Applied Materials Signs $80 Million Total Parts Management Agreement With TSMC.

Business Editors/High-Tech Writers

HSIN CHU, Taiwan--(BUSINESS WIRE)--July 16, 2001

TSMC Expands Use of Applied Materials' Total Parts Management(TM)

Program to Cut Manufacturing Costs

Applied Materials, Inc. (Nasdaq:AMAT) has entered into an $80 million agreement with Taiwan Semiconductor Manufacturing Company Ltd. (TSMC), the world's largest dedicated semiconductor foundry, to manage the spare parts inventory for TSMC's large installed base of Applied Materials systems.

TSMC is extending its use of Applied Materials' Total Parts Management(TM) (TPM) program throughout TSMC fabs because of the program's proven ability to achieve significant cost reductions in spare parts ownership and administration, as well as increased inventory efficiency for Applied Materials' systems.

Quincy Lin, senior vice president of corporate development for TSMC, said, "The first year's TPM program has provided on-going cost reductions by reducing our parts inventory while simultaneously improving cash flow by lowering administrative and transportation costs. Applied Materials' TPM program demonstrates its commitment to delivering innovation, value and customer satisfaction in a way that increases our profitability."

Total Parts Management is Applied Materials' complete spare parts inventory management solution that offers customers the option of having Applied Materials completely own and manage spare parts (consumables and non-consumables) for Applied Materials equipment used in a fab. Using TPM, customers typically can significantly reduce administrative and stocking costs and pay only for parts used.

"We are extremely pleased to receive this large-scale TPM agreement from TSMC," said David Fried, corporate vice president and general manager of Applied Materials' Customer Productivity Support group. "The TPM program is one of the many service and product innovations we are offering to help TSMC maintain its leadership in the foundry business, where manufacturing excellence and technical capability are the keys to long-term success."

TSMC is the world's largest dedicated semiconductor foundry, providing the industry's leading process technology, library and IP options and other leading-edge foundry services. TSMC operates two six-inch wafer fabs and six eight-inch wafer fabs. The Company also has substantial capacity commitments at two joint ventures fabs (Vanguard and SSMC) and WaferTech. TSMC's corporate headquarters is in Hsin-Chu, Taiwan. More information about TSMC is available through the World Wide Web at http://www.tsmc.com.

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.