Applied Materials Selected by Microchip Technology to Provide Comprehensive Service Support.

Business Editors/High-Tech Writers

SANTA CLARA, Calif.--(BUSINESS WIRE)--Dec. 9, 2002

Total Support Package(TM) Agreement Implemented to

Increase Equipment Productivity

Applied Materials, Inc. today announced a multi-year Total Support Package(TM) (TSP(TM)) contract with Microchip Technology Inc. to maximize the availability and performance of its Applied Materials systems. The TSP service program provides customers complete on-site maintenance support for Applied Materials equipment. Microchip, a manufacturer of microcontroller chips for embedded applications is implementing the TSP program in its Fab-2 facility located in Tempe, Arizona.

Michael Finley, vice president of Operations for Microchip, said, "As we focus on increasing production levels, we need to optimize the productivity of our systems. Based on an evaluation in which a system with TSP coverage achieved significantly higher availability, we're confident this program will enable us to improve system utilization and overall equipment efficiency. The TSP service further allows us to simplify our maintenance operations and realign resources by outsourcing these key service and support functions."

The new TSP agreement with Microchip covers 20 process tools and includes etch, ion implantation, chemical mechanical planarization (CMP), and physical and chemical vapor deposition (PVD and CVD) systems. Under a TSP agreement, Applied Materials takes full ownership of all service maintenance and spare parts covering consumables and non-consumables to optimize the production capability of Applied Materials systems in a fab. The program eliminates the need for customers to invest in and manage service-related parts inventories for these systems.

"We are pleased to be working with Microchip to deploy our TSP program and deliver customer value through world-class service support," noted David Fried, corporate vice president of Applied Materials' Customer Productivity Support Business Group. "Customers want to focus on their core competencies of chip design and technology, and by providing complete support and skilled resources in the fab, we contribute to the achievement of this objective."

The TSP product is one of Applied Materials' innovative service support programs that has transformed the way equipment is supported in a customer's fab. With the TSP service, Applied Materials delivers optimized system availability and provides the flexibility to link service costs to production volume. Since its introduction in July 1999, the TSP program has been implemented by more than 19 customers at over 25 locations in multiple regions.

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 http://www.appliedmaterials.com.