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DayStar Technologies Announces Sale of New York Assets to Support Strategic Partnership Strategy

Santa Clara, CA, July 15, 2009 – DayStar Technologies, Inc. (Nasdaq: DSTI), a developer of solar photovoltaic products based on CIGS thin-film deposition technology announced today the sale of substantially all the non-core assets of its Halfmoon, NY operation to Veeco Compound Semiconductor, Inc. (“Veeco”), a wholly-owned subsidiary of Veeco Instruments, Inc. (Nasdaq: VECO).  Dr. Robert Aldrich, Chief Executive Officer commented, “As we have previously disclosed, we are in negotiations with potential strategic partners to allow us to expand our manufacturing capability and commercialize our CIGS PV modules. This sale of our New York assets is another step in our strategic partnership strategy and is consistent with the direction we established for DayStar approximately two years ago. In 2007 we moved our primary operations to Santa Clara, California and focused our development on single step reactive sputtering on glass substrates and we moved away from flexible foil based CIGS.” Dr. Aldrich further noted, “We have retained the intellectual property developed in New York for future use in either glass or flexible substrate PV modules, while Veeco has purchased assets that will allow them to advance their CIGS solar equipment strategy.”

The sale of the company’s New York assets will reduce annual operating expenses by over $2.0 million. The transaction also allows the company to continue its efforts on the DayStar-proprietary reactive sputter process currently in use to produce CIGS-on-glass photovoltaic modules without diminishing opportunities to re-enter flexible PV module markets when business, technology, and market conditions favor such a product. DayStar’s core technology, the creation of the critical CIGS (copper indium gallium diselenide) layer in a single heated process step using the same proven reactive sputter process as used in virtually all flat panel display and architectural glass factories, remains exclusively owned by the Company.

“Veeco’s efforts to advance their CIGS equipment business, leveraging their extensive portfolio of thermal deposition technology, aligned perfectly with DayStar’s efforts to bring our single step reactively sputtered CIGS to market. Our New York team has provided expert support as the company transferred headquarters to California and we thank them for their contributions. DayStar’s resources are focused on our core technology as we begin our production ramp while our earlier efforts on flexible substrate two-step CIGS facilitates Veeco’s misson in solar”, commented  Robert Weiss, DayStar’s Chief Technology Officer.

Further details of the transaction will be disclosed in a Form 8-K to be filed with the Securities and Exchange Commission.