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VEECO INSTRUMENTS VEECO INSTRUMENTS OVERVIEWOVERVIEW

APRIL 2005APRIL 2005

2APRIL 2005 ROADSHOW

VEECO PROVIDES ENABLING TECHNOLOGY VEECO PROVIDES ENABLING TECHNOLOGY FOR MULTIPLE GROWTH MARKETSFOR MULTIPLE GROWTH MARKETS

120 and 160 GB; 1” Drives for CE 90 and 65nm; 300mm HB-LEDs, WiFi, Nanotech & Life ScienceCamera Cell Phones, LCD TV

Data Storage Semiconductor LED/WirelesData Storage Semiconductor LED/Wireless s Scientific ResearchScientific Research


ENABLING SOLUTIONS ADDRESS COMMON CHALLENGES ACROSS MULTIPLE END-MARKETS

Process Equipment

• Ion Beam Etch & Deposition

• Physical Vapor Deposition

• Molecular Beam Epitaxy

• Metal Organic CVD

• Diamond-Like Carbon

• Lapping, Dicing & Slicing

Metrology

• Automated Atomic Force Microscopes

• Research AFMs and SPMs

• Stylus Profilers/Optical Interferometers

Enabling SolutionsCore technologies, capable of R&D and manufacturing, key to multi-year technology road maps

Data Storage

Semiconductor LED/Wireless

Scientific Research

• Technology solutions for R&D and production challenges

• Smaller geometries• New/ difficult

materials• Higher performance• Lower costs


VEECO LEVERAGES CORE TECHNOLOGIES IN GROWTH MARKETS

ADD MATERIAL (DEPOSITION)

REMOVE MATERIAL

IMAGE, MEASURE & MONITOR

MARKETS WE SERVE...

Multiple markets provide stable growth …Broader opportunities

than silicon semiconductor

2004 REVENUE ($390M;UP 40%)

WE PROVIDE “KEY TECHNOLOGIES” FOR DEVELOPMENT AND MANUFACTURING

% of Veeco Revenue

• Ion Beam Deposition (IBD)• Physical Vapor Deposition (PVD)• Molecular Beam Epitaxy (MBE)• Diamond-Like Coating (DLC)• Metal Organic CVD (MOCVD)

• Ion Beam Etch (IBE)• Reactive Ion Beam Etch (RIBE)• Precision Lapping/Slicing

• Atomic Force Microscopy (AFM)

• Scanning Probe Microscopy (SPM)

• Stylus Profilers

• Optical Profilers

• Interferometers

• Quasi-static Magnetic Measurements

Semiconductor

Data StorageWireless

25%25%

32%32%

14%14%

29%29%

Scientific Research


VEECO INVESTMENT THEMES

• We are a leading supplier of enabling technology (used in R&D and production) for converging data storage, semiconductor/compound semi and HB-LED, color display growth opportunities

• In the post PC era…microdrives, HB-LEDs, color displays, and wireless technology will enable a wave of new high volume, digital consumer electronics for mass markets

• A diverse market and product mix allows Veeco a broader customerbase than most other semi equipment companies

• Nanotechnology, smaller form factors, higher density and new materials will drive extensions of:• Moore’s Law 20nm feature size• Areal Density 1 Tb/in²• Large high resolution, high brightness color displays• Breakthrough “new class” of pharma/drug delivery/molecular

measurement for life science applications


SERVING INDUSTRY LEADERS IN MULTIPLE MARKETS

MARKETS PRODUCTS CUSTOMERS

Data Storage

#1 Equipment Supplier for TFMHs;

Etch, Deposition, Lapping, Slicing, Dicing and

Metrology

LED/WirelessOnly Broad line Equipment and

Metrology Supplier

MBE, MOCVD (Epitaxial Deposition) and Metrology

Semiconductor

#1 3D AFM Metrology

Automated Atomic Force Microscopy and Optical

Profilers

Scientific Research

#1 AFMs, SPMs and Optical Profilers

Breadth of research solutions

http://www.sharpusa.com/SharpHome/0,1959,,00.html

http://www.toshiba.com/tai-new/index.jsp


VEECO MULTI-MARKET GROWTH OPPORTUNITY

Data Storage Microdrive growth to enable new wireless consumer products (iPod, MP3 players, camera/cell phones). Development of next generation 160/200 GB drives and advanced development of perpendicular heads for 2006/2007. Industry to add capacity to double HDD unit manufacturing in 3 years

