Second quarter net sales of € 211.9 million, up 38.4% from net sales of the second quarter of 2003 and up 8.2% from net sales of the previous quarter;
Second quarter net earnings of € 4.4 million or € 0.08 diluted net earnings per share as compared to a net loss of € (7.3) million or € (0.15) diluted net loss per share for the second quarter of 2003 and net earnings of € 14.6 million or € 0.28 diluted net earnings per share for the first quarter of 2004;

Second quarter net operating margins were impacted by some one-time charges in the Back-end operations;

Second quarter bookings of € 232.1 million, an increase of 107.6% compared to € 111.8 million in the second quarter of 2003 and up 2.8% from € 225.7 million in the previous quarter.

Six months bookings of € 457.8, an increase of 74.9% compared to the € 261.7 million in the first half of 2003;

Quarter-end backlog of € 248.9 million, up 8.8% from the previous quarter.

BILTHOVEN, THE NETHERLANDS, July 27, 2004 - ASM International N.V. (NASDAQ: ASMI and Euronext Amsterdam: ASM) reports today the operating results for the second quarter of 2004. Net earnings for the second quarter amounted to € 4.4 million, or € 0.08 diluted net earnings per share compared to a net loss of € (7.3) million or € (0.15) net loss per share for the second quarter of 2003.

For the six months ended June 30, 2004 net earnings amounted to € 19.0 million or € 0.37 diluted net earnings per share compared to a net loss of € (16.2) million or € (0.33) diluted net loss per share for the same period in 2003.

Sales in the first six months of 2004 improved substantially to € 407.8 million, the highest sales level since the second half of 2000. In particular the Company’s Back-end segment reported record sales in the first six months of 2004, measured in the reporting currency of the Back-end segment, the Hong Kong dollar.

The second quarter of 2004 continued to show a strong order intake, particularly in the Company’s Front-end segment. However, second quarter of 2004 operating performance levels were lower compared to the first quarter, in both the Company’s Front-end and Back-end segments.



In the Front-end segment, operating results were lower due to changes in the product mix and lower average sales prices, in particular on our vertical furnaces, higher operating expenses in anticipation of expected increased sales levels in future periods and the first time consolidation of our 100% subsidiary NuTool, Inc. (NuTool), which is included in the consolidated financial statements since June 2, 2004..

In the Back-end segment, the consolidation of manufacturing activities in Malaysia needed to further improve manufacturing efficiency and to have manufacturing capacity closer to some of the Company’s main lead-frame customers, resulted in some fixed asset impairment charges and write-offs.

In addition, our Back-end segment introduced a large number of new innovative products in the past six months, such as soft solder die attach, turret test handlers, ball placement systems, stud bumping machines, thermosonic flip chip bonders, lens holder attachments for image sensors, handlers for wafer level packages, LED wafer scanning equipment as well as photo diode assembly equipment. These new models / types are all in the early phases of their learning curves which typically lead to more frequent engineering changes and lower initial gross margin contributions on these products. Also, as a result of these new product introductions and the continuously changing product mix the Back-end segment recorded additional provisions on slow moving inventories.

The combined impact of the above circumstances were one-time charges in the Back-end segment of more than € 10 million, impacting gross profit margins and increased research and development expenses, and reducing the earnings from operations especially in the second quarter of 2004.

The following table shows the operating performance for the second quarter of 2004 as compared to the first quarter of 2004 and the second quarter of 2003 and the percentage change for the second quarter of 2004 compared to the first quarter of 2004 and the second quarter of 2003:

In the six months ended June 30, 2004, net sales of wafer processing equipment (Front-end segment) represented 41.5% of consolidated net sales. Net sales of assembly and packaging equipment and materials (Back-end segment) represented 58.5% of consolidated net sales.

Consolidated sales levels expressed in euro were negatively impacted by the strong euro against the Japanese yen, the US dollar and US dollar related currencies. The decline in exchange rates for the first six months of 2004 compared to the first six months of 2003 impacted our sales negatively by 8.1%.

Net sales for the second quarter of 2004 amounted to € 211.9 million, an increase of 38.4% compared to net sales for the same period last year of € 153.1 million and 8.2% above the sales level of the first quarter of 2004.