Universal Display Corporation Signs Development and License Agreement with AIXTRON AG of Germany

Parties to Jointly Commercialize a Revolutionary New Technology for High Throughput OLED Production Equipment

EWING, N.J., July 25 /PRNewswire/ -- Universal Display Corporation (UDC) (Nasdaq: PANL; PHLX), a leading developer of flat panel display technology, has entered into a development and license agreement with AIXTRON AG of Aachen, Germany, the leading manufacturer of precision semiconductor production equipment for LEDs, to develop and fabricate OLED (organic light emitting device) production equipment based on an innovative low cost, precise, high throughput process, it was announced here today.

OLEDs are seen by many industry observers as the technology of the future for the flat panel displays required by the information age, including portable electronic communications devices based on new wireless and cellular telephony.

Using a transformational technology called Organic Vapor Phase Deposition (OVPD) invented by scientists at Princeton University, the production process utilizes a carrier gas stream in a hot walled reactor at very low pressure to precisely deposit the thin layers of organic materials used in OLED displays. Conventional OLED fabrication equipment evaporates the organic molecules at high temperature and pressure. OVPD offers the ability to precisely control the multi-source deposition required for full-color OLED displays. The OVPD design is also adaptable to the rapid, uniform deposition of organics on large-area substrates.

UDC and AIXTRON will develop the production equipment together which will be sold exclusively by AIXTRON under royalty bearing-licenses from UDC. Plans to install a demonstration pre-production system next year at the UDC facility are underway.

"The partnership with AIXTRON is designed to provide the next generation of OLED fabrication equipment and processes that can dramatically reduce the cost of producing OLED displays," said Steven V. Abramson, President of UDC. "This is an important step in our mission to commercialize innovative OLED technologies that can dramatically expand the penetration of OLED products in the flat panel display marketplace."

"OVPD provides a fundamentally new solution to the problems encountered in the low cost, high precision mass production of molecular organic displays," said Dr. Stephen Forrest, Chairman of the Electrical Engineering Department at Princeton University and a principal inventor of the OVPD technology. "It is very exciting working with AIXTRON, a world leader in the production of semiconductor growth equipment, and our partners at UDC, to see the emergence from the laboratory demonstrations of our work into the high volume marketplace of OLED display production."

"As the world leading supplier of semiconductor production equipment to the LED industry (for large screen outdoor video displays, signaling and illumination), AIXTRON is excited to further extend its equipment diversification by adding OVPD machines for OLEDs, using synergies in the market and applications," comments Dr. Holger Juergensen, President and CEO of AIXTRON. "Through OVPD, the OLEDs receive superior properties, which convinced us to invest into this joint development with UDC and the team of Dr. Stephen Forrest of Princeton University."

About UDC

UDC has been developing OLED technology with Princeton University and The University of Southern California (USC) since 1994. This partnership continues to be committed to the innovative research and commercialization of this proprietary OLED technology.

The Company believes that OLEDs will open up significant new markets for flat panel displays based on their novel features that include transparency and flexibility. OLEDs are seen by many as a future replacement technology for Cathode Ray Tubes (CRTs) and Liquid Crystal Displays (LCDs), due to their bright and beautiful colors, wide viewing angle, compatibility with full motion video, broad temperature ranges, thin and conformable form factor and low power requirements. CRTs and LCDs currently dominate the growing $40 billion annual electronic display market.

Universal Display Corporation is located minutes away from their research partners at Princeton University. The new location encompasses 11,000-sq. ft., which includes a pilot production line as well as 2,500 square feet of clean room space and laboratories for technology development and technology transfer.

About AIXTRON:

AIXTRON AG, Germany, and AIXTRON Inc. Chicago offer a wide range of CVD and epitaxial equipment for multicomponent materials like compound semiconductors, dielectrics and ferroelectrics. The production equipment scales to 20x4" or 9x6" batch processes, or 8"/300 mm bridge tools, of which a variant will be developed for OVPD. AIXTRON has installed over 350 systems worldwide and is represented in over 15 countries, providing an extensive service and support network.

AIXTRON equipment is being used in manufacturing of LED and optoelectronic components by customers like Agilent/LumiLeds (subs. H-P), Alcatel, Anritsu, Epistar, Epson, JDS-Uniphase, Lucent, Mitsubishi, NEC, Nortel, OSRAM, Samsung, ShowaDenko, Sumitomo, Thomson, UEC, VPEC, and many renowned research institutes and Universities worldwide. AIXTRON AG is a multi billion dollar traded public stock company on the German Exchange "Neuer Markt" in Frankfurt under AIX.

All statements in this news release that are not historical are forward- looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially for Universal Display Corporation from those projected, including, but not limited to, uncertainties relating to technological approaches, product development, manufacturing, and marketing acceptance, uncertainties related to cost and pricing of Universal Display products, dependence on collaborative partners, and other competition, risks relating to intellectual property of others and the uncertainties of patent protection. These are discussed in periodic reports filed with the SEC, including the Company s annual report on Form 10-K for the year ended December 31, 1999 and quarterly report on Form 10-Q. Universal Display Corporation expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Universal Display Corporation s expectations with regard thereto or any change in events, conditions, or circumstances on which any such statements are based.

Contact: Stephanie Hamernik of Minkus & Dunne PR Tel: 312-541-8787 e-mail, shamernik@minkus-dunne.com for Universal Display Corporation