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Slide 10: New Consumer Electronics Based on Microdrive, HB LED, Color Display
NEW CONSUMER ELECTRONICS BASED ON MICRODRIVE, HB LED, COLOR DISPLAY TECHNOLOGY... consumer electronics manufacturers continue to select hard drives for high capacity video applications Apple launches new video iPod w/30G HDD o ‘Samsung introduces new Smart Phone with 3G HDD > Hard Drives HP new phot
Slide 11: Veeco Solutions for a Nanoscale World
VECO solutions for « nanoscale world. Revenue (by Business Segment) > Gross Margin > Profitability
Slide 12: The 2005 Revenue Model by Business Segment
THE 2005 REVENUE MODEL by Business Segment PROJECTED REVENUE/PRODUCT MIX CHANGE FOR 2008 (updated 102405) Original Guidance (January ‘05) CURRENT 2008, FORECAST 2004 | 2005 CHANGE | 2005 RANGE orivenay | _ (10724108) lon Beam and ‘gualg conemiee Mechanical Equipment $134M —_-#48%TO+18% | $t64MTO 166
Slide 13: The Gross Margin Model
THE GROSS MARGIN MODEL 200: IMPROVED GROSS MARGINS IN EACH BUSINESS SEGMENT "CORRENT SIN" | ccurnenr | prem. vsauanterty | 05 | | rontons | zovsvean | "ssoe voavenr | RRR” | veka GS | Zonecast | ranoer Meche ame | som—e aoe | am | | ame | are | aonaon Senabisicen Eps Eulpent Eps Eau zm | am —> sm |
Slide 14: Q3 Marks Fourth Consecutive Quarter of Improved Gross Margin
(03 marks the fourth consecutive quarter of improved GROSS MARGIN, while EBITA has improved each quarter of 2005 “THE 2005 INCOME MODEL” IMPROVE GROSS MARGINS 2% PER QUARTER Asa result a @ a3 ot 2005¥R | 2004VR | of Gross ‘Margin and EBITA 100% 100% 100% = 100% 100% | 100% | growth in each of the la
Slide 15: Data Storage
VECO solutions for « nanoscale world. ee DATA STORAGE
Slide 16: Data Storage: Growth Continues, Q3 Revenue $50M, Up 85%
DATA STORAGE... growth continues, Q3 revenue $50M, up 85% Y/Y; up 6% sequentially + Digital consumer electronics will continue to 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) ital
Slide 17: Data Storage: Q3 Orders and 2005 Expectations
DATA STORAGE... growth continues, Q3 revenue $50M, up 85% Y/Y; up 6% sequentially + Veeco Q3 Data Storage orders $33.6M, up 78% from Q304, down 44% sequentially; 9 months orders $139.2M, up 54% + Qiincluded multi-mill lon Beam Etch/Deposi Storage nn dollar orders from all (5) WW TFMH manufacturers i
Slide 18: Data Storage: Multi-Year Investment in Capacity and New Technology
DATA STORAGE-MULTI YEAR INVESTMENT IN CAPACITY AND NEW TECHNOLOGY... provides Veeco with continued growth 15% Industry Growth Forecasted for HDD industry Through 2007 Industry HOD Production Growth | 250 206 Gants) : Industry HOD Revenue Growth G8) 27a we | 7s 2.0 2.0 273 soz | oa as ae soot | 10.9%
Slide 19: Consumer Applications Enable Exponential Hard Drive Growth
CON: IER APPLICATIONS ENABLE ONENTIAL HARD DRIVE GROWTH... unit growth to double and triple M Units — Annual HDD Shipments 1% era 2r¢era 3 era 4" era 4600 Mainframe era Minicomputerera PC era Consumer era GS © Ae © © ©@ SE EEF SEs Source: Hitachi GST Estimate
Slide 20: Data Storage Hard Drive Growth: Consumer Electronics Adoption
DATA STORAGE HARD DRIVE GROWTH CONSUMER ELECTRONICS ADOPTION Growth in CE and traditional computer markets 600 7 500 @ CAGR 2 400 (2004-2008) = a Consumer a 208 Electronics ae 5 a 200 5 Laptop, Enterprise) 9% 100 Tota 15% 0 cyo4 cy05 cYos cyYo7 cyYos iaciatty shipnent oh PC's grew 15% in September q
Slide 21: Data Storage: Home of the (Near) Future
DATA STORAGE HOME OF THE (NEAR) FUTURE By 2010 each household will include 10 HDD’s* ible Applications Es (Home Applications an
