Veeco Wins Orders for AFM Metrology Solutions from Key Worldwide Semiconductor Customers; Will Feature``Fab-Wide'' AFM Technology at SEMICON West.

WOODBURY, N.Y. -- Veeco Instruments Inc. (Nasdaq:VECO) announced today that it received several multiple unit orders for its next-generation atomic force microscopes (AFMs) from key worldwide semiconductor customers in its recently completed second quarter. Veeco received multiple orders for each of its Dimension family of products: the X3D, X and Vx 340 for in-line production applications as well as in customers' advanced technology development labs.

Don Kania, Ph.D., President of Veeco, commented, "Veeco's AFMs have won acceptance and are considered a 'must have' tool in semiconductor fabs. The top 10 semiconductor device manufacturers, and many others, are using Veeco's AFMs in their production fabs for etch, chemical mechanical planarization (CMP) and photomask metrology and in their advanced technology development centers. With our years of experience and large installed base of over 200 automated systems, Veeco is uniquely positioned to deliver a broad range of 1D and 3D metrology for features as small as those required for the 45nm technology node."

Veeco also announced that it will feature its "Fab-Wide" AFM Metrology Solutions at the SEMICON West 2004 Exhibition July 12-14 in San Francisco's Moscone Center. Semiconductor customers should visit Veeco's booth #402 South Hall to learn more about how AFMs are being used to solve today's critical in-line production challenges and advance customers' research and development programs below 90nm. Veeco is also hosting a Customer Seminar featuring its AFM solutions in conjunction with SEMICON West on Monday, July 12th: "Defining New Dimensions: Metrology at 65nm and Beyond." Visit www.veeco.com/seminar for registration information.

Veeco's 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 the lowest noise AFM capability, industry-leading repeatability and accuracy, and exclusive probe technology which are critical to future development nodes. Veeco's top-selling, automated, production AFMs include:

--The Dimension X: The Dimension X is designed specifically to address the semiconductor industry's need for higher-resolution etch depth metrology. It enables chipmakers to measure etch related structures that are 90nm and below for depth uniformity control in high production environments. The gauge-capable system give users the ability to take repeatable, in-line measurements of shallow trench isolation (STI) and gate structures, as well as contacts and vias in high aspect ratio depth metrology without damaging the device or sacrificing a wafer for cross-sectioned measurements. The Dimension's proven 300mm automation platform has been adopted by fabs worldwide for its reliability, improved throughput, unparalleled accuracy and low cost of ownership.

--The Dimension X3D: the first nondestructive, gauge-capable, automated metrology system to deliver three-dimensional (X, Y, and Z) in-line characterization of critical dimension (CD) feature shape control for 65nm and 45nm advanced process development. This system is targeted at critical level control for leading-edge device manufacturing. 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. In addition, the X3D can scan on any material; even new photoresists and dielectric materials under development by fabs worldwide. Our AFM technology enables unmatched resolution and repeatability.

--The Dimension Vx 340: The Dimension Vx340 Atomic Force Profiler (AFP) is a powerful new automated metrology system for characterization and control of CMP processes. It enables non-destructive accurate metrology for dishing, erosion, low k, copper and STI CMP-related effects on devices with features as small as 65nm. It also enables depth measurements of other CMP-related structures such as via etch, dual damascene and plug recess. With unparalleled low noise, resolution and capability, the dimension Vx340 allows users to accurately characterize CMP process and ultimately improve overall yields. It provides the highest throughput and repeatability currently available in the industry.

About Veeco

Veeco Instruments Inc. provides solutions for nanoscale applications in the worldwide, data storage, compound semiconductor/wireless, semiconductor 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, 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 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.