February 13, 2002 — Santa Clara, CA — Applied Materials reported sales of $1 billion for its first quarter, ending January 27, with new orders edging up to $1.12 billion, an increase of $20 million over the fourth quarter. First quarter sales were down 21 percent form the fourth quarter, and 58 percent lower than the same period a year ago. Net income totaled $15 million, or $0.02 per diluted share.

Regional distribution of the company’s $1.12 billion in new orders was: Taiwan 27 percent, Southeast Asia and China 25 percent, North America 22 percent, Europe 15 percent, Japan 6 percent and Korea 5 percent.

&#34Throughout this extremely difficult industry environment, Applied Materials has continued to invest in the critical new technologies our customers need for advanced chip designs using copper and nanometer-sized circuits, as well as the move to 300mm wafers. While we believe that industry conditions remain challenging in the short-term, we are somewhat encouraged by orders for the new technologies,&#34 notes James C. Morgan, CEO.

Securities firm Lehman issued cautious comments after Applied reported its earnings and says given the excess capacity still hovering over the industry that &#34it does not see a meaningful re-acceleration in growth until late 2002/early 2003.&#34