Document:

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

                                                                    EXHIBIT 10.1

                             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.

                        INTEGRATION TECHNOLOGY AGREEMENT

        THIS INTEGRATION TECHNOLOGY AGREEMENT ("this Agreement") is made and
entered into as of *** (the "EFFECTIVE DATE") by and between Philips
Semiconductors, a Netherlands corporation ("CUSTOMER") with a Tax Identification
Number of _________________, and PDF Solutions, Inc., a California corporation
("PDF SOLUTIONS") with a Tax Identification Number of 25-1701361.

                                    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. Customer 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 Customer'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, and images of said
structures or circuit elements, historically or hereafter created or customized
by PDF Solutions for the purposes of creating a test

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

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 Customer owns or operates to manufacture
products and any third party foundry with which Customer has a relationship that
manufactures products for Customer.

"Manufacturing Designs" refers to all non-public information relating to
Customer'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 Customer independently has the
right to use.

"Raw Data" shall mean the data generated by PDF Solutions using the CV in
conjunction with Customer'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, Customer and PDF
Solutions, intending to be legally bound, hereby agree as follows:

                         SECTION 1. TERM AND TERMINATION

        1.1 Term. This Agreement shall commence on the Effective Date and shall
expire on ***, unless sooner terminated in accordance with
Sections 1.2 or 1.3.

        1.2 Termination Without Cause. Either party may upon 120 days prior
written notice to the other party, at any time and/or for any reason, terminate
this Agreement. In such case, Customer shall pay PDF Solutions all Fixed Fees
(as defined in EXHIBIT "B" attached hereto) payable at the effective date of
such termination, all Reimbursements (as

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defined below) incurred through the effective date of such termination and all
Incentive Fees and Gainshare Fees (as defined in EXHIBIT "B") that would
otherwise have been earned had this Agreement not been terminated; provided that
should PDF Solutions exercise its right to terminate this Agreement under this
Section 1.2 prior to the end of the term PDF Solutions shall thereby forfeit any
and all right it may have in any Incentive Fee, Gainshare Fee (as defined in
EXHIBIT "B" attached hereto) other than Incentive Fees and Gainshare Fees earned
based upon work completed prior to the effective date of such termination.

        1.3 Termination for Cause. This Agreement may be terminated upon thirty
(30) days prior written notice by either party if the other party materially
breaches or fails to perform any material obligations hereunder and the
breaching party fails to cure such breach within thirty (30) days of such
written notice. Notwithstanding the foregoing, the cure period for any failure
of Customer to pay Fees and Reimbursements due hereunder shall be 10 days from
the date of receipt by Customer of any notice of breach relating thereto. In the
event of a termination under this Section 1.3, Customer shall pay PDF Solutions
all Fixed Fees incurred through the effective date of such termination, all
Reimbursements incurred through the effective date of such termination and, if
PDF Solutions shall so terminate this Agreement, all Incentive Fees and
Gainshare Fees that would otherwise have been earned had this Agreement not been
terminated.

        1.4 Survival of Provisions. Any and all obligations and duties which
have accrued hereunder upon such termination shall survive the termination and
remain obligations and duties of the burdened party. Additionally, Sections 3
(Payment for Services and Technology) as modified by this Section 1, 4
(Proprietary Rights), 5 (Confidentiality), 6 (Representations and Warranties), 7
(Indemnity), 8 (Limitation of Liability) and 9 (Miscellaneous) shall survive the
expiration or sooner termination of this Agreement and remain binding upon the
parties hereto; provided that in the event of any termination of this Agreement
by PDF Solutions pursuant to Section 1.3, any and all rights and licenses
granted by PDF Solutions to Customer hereunder shall terminate effective upon
such termination.

                 SECTION 2. DELIVERY OF SERVICES AND TECHNOLOGY

        2.1 Scope of Services. During the term of this Agreement, PDF Solutions
shall furnish the PDF Technology and related services (the "SERVICES AND
TECHNOLOGY") described in detail in EXHIBIT "A" attached hereto (the "SCOPE OF
SERVICES AND TECHNOLOGY"). The manner and means used by PDF Solutions to provide
the Services and Technology are in the sole discretion and control of PDF
Solutions.

        2.2 Standard for Performance. PDF Solutions shall perform and deliver
the Services and Technology under this Agreement in accordance with the
standards and practices of care consistent with the quality of services PDF
Solutions performs for its other similarly situated clients. PDF Solutions at
all times shall provide such number of qualified and skilled personnel to
perform and deliver the Services and Technology in accordance with the quality
standards, time frames and other requirements set forth in this Agreement. PDF
Solutions shall utilize and comply with the relevant portions of any

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regulatory standards applicable to the provision of the Services and Technology.
PDF Solutions shall promptly repair or replace at its own expense all damages,
scars or disfigurements to any materials or property that is part of, or
contained in, Customer's work site that are the result of the negligence of
personnel employed by PDF Solutions.

        2.3 Customer Assistance. Subject to Section 5 (Confidentiality),
Customer will provide PDF Solutions with such information, materials, technology
and Proprietary Rights as PDF Solutions shall reasonably require in order to
perform and deliver the Services and Technology as specified in the Scope of
Services and Technology.

        2.4 Mutual Cooperation; Schedule. Customer and PDF Solutions agree to
cooperate in good faith to achieve completion of the services specified in
EXHIBIT A in a timely and professional manner. Customer understands and agrees
that PDF Solutions' provision of the Services and Technology may depend on
Customer or a third party Foundry completing certain tasks or adhering to
certain schedules within Customer's control. Consequently, the schedule for
completion of the services specified in EXHIBIT A or any portion thereof may
require adjustments or changes in the event such tasks are not completed as
anticipated. PDF Solutions shall bear no liability or otherwise be responsible
for delays in the provision of services specified in EXHIBIT A or any portion
thereof proximately caused by failure by Customer or a third party Foundry to
complete a reasonable task or adhere to a reasonable schedule.

        2.5 Right to Perform Services for Others. Customer acknowledges that PDF
Solutions has extensive expertise, experience, technology and proprietary
products and tools in the area of electronic design and yield improvement and
that PDF Solutions intends to utilize such expertise, experience, products and
tools in providing consulting services and other services to other clients.
Subject to PDF Solutions' compliance with the confidentiality provisions stated
herein, nothing in this Agreement shall restrict or limit PDF Solutions from
providing integration technology or services to any other entity in any
industry, including the semiconductor and electronics industries. Customer
agrees that, except as otherwise agreed in this Agreement, PDF Solutions and its
employees may provide design consulting services similar in nature to the
Services and Technology for any third parties both during and after the term of
this Agreement. Subject to the limitations placed on PDF Solutions by this
Agreement, PDF Solutions may in its sole discretion develop, use, market,
license, offer for sale, or sell any software, application or product that is
similar or related to that which was developed by PDF Solutions for Customer
hereunder.

                 SECTION 3. PAYMENT FOR SERVICES AND TECHNOLOGY

        3.1 Fees. As compensation for the Services and Technology, Customer
shall pay to PDF Solutions the fees ("FEES") set forth in EXHIBIT "B" attached
hereto.

        3.2 Expenses. Customer shall also reimburse PDF Solutions for its
reasonable out-of-pocket expenses incurred in carrying out its obligations under
this Agreement including, but not limited to, travel, hotel, meals, document
production and other customary business expenses directly related to the
Services and Technology

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

("REIMBURSEMENT"). Travel, other than trips to Customer's office or fabrication
facilities, shall be in accordance with PDF Solution's travel policy.
Reimbursement for expenses incurred in an amount of up to ******** in any
calendar month shall not require the written approval of Customer; provided,
however, that any extraordinary engagement-related purchases including, but not
limited to, expenses for mask production, equipment purchases, on-site
facilities and on-site communications services, must receive Customer's prior
written authorization. Customer shall not have any liability to PDF Solutions
for any Reimbursement for expenses incurred in an amount in excess of ********
in any calendar month, unless such expenses are approved in writing by the
designated individual(s) set forth in EXHIBIT "C" attached hereto.

        3.3 Invoice. PDF Solutions shall bill Customer as agreed herein for
Services and Technology pursuant to an invoice delivered on a monthly basis.
Each invoice shall be accompanied by a reasonably detailed breakdown of the
invoiced amount. Invoices shall be mailed to:

               Philips Semiconductors
               9651 Westover Hills Blvd.
               San Antonio, TX 78251
               Attn:  ********

        3.4 Payment of Invoices. All payments by Customer hereunder shall be
made by corporate or other check. All invoices shall be due and payable within
thirty (30) days after the date of invoice. Amounts not paid in accordance
herewith shall be subject to a late charge equal to **************** (or, if
less, the maximum allowed by applicable law). Without prejudice to other
remedies available, PDF Solutions reserves the right to suspend performance and
delivery of Services and Technology until such delinquency is corrected,
provided that PDF Solutions shall give written notice of payment delinquency and
shall give 10 days advance written notice of its intention to suspend
performance. The amounts payable to PDF Solutions hereunder are exclusive of any
sales or use or other taxes or governmental charges. Customer shall be
responsible for payment of all such taxes or charges except for any taxes based
solely on PDF Solutions' net income. If Customer is required to pay any taxes
based on this Section 3.4, Customer shall pay such taxes with no reduction or
offset in the amounts payable to PDF Solutions hereunder.

                          SECTION 4. PROPRIETARY RIGHTS

        4.1 Ownership. Customer 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) Customer 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) Customer is the exclusive owner of Mask Sets.

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

        To the extent the law would provide for ownership other than as provided
herein, (y) Customer hereby assigns to PDF Solutions its right, title and
interest in and to the PDF Technology and the Proprietary Rights in the PDF
Technology and (z) PDF Solutions hereby assigns to Customer its right, title and
interest in and to the Analysis, Manufacturing Designs, Raw Data and the
Proprietary Rights in the Analysis, Manufacturing Designs and Raw Data, and in
the Mask Sets.