Slide 22: Hard Disk Drive Unit Growth in Consumer Electronics
DATA STORAGE...Hard Disk Drive Unit Growth...Consumer Electronics Segment Will Approach Size Of Computer Market Segment Unit Drive Shipments (millions) 1980 1985 «= 1990 1995 2000 2005» 20102015,
Slide 23: Veeco: A Strategic Partner to TFMH Suppliers
VEECO: A STRATEGIC PARTNER TO TFMH SUPPLIERS...IN EVERY STEP OF THE MANUFACTURING PROCESS Process Equipment Metrology
Slide 24: Unprecedented Technology and Form Factor Changes Occurring Simultaneously
UNPRECEDENTED TECHNOLOGY AND FORM FACTOR CHANGES OCCURRING SIMULTANEOUSLY TFMH Technology Changes Drive ition, Capital Equipment Growth 1000 we Sido Shuinks (FENTO) 100} 10 Areal Density (Gbit/in2) 41 00 of 02 03 04 05 06 07 Areal density roadmap inereases (50%) per year toward CPP (erpendicular rec
Slide 25: Next Generation Thin Film Head Stacks
NEXT GENERATION THIN FILM HEAD STACKS... demand new materials, thinner films and tighter interfaces GMR Head Stack TMR Head Stack CPP Head Stack a (perpendicular recording) (e.930CoFe) ayer (e.g. 20Ta) | 30 NiFe ) Spedayer 2(6 a 40NFeCrs) Seedlayert (© 950Ta, 50 TaN) / Substrate Substrate 41 layers
Slide 26: Broad Range of Process Technologies Will Enable Next Generation Data Storage
VEEC BROAD RANGE OF PROCESS TECHN NEXT GENERATION DATA STORAGE TFMH PR GIES WILL ENABLE ICTION PVD Conceptual Veeco “Cluster Too!” combines breadth of process technologies Veeco . %
Slide 27: Semiconductor
Veeco Solutions for a nanoscale world. “ff a = SEMICONDUCTOR
Slide 28: Semiconductor: Q3 Revenue $12.2M, Up 18% Y/Y
IN SEMICONDUCTOR ....@3 revenue $12.2M, up 18% Y/Y; 9 months revenue $46.5M, up 19% + Despite our initial 2005 expectations of an industry-wide Semi Capex softening...we see continued world wide acceptance of our Auto AFM in Water Fabs for 90nm and 70nm, 300M applications + Veeco Auto AFM 2005 reven
Slide 29: Veeco Has Penetrated Key Semiconductor Customer Base
VEECO HAS PENETRATED KEY SEMICONDU CUSTOMER BASE (growth in foundries) + 101 Ms + Foundries + Tech. Dev. Centers Intel TSMC IBM Samsung uMc TSMC Micron UMCi umc IBM SMIC AMD Hynix Promos Infineon Toshiba Inotera Sematech ST Micro Leti AMD Selete Infineon TI Tl CNT Veeco expanded applications support
Slide 30: Veeco's Semiconductor Opportunity: Shrinking Dimensions Require 3D Metrology
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 —
Slide 31: Leading Atomic Force Microscope Tip Technology
LEADING ATOMIC FORCE MICROSCOPE TIP TECHNOLOGY Veeco tip development roadmap addresses leading edge 45nm and 25nm applications + Recent JDP with Leti and Team NanoTech for advanced tip development + Next-gen tips required to meet industry roadmap and improve customers’ CoO ”
Slide 32: AFM Applications Lab-to-Fab
AFM APPLICATIONS ‘LAB-TO-FAB’ RESEARCH & SCIENTIFIC (installed base >7000 systems)
Slide 33: LED/Wireless
VECO solutions for « nanoscale world. xi LEDMWIRELESS
Slide 34: LED/Wireless: Q3 Revenue $9.5M, Appears to Have Bottomed
LEDWIRELESS...Q3 revenue $9.5M, down 73% appears to have bottomed; orders $14.6M, up 10% sequentially + Expected 2005 industry LED capex decline to be over 30% as 2004 equipment excess is absorbed + Next LED growth wave...large area flat panel LCD TVs backtighting, automotive lighting and ‘specialty
Slide 35: LEDs in Mobile Phones
LEDS IN MOBILE PHONES...over 45 LED chips per phone ~670M phones sold in 2004 ¥ Color LCD Display ¥ Camera Phone—Flash LED (camera phones will show rapid growth ‘04-07) ¥ Mid-end using 11 LED, High-End using 24 LED —= Main :3 chip (sub-display :2) sortchip Va ‘Sideview White for color displays 1.00.
