For more information, contact:

Mike El-Hillow
Advanced Energy Industries, Inc.
Cathy Kawakami,
Advanced Energy Industries, Inc.

Advanced Energy Reports Fourth Quarter and Year-End 2003 Results
FORT COLLINS, Colo., Feb. 12—Advanced Energy (Nasdaq: AEIS) today reported financial results for the fourth quarter and year ended December 31, 2003. Advanced Energy is a leading global provider of critical solutions used in the production of semiconductors, flat panel displays, data storage products and other advanced applications.

Fourth Quarter Review

For the 2003 fourth quarter, revenue was $74.7 million, up 30 percent from $57.4 million for the fourth quarter of 2002, and up 9 percent compared to $68.6 million for the third quarter of 2003. The company generated income from operations of $319,000 for the fourth quarter of 2003, compared to a loss from operations of $5.7 million for the third quarter of 2003.

The net loss for the fourth quarter of 2003 was $2.4 million, or $0.08 per share, compared to the net loss of $22.0 million, or $0.68 per share, for the fourth quarter of 2002 and a net loss of $27.4 million, or $0.85 per share, for the third quarter of 2003. The fourth quarter of 2002 includes pre-tax charges of $13.1 million relating to excess and obsolete inventory and warranty reserves, and other items. The third quarter 2003 net loss included a non-cash charge of $22.4 million related to a reduction in the carrying value of the Company's net deferred tax assets.

Full Year Review

For the full year 2003, revenue was $262.4 million, compared with $238.9 million for the full year 2002, a 10 percent increase. Net loss for the full year 2003 was $44.2 million, or $1.37 per share, compared with a net loss of $41.4 million, or $1.29 per share, for the full year 2002.

Doug Schatz, chairman and chief executive officer, said, "Industry fundamentals are improving, and we are experiencing strong demand in all product groups, primarily driven by our semiconductor and flat panel customers. Our sales to semiconductor original equipment manufacturers (OEMs) in the fourth quarter of 2003 increased 22 percent compared to the 2003 third quarter, and sales to flat panel display OEMs increased 38 percent from the prior quarter. Our ability to secure key designs in high-growth semiconductor segments such as 300mm etch and chemical vapor deposition (CVD) puts us in a strong position to benefit as the industry accelerates its transition to larger wafers, as well as to smaller line widths and advanced materials such as copper and low-k dielectrics.

"In this accelerating order environment, we continue to focus on improving internal efficiencies and cost control. The initial improvements have shown through in our fourth quarter performance, and we posted income from operations for the first time in ten quarters. Looking ahead, we expect to gain greater leverage from the changes we have made, such as our manufacturing operation in China and our transition to a world-class Asian supply base.

"Based on our strong market position and the continued order momentum, we anticipate first quarter revenue in the $95 to $100 million range and earnings per share in the range of $0.12 to $0.17," said Mr. Schatz.

Fourth Quarter and Year-End Conference Call

Management will host a conference call today, Thursday, February 12, 2004 at 5:00 pm Eastern time to discuss the financial results. You may access this conference call by dialing 888-713-4717, or 706-679-7220 for international callers. For a replay of this teleconference, please call 706-645-9291, passcode 4682617. The replay will be available through Thursday, February 19, 2004.

There will also be a webcast available on the Advanced Energy Website, .

About Advanced Energy

Advanced Energy is a global leader in the development and support of technologies critical to high-technology manufacturing processes used in the production of semiconductors, flat panel displays, data storage products, compact discs, digital video discs, architectural glass, and other advanced product applications.

Leveraging a diverse product portfolio and technology leadership, Advanced Energy creates solutions that maximize process impact, improve productivity and lower cost of ownership for its customers. This portfolio includes a comprehensive line of technology solutions in power, flow, thermal management, plasma and ion beam sources, and integrated process monitoring and control for original equipment manufacturers (OEMs) and end-users around the world.

Advanced Energy operates in regional centers in North America, Asia and Europe and offers global sales and support through direct offices, representatives and distributors. Founded in 1981, Advanced Energy is a publicly held company traded on the Nasdaq National Market under the symbol AEIS. For more information, please visit our corporate website: .

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, our ability to manage the operations of our new manufacturing facility in China, our customers' acceptance of products manufactured at our Chinese manufacturing facility, the volatility and cyclicality of the semiconductor and semiconductor capital equipment industries, the timing of orders received from our customers, our ability to execute on the cost reduction initiatives currently underway, and other risks described in Advanced Energy's Form 10-K, Forms 10-Q as well as other reports and statements filed with the Securities and Exchange Commission. These reports and statements are available on the SEC's website at . 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.