        4.2 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 Customer and its subsidiaries, ***************
license ***** to use the 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 use of PDF Technology in connection with the development, manufacture
and fabrication of integrated circuit products of Customer and its
majority-owned subsidiaries. The foregoing license includes all PDF Technology
disclosed by PDF Solutions in its work for Customer hereunder (including
methodologies or practices observed by Customer personnel in the course of PDF
Solutions' work hereunder); provided, however, that specifically excluded from
this license of PDF Technology is any and all software or software tools or
software manuals and documentation. Customer shall be bound by and shall cause
its sublicensees to be bound by the confidentiality obligations contained in
Section 5 or obligations at least as restrictive as the confidentiality
obligations contained in Section 5. Except as specifically provided herein,
Customer shall not disclose or license PDF Technology to any third party.
Customer understands that PDF Solutions will not disclose to Customer 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 Customer, unless the same defeats or substantially impedes
the Scope of Services and Services and Technology under Section 2 of this
Agreement.

        4.3 Grant of License by Customer. Subject to the terms and conditions of
this Agreement, Customer hereby grants to PDF Solutions ************** license
*****, but only to the extent Customer has the right to grant such license, as
follows:

               (a) to incorporate Customer's Manufacturing Designs in CVs at any
time during the term solely for the purpose of performing under this Agreement;

               (b) to use, copy, compile, manipulate, analyze or reproduce Raw
Data and the Mask Sets solely for the purpose of performing under this
Agreement; and

               (c) to use and rely upon Raw Data and Analysis from any Foundry
for any purpose, including with other customers of PDF Solution. PDF Solutions
shall be bound by and shall cause its sublicensees to be bound by the
confidentiality obligations contained in Section 5 or obligations at least as
restrictive as the confidentiality obligations contained in Section 5. Customer
will, in good faith, work with PDF Solutions

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and third party Foundry to encourage third party Foundry to provide any required
consents or licenses in accordance with this Section 4.

        4.4 No Other Rights. Except as otherwise set forth in this Section 4,
neither this Agreement nor performance and delivery of the Services and
Technology shall give either PDF Solutions or Customer any ownership, interest
in, or rights to, the Proprietary Rights owned or provided by the other party.

                           SECTION 5. CONFIDENTIALITY

The parties acknowledge and agree that during the course of the performance of
the mutual obligations hereunder, each party will occasionally deliver to the
other party certain information (including proprietary information, technical
data, trade secrets, know-how, research, software, developments, inventions,
processes, design flows, methods, methodologies, formulas, algorithms,
technologies, designs, drawings, engineering, hardware configuration
information, yield data or other similar information, and related documentation
and information) which the disclosing party deems to be confidential or
proprietary. Such information shall be considered and treated hereunder as
proprietary and other confidential information if it is marked as "Confidential"
or "Proprietary" (hereinafter referred to as "CONFIDENTIAL INFORMATION"): (i) by
stamp or legend if communicated in writing or other tangible form, or (ii)
orally at the time of disclosure with a written confirmation within thirty days
describing the Confidential Information communicated orally. All restrictions as
to use and disclosure shall apply during such thirty day period. Except as
permitted hereunder, the receiving party shall not use or disclose the
Confidential Information of the disclosing party. Any recipient of Confidential
Information disclosed pursuant to this Agreement shall hold the Confidential
Information in strictest confidence and shall protect the Confidential
Information by using the same degree of care, but no less than a reasonable
degree of care, to prevent the unauthorized use, disclosure, dissemination or
publication of the Confidential Information as the recipient uses to protect its
own comparable confidential and proprietary information. Any permitted
reproduction of Confidential Information shall contain all confidential or
proprietary legends which appear on the original. If the disclosing party
discloses any software, the recipient is prohibited from disassembling,
decompiling, reverse-engineering or otherwise attempting to discover or disclose
the disclosing party's software or methods or concepts embodied in such
software. Subject to the licenses granted in Section 4, upon receipt of the
written request of the disclosing party, the receiving party will return, or
give written certification of the destruction of all Confidential Information in
any tangible or digital form, including all copies thereof whether on paper or
in digital form, which are in the recipient's possession or control. The
recipient will immediately notify the disclosing party in the event of any loss
or unauthorized disclosure of Confidential Information. The above restrictions
on use and disclosure shall not apply to any Confidential Information that: (1)
is in the public domain or in the possession of the recipient without
restriction at the time of receipt under this Agreement through no wrongful act
or omission of the recipient, (2) is disclosed with the prior written approval
of the disclosing party, (3) is disclosed after five years from the date of
expiration or earlier termination of this Agreement, (4) is independently
developed by the recipient without breach of this Agreement which independent
development is

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supported by reasonable contemporary evidence, (5) becomes known to the
recipient from a source other than the disclosing party without breach of this
Agreement by the recipient or any other wrongful act or omission by recipient or
any third party; or (6) is required to be disclosed pursuant to law, provided
the recipient uses reasonable efforts to give the disclosing party reasonable
notice of such required disclosure sufficient to give the disclosing party the
opportunity to contest such disclosure. The obligations of confidentiality shall
survive the expiration or sooner termination of this Agreement for a period of
******** years thereafter. Disclosing party assumes no responsibility or
liability whatever under this Agreement for any use of Confidential Information
by the recipient or its sublicensees, customers or agents. Nothing in this
Agreement shall restrict recipient's discretion to transfer or assign its
personnel, providing the obligations of recipient under this Agreement are
otherwise met. Subject to the provisions of Section 4, either party shall be
free to use for any purpose the "residuals" resulting from access to or work
with such Confidential Information, provided that such party shall maintain the
confidentiality of the Confidential Information as provided herein. The term
"residuals" means information in non-tangible form, which may be retained by
persons who have had access to the Confidential Information, including ideas,
concepts, know-how or techniques contained therein. Neither party shall have any
obligation to limit or restrict the assignment of such persons or to pay
royalties for any work resulting from the use of residuals. Each party hereto
recognizes and agrees that there is no adequate remedy at law for a breach of
this Section 5, that such a breach would irreparably harm the disclosing party
and that the disclosing party shall be entitled to seek equitable relief
(including, without limitation, injunctions) with respect to any such breach or
potential breach in addition to any other remedies.

                    SECTION 6. REPRESENTATIONS AND WARRANTIES

        6.1 Corporate Warranties. Each party hereby represents and warrants to
the other party that: (i) it is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it was organized, (ii) the
person executing this Agreement on behalf of each party is duly authorized to
bind such party to all terms and conditions of this Agreement, (iii) this
Agreement, when executed and delivered by each party, will be the legal, valid,
and binding obligation of such party, enforceable against it in accordance with
its terms, and (iv) the execution, delivery and performance of this Agreement by
each party does not and will not conflict with or constitute a breach or default
under such party's charter documents, delegations of authority, or any material
agreement, contract or commitment of such party, or require the consent,
approval or authorization of, or notice, declaration, filing or registration
with, any third party or governmental or regulatory authority.

        6.2 Infringement. PDF Solutions warrants that it is not aware of
infringement or alleged infringement of its deliverables under third parties'
valid U.S. intellectual property rights.

        6.3 Disclaimer of Warranties. THE WARRANTIES STATED IN THIS SECTION 6
ARE THE PARTIES' SOLE AND EXCLUSIVE WARRANTIES PERTAINING TO THE SUBJECT MATTER
OF THIS AGREEMENT, AND EACH

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PARTY HEREBY DISCLAIMS ANY OTHER WARRANTY, EXPRESS OR IMPLIED, WRITTEN OR ORAL,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF TITLE, MERCHANTABILITY,
NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE. NOTHING UNDER THIS
AGREEMENT, OR THE STATEMENT OF WORK OR PROJECT SHALL BE DEEMED TO BE A WARRANTY
AS TO THE OUTCOME OF ANY PROJECT OR THE EFFICACY OF ANY RECOMMENDATIONS MADE BY
PDF SOLUTIONS. NOTHING UNDER THIS AGREEMENT OR THE STATEMENT OF WORK SHALL BE
DEEMED TO CREATE ANY LIABILITY ON THE PART OF EITHER PARTY WITH RESPECT TO THE
OUTCOME OF A PROJECT OR ANY ACTIONS TAKEN BY CUSTOMER OR THE PDF SOLUTIONS AS A
CONSEQUENCE OF THE OTHER PARTIE'S RECOMMENDATIONS.

                           SECTION 7. INDEMNIFICATION.

PDF Solutions shall defend or settle at PDF Solutions' expense any claim
("Claim") brought against Customer that the Services and Technology and/or any
tangible or intangible delivered in connection therewith impermissibly contains
third party's proprietary rights, trade secrets, or copyrighted materials or
that Customer's use of any such materials, as permitted hereunder, infringes any
United States patent; provided that such indemnification shall not extend (a) to
any infringement by Customer's designs or products, (b) to any infringement
resulting from any infringement contained in any technical data, Manufacturing
Designs, Mask Sets or materials or reports or information provided by Customer.
The indemnification obligations set forth in this Section 7 are subject to the
conditions that the Customer: (i) gives prompt written notice of the Claim to
the PDF Solutions, (ii) gives the PDF Solutions the exclusive authority to
control and direct the defense or settlement of such Claim, provided that the
PDF Solutions does not take adopt any positions that may be prejudicial to
Customer and (iii) gives the PDF Solutions, at Customer's own expense (except
for the value of the Customer's employees' time), all reasonably necessary
information and reasonable assistance with respect to such Claim. PDF Solutions
shall pay all amounts paid in settlement and all damages and costs awarded with
respect to such Claim. PDF Solutions will not be liable for any costs or
expenses incurred without its prior written authorization. In the event of any
Claim under this Section 7, PDF Solutions shall have the option, at its
election, to (a) obtain a license to permit continued use of the allegedly
infringing item or practice, (b) modify the allegedly infringing item or
practice to avoid continued infringement provided the modified item or practice
is substantially equivalent, (c) procure or provide a substantially equivalent
substitute for the allegedly infringing item or practice or (d) if PDF Solutions
is unable to achieve (a), (b) or (c) after reasonable efforts, then PDF
Solutions may require that Customer cease use of the infringing item or practice
as soon as feasible and terminate this Agreement and refund all Incentive Fees
and Gainshare Fees paid by Customer to PDF Solutions.

