10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(MARK ONE)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

or

o 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 0-23621

MKS INSTRUMENTS, INC.

(Exact name of registrant as specified in its charter)

Massachusetts	04-2277512
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)
2 Tech Drive, Suite 201, Andover, Massachusetts	01810
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (978) 645-5500

     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 þ No o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ Accelerated filer o Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company o

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

     As of July 29, 2011 the registrant had 52,460,897 shares of common stock outstanding.

MKS INSTRUMENTS, INC.
FORM 10-Q
INDEX

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (Unaudited)
Consolidated Balance Sheets — June 30, 2011 and December 31, 2010	3
Consolidated Statements of Operations — Three and six months ended June 30, 2011 and 2010	4
Consolidated Statements of Cash Flows — Six months ended June 30, 2011 and 2010	5
Notes to Unaudited Consolidated Financial Statements	6
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	18
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	24
ITEM 4. CONTROLS AND PROCEDURES	25
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS	25
ITEM 1A. RISK FACTORS	25
ITEM 6. EXHIBITS	25
SIGNATURES
EXHIBIT INDEX
EX-31.1
EX-31.2
EX-32.1
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

2

PART I. FINANCIAL INFORMATION

     ITEM 1. FINANCIAL STATEMENTS.

MKS INSTRUMENTS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(Unaudited)

	June 30, 2011		December 31, 2010
ASSETS
Current assets:
Cash and cash equivalents	$	226,538	$	162,476
Short-term investments		269,749		269,457
Trade accounts receivable, net		150,980		138,181
Inventories		164,450		156,429
Deferred income taxes		13,872		13,775
Other current assets		24,120		12,577
Total current assets		849,709		752,895
Property, plant and equipment, net		69,653		68,976
Long-term marketable securities		5,277		—
Goodwill		140,020		140,020
Intangible assets, net		1,243		1,743
Other assets		14,713		18,779
Total assets	$	1,080,615	$	982,413
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings	$	619	$	—
Accounts payable		33,754		36,427
Accrued compensation		29,201		29,944
Income taxes payable		490		5,347
Other current liabilities		37,919		37,968
Total current liabilities		101,983		109,686
Other liabilities		29,666		25,688
Commitments and contingencies (Note 15)
Stockholders’ equity:
Preferred Stock, $0.01 par value, 2,000,000 shares authorized; none issued and outstanding		—		—
Common Stock, no par value, 200,000,000 shares authorized; 52,439,231 and 50,648,601 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively		113		113
Additional paid-in capital		699,458		663,792
Retained earnings		232,372		171,356
Accumulated other comprehensive income		17,023		11,778
Total stockholders’ equity		948,966		847,039
Total liabilities and stockholders’ equity	$	1,080,615	$	982,413

The accompanying notes are an integral part of the consolidated financial statements.

3

MKS INSTRUMENTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Net revenues
Products	$	198,737	$	198,930	$	406,184	$	370,001
Services		25,750		21,717		50,154		42,812
Total net revenues		224,487		220,647		456,338		412,813
Cost of revenues
Cost of products		105,086		111,117		216,301		205,256
Cost of services		14,413		12,211		28,688		24,743
Total cost of revenues		119,499		123,328		244,989		229,999
Gross profit		104,988		97,319		211,349		182,814
Research and development		15,582		16,154		32,478		31,829
Selling, general and administrative		31,851		30,902		64,558		58,714
Amortization of intangible assets		250		314		500		783
Gain on sale of asset		—		—		—		(682	)
Income from operations		57,305		49,949		113,813		92,170
Interest income		309		284		585		631
Interest expense		—		30		5		52
Income from continuing operations before income taxes		57,614		50,203		114,393		92,749
Provision for income taxes		19,013		17,059		37,749		30,607
Income from continuing operations		38,601		33,144		76,644		62,142
Income from discontinued operations, net of taxes		—		5,633		—		5,860
Net income	$	38,601	$	38,777	$	76,644	$	68,002
Basic income per share:
Continuing operations	$	0.74	$	0.66	$	1.48	$	1.24
Discontinued operations		—		0.11		—		0.12
Net income	$	0.74	$	0.77	$	1.48	$	1.36
Diluted income per share:
Continuing operations	$	0.73	$	0.65	$	1.46	$	1.22
Discontinued operations		—		0.11		—		0.12
Net income	$	0.73	$	0.76	$	1.46	$	1.34
Cash dividends per common share	$	0.15	$	—	$	0.30	$	—
Weighted average common shares outstanding:
Basic		52,346		50,067		51,877		49,834
Diluted		52,906		50,870		52,646		50,735

