UNITED STATES SECURITIES AND EXCHANGE COMMISSION

FORM 10-K

[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2003

[   ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file Number: 1-16239

ATMI, Inc.

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $.01 par value

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [  ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K [  ]

Indicate by check mark whether the registrant is an accelerated filer (as defined by Rule 12b-2 of the Act). Yes [x] No [  ]

The aggregate market value of the voting stock held by non-affiliates of the registrant at June 30, 2003, was approximately $766,759,000 based on the closing price of $24.95 per share.

The number of shares outstanding of the registrant’s common stock as of March 8, 2004 was 31,139,195.

DOCUMENTS INCORPORATED BY REFERENCE:

     Proxy Statement for the annual meeting of stockholders to be held on May 25, 2004 (Part III).

Table of Contents

ATMI, INC.
Annual Report on Form 10-K
For the Fiscal Year Ended December 31, 2003

TABLE OF CONTENTS

PART I

Item 1. Business.

     ATMI is a leading supplier of materials, materials delivery systems, and high-purity materials packaging products used worldwide in the manufacture of semiconductor devices. ATMI specifically targets the “front-end” semiconductor materials market. This market includes the processes used to convert a bare silicon wafer into a fully functional wafer that contains many copies of a semiconductor device or “chip.” To complete the manufacturing process, this functional wafer is taken through a “back-end” manufacturing process that includes wafer dicing into chips, packaging and testing. ATMI’s customers include many of the leading semiconductor manufacturers in the world.

     ATMI has further refined its market focus to target specialty materials used in front-end semiconductor manufacturing. These specialty materials are used in eight key process steps that are used repetitively to add functionality to a silicon wafer. Despite the downturn in 2001 and 2002, the semiconductor industry has grown worldwide over time and front-end manufacturing processes have become increasingly complex, resulting in rapidly changing requirements for semiconductor materials. ATMI has capitalized on the growth of the semiconductor industry in general, and front-end processing in particular, through:

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a comprehensive research and development program that has provided a stream of proprietary and patented products for this market;

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a strategy of providing a comprehensive array of semiconductor materials products (ATMI now offers materials consumed in five of the eight front-end processes used in semiconductor manufacturing); and

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an aggressive acquisition effort that has allowed us to move toward a complete product portfolio more rapidly.

     During 2003, ATMI announced its intention to reduce its exposure to the capital equipment cycles by exiting non-core product lines (which represented nearly all of our former Technologies segment). The non-core product lines that we expect to exit include the following: environmental abatement equipment, materials sensing and monitoring equipment, specialty thin-film deposition services, outsourced parts cleaning and tool maintenance services, our smartcard device venture, and gallium nitride materials. The Company intends to complete these exit activities by the end of 2004.

     As a result of the decision to exit non-core businesses, ATMI’s continuing operations have been effectively reduced to one business segment.

     ATMI provides:

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a broad range of ultrahigh-purity semiconductor materials and materials delivery systems; and

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ultrahigh-purity semiconductor materials packaging.

     ATMI’s business has evolved to consist of a mix of consumables and packages that track wafer starts, or the approximate number of silicon wafers processed into fully functional semiconductor devices. Additional financial information about the Company and related geographic information can be found in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this Form 10-K.

     Over the last several years, ATMI has achieved a leadership position in high-purity materials, materials delivery systems and high-purity semiconductor packaging products by providing a more complete line of products than its competitors through innovation and acquisitions. ATMI plans to continue its growth through product line expansion and to leverage its core technology to create new high growth businesses.

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Semiconductor Industry Background

     Despite the severe downturn in the semiconductor industry during 2001 and 2002, the industry has grown significantly over time as the use of semiconductor devices has proliferated in a wide variety of consumer and industrial products, especially in computing, networking and communications equipment. This increase in demand for semiconductor devices has been fueled by the ability of semiconductor manufacturers to deliver products with:

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consistently enhanced performance characteristics and functionality;

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improved reliability;

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increased memory capacity; and

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reduced size, weight, power consumption and cost.

These advances have been made possible by innovations in the fabrication processes and in the materials and delivery systems used in manufacturing advanced semiconductor devices. At the same time, as the construction and management of fabrication facilities has become more complex, semiconductor manufacturers are seeking to streamline their supplier relationships and reduce the number of suppliers upon which they rely. In turn, this is driving significant consolidation among the providers of semiconductor materials and materials delivery systems.

     Semiconductor devices are manufactured by repeating a complex series of process steps on a wafer substrate, usually made of silicon. The primary process steps include various kinds of materials deposition (physical vapor deposition, chemical vapor deposition, electrochemical deposition, and ion implant), etch, wafer preparation (chemical mechanical planarization), patterning (photolithography) and photoresist strip.

     During deposition processes, several layers of conducting, semi-conducting or insulating thin films are formed on a wafer. Precise and reliable control of the deposition of these films is vital to the ultimate performance of an individual device.

     The most mature processes for thin film deposition and modification are physical vapor deposition, also known as PVD or sputtering, and ion implantation. In PVD, which is used primarily for the deposition of conducting or metal layers, a high energy beam is directed at a high purity metal target which in turn causes the displacement of metal atoms that are showered over the wafer, coating it with a thin metallic film. Ion implantation is a gas-based process used principally to modify (or dope) semi-conducting layers with a high-energy beam of material that is “implanted” into an existing thin film.

     Chemical vapor deposition, or CVD, is a process used in the deposition of semi-conducting and insulating thin films. In the CVD process, wafers are placed in a sophisticated reaction chamber and a specially designed gas or vaporized liquid material is introduced. Simultaneously, a form of energy, such as heat or plasma, is added to the reactor to cause the decomposition of the material being introduced. As a result of this decomposition, a thin film of material is deposited on the surface of the wafer. The advantages of CVD over PVD based processes include:

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the relative thinness of the films applied to the wafer;

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conformality (ability to coat evenly, especially in holes and trenches designed into the device);

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purity; and

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the ability to coat large areas.

These advantages have led to rapid growth in sales of reactors and related CVD process consumables and equipment. Consumables and related equipment include the raw materials used in the CVD process and the delivery systems required to transport the materials around a semiconductor plant and to a reactor.

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     Electrochemical deposition, or ECD, is growing rapidly as a result of the industry’s desire to use copper as the conducting layer in certain devices. The use of copper allows for smaller circuits, because copper greatly reduces power consumption while increasing integrated circuit (IC) speed. Nature favors copper over current aluminum wiring because of its higher conductivity and greater resistance to thermally and electrically induced short circuits. In ECD, the wafer is submerged in a bath of copper electroplating solution which, when appropriately charged, deposits a thin film of copper on the wafer.

     Etch is a process that selectively erodes away certain thin film materials. It is carried out either “dry” with corrosive gases or “wet” with energized liquids. As semiconductor manufacturing facilities (or “fabs”) migrate to copper wiring as the main component inside advanced integrated circuits, new advanced interconnect materials are required.

     Chemical mechanical planarization, or CMP, is used to prepare a wafer for photolithography. As wafers are processed, thin film thicknesses inevitably vary across the surface of the wafer. Due to the fine line widths used in photolithography, present-day wafers need to be perfectly flat. CMP flattens the processed wafer by polishing the wafer using a mechanical polishing pad and a slurry, which is an abrasive solution containing solid materials and chemicals which selectively erodes away the appropriate excess materials. Given the migration to copper, precision surface preparation and cleaning materials become more critical in the fabrication of advanced interconnect devices.

     Photolithography is the process whereby patterns are developed on the wafer surface. The process is begun by spinning a photosensitive material called “photoresist” or “resist” onto the wafer surface and shining light through a patterned photomask to selectively harden the resist. Photoresist strip is the process of stripping or otherwise removing excess resist material and allowing for the fabrication of the wafer’s circuitry.

     Because thin film materials are consumables, the market for these materials and delivery systems generally tracks wafer starts. The thin film materials market is also segmented into a wide variety of material types and forms. For example, many thin film precursors are now sold as pressurized gases, which allows for easy transport around a typical semiconductor manufacturing plant. However, many of these gases are toxic and/or hazardous, leading to the development of safer alternatives including the use of liquid or solid materials and the adoption of gas handling technologies and delivery systems that minimize the danger of a catastrophic release of toxic gas.

     Semiconductor materials have exceptional purity requirements due to the extremely low tolerances for impurities and particulates in semiconductor processing. Liquids and solids used in making devices require special packaging to minimize exposure to air, airborne contamination and particulates.