Semiconductor Complete deployment of 90/65nm, 300mm (8-10 AFMs per fab)

Wireless New application opportunity for Blue/White LED’s for backlighting of color displays, handheld camera/ cell phone, large area color displays, PDA, Wi Max, automotive, and solid state lighting

Scientific Research Continued strength of research AFMs/SPMs, characterization of new materials. Nanoscience emerges (life sciences, material sciences, genomics)

The content of Veeco’s enabling technologies increases in new consumer and nanotech applications


THE NEXT BIG GROWTH OPPORTUNITY…beyond the PC

A $150B DIGITAL CONSUMER

ELECTRONICS MARKET BY 2007

$150B

$ 60B

Consumer Electronics

Chip, LED, color display storage content (40%)

Capital Equipment required$10B


DRAMATIC CONSUMER PRODUCT GROWTH (CG’02-’08)

Flat Panel Display Backlighting

HB-LED Headlights

Home Media Server

Enabled by the convergence of

semiconductor chips, wireless chips,

microdrives, high resolution color

displays, and high brightness LEDs

HDD for DVR/DVT

HDD for GPS; Auto Nav.

HDD for Digital Cameras, Audio/

Video Player

+35.9% CAGR

+61.4% CAGR

+33.6% CAGR

+145.7% CAGR

+159.2% CAGR

+71.2% CAGR

Sources: IDC, 2004; Strategies Unlimited 2004

Wireless Mobile Consumer Products


VEECO INVESTMENT THEMES

• Double digit consumer product growth, with high chip, LED, display and embedded data storage content will drive “data storage equipment capex” growth in 2005 and Epitaxial capex growth in 2006/2007

• Mass market, high volume, easy to use, low cost consumer electronics will broaden Veeco’s current customer base

• Veeco well positioned to benefit from growth in “converged” datastorage, semiconductor, HB-LED display opportunities…based on Veeco’s core technologies


INFORMATION TECHNOLOGY EVOLVES BEYOND THE “SCALING” OF SILICON

CMOS Scaling

70s 80s 90s 00s 10s

Perf

orm

ance Novel Materials

Novel ArchitecturesNew DevicesNanotech • 3D Wafer Stacking

• Optoelectronics • RF/Microwave• Spintronics• CS on Silicon

• Lithography

• Copper Interconnects• Silicon-on-Insulator• Low k dielectric• Silicon-Germanium (SiGe)• Strained Silicon• High k dielectric

Courtesy of Albany Nanotech, University of Albany

CMOS Scaling

70s 80s 90s 00s 10s

Perf

orm

ance Novel Materials

Novel ArchitecturesNew DevicesNanotech • 3D Wafer Stacking

• Optoelectronics • RF/Microwave• Spintronics• CS on Silicon

• Lithography

• Copper Interconnects• Silicon-on-Insulator• Low k dielectric• Silicon-Germanium (SiGe)• Strained Silicon• High k dielectric

Courtesy of Albany Nanotech, University of Albany

Veeco CompetenceEquipment & Metrology

AFM MetrologyAFM Metrology

EUV Masks

CS and Novel Material Processing

ION BEAM DEPOSITION

The Opportunity

http://images.google.com/imgres?imgurl=http://www.xenocs.com/upload/EUVmaskblank.jpg&imgrefurl=http://www.xenocs.com/fich_products.php%3FId%3D4&h=160&w=157&sz=16&tbnid=3p4zben0QtkJ:&tbnh=91&tbnw=90&start=1&prev=/images%3Fq%3DEUV%2BMask%2BBlank%26hl%3Den%26lr%3D%26sa%3DN


YOUR NEXT COMPUTER….Losing the wires is only the beginning

There are 1.5 billion mobile phones in the

world today. They browse the Web, take pictures,

send email, watch movies and play games. Soon

they could make your PC obsolete.


