Third Quarter Detail

Shipments and Margins

Shipments for the third quarter, including aftermarket business, before provision for deferred revenue totaled $9.6 million. Geographically, Axcelis' systems shipments were to: Asia, 53%; North America, 40%; and Europe, 7%. The ion implantation business accounted for 85% of total systems shipments in the third quarter. Gross margin for the third quarter was 36.9%.

Orders and Backlog

Orders received for the third quarter (new systems bookings and aftermarket) totaled $49.5 million. New systems bookings, excluding aftermarket, amounted to $12.8 million. Backlog plus deferred systems revenue at quarter end was $37.0 million. Backlog consists of systems orders (aftermarket orders are excluded) that are generally scheduled to ship within six months.

Aftermarket Business

The Company's revenues include sales of spare parts and product upgrades as well as complete systems. We refer to the business of selling spare parts and product upgrades, combined with the sale of maintenance labor and service contracts and service hours as the "Aftermarket" business. Our Aftermarket business remains relatively stable despite the significant decrease in fab utilization and continues to generate margins that are accretive to the business as a whole. Revenue from our aftermarket business was $36.8 million for the three month period ended September 30, 2008, compared to $38.3 million for the second quarter of 2008 and $43.2 million for the corresponding period of the preceding year.

SEN Corporation, an SHI and Axcelis Company ("SEN")

Axcelis owns 50% of SEN, a Japanese company that is licensed by Axcelis to manufacture and sell certain implant products in Japan. SEN's revenue for the third quarter totaled $38.0 million. Revenues in Japan are also challenged by weak market conditions, reducing SEN's contribution to the Company.

Business Outlook

Axcelis' financial outlook for the fourth quarter of 2008 includes revenues in the range of $45 million to $60 million. The Company also forecasts a fourth quarter loss per share in the range of $0.24 to $0.28, including the effect of restructuring charges of $0.03 to $0.04 per share. The Axcelis share of SEN net loss is projected to be in the range of $1 to $2 million. Royalties from SEN are projected in the range of $0.5 million to $1 million. Operating expenses for the quarter are forecast to be approximately at $36 million. Axcelis assumes no responsibility to update guidance. Axcelis will only confirm or update guidance via a press release.

Safe Harbor Statement

This document contains forward-looking statements under the SEC safe harbor provisions. These statements, which include our guidance for future financial performance, are based on management's current expectations and should be viewed with caution. They are subject to various risks and uncertainties, many of which are outside the control of the Company, including the timing of orders and shipments, the conversion of orders to revenue in any particular quarter, or at all, our ability to implement successfully our profit plans, the continuing demand for semiconductor equipment, relative market growth, continuity of business relationships with and purchases by major customers, competitive pressure on sales and pricing, increases in material and other production costs that cannot be recouped in product pricing and global economic, political and financial conditions. These risks and other risk factors relating to Axcelis are described more fully in the most recent Form 10-K filed by Axcelis and in other documents filed from time to time with the Securities and Exchange Commission.

About Axcelis Technologies, Inc.

Axcelis Technologies, Inc., headquartered in Beverly, Massachusetts, provides innovative, high-productivity solutions for the semiconductor industry. Axcelis is dedicated to developing enabling process applications through the design, manufacture and complete life cycle support of ion implantation and cleaning systems. Axcelis also licenses its 50% owned joint venture, SEN Corporation, an SHI and Axcelis Company, to manufacture and sell certain implant products in Japan. The company's Internet address is: www.axcelis.com.

