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Advanced Energy Updates Third Quarter 2004 Outlook

FORT COLLINS, Colo., Sep 29, 2004—Advanced Energy Industries, Inc. (Nasdaq: AEIS), a provider of process-centered solutions critical to the production of semiconductors, flat panel displays, data storage products, architectural glass and other advanced product applications, today updated its outlook for the third quarter ended September 30, 2004.

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The Company now expects third quarter sales to be approximately $91 million to $93 million, or 15 percent to 16 percent lower than second quarter 2004 sales of $108.9 million, due to a general softening in demand patterns and customer order push-outs in the semiconductor and flat panel display industries. The Company previously anticipated sales in the range of $103 million to $107 million for the third quarter of 2004. Third quarter 2003 sales were $68.6 million. Based on the lower third quarter 2004 sales volume, the Company expects net income to be essentially breakeven.

Doug Schatz, chairman and chief executive officer, said, "Despite the near-term softening in demand throughout the semiconductor and flat panel display supply chain, sales to semiconductor customers are expected to outpace the growth rate of the industry overall in the first nine months of 2004. We have a leading market position that continues to strengthen with the transition to 300mm and sub-90 nanometer wafer processing, and the move to next generation flat panel display manufacturing. We continue to focus on improving our operational efficiency so that we are positioned to achieve our operating and profitability targets at all sales levels."

Third Quarter Conference Call

Management will host a conference call on Thursday, October 21, 2004 at 5:00 pm Eastern time to discuss Advanced Energy's third quarter 2004 financial results. You may access this conference call by dialing 888-713-4717. International callers may access the call by dialing 706-679-7720. For a replay of this teleconference, please call 706-645-9291, and enter the pass code 6231808. The replay will be available through Thursday, October 28, 2004. There will also be a webcast available at www.advanced-energy.com.

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 the cost of ownership for its customers. This portfolio includes a comprehensive line of technology solutions in power, flow, thermal management, and plasma and ion beam sources 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: www.advanced-energy.com.

Safe Harbor Statement

This press release contains certain forward-looking statements, including the company's expectations with respect to Advanced Energy's financial results for the third quarter of 2004. Forward-looking 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. Such risks and uncertainties include, but are not limited to: the volatility and cyclicality of the semiconductor and semiconductor capital equipment industries, Advanced Energy's ongoing ability to develop new products in a highly competitive industry characterized by increasingly rapid technological changes, Advanced Energy's ability to successfully integrate acquired companies' operations, 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 from Advanced Energy's website at www.advanced-energy.com or by contacting Advanced Energy's investor relations at 970-407-6305. The company assumes no obligation to update the information in this press release.