Applied Materials Announces Accelerated Stock Buyback and New $5 Billion Stock Repurchase Program; Reduces Outstanding Shares by 10% in 4th Quarter

SANTA CLARA, Calif.--(BUSINESS WIRE)--Sept. 18, 2006--Applied
Materials, Inc. announced today the repurchase of 145 million shares
of its common stock for approximately $2.5 billion cash under an
accelerated stock buyback program. This stock buyback, combined with
repurchases of nearly 9 million shares previously made during the
current fiscal quarter, has resulted in a 10% reduction of the
Company's common stock outstanding at the end of its third fiscal
quarter.

In addition, Applied's Board of Directors approved a new stock
repurchase program authorizing up to $5.0 billion in ongoing
repurchases of stock over the next three years. With the accelerated
stock buyback announced today, Applied has repurchased over $5.8
billion of its common stock during its 2005 and 2006 fiscal years, or
nearly 340 million shares, representing 20% of its common stock
outstanding at the beginning of fiscal 2005.

"Applied Materials has delivered increased value to our
stockholders through growth of revenue and earnings, as well as our
stock repurchase program and payment of quarterly dividends," said
Mike Splinter, president and CEO. "We believe the long-term outlook
for Applied Materials is excellent and we are confident in our
strategy. Our strong balance sheet and significant cash flows enable
us to invest in our future business, pursue strategic opportunities,
repurchase shares and pay quarterly dividends."

Applied executed its accelerated stock buyback with Goldman, Sachs
& Co. Under the agreement, Applied's initial purchase price is subject
to adjustment based on the volume-weighted average price of Applied
common stock over an expected four-month period. Applied may elect to
settle the price adjustment in shares or in cash.

This press release contains forward-looking statements, including
those relating to Applied Materials' long-term outlook, cash
generation, cash deployment strategies, future business and strategic
opportunities, and the execution of the accelerated stock buyback
program. These statements are subject to known and unknown risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by such statements, including without
limitation: the sustainability of demand in the nanomanufacturing
technology industry and broadening of demand for emerging applications
such as solar, which are subject to many factors, including global
economic conditions, business spending, consumer confidence, demand
for electronic products, and geopolitical uncertainties; customers'
capacity requirements, including capacity utilizing the latest
technology; the timing, rate, amount and sustainability of capital
spending for new technology; the Company's ability to develop, deliver
and support a broad range of products and to expand its markets and
develop new markets; the extent of any adjustment to the initial price
paid for shares in the accelerated buyback; the Company's ability to
timely align its cost structure with business conditions and manage
its resources and production capability; and other risks described in
Applied's SEC filings. All forward-looking statements are based on
management's estimates, projections and assumptions as of September
18, 2006 and Applied undertakes no obligation to update any such
statements.

Applied Materials, Inc. is the global leader in Nanomanufacturing
Technology(TM) solutions for the electronics industry with a broad
portfolio of innovative equipment, service and software products. At
Applied Materials, we apply Nanomanufacturing Technology to improve
the way people live. Learn more at www.appliedmaterials.com.

CONTACT: Applied Materials, Inc.

David Miller, 408-563-9582 (Business Media)

Betty Newboe, 408-563-0647 (Technical Media)

Randy Bane, 408-986-7916 (Financial)

SOURCE: Applied Materials, Inc.