Unterpremstaetten, Austria (July 27, 2004) - austriamicrosystems reports strong business performance in the second quarter and first six months of 2004 due to increasing demand for its products in all regions. The second quarter and first half of 2004 show significant growth in sales and operating profit.

Consolidated group revenues in the second quarter reached EUR 36.6 million, an increase of 17% compared to the same quarter in 2003. Group revenues for the first six months of 2004 increased by 22% to EUR 68.9 million compared to the first half of 2003. Gross margin in the second quarter amounted to 43% compared to 37% in the same quarter of last year. For the first six months of 2004, gross margin reached 43%, an increase of ten percentage points compared to the same period last year.

The result from operations (EBIT) for the second quarter grew significantly to EUR 3.8 million, an increase of 196% from EUR 1.3 million in the same quarter last year. For the first six months of 2004, the result from operations rose to EUR 6.1 million from EUR -0.7 million in the relevant period last year.

New legislation passed during the second quarter lowered the Austrian corporate tax rate from 34% to 25% from January 1st, 2005. This favourable legislation creates an attractive tax environment for austriamicrosystems going forward. As detailed in the offering memorandum for its IPO and required by IFRS rules, a direct adjustment to our deferred tax asset of around EUR 12 million was taken to reflect this change. This one-time extraordinary non-cash adjustment impacted the net result for the second quarter 2004.

Net result for the second quarter amounted to EUR -9.6 million versus EUR 0.1 million in the comparable period last year while earnings per share for the second quarter were CHF -1.48 / EUR -0.96. Net income for the first half of 2004 was EUR -8.0 million or CHF -1.30 / EUR -0.84 per share compared to EUR -1.9 million for the same period last year. Not taking into account the non-cash adjustment, net income would have reached EUR 2.5 million in the second quarter and EUR 4.1 million in the first half with earnings per share of CHF 0.38 / EUR 0.25 for the second quarter and CHF 0.67 / EUR 0.43 for the first six months of 2004. Our total backlog increased to EUR 49.9 million on June 30, 2004 from EUR 37.4 million on June 30, 2003.

In its recent IPO austriamicrosystems increased its share capital by 2 million new shares with net proceeds to the company of more than EUR 41 million. Of these, EUR 40 million were used for the accelerated repayment of long-term debt which resulted in a significant strengthening of austriamicrosystems' balance sheet.

In operations, the second quarter showed high utilization in all areas of production. The expansion of production capacity in Fab B from 3,900 WSPM to 5,200 WSPM is progressing as planned. austriamicrosystems expects several customers from all regions to ramp volume products in the coming months and anticipates that the additional fab capacity will be fully utilized in the third quarter.

Looking forward, austriamicrosystems continues to see strength in the analog semiconductor market. austriamicrosystems expects its business in the product as well as foundry segments to continue to develop positively with revenues showing a further increase and earnings improving strongly in the second half of the year. Based on currently available information, austriamicrosystems anticipates full year revenues for 2004 to reach between EUR 155 and 165 million.

The complete half-year report 2004 including detailed financial information is available on austriamicrosystems' website under http://www.austriamicrosystems.com/08ir/report.htm

About austriamicrosystems
austriamicrosystems AG is a leading designer and manufacturer of highly integrated analog and analog intensive mixed signal ICs. austriamicrosystems combines more than 20 years of design capabilities, product and marketing know-how with its own cutting edge analog manufacturing and test facilities. Operating worldwide with more than 800 employees, austriamicrosystems serves four strategic markets: Communications, Industry & Medical, Automotive and Full-Service Foundry. austriamicrosystems AG is listed on the SWX Swiss Exchange in Zurich (ticker symbol: AMS).