                       SECTION 8. LIMITATION OF LIABILITY

THE LIABILITY OF EITHER PARTY AND OF SUCH PARTY'S OFFICERS, DIRECTORS,
EMPLOYEES,CONTRACTORS AND AGENTS, TAKEN AS A

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WHOLE, WHETHER IN TORT, CONTRACT OR OTHERWISE, AND NOTWITHSTANDING ANY FAULT,
NEGLIGENCE, STRICT LIABILITY OR PRODUCT LIABILITY OF SUCH PARTY OR OF ITS
OFFICERS, DIRECTORS, EMPLOYEES, OR AGENTS OR FAILURE OF ESSENTIAL PURPOSE, WITH
REGARD TO ANY SERVICES OR OTHER ITEMS FURNISHED UNDER THIS AGREEMENT SHALL IN NO
EVENT EXCEED THE AGGREGATE COMPENSATION PAID BY CUSTOMER TO SERVICE PROVIDER
HEREUNDER. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, IN NO
EVENT SHALL EITHER PARTY BE LIABLE FOR ANY CLAIM FOR ANY INDIRECT, INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES, COVER OR ANY LOSS OF DATA, PROFIT, REVENUE OR
USE UNDER ANY THEORY OF LAW OR FOR ANY CAUSE OF ACTION.

                            SECTION 9. MISCELLANEOUS

        9.1 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 faith with PDF Solutions to
produce five mutually acceptable public announcements 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.

        9.2 Assignment. Neither party shall assign any portion of its rights,
duties, or obligations under this Agreement without the prior written consent of
the other party, which consent will not be unreasonably withheld or delayed,
provided that PDF Solutions may utilize the services of consultants and
subcontractors to perform hereunder.

        9.3 Changes. No modification to this Agreement will be binding unless in
writing and signed by a duly authorized representative of each party. Change
orders affecting any Scope of Services will not be effective until reviewed and
approved in writing by PDF Solutions and Customer. PDF Solutions will submit to
Customer a report on how the proposed changes will affect the current Services
including the effect on the time schedule and cost estimates. The parties will
have no obligation to proceed with changed work until both parties have approved
the change in writing.

        9.4 Notices. All notices or correspondence pertaining to this Agreement
shall be in writing, delivered by either first class mail with receipt or by
facsimile with receipt. Such notice shall be effective upon the earlier of
actual receipt or the expiration of three

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

days following the date of mailing to the addresses as follows, or such
alternative address the parties may designate in the future:

        To Customer:

               Philips Semiconductors
               9651 Westover Hills Blvd.
               San Antonio, TX 78251
               Attn:  *************
               Tel:  (210) 522-7010
               Fax: (210) 522-7301

        To PDF Solutions:

               PDF Solutions, Inc.
               333 West San Carlos Street
               Suite 700
               San Jose, CA 95110
               Attn:  Chief Financial Officer
               Tel:   (408) 938-6445
               Fax:   (408) 938-6478

        9.5 Independent Contractors. PDF Solutions and Customer shall perform
their obligations under this Agreement as independent contractors, and nothing
contained in this Agreement shall be construed to create or imply a joint
venture, partnership, principal-agent or employment relationship between the
parties. Neither party shall take any action or permit any action to be taken on
its behalf which purports to be done in the name of or on behalf of the other
party and shall have no power or authority to bind the other party to assume or
create any obligation or responsibility express or implied on the other party's
behalf or in its name, nor shall such party represent to any one that it has
such power or authority.

        9.6 Force Majeure. Neither party shall be liable to the other party for
any loss, damage, or penalty arising from delay to the extent due to causes
beyond its reasonable control including acts of God, acts of government, war,
riots, or embargoes.

        9.7 Severability. If any term or provision of this Agreement is
determined to be invalid or unenforceable for any reason, it shall be adjusted
rather than voided, if possible, to achieve the intent of the parties to extent
possible. In any event, all other terms and provisions shall be deemed valid and
enforceable to the maximum extent possible.

        9.8 Insurance. PDF Solutions shall carry Workers' Compensation and
Comprehensive General Liability Insurance (including Products, Contractual, and
Automobile Liability) having limits of liability not less than $1 million
combined single limit per occurrence for bodily injury, including death and
property damages, prior to performing any services on site at Foundry.

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        9.9 Disputes. If any claim or controversy arises out of this Agreement,
the parties shall first make a good faith attempt to resolve the matter through
a designated executive officer. The officers having cognizance of the subject
matter of the Agreement for each of the parties shall first meet and make a good
faith attempt to resolve such controversy or claim. In the event such good faith
negotiation fails to settle any dispute within sixty (60) days from notice of
such dispute, the controversy shall be settled by binding arbitration by one or
three arbitrators, (if three are used, each party shall select one, and the
third shall be selected by mutual agreement of the parties), conducted in Santa
Clara County, California and in accordance with the Commercial Arbitration Rules
of the American Arbitration Association and judgment upon the award rendered by
the arbitrator(s) may be entered by any court having jurisdiction thereof. The
arbitrator(s) shall not be empowered to award damages in excess of, and/or in
addition to, actual damages, and the arbitrator(s) shall deliver a reasoned
opinion in connection with his/her/their decision. Nothing herein, however,
shall prohibit either party from seeking injunctive relief if such party would
be substantially prejudiced by a failure to act during the time that such good
faith efforts are being made to resolve the claim or controversy. In the event
either party seeks injunctive relief, the parties agree that jurisdiction will
be before a state or district court seated in either Santa Clara County,
California.

        9.10 Governing Law. This Agreement and any and all disputes arising
hereunder shall be governed by the internal laws of the State of California,
without regard to choice of law principles. This Agreement is prepared and
executed and shall be interpreted in the English language only, and no
translation of the Agreement into another language shall have any effect. The
parties agree that the United Nations Convention on Contracts for the
International Sale of Goods (1980) is specifically excluded from and shall not
apply to this Agreement.

        9.11 Waiver. The failure of any party hereto to enforce at any time any
of the provisions of this Agreement or to require at any time performance by the
other party of any of the provisions of this Agreement, or any part hereof,
shall not be construed to be a waiver of said provision or to effect the right
of any party to enforce each and every provision in accordance with the terms of
this Agreement.

        9.12 Interpretation. In the event that any term of the Scope of Services
conflicts with the terms of this Agreement, the terms of this Agreement shall
take precedence.

        9.13 Non-Solicitation. Customer shall not actively solicit or influence
or attempt to influence any person employed by PDF Solutions to terminate or
otherwise cease his or her employment with PDF Solutions or become an employee
of Customer. PDF Solutions shall not actively solicit or influence or attempt to
influence any person employed by Customer to terminate or otherwise cease his or
her employment with Customer or become an employee of PDF Solutions.

        9.14 Drafter. Neither party will be deemed the drafter of this
Agreement, which Agreement will be deemed to have been jointly prepared by the
parties. If this Agreement is ever construed, whether by a court or by an
arbitrator, such court or arbitrator will not construe this Agreement or any
provision hereof against any party as drafter.

                                       12
<PAGE>   13

        9.15 Entire Agreement. The parties acknowledge that PDF Solutions is not
providing or licensing to Customer under this Agreement any software programs or
products and anticipate that they will enter into a Software Evaluation and/or
Software License Agreement related to the subject matter hereof. Such agreement
shall also not be affected by this Agreement. Except for such software
agreements, this Agreement shall constitute the entire agreement between the
parties with respect to the subject matter hereof and: (i) shall supersede all
prior contemporaneous oral or written communications, proposals and
representations with respect to its subject matter, and (ii) shall prevail over
any conflicting or additional terms of any statement of work, quote, order
acknowledgment or similar communication between the parties during the term of
this Agreement.

        9.16 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.

        9.17 Exhibits. Exhibits "A," "B," and "C" attached hereto are
incorporated herein by this reference as if fully set forth herein.

        IN WITNESS WHEREOF, the parties hereto have executed this Services
Agreement as of the date(s) set forth below to be effective as of the Effective
Date.

PDF SOLUTIONS, INC., A CALIFORNIA CORPORATION     PHILIPS SEMICONDUCTORS

By:     /s/ PS Melman                             By:     /s/ David N. Ledvina
   -----------------------------------------         ---------------------------
Name:   PS Melman                                 Name:   David Ledvina
     ---------------------------------------           -------------------------
Title:  CFO                                       Title:  VP - General Manager
      --------------------------------------            ------------------------
Date:   6/15/00                                   Date:   6/14/00
     ---------------------------------------           -------------------------

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

                                STATEMENT OF WORK

                                       for

                                  ************
                     Philips Semiconductor, Inc. - ********

        SCOPE: THIS STATEMENT OF WORK (SOW) DESCRIBES TASKS TO BE PERFORMED BY
PDF SOLUTIONS INC. IN COLLABORATION WITH PHILIPS SEMICONDUCTOR, INC. - ********.
AS INDICATED BELOW, IT IS THE GOAL OF THIS EFFORT TO GENERATE A CHARACTERIZATION
VEHICLE (CV) FOR A SCALABLE _ FLOW FRONT-END AND SUPPORT FOR PHILIPS'
***************.

