Advanced Power Technology Announces Further Cost Reduction Actions.

Business Editors, Technology Writers

BEND, Ore.--(BUSINESS WIRE)--Sept. 7, 2001

Advanced Power Technology, Inc. (Nasdaq:APTI) today announced it is implementing further cost reduction actions in light of continued weak market conditions in the worldwide communications and semiconductor capital equipment markets which collectively accounted for approximately 58 percent of the company's revenue in the first half of 2001.

These actions are in addition to the cost reductions implemented in July that included graduated pay reductions, reductions in discretionary spending and intermittent production shutdowns.

Patrick Sireta, Chairman and Chief Executive Officer said, "Since our July 19, 2001 earnings announcement, figures released by the Semiconductor Industry Association for June and July have shown a continued steep reduction in worldwide semiconductor sales and several of our key customers in the communications and the semiconductor capital equipment markets have reduced their near-term outlook.

"As a result, today the company is reducing its workforce by about 10% of total headcount, or 22 full-time employees. This action will reduce the company's total headcount to approximately 202 employees worldwide. The reduction in force action impacts manufacturing and administrative personnel. In addition, the company is increasing the level of salary reduction to 1.5% per $10,000 of annual salary and plans to enact additional production shutdowns in the fourth quarter. As a result of these actions, the company expects a savings of about 20% of its payroll expenses on an annualized basis from the first half of 2001 run rate.

"Our balance sheet is strong and we are committed to sustaining our investments in R&D programs and new product introductions. As market conditions improve and recent design wins move into production, Advanced Power Technology will be well positioned," concluded Mr. Sireta.

Business Outlook

The following statements are based on current expectations. These statements are forward-looking, subject to risks and uncertainties, and actual results may differ materially. These statements do not include the potential impact of any investments outside the ordinary course of business, or mergers or acquisitions that may be completed after September 7, 2001. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The inclusion of any statement in this release does not constitute a suggestion by the company or any other person that the events or circumstances described in such statements are material. The company does not undertake to publicly update or revise these forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied in this release will not be realized.

Based upon the company's July and August revenue levels and an ordering pattern from many customers that remains extremely fluid and unpredictable, management believes that meeting the low end of the $8.2M to $9.0M revenue guidance previously given for the third quarter ending September 30, 2001 remains possible but will be challenging.

Also, as a result of the continued decline through July of the worldwide semiconductor market and of the historical lag between the company's sales and the worldwide semiconductor sales, in upturns and downturns, management now believes that revenues in the fourth quarter of 2001 will decline sequentially from the third quarter. There is currently not enough visibility to provide specific revenue guidance for the fourth quarter.

About Advanced Power Technology

Advanced Power Technology is a leading supplier of high performance power semiconductors used in the conditioning and control of electrical power. The Company's products are used in communications and Internet infrastructure equipment, semiconductor capital equipment, as well as medical, industrial, and military and aerospace systems. Important information about Advanced Power Technology, Inc., including press releases and SEC filings, are available at no charge through the Company's Web site at www.advancedpower.com.

Safe Harbor Statement

Except for historical information contained herein, the matters discussed in this news release are forward-looking statements made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. APT cautions that such statements are subject to a number of uncertainties, and actual results may differ materially. Factors that could affect the company's actual results include the ability of subcontractors to meet their delivery commitments; unfavorable changes in industry and competitive conditions; the Company's mix of product shipments; the accuracy of customers forecasts; the effectiveness of the Company's efforts to control and reduce costs; and other uncertainties disclosed in the Company's S-1 filing with the Securities and Exchange Commission dated August 7, 2000, Annual Report on Form 10K filed on March 21, 2001 and other periodic filings made by the Company. The Company assumes no obligation to update the information in this release.