     (in thousands, except per share data)

                                      Three Months Ended  Twelve Months Ended
                                        December 31,       December 31,
                                         2003      2002      2003      2002

     Sales                              $74,731   $57,444  $262,402  $238,898
     Cost of sales (2)                   48,100    52,970   174,455   170,138
     Gross profit                        26,631     4,474    87,947    68,760

     Operating expenses:
       Research and development          12,750    12,975    51,647    48,995
       Sales and marketing                7,095     9,739    31,015    34,940
       General and administrative         4,250     7,556    18,324    25,110
       Amortization of intangible
        assets                            1,199     1,904     4,612     5,423
       Litigation damages                    --        --        --     5,313
       Restructuring charges              1,018     5,840     4,306     9,060
       Impairment of intangible
        assets                               --     1,904     1,175     1,904
         Total operating expenses        26,312    39,918   111,079   130,745

     Income (loss) from operations          319   (35,444)  (23,132)  (61,985)

     Other (expense) income, net (1)     (1,957)    1,663    (9,308)   (1,707)
     Loss before income taxes            (1,638)  (33,781)  (32,440)  (63,692)
     (Provision) benefit for income
      taxes (1)                            (801)   11,824   (11,801)   22,293
     Net loss                           $(2,439) $(21,957) $(44,241) $(41,399)

     Basic and diluted net loss per
      share                              $(0.08)   $(0.68)   $(1.37)   $(1.29)

     Basic and diluted weighted-average
      common shares outstanding          32,433    32,111    32,271    32,026

     (1) In the fourth quarter of 2002, Advanced Energy recorded a gain on the
         extinguishment of debt, net of related income taxes, as a result
         of the Company's previously announced repurchase of a portion of its
         convertible debt.  The gain was previously reported as an
         extraordinary gain, net of related tax effects.  In connection with
         the issuance of Statement of Financial Accounting Standards No. 145,
         the gain before any tax effect has been reclassified to other
         (expense) income.  The loss before income taxes and income tax
         benefit were adjusted accordingly.

     (2) In the fourth quarter of 2002, Advanced Energy recorded charges of
         $11.5 million as cost of sales for excess and obsolete inventory and
         warranty reserves.

     (in thousands)

                                            December 31,      December 31,
                                                2003              2002


     Current Assets:
       Cash and cash equivalents              $41,522           $70,188
       Marketable securities                   93,691           102,159
       Accounts receivable                     61,927            43,885
       Income tax receivable                      151            14,720
       Inventories                             65,703            57,306
       Other current assets                     5,486             6,828
       Deferred income tax assets, net             --            17,510
     Total current assets                     268,480           312,596

     Property and equipment, net               44,725            41,178

     Deposits and other                         5,630             5,181
     Goodwill and intangibles, net             88,943            86,601
     Deferred debt issuance costs               3,019             4,091
     Demonstration and customer service
      equipment, net                            3,934             6,086
     Total assets                            $414,731          $455,733


     Current Liabilities:
       Trade accounts payable                 $23,066           $16,055
       Other current liabilities               28,216            31,064
       Current portion of capital
        leases and senior borrowings            8,582            15,197
       Accrued interest payable on
        convertible subordinated notes          2,460             2,338
     Total current liabilities                 62,324            64,654

     Long-term Liabilities:
       Capital leases and senior
        borrowings                              6,168            10,665
       Other long-term liabilities              2,015               694
       Deferred income tax liability,
        net                                     4,672             8,663
       Convertible subordinated notes
        payable                               187,718           187,718
     Total long-term liabilities              200,573           207,740

     Total liabilities                        262,897           272,394

     Stockholders' equity                     151,834           183,339
     Total liabilities and stockholders'
      equity                                 $414,731          $455,733

     (in thousands)

                                             Twelve Months Ended December 31,
                                                  2003              2002

     NET CASH USED IN OPERATING ACTIVITIES      $(12,986)         $(15,305)

      INVESTING ACTIVITIES                        (8,590)           24,311

     NET CASH USED IN FINANCING ACTIVITIES        (8,608)          (22,634)

      CASH                                         1,518             1,861
     DECREASE IN CASH AND CASH EQUIVALENTS       (28,666)          (11,767)
     CASH AND EQUIVALENTS, beginning of
      period                                      70,188            81,955
     CASH AND EQUIVALENTS, end of period         $41,522           $70,188