     The market for semiconductor thin film materials has expanded and contracted with the growth and contractions of the market for semiconductor devices. The design of new thin film materials and delivery systems to transport these materials around a semiconductor plant has experienced ongoing innovation. This innovation has been driven by the demand for expanding semiconductor device capabilities and corresponding decreases in circuit dimensions.

ATMI’s Strategy

     ATMI’s objective is to establish and enhance leadership positions in each of the market segments it serves. ATMI’s strategy consists of the following key elements:

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Target high-growth, high-margin specialty markets that use ATMI’s core materials technologies and require products that are consumed in the production process.

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Add value through advanced high-purity packaging and dispensing systems designed to meet the demands of users for greater levels of purity, productivity, safety and environmental responsiveness.

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Leverage ATMI’s technology leadership by investing extensively in developing proprietary and patented materials and materials handling technology which the Company uses to commercialize new products and new services to meet customer requirements.

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Form strategic alliances, including joint development programs and collaborative marketing efforts, to accelerate the introduction of ATMI’s products into markets that have manufacturing and/or distribution barriers.

In summary, ATMI’s strategy does not envision a “traditional” materials supplier-to-customer relationship. In those relationships, suppliers tend to provide materials to customers based on the cost, quantity and quality of the materials being supplied. Instead, ATMI has worked to establish partnerships with its customers based on ATMI’s ability to improve the efficiency of our customers’ manufacturing and supply chain processes - thereby lowering the integrated costs of materials to our customers.

Businesses and Products

     ATMI believes it is one of the fastest growing and is among the most innovative suppliers of ultrahigh purity semiconductor materials, delivery systems and related packaging to the semiconductor industry. ATMI has taken advantage of the changes in the market for materials, delivery systems and packaging by:

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developing and commercializing a wide range of “front-end” semiconductor materials;

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commercializing innovative bulk delivery systems that automatically deliver materials of the highest purity and consistency to a process;

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developing innovative high-purity packaging systems that allow for the introduction of low volatility liquids and solids to semiconductor processes;

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developing and commercializing patented low-pressure gas delivery systems for safe handling and delivery of toxic and hazardous gases to semiconductor process equipment; and

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developing manufacturing processes to meet the critical purity and integrity requirements of the microelectronics industry.

     In meeting the needs of its customers, which include semiconductor device manufacturers, chemical suppliers and semiconductor original equipment manufacturers, or OEMs, located throughout the world, and anticipating their future requirements, ATMI seeks:

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to offer the most complete line of consumable and delivery and packaging system products;

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to offer the highest purity materials available;

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to provide a high level of customer service and technical support;

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to meet customer needs for statistical quality and process control and dock-to-stock programs; and

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to meet the industry’s needs for advanced materials required for future generation devices.

     Products and Services. ATMI has three primary product lines, which consist of gas delivery systems, liquid materials and delivery systems and advanced high-purity packaging and delivery systems. ATMI also provides applications and analytical support services relating to each of these product lines.

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Gas Delivery Systems

     Gas Delivery Systems (the SDS^® or Safe Delivery Source). ATMI’s patented SDS^® product line uses a standard gas cylinder containing an adsorbent material. The cylinder is filled with gas under conditions such that the gas is adsorbed onto the adsorbent material at sub-atmospheric pressure. Sub-atmospheric storage of hazardous gases eliminates or minimizes potential leaks of gas during transportation and use, thus providing significant safety and environmental improvements over the traditional high-pressure cylinders. In addition, SDS^® products allow more gas to be stored in the cylinder, providing significantly higher rates of productivity than traditional methods of gas delivery used in ion implantation manufacturing processes. Since ion implantation processes operate at reduced pressures, the gas can be desorbed or released from the SDS^® gas sources using the ion implanter’s vacuum pumps. SDS^® gas sources can be installed and operated like conventional high-pressure gas cylinders with minimal maintenance. These advantages have led major chip manufacturers to adopt this technology as the industrial standard for dopant gas delivery.

     ATMI is a market leader in materials used in ion implantation applications with its SDS^® brand of implant gases. SDS^® materials include primarily arsine, phosphine and boron trifluoride. ATMI introduced several new implant gases in 2002 including indium and antimony sources. These products are manufactured by ATMI and ATMI’s exclusive distributor, Matheson Tri-Gas. In its continuous effort to improve SDS^® technology, ATMI recently introduced the third generation of SDS^® products, called SDS3^®. The new product, while still maintaining all the inherent safety features of previous generation SDS^® products, dramatically increases the gas storage capacity by using a newly invented adsorbent. The 2 to 3 times capacity improvement over existing products will allow implanter users to further reduce tool down times and to generate significant cost savings. ATMI has also successfully adopted the carbon adsorption technology and introduced new products for semiconductor deposition processes marketed under the SAGE™ brand. These applications include: Low-k plasma-enhanced deposition, or “PE-CVD”, processes using Low-k materials, pre-metal dielectric high-density plasma, or “HDP-CVD”, films utlilizing phosphine gases and thermal deposition processes using germane gases. ATMI has also introduced a silane product used in processes such as HDP-CVD packaged in a novel vacuum-actuated cylinder for improved safety.

Liquid Materials and Delivery Systems

     Deposition. ATMI is also a leader in CVD products used for thin films in semiconductor manufacturing. ATMI markets these materials under the “UltraPur™” brand for pre-metal dielectric, dielectric, and barrier applications. ATMI is well positioned as the industry prepares to move to low-k dielectric films with the introduction of several new products in this area including “UltraPur™ OMCTS” (octamethylcyclotetrasiloxane), “UltraPur™ 4MS” (tetramethylsilane), and “Super Dry™ TMCTS” (tetramethylcyclotetrasiloxane) and other materials. The low-k dielectric application is one of the fastest growing applications for dielectric deposition and is expected to become a mainstream technology at 90 nanometer device generations. ATMI is also well positioned for the incorporation of atomic layer deposition (ALD) processes to the semiconductor industry with its “ProE-Vap™” ampoule. This proprietary container allows for reliable delivery of low volatility solid precursors required for ALD.

     ATMI manufactures and markets chemical delivery systems under the Bulkfill™, Unichem™, 3Chem™, and RPM™ brands. ATMI’s patented canister technology and proprietary piping manifold purge technology make these systems a preferred solution, which reliably and safely manage materials in semiconductor fabs. These systems are designed to enable process tool efficiency through continuous refill of deposition tools, alleviating the need for costly tool shutdowns for container changes. The Bulkfill™ is used for fab-wide distribution of TEOS (tetraethylorthosilicate), greatly reducing the frequency of container changes with its large 200-liter reservoirs. The 3Chem™ is designed for BPSG (boron phosphorous silica glass) applications, combining the delivery of the boron, phosphorous, and silicon precursors. The reduced pressure manifold or RPM™ gas delivery cabinet is designed to deliver ATMI’s proprietary sub-atmospheric SAGE™ and VAC gases.

     Photo Etch. ATMI’s AP™ and ST™ brand wafer photoresist strip cleaning materials are proprietary chemistries used for applications such as semiconductor post-etch residue removal, wafer etching, organics removal, negative resist removal, edge bead removal and corrosion prevention. The ST-250™ material is recognized as a leading

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material for the high-growth copper device post-etch residue removal application. This proprietary and patented material is used for copper interconnects in advanced wafer fabs. Copper wiring in semiconductor devices is a very rapid-growth segment with most major logic segment semiconductor companies in production at 130 nanometers.

     Chemical Mechanical Planarization. ATMI’s chemical mechanical planarization “CMP” products include the PlanarChem™ brand of materials. ATMI supplies materials for silicon oxide based film polishing for many different applications including shallow-trench isolation “STI”, HDP-CVD and TEOS based films. The PlanarChem™ brand of slurries offers improved polishing performance through the use of tightly controlled colloidial silica materials. CMP is one of the fastest growing markets in the semiconductor materials industry. ATMI is also developing copper and barrier polishing materials for the application of polishing copper-based dual damascene structures.

     In July 2003, ATMI acquired ESC, Inc., which is now known as the Surface Preparation Products (SPP) group. SPP is a provider of leading-edge surface preparation products for advanced copper device fabrication. SPP products are being used in the most advanced copper fabs around the world for various surface preparation applications such as post-CMP cleaning and pre-nitride deposition surface treatment. These materials are marketed under the ESC brand name. ATMI expects that applications for these products will expand rapidly as the advanced IC device designs drop below 90 nanometers. The SPP technology has applications in IC as well as other niches such as LCD (liquid crystal display), disk drive, and other areas.