The accompanying notes are an integral part of the consolidated financial statements.

4

MKS INSTRUMENTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)

	Six Months Ended
	June 30,
	2011			2010
Cash flows from operating activities:
Net income	$	76,644		$	68,002
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		6,374			7,037
Stock-based compensation		6,048			4,310
Provision for excess and obsolete inventory		6,458			4,926
Gain on disposal of discontinued operations		—			(4,228	)
Deferred income taxes		2,485			2,280
Excess tax benefits from stock-based compensation		(5,218	)		(640	)
Other		299			(722	)
Changes in operating assets and liabilities:
Trade accounts receivable		(10,953	)		(57,994	)
Inventories		(12,880	)		(28,280	)
Income taxes		(365	)		3,519
Other current assets		(9,885	)		(696	)
Accrued expenses and other current liabilities		2,614			27,700
Accounts payable		(2,897	)		13,959
Net cash provided by operating activities		58,724			39,173
Cash flows from investing activities:
Purchases of short-term and long-term available-for-sale investments		(197,574	)		(111,767	)
Maturities, sales and settlements of short-term and long-term available-for-sale investments		192,944			104,544
Purchases of property, plant and equipment		(6,265	)		(6,627	)
Proceeds from sale of assets		4			2,113
Net proceeds from sales of discontinued operations		—			15,097
Other		(170	)		(1,438	)
Net cash (used in) provided by investing activities		(11,061	)		1,922
Cash flows from financing activities:
Proceeds from short-term borrowings		13,404			71,795
Payments on short-term borrowings		(12,791	)		(72,319	)
Net proceeds related to employee stock-based compensation		24,662			2,265
Dividend payments to common stockholders		(15,628	)		—
Excess tax benefits from stock-based compensation		5,218			640
Net cash provided by financing activities		14,865			2,381
Effect of exchange rate changes on cash and cash equivalents		1,534			(2,963	)
Increase in cash and cash equivalents		64,062			40,513
Cash and cash equivalents at beginning of period		162,476			111,009
Cash and cash equivalents at end of period	$	226,538		$	151,522

The accompanying notes are an integral part of the consolidated financial statements.

5

MKS INSTRUMENTS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Tables in thousands, except share and per share data)

1) Basis of Presentation

The terms “MKS” and the “Company” refer to MKS Instruments, Inc. and its subsidiaries. The interim financial data as of June 30, 2011 and for the three and six months ended June 30, 2011 and 2010 are unaudited; however, in the opinion of MKS, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. The consolidated balance sheet presented as of December 31, 2010 has been derived from the audited consolidated financial statements as of that date. The unaudited consolidated financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by United States generally accepted accounting principles (“U.S. GAAP”). The consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the MKS Annual Report on Form 10-K for the year ended December 31, 2010 filed with the Securities and Exchange Commission on February 25, 2011.

The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, stock-based compensation, inventory, intangible assets, goodwill and other long-lived assets, acquisition expenses, income taxes and investments. Management bases its estimates and judgments on historical experience and on various other factors 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.

2) Recently Issued Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) which eliminates the option to present the components of other comprehensive income as part of the statement of equity and requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments are effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2011. The ASU requires changes in presentation only and the Company does not expect it will have a material effect on its consolidated financial statements.

