For more information, contact:

Richard Beck Advanced Energy Industries, Inc. 970.407.6204 dick.beck@aei.com

Cathy Kawakami Advanced Energy Industries, Inc. 970.407.6732 cathy.kawakami@aei.com

FORT COLLINS, Colo., October 22, 2001—Advanced Energy Industries, Inc. (Nasdaq: AEIS) today announced additional cost reduction actions in response to the sustained downturn in the semiconductor industry and global economy. Advanced Energy is an industry-leading provider of critical technology solutions for the manufacture of semiconductors, data storage products, and flat panel displays.

Doug Schatz, chairman and chief executive officer said, “We have implemented several tiers of our cost reduction program as the environment dictated over the past seven months. The continuing slow down in orders and the uncertain timing of an industry rebound force us to take even more aggressive actions to further reduce our cost structure.

“Reducing production costs and improving manufacturing flexibility are important elements of lowering our fixed cost base. As part of our strategy to increase the use of outsourcing to achieve these operating goals, we are taking steps to consolidate our manufacturing structure. As a first step, we are phasing out our Austin, Texas manufacturing facility in order to begin outsourcing the assembly of certain DC power products," Mr. Schatz continued.

The company further reduced its workforce by 8 percent, or 107 employees, bringing the worldwide headcount to 1185 employees. This represents a 26 percent decrease from 1600 employees at December 31, 2000. As part of its strategy to take advantage of additional outsourcing opportunities, the company expects to further reduce the number of employees at its Voorhees, New Jersey facility over the course of the next six months.

Further discretionary spending restrictions were also put into place, including additional reductions to travel budgets and additional shutdown days to be taken through the first quarter of 2002.

“While difficult, the changes we are making today will increase our operating leverage as we weather this steep industry downturn. Advanced Energy continues to strengthen its customer relationships and technology leadership throughout these challenging times, positioning the company to maximize its opportunities once order volumes begin to rebound,” said Mr. Schatz.

The manufacturing consolidation, reduction in force and additional discretionary spending reductions will remove approximately $11 million from the annualized cost structure, and will reduce the company’s break-even point progressively over the next two quarters. The company expects to report a restructuring charge of approximately $2.5 million, and revenues in the $28 million to $33 million range for the fourth quarter of 2001.

About Advanced Energy
Advanced Energy is a global leader in the development, marketing, and support of technology solutions that are central in the manufacture of semiconductors, data storage products, and flat panel displays. Original equipment manufacturers (OEMs) and end-users around the world depend on AE products when plasma-based technology plays a vital role in their manufacturing process. AE offers a comprehensive suite of products for vacuum process systems, including power management, temperature sensing, dynamic temperature control, gas delivery management, process monitoring and machine control tools, ion-beam sources, and plasma abatement technologies. AE technology solutions are sold and supported globally by direct offices, representatives, and distributors. Founded in 1981, AE is a publicly held company traded on the Nasdaq National Market under the symbol AEIS. AE’s URL is www.advanced-energy.com

Safe Harbor Statement
This press release contains certain forward-looking statements subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to: the volatility and cyclicality of the semiconductor and semiconductor capital equipment industries, fluctuations in quarterly and annual revenues and operating results, Advanced Energy's ongoing ability to develop new products in a highly competitive industry characterized by increasingly rapid technological changes, and other risks described in Advanced Energy's Form 10-K, Forms 10-Q and other reports and statements, as filed with the Securities and Exchange Commission. These reports and statements are available on the SEC's website at www.sec.gov. Copies may also be obtained by contacting Advanced Energy's investor relations at 970-407-6732. The company assumes no obligation to update the information in this press release.
For further information, please contact Richard Beck, Senior Vice President, Chief Financial Officer, +1-970-407-6204, dick.beck@aei.com; or Cathy Kawakami, Director of Investor Relations, +1-970-407-6732, cathy.kawakami@aei.com, both of Advanced Energy Industries, Inc.