HIGH GROWTH OF EASY TO USE, LOW PRICED CONSUMER ELECTRONICS

Apple iPod

Palm One sold 300,000 camera equipped Smart

Phones in 3 months

Nokia WiFi-equipped Communicator Cell Phone targets traveling executives

Apple sold 10 million units(sold 5M at Christmas)

iPod, MP3, smart cell phones, will converge

Palm One Camera-Equipped Smart Phone

Nokia WifiCommunicator

Source: Electronic Business

MARKET TRENDS

DATA STORAGE


DATA STORAGE…growth continues, orders up 26% in Q1 following a 91% increase in Q4 orders

• Record orders of $45M included Veeco Ion Beam, Slider, Optical Metrology and Auto AFM buys…Multi-million $ orders from all 5 leading hard drive manufacturers

• First Data Storage production X3D Auto AFM ordered in Q1

• Drive manufacturers are reporting 90% utilization rates in wafer manufacturing and nearly 100% utilization rates in slider back end factories…many have announced planned capex spending increases for 2005

• Digital consumer electronics will drive growth in the HDD industry over the next several years… CE forecasted to grow 39%/year through 2008… Sub 1.8” drives to penetrate

– set top boxes (DVR/DTV) – digital cameras/cell phones– information appliances – “pocket” drives– automotive GPS


DATA STORAGE…growth continues, orders up 26% in Q1 following a 91% increase in Q4 orders

• Current buys reflect increased capacity and investment in technology for development of perpendicular heads for next generation areal density requirements

• Overall industry drive revenue forecasted to grow 20% in 2005.

• Heads per drive are increasing with 2005 forecasted growth (up 20%) to 900 million heads from 740 million in 2004

• Increased industry capacity will impact Veeco’s Q2 order rate…expect continued order strength…backlog extends to Q3


CONSUMER APPLICATIONS ENABLE EXPONENTIAL GROWTH

0200400600800

1000120014001600

1956

1966

1976

1986

1996

2006

PC era

3.5” 2.5”

3rd era 20

16

Mainframe era

24”, 14”

1st era Minicomputer era

8”, 5.25”

2nd era

2004

Consumer era

2.5” 1.8” 1”3.5”

DVD/HDD recorder since 2002

MP3 HDD since 2001

4th era

Source : Hitachi GST Estimate

M U

nits

–A

nnua

l HD

D S

hipm

ents


DATA STORAGE HOME OF THE (NEAR) FUTURE

TiVo/DVR

Entertainment Centers/PCs

Laptop

Game (Xbox, PlayStation, etc)

Automobile GPS Navigation

MP4 Video

Mobile Phone

By 2010 each household will include 10 HDDs*

MP3 Music (i.e., iPod)

Home Applications

Mobile Applications

New Microdrive(.85 dia.)

Home Media Server

* Source: Hitachi Global Storage Technologies


DATA STORAGE …Hard Disk Drive Unit Growth

Xbox800

700

600

500

400

300

200

100

0

Consumer Electronics

Laptop PC

Desktop PC

Enterprise

Servers

Desktop

Laptop

TiVo

iPodGPS

MobilePhones

Approx30%

ofHDDsby

2006

Uni

t Driv

e Sh

ipm

ents

(mill

ions

)

1980 1985 1990 1995 2000 2005 2010 2015

http://images.google.com/imgres?imgurl=chip.ua/action/enterex2002/iPod.jpg&imgrefurl=http://chip.ua/action/enterex2002/5.html&h=181&w=200&sz=4&tbnid=tc_8P2KAhhoJ:&tbnh=89&tbnw=98&prev=/images%3Fq%3DiPod%2B%26start%3D360%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DN


DATA STORAGE HARD DRIVE GROWTHCONSUMER ELECTRONICS ADOPTION

0

100

200

300

400

500

600

CY04 CY05 CY06 CY07 CY08

HD

D U

nits

(Mill

ions

)

CE 1 out of 7

CE 1 out of 3

Growth in CE and traditional computer markets

ConsumerElectronics

Traditional (PC,Laptop, Enterprise)

CAGR(2004-2008)

39%

9%

15%Total

Source: IDC Mar2005


UNPRECEDENTED TECHNOLOGY AND FORM FACTOR CHANGES OCCURRING SIMULTANEOUSLY

1000

100

10

1

100

10

1

100

10

1

100

10

100

10

100

10

100

10

100

10

100

10

1

100

10

1

100

10

1

100

10

100

10

100

10

100

10

100

10

00 01 02 03 04 05 06 07

Are

alD

ensi

ty (G

bit/i

n2 )2 )

Perpendicular

Recording

Longitudinal Recording

CPP

GMR

TMR

Reader & Writer Development

Pico Slider

Femto Slider

Mini Micro Namo Pico Femto(100%) (70%) (50%) (30%) (20%)

1975

19871990

1995 2004?