In May 2011, the FASB issued an ASU which applies to all reporting entities that are required or permitted to measure or disclose the fair value of an asset, a liability, or an instrument classified in a reporting entity’s shareholders’ equity in the financial statements. The amendments do not extend the use of fair value accounting, but provide guidance on how it should be applied where its use is already required or permitted by other standards within U.S. GAAP. The amendments change the wording used to describe many requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. Additionally, the ASU clarifies the FASB’s intent about the application of existing fair value measurements. The amendments in this ASU are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. Early application by public entities is not permitted. The Company does not expect the new ASU to have a material effect on its financial position, results of operations or cash flows.

In October 2009, the FASB issued an ASU that established new accounting and reporting provisions for arrangements including multiple revenue-generating activities. This ASU provides amendments to the criteria for separating deliverables, measuring and allocating arrangement consideration to one or more units of accounting. The amendments in this ASU also established a selling price hierarchy for determining the selling price of a deliverable. Significantly enhanced disclosures are also required to provide information about a vendor’s multiple-deliverable revenue arrangements, including information about the nature and terms, significant deliverables, and its performance within arrangements. The amendments also require providing information about the significant judgments made and changes to those judgments and about how the application of the relative selling-price method affects the timing or amount of revenue recognition. The amendments in this ASU were effective prospectively for revenue arrangements entered into or materially modified in the fiscal years beginning on or after June 15, 2010. The Company adopted the new ASU in the first quarter of 2011, and the adoption did not have a material impact on the Company’s financial position, results of operations or cash flows.

6

MKS INSTRUMENTS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(Tables in thousands, except share and per share data)

In October 2009, the FASB issued an ASU that changed the accounting model for revenue arrangements that include both tangible products and software elements that are “essential to the functionality,” and scoped these products out of current software revenue guidance. The new ASU includes factors to help companies determine what software elements are considered “essential to the functionality.” The amendments now subject software-enabled products to other revenue guidance and disclosure requirements, such as guidance surrounding revenue arrangements with multiple-deliverables. The amendments in this ASU were effective prospectively for revenue arrangements entered into or materially modified in the fiscal years beginning on or after June 15, 2010. The Company adopted the new ASU in the first quarter of 2011, and the adoption did not have a material impact on the Company’s financial position, results of operations or cash flows.

3) Cash and Cash Equivalents and Investments

The fair value of short-term available-for-sale investments with maturities or estimated lives of less than one year consists of the following:

	June 30, 2011		December 31, 2010
Time deposits and drafts	$	1,597	$	15,716
Equity mutual funds		517		491
U.S. treasury and agency obligations		267,635		253,250
	$	269,749	$	269,457

The fair value of long-term available-for-sale investments with maturities or estimated lives of more than one year consists of the following:

	June 30, 2011		December 31, 2010
U.S. treasury and agency obligations	$	5,277	$	—

The following table shows the gross unrealized gains and (losses) aggregated by investment category:

			Gross		Gross
			Unrealized		Unrealized
	Cost		Gains		(Losses)			Estimated Fair Value
As of June 30, 2011:
Money market funds	$	16,792	$	—	$	—		$	16,792
Time deposits and drafts		31,053		—		—			31,053
Equity mutual funds		659		—		(142	)		517
U.S. treasury and agency obligations		347,865		60		(15	)		347,910
	$	396,369	$	60	$	(157	)	$	396,272
Reported as follows:
Cash and cash equivalents (1)	$	121,245	$	1	$	—		$	121,246
Short-term investments		269,846		58		(155	)		269,749
Long-term marketable securities		5,278		1		(2	)		5,277
	$	396,369	$	60	$	(157	)	$	396,272