1.      PROJECT PLAN

        1.1     Phase I *****************************************************
                ****************************************************************
                ****************************************************************
                ****************************************************************
                ****************************************************************
                ****************************************************************
                ****************************************************************
                ****************************************************************

                        -       ********

                        -       ********

                        -       ********

                        -       ********

                        -       ********

                        -       ********

        1.2     Phase II ****************************************************
                ****************************************************************
                ****************************************************************
                ****************************************************************
                ****************************************************************

        1.3     Phase III ******************************************************
                ****************************************************************
                ****************************************************************
                ****************************************************************
                ****************************************************************
                ****************************************************************
                ****************************************************************
                ****************************************************************

        1.4     Phase IV *******************************************************
                ****************************************************************
                ****************************************************************
                ****************************************************************
                ****************************************************************
                ****************************************************************
                ****************************************************************
                ****************************************************************
                ****************************************************************
                ******************

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

2.      PROJECT MILESTONES

<TABLE>
<CAPTION>
STEP              DESCRIPTION               PHASE        DELIVERABLE           DATE*
----       ---------------------------      -----        -----------      ---------------

<S>        <C>                              <C>          <C>              <C>
0          Project Start Date                N/A             N/A                TBD

1          *************                      I                           Start date plus
           **********************                                            ********
           ********  **************
           **************************
           ******

2          ************                       I               0             Step 1 plus
                                                                             ********

3          ************************          II              0             Step 2 plus
           ************************                                          ********

4          **************************         II              0             Step 3 plus
           **************************                                        ********

5          **************************        III              0                 TBD
           **************************
           ********

6          ***********************           III                                TBD

7          ****************************       IV                            Step 6 plus
                                                                             ********

8          **************************         IV              0             Step 7 plus
           **************************                                        ********
           ***********
</TABLE>

3.      DELIVERABLES

The deliverables are itemized below:

        ***********************************************************************
        ***********************************************************************
        ***********************************************************************

        ***********************************************************************
        ***********************************************************************
        ***********************************************************************

        ***********************************************************************
        ***********************************************************************
        ***********************************************************************

        ***********************************************************************
        ***********************************************************************
        ***********************************************************************
        ***********************************************************************

        ***********************************************************************
        ********.

                                       15
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                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.

1       COMPENSATION

        1.1     Service Fees for this IP and service will be ******** for the CV
                and initial full support plus ******** per month for on-going
                support.

                1.1.1.  The initial support period will last for *************
                        The start of the ************ support period will
                        commence after **************************************
                        *****************************************************
                        ****************************** whichever occurs first.

        1.2     Philips will reimburse all authorized travel by PDF Solutions up
                to a limit of ***********.

        1.3.    CV and CVA License Fees

                1.3.1.  NRE: CV (GDSII) and associated analysis - included in
                        fixed fee.

                1.3.2.  CV use in ******** for ************* technology -
                        included in fixed fee.

        1.4.    Other expenses to be paid by Philips include ***************
                cost.

                                       16
<PAGE>   17
                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.

        Philips Semiconductors
        9651 Westover Hills Blvd.
        San Antonio, TX 78251
        Attn:  ********
        Tel:  (210) 522-7010
        FAX:  (210) 522-7301

        PDF Solutions
        101 West Renner RD
        Suite 325
        Richardson, TX 75082
        Attn: ********
        Tel:  (972) 889-3085 ext. 208
        FAX:  (972) 889-2486<PAGE>   1
                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.

                                                                    EXHIBIT 10.2

                             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.

                        INTEGRATION TECHNOLOGY AGREEMENT

        THIS INTEGRATION TECHNOLOGY AGREEMENT ("this AGREEMENT") is made and
entered into as of ************** (the "EFFECTIVE DATE") by and between Conexant
Systems, Inc., a Delaware corporation ("CONEXANT") with a Tax Identification
Number of 251799439 and its principal place of business at 4311 Jamboree Road,
Newport Beach, California 92660, and PDF Solutions, Inc., a California
corporation ("PDF SOLUTIONS") with a Tax Identification Number of 25-1701361 and
its principal place of business at 333 West San Carlos Street, Suite 700, San
Jose, California 95110.

                                    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. Conexant 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 Conexant'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, and images of said
structures or circuit elements

                                       1
<PAGE>   2
                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.

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 foundry with which Conexant has a relationship that
manufactures **** technology products for Conexant.

 "MANUFACTURING DESIGNS" refers to all non-public information relating to
Conexant'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 Conexant independently has the
right to use.

"RAW DATA" shall mean the data generated by PDF Solutions using the CV in
conjunction with Conexant's Manufacturing Design.

"******" shall be defined as the following ****************************
processes run          by Conexant using

*****************************************************.

                                    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, Conexant and PDF
Solutions, intending to be legally bound, hereby agree as follows:

SECTION 1. TERM AND TERMINATION

        1.1 Term. This Agreement shall commence on the Effective Date and shall
expire on ****************************, unless sooner terminated in accordance
with Sections 1.2, 1.3 or 1.4.

                                       2
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                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.

        1.2 Termination Without Cause. Either party may upon 60 days prior
written notice to the other party, at any time and/or for any reason, terminate
this Agreement. In such case, Conexant shall pay PDF Solutions all Fixed Fees
(as defined in Exhibit "B" attached hereto) payable at the effective date of
such termination, all Reimbursements (as defined below) incurred through the
effective date of such termination and all Incentive Fees and Gainshare Fees
that would otherwise have been earned had this Agreement not been terminated;
provided that should PDF Solutions exercise its right to terminate this
Agreement under this Section 1.2 prior to ************************** PDF
Solutions shall thereby forfeit any and all right it may have in any Incentive
Fee, Gainshare Fee (as defined in Exhibit "B" attached hereto) other than
Incentive Fees and Gainshare Fees earned prior to the effective date of such
termination.

        1.3 Termination for Cause. This Agreement may be terminated upon thirty
(30) days prior written notice by either party if the other party materially
breaches or fails to perform any material obligations hereunder and the
breaching party fails to cure such breach within thirty (30) days of such
written notice. Notwithstanding the foregoing, the cure period for any failure
of Conexant to pay Fees and Reimbursements due hereunder shall be 20 days from
the date of receipt by Conexant of any notice of breach relating thereto. In the
event of a termination under this Section 1.3, Conexant shall pay PDF Solutions
all Fixed Fees incurred through the effective date of such termination, all
Reimbursements incurred through the effective date of such termination and, if
PDF Solutions shall so terminate this Agreement, all Incentive Fees and
Gainshare Fees that would otherwise have been earned had this Agreement not been
terminated.

        1.4 Change of Control Termination. This Agreement may be terminated upon
thirty (30) days prior written notice by either party if either party has
experienced a Change of Control and continuation under this Agreement is not
feasible, provided such notice is given within six (6) months of the
Announcement Date. If termination occurs under this Section 1.4 then both
parties will work together in good faith to agree upon a reasonable settlement
payment for dissolution of the Agreement. If the parties are unable to achieve
mutual agreement within thirty (30) days of termination notice under this
Section 1.4, then the settlement payment due to PDF Solutions shall be finally
determined in arbitration pursuant to Section 9.10; provided that the reasonable
settlement is intended to be an estimate of the Fixed Fees, Incentive Fees and
Gainshare Fees PDF Solutions would have earned for PDF Solution's efforts
extended prior to the termination under this Section 1.4.

* INCORPORATE "CHANGE OF CONTROL" DEFINITION PER ATTACHED EMAIL FROM ********
  DATED 5/18/00.

        1.5 Survival of Provisions. Any and all obligations and duties which
have accrued hereunder upon such termination shall survive the termination and
remain obligations and duties of the burdened party. Sections 3 (Payment for
Services and Technology) as modified by this Section 1, 4 (Proprietary Rights),
5 (Confidentiality), 6 (Representations and Warranties), 7 (Indemnity), 8
(Limitation of Liability) and 9 (Miscellaneous) shall survive the expiration or
sooner termination of this Agreement and remain binding upon the parties hereto;
provided that in the event of any termination of

                                       3
<PAGE>   4

this Agreement by PDF Solutions pursuant to Section 1.3, any and all rights and
licenses granted by PDF Solutions to Conexant hereunder shall terminate
effective upon such termination; and provided that in the event of any
termination of this Agreement Conexant pursuant to Section 1.3, any and all
rights and licenses granted by Conexant to PDF Solutions hereunder shall
terminate effective upon such termination.

SECTION 2. DELIVERY OF SERVICES AND TECHNOLOGY

        2.1 Scope of Services. During the term of this Agreement, PDF Solutions
shall furnish the PDF Technology and related services (the "SERVICES AND
TECHNOLOGY") described in detail in Exhibit "A" attached hereto (the "SCOPE OF
SERVICES AND TECHNOLOGY"). The manner and means used by PDF Solutions to provide
the Services and Technology are in the sole discretion and control of PDF
Solutions. The Scope of the Services and Technology shall be governed by the
terms and conditions of this Agreement.

        2.2 Standard for Performance. PDF Solutions shall perform and deliver
the Services and Technology under this Agreement in accordance with the
standards and practices of care consistent with the quality of services PDF
Solutions performs for its other similarly situated clients. PDF Solutions at
all times shall provide such number of qualified and skilled personnel to
perform and deliver the Services and Technology in accordance with the quality
standards, time frames and other requirements set forth in this Agreement. PDF
Solutions shall utilize and comply with the relevant portions of any regulatory
standards applicable to the provision of the Services and Technology. PDF
Solutions shall promptly repair or replace at its own expense all damages, scars
or disfigurements to any materials or property that is part of, or contained in,
Conexant's work site that are the result of the methods or materials used or
employed by PDF Solutions, its personnel or its other agents.

        2.3 Conexant Assistance. Subject to Section 5 (Confidentiality),
Conexant will provide PDF Solutions with such information, materials, technology
and Proprietary Rights as PDF Solutions shall reasonably require in order to
perform and deliver the Services and Technology as specified in the Scope of
Services and Technology.