Mini Micro Namo Pico Femto(100%) (70%) (50%) (30%) (20%)

1975

19871990

1995 2004?

Slider Shrinks

Microdrives

MicrodrivesTFMH Technology Changes Drive Capital Equipment Growth

Areal density roadmap increases (50%) per year toward CPP (perpendicular recording) capable of 1 Terabit/in² (2006)…will

require new manufacturing technology


VEECO: IN EVERY STEP OF YOUR TFMH PROCESS

WAFER PROCESSES ROWBAR/SLIDER PROCESSES HGS, FINAL ASSY AND TEST

NEW MTI

Slicing

NEW MTI

Dicing

SEMICONDUCTOR


SEMICONDUCTOR SECTOR …Q1 orders of $14.4M included multiple Auto AFM orders and record Auto AFM revenue

• Despite our expectations of an industry-wide Semi Capexsoftening…we see continued world wide acceptance of our Auto AFMin Wafer Fabs for 90nm and 70nm applications (where utilization rates remain high)

• Q1 Auto AFM orders included multiple system buys

• In general, our AFM sales will be paced by leading edge 90/70 nmdeployment in 2005

• KLA, a key competitor, has withdrawn their AFM product and beta site units have been returned


VEECO’S SEMICONDUCTOR OPPORTUNITY:SHRINKING DIMENSIONS REQUIRE 3D METROLOGY• Veeco has the broadest line of 3D

AFM non-destructive Metrology solutions

• Our goal is to be a step ahead of industry roadmap…90…65…45nm

• Top 10 semi device manufacturers have at least one AFM in line wafer fab – 300 systems installed…TAM 10 per fab

• We have launched new systems for specific applications in Etch, CMP, CD control, Photolithography

26nm lines in R&D sample

Veeco Dimension X3D and 65nm scan


LEADING ATOMIC FORCE MICROSCOPE TIP TECHNOLOGYLEADING ATOMIC FORCE MICROSCOPE TIP TECHNOLOGY

Veeco tip development roadmap addresses leading edge 45nm and

25nm applications

LED/WIRELESS


LED/WIRELESS...Q1 orders $14.0M reflects and industry downturn

• We expect a revenue decline in 2005 as mobile cell phone growth slows and Taiwan/China have excess capacity

• Industry LED device growth was 37% in ’04 to $3.5B; ’05 to be marked by ASP declines and vendor consolidation (APAC)

• Next LED growth wave…large area flat panel LCD TVs and automotive lighting expected in 2006..

• The LED market is forecasted to double from $3.5B to $7.0B in the next 5 years driven by Blue/Green/White LED penetration evolving from keypad and color display backlighting

• To large area LCD TV (Sony/Samsung/Philips announcing 20”/40” TV’s)• To automotive tail light/turn signals/interior light, eventually headlights • To specialty lighting for buildings/bridges/museums/airports high resolution signs

and eventually to general illumination in homes and offices penetrating the $12B/year world-wide lighting business (2008 to 2010 timeframe)

• Veeco to use 2005 to improve gross margin, product reliability, reduce warranty cost, introduce GaNzilla II plus, be profitable in Q4…prepare for 2006 growth


LEDS IN MOBILE PHONES…over 45 LED chips per phone~670M phones sold in 2004

Color LCD DisplayCamera Phone—Flash LED (camera phones will show rapid growth ‘04-’07)Mid-end using 11 LED, High-End using 24 LED

Sideview Whitefor color displays 1.0/0.8/0.6t600mcd ~1cdWhite Multi LEDs

for Camera flash3 White or RGB whitemore than 2cd

Multi chip indicators

Slim SMD Blue or Whitefor keypads0.35t

4 or 1 chip

3 chips

Main : 3 chip(sub-display :2)

