For more information, contact:

Richard Beck
Advanced Energy Industries, Inc.
970.407.6208
dick.beck@aei.com
Cathy Kawakami
Advanced Energy Industries, Inc.
970.407.6732
cathy.kawakami@aei.com

Advanced Energy Reports Third Quarter Results
Fort Collins, Colorado (October 12, 2000)- Advanced Energy (Nasdaq: AEIS) today reported financial results for the third quarter and nine-month period ended September 30, 2000. Advanced Energy is an industry-leading provider of critical technology solutions for the manufacture of semiconductors, data storage products, and flat panel displays. For the third quarter, revenues were $96.3 million, up 73 percent from $55.6 million for the third quarter of 1999, and up 12 percent from $85.7 million for the second quarter of 2000. The company's prior quarter and 1999 results have been restated to reflect the April 6, 2000 acquisition of Noah Holdings and the August 18, 2000 acquisition of Sekidenko, Inc., using the pooling of interests method of accounting.

"Despite posting our fourth consecutive quarter of record revenues and record net income, the third quarter results were lower than our expectations," said Doug Schatz, Chairman and Chief Executive Officer. "Late in the quarter we learned that one of our major OEM customers had pulled inventory in the second quarter in anticipation of changing to a contract manufacturer for sub assemblies. As a result, the new contract manufacturer did not have to purchase all of its product requirements from us in the third quarter. This was a one-time occurrence that has now been resolved, although it resulted in lower revenues in the third quarter than we anticipated. One result of this change in the method of procurement is that it will decrease the percentage of our revenue derived from Just-in-Time (JIT) shipments."

"We believe the semiconductor industry cycle is far from over, and we expect strong, continued industry growth in 2001," Mr. Schatz continued. "The third quarter revenue shortfall was customer specific and does not reflect the tone of the overall semiconductor equipment industry or of our OEM customers."

Net income for the 2000 third quarter was $16.3 million, or $0.50 per diluted share, which includes a $2.3 million non-recurring charge associated with the acquisition of Sekidenko, Inc., a $1.0 million non-recurring charge related to the relocation of the Tower Electronics business unit to Voorhees, NJ, and a $4.8 million one-time gain on investment. This compares to net income of $6.1 million or $0.20 per diluted share for the third quarter of 1999, and net income of $13.1 million, or $0.40 per diluted share, for the second quarter of 2000 which also included a one-time charge of $2.3 million for costs related to the Noah Holdings acquisition.

Pro forma net income from operations for the third quarter of 2000, excluding the non-recurring charges and the one-time gain was $16.5 million, or $0.51 per diluted share and is lower than the company¡¦s previous expectations. This compares to pro forma net income of $15.5 million, or $0.47 per diluted share for the second quarter of 2000 excluding one-time charges related to the Noah Holdings acquisition. The lower-than-anticipated net income is directly attributable to the shortfall in revenue as gross margin and operating expenses were in line with the company's expectations.

For the 2000 nine-month period, revenues were $257.0 million compared with $137.4 million for the first nine months of 1999. Gross profit for the 2000 nine-month period was $125.9 million, or 49.0 percent, an improvement compared with $60.5 million or 44.0 percent for the same 1999 period.

Net income for the 2000 nine-month period was $40.6 million, or $1.25 per diluted share, compared with $10.6 million, or $0.35 per diluted share, for the nine-month period ended September 30, 1999. Pro forma net income for the 2000 nine-month period was $42.8 million, or $1.32 per diluted share, and does not include non-recurring charges or the one-time gain on investment.

"We are pleased with the progress we've made in integrating our recent acquisitions of Sekidenko, Inc. and Noah Holdings," said Mr. Schatz. "We are continuing to pursue our strategy of integrating more components around a semiconductor processing