New Fraunhofer Nanotechnology Center Purchases Veeco Automated Atomic Force Microscope.

WOODBURY, N.Y. -- Veeco Instruments Inc. (Nasdaq: VECO), a world leader in atomic force microscopy (AFM) technology, announced today that The Fraunhofer Center for Nanoelectronic Technology (CNT) in Dresden, Germany has purchased a Dimension X3D automated atomic force microscope (AFM). CNT plans to use the tool for critical dimension metrology for 70nm and below R&D applications.

The CNT is a private-public partnership between Fraunhofer-Gesellschaft and the industrial partners Infineon Technologies AG and Advanced Micro Devices (AMD), and has clean-room facilities adjacent to Infineon. The CNT's objective is to become a key semiconductor and nanoelectronics research center, thereby accelerating the introduction of new semiconductor technologies from R&D to production. Information on the CNT is available at www.fraunhofer.de/fhg/EN/press/pi/2004/11/Mediendienst112004Thema7.jsp Funding for the CNT is provided by the German Ministry of Education and Research and the free state of Saxony.

According to Paul Clayton, Vice President, Business Unit Manager of Veeco's Automated AFM Business, "We are pleased that the CNT has chosen our X3D for their new development center, which is meant to be a research facility that can develop next generation processes in a 'real-world' production environment. The X3D's unique ability to non-destructively measure important CD elements makes it an important tool for the CNT's lab-to-fab efforts. AFM metrology continues to increase in significance as the leading fabs worldwide move to linewidths below 90nm."

The Dimension X3D AFM is the first nondestructive, gauge-capable, automated metrology system targeted to deliver three-dimensional (X, Y, and Z), in-line critical dimension (CD) metrology for 65nm and 45nm advanced process development. The X3D gathers detailed data on crucial CD elements encountered in lithography and advanced etch processing including gate, STI, dual-damascene structures, sidewalls and line-edge variation and now pole shape in data storage. In addition, the X3D can scan on all materials currently utilized in the semiconductor and data storage industries, including new photoresists and Low-k dielectric materials under development by fabs worldwide.

In addition to an unmatched combination of resolution and precision, Veeco's AFM product line now features ease-of-use software that incorporates standardized, multi-application analysis as well as the capability to perform sophisticated and detailed evaluations. This enables an acceleration from yield and process development to complete in-line production within a fab. All systems combine low noise AFM capability, industry-leading repeatability and accuracy, and exclusive probe technology which are critical to future development nodes. Veeco has over 300 automated AFMs installed in fabs worldwide.

About Veeco

Veeco Instruments Inc. provides solutions for nanoscale applications in the worldwide semiconductor, data storage, HB-LED/wireless and scientific research markets. Our Metrology products are used to measure at the nanoscale and our Process Equipment tools help create nanoscale devices. Veeco's manufacturing and engineering facilities are located in New York, New Jersey, California, Colorado, Arizona and Minnesota. Global sales and service offices are located throughout the United States, Europe, Japan and Asia Pacific. Additional information on Veeco can be found at http://www.veeco.com/.

To the extent that this news release discusses expectations about market condition, market acceptance and future sales of Veeco's products, Veeco's future financial performance, future disclosures, or otherwise makes statements about the future, such statements are forward-looking and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These factors include the challenges of continuing weakness in end market conditions and the cyclical nature of the compound semiconductor/wireless, data storage, semiconductor and research markets, risks associated with integrating acquired businesses and the acceptance of new products by individual customers and by the marketplace and other factors discussed in the Business Description and Management's Discussion and Analysis sections of Veeco's Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and current reports on Form 8-K.