Slide 36: MOCVD: Critical First Step for HB-LEDs
MOCVD — CRITICAL FIRST STEP FOR HB-LEDs + The epitaxial structure continues to be the heart of the LED device ¥ * Controls color (wavelength) © Brightness (lumens output) * Electrical properties + MOCVD is the enabling technology for epitaxial growth of HB- LEDs * Provides precise control of gas flo
Slide 37: LED Forecast: GaN HB LED Market Continues to Grow
LED FORECAST...GaN HB LED market continues to grow (22% CAGR ’05 to ’09) mOther illumination Signals @ Automotive @ SignsiDisplays EMobile Apps. "99 '00 ‘01 ‘02 '03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 a”
Slide 38: High Brightness Light Emitting Diodes (HB-LEDs)
BRIGHTNESS LIGHT EMITTING DIODES (HB-LEDS) GaN-based HB-LEDs § § a a 3 1wiiniinin 8 4pip4pipiwipiD Primary Growth Demand Timeframe Application 2015-2020 General Illumination 2010-2015 Automobile Headlights 2005-2010 Large LCD Backlights 2000-2005 Mobile Phone Backlights
Slide 39: Solid State Lighting Growth
SOLID STATE LIGHTING GROWTH Red, Green, Blue HB-LEDs >20% CAGR Relative LED Unit Shipments 1960 1970 1980 1990 2000 2010 2020 ) =
Slide 40: Epitaxy Roadmap: Brightness Defines Next Generation
EPITAXY ROADMAP. RIGHTNESS” DEFINES NEXT GENER: VEECO MOCVD GaN HB-LEDS amw| New Applications Enabled By Brighter Epitaxy Films 7m) mw) mW) 4mw| mW) 2mW) Brightness (mw per std LED area) 1m) "4nm ann <225nm Color Binning (wavelength in nanometers)
Slide 41: GaNzilla II MOCVD Value Proposition
GANZILLA Il MOCVD VALUE PROPOSITIO FEATURE BENEFIT New Flow Flange Heeter Filament Improved Retabilty Advanced controls Improved Reiablty Higher Yields 5. Automation Increased thruput Die Selling Price aint a2 BinS ans = Bins Value Proposition: Superior Productivity from Higher Throughput and Narrow
Slide 42: The Importance of GaN Epi Film Quality
THE IMPORTANCE OF GaN EPI FILM QUALITY High Current Qu: apa $3 ($1 die) $7500 (40" LED Backlight TV) Standard Quality * $0.3 (10 cent die) + 7 $7 (LED Dog Collar) Epitaxy film ‘quality’ and tighter “binning control” determines mix of high end LED and low price LED production
Slide 43: Key LED Applications
KEY LED APPLICATIONS Leb Automotive General Lighting lilumination on Mobile Outdoor Appliances Signage Backlighting Headlamps Interior lighting Traffic signals Dashboard Industrial front lighting Heads up displays Eventllighting Signage displays lorendering | 60rillon ight votes 5% of LED market in
Slide 44: Veeco's Key Differentiation
VEECO’S KEY DIFFERENTIATION Veeco provides integrated products and services throughout the product cycle Deposition Metrology Process Leading equipment for Nanoscale World-class LED growth / processing measurement applications laboratory Highest throughput Optimize surface Refine material available
Slide 45: Solid State Lighting to Penetrate $12B General Illumination Market
SOLID STATE LIGHTING TO PENETRATE $12B GENERAL ILLUMINATION MARKET : Incandescent Solid State Lighting +20% of Global Electricity Demand is for Lighting *Solid State Lighting (HB-LED) will Cut Consumption in Half
Slide 46: Scientific Research
Veeco Solutions for a nanoscale world. SCIENTIFIC RESEARCH
Slide 47: Veeco's Scientific Research Business
VEECO’S SCIENTIFIC RESEARCH BUSINESS (approximately 100 Research AFMs per quarter) Nanotechnology + Nano Metrology + Nano Manipulation Nano Material Materials Research + Semiconductor + Future Data Storage + Polymers Life Sciences cc = + Living Cells ’ + DNA + Proteomics © Veeco @
Slide 48: Scientific Research: Q3 Revenue $28.3M, Up 11% Y/Y
SCIENTIFIC RESEARCH... Q3 revenue $28.3M, up 11% Y/ 12% sequentiall} sequentially) + Veeco initiates a new management focus in nanomaterial and life science instrumentation...to accelerate growth of our profitable “table top” AFM/Optical instrument business... beyond material science base + Ournine
Slide 49: Why the Focus on Nano-Bio?