			Gross		Gross
			Unrealized		Unrealized
	Cost		Gains		(Losses)			Estimated Fair Value
As of December 31, 2010:
Money market funds	$	7,032	$	—	$	—		$	7,032
Time deposits and drafts		18,554		—		—			18,554
Equity mutual funds		659		—		(168	)		491
U.S. treasury and agency obligations		298,034		42		(35	)		298,041
	$	324,279	$	42	$	(203	)	$	324,118
Reported as follows:
Cash and cash equivalents (1)	$	54,664	$	—	$	(3	)	$	54,661
Short-term investments		269,615		42		(200	)		269,457
	$	324,279	$	42	$	(203	)	$	324,118

7

MKS INSTRUMENTS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(Tables in thousands, except share and per share data)

(1) The cash and cash equivalent amounts presented in the tables above do not include cash amounts of $105,292,000 and $107,815,000 as of June 30, 2011 and December 31, 2010, respectively.

Interest income is accrued as earned. Dividend income is recognized as income on the date the stock trades “ex-dividend.” The cost of marketable securities sold is determined by the specific identification method and realized gains or losses are reflected in income and were not material for the three and six months ended June 30, 2011 and 2010.

4) Fair Value Measurements

In accordance with the provisions of fair value accounting, a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability and defines fair value based upon an exit price model.

The fair value measurement guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of inputs that may be used to measure fair value:

Level 1	Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 assets and liabilities include money market funds and debt and equity securities.
Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes certain time deposits, time drafts and non-exchange traded derivative contracts.
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

The following tables provide a summary of assets and liabilities of the Company measured at fair value on a recurring basis as of June 30, 2011 and December 31, 2010:

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
Description	June 30, 2011		(Level 1)		(Level 2)		(Level 3)
Assets:
Available-for-sale securities:
Money market funds	$	16,792	$	16,792	$	—	$	—
Time deposits and drafts		31,053		—		31,053		—
Equity mutual funds		517		517		—		—
U.S. treasury and agency obligations		347,910		347,910		—		—
Derivatives — currency forward contracts		74		—		74		—
Total assets	$	396,346	$	365,219	$	31,127	$	—
Liabilities:
Derivatives — currency forward contracts	$	3,301	$	—	$	3,301	$	—

8

MKS INSTRUMENTS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(Tables in thousands, except share and per share data)

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
Description	June 30, 2011		(Level 1)		(Level 2)		(Level 3)
Reported as follows:
Assets:
Cash and cash equivalents	$	121,246	$	91,790	$	29,456	$	—
Short-term investments		269,749		268,152		1,597		—
Long-term marketable securities		5,277		5,277		—		—
Other current assets		74		—		74		—
	$	396,346	$	365,219	$	31,127	$	—
Liabilities:
Other current liabilities	$	3,301	$	—	$	3,301	$	—

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in		Significant Other		Significant
			Active Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
Description	December 31, 2010		(Level 1)		(Level 2)		(Level 3)
Assets:
Available-for-sale securities:
Money market funds	$	7,032	$	7,032	$	—	$	—
Time deposits and drafts		18,554		—		18,554		—
Equity mutual funds		491		491		—		—
U.S. treasury and agency obligations		298,041		298,041		—		—
Derivatives — currency forward contracts		369		—		369		—
Total assets	$	324,487	$	305,564	$	18,923	$	—
Liabilities:
Derivatives — currency forward contracts	$	3,463	$	—	$	3,463	$	—
Reported as follows:
Assets:
Cash and cash equivalents	$	54,661	$	51,823	$	2,838	$	—
Short-term investments		269,457		253,741		15,716		—
Other current assets		369		—		369		—
	$	324,487	$	305,564	$	18,923	$	—
Liabilities:
Other current liabilities	$	3,463	$	—	$	3,463	$	—

Money market funds

As of June 30, 2011 and December 31, 2010, this asset class consisted mainly of a money market portfolio that comprises Federal government agency and U.S. treasury securities. The asset class is classified within Level 1 of the fair value hierarchy because its underlying investments are valued using quoted market prices in active markets for identical assets.

