Veeco Supplies MBE System to IQE, Motorola Epi Wafer Supplier For GaAs on Silicon Application.

Business & Technology Editors

WOODBURY, N.Y.--(BUSINESS WIRE)--Oct. 26, 2001

Veeco Instruments Inc. (NASDAQ:VECO) announced today that IQE of Bethlehem, PA is using its Applied Epi molecular beam epitaxy (MBE) system in conjunction with Motorola's breakthrough gallium arsenide (GaAs) deposition on silicon wafers.

IQE, the leading merchant epiwafer supplier for the compound semiconductor industry, and one of Motorola's key suppliers of epiwafers, recently took shipment of an Applied Epi dual chamber GEN2000 production system. Applied Epi was acquired by Veeco in September.

Motorola's technology allows very thin, high purity layers of III-V semiconductor materials to be grown on a silicon substrate using an intermediate conforming layer. This integration of high-speed compound semiconductor films deposited on low-cost, production-proven, silicon wafers has the potential to reduce opto-electronic and RF device costs tenfold. Until now, there has been no way to combine costly, light-emitting compound semiconductors with silicon integrated circuits on a single wafer, providing high-speed, reduced size, low cost communication devices for broadband optical and wireless applications.

According to Edward H. Braun, Chairman, President and Chief Executive Officer of Veeco Instruments, "We are pleased that IQE has chosen our MBE systems for their work with Motorola. As the leading MBE equipment company, Applied Epi is well positioned to support the commercialization of these revolutionary devices."

Thomas Hierl, Chief Technical Officer of IQE, commented, "The GEN2000 is the first production system to integrate MBE and ultra-high vacuum technologies with silicon-style cluster tool architecture, and now dual reactors. We believe the Dual GEN2000 MBE system best supports the growth and throughput requirements of this new application."

Applied Epi is an innovator in molecular beam epitaxy (MBE), a critical enabling technology for growing compound semiconductors. Applied Epi manufactures MBE components, MBE research systems, and MBE production systems, including its industry-exclusive silicon style GEN2000 and GEN200 systems, at its 75,000-sq. ft. facilities in St. Paul, Minnesota. The silicon-style GEN2000 is the only qualified 7x6" MBE system in the world today. Its unique cluster tool architecture enables a dual chamber configuration, which gives manufacturers the ability to greatly increase throughput, or grow different materials in connected chambers.

Veeco Instruments Inc. is a worldwide leader in process equipment and metrology tools for the optical telecommunications/wireless, data storage, semiconductor and research markets. Manufacturing and engineering facilities are located in New York, 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.

IQE plc (LSE: IQE.L, NASDAQ EUROPE: IQEP) is the leading global outsource supplier of advanced epi-wafers to the Semiconductor Industry with manufacturing operations in Cardiff and Milton Keynes, UK and Bethlehem, PA, USA. Its wafer products are used by a diverse range of customers worldwide to manufacture the critical, advanced components used in fiber optic communications systems, wireless and mobile telephony applications, optical storage devices such as CD, DVD, Minidisc and a range of other leading edge technologies including High Brightness LED displays, medical devices, satellite systems and automotive applications. The group has expanded to over 450 people worldwide.

To the extent that this news release discusses expectations about market conditions or about market acceptance and future sales of Veeco's products, 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 cyclical nature of the optical telecommunication/wireless, data storage, semiconductor and research markets, risks associated with 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 Report on Form 10-K and Annual Report to Shareholders.