WHY THE FOCUS ON “NANO-BIO”? Life Science Instrumentation is fastest growing portion of analytical instrumentation business * Forecasted to grow 28% CAGR from 2003-2008 (versus 6% overall for the analytical instrumentation market) Nanomaterials: $358 market by 2020 ($200M in 2002) Industry lacks nan
Slide 50: Nanotechnology
NANOTECHNOLOGY Rédito08 cai é onksitend a ‘Scan Atom ‘Steno AFMs Image, Measure and Manipulate Nanoscale Structures SCIENTIFIC sccau| AMERICAN a NANOTECH
Slide 51: Nanomaterials
NANOMATERI. Veeco and Dow receive a $6M NIST/ ATP to Develop New Nanotechnology tools
Slide 52: Veeco Multi-Market Growth Opportunity
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 2007. Industry to add capacity to double HDD uni
Slide 53: Financial Highlights
Veeco Solutions for a nanoscale world. FINANCIAL HIGHLIGHTS
Slide 54: Veeco Q3 Revenue
VEECO Q3 REVENUE; GROWTH IN DATA STORAGE AND SEMICONDUCTOR + Q3 revenue $100.1M, up 3% from prior year, down 3% sequentially from prior quarter, inline with ‘uidance ($95-105M) Seq, YN Revenue by Market Se OME! tl aaok Data Storage $ 50.1M (record level) 46% +85% ‘Semi 122M 28% = +18% LEDMWireless 9
Slide 55: Veeco 9 Months Revenue
VEECO 9 MONTHS REVENUE double digit growth in Data Storage and Sen + 9 months revenue $297.3M, up 3% Y/Y; Semiconductor and Data Storage increase Data Storage $123.1M up 31% ‘Semiconductor 465 up 19% LEDMWireless 45.6 down 37% Scientific Research 82.1 flat Total $297.3M up 3% Data Storage “py 9 Mont
Slide 56: Veeco Q3 Orders
VEECO Q3 ORDERS 3 orders $84.6M, up 6% from prior year, down sequentially from strong prior quarter; below guidance Our 6 months order rate of $203M... more representative of current business conditions ($100M/atr) ($95-105M) (Orders by market webs Data Storage $33.6M 44% Semi 113M 41% LEDMireless.
Slide 57: Veeco 9 Months Orders
VEECO 9 MONTHS ORDERS + 9 months orders $302M, down 6%; Strength in Data Storage Orders by Market Data Storage $139.2 up 54% ‘Semiconductor 44.7 down 7% LED/Wireless 419 down 60% Scientific Research 76.2 down 2% Total '$302.0M down 6% * Book to Bill 1.02 to 1 Data Storage 455 9 Months Orders by Mark
Slide 58: Q3 Profitability Improvement
Q3 PROFITABILITY IMPROVEMENT... tracking Gross Margin and EBITA profit growth plan Q3 EBITA $8.3M up 36% sequentially, up 10 times prior year 304, in line with 2% per quarter improvement... to 8% of revenue + 9 months EBITA $16.9M, up 62% Y/Y + _ EPS excluding amortization $.14 vs. ($.02) Q304 * abo
Slide 59: Strong Veeco Balance Sheet
TRONG VEECO B,; NCE SHEET (S IN MILLIONS) September 30, Dec. 31, 2005 2004 Cash and Investments $111.7 $100.3 Working Capital 221.8 216.8 Fixed Assets 70.4 73.5 Total Assets 566.1 576.9 Long-Term Debt 229.3 229.6 Shareholders’ Equity $ 246.4 $252.4
Slide 60: Q4 2005 Guidance
Veeco Solutions for a nanoscale world. Q4 2005 GUIDANCE
Slide 61: Q4 2005 Guidance (as of 10/24/05)
Q3 2005 GUIDANCE (as of 10/24/05) + Q4 revenues to be in the range of $100-105 million + Q4 orders to be in the range of $90-100 million + Q4 2005 GAAP earnings in the range of $0.03 to $0.09 per share * Q4 2005 non-GAAP (excluding amortization and revenue changes) earnings per diluted share are exp
Slide 62: Safe Harbor Statement
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 subjec
Slide 63: Veeco Solutions for a Nanoscale World
VECO solutions for « nanoscale world. OCTOBER 27, 2005 ED BRAUN CHAIRMAN AND CEO
Slide 64: Reconciliation Table
RECONCILIATION TABLE
Slide 65: Searchable text section
Searchable text section of graphics shown above Exhibit 99.1 [ L OGO] PRUDENTIAL EQUITY GROUP TECHNOLOGY MEETING OCTOBER 27, 2005 ED BRAUN CHAIRMAN AND CEO V EECO PROVIDES ENABLING TECHNOLOGY IN PROCESS EQUIPMENT AND METROLOGY FOR MULTIPLE GROWTH MARKETS Data Storage [PICTURE] 1" Drives for CE; iPod