Veeco Expands Solar Equipment Product Line Acquisition of Mill Lane Engineering. May 22, 2008

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1 Veeco Expands Solar Equipment Product Line Acquisition of Mill Lane Engineering May 22, 2008

2 Veeco Expands Thin Film Solar Equipment Product Line Completed purchase of Mill Lane Engineering Privately held manufacturer of Web Coating Systems for flexible substrates Based in Lowell, MA 20 Employees Second half 2008 Revenue impact to Veeco $10-15M Existing multi-unit order for web coaters from leading manufacturer of thin film CIGS solar cells Complements Veeco s deposition product offerings for emerging thin film solar market To be managed by Piero Sferlazzo, Ph.D., one of our top GMs Focus on combining Veeco s existing thin film deposition technologies (IBD, PVD, thermal sources) with Mill Lane web coating technology Address unmet equipment needs of thin film solar customers 2

3 Thin Film Solar Technology & Market Trends

4 Supply Chain for Photovoltaics Substrate Cell Module Systems 4

5 Solar PV Technology Landscape Crystalline Si Thin Film Mono-Si 16-18% Poly-Si 14-16% a-si 5-10% CIGS 8-14% CdTe 8-12% III-Vs 35-40% Si Wafer Glass, Stainless Steel, Plastic Ge Wafer CIGS = copper, indium, gallium, selenide (Cu, In, Ga, Se) 5

6 WW Solar Market Growth Forecasts WW Solar Cell Consumption (MW) 10,000 9,000 8,000 7,000 6, CAGR% Total = 40.7% Cryst. Si = 37.1% Thin Film= 71.3% Thin Film Other Thin Films CIGS Cadmium Telluride MW 5,000 4,000 Amorphous - Si Other (i.e Ribbon) 3,000 2,000 1, Poly - Si Mono-Si Crystalline Si Source: Information Network, Photon Consulting 6

7 Thin Film Projected Costs CIGS Thin Film costs are estimated to be lower than silicon by

8 Thin Film CIGS Solar Cell Structure Sunlight TCO Window Layer - CdS CIGS Mill Lane Back Contact Mo Glass, Stainless, Plastic CIGS Thin Films Currently Deposited with Glass or Roll-to-Roll (Web) Systems Veeco product line now includes Oxide and Metal Deposition Processing capability using Web Coating systems For CIGS layer, Veeco manufactures thermal deposition sources - opportunity to expand the existing web coating deposition product line 8

9 Mill Lane Extends our Technology & Market Opportunity Crystalline Si Thin Film Mono-Si Poly-Si a-si CuInGaSe 2 (CIGS) CdTe (Cad-Tel) III-Vs (Multi-Jct.) MOCVD CIGS Thermal Sources Mill Lane Now Provides Us with Web Coating Entry to Systems Business 9

10 Why Veeco for Thin Films CIGS? We are thin film experts CIGS complex thin film structure fits well in Veeco overall expertise and portfolio Veeco is already a leading provider of CIGS thermal source technology Opportunity to combine other Veeco technologies IBD, PVD, with Mill Lane expertise Emerging customer base: Requires integrated process equipment solutions for mass production Good opportunity for customer partnership and equipment innovation Our Sweet Spot to integrate process and equipment 10

11 CIGS Thin Film Equipment Opportunity About 20 thin film PV suppliers worldwide currently working on CIGS technology both glass and roll-to-roll (web) technology being used Early stage opportunity some merchant competition in glass and web coating technology, but customers also make their own equipment Our estimate is that every 10MW capacity solar line requires $8-12M in MO, TCO and CIGS deposition equipment 11

12 Financial Implications of the Transaction

13 Terms of the Transaction $11M Cash at Close Potential additional payments based upon satisfaction of future conditions: New Orders Sales Profit Levels 13

14 Veeco 2008 Financial Model Implications Mill Lane to be part of our LED & Solar Process Equipment Business Segment Q2 08: No material impact to revenue guidance of $102-$110M Will impact earnings guidance due to addition of Mill Lane s operating expenses GAAP impact - additional amortization & potential in-process R&D charge estimated at $0.05/share Non-GAAP impact - estimated at $0.02/share New Q2 EPS guidance: ($0.07) - $0.02 per share GAAP; $0.03-$0.09 non GAAP excluding amortization, using 35% tax rate Q2 08 Orders: $110-$118 million unchanged $10-15M addition to second half 2008 Revenues No material impact to 2H earnings 14

15 Fits With Our Strategy to Increase Sales from High Growth HB-LED & Solar Markets 2007 Revenue 2008 Old Revenue Guidance New 2008 Guidance with Mill Lane LED & Solar Process Equipment $116M $ M $ M Data Storage Process Equipment $136M $137-$143M $ M Metrology $150M $ M $ M TOTAL $402M $440M $ M * Based upon end market industry forecasts (Strategic Analytics, IDC) and Veeco Estimates 15

16 Safe Harbor Statement To the extent that this presentation discusses expectations or otherwise make 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 risk factors discussed in the Business Description and Management's Discussion and Analysis sections of Veeco's Annual Report on Form 10-K for the year ended December 31, 2007 and subsequent Quarterly Reports on Form 10-Q and current reports on Form 8-K. Veeco does not undertake any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements. In addition, this presentation includes non-gaap financial measures. For GAAP reconciliation, please refer to the reconciliation section in this presentation as well as Veeco s financial press releases and 10-K and 10-Q filings available on 16