August Technology Lowers Third Quarter Revenue Expectations.

Business Editors & Technology Writers

MINNEAPOLIS--(BUSINESS WIRE)--Sept. 5, 2001

August Technology Corp. (Nasdaq:AUGT), today announced that third quarter revenue is anticipated to be significantly below the current year's second quarter, as a result of the continuing downturn in the microelectronics industries. The Company anticipates third quarter revenue will be approximately 55 to 65 percent below the Company's second quarter revenue.

"Despite our strong performance during the first half of this year, the downturn is clearly impacting our business," said Jeff O'Dell, chief executive officer of August Technology. "We have recently seen another wave of capital spending cuts roll through the industry which have affected nearly all companies."

While existing August Technology product lines are being affected by the downturn, the Company remains optimistic about its newest product offerings, specifically the newly released 3Di-8000 high-speed wafer bump inspection system. The 3Di-8000 combines August Technology's industry-leading 2D inspection technology with revolutionary 3D capabilities for wafer bump and other emerging microelectronics applications. The Company expects to begin shipping the 3Di-8000 in the current quarter, and recognizing associated revenue in the fourth quarter of this year.

"With the industry in search of increased cost-savings and yield-enhancements, we believe our automated defect inspection solutions will continue to provide our customers with the information they need to further streamline their processes," O'Dell said. "Consequently, we continue to forecast positive revenue growth from 2000 to 2001." O'Dell continued, "In spite of the ongoing industry challenges, we are excited by recent competitive wins and our ability to effectively and quickly reduce expenses while continuing to invest and position the company for the next industry upturn."

The Company acknowledges that expected results are preliminary, based on the best information currently available and subject to the closing of its books and customary quarter-end accounting procedures. The Company will provide further information when it reports third quarter results during a conference call and live webcast on October 17, 2001 beginning at 3:30 CDT.

Forward-Looking Statements: This release contains forward-looking statements including our statements regarding third quarter revenue and growth in revenues for 2001. These forward-looking statements involve risks and uncertainties, which may cause actual results to differ from those set forth in the forward-looking statements. For example, our expectations regarding the third quarter are subject to the risk that unanticipated accounting or record-keeping issues adversely affect the final results for the quarter, and our expectations regarding revenue for 2001 are subject to the risk that fourth quarter revenue falls short of current expectations. Please refer to additional risk factors stated in August Technology's Form 10-K filed with the Securities and Exchange Commission. August Technology does not assume any obligation to update the forward-looking information contained in this press release.

August Technology Corporation, based in suburban Minneapolis, Minnesota, is a leading supplier of automated visual inspection equipment for the microelectronics industries with established service and sales representation in all major manufacturing markets worldwide. The inspection solutions designed, manufactured and marketed by August Technology, provide manufacturers of microelectronic devices with cost-saving quality and process information. Additional information can be found by visiting August Technology's web site at www.augusttech.com.