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Investor Presentation

August 2013

Copyright ©2013 Veeco Instruments Inc. 2

Safe Harbor To the extent that this presentation discusses expectations or otherwise makes 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 items 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, 2011 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.


Veeco at a Glance

Our Technology supports energy efficiency, consumer electronics and network storage

We are the Market Leader • MOCVD • MBE • IBE/IBD • Advanced Thin Film

Process Technologies

High Growth Market Focus Our equipment enables the manufacture of: • LEDs • Power electronics • Hard drives • MEMS • Wireless chips

We Make Thin Film Process Equipment Growing, depositing, etching and processing thin films is our core competency

Our R&D is Best-in-Class Veeco’s exceptional R&D organization delivers systems that enable the future

~800 employees

>200 patents

VECO


Select Q2 2013 Financial Metrics

Bookings up 20% to ~$85M

Cash Balance $585M

Continued weak overall business conditions

MOCVD $52M (+42% sequentially)

MBE $6M (flat)

Data Storage $27M (flat)

Down slightly – continued good job managing cash and working capital

Shipments up sequentially; MOCVD pricing pressure intense


Update on Accounting Review – Working to Be A Timely Filer as Soon as Possible • Primary area of focus remains on technical accounting issues related

to “multiple element arrangements” for MOCVD transactions originating in 2009 and 2010 ‒ These systems were delivered, accepted and paid for in full

‒ Review is not related to any product quality or customer satisfaction issues

‒ The Company is undergoing a comprehensive review of “multiple element” arrangements since 2009

• Veeco is examining >100 multiple element arrangements which involve hundreds of individual transactions…rules require significant interpretation and judgment

• We are making significant progress and have achieved several key milestones

• NASDAQ granted Veeco an extension until Nov. 4th to become current in our filings

• Still unclear whether or not a restatement will be required


Driving our Growth Strategy

Expand Leadership in Core Markets

LED Lighting

Compound Semi

Production

Hard Disk Drive

#1 Technology

MOCVD

MBE

IBD, IBE, PVD (Data Storage)

Extend to New Growth Markets Organic and Acquisitions

GaN Power Electronics

Grow Share in MBE R&D

Penetrate OLED

MEMS EUV Photomask

Focused on Growing Services in all Businesses


Why is LED Lighting So Important? In the U.S. Alone…By 2025, LED Lighting Adoption Will…

Reduce electricity demands from lighting by: 62%

Save over $280B and enable us to avoid building 133 new power plants


2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

LED TV 1500 MOCVD

LED Lighting Adoption is Accelerating

LED Lighting projected to grow at 35% CAGR from 2010 to 2020

LED

Dem

and

by A

rea

(B m

m2 )

Cellphone 250 MOCVD

LED Lighting ~3000+ MOCVD

LED Lighting CAGR 35%

LED TV

Wall Street and Veeco Estimates


Veeco Innovation Helped Accelerate LED Bulb to the “Teens Price”

Veeco Epi Cost reduction is 2X faster than U.S. DOE Forecast (‘10-’12)

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

Nor

mal

ized

Epi

Cos

t ($/µm

.cm

2 )

2010 2012 2015 2020

$50 LED bulb Price

$13

$23

$6 $5

Throughput

Yield (HP) Automation

Cluster Yield

Next Gen Next Gen

U.S. Dept of Energy projected bulb cost Actual bulb cost Reduction of Epi cost from Veeco innovations


Veeco Helping to Drive the LED Lighting Market

24 % 29 %

44 %

62% 51%

2007 2008 2009 2010 2011 2012

Veeco investments and innovation will enable LED lighting mass adoption

Next Generation Platform

• ↑ Yield, ↓ CoO • ↑ Brightness • In-situ Control • Automation

Note: Estimated comparative market share Veeco and Aixtron only

K465i and MaxBright are #1 Selling MOCVD Systems with the Industry’s Highest Productivity

Veeco Market Share


Focus on Services Growth Continues

• New Service Products • Expand Veeco Certified

Equipment across more product lines

• “Designed in” Services for new products

• MOCVD: post-warranty parts and services, local depots, consumables, performance upgrades

MOCVD Services to Increase ~70% from 2011 to 2013

25% Grew

Services

in 2012


Power Electronics: New Growth Opportunity for MOCVD

Power Supplies

Solar

Consumer Electronics

Wind

Automobile

• Power Electronics device market continues to grow1

• GaN-based power devices offer higher efficiency, switching speed and lower power consumption

• Veeco is positioned at key customer sites around the globe to support this high growth segment

Notes: 1) Yole Nov 2011, 2) IMS Research Feb 2012

GaN

Pow

er D

evic

e M

arke

t2

2011 2012 2013 2015 2018 2021

71% CAGR


Growing MBE in 2013 and Beyond Capitalizing on our Leadership MBE Position

To Increase Our Market Share in R&D

Veeco GEN2000 on Cover


Entering OLED Market Through Core Deposition Source Technology

Veeco Deposition Source for OLED

OLED equipment is quickly becoming a billion dollar plus opportunity


Hard Disk Drives Will Continue to Dominate Storage

2012

3,500

0 2020

It took Seagate 29 years to reach their first billion hard drives… and only four years to reach their second billion

Source: Western Digital

Exa

byte

Shi

pmen

ts

Over 85% of exabytes in 2020 will

be stored on HDDs

2016

Client PC

Personal Consumer Electronics

Cloud

Smart Phones/ Tablets

Cloud SSD

Client SSD


Global Trends Driving Veeco’s MEMS Opportunity • We are the largest

supplier of thin film magnetics process equipment

• Over 800 etch and deposition systems installed worldwide

• Strong technical team and dedicated applications lab

Source: Semico Research Corp. Dec 2012

$Bill

ions

of d

olla

rs

$20

2005 2015

MEMS Revenue by Application

Automotive

Smartphones

Displays

$0


Veeco IBD Required for EUV Mask Roadmap • $300B semiconductor

market investing heavily in EUV to solve lithography challenges

• Defect-free photomasks are a technical roadblock

• We have 100% market share in Ion Beam Deposition for this application

Currently engaged with key industry players on next-gen equipment solutions


Veeco’s Growth Opportunities

Growth Exciting

Power Electronics OLED EUV MBE R&D

Systems MEMS MOCVD Services

OPP RTUNITY in LED Lighting

Huge


Market Trends Still Mixed

Data Storage: • Little capacity buying • Customers making strategic investments for HAMR and

other next-gen technology

MOCVD/LED: • Utilization rates stable at high levels • Increased quoting and pick-up in customer confidence • But caution remains and orders still low

MBE: • Deal funnel is improving for R&D; starting to increase our

win rate • Wireless market still digesting capacity; focused on

growing Services


Key Take-Aways

We are managing our cash and expenses through the downturn

We are focused on completing the accounting review and getting back to being current filers

We continue to invest in next generation product development in LED & Power Electronics and for emerging opportunities in OLED, EUV and MEMS

We are growing our Services business and maintaining our edge as the preferred supplier to top industry players


Veeco Summary

1 Market Leaders We are the leader in each of our core technologies – MOCVD, MBE, IBE/IBD and Advanced Thin Film Process Technologies

2 Exceptional Technology Our people, technology and process knowledge enables us to deliver systems with the lowest CoO to the world’s leading companies

Tied to High Growth Markets LEDs for lighting, power electronics for energy conversion, hard drives, wireless chips and MEMS for cloud computing and state-of-the-art electronics

4 High-Performance Organization Fast and agile culture featuring speed as a competitive differentiator, customers count on our flexibility and value proposition

3

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