Applied Materials Prepares Semiconductor Industry for Nano-Chip Revolution; Pioneering Efforts Bring First Process Module System to Advance Chipmaking.

Business Editors/High-Tech Writers

SAN FRANCISCO--(BUSINESS WIRE)--July 16, 2001

SEMICON West-- Applied Materials, Inc., (Nasdaq:AMAT), the largest supplier of equipment and services to the global semiconductor industry, today highlighted its plans to help enable the future of semiconductor devices built on a nanometric scale. By extending its product line to sub-100-nanometer device generations, the Company is enabling the development of so-called "nano-chips" that employ nanometer (a nanometer is one billionth of a meter) dimension feature sizes.

Additionally, Applied Materials plans to ship its first fully integrated Process Module(TM) systems -- several individual systems that work together as a single unit to improve output of chips -- by the end of the calendar year.

Today, semiconductor manufacturers are primarily using 0.18 micron (180-nanometer) designs and are rapidly transitioning to 0.13 micron (130-nanometer) designs, to allow for more functions on a chip. As a result of the nano-chip revolution, more powerful, portable and affordable electronics products will be brought to market and consumers may soon see the merging of television, DVDs, games, cell phones and computers into single products. In the not-so-distant future, chips will become capable of storing billions of units of information in the size of a dime or smaller. Access to products once squarely in the realm of science fiction such as wearable watch-sized video communicators and PC's, real-time automatic speech translation, and other innovations, becomes possible as chip power and affordability reach new levels.

"Applied Materials success is testimony to its long history of introducing solutions which leap-frog current products in the marketplace, applying the lessons of continuous improvement, and again commercializing the most advanced technology for our customers," said James C. Morgan, chairman and chief executive officer of Applied Materials. "Our equipment that enables nanometer technology and Process Modules is clearly leap-frog technology that will significantly advance the future of chipmaking."

"As the time between device generations shortens and the challenges continue to mount, we believe that Applied Materials' broad experience in multiple processes, and our considerable resources and worldwide support capabilities offer the most value and least risk to our customers as the industry transitions to more complex chip manufacturing requirements," Morgan added. "These capabilities will be a major differentiator for Applied Materials moving forward."

Leading the Three Waves -- And a fourth new wave

The key to the industry's continued progression down the path of Moore's Law is the current convergence of three waves of technology: device shrinks, copper and low k materials and 300mm wafers. These trends are the foundation upon which nano-chips will become possible. A fourth wave, the application of Process Modules, is a new paradigm shift for the semiconductor industry to meet the challenges of this technical progression. Applied Materials' equipment addressing these requirements will be integrated into Process Modules for higher performance, as well as faster time to market and process qualification.

Process Module Systems -- Applied Materials' Advantage

"In the 80's, Applied Materials revolutionized the semiconductor industry with our single wafer, multi-chamber wafer processing approach. We plan to ship our first complete Process Module systems, such as a copper wiring Process Module, by the end of the calendar year in what could prove to be as equally strong a paradigm shift in the industry," stated Dan Maydan, president of Applied Materials. "This fourth wave of Process Module products will fully integrate several processing systems to work in essence as a single unit. These intelligent systems take advantage of the advanced chips they enable to synchronize multiple pieces of equipment and processes to control, continuously monitor and communicate with one another."

Applied Materials' individual systems and pioneering Process Module systems provide the building blocks for producing an entire structure on a chip, enabling this technology to optimize performance and yields by combining several of the steps used in the semiconductor making process. This technology will help customers bring products to market faster. Applied Materials will offer modules for copper wiring, deposition and etch and gate stack/patterning.

"Ultimately this will allow customers to pre-qualify selected process flows, thereby achieving guaranteed levels of performance and improving upon stand alone capabilities, while increasing their time to market and the efficiency of their processing lines," Maydan continued.

Information for Everyone

"Applied Materials believes its purpose is to help provide Information for Everyone(TM). By helping to create virtually every new microchip in the world our employees are important members of the global team that has already driven electronics into realms once only imagined. We are helping to increase the power, extend the reach and lower the cost of chips to the world's consumers. At this challenging yet opportunity-rich time for our industry, it is important to reflect upon the true potential ahead," Morgan concluded.

Applied Materials (Nasdaq:AMAT), the largest supplier of products and services to the global semiconductor industry, is one of the world's leading information infrastructure providers. Applied Materials enables Information for Everyone(TM) by helping semiconductor manufacturers produce more powerful, portable and affordable chips. Applied Materials' Web site is www.appliedmaterials.com.