     Copper Plating. ATMI is a market leader in materials used in copper electrochemical deposition applications with its Viaform^® brand of copper materials. ATMI was granted an exclusive, worldwide license to market and distribute Viaform^® materials in 2003 by Enthone, Inc., a subsidiary of Cookson Electronics. Viaform^® materials include inorganic and proprietary organic molecules that enable process efficiency in Dual Damascene copper processing applications. Dual Damascene copper processing in semiconductor devices is a rapidly growing segment with most major logic segment semiconductor companies in production at 130 nanometers with ongoing research and development in 90 and 65 nanometer technology nodes. ATMI also supplies CuChem^® and CuSuite^® equipment to analyze and deliver copper materials in semiconductor fabs worldwide.

Advanced High Purity Packaging and Delivery Systems

     Advanced High-Purity Packaging and Delivery Systems. ATMI manufactures three different types of NOWPak^® container assemblies: Bag-in-a-Bottle™; Bag-in-a-Can™; and Bag-in-a-Drum™, each with its own companion dispense connection system. Each features a pre-cleaned collapsible inner liner, or “bag”, inside a rugged, high-density polyethylene or stainless steel overpack. The standard liner film is made of polytetrafluoroethylene, which allows virtually all chemicals to be delivered to the manufacturing process without compromising their inherent purity. The empty inner liner is easily removed for waste consolidation, and the outer shell is recyclable or returnable for insertion of a new replacement liner. The dispense system insures full utilization of the chemical and improved safety during dispense by sealing and isolating the chemical from the environment to further protect the chemical and the operator. It also ensures that the correct chemical is installed on the process through a key coding system.

     The largest market for NOWPak packaging is photoresist and related chemicals used to pattern integrated circuits. These materials are typically packaged in Bag-in-a-Bottle™ containers that range in size from 1 to 10 liters. The NOWPak^® is also widely used to package photoresist and related materials for the manufacture of flat panel displays. Here, larger 18-20 liter Bag-in-a-Bottle™ or Bag-in-a-Can™ containers are used. Other markets for the larger volume containers include the pharmaceutical, biotech and laboratory markets. Additionally, applications have recently expanded beyond photolithography chemicals in the semiconductor niche to include ancillary chemicals, CMP slurries and process chemicals for which the new 200 liter Bag-in-a-Drum™ is well suited.

     ATMI also produces packages for high-purity solids under the Newform brand name. The Company makes high-purity flexible Ultra Clean packaging for the semiconductor and pharmaceutical industries. With its Newform products, ATMI packages critical materials and components such as sputtering targets, wafer and disc shippers and cleanroom components as well as container overwraps. With the NOWPak^® liquid packaging system and Newform

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solids packaging, ATMI is addressing an increasing number of critical packaging needs for the microelectronics market.

Customers, Sales and Marketing

     ATMI sells and distributes its products worldwide primarily through a direct global sales and service organization. For a breakdown of revenue by geography, see Note 17 to the consolidated Financial Statements. ATMI distributes its materials products to end-use customers, chemical suppliers and equipment suppliers through its direct sales force in North America, Europe, Taiwan, Korea, Japan, China and Singapore, with limited use of regional manufacturing representatives in certain remote parts of Asia and Europe. Additionally, ATMI’s delivery and analytical systems product lines are marketed and sold to semiconductor equipment OEMs, who in turn resell to end users. NOWPak^® containers are generally sold to chemical suppliers. The chemical companies then sell their high purity chemicals in NOWPak^® containers at the request of end-users. Newform packaging products have historically been sold directly to semiconductor and pharmaceutical companies, predominately in Europe. ATMI sells its SDS^® product into the ion implant market directly and through an exclusive distribution agreement with Matheson Tri-Gas.

     The majority of ATMI’s sales are to customers in the worldwide semiconductor industry. Results of operations, therefore, are materially dependent upon economic and business conditions in the semiconductor industry. The semiconductor industry has historically experienced significant growth; however, periods of reduced semiconductor unit demand and manufacturing overcapacity have resulted and could result again in significantly reduced demand for semiconductor materials.

Manufacturing

     The following table summarizes the location, products manufactured and size of ATMI’s various manufacturing facilities in its continuing operations as of December 31, 2003.

Competition

     ATMI’s primary competitors in certain product lines of the business are the Schumacher Division of Air Products and Chemicals, Inc., the EKC Division of DuPont and the Shipley division of Rohm and Haas. There are several additional companies outside the United States that compete with ATMI.

     ATMI’s SDS^® brand product currently has no widely established direct competition. Several companies compete with high-pressure gas cylinders and solid sources. There are numerous domestic and foreign companies that offer products that compete with ATMI’s high-purity packaging and chemical dispensing system products. However, ATMI believes that its ability to compete in the markets for containers and dispensing systems is dependent largely upon its patented NOWPak^® technology and its proven ability to enhance and improve its products and technologies.

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Research and Development

     The Company’s research and development expenses consist of personnel and other direct and indirect costs for internally funded project development. ATMI also participates in joint development efforts with certain semiconductor manufacturers, semiconductor equipment OEMs, and various federal government agencies. Total expenses for research and development for the years ended December 31, 2003, 2002 and 2001 were $19.2 million, $13.8 million and $9.9 million, respectively, excluding amounts reimbursed by external parties through contract funding and cost share agreements of $0.8 million, $1.6 million and $2.4 million in 2003, 2002 and 2001, respectively. Total research and development expenditures represented 11.2%, 10.1% and 8.9% of revenues in 2003, 2002 and 2001, respectively.

Strategic Alliances

     ATMI forms strategic alliances, including joint development programs and collaborative marketing efforts, to accelerate the introduction of its products into markets that have manufacturing and/or distribution barriers. These programs have led to significant technological advances, including the development of proprietary advanced materials and semiconductor manufacturing processes. During 2003, ATMI entered into a strategic alliance with Enthone, Inc., a Cookson Electronics Company (“Enthone”), whereby ATMI purchased the exclusive worldwide selling and distribution rights to Enthone’s copper electrochemical deposition (ECD) products, including its ViaForm^® products, for a period of ten years, subject to automatic renewal upon satisfaction of certain conditions. Under the terms of the agreement, Enthone will continue to manufacture the ViaForm^® products for ATMI. Most of ATMI’s other strategic alliances are with leading semiconductor manufacturers or OEMs, such as Applied Materials, IBM, Micron Technology, Novellus, Infineon and Texas Instruments, each of which has participated with the Company in advanced materials and process development programs. These programs enhance ATMI’s core technology base and promote the introduction of targeted products.

Backlog

     ATMI’s materials and packaging businesses do not maintain significant backlog, since substantial portions of the business are conducted with open-ended, long-term supply contracts that do not specify quantities. Also, the SDS^® gas delivery source product, marketed through Matheson Tri-Gas as an exclusive distributor for the ion implant market, carries no backlog. Therefore, we do not believe that backlog as of any particular date is indicative of future results.

Patents and Proprietary Rights

     ATMI has made a significant investment in securing intellectual property protection for its technology and products. ATMI seeks to protect its technology by, among other things, filing patent applications where appropriate for technology considered important to the development of its business. The Company also relies upon trade secrets, unpatented know-how, continuing technological innovation and the aggressive pursuit of licensing opportunities to help develop and maintain its competitive position.

     As of February 15, 2004, ATMI had been awarded 378 United States patents and had 216 current United States patent applications pending. Foreign counterparts of certain of these applications have been filed, or may be filed at an appropriate time. ATMI decides on a case-by-case basis whether, and in what countries, it will file counterparts of a United States patent application outside the United States. ATMI’s United States patents expire between 2004 and 2024. Approximately 90 of the United States patents awarded to ATMI and 74 of the United States patents pending relate to discontinued operations and will most likely be sold. ATMI also holds 36 United States registered trademarks, of which 14 relate to discontinued operations and will most likely be sold.

     ATMI’s ability to compete effectively with other companies will depend, in part, on its ability to maintain the proprietary nature of its technology. Although the Company has been awarded, has filed applications for, or has been licensed under numerous patents in the United States and other countries, there can be no assurance concerning the degree of protection afforded by these patents or the likelihood that pending patents will be issued.