        2.4 Mutual Cooperation; Schedule. Conexant and PDF Solutions agree to
cooperate in good faith to achieve completion of the services specified in
Exhibit A in a timely and professional manner. Conexant understands and agrees
that PDF Solutions' provision of the Services and Technology may depend on
Conexant completing certain tasks or adhering to certain schedules within
Conexant's control. Consequently, the schedule for completion of the services
specified in Exhibit A or any portion thereof may require adjustments or changes
in the event such tasks are not completed as anticipated. PDF Solutions shall
bear no liability or otherwise be responsible for delays in the provision of
services specified in Exhibit A or any portion thereof proximately caused by
Conexant's failure to complete a reasonable Conexant task or adhere to a
reasonable Conexant schedule. PDF Solutions shall provide prior written notice,
allowing reasonable time for Conexant to act on the notice, of any Conexant task
and/or Conexant schedule upon which PDF Solutions is depending on to perform
services specified in Exhibit A. Conexant shall bear no liability or otherwise
be responsible for delays in the provision of services

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

specified in Exhibit A or any portion thereof proximately caused by a Foundry's
failure to complete tasks or schedules upon which Conexant and PDF Solutions may
depend.

        2.5 Right to Perform Services for Others. Conexant acknowledges that PDF
Solutions has extensive expertise, experience, technology and proprietary
products and tools in the area of electronic design and yield improvement and
that PDF Solutions intends to utilize such expertise, experience, products and
tools in providing consulting services and other services to other clients.
Subject to PDF Solutions' compliance with the confidentiality provisions stated
herein, nothing in this Agreement shall restrict or limit PDF Solutions from
performing such design consulting or other services to any other entity in any
industry, including the semiconductor and electronics industries. Conexant
agrees that, except as otherwise agreed in this Agreement, PDF Solutions and its
employees may provide design consulting services similar in nature to the
Services and Technology for any third parties both during and after the term of
this Agreement. Subject to the limitations placed on PDF Solutions by this
Agreement or by any existing Non-Disclosure Agreement between PDF Solutions and
Conexant, PDF Solutions may in its sole discretion develop, use, market,
license, offer for sale, or sell any software, application or product that is
similar or related to that which was developed by PDF Solutions for Conexant
hereunder.

SECTION 3. PAYMENT FOR SERVICES AND TECHNOLOGY

        3.1 Fees. As compensation for the Services and Technology, Conexant
shall pay to PDF Solutions the fees ("FEES") set forth in Exhibit "B" attached
hereto.

        3.2 Expenses. Conexant shall also reimburse PDF Solutions for its
reasonable out-of-pocket expenses incurred in carrying out its obligations under
this Agreement including, but not limited to, travel, hotel, meals, document
production and other customary business expenses directly related to the
Services and Technology ("REIMBURSEMENT"). Travel, other than trips to
Conexant's office or fabrication facilities, shall be in accordance with
Conexant's travel policy (provided that PDF Solutions may select its own travel
agency). Reimbursement for expenses incurred in an amount of up to
*********************** in any calendar month shall not require the written
approval of Conexant; provided, however, that any extraordinary
engagement-related purchases including, but not limited to, expenses for mask
production, equipment purchases, on-site facilities and communications services,
must receive Conexant's prior written authorization. Conexant shall not have any
liability to PDF Solutions for any Reimbursement for expenses incurred in an
amount in excess of ******************** in any calendar month, unless such
expenses are approved in writing by the designated individual(s) set forth in
Exhibit "C" attached hereto. Reimbursement shall be made only upon presentation
by PDF Solutions of mutually agreed upon documentation substantiating the amount
and purpose of such expense.

        3.3 Invoice. PDF Solutions shall bill Conexant as agreed herein for
Services and Technology pursuant to an invoice delivered on a monthly basis.
Each invoice shall be accompanied by a reasonably detailed breakdown of the
invoiced amount. Invoices shall be mailed to:

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

               Conexant Systems, Inc.
               4311 Jamboree Road, PO Box 7370
               Newport Beach, CA 92658-7370
               Attention: Accounts Payable

        3.4 Payment of Invoices. All payments by Conexant hereunder shall be
made by corporate or other check. All invoices shall be due and payable within
thirty (30) days after the date of invoice. Amounts not paid in accordance
herewith shall be subject to a late charge equal to ***********************
(1.5%) per month (or, if less, the maximum allowed by applicable law). Without
prejudice to other remedies available, PDF Solutions reserves the right to
suspend performance and delivery of Services and Technology until such
delinquency is corrected, provided that PDF Solutions shall give written notice
of payment delinquency and shall give ************ advance written notice of its
intention to suspend performance. The amounts payable to PDF Solutions hereunder
are exclusive of any sales or use or other taxes or governmental charges.
Conexant shall be responsible for payment of all such taxes or charges except
for any taxes based solely on PDF Solutions' net income. If Conexant is required
to pay any taxes based on this Section 3.4, Conexant shall pay such taxes with
no reduction or offset in the amounts payable to PDF Solutions hereunder.

SECTION 4. PROPRIETARY RIGHTS

        4.1 Ownership. Conexant 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) Conexant 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) Conexant is the exclusive owner of Mask Sets.

        To the extent the law would provide for ownership other than as provided
herein, (y) Conexant hereby assigns to PDF Solutions its right, title and
interest in and to the PDF Technology and the Proprietary Rights in the PDF
Technology and (z) PDF Solutions hereby assigns to Conexant its right, title and
interest in and to the Analysis, Manufacturing Designs, Raw Data and the
Proprietary Rights in the Analysis, Manufacturing Designs and Raw Data, and in
the Mask Sets.

        4.2 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 Conexant and its subsidiaries, a ******************
************************************************* license *********************
to use the 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 only for use of PDF
Technology in connection with the development, manufacture and

                                       6
<PAGE>   7
                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.

fabrication of *********** technology products of Conexant and its
majority-owned subsidiaries. The foregoing license includes all PDF Technology
disclosed by PDF Solutions in its work for Conexant hereunder (including
methodologies or practices observed by Conexant personnel in the course of PDF
Solutions' work hereunder); provided, however, that specifically excluded from
this license of PDF Technology is any and all software or software tools or
software manuals and documentation. Conexant shall be bound by and shall cause
its sublicensees to be bound by the confidentiality obligations contained in
Section 5 or obligations at least as restrictive as the confidentiality
obligations contained in Section 5. Except as specifically provided herein,
Conexant shall not disclose or license PDF Technology to any third party.
Conexant understands that PDF Solutions will not disclose to Conexant 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 Conexant, unless the same defeats or substantially impedes
the Scope of Services and Services and Technology under Section 2 of this
Agreement. This Section 4.2 shall not limit or alter any other Software license
or rights that may exist between the parties under a separate agreement.

        4.3 Grant of License by Conexant. Subject to the terms and conditions of

this Agreement, Conexant hereby grants to PDF Solutions ***********************
******************************************************** license ***********,
but only to the extent Conexant has the right to grant such license, as follows:

               (a) to incorporate Conexant's Manufacturing Designs in CVs at any
time during the term solely for the purpose of performing under this Agreement;

               (b) to use, copy, compile, manipulate, analyze or reproduce Raw
Data and the Mask Sets solely for the purpose of performing under this
Agreement; and

               (c) to use and rely upon Raw Data and Analysis from any Foundry
for any purpose, including with other customers of PDF Solutions; provided,
however that (i) PDF Solutions shall not use and rely upon CVs incorporating
Conexant's Manufacturing Designs, Raw Data or Analysis from any Foundry for any
other customers for a period of four months from the date of CV approval by
Conexant and (ii) PDF Solutions may itself rely upon, but shall not disclose or
deliver Raw Data to any third party. (iii) PDF Solutions shall be bound by and
shall cause its sublicensees to be bound by the confidentiality obligations
contained in Section 5 or obligations at least as restrictive as the
confidentiality obligations contained in Section 5. Conexant will, in good
faith, work with PDF Solutions and Foundry to encourage Foundry to provide any
required consents or licenses in accordance with this Section 4.

        4.4 No Other Rights. Except as otherwise set forth in this Section 4,
neither this Agreement nor performance and delivery of the Services and
Technology shall give either PDF Solutions or Conexant any ownership, interest
in, or rights to, the Proprietary Rights owned or provided by the other party.

                                       7
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                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.

SECTION 5. CONFIDENTIALITY

Both parties hereto acknowledge and agree that they are parties to that certain
Master Non-Disclosure Agreement numbered ****************, the "Master NDA"
pursuant to which they have exchanged confidential and/or proprietary
information under cover of various Confidential Information Transmittal Records
("CITR'S"). Both parties further acknowledge that the Raw Data developed
pursuant to PDF Solutions' services to Conexant under this Agreement shall be
deemed Confidential and shall not be disclosed. Both parties agree that this
Agreement shall not modify, alter or extinguish the Master NDA nor any CITR's
currently existing or to be executed in the future. The parties acknowledge and
agree that during the course of the performance of the mutual obligations
hereunder, each party will occasionally deliver to the other party certain
information (including proprietary information, technical data, trade secrets,
know-how, research, software, developments, inventions, processes, design flows,
methods, methodologies, formulas, algorithms, technologies, designs, drawings,
engineering, hardware configuration information, yield data or other similar
information, and related documentation and information) which the disclosing
party deems to be confidential or proprietary. Such information shall be
considered and treated hereunder as proprietary and other confidential
information if it is marked as "Confidential" or "Proprietary" (hereinafter
referred to as "CONFIDENTIAL INFORMATION"): (i) by stamp or legend if
communicated in writing or other tangible form, or (ii) orally at the time of
disclosure with a written confirmation within thirty days describing the
Confidential Information communicated orally. All restrictions as to use and
disclosure shall apply during such thirty day period. Any recipient of
Confidential Information disclosed pursuant to this Agreement shall hold the
Confidential Information in strictest confidence and shall protect the
Confidential Information by using the same degree of care, but no less than a
reasonable degree of care, to prevent the unauthorized use, disclosure,
dissemination or publication of the Confidential Information as the recipient
uses to protect its own comparable confidential and proprietary information. Any
permitted reproduction of Confidential Information shall contain all
confidential or proprietary legends which appear on the original. If the
disclosing party discloses any software, the recipient is prohibited from
disassembling, decompiling, reverse-engineering or otherwise attempting to
discover or disclose the disclosing party's software or methods or concepts
embodied in such software. Subject to the licenses granted in Section 4, upon
receipt of the written request of the disclosing party, the receiving party will
return, or give written certification of the destruction of all Confidential
Information in any tangible or digital form, including all copies thereof
whether on paper or in digital form, which are in the recipient's possession or
control. The recipient will immediately notify the disclosing party in the event
of any loss or unauthorized disclosure of Confidential Information. The above
restrictions on use and disclosure shall not apply to any Confidential
Information that: (1) is in the public domain or in the possession of the
recipient without restriction at the time of receipt under this Agreement
through no wrongful act or omission of the recipient, (2) is used or disclosed
with the prior written approval of the disclosing party, (3) is used or
disclosed after *** years from the date of expiration or earlier termination of
this Agreement, (4) is independently developed by the recipient without breach
of this Agreement which independent development is supported by reasonable
contemporary evidence, (5) becomes known to the recipient from a source other
than the disclosing party without breach of this

                                       8
<PAGE>   9
                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.

