**EXHIBITNO. 10**

August28, 2006

**Re:****                             MicroComponent Technology, Inc.:Offer to Reduce Note Conversion Price**

Dear                                   :

# **A.            Introduction**

This letter is arevised offer by Micro Component Technology, Inc. (the “Company”), to the holdersof the Company’s 10% Senior Subordinated Convertible Notes due December 24,2006 (the “Notes”).  The Company isoffering to reduce the current conversion price of the Notes for all holders to$0.29 per share.  On August 25, 2006, theclosing sale price of the Company’s common stock was $ 0.37 per share and thefinal bid and asked prices were $ 0.35 and $ 0.39, respectively.  This offer must be accepted by 4:00 p.m.,central time, on August 31, 2006, or it will lapse.  There is currently $3,429,919 in principalamount of the Notes outstanding.

# **B.            CurrentFinancial Information**

You previouslyreceived a letter, dated August 3, 2006, containing current public informationconcerning the Company.  Since that date,the Company has filed its Form 10-Q for the second quarter ended July 1,2006.  The Form 10-Q is available fromthe SEC via EDGAR.  Please contact theCompany if you would like a copy.  As ofthe end of the second quarter, the Company had: (a) cash of $1,425,000; (b)total current liabilities of $9,986,000 versus total current assets of$6,564,000; and (c) total liabilities of $14,039,000 versus total assets of$7,027,000.  For the first six months of2006, the Company had a net loss of ($1,076,000), or $(.04) per share.  Therefore, although net sales have beenimproving, and management is optimistic that the Company’s financial conditionwill also improve, management currently expects that the Company will not havethe funds necessary to pay the remaining principal balance of the Notes onDecember 24, 2006.

If the Companydefaults on payment of the Notes, that would trigger a default under theCompany’s secured debt with Laurus Funds, Ltd. The amount of debt owed to Laurus at July 1, 2006 was $8,840,000, whichexceeded the total book value of the Company’s assets on that date.  Therefore, if the Company were liquidated,there is a significant risk that holders of the Notes would receive nothing.

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**C.            Enhanced Conversion Offer**

Because of thesignificant risk that the Company will be unable to pay the Notes at maturity,the Company’s management believes that by reducing the conversion price of theNotes to $0.29 per share, holders of the Notes, upon conversion, will be in abetter position to recover their investments in the Notes, because of thelikelihood that the Company will be unable to pay the Notes at maturity.

If holders of theNotes agree to convert at the reduced conversion price, there is no assurancethat the market price of the Common Stock will remain higher than the reducedconversion price, especially if there is heavy selling by Noteholders.  Therefore, there is no assurance thatNoteholders will be able to recover their investment in the Notes even if theyagree to convert at the reduced conversion price.

Management hopesthat all of the Noteholders will consider this offer carefully and elect toconvert at the reduced conversion price. This offer will remain open until 4:00 p.m., central time, on August 31,2006, unless extended by the Company in its sole discretion.  If this offer is accepted by any of thenoteholders, on September 1, 2006, the Company will direct its transfer agent,Wells Fargo, to issue the shares, together with shares in payment of accruedinterest.  Wells Fargo will issue the sharesas soon as administratively feasible after it receives directions.  The Company reserves the right, in its solediscretion, to extend the deadline and/or make other changes in the offer.

Shares acquiredupon conversion can be sold pursuant to prospectus, or pursuant to Rule 144(k)if the holder is not an affiliate. Shares issued in payment of interest can only be sold pursuant toprospectus.

**D.            Procedure for Electing toParticipate**

Please send yourElection to Convert to the address or fax number listed below so that it isreceived by 4:00 p.m., central time, on August 31, 2006.  Please also contact the undersigned RogerGower, CEO, with questions about the offer, or the Company’s attorneys, JimDiracles at (612-349-5642), or Charlie Berquist at (612-341-9726),with any questions about legal matters.

Please keep thisletter confidential.  This lettercontains forward-looking statements within the meaning of federal securitieslaw.  Noteholders are cautioned not toplace undue reliance on these forward-looking statements, which are based on theCompany’s current predictions of future performance and are subject to a numberof risks and uncertainties, including those described in the Company’s SECfilings.  Actual results could differmaterially from these forward-looking statements.

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Thank you for yourconsideration of this important matter.
|        | Sincerely,                       |
|--------|----------------------------------|
|   |                             |
|   | MICRO COMPONENT TECHNOLOGY, INC. |
|   |                             |
|   |                             |
|   | By:                              |  |   |
|   |                             | Roger E. Gower, CEO |

 

Send your Election toConvert prior to 4:00 p.m., central time, on August 31, 2006, to:

Michele SprunckMicro Component Technology2340 West County Road CSt. Paul, Minnesota 55113Fax # 651-697-4200Phone # 651-697-4000

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**ELECTIONTO CONVERT**

The undersignedholder of 10% Senior Subordinated Convertible Notes issued by Micro ComponentTechnology, Inc. (the “Company”), due December 24, 2006 (the “Notes”), herebyirrevocably elects to convert all Notes currently owned by the undersigned toCompany Common Stock, at a conversion price of $0.29 per share, effectiveAugust 31, 2006.
| Dated: August        , 2006 |   |   |
|-----------------------------------------------------------|--------|--------|
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|                                                      |   | Its:   |   |   |
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