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     ATMI requires all employees and most consultants, outside scientific collaborators, sponsored researchers and other advisors to execute confidentiality agreements upon the commencement of employment or consulting relationships with the Company. These agreements provide that all confidential information developed or made known to the entity or individual during the course of the entity’s or individual’s relationship with ATMI is to be kept confidential and not disclosed to third parties except in specific circumstances. All of ATMI’s employees have entered into agreements providing for the assignment of rights to inventions made by them while employed by the Company.

Environmental Regulation

     ATMI uses, generates and discharges toxic, volatile or otherwise hazardous chemicals and wastes in its manufacturing, processing, and research and development activities. As a result, the Company is subject to a variety of governmental regulations related to the storage, use and disposal of these materials. ATMI’s failure to comply with present or future laws could result in fines or other liabilities being imposed on the Company, suspension of production or a cessation of operations.

     The various premises that ATMI occupies may have been contaminated prior to occupancy. ATMI is not aware of any material environmental investigation or action by government agencies involving these premises. However, under federal and state statutes and regulations, a government agency may seek to recover its response costs and/or require future remedial measures from both operators and owners of property where releases of hazardous substances have occurred or are ongoing. The Company has secured indemnifications for remediation costs in connection with certain potential pre-existing, on-site contamination or environmental conditions. However, these indemnifications may not prove adequate to cover any liability imposed on the Company related to the environmental condition of the premises or the cost of defending an environmental action, either of which could be substantial.

     ATMI’s activities may also result in the Company’s being subject to additional regulation. Such regulations could require ATMI to acquire significant additional equipment or to incur other substantial expenses to comply with environmental laws. ATMI’s failure to control the use of hazardous substances could subject the Company to substantial liabilities.

Employees

     As of December 31, 2003, ATMI’s continuing operations employed 645 individuals, including 292 in sales and administration, 248 in operations and 105 in research and development. Of these employees, 35 hold Ph.D. degrees and 44 hold other advanced degrees in electrical engineering, materials science, chemistry, physics or related fields. As of December 31, 2003, ATMI employed a total of 1,044 individuals. Only 3% of the Company’s employees are covered by a collective bargaining agreement, which expires in December 2004. All of the employees covered by this agreement are based in Europe. ATMI has never experienced any work stoppages and considers its relations with its employees to be good.

Company Information

     ATMI was incorporated under the laws of Delaware in 1997, and our predecessor company was incorporated under the laws of Delaware in 1987. ATMI’s headquarters is located at 7 Commerce Drive, Danbury, Connecticut 06810, and our telephone number is (203) 794-1100.

     ATMI’s website can be found on the Internet at www.atmi.com. The website contains information about the Company and its operations. Copies of each of the Company’s filings with the SEC on Form 10-K, Form 10-Q, Form 8-K and Form S-8 and all amendments to those reports can be viewed and downloaded free of charge as soon as reasonably practicable after the reports and amendments are electronically filed with or furnished to the SEC by accessing www.atmi.com and clicking on Investor and then clicking on SEC Filing.

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     Any of our reports on Form 10-K, Form 10-Q, Form 8-K and Form S-8 and all amendments to those reports can also be obtained in print by any stockholder who requests them from our Investor Relations Department:

Investor Relations ATMI, Inc. 7 Commerce Drive Danbury, CT 06810

Item 2. Properties

     The following table summarizes the location and size of ATMI’s various properties as of December 31, 2003 other than headquarters.

(1)		These facilities are associated with product lines that are held for sale at December 31, 2003. Management anticipates that these facilities will be sold, or the associated leases will be assumed for facilities held under lease, by the buyers pending the divestiture of the Company’s non-core product lines.
(2)		The operations of this Burnet, Texas facility have been moved to the Company’s new state-of-the-art materials manufacturing facility also in Burnet, Texas. Management expects to dispose of this site by the end of 2004.

     ATMI’s corporate headquarters is located in Danbury, Connecticut, in a 31,000 square foot leased facility. The lease on this facility expires in 2008.

     ATMI also has a U.S. sales office located in Austin, Texas (3,000 square foot leased facility), a sales office located in Witney, Oxfordshire, United Kingdom (1,000 square foot leased facility), and Asian sales offices located in Singapore (3,000 square foot leased facility), Tokyo, Japan (1,000 square foot leased facility), Anseong, South Korea (3,000 square foot leased facility) and Shanghai, China (1,000 square foot leased facility).

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Item 3. Legal Proceedings

     During 2003, the Company received a favorable judgment from the U.S. Tax Court regarding an assessment made by the Internal Revenue Service. Accordingly, the Company’s 2003 results of continuing operations reflect a $3.0 million tax benefit related to this favorable judgment.

     On July 11, 2003, ATMI’s subsidiary, Advanced Technology Materials, Inc., filed suit against Praxair, Inc., the parent company of Praxair Electronics, in the United States District Court for the Southern District of New York charging it with infringing upon two patents ATMI holds for certain sub-atmospheric gas delivery technologies. ATMI is seeking treble damages and an injunction against Praxair. On December 22, 2003, Praxair, Inc. and Praxair Technology, Inc. filed suit against ATMI, Inc. and Advanced Technology Materials, Inc. in the United States District Court for the District of Delaware alleging infringement of three patents licensed to Praxair, Inc. and Praxair Technology, Inc. related to pressurized container components. Praxair is seeking treble damages and an injunction against ATMI.

     In addition, in the normal course of business, ATMI is involved in various lawsuits and claims. Although the Company cannot determine the ultimate outcome of any of these legal proceedings at this time, management, including internal counsel, does not believe that the outcome of these proceedings, individually or in the aggregate, will have a material adverse effect on ATMI’s financial position or results of operations.

Item 4. Submission of Matters to a Vote of Security Holders.

     No matter was submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of the fiscal year ended December 31, 2003.

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PART II.

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters.

     The common stock of ATMI has traded on the Nasdaq National Market under the symbol ATMI since October 13, 1997, and the common stock of our predecessor traded under that symbol from 1993 until October 12, 1997. The following table sets forth for the periods indicated the high and low sales price for the Common Stock as reported on the Nasdaq National Market:

     As of March 8, 2004, there were approximately 241 holders of record of the Common Stock.

     The Company has never declared or paid any cash dividends on its capital stock. The Company currently intends to retain all available earnings for use in its business and does not anticipate paying any cash dividends in the foreseeable future. Certain financing agreements of the Company’s subsidiaries contain limitations or prohibitions on the payment of dividends without the lender’s consent.

     The Transfer Agent and Registrar for ATMI Common Stock is Boston Equiserve LP.

     See Item 12 for information about our equity compensation plans.

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Item 6. Selected Financial Data.

     The following selected consolidated statements of operations for the years ended December 31, 2003, 2002, 2001, 2000, and 1999 and the consolidated balance sheet data as of December 31, 2003, 2002, 2001, 2000 and 1999 are derived from ATMI’s audited consolidated financial statements. The data set forth below should be read in conjunction with the consolidated financial statements and notes thereto and other financial information included elsewhere in this Form 10-K.

(1)		Includes charges of $2.7 million to write down inventory balances in the liquid chemistries and delivery equipment product lines.
(2)		Includes $0.7 million of in-process research and development expensed in connection with the ESC, Inc. acquisition.
(3)		Represents a $2.4 million asset impairment charge related to the Company’s former liquid chemistries manufacturing facility, partially offset by a $0.7 million gain related to sublease income from a former tenant in the Company’s Danbury, Connecticut facility.
(4)		Includes $5.7 million of asset impairment charges related to the Company’s strategic investment portfolio.
(5)		Includes $3.0 million of tax benefit recognized as a result of a favorable U.S. Tax Court judgment.
(6)		Includes a $2.6 million (net of $1.5 million tax benefit) charge for excess and obsolete inventory.

