September 20, 2001 – Santa Clara, CA – Applied Materials will reduce its global work force by approximately 2,000 positions, or approximately 10%, to address the continuing downturn in the semiconductor industry. The company will record a restructuring charge in the 4Q, ending October 28, 2001, for employee-related costs, consolidation of facilities and other costs.

Approximately 700 positions at Applied Materials’ Silicon Valley operations and approximately 500 positions at the company’s Austin operations will be affected. The remaining positions are expected to be eliminated at other locations worldwide by the end of the company’s fourth fiscal quarter. Employees will be notified beginning today.

Since January 2001, the company has instituted a number of cost-savings programs in response to the slowing demand in the semiconductor and equipment industries, including executive and employee salary reductions, mandatory shutdown days, a voluntary separation plan, restricted hiring, and a reduction in the temporary work force.

“We implemented a series of aggressive cost-reduction programs in an effort to avoid reductions in our work force. Unfortunately, the length and severity of the downturn and lack of near-term visibility have made it necessary for us to take additional action to align our operations with the current level of business,” said James Morgan, chairman and CEO of Applied Materials.

“While this is a challenging time for Applied Materials and our customers, we firmly believe that the long-term outlook for the semiconductor industry remains strong. We are now working closely with our customers around the world on the leading-edge manufacturing technologies that will prepare them to make the critical transitions to the 300 mm, copper and nano-chip era,” concluded Morgan.