Time deposits and drafts

As of June 30, 2011, this asset class consisted primarily of time deposits denominated in the Euro currency and time drafts guaranteed by a financial institution. As of December 31, 2010, this asset class consisted of time deposits denominated in the Euro currency. The asset class is valued using other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities and are classified within Level 2 of the fair value hierarchy.

9

MKS INSTRUMENTS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(Tables in thousands, except share and per share data)

Equity mutual funds

As of June 30, 2011 and December 31, 2010, this asset class consisted of certain U.S. and international equity mutual funds, classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in an active market for identical assets. The equity mutual funds are associated with the Company’s supplemental defined contribution retirement obligations.

U.S. treasury and agency obligations

As of June 30, 2011 and December 31, 2010, this asset class consisted of U.S. treasury and agency obligations classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in an active market for identical assets.

Derivatives

As a result of the Company’s global operating activities, the Company is exposed to market risks from changes in foreign currency exchange rates, which may adversely affect its operating results and financial position. When deemed appropriate, the Company minimizes its risks from foreign currency exchange rate fluctuations through the use of derivative financial instruments. The principal market in which the Company executes its foreign currency contracts is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants usually are large commercial banks. The forward foreign currency exchange contracts are valued using broker quotations, or market transactions and are classified within Level 2 of the fair value hierarchy.

5) Derivatives

The Company enters into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments and those utilized as economic hedges. The Company operates internationally and, in the normal course of business, is exposed to fluctuations in interest rates and foreign exchange rates. These fluctuations can increase the costs of financing, investing and operating the business. The Company has used derivative instruments, such as forward contracts, to manage certain foreign currency exposure.

By nature, all financial instruments involve market and credit risks. The Company enters into derivative instruments with major investment grade financial institutions and no collateral is required. The Company has policies to monitor the credit risk of these counterparties. While there can be no assurance, the Company does not anticipate any material non-performance by any of these counterparties.

The Company hedges a portion of its forecasted foreign currency denominated intercompany sales of inventory, over a maximum period of eighteen months, using forward foreign exchange contracts accounted for as cash-flow hedges related to Japanese, South Korean, British and European currencies. To the extent these derivatives are effective in off-setting the variability of the hedged cash flows, and otherwise meet the hedge accounting criteria, changes in the derivatives’ fair value are not included in current earnings but are included in other comprehensive income (“OCI”) in stockholders’ equity. These changes in fair value will subsequently be reclassified into earnings, as applicable, when the forecasted transaction occurs. To the extent that a previously designated hedging transaction is no longer an effective hedge, any ineffectiveness measured in the hedging relationship is recorded currently in earnings in the period it occurs. The cash flows resulting from forward exchange contracts are classified in the consolidated statements of cash flows as part of cash flows from operating activities. The Company does not enter into derivative instruments for trading or speculative purposes.

To the extent the hedge accounting criteria is not met, the related foreign currency forward contracts are considered as economic hedges and changes in the fair value of these contracts are recorded immediately in earnings in the period in which they occur. These include hedges that are used to reduce exchange rate risks arising from the change in fair value of certain foreign currency denominated assets and liabilities (i.e., payables, receivables) and other economic hedges where the hedge accounting criteria were not met.