Agreement by the recipient or any other wrongful act or omission by recipient or
any third party; or (6) is required to be disclosed pursuant to law, provided
the recipient uses reasonable efforts to give the disclosing party reasonable
notice of such required disclosure sufficient to give the disclosing party the
opportunity to contest such disclosure. The obligations of confidentiality shall
survive the expiration or sooner termination of this Agreement for a period of
**************** thereafter. Disclosing party assumes no responsibility or
liability whatever under this Agreement for any use of Confidential Information
by the recipient or its customers or agents. Nothing in this Agreement shall
restrict recipient's discretion to transfer or assign its personnel, providing
the obligations of recipient under this Agreement are otherwise met. Each party
understands that the other party may currently or in the future be developing
information internally, or receiving information from third parties that may be
similar to the Confidential Information. Accordingly, nothing in this Agreement
will be construed as a representation or inference that either party will not
develop products, or have products developed for it, or enter into joint
ventures, alliances, or licensing arrangements that, without violation of this
Agreement, compete with the products or systems embodying the Confidential
Information. Further, subject to the provisions of Section 4, either party shall
be free to use for any purpose the "residuals" resulting from access to or work
with such Confidential Information, provided that such party shall maintain the
confidentiality of the Confidential Information as provided herein. The term
"RESIDUALS" means information in non-tangible form, which may be retained by
persons who have had access to the Confidential Information, including ideas,
concepts, know-how or techniques contained therein. Neither party shall have any
obligation to limit or restrict the assignment of such persons or to pay
royalties for any work resulting from the use of residuals. The parties do not
intend that any agency or partnership relationship be created between them by
this Agreement. Each party hereto recognizes and agrees that there is no
adequate remedy at law for a breach of this Section 5, that such a breach would
irreparably harm the disclosing party and that the disclosing party shall be
entitled to seek equitable relief (including, without limitation, injunctions)
with respect to any such breach or potential breach in addition to any other
remedies.

SECTION 6. REPRESENTATIONS AND WARRANTIES

        6.1 Corporate Warranties. Each party hereby represents and warrants to
the other party that: (i) it is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it was organized, (ii) the
person executing this Agreement on behalf of each party is duly authorized to
bind such party to all terms and conditions of this Agreement, (iii) this
Agreement, when executed and delivered by each party, will be the legal, valid,
and binding obligation of such party, enforceable against it in accordance with
its terms, and (iv) the execution, delivery and performance of this Agreement by
each party does not and will not conflict with or constitute a breach or default
under such party's charter documents, delegations of authority, or any material
agreement, contract or commitment of such party, or require the consent,
approval or authorization of, or notice, declaration, filing or registration
with, any third party or governmental or regulatory authority.

                                       9
<PAGE>   10

        6.2 Infringement. PDF Solutions warrants that it is not aware of
infringement or alleged infringement of its deliverables under third parties'
intellectual property rights.

        6.3 Disclaimer of Warranties. THE WARRANTIES STATED IN THIS SECTION 6
ARE PARTIES' SOLE AND EXCLUSIVE WARRANTIES PERTAINING TO THE SUBJECT MATTER OF
THIS AGREEMENT, AND EACH PARTY HEREBY DISCLAIMS ANY OTHER WARRANTY, EXPRESS OR
IMPLIED, WRITTEN OR ORAL, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF TITLE,
MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE. NOTHING
UNDER THIS AGREEMENT, OR THE STATEMENT OF WORK OR PROJECT SHALL BE DEEMED TO BE
A WARRANTY AS TO THE OUTCOME OF ANY PROJECT OR THE EFFICACY OF ANY
RECOMMENDATIONS MADE BY PDF SOLUTIONS. NOTHING UNDER THIS AGREEMENT OR THE
STATEMENT OF WORK SHALL BE DEEMED TO CREATE ANY LIABILITY ON THE PART OF EITHER
PARTY WITH RESPECT TO THE OUTCOME OF A PROJECT OR ANY ACTIONS TAKEN BY CONEXANT
OR THE PDF SOLUTIONS AS A CONSEQUENCE OF THE OTHER PARTIE'S RECOMMENDATIONS.

        6.4 Limitation. Nothing in this Agreement shall extend the time or
remedies allowable under law or remedy for either party to file an action
against the other party.

SECTION 7. INDEMNIFICATION

        7.1 Infringement Indemnity. PDF Solutions shall defend or settle at PDF
Solutions' expense any claim ("CLAIM") brought against Conexant that the
Services and Technology and/or any tangible or intangible delivered in
connection therewith impermissibly contains third party's proprietary rights,
trade secrets, patents or copyrighted materials or that Conexant's use of any
such materials, as permitted hereunder, infringes any United States, Singapore,
Korean, Japanese, or Taiwanese patent; provided that such indemnification shall
not extend (a) to any infringement by Conexant's designs or products, provided
such designs, processes or products are not influenced by PDF Solutions in a way
that renders it infringing, (b) to the extent any infringement results from any
infringement contained in any technical data, Manufacturing Designs, Mask Sets
or materials or reports or information provided by Conexant. The indemnification
obligations set forth above in this Section 7 are subject to the conditions that
the Indemnified Party: (i) gives prompt written notice of the Claim to the
Indemnifying Party, (ii) gives the PDF Solutions the exclusive authority to
control and direct the defense or settlement of such Claim, provided that the
PDF Solutions does not take adopt any positions that may be prejudicial to
Conexant and (iii) gives the PDF Solutions, at the Indemnified Party's own
expense (except for the value of the Indemnified Party's employees' time), all
reasonably necessary information and reasonable assistance with respect to such
Claim. PDF Solutions shall pay all amounts paid in settlement and all damages
and costs awarded with respect to such Claim. PDF Solutions will not be liable
for any costs or expenses incurred without its prior written authorization. In
the event of any Claim under this Section 7.2, PDF Solutions shall have the
option, at its election, to (a) obtain a license to permit continued use of the
allegedly infringing item or practice, (b) modify the allegedly

                                       10
<PAGE>   11

infringing item or practice to avoid continued infringement provided the
modified item or practice is substantially equivalent, (c) procure or provide a
substantially equivalent substitute for the allegedly infringing item or
practice or (d) if PDF Solutions is unable to achieve (a), (b) or (c) after best
efforts, then PDF Solutions may require that Conexant cease use of the
infringing item or practice as soon as feasible and terminate this Agreement and
refund all Incentive Fees and Gainshare Fees paid by Conexant to PDF Solutions.

SECTION 8. LIMITATION OF LIABILITY

THE LIABILITY OF EITHER PARTY AND OF SUCH PARTY'S OFFICERS, DIRECTORS,
EMPLOYEES, CONTRACTORS AND AGENTS, TAKEN AS A WHOLE, WHETHER IN TORT, CONTRACT
OR OTHERWISE, AND NOTWITHSTANDING ANY FAULT, NEGLIGENCE, STRICT LIABILITY OR
PRODUCT LIABILITY OF SUCH PARTY OR OF ITS OFFICERS, DIRECTORS, EMPLOYEES, OR
AGENTS OR FAILURE OF ESSENTIAL PURPOSE, WITH REGARD TO ANY SERVICES OR OTHER
ITEMS FURNISHED UNDER THIS AGREEMENT SHALL IN NO EVENT EXCEED THE AGGREGATE
COMPENSATION PAID BY CONEXANT TO SERVICE PROVIDER HEREUNDER. NOTWITHSTANDING
ANYTHING TO THE CONTRARY IN THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE
LIABLE FOR ANY CLAIM FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL
DAMAGES, COVER OR ANY LOSS OF DATA, PROFIT, REVENUE OR USE UNDER ANY THEORY OF
LAW OR FOR ANY CAUSE OF ACTION.

SECTION 9. MISCELLANEOUS

        9.1 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.
Conexant agrees to work in good faith with PDF Solutions to produce two mutually
acceptable public announcements of PDF Solutions' engagement with Conexant 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.

        9.2 Assignment. Neither party shall assign, delegate, or subcontract any
portion of its rights, duties, or obligations under this Agreement without the
prior written consent of the other party, which consent will not be unreasonably
withheld or delayed, provided that PDF Solutions may utilize the services of
consultants whose services it utilizes on a regular basis.

                                       11
<PAGE>   12

        9.3 Changes. No modification to this Agreement will be binding unless in
writing and signed by a duly authorized representative of each party. Change
orders affecting any Scope of Services will not be effective until reviewed and
approved in writing by PDF Solutions and Conexant and attached to this
Agreement. PDF Solutions will submit to Conexant a report on how the proposed
changes will affect the current Services including the effect on the time
schedule and cost estimates. The parties will have no obligation to proceed with
changed work until both parties have approved the change in writing. Conexant
will be under no obligation to pay for work performed under a change order
without prior written authorization in accordance herewith.

