba has repeatedly given notices of
such failure to PDF and PDF has repeatedly failed to remedy such noncompliance
as specified in such notices, (B) Toshiba shall notify PDF in writing that
failure to cure such repeated non compliance within ** ***** shall constitute a
basis for termination of the Agreement and PDF shall fail to remedy such non
compliance, and (C) Toshiba gives final notice of termination within ** *****
following such ***** period. PDF shall take all reasonable steps necessary to
ensure that all employees resident at or visiting a Toshiba facility shall treat
as confidential in accordance with Section 6 all material information of a
proprietary nature observed by or disclosed to such employee, and shall comply
in all material respects with the all export control obligations contained in
Section 8.8.


                                     SOW-4
<PAGE>   16
                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.


        (e) FEES AND EXPENSES.

        Toshiba will pay PDF Fees consisting of three components: (1) the
Deliverable Fees and (2) the Maintenance Fees and (3) the Product Fees, each as
defined below:

(i)     DELIVERABLE FEES. Toshiba will pay PDF a deliverable fee described in
        each deliverable tables after each deliverable are provided to Toshiba
        (the "DELIVERABLE FEES"). The payment will be made within *** days of
        receipt of an invoice covering such Deliverable Fees.

(ii)    MAINTENANCE FEE. *******************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************

(iii)   PRODUCT FEE.
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
****************

EXPENSES.

        Toshiba will reimburse PDF for all reasonable and customary Expenses
incurred by PDF in performing the services, delivering the Deliverables and
fulfilling its obligations under the Project. The Expenses will be billed to
Toshiba at PDF's cost and will not exceed an average of *** per calendar quarter
without the written consent of Toshiba. PDF will submit to Toshiba invoices
specifying the Expenses and Toshiba will pay the Expenses within ****** of the
receipt of the invoice. Invoices will be submitted to Toshiba no more frequently
than a monthly basis. Payments of invoices for PDF's expenses will be made in
accordance with the provisions of Section 2.2 of the Agreement. Notwithstanding
the foregoing


                                     SOW-5
<PAGE>   17

if PDF is entitled to receive reimbursement of the same travel, lodging and
other similar expenses from both Toshiba and other customers, then PDF will
allocate any expenses that are for the benefit of both Toshiba and such other
customers, among Toshiba and such other customers on a basis that PDF shall
determine is fair, just and equitable to Toshiba and such other customers taking
into account all relevant factors.


                                     SOW-6