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(7)		Includes $1.0 million gain from the sale of available-for-sale securities, offset by a $0.4 million write-down of other available-for-sale securities.
(8)		Includes an asset impairment charge of $21.8 million (net of tax benefit of $12.8 million) to recognize the impairment of assets in the Company’s former gallium arsenide epitaxial services business.
(9)		Includes a $0.6 million inventory write-down.
(10)		Includes a special charge for accounts receivables write down of $2.5 million as a reserve against the possible effects that the weakened economic environment and semiconductor industry downturn had on ATMI’s customers.
(11)		Represents severance and other costs incurred in connection with ATMI’s restructuring efforts.
(12)		Includes a gain on settlement of certain patent litigation, net of related expenses, and a $2.6 million gain on the sale of certain available-for-sale securities, offset by an asset impairment charge of approximately $0.4 million on available-for-sale securities.
(13)		Includes a $0.7 million (net of tax benefit of $0.4 million) inventory write-down and a $5.4 million (net of tax benefit of $2.6 million) of costs incurred in connection with ATMI’s restructuring efforts announced in the first and third quarters of 2001.
(14)		Includes a $9.5 million gain on the sale of certain marketable securities offset by a loss of $1.3 million on certain other investments.
(15)		Includes $1.5 million of costs incurred in connection with completing the ESCA, Inc. acquisition.
(16)		Includes $1.9 million of severance expense for several former executives.
(17)		Represents $1.3 million incurred in connection with the completion of the acquisition of NewForm N.V., and $1.1 million incurred in connection with the acquisition of Advanced Chemical Systems International, Inc., offset by a reversal of $0.6 million for previously accrued merger costs.
(18)		Includes $7.0 million (net of tax benefit of $1.1 million) of costs incurred in connection with the acquisitions of MST Analytics, Inc., Delatech, Inc. and TeloSense Corporation and $0.3 million (net of tax benefit of $0.1 million) of severance expense for several former employees.

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Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.

     The following discussion and analysis of our financial condition and results of operations should be read together with the consolidated financial statements and the related notes thereto appearing in Item 8 of this report.

Overview

     ATMI is a leading supplier of materials, materials delivery systems, and high-purity materials packaging products used worldwide in the manufacture of semiconductor devices. ATMI specifically targets the “front-end” semiconductor materials market. This market includes the processes used to convert a bare silicon wafer into a fully functional wafer that contains many copies of a semiconductor device or “chip.” To complete the manufacturing process, this functional wafer is taken through a “back-end” manufacturing process that includes wafer dicing into chips, packaging and testing. ATMI’s customers include many of the leading semiconductor manufacturers in the world.

     During 2003, ATMI announced its intention to reduce its exposure to the capital equipment cycles by exiting non-core product lines (which represented nearly all of our former Technologies segment). The non-core product lines that we expect to exit include the following: environmental abatement equipment, materials sensing and monitoring equipment, specialty thin-film deposition services, outsourced parts cleaning and tool maintenance services, our smartcard device venture, and gallium nitride materials. The Company intends to complete these exit activities by the end of 2004.

     The consolidated financial statements have been reclassified for all periods presented to reflect the non-core product lines as discontinued operations. See Note 2 to our consolidated financial statements in Item 8 for additional details.

Critical Accounting Policies and Estimates

General

     Management’s discussion and analysis of ATMI’s financial condition and results of continuing operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires ATMI to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to bad debts, inventories, marketable securities and investments, intangible assets, property, plant and equipment, income taxes, restructuring charges, and contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

     The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

Revenue Recognition

     The Company recognizes revenue in accordance with SEC Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements (“SAB 101”), as amended by SAB 101A and 101B. SAB 101 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) the fee is fixed and determinable; and (4) collectibility is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the fee charged for products delivered and services rendered and collectibility of those fees. The Company’s revenues from product sales are recognized upon title transfer, which generally occurs upon shipment. In instances where final acceptance of equipment is specified by the purchase agreement, revenue is deferred until all

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acceptance criteria have been satisfied. Service revenue is generally recognized ratably over the period of the related contract, or if not under contract, when service is provided. Should changes in conditions cause management to determine these criteria are not met for certain future transactions, revenue recognized for any reporting period could be adversely affected. The Company accrues for sales returns, warranty costs and other allowances based on a current evaluation of its historical experience based on stated terms of the transactions. Should actual product failure rates or customer return experience differ from the Company’s estimates, revisions to the estimated accruals would be required.

Bad Debt

     The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Past due status of accounts receivable is determined primarily based upon contractual terms. ATMI grants extended payment terms, which vary based on the geographic location of the customer and generally range from 30 to 90 days. There are no known material collectibility issues with these extended-term receivables. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

Inventories

     The Company provides inventory allowances for estimated excess, obsolete and unmarketable inventory equal to the difference between the cost of inventory and estimated market value based upon future demand forecasts and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required.

Marketable Securities and Investments

     The Company holds minority interests in companies having operations or technology in areas within or related to its strategic focus, some of which are in publicly traded companies whose share prices are highly volatile and some of which are in private companies whose value is difficult to determine. Investments in private companies are included in the consolidated balance sheets under the caption “other long-term assets, net”. ATMI records an impairment charge when it believes an investment has experienced a decline in value that is other than temporary. Future adverse changes in market conditions or poor operating results of underlying investments could result in losses or an inability to recover the carrying value of the investments that may not be reflected in an investment’s current carrying value, thereby possibly requiring an impairment charge in the future.

Depreciable Lives of Property, Plant and Equipment

     ATMI’s net property, plant and equipment at December 31, 2003 was $64.7 million, representing 15.6% of the Company’s consolidated total assets. Depreciation expense for the year ended December 31, 2003 was $12.5 million, or 7.6% of total operating expenses, including cost of revenues. Management’s judgment is required in the determination of the estimated depreciable lives that are used to calculate the annual depreciation expense and accumulated depreciation.

     Property, plant and equipment is recorded at cost and depreciated over the assets’ estimated useful lives on a straight-line basis for financial reporting purposes. The estimated useful life represents the projected period of time that the asset will be productively employed by the Company and is determined by management based on many factors, including historical experience with similar assets, technological life cycles, and geographic locations. Circumstances and events relating to these assets are monitored to ensure that changes in asset lives or impairments are identified and prospective depreciation expense or impairment expense is adjusted accordingly.

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Goodwill

     The Company accounts for goodwill in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets.” In accordance with SFAS 142, management reviews goodwill for impairment annually or when events or circumstances indicate that its value may have declined. In order to evaluate impairment of goodwill, assumptions about the future condition and operations of the business unit to which the goodwill asset relates are made. These assumptions are applied to complex models in which we estimate the fair value of the business unit utilizing projected future cash flows, multiples of earnings and sales and other factors. Using these models, management determines whether an impairment charge is required to reduce goodwill to its estimated fair value.

     This estimation process is complex and involves subjective assumptions about future events and discount factors to be applied to projected cash flows. Estimated values can be affected by many factors beyond the Company’s control such as business and economic trends, government regulation, and technological changes. Management believes the assumptions made to evaluate goodwill impairment are appropriate and reasonable. However, changes in circumstances or conditions affecting these assumptions could result in impairment charges in future periods that may be material.

Other Identifiable Intangible Assets

     Other identifiable intangible assets, such as acquired patents and trademarks, customer base and covenants not to compete are currently amortized using the straight-line method over their estimated useful lives ranging from 2 to 14 years. These assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

Stock-Based Compensation

     At December 31, 2003, the Company has six stock-based employee compensation plans, which are described more fully in Note 13 to the consolidated financial statements. The Company accounts for these plans under the recognition and measurement principles of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related Interpretations. All options granted under those plans had an exercise price equal to market value of the underlying common stock on the date of grant. See Note 1 to the consolidated financial statements for the effect on net loss and loss per share if the Company had applied the fair value recognition provisions of SFAS No. 123, “Accounting For Stock-Based Compensation”, to stock-based employee compensation.

Restructuring

     During the fiscal years ended December 31, 2003 and 2001, the Company recorded significant charges in connection with restructuring and other initiatives. These charges include costs related to employee separation costs, plant closing costs, early lease termination expenses and various other asset and working capital write-offs or write-downs. Although management does not anticipate significant changes to the 2003 charge, the actual costs may differ from the estimates used.

Income Taxes

     The carrying value of the Company’s net deferred tax assets assumes that the Company will be able to generate sufficient future taxable income in certain tax jurisdictions, based on estimates and assumptions. If these estimates and related assumptions change in the future, the Company may be required to record additional valuation allowances against its deferred tax assets resulting in additional income tax expense in the Company’s consolidated statement of operations. Management evaluates the realizability of the deferred tax assets and assesses the adequacy of the valuation allowance quarterly. Likewise, in the event that the Company was to determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment to the deferred tax assets would increase income in the period such determination was made.

