The joint development efforts include the purchase of two NEXUS(R) Physical Vapor Deposition (PVD) systems.

"Veeco will work with these customers to develop their next-generation GMR/TMR thin film heads, and to extend areal densities beyond 120 Gb/in2," commented Edward H. Braun, Chairman, CEO and President of Veeco. "Veeco is uniquely positioned to provide our data storage customers with the industry's broadest line of etch, deposition and metrology products, combined with worldwide service and support." Data storage market research firm Peripheral Research forecasts a 7% growth in 2003 in thin film magnetic head demand following a decline in 2002.

Veeco NY Process Equipment Group President Emmanuel N. Lakios said, "Veeco is collaborating with our customers to optimize sensor performance for their next generation of GMR/TMR heads. Veeco's PVD offering is unique because it bridges the development of multiple generations of GMR sensors." Veeco has the largest installed base of GMR sensor tools.

About Veeco

Veeco Instruments Inc. is a worldwide leader in metrology tools and process equipment for the semiconductor, data storage, telecommunications/wireless, and scientific research markets. Veeco's manufacturing and engineering facilities are located in New York, California, Colorado, Arizona and Minnesota. Global sales and service offices are located throughout the United States, Europe, Japan and Asia Pacific. Additional information on Veeco can be found at http://www.veeco.com/.

To the extent that this news release discusses expectations about market conditions or about market acceptance and future sales of Veeco's products, 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 factors include the challenges of continuing weakness in end market conditions and the cyclical nature of the telecommunications/wireless, data storage, semiconductor and research markets, risks associated with the acceptance of new products by individual customers and by the marketplace and other factors discussed in the Business Description and Management's Discussion and Analysis sections of Veeco's Annual Report on Form 10-K Annual Report to Shareholders, subsequent Quarterly Reports on Form 10-Q and Form 8-K .

CONTACT:
Veeco Instruments
Debra Wasser
516-677-0200, x1472

Trade Contact:
Fran Brennen
516-677-0200 x1222