WOODBURY, N.Y.--(BUSINESS WIRE)--Jan. 28, 2003-- Veeco Instruments Inc. (Nasdaq: VECO) today announced a joint development agreement with International SEMATECH (ISMT) to utilize Veeco's NEXUS(TM) Low Defect Density (LDD) Ion Beam Deposition (IBD) System for the development of certain advanced manufacturing technologies required to fabricate next generation extreme ultraviolet (EUV) photomask technology.

As part of the agreement, International SEMATECH (ISMT) has purchased Veeco's NEXUS(TM) IBD-LDD system. At a press conference in Albany today, New York Governor George E. Pataki announced that Veeco's system will be the first tool installed ISMT North, the new EUV lithography development center located at Albany NanoTech of the University at Albany-SUNY.

"The R&D work of ISMT has led to important advancements for the entire semiconductor industry, and we are pleased to be collaborating with them to develop technology critical for next generation photomasks," said Edward H. Braun, Veeco's Chairman and CEO. "We are pleased to partner with Albany NanoTech and ISMT in this important research, and are grateful to Governor Pataki and the State of New York for the significant investments in university research and high technology commercialization."

Manny Lakios, President of Veeco's NY Process Equipment Group added, "ISMT's decision to install our NEXUS IBD-LDD in the Albany facility further validates IBD as a viable technology for EUV photomask deposition. The system has demonstrated the ability to provide low defect density deposition as well as the precise control required for such critical work. Veeco's collaboration with ISMT will help further the commercialization of EUV technology."

Lawrence Livermore National Laboratory, which has a history of developing EUV photomask technology with Veeco's first generation LDD system, will also join the partnership. This research will enable semiconductor manufacturers to produce semiconductor devices that have geometries of 45 nanometer (or billionths of a meter) and smaller, at least two generations beyond the current 193 nm technology node. Chips made using EUV technology are projected to be as much as 100 times faster and have 1,000 times the memory capacity of today's most powerful computer chips.

Albany NanoTech is the centerpiece of the $1B high-tech, bio-tech initiative by New York State Governor Pataki to encourage collaboration of high tech industry with New York's top academic institutions. The ISMT North program in EUV infrastructure will be funded with approximately $320 million combined from ISMT, Albany NanoTech, and New York State. In his January 8th 2003 State of the State address, Governor Pataki cited Veeco as "one of the companies that will benefit from this initiative."

Veeco's NEXUS IBD-LDD system, based on award-winning technology, was developed specifically for semiconductor photomask applications and features extremely low particulate deposition and precise control of optical properties for single or multi-layer processes. Both are critical for producing advanced photomasks such as Phase Shift masks and EUV masks.

About International SEMATECH:

International SEMATECH (ISMT) is a global semiconductor technology development consortium that has effectively represented the semiconductor manufacturing industry on innovation issues since 1988. Its members are Agere Systems, AMD, Hewlett- Packard, IBM, Infineon, Intel, Motorola, Philips, Texas Instruments and TSMC. ISMT conducts state-of-the-art research and development, and is a highly regarded technology partner whose mission is to promote the interests common to all chipmakers. It has extensive experience collaborating with equipment and materials suppliers, as well as government and academic research centers, to refine the tools and technology necessary to produce future generations of chips. Additional information may be found at www.sematech.org.

About Albany NanoTech:

Albany NanoTech is the umbrella organization that oversees and coordinates UAlbany's comprehensive portfolio of academic, research, and outreach programs in nanosciences and nanotechnology. It serves as a fully-integrated research, development, prototyping, and technology deployment resource that manages a strategic portfolio of focus centers that encompass nanoelectronics, micro- and nano-mechanical systems, bioelectronics, telecommunications and wireless communications, optical devices and components, leading edge metrology, and sensor-on-a-chip devices for energy, environment, and defense related applications. Albany NanoTech currently maintains a $125M state-of-the-art infrastructure, including laboratory, prototyping and cleanroom facilities, thereby offering students and faculty the most advanced facilities and equipment available today. Its asset value is projected to exceed $500M once the two 300mm wafer facilities are completed. Additional information may be found at www.albanynanotech.org.

About Lawrence Livermore National Laboratory:

Founded in 1952, Lawrence Livermore National Laboratory is a national security laboratory, with a mission to ensure national security and apply science and technology to the important issues of our time. The Lawrence Livermore National Laboratory is managed by the University of California for the U.S. Department of Energy.

About Veeco:

Veeco Instruments Inc. is a worldwide leader in metrology and process equipment tools for the data storage, semiconductor, scientific research and telecom/wireless markets. Manufacturing and engineering facilities are located in New York, California, Colorado, Arizona and Minnesota. Global sales and service offices are located throughout the United States, Europe, Japan and Asia Pacific. Additional information on Veeco can be found at http://www.veeco.com. To the extent that this news release discusses expectations about market conditions or about market acceptance and future sales of Veeco's products, or otherwise makes statements about the future, such statements are forward-looking and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These factors include the cyclical nature of the telecommunications/wireless, data storage, semiconductor and research markets, risks associated with the acceptance of new products by individual customers and by the marketplace, and other factors discussed in the Business Description and Management's Discussion and Analysis sections of Veeco's Annual Report on Form 10-K and Annual Report to Shareholders.

CONTACT:
Veeco Instruments, Woodbury
Debra Wasser
516-677-0200 x1472

(Trade Contact)
Fran Brennen
516-677-0200 x1222