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     See Note 1 to the consolidated financial statements for information concerning recent accounting pronouncements.

Results of Operations

     The following table sets forth selected financial data as a percentage of total revenues for the periods indicated:

Comparison of Years Ended December 31, 2003, 2002 and 2001

     Revenues. Revenues increased 25.3% to $171.6 million in 2003 from $137.0 million in 2002, and increased 22.8% to $137.0 million in 2002 from $111.6 million in 2001. Revenues increased in 2003 compared to 2002 primarily due to increased wafer starts which led to increased demand for liquid chemistries, SDS^® and high purity packaging products, and also due to the ViaForm^® licensing agreement and the acquisition of the ESC product lines. In 2002 the increase in revenues to $137.0 million from $111.6 million was similarly driven by increased wafer starts which led to increased demand for liquid chemistries and SDS^® products as well as increased demand for solids packaging products.

     Gross Profit. Gross profit increased 19.2% to $81.7 million in 2003 from $68.6 million in 2002. Gross margin decreased to 47.6% in 2003 from 50.0% in 2002. In 2003, the Company recorded a $2.7 million charge for excess and obsolete inventory primarily related to the outsourcing and standardization of the Company’s materials delivery equipment product lines. Excluding the inventory charge, gross margins for 2003 would have been 49.1%. The increase in gross profit in 2003 as compared to 2002 was primarily attributable to volume increases in the higher margin Ion Implant and high purity packaging product lines, as well as the ViaForm^® licensing agreement and the acquisition of the ESC product lines in 2003. Gross profit increased 20.2% to $68.6 million in 2002 from $57.0 million in 2001. Gross margin decreased to 50.0% in 2002 compared to 51.1% in 2001. The increase in gross profit was primarily attributable to volume increases in the SDS^® and Solids Packaging product lines. Gross profit in 2001 includes a $0.6 million inventory write-down.

     Research and Development Expenses. Research and development expenses increased 38.5% to $19.2 million in 2003 from $13.8 million in 2002. As a percentage of revenues, research and development expenses

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increased to 11.2% in 2003 compared to 10.1% in 2002. The increase is mainly attributable to increased research and development efforts in chemical mechanical planarization (CMP), photoresist and advanced interconnect materials applications, as well as spending in the ViaForm^®; and ESC product lines which were licensed and acquired, respectively, in 2003. Approximately $0.7 million of the 2003 increase in research and development expense is attributable to writing off in-process research and development costs with no alternative future use acquired in the ESC acquisition. Research and development expenses increased 39.9% to $13.8 million in 2002 from $9.9 million in 2001, primarily attributable to increased research and development spending on advanced interconnect and high-purity packaging applications. As a percentage of revenues, research and development expenses increased to 10.1% in 2002 from 8.9% in 2001.

     Selling, General and Administrative Expenses. Selling, general and administrative expenses increased 7.1% to $54.1 million in 2003 compared to $50.6 million in 2002. As a percentage of revenues, selling, general and administrative expenses decreased to 31.5% in 2003 compared to 36.9% in 2002 primarily due to increased sales volumes in 2003 versus 2002. The increase in selling, general and administrative expenses reflects a half-year of expenses related to one acquisition and one strategic alliance in 2003, including amortization expense from intangibles relating to the acquisitions. Direct selling expenses also increased in 2003 due to several new product launches. Selling, general and administrative expenses decreased 2.5% to $50.6 million in 2002, compared to $51.8 million in 2001, primarily due to the higher costs related to the restructuring efforts undertaken in 2001 and a $2.5 million charge in 2001 to write down uncollectible accounts receivable balances. In 2002, selling, general and administrative expenses were 36.9% of revenues, compared to 46.4% of revenues in 2001. The decrease was primarily the result of the restructuring actions taken in 2001.

     Restructuring and Other Charges. The 2003 results include the recognition of $1.7 million of restructuring and other charges. The $1.7 million charge includes $2.4 million for abandoned assets in the Company’s former materials and liquid delivery systems manufacturing facility in Burnet, Texas, including $1.1 million of liquid chemistry canisters, which were not returned to the Company by various customers. Offsetting the charge is a $0.7 million gain related to sub-lease income from a former tenant in the Company’s Danbury, Connecticut research and development facility. Operating results for 2001 include a $6.0 million charge for severance and other costs associated with restructuring initiatives. The 2001 charge includes costs related to plant closings, lease termination fees, and various other assets and working capital write-offs or write-downs. An additional $0.6 million charge related to a write down of inventory is included in cost of revenues. All restructuring costs related to the 2001 charge have been fully paid by September 30, 2003.

     Operating Income (Loss). In 2003, the Company reported operating income of $6.7 million compared to operating income of $4.1 million in 2002. The 2003 operating income is a result of the positive effect of acquisitions made by the Company during the year and incremental wafer start growth driving increased demand for specialty materials packaging products and SDS^®. Operating income was unfavorably impacted by the $2.7 million inventory excess and obsolescence charge and the $1.7 million restructuring and other charge taken in 2003, both previously discussed above. The 2002 operating income increased to $4.1 million from an operating loss of $10.7 million in 2001. This significant increase was due to increased sales volumes in SDS^® and liquid chemistries product lines and a full year’s cost benefit from the 2001 restructuring activities. The operating loss in 2001 was affected by the significant semiconductor industry downturn in 2001, which severely impacted most product lines’ volumes, which led to lower gross margins as well as the previously mentioned $6.0 million restructuring charge taken in 2001.

     Interest and Other Income (Expense), Net. Interest and other income (expense) increased to $9.3 million of expense in 2003 from $1.4 million of expense in 2002. 2003 interest and other income (expense) included a $5.7 million impairment charge related to two of the Company’s long-term strategic venture capital investments. Interest and other income (expense) decreased to $1.4 million of expense in 2002 from $10.6 million of income in 2001. Interest and other income (expense) in 2002 includes a $1.0 million gain from the sale of available-for-sale securities, partially offset by a $0.4 million write-down on other available-for-sale securities. 2001 includes the positive impact of a settlement of certain patent litigation, net of related expenses, and a $2.6 million gain from the sale of available-for-sale securities, partially offset by a write-down of $0.4 million for an other-than-temporary decline in fair value of other available-for-sale securities. Interest income declined $1.9 million to $3.0 million in 2003 from $4.9 million in 2002 primarily due to overall lower yields on the Company’s cash and marketable

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securities portfolio and a reduction of cash balances due to acquisitions in 2003. Interest income increased 6.6% to $4.9 million in 2002 from $4.6 million in 2001 on higher invested balances, despite significantly lower market interest rates. Interest expense increased 3.3% in 2003 to $6.9 million from $6.7 million in 2003, primarily as a result of lower interest capitalization on construction projects. Interest expense increased to $6.7 million in 2002 from $1.0 million in 2001, due mainly to a full year of debt service costs related to the Company’s $115.0 million convertible subordinated notes issued in the fourth quarter of 2001.

     Income Taxes. In 2003, the income tax benefit was $4.6 million, compared to an income tax provision of $1.0 million in 2002. The 2003 tax benefit includes a $3.0 million benefit from the favorable judgment received from the U.S. Tax Court during 2003. Excluding this one-time benefit, the income tax benefit for 2003 was $1.6 million. The increase in the tax benefit was the result of the pre-tax operating losses in 2003 compared to pre-tax operating income in 2002. The effective tax rate for 2003 was 61.5%, excluding the one-time $3.0 million tax benefit described above compared to an effective tax rate of 35.0% for the comparable period a year ago. The effective tax rate of 61.5%, excluding the one-time $3.0 million tax benefit, differs from the Federal statutory rate of 35.0% primarily because of state and foreign income taxes, extra-territorial income exclusion benefits, in-process research and development expenses, and the change in valuation allowances of deferred tax assets. As of December 31, 2003, the Company has a net deferred tax asset on its balance sheet of $17.8 million, primarily due to temporary differences, tax credits and net operating loss and tax credit carryforwards, which are anticipated to be used to offset future taxable income. The minimum amount of future taxable income that would have to be generated to realize the net deferred tax assets is approximately $49.5 million. In 2002, the income tax provision was $1.0 million, compared to income tax benefit of $0.8 million in 2001. The change was due to the Company’s operating losses as a result of the semiconductor industry downturn, the restructuring efforts undertaken by management during 2001 offset by the settlement of certain patent litigation. The effective tax rates for 2001 and 2000 differ from the Federal statutory rate of 35% primarily because of state and foreign income taxes, foreign sales corporation benefits, research and development tax credits, and the change in valuation allowances of deferred tax assets.

