March 17, 2003 – Santa Clara, CA – Applied Materials Inc., the world’s largest supplier of wafer fabrication solutions to the semiconductor industry, has unveiled a plan to align the company’s cost structure with current business conditions. The realignment plan has two major elements: restructuring actions — including consolidation of facilities and a reduction in work force of some 2,000 employees; and second, focused program management to provide additional cost savings.

“The world is changing and the semiconductor industry is changing with it,” said James Morgan, chairman and CEO. “Our customers are investing in advanced, complex technologies at the same time that they are under enormous pressure to reduce costs. The combination of changes in the industry and the extended downturn have led Applied Materials to take decisive action that will enable the company to generate increased profits at current levels of revenue while maintaining strategic product development capability.”

Facilities infrastructure is being reduced primarily through building consolidation in Santa Clara, CA, and Austin, TX. The company’s facilities outside of the US also will be reduced in various locations.

The realignment plan includes the elimination of approximately 2,000 positions or 14% of the company’s global work force. Approximately 1,400 positions in Applied Materials’ North America operations will be affected and the majority of notifications will occur at the end of 2Q03. The remaining 600 positions will be eliminated at other locations worldwide by the end of 4Q03.

Additional savings are expected from focused program management and productivity initiatives that the company has been implementing during the past two years.