        9.4 Notices. All notices or correspondence pertaining to this Agreement
shall be in writing, delivered by either first class mail with receipt or by
facsimile with receipt. Such notice shall be effective upon the earlier of
actual receipt or the expiration of three days following the date of mailing to
the addresses as follows, or such alternative address the parties may designate
in the future:

        To Conexant:

               Conexant Systems, Inc.
               4311 Jamboree Rd.
               Newport Beach, CA 92660
               Attn:  Manager, Contracts
               Tel:   (949) 483-6610
               Fax:   (949) 483-4176

        To PDF Solutions:

               PDF Solutions, Inc.
               333 West San Carlos Street
               Suite 700
               San Jose, CA 95110
               Attn:  Chief Financial Officer
               Tel:   (408) 938-6445
               Fax:   (408) 938-6478

        9.5 Independent Contractors. PDF Solutions and Conexant shall perform
their obligations under this Agreement as independent contractors, and nothing
contained in this Agreement shall be construed to create or imply a joint
venture, partnership, principal-agent or employment relationship between the
parties. Neither party shall take any action or permit any action to be taken on
its behalf which purports to be done in the name of or on behalf of the other
party and shall have no power or authority to bind the other party to assume or
create any obligation or responsibility express or implied on the other party's
behalf or in its name, nor shall such party represent to any one that it has
such power or authority.

                                       12
<PAGE>   13
                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.

        9.6 Force Majeure. Neither party shall be liable to the other party for
any loss, damage, or penalty arising from delay due to causes beyond its
reasonable control including acts of God, acts of government, war, riots, or
embargoes.

        9.7 Severability. If any term or provision of this Agreement is
determined to be invalid or unenforceable for any reason, it shall be adjusted
rather than voided, if possible, to achieve the intent of the parties to extent
possible. In any event, all other terms and provisions shall be deemed valid and
enforceable to the maximum extent possible.

        9.8 Insurance. PDF Solutions shall carry Workers' Compensation and
Comprehensive General Liability Insurance (including Products, Contractual, and
Automobile Liability) in such form as to protect PDF Solutions and Conexant,
their directors and officers, and the agents and employees as additional
insureds from any claims or omissions of PDF Solutions under this Agreement. PDF
Solutions shall furnish Conexant with a Certificate(s) of Insurance evidencing
limits of liability not less than *********** combined single limit per
occurrence for bodily injury, including death and property damages, prior to
performing any services on site at Conexant's facility. Such insurance shall be
primary and non-contributing to any insurance maintained or obtained by Conexant
and shall not be canceled or materially reduced without thirty (30) days
prior written notice to Conexant. PDF Solutions agrees to waive any rights of
subrogation PDF Solutions or PDF Solutions' insurers may have against Conexant
under applicable Workers' Compensation laws.

        9.9 Export Control Laws and Regulations. Each party, for itself and any
of its employees and agents who may be given access by such party to technical
information pursuant to the performance of the Services hereunder, acknowledges
its obligations to control access to such technical information and to ensure
that such access does not result in a violation of the U.S. Export Control Laws
and Regulations.

        9.10 Disputes. If any claim or controversy arises out of this Agreement,
the parties shall first make a good faith attempt to resolve the matter through
a designated executive officer. The officers having cognizance of the subject
matter of the Agreement for each of the parties shall first meet and make a good
faith attempt to resolve such controversy or claim. In the event such good faith
negotiation fails to settle any dispute within sixty (60) days from
notice of such dispute, the parties shall endeavor to resolve such dispute
arising out of this Agreement by mediation in either Santa Clara County, Orange
County or Los Angeles County California or at such other place as the parties
hereto mutually agree upon, in accordance with the Center for Public Resources
(CPR) Model Procedure for Mediation of a Business Dispute. Unless the parties
agree otherwise, the mediator will be selected from the CPR Panels of
Distinguished Neutrals and each party shall be responsible for its own costs
associated with such mediation. If the matter has not been resolved pursuant to
the aforementioned mediation procedure within sixty (60) days of the
initiation of such procedure, the controversy shall be settled by binding
arbitration by one or three arbitrators, (if three are used, each party shall
select one, and the third shall be selected by mutual agreement of the parties),
conducted in accordance with the Commercial Arbitration Rules of the American
Arbitration Association and judgment upon the award rendered by the
arbitrator(s) may be entered by

                                       13
<PAGE>   14

any court having jurisdiction thereof. The arbitrator(s) shall not be empowered
to award damages in excess of, and/or in addition to, actual damages, including
punitive damages, and the arbitrator(s) shall deliver a reasoned opinion in
connection with his/her/their decision. Nothing herein, however, shall prohibit
either party from seeking injunctive relief if such party would be substantially
prejudiced by a failure to act during the time that such good faith efforts are
being made to resolve the claim or controversy. In the event either party seeks
injunctive relief, the parties agree that jurisdiction will be before a state or
district court seated in either Santa Clara County, Orange County or Los Angeles
County, California. All deadlines in this Section 9.10 may be extended by mutual
agreement.

        9.11 Governing Law. This Agreement and any and all disputes arising
hereunder shall be governed by the internal laws of the State of California.
This Agreement is prepared and executed and shall be interpreted in the English
language only, and no translation of the Agreement into another language shall
have any effect. The parties agree that the United Nations Convention on
Contracts for the International Sale of Goods (1980) is specifically excluded
from and shall not apply to this Agreement.

        9.12 Waiver. The failure of any party hereto to enforce at any time any
of the provisions of this Agreement or to require at any time performance by the
other party of any of the provisions of this Agreement, or any part hereof,
shall not be construed to be a waiver of said provision or to effect the right
of any party to enforce each and every provision in accordance with the terms of
this Agreement.

        9.13 Interpretation. In the event that any term of the Scope of Services
conflicts with the terms of this Agreement, the terms of this Agreement shall
take precedence.

        9.14 Non-Solicitation. Conexant shall not actively solicit or influence
or attempt to influence any person employed by PDF Solutions to terminate or
otherwise cease his or her employment with PDF Solutions or become an employee
of Conexant. PDF Solutions shall not actively solicit or influence or attempt to
influence any person employed by Conexant to terminate or otherwise cease his or
her employment with Conexant or become an employee of PDF Solutions.

        9.15 Drafter. Neither party will be deemed the drafter of this
Agreement, which Agreement will be deemed to have been jointly prepared by the
parties. If this Agreement is ever construed, whether by a court or by an
arbitrator, such court or arbitrator will not construe this Agreement or any
provision hereof against any party as drafter.

        9.16 Entire Agreement. As noted in Section 5 relating to
confidentiality, the parties hereto have a separate confidentiality agreement in
place that will not be affected by this Agreement. The parties also acknowledge
that PDF Solutions is not providing or licensing to Conexant under this
Agreement any existing software programs or products and anticipate that they
will enter into a Software Evaluation and/or Software License Agreement related
to the subject matter hereof. Such agreement shall also not be affected by this
Agreement. Other than these specified agreements, this Agreement shall
constitute the entire agreement between the parties with respect to the subject
matter hereof and: (i) shall supersede all prior contemporaneous oral or written
communications, proposals and

                                       14
<PAGE>   15

representations with respect to its subject matter, and (ii) shall prevail over
any conflicting or additional terms of any statement of work, quote, order
acknowledgment or similar communication between the parties during the term of
this Agreement.

        9.17 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.

        9.18 Exhibits. Exhibits "A," "B" and "C" attached hereto are
incorporated herein by this reference as if fully set forth herein.

                                       15
<PAGE>   16

        IN WITNESS WHEREOF, the parties hereto have executed this Services
Agreement as of the date(s) set forth below to be effective as of the Effective
Date.

PDF SOLUTIONS, INC., A CALIFORNIA     CONEXANT SYSTEMS, INC., A DELAWARE
CORPORATION                           CORPORATION

By:     /s/ P.S. Melman               By:     /s/ James Spoto
   --------------------------------      ---------------------------------------
Name:   P.S. Melman                   Name:   James P. Spoto
     ------------------------------        -------------------------------------
Title:  CFO                           Title:  Senior VP, *********************
      -----------------------------           Group
Date:   5/18/00                             ------------------------------------
     ------------------------------   Date:   5/16/00
                                            ------------------------------------

                                       16
<PAGE>   17
                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.

      EXHIBIT "A" TO SERVICES AGREEMENT - SCOPE OF SERVICES AND TECHNOLOGY

        This Exhibit specifies in detail the Services and Technology to be
performed by PDF Solutions during the term of this Agreement.

PROJECT DESCRIPTION & GOALS

PDF Solutions agrees to provide Conexant with ************ services for all of
Conexant's products targeted for ***** technology. Services in support of these
products are divided into two major components: (1) CONEXANT'S
******************* ******* AND (2) CONEXANT'S ****************
*********************.

The primary goals of the project are (1) to accelerate Conexant's historical
yield ramp rates at ********************** and (2) to improve Conexant's yield
****************** management of products ***********************************

At **********************, PDF Solutions and Conexant will jointly attempt to
improve Conexant's ********************** the estimated month the ****** process
will be brought to mass production. The project will target to improve yield in
the range of ************** after ***************. The specified **************
improvement target represents the project goal with no implicit performance
obligations on either party. PDF Solutions agrees to provide Conexant with yield
improvement recommendations for the ***** ******* and to assist in its
implementation.

PDF Solutions and Conexant will also jointly implement a ***************
***************** for the purpose of ******************************************
************************************** for the ***** process. The system will
also provide insight to both PDF Solutions and Conexant to improve product
yields through changes in ********************************************

PROJECT ACCOUNTABILITY

PDF Solutions will maintain an engagement manager to lead the project effort
throughout the duration of the project. PDF Solutions' engagement manager
currently assigned to the ****** process project is **********************.
************** will report to ***************************. Conexant will also
maintain a project leader to lead the project effort and Conexant team for the
****** process. ***************** is currently assigned as Conexant's project
leader. ********* will serve as the primary point of contact for **************
or other Conexant representatives regarding project status and updates.