     Loss from Discontinued Operations. The loss from discontinued operations in 2003, net of income taxes, is $11.9 million compared to a loss of $32.5 million in 2002, net of income taxes. The loss from discontinued operations in 2003 includes a $4.1 million charge for excess and obsolete inventory. Excluding this charge, the loss was driven by three quarters of reduced demand for semiconductor equipment as capital spending in the industry continued to decline. The fourth quarter of 2003 showed some positive volume momentum as wafer starts increased, leading to higher industry capital spending, which translated to higher sales volumes. The results for the fourth quarter of 2003 exclude $2.2 million of depreciation and amortization expense as a result of assets being classified as “held for sale.” Depreciation and amortization expense was recognized on these assets in all previous quarters. The 2002 results from discontinued operations included the recognition of a $34.6 million pre-tax asset impairment charge associated with the Company’s former gallium arsenide epitaxial services business in Phoenix, Arizona. The loss from discontinued operations in 2002 was also driven by the downturn in the semiconductor industry, particularly the equipment sector, which had a significant impact on operations. The loss from discontinued operations in 2002 was $32.5 million, net of income taxes, compared to a loss from discontinued operations of $10.4 million, net of income taxes, in 2001. The increased loss from discontinued operations in 2002 versus 2001 was driven by the continued softness of industry capital spending and the $34.6 million pre-tax charge described above, partially offset by a full year of cost savings from restructuring initiatives implemented during 2001.

     Net Loss per Share. Net loss per share, assuming dilution, was $0.32 for 2003 compared to a net loss per share, assuming dilution, of $0.99 for 2002. Net loss per share, assuming dilution, was $0.99 for 2002, compared to net loss per share, assuming dilution, of $0.32 for 2001. Weighted average shares outstanding, assuming dilution was 31.2 million for 2003 compared to 31.0 million for 2002. The difference in weighted average shares outstanding, assuming dilution, between 2003 and 2002 is primarily the result of the exercise of employee stock options and employee stock purchase plan shares. Weighted-average shares outstanding, assuming dilution, was 31.0 million for 2002 compared to 30.7 million in 2001. The difference in weighted-average shares outstanding, assuming dilution, between 2002 and 2001 is primarily the result of the exercise of employee stock options and employee stock purchase plan shares.

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Years ended December 31, 2003, 2002 and 2001

     To date, ATMI has financed its activities principally through cash from operations, the sale of equity, the issuance of convertible debt securities, external research and development funding and various lease and debt instruments. All of the assets and liabilities associated with the discontinued operations are classified as held for sale in the consolidated balance sheets. The Company’s working capital decreased to $244.9 million at December 31, 2003 from $282.7 million at December 31, 2002 primarily as a result of a decrease in cash to fund acquisition and licensing activity. The Company’s working capital decreased to $282.7 million at December 31, 2002 from $339.4 million at December 31, 2001 primarily as a result of reductions in cash due to capital expenditures related to the Company’s new manufacturing facility in Burnet, Texas and payments on long-term financing arrangements.

     Net cash provided by operations was $7.8 million in 2003, compared to $15.0 million in 2002. The decrease in cash provided from operations in 2003 compared to 2002 is mainly attributable to collection of federal income tax receivables and increased operating income before non-cash expenses, offset by increased inventories to support the strategic alliance with Enthone and also to support increased sales volumes in various other product lines, increased accounts receivable as a result of higher sales volumes, and $12.2 million of cash used by discontinued operations. Net cash provided by operations was $15.0 million in 2002 compared to $24.1 million in 2001. The reduction in cash from operations resulted primarily from unfavorable changes in deferred income taxes and other working capital accounts, reduced operating income before non-cash expenses, and a reduction in cash provided by discontinued operations in 2002 compared to 2001.

     Net cash used by investing activities was $44.6 million, $89.1 million and $108.3 million in 2003, 2002 and 2001, respectively. Capital expenditures were $15.3 million, $31.2 million and $21.9 million in 2003, 2002 and 2001, respectively. The significant 2002 capital spending related primarily to the construction of the Company’s new liquid materials manufacturing facility in Burnet, Texas, and continued strategic investments in facilities and equipment for materials research and development capabilities. 2001 capital expenditures primarily related to the start of the construction of the new liquid materials manufacturing facility in Burnet, Texas, and the expansion of the Danbury, Connecticut research and development facility. The significant cash used for investing activities for discontinued operations in 2001 was primarily related to the installation of compound semiconductor manufacturing capacity at the Company’s epitaxial services facility in Phoenix, Arizona, which was subsequently disposed of in 2003. Acquisitions and other equity investments in 2003 included entering into a strategic alliance with Enthone, Inc., which included purchasing the exclusive worldwide selling and distribution rights to Enthone’s copper electrochemical deposition products, namely its ViaForm^® product line, and the acquisition of all the outstanding capital stock of ESC, Inc. ESC develops, markets and sells novel surface preparation and cleaning materials for copper and advanced interconnect microelectronic fabrication processes. Acquisitions and other equity investments in 2002 include a strategic investment to acquire copper delivery and abatement product lines and rights to a copper electrochemical deposition management system. During 2001, the Company paid approximately $6.7 million for equity investments in two strategic partners for the development of advanced materials, of which $3.5 million has subsequently been written down and $2.0 million for the remainder of the purchase of K.C. Tech Co. Ltd.’s 30% interest in the operations of ADCS Korea. For the years ended December 31, 2003, 2002 and 2001, the Company purchased $103.4 million, $225.7 million and $80.7 million of marketable securities, respectively, consisting primarily of short-term corporate and municipal debt obligations. For the years ended December 31, 2003, 2002 and 2001, the Company sold $111.0 million, $182.5 million and $44.1 million of marketable securities, respectively.

     Net cash provided by financing activities was $3.9 million in 2003, compared to net cash used by financing activities of $16.2 million in 2002. In 2002, net cash from financing activities from discontinued operations consisted of the Company paying down the entire amounts outstanding on its $20.0 million bank financing agreement and approximately $5.1 million of capital lease obligations, in order to reduce the weighted average interest rate on its indebtedness, as allowed under the terms of the agreements. During 2001, the Company completed the sale of $115.0 million of 5.25% convertible subordinated notes due November 2006, and received net proceeds from the sale of approximately $111.6 million. Also during 2001, the Company entered into a $20.0 million bank financing agreement for the purchase of additional silicon epitaxial capacity, which was paid down in 2002 as noted above. During 2003, 2002 and 2001, the Company received net proceeds from the exercise of employee stock options and employee stock purchase plan shares of $4.7 million, $4.4 million and $2.6 million,

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respectively. At December 31, 2003, $116.3 million of convertible notes, loans, bonds, capital lease obligations and financing remained outstanding.

     Following is a summary of consolidated debt, lease, purchase and other long-term liability obligations at December 31, 2003 (see Notes 7, 9 and 10 of the consolidated financial statements), in thousands:

(1)

Included in the operating lease commitments shown above is $12.1 million in operating lease commitments from discontinued operations. The following table presents the lease obligations associated with discontinued operations:

     ATMI has agreed not to allow any of its significant subsidiaries or the subsidiaries of those significant subsidiaries to incur any subordinated debt while the convertible subordinated notes are outstanding without such subsidiary first entering into an unconditional guarantee of the notes on a subordinated basis. This restriction may limit those subsidiaries’ ability to obtain subordinated debt on favorable terms and conditions or at all.

     ATMI believes that the Company’s existing cash and cash equivalents and marketable securities balances, existing sources of liquidity, available lines of credit and anticipated proceeds from disposal of assets and liabilities held for sale will satisfy the Company’s projected working capital and other cash requirements through at least the end of 2004. However, management also believes the level of financing resources available to ATMI is an important competitive factor in its industry, and management may seek additional capital prior to the end of that period. Additionally, management considers, on a continuing basis, potential acquisitions of strategic technologies and businesses complementary to ATMI’s current business. There are no present definitive agreements with respect to any such acquisitions. However, any such transactions may affect ATMI’s future capital needs. In addition, the activities the Company is currently undertaking to exit non-core businesses and reduce its exposure to the cyclical capital equipment spending environment may generate additional sources of liquidity and also affect ATMI’s future capital needs.