               Axcelis Technologies, Inc.
              Consolidated Balance Sheets
                      In thousands
                       (Unaudited)

                                          September 30,    December 31,
                                              2008            2007
                                          ------------    ------------
 Assets

 Current assets
  Cash and cash equivalents               $     49,727    $     83,877
  Restricted cash                               12,641          17,018
  Accounts receivable, net                      36,571          76,067
  Inventories, net                             177,012         169,278
  Prepaid expenses and other current
   assets                                       19,216          32,442
                                          ------------    ------------
 Total current assets                          295,167         378,682

 Property, plant and equipment, net             63,997          68,101
 Investment in SEN                             136,131         132,911
 Goodwill                                       42,115          42,115
 Intangible assets                               8,957          10,925
 Other assets                                   33,374          37,195
                                          ------------    ------------
                                          $    579,741    $    669,929
                                          ============    ============

 Liabilities and stockholders' equity

 Current liabilities
  Accounts payable                        $     12,589    $     27,054
  Accrued compensation                          14,925          17,003
  Warranty                                       3,166           5,011
  Income taxes                                     754             531
  Deferred revenue                              15,107          35,827
  Other current liabilities                      5,294           8,577
  Current portion of convertible
   subordinated debt                            82,364              --
                                          ------------    ------------
 Total current liabilities                     134,199          94,003

 Convertible subordinated debt                      --          79,923
 Long-term deferred revenue                      3,308           4,704
 Other long-term liabilities                     4,858           5,293

 Stockholders' equity
  Preferred Stock                                   --              --
  Common stock                                     103             103
  Additional paid-in capital                   482,725         478,726
  Treasury stock                                (1,218)         (1,218)
  Accumulated deficit                          (57,033)         (1,815)
  Accumulated other comprehensive income        12,799          10,210
                                          ------------    ------------
                                               437,376         486,006
                                          ------------    ------------
                                          $    579,741    $    669,929
                                          ============    ============


                    Axcelis Technologies, Inc.
              Consolidated Statements of Operations
             In thousands, except per share amounts
                           (unaudited)

                                Three Months ended   Nine Months ended
                                    September 30,       September 30,
                                ------------------  ------------------
                                  2008      2007      2008      2007
                                --------  --------  --------  --------


  Revenue                         46,454   107,553   208,237   315,152

  Cost of Revenue                 29,295    71,284   134,772   194,043

  Gross Profit                    17,159    36,269    73,465   121,109

  Operating Expense
   Research and development       15,873    18,288    49,680    54,114
   Sales and marketing            12,381    12,411    36,760    38,495
   General and administrative     10,562    10,367    31,254    31,037
   Impairment of goodwill             --     4,658        --     4,658
   Amortization of intangible
    assets                           656       656     1,968     1,968
   Restructuring charges             444        --     3,512        --
                                --------  --------  --------  --------
                                  39,916    46,380   123,174   130,272
                                --------  --------  --------  --------

  Loss from operations           (22,757)  (10,111)  (49,709)   (9,163)

  Other Income Expense
   Equity income (loss) of SEN      (968)    1,767    (1,100)    8,340
   Interest income                   319     1,224     1,400     3,824
   Interest expense               (1,724)   (1,587)   (5,005)   (4,822)
   Other-net                         763       254       314       505
                                --------  --------  --------  --------
                                  (1,610)    1,658    (4,391)    7,847
                                --------  --------  --------  --------

  Loss before income taxes       (24,367)   (8,453)  (54,100)   (1,316)

  Income taxes (credits)             374      (256)    1,118      (536)
                                --------  --------  --------  --------

  Net loss                      $(24,741) $ (8,197) $(55,218) $   (780)
                                ========  ========  ========  ========

  Net loss per share
   Basic                        $  (0.24) $  (0.08) $  (0.54) $  (0.01)
   Diluted                         (0.24)    (0.08)    (0.54)    (0.01)

  Shares used in computing net
   loss per share
   Basic                         103,002   102,206   102,635   101,772
   Diluted                       103,002   102,206   102,635   101,772

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SOURCE: Axcelis Technologies, Inc.

Axcelis Technologies, Inc. 
          Maureen Hart
            +1 (978) 787-4266
            Fax: +1 (978) 787-4275
            maureen.hart@axcelis.com
          Investor Contact:
          Stephen Bassett
            +1 (978) 787-4000
            Fax: +1 (978) 787-9133
            investor.relations@axcelis.com
         
          Loomis Group
          Heather Smith
          +1 (617) 309-8005
          Fax: +1 (617) 638-0033
          smithh@loomisgroup.com