8 ~ 12 chips

Source: Samsung SEMCO, Blue 2004


HB-LEDS…A MULTIPLE MARKET GROWTH OPPORTUNITY

Electronic Equipment

IlluminationEfficiency(lm/W)

200

120

80

40

20

Future

Sign

* Outdoor

~ 2000~ 2000 2004 ~ 20062004 ~ 20062001 ~ 20032001 ~ 2003 2007~2007~

Automotive

* Interior

* Head Lamp

Signal

Mobile

* Keypad* Backlight

* Flash

* Power Amps

* Stop lamp* LCD Monitor

* LCD TV

* Indoor

* Radar

* Wi-MAX/Mobil WirelessCommunications

* HD-DVD

Present

Source: Samsung BLUE 2004


SOLID STATE LIGHTING GROWTH OPPORTUNITYRed, Green, Blue HB-LEDs >20% CAGR

EnterpriseRed Indicator Lights

Red HB-LEDs

Blue & Green

HB-LED (GaN)

White

Backlighting

Gener

alIllu

min

atio

n

Red LED

Blue & Green HB-LEDRed HB-LEDTail Light

HB-LED Headlights

Small LCD Backlighting

Cell Phone PDA

Large LCD Backlighting

Rel

ativ

e LE

D U

nit S

hipm

ents

$12BHB-LEDMarket

Size

1960 1970 1980 1990 2000 2010 2020


COMPOUND SEMICONDUCTOR: HIGH BRIGHTNESS LIGHT EMITTING DIODES (HB-LEDS)

2002 2003 2004 2005 2006 2007

$5B

$4B

$3B

$2B

$1B

$5B

$4B

$3B

$2B

$1B

30% CAGR2002-2007

2002 2003 2004 2005 2006 2007

$5B

$4B

$3B

$2B

$1B

$5B

$4B

$3B

$2B

$1B

30% CAGR2002-2007

GaN-based HB-LEDs

Primary Growth Demand

Timeframe Application

2015-2020 General Illumination

2010-2015 Automobile Headlights

2005-2010 Large LCD Backlights

2000-2005 Mobile Phone Backlights


LED FORECAST…GaN HB LED market continues to grow (22% CAGR ’05 to ’09)

Source: Strategies Unlimited


SOLID STATE LIGHTING TO PENETRATE $12B GENERAL ILLUMINATION MARKET

•20% of Global Electricity Demand is for Lighting•Solid State Lighting (HB-LED) will Cut Consumption in Half

Satellite Composite Photo at Night

2015

Solid State Lighting

2005

Incandescent

SCIENTIFIC RESEARCH


IN SCIENTIFIC RESEARCH…orders declined 6% in Q1

• We see continued strength of our profitable optical and AFM Metrology products in Material Science/Life Science and Nanotechmaterial applications

• We will introduce new metrology products for extended applications in the second half of 2005 to grow this profitable Veeco segment


NANOTECHNOLOGY “All The World’s Industry Is In Its Path”

AFMs Image, Measure and Manipulate Nanoscale Structures

Life Science Information TechnologyNano Ruler

Magnetic Bits (HDD)160nmx40nm (100Gb/in2).

MEMS10um – 1mm

Transistor0.5um – 90nm

Quantum Dots20nm wide ea.

Silicon Atom0.2nm dia

Human Hair70um wide

Red Blood Cells3um dia

DNA Strand2nm wide

1,000,000nm

100,000nm

10,000nm

1,000nm

100nm

10nm

1nm

0.1nm

Magnetic Bits (HDD)160nmx40nm (100Gb/in2).

MEMS10um – 1mm

MEMS10um – 1mm

Transistor0.5um – 90nm

Quantum Dots20nm wide ea.