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Operations Outside the United States

     For the years ended December 31, 2003, 2002 and 2001, sales outside the United States, including Asia and Europe, accounted for 58.4%, 50.0% and 55.8%, respectively, of the Company’s revenues. Management anticipates that the Company’s sales outside the United States will continue to account for a significant percentage of total revenues. The Company has a wholly-owned subsidiary in Belgium where it manufactures and sells high-purity solids packaging applications. In addition, the Company has wholly-owned subsidiaries in Taiwan, Singapore, China and Japan where the Company sells and services several product lines. The Company also has a wholly-owned subsidiary in South Korea that manufactures, sells and distributes materials delivery equipment and thin-film materials to the semiconductor and related industries in South Korea.

Cautionary Statements Under the Private Securities Litigation Reform Act of 1995

Forward-Looking Statements

     The statements contained in this report which are not historical are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Examples of forward-looking statements include, without limitation, statements by ATMI regarding financial projections, expectations for demand and sales of new and existing products, market and technology opportunities, business strategies, business opportunities, objectives of management for future operations and semiconductor industry and market segment growth. In addition, when used in this report, the words “anticipate,” “plan,” “believe,” “estimate,” “expect” and similar expressions as they relate to the Company or its management are intended to identify forward-looking statements. All forward-looking statements involve risks and uncertainties. Actual results may differ materially from those discussed in, or implied by, the forward-looking statements as a result of certain factors including, but not limited to, changes in the pattern of semiconductor industry demand, the markets for or customer interest in the Company’s products, product and market competition, delays or problems in the development and commercialization of products, technological changes affecting the competencies of ATMI, problems or delays associated with its restructuring and proposed divestiture activities, problems or delays in integrating acquired operations and businesses into ATMI, and unanticipated internal and/or third-party delays. The cautionary statements made in this report should be read as being applicable to all related forward-looking statements wherever they appear in this report.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk

     As of December 31, 2003 the Company’s cash and cash equivalents and marketable securities included money market securities, corporate and municipal bond obligations and commercial paper. As of December 31, 2003, an increase of 100 basis points in interest rates would reduce the fair value of our marketable securities portfolio by approximately $0.6 million. Conversely, a reduction to interest rates would increase the fair value of our marketable securities portfolio by approximately $0.5 million.

     As of December 31, 2003, we had $115.0 million of fixed rate long-term convertible notes outstanding. Interest rate changes and changes in the value of our common stock would likely result in changes in the market value of these notes. The fair value of these notes was approximately $146.3 million at December 31, 2003. We perform a sensitivity analysis on our fixed rate long-term convertible debt to assess the risk of changes in fair value. The model to determine interest rate sensitivity assumes a hypothetical 100 basis point shift in interest rates, while keeping the price of our common stock constant. At December 31, 2003, assuming a 100 basis point increase in interest rates, the fair value of the notes would decrease by $0.8 million. Conversely, a 100 basis point decrease in interest rates at December 31, 2003 would increase the fair value of the notes by $0.8 million. The model to determine equity price sensitivity assumes a hypothetical 10% change in the price of our common stock, while keeping the interest rate constant. At December 31, 2003, assuming a 10% increase in the price of our common stock, the fair value of the notes would increase by $8.5 million. Conversely, a 10% decrease in the price of our common stock would result in the fair value of the notes decreasing by $7.4 million.

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Foreign Currency Exchange Risk

     A substantial portion of the Company’s sales are denominated in U.S. dollars and, as a result, the Company has relatively minimal exposure to foreign currency exchange risk with respect to sales made. This exposure may change over time as business practices evolve and could have a material impact on the Company’s financial results in the future. The Company currently utilizes forward exchange contracts to hedge certain Japanese Yen exposures, but does not use any other derivative financial instruments for trading or speculative purposes. At December 31, 2003, ATMI had $6.0 million notional amount of foreign exchange contracts, which are being used to hedge recorded foreign denominated assets. Holding other variables constant, if there were a 10% adverse change in foreign exchange rates for the Japanese Yen, the fair market value of the contracts outstanding at December 31, 2003 would decrease by approximately $0.7 million. The effect of an immediate 10% change in other foreign exchange rates would not be expected to have a material impact on the Company’s future operating results or cash flows.

Changes in Market Risk

     There have been no material quantitative changes in market risk exposure between the fiscal years ended December 31, 2003 and December 31, 2002.

Item 8. Financial Statements and Supplementary Data.

     The Report of Independent Auditors, the consolidated financial statements and the financial statement schedule that are listed in the Index to Consolidated Financial Statements and Financial Statement Schedule are included herein on pages F-1 through F-28.

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

     There have been no changes in or disagreements with accountants required to be reported herein.

Item 9A. Controls and Procedures.

     The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of December 31, 2003. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2003. There were no material changes in the Company’s internal control over financial reporting during the fourth quarter of 2003.

PART III.

Item 10. Directors and Executive Officers of the Registrant.

     Information regarding ATMI’s directors, executive officers, audit committee, and audit committee financial experts is incorporated by reference herein to the Company’s Proxy Statement for its Annual Meeting of Stockholders to be held on May 25, 2004 (the “2004 Proxy Statement”).

     ATMI has adopted a code of ethics that applies to all of its directors, officers (including its chief executive officer and chief financial officer) and employees. The Company has made the Code of Ethics (known as the “Code of Conduct”) available on its website at www.atmi.com.

Item 11. Executive Compensation.

     Information regarding compensation of ATMI executive officers is incorporated by reference herein to the 2004 Proxy Statement.

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Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

     The following table summarizes information about our equity compensation plans as of December 31, 2003. All outstanding awards relate to our common stock. For additional information about our equity compensation plans, see Note 13 to our consolidated financial statements in Item 8.

(1)

Includes 42,316 shares issued in January 2004 pursuant to the Company’s Employee Stock Purchase Plan, and 20,000 warrants outstanding at an exercise price of $11.75 that are fully exercisable and expire on September 1, 2005.

     The other information required by this Item is incorporated by reference to the applicable information in the 2004 Proxy Statement.

Item 13. Certain Relationships and Related Transactions.

     Information regarding certain relationships and related transactions of ATMI is incorporated by reference herein to the 2004 Proxy Statement.

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Item 14. Principal Accountant Fees and Services.

     Information regarding principal accountant fees and services is incorporated by reference herein to the 2004 Proxy Statement.

PART IV

Item 15. Exhibits, Financial Statement Schedule, and Reports on Form 8-K.

(a)		The following documents are filed as part of this Annual Report on Form 10-K:
(1)		Financial Statements:
		Report of Independent Auditors Consolidated Balance Sheets - December 31, 2003 and 2002 Consolidated Statements of Operations for the years ended December 31, 2003, 2002 and 2001 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2001, 2002 and 2003 Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001 Notes to Consolidated Financial Statements
(2)		Financial Statement Schedule:
		Schedule II Valuation and Qualifying Accounts
		The Report of Independent Auditors, consolidated financial statements and financial statement schedule listed in the Index to Consolidated Financial Statements and Financial Statement Schedule on page F-1 hereof are filed as part of this report, commencing on page F-2 hereof.
		All other financial statement schedules are omitted as the required information is not applicable or the information is shown in the consolidated financial statements or related notes.
(3)		Exhibits

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*Management contract or compensatory plan arrangement.

(1)		Incorporated by reference.
(2)		Filed herewith
(3)		Portions omitted pursuant to a request for confidential treatment..

(b)		Reports on Form 8-K
		The Company filed the following Reports on Form 8-K:

Date of Report:	October 22, 2003 (filed on October 23, 2003); Items 7 and 12 (attaching a press release announcing the Company’s financial results for the three months ended September 30, 2003).

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SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

     Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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ATMI, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

F-1

Report of Independent Auditors

The Board of Directors and Stockholders of ATMI, Inc.

We have audited the accompanying consolidated balance sheets of ATMI, Inc. as of December 31, 2003 and 2002, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2003. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule are the responsibility of ATMI, Inc.’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of ATMI, Inc. at December 31, 2003 and 2002, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ ERNST & YOUNG LLP

Stamford, Connecticut
January 27, 2004

F-2

ATMI, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

See accompanying notes.

F-3

ATMI, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

See accompanying notes.

F-4

ATMI, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

See accompanying notes.

F-5

ATMI, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS