Since early 1999, the microelectronics industry has started to move from a period of cyclical contraction to one of growth. This growth is caused in part by increased demand for semiconductors, not only in personal computers, but also in sophisticated communications equipment and consumer electronics. The growth is also caused by the semiconductor industry expanding into new manufacturing process technologies to ensure the capability, capacity, and speed of operation increase in each new semiconductor. Also, this growth is caused by pent-up demand created during the last semiconductor downturn in the newly rebounding economies in Asia. The result is a shortage of capacity for semiconductor production, particularly for DRAMs, and a demand for new process technology and equipment. These trends are forecasted to last longer than the normal semiconductor expansion due to the length and depth of the last downturn. Current forecasts for expansion extend to three years of growth. Since Millipore has a broad product line of liquid filtration, photoresist pump and filtration systems, gas flow control and pressure control instruments, and gas filtration, this expansion is very favorable for Millipore.

In all three markets, new processes and new technologies are discovered, developed and adopted continuously. Millipore’s global strength in understanding the needs of our customers and our ability to develop new products to meet those needs will allow Millipore to support these changes with new products, grow even more rapidly than these fast growing markets, and gain market share as the new products are adopted.

In January, 2000, we restructured Millipore in order to consolidate the operating units of the Corporation under the newly created position of Chief Operating Officer. Fran Lunger, who joined Millipore as Chief Financial Officer in June, 1997, was promoted to the position of Executive Vice President and Chief Operating Officer, with worldwide operating divisions and worldwide manufacturing reporting directly to him. Kathy Allen, formerly Millipore’s Controller and an employee since 1983, was promoted to Vice President and Chief Financial Officer. I feel these changes will improve communications, streamline decision-making and result in better implementation of our strategies.

For all of the reasons I have outlined above, I feel Millipore is well positioned to meet the challenges of 2000 and the new millennium. We are eager to move forward and build on 1999’s success, satisfying our customers, and rewarding our shareholders and employees.

In closing, I would like to recognize the contributions of Charles D. Baker, Professor of Business Administration at Northeastern University, who retired from the Millipore Board of Directors in April, 1999. We greatly appreciate Charlie’s help and excellent counsel during his 20 years on the Board, and we wish him well. In September, we were pleased to welcome Richard J. Lane, President, Worldwide Medicines for Bristol-Myers Squibb Co., to our Board. We are pleased to have Rick on the Board and look forward to many years working together.

Sincerely,

C. William Zadel
Chairman, President,
Chief Executive Officer


Francis J. Lunger
Executive Vice President,
Chief Operating Officer