Applied Materials Completing Plans for Equipment Industry's First Process Development Pilot Line; Pilot Line for Technology Development and Demonstration will Include ASM Lithography Deep UV Stepper.

SANTA CLARA, Calif.--(BUSINESS WIRE)--Aug. 20, 1997--Applied Materials, Inc. (NASDAQ:AMAT) is completing plans for the semiconductor equipment industry's first equipment development pilot line at its headquarters in Santa Clara, California. This new facility will enhance the company's engineering and technology activities to a new level by enabling integrated development, test and demonstration capabilities for its extensive process technologies.

The pilot line project is part of an ambitious $430 million investment in the company's Santa Clara facilities to support system and process development for both 200mm and 300mm wafer sizes.

"The semiconductor industry is experiencing a convergence of several trends, all of which offer Applied Materials an opportunity to add more value to our systems," said Dr. Dan Maydan, president of Applied Materials. "As the industry moves to more advanced 200mm technologies and 300mm manufacturing, chipmakers have a pressing need for more efficient, cost-effective systems. By strengthening our technology development infrastructure -- beginning with this new pilot line -- Applied Materials will be in a unique position to provide our customers with a total solutions approach to their processing needs."

The pilot line will have a full range of process technologies, including lithography and wet processing, that will enable Applied Materials to perform complete wafer processing cycles similar to those used in its customers' semiconductor fabs. For its lithography needs, Applied Materials has selected an ASM Lithography (ASML) deep UV stepper, which will be delivered by the end of 1997. The ASML system will be configured initially for 200mm wafers, and is designed to be upgraded for 300mm process development. The pilot line will also include a metrology laboratory with a full range of material and electrical testing tools for measuring process and device performance.

"Since lithography processing is performed before and after many of our process technologies, having this system in our development facility will help us rapidly characterize the performance of our systems for customers' specific devices. ASML will also be able to gain experience with pre- and post-lithography processing, including CVD, PVD, Etch and CMP, to help in future lithography equipment development," noted Dr. Sass Somekh, senior vice president at Applied Materials.

"Our goal is to fully integrate and optimize Applied Materials' process technologies for higher overall fab productivity. The pilot line will allow us to replicate customer device structures at our site, thus speeding up process development cycle time, as well as customer equipment evaluation and qualification. We will also be able to move ahead more rapidly on providing integrated multi-system modules to help our customers reduce factory startup time. Applied Materials already has integrated modules for the interconnect structure, as well as shallow trench isolation, capacitor formation, and other device structures," Somekh continued.

Applied Materials, Inc. is a Fortune 500 global growth company and the world's largest supplier of wafer fabrication systems and services to the global semiconductor industry. Applied Materials is traded on the Nasdaq National Market System under the symbol, "AMAT." Applied Materials' web site is http://www.AppliedMaterials.com .

CONTACT: Applied Materials Inc.

Betty Newboe (editorial/media), 408/563-0647

Carolyn Schwartz (financial community), 408/748-5227