Human Hair70um wide


DNA Strand2nm wide


Human Hair70um wide


DNA Strand2nm wide

1,000,000nm

100,000nm

10,000nm

1,000nm

100nm

10nm

1nm

0.1nm


AFM APPLICATIONS ‘LAB-TO-FAB’

CMP Etch Litho Resist Litho Masks

DNA

Nano-manipulation& PicoForce

Topography Magnetics Life Science

Non-destructive(SARS virus)

Polarization Meas.(BiFeO3 spheres)

Atomic Scale Meas.(Copper seed layer)

RESEARCH & SCIENTIFIC (installed base >7000 systems)Nano ‘Pull / Position”

PRODUCTION FAB (installed base >300 systems)

http://images.google.com/imgres?imgurl=http://www.aracnet.com/~stadler/gifs/light_bulb.jpg&imgrefurl=http://www.aracnet.com/~stadler/index27.html&h=217&w=200&sz=4&tbnid=_yyoqk03VzgJ:&tbnh=100&tbnw=93&start=6&prev=/images%3Fq%3Dlight%2Bbulb%26hl%3Den%26lr%3D%26sa%3DN


VEECO’S SCIENTIFIC RESEARCH BUSINESS INCLUDES:

• Nano Metrology

• Nano Manipulation

• Nano Material

Carbon Nanotube TransistorNanotechnology

Materials Research

Life Sciences

• Semiconductor• Future Data Storage• Polymers

• Living Cells• DNA• Proteomics

Polymers Cu Films Magnetic Storage Media

DNA Lipids Protein Crystal Detection

$116

$961

$-

$200

$400

$600

$800

1997 2004

NANOTECHNOLOGY ($M)

Government Nanotech Funding Source: NNI

$116

$961

$-

$200

$400

$600

$800

1997 2004

NANOTECHNOLOGY ($M)

Government Nanotech Funding Source: NNI


NANOMATERIALS

• Nanomaterials: $35B market by 2020 ($200M in 2002)

• Industry lacks nanoscale metrology standards: a key bottleneck in development and manufacturing of commercial nanomaterials

Veeco and Dow receive a $6M NIST/ ATP to Develop New Nanotechnology tools


PICOFORCE AND NANOMAN FOR SINGLE MOLECULE MEASUREMENTAND NANOMANIPULATION

MANIPULATION OF DNA USING VEECO’S NANOMAN SCANNING PROBE

Pulls or stretches molecules and produces force spectroscopy

readings at Pico-Newton levels

100+ Units Sold Since Introduction

THE 2005 MODEL


THE 2005 REVENUE MODEL by Business Segment

PROJECTED REVENUE/PRODUCT MIX CHANGE FOR 2005

2004 2005 CHANGE 2005 RANGE

+15% TO +18% $154M TO $158M

$68M TO $71M

$168M TO $171M

$390M TO $400M

-24% TO -27%

+3% TO +5%

$134M

$93M

$163M

$390M

Ion Beam and Mechanical Equipment(IBE/IBD/Slider)

Epitaxial Equipment(MOCVD/MBE)

Metrology(Auto AFM/Research AFM

and Optical)

Total

Data Storage Growth

LED Decline

Scientific Research/Industrial Metrology Growth

Flat to modest growth

Revenue mix change favors higher Vecco gross margin


THE GROSS MARGIN MODEL 2005

IMPROVED GROSS MARGINS IN EACH BUSINESS SEGMENT

’04 YEAR’05 QUARTERLY

INCREASE ‘05 YEAR

2006TARGET GROSS MARGIN

35%

24%

46%

44%

55%52%

39.5% 50%

Ion Beam and Mechanical Equipment(IBE/IBD/Slider)

36% 44% 42%

Epitaxial Equipment(MOCVD/MBE) 22% 33% 30%

Metrology(Auto AFM/Research

AFM and Optical)52% 55% 53%

Total 40% 46% 43%-44%


“THE 2005 INCOME MODEL”

IMPROVE GROSS MARGINS 2% PER QUARTER

Q1 Q2 Q3 Q4 2005 YR Q106 Q206

100% 100%

50%

34%

16%

48%

35%

13%

100%

44%

36%

8%

100%

40%

37%

Sales 100% 100%

3%

100%

46%

36%

EBITA 5% 8% 10%

Gross Margin 42% 44%

Operating Expenses 37% 36%

APPROXIMATE TIME FRAME


2005 PROFIT GROWTH PLAN ON FLAT REVENUE

Favorable product mix change (higher Data Storage, less Epitaxial revenue, stable Scientific Research/Metrology)… improves Veeco profitability

54

60

98

114109

117

90

124 15540

40

73

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

2003 2004A 2005E

+4%

+35%

+37%

+151%$279M

$390M +40% $405M +4%

-26%

+11%

+25%

+2%

CS

Semi

DS

SciRes

▲ ▲

EBITA $13.0M $13.8M $~30M*

* Based on projected cost reductions, material savings, new products, warranty cost reductions and mix change

Q2 2005 GUIDANCE


Q2 2005 GUIDANCE (as of 4/26/05)

• Q2 revenues and orders in the range of $90-95 million

• Q2 2005 GAAP loss in the range of $(0.11) to $(0.06) per share

• Q2 2005 non-GAAP (excluding amortization) earnings per diluted share are expected to be between $0.04 and $0.07 using a 35% taxrate

FINANCIALS


MANAGEMENT HIGHLIGHTS (Q1 2005 Revenue)

• Revenue $93.9M, up 3% Y/Y, down 9% sequentially

• Sequentially Data Storage down 14% $25.6M Semiconductor up 14% 17.4Wireless down 14% 22.3Scientific Research down 10% 28.6

down 9% $93.9M• Above $85M to $90M guidance

• Record quarterly Auto AFM revenue ($14M)Continued strong AFM Semi acceptance at90/65nm line widths Semiconductor

Data Storage

Wireless

24%24%

27%27%

19%19%

30%30%

Scientific Research

Benefit of Market Diversity


MANAGEMENT HIGHLIGHTS (Q1 2005 Orders)

• Orders $98.9M, down 15% Y/Y, flat sequential ordersB/B

• Sequentially Data Storage up 26% $45.3M 1.77Wireless down 23% 14.0 0.63 Semiconductor down 21% 14.4 0.83Scientific Research down 6% 25.2 0.88

flat $98.9M 1.05• Above guidance range $85-$90M

• Book/Bill 1.05 to 1; Backlog increased to $144M

• Strong Data Storage investmentexpected to continue in Q2

• Q1 Data Storage orders $45M atrecord level…multi million dollar orders

from all (5) leading TFMH manufacturers

Semiconductor

Data Storage

Wireless14%14%

46%46%

15%15%

25%25%

Scientific Research

Market Diversity


MANAGEMENT HIGHLIGHTS

• EBITA $2.6M in line with guidance, below Q4 and prior year

• Gross Margin• 40% in line with guidance, above 37.5% in Q4, in line with quarterly improvement

plan… 2% increase per quarter• Includes 30% for Process Equipment (36% for Ion Beam; 22% Epitaxial)• Includes 52% for Metrology

• Operating Expense $35M or 37%

• RIF of 30 people in quarter (MOCVD/MBE)

• Inventory $106.2M, down $4.4M

• Accounts Receivable… stayed at 65 days

• Cash positive operations generated $15.5M, paid acquisition earnouts $15M

• Balance Sheet remains strong with $100.7M Cash


STRONG VEECO BALANCE SHEET

($ IN MILLIONS)March 31

2005Dec. 31,

2004

Cash and Investments $ 100.7 $100.3

Working Capital 216.9 216.8

Fixed Assets 70.6 73.5

Total Assets 551.7 577.0

Long-Term Debt 229.5 229.6

Shareholders’ Equity $ 246.2 $ 252.4


ATTRACTIVE UPSIDE FROM NEW OPPORTUNITIES WITHIN OUR REACH

New wireless consumer Electronics with 1.0 “

embedded hard drive;

perpendicular heads

develop

White LED backlighting

LCD TV, automotive and general illumination

Use of In-Line 3D AFM

Metrology for 90, 65 and

45 nm

Extending Nanoscience

Applications to Life Sciences

and NanoMaterials

$390MRevenue

~$600MRevenue*

Technology Convergence

Enabling Consumer Electronics

2004 2007


SAFE HARBOR STATEMENT

• To the extent that this presentation 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 challenges of continuing weakness in end market conditions and the cyclical nature of the telecommunications/wireless, data storage, semiconductor andresearch 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 .

VEECO INSTRUMENTS VEECO INSTRUMENTS OVERVIEWOVERVIEW

APRIL 2005APRIL 2005

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VEECO INSTRUMENTS OVERVIEW - IIS Windows Serverlibrary.corporate-ir.net/library/11/111/111487/items/149046/... · • Large high resolution, high brightness color ... in Wafer Fabs