REPORTS AND DOCUMENTATION

PDF Solutions agrees to provide at minimum bi-weekly updates to *************.
PDF Solutions will provide a written summary report with a formal presentation
to Conexant after the *******************************************************
phases.

******************* ***********************************

This component of the project is described below in the following *** phases.
Phases may be amended upon written notice to more appropriately achieve the
targeted project goals.

                                       17                           CONFIDENTIAL
<PAGE>   18

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

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

------------------------------------------------------------------------------------------
***********          -                  ***********
                                                                               ***********
------------------------------------------------------------------------------------------
***********          -                  ***********

                                                                               ***********

                     -

                     -
------------------------------------------------------------------------------------------
***********          -                  ***********
                                                                               ***********
                     -
                     -

                     -

------------------------------------------------------------------------------------------
****                 -                  ***********
                                                                               ***********
(Level 2)
------------------------------------------------------------------------------------------
****                 -                  ***********
                                                                               ***********
(Level 3)
------------------------------------------------------------------------------------------

DELIVERABLES: **********************    ***********               SYSTEM

PDF Solutions agrees to provide Conexant the following deliverables:
------------------------------------------------------------------------------------------
                                                                            ESTIMATED
    DELIVERABLE                         DESCRIPTION                      DELIVERY PERIOD
------------------------------------------------------------------------------------------
***********          -                  ***********

                                                                               ***********

                     -
------------------------------------------------------------------------------------------
***********          -                  ***********
                                                                               ***********

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

                                       18                           CONFIDENTIAL
<PAGE>   19
                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.

***********                         SYSTEM

PDF Solution agrees to develop, *********** *********** for all of Conexant's
***********. Data to be used to manage potential improvements to Conexant's
*********** process (only if necessary) to increase yield.

<TABLE>
<CAPTION>

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

DELIVERABLES: ***********

PDF Solutions agrees to provide Conexant the following deliverables:
<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------
                                                                           ESTIMATED
    DELIVERABLE                         DESCRIPTION                     DELIVERY PERIOD
-----------------------------------------------------------------------------------------
<S>                   <C> <C>                                           <C>
***********           ***********
***********           ***********                                         ***********
-----------------------------------------------------------------------------------------
***********           ***********
                      ***********
                      ***********                                         ***********
-----------------------------------------------------------------------------------------
***********           ***********
***********           ***********                                         ***********

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

REQUIREMENTS FROM CONEXANT

PDF Solutions believes the following is necessary to enable the successful
completion of this project: Conexant agrees to run *********** *********** at
the *********** facility. Conexant agrees to run *********** at each ***********
******** products on an as-needed basis. Conexant shall not be responsible for
*********** delays or refusal to cooperate with the terms of this agreement.

                                       19                           CONFIDENTIAL

<PAGE>   20
                             CONFIDENTIAL MATERIAL
                       OMITTED AND FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.
                        ASTERISKS DENOTE SUCH OMISSIONS.

GENERAL

The Services and Technology specifically contemplate the acceleration of
Conexant's historical ********** rates at *********** (with anticipated yield
improvement of **************** projections after ***********); and the
improvement of Conexant's yield ************** and management of ***********
products targeted **************************** (with anticipated yield
improvement above ******************************** *********** products).

Conexant agrees to pay three types of fees associated with the Services and
Technology: a *********** (the "FIXED FEE"), an *********** with conditions
described below (the "INCENTIVE FEE") and a variable Gainshare fee paid over
************************************** and calculated according to the Gainshare
Fee Calculation models defined below ("GAINSHARE FEE") (collectively referred to
as "FEES"). ***************** ***************************. Conexant shall not
have any liability to PDF Solutions for any Fees incurred in an amount in excess
of ***********.

PDF Solutions agrees and acknowledges that Conexant does not guarantee a minimum
production volume either expressly, impliedly or otherwise, for any purpose
whatsoever, including the calculation of any and all Fees under this Exhibit B.

FIXED FEE

PDF Solutions shall invoice Conexant the Fixed Fee on a monthly basis at
***********per month for services rendered from *********** to *********** and
********* per month for services rendered after ************************** and
Conexant shall pay such invoices in accordance with this Agreement. If the term
of this Agreement is extended with prior written approval, both parties may
elect to continue services under this Agreement at a Fixed Fee rate of
*******************.

***************

*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*************************************************************
**********************************************************. ******************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*************************.

GAINSHARE FEE

*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
***************.

                                       20                          CONFIDENTIAL

<PAGE>   21

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

PRODUCT VOLUME EXCLUDED FROM GAINSHARE FEE COGS REDUCTION CALCULATIONS

The following volume shall be excluded from the calculation of the defect
density for both **************************** and Conexant ********* ********
run at *******:

-   Pre-production lots
-   Engineering lots
-   Lots adversely affected by equipment failures or malfunctions.
-   Lots adversely affected by non-qualified PM adjustments. Non-qualified means
    equipment introduced not verified to process tolerances. Conexant and PDF
    Solutions agree to review the qualification process by ***********. Conexant
    may elect not to make any changes suggested by PDF Solutions that are deemed
    unreasonable or beyond Conexant's control.
-   Mis-processed lots or lots otherwise adversely affected by mishandling.
-   Products identified with yield issues that are not adequately addressed
    during the engineering phase and prematurely introduced into mass
    production for reasons beyond PDF Solutions' control. For products to be
    considered under this exclusion, products must be first identified by PDF
    Solutions during the engineering phase as products to be excluded from the
    calculations. In such an event, products will be excluded from the
    calculations for a grace period of ************** after date product is
    identified by PDF Solutions by written notice.

GAINSHARE FEE CALCULATION SCHEDULE

Gainshare Fee is to be calculated quarterly, but accumulated monthly. The
Gainshare Fee will be calculated during the months of (1)January, (2) April, (3)
July and (4) October for the prior three months. An example schedule is provided
to clarify the calculation dates. Each party will work together in good faith,
to determine and agree upon the appropriate Gainshare amount within the first
twenty (20) days of the stated month.

-------------------------------------------------------------------------------
    GAINSHARE FEE MONTH          WHEN CALCULATED             WHEN INVOICED
-------------------------------------------------------------------------------
            ***                        ***                        ***
-------------------------------------------------------------------------------
            ***                        ***                        ***
-------------------------------------------------------------------------------
            ***                        ***                        ***
-------------------------------------------------------------------------------
            ***                        ***                        ***
-------------------------------------------------------------------------------
            ***                        ***                        ***
-------------------------------------------------------------------------------
            ***                        ***                        ***
-------------------------------------------------------------------------------
            ***                        ***                        ***
-------------------------------------------------------------------------------
            ***                        ***                        ***
-------------------------------------------------------------------------------
            ***                        ***                        ***
-------------------------------------------------------------------------------
            ***                        ***                        ***
-------------------------------------------------------------------------------
            ***                        ***                        ***
-------------------------------------------------------------------------------
            ***                        ***                        ***
-------------------------------------------------------------------------------

                                       21                          CONFIDENTIAL

<PAGE>   22

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

NPB COGS REDUCTION MODEL: *************** PROCESS

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

****
****

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

YIELD MODEL

For the purposes of this Agreement, the *********** equation used in determining
Gainshare Fees when appropriate will be *****************************, described
as ******************************* *** in Conexant's use of the model. The
*********** *********************** was developed with the use of the *********
as described above. Both Conexant and PDF Solutions agree that the complexity
factor, ***, will vary based on the design and may be adjusted as required. Both
Engagement Managers will verbally agree to such changes.

                                       22                          CONFIDENTIAL

<PAGE>   23

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

************* ***********************

The baseline information is described in the following table:

<TABLE>
<CAPTION>

--------------------------------------------------------------
   CALENDAR MONTH                                 D0
--------------------------------------------------------------
<S>                                             <C>
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
************                                    *******
--------------------------------------------------------------
</TABLE>

If Conexant's ********************************************, both parties agree
to discuss actions to be taken.

                                       23                         CONFIDENTIAL

<PAGE>   24

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

******* **** ********* MODEL: CONEXANT'S **************** ********

--------------------------------------------------------------------------------
                                  *************
--------------------------------------------------------------------------------

******* BASELINE ****** *******

   The ******** will be set to each ********* **** forecast for Conexant's
  ****** products, unless otherwise mutually agreed to in writing. Conexant
  agrees to meet with PDF Solutions
                                 on or around ***************

to re-evaluate the methodology for ******** ***********.

                                       24                          CONFIDENTIAL

<PAGE>   25

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

GAINSHARE FEE CALCULATION MODEL

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

********

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

                                       25                          CONFIDENTIAL

<PAGE>   26

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

For questions on technical issues contact:

Conexant Systems, Inc.
Attn: ************, Yield Engineering
Tel:  ************
Fax:

For approval of expenses and/or questions on contract or business related
issues, contact:

Conexant Systems, Inc.
Attn: ************, Strategic Sourcing
Tel: *************
Fax:

                                       26                          CONFIDENTIAL

<PAGE>   27

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

Subject: Re. Change of Control
   Date: Thu, 11:28:25 - 0700
   From: *******
     To: dan@PDF.COM
     CC: *******

Dan,

As discussed this morning regarding the ******** Conexant hereby defines the
term "Change of Control" as follows:

"Change of Control" is defined as any of the following events: (i) any
consolidation or merger of a party in which such party is not the continuing or
surviving corporation, or pursuant to which a material number of shares of such
party's common stock would be converted to cash, securities or other property;
(ii) any sale, exchange or other transfer (in one transaction or series of
related transactions) of all or substantially all the assets of such party;
(iii) any sale or other transfer of stock or assets, any consolidation or
merger, or any other transaction, that results in management or control of the
facility resting with a third party.

If PDF accepts this definition as applicable and binding under the above
referenced Integrated Technology Agreement, please respond with your
acknowledgement.

Thanks,

Conexant Systems, Inc.
*******
*******
*******

                                       27                          CONFIDENTIAL

<PAGE>   28

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

                     INTEGRATION TECHNOLOGY AGREEMENT (ITA)

**********

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