10

MKS INSTRUMENTS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(Tables in thousands, except share and per share data)

As of June 30, 2011 and December 31, 2010, the Company had outstanding forward foreign exchange contracts with gross notional values of $70,244,000 and $87,666,000, respectively. The following tables provide a summary of the primary net hedging positions and corresponding fair values held as of June 30, 2011 and December 31, 2010:

	June 30, 2011
	Gross Notional
Currency Hedged (Buy/Sell)	Value		Fair Value (1)
U.S. Dollar/Japanese Yen	$	33,626	$	(1,632	)
U.S. Dollar/South Korean Won		21,123		(1,296	)
U.S. Dollar/Euro		9,462		(294	)
U.S. Dollar/U.K. Pound Sterling		6,033		(5	)
Total	$	70,244	$	(3,227	)

	December 31, 2010
	Gross Notional
Currency Hedged (Buy/Sell)	Value		Fair Value (1)
U.S. Dollar/Japanese Yen	$	50,104	$	(2,876	)
U.S. Dollar/South Korean Won		27,574		(563	)
U.S. Dollar/Euro		6,934		305
U.S. Dollar/U.K. Pound Sterling		3,054		40
Total	$	87,666	$	(3,094	)

(1) Represents the net receivable (payable) amount included in the consolidated balance sheets.

The following table provides a summary of the fair value amounts of the Company’s derivative instruments:

Derivatives Designated as Hedging Instruments	June 30, 2011			December 31, 2010
Derivative assets:
Forward exchange contracts	$	74		$	369
Derivative liabilities:
Forward exchange contracts		(3,301	)		(3,463	)
Total net derivative liability designated as hedging instruments (1)	$	(3,227	)	$	(3,094	)

(1) The derivative asset of $74,000 and derivative liability of $3,301,000 are classified in other current assets and other current liabilities, respectively, in the consolidated balance sheet as of June 30, 2011. The derivative asset of $369,000 and derivative liability of $3,463,000 are classified in other current assets and other current liabilities, respectively, in the consolidated balance sheet as of December 31, 2010.

The following table provides a summary of the gains (losses) on derivatives designated as hedging instruments:

Derivatives Designated as Cash Flow Hedging Relationships	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
Forward exchange contracts:	2011			2010			2011			2010
Net (loss) recognized in OCI (1)	$	(157	)	$	(1,097	)	$	(319	)	$	(741	)
Net (loss) gain reclassified from OCI into income (2)		(949	)		371			(1,475	)		384

(1)	Net change in the fair value of the effective portion classified in OCI.
(2)	Classified in selling, general and administrative.

11

MKS INSTRUMENTS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(Tables in thousands, except share and per share data)

6) Inventories

Inventories consist of the following:

	June 30, 2011		December 31, 2010
Raw materials	$	81,967	$	82,012
Work-in-process		22,606		21,891
Finished goods		59,877		52,526
	$	164,450	$	156,429

7) Goodwill and Intangible Assets

Goodwill

The Company tests goodwill for impairment on an annual basis, which has been determined to be as of October 31 of each fiscal year. The Company also tests goodwill between annual tests if an event occurs or circumstances change that indicate that the fair value of a reporting unit may be below its carrying value.

Goodwill impairment is determined using a two-step process. The first step involves a comparison of the estimated fair value of a reporting unit to its carrying amount, including goodwill. In performing the first step, the Company determines the fair value of a reporting unit using a discounted cash flow (“DCF”) analysis. Determining fair value requires the exercise of significant judgment, including judgments about appropriate discount rates, perpetual growth rates, and the amount and timing of expected future cash flows. Discount rates are based on a weighted average cost of capital (“WACC”), which represents the average rate a business must pay its providers of debt and equity. The WACC used to test goodwill was derived from a group of comparable companies. The cash flows employed in the DCF analysis were derived from internal earnings and forecasts and external market forecasts. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired and the second step of the impairment test is not necessary. If the carrying amount of a reporting unit exceeds its estimated fair value, then the second step of the goodwill impairment test must be performed.

The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with its carrying amount of goodwill to measure the amount of impairment loss, if any. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination, whereby the estimated fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.

As of October 31, 2010, the Company performed its annual impairment assessment of goodwill and determined that no impairment charges were required, as the fair value of each reporting unit exceeded its book value.

The changes in the carrying amount of goodwill and accumulated impairment losses during the six months ended June 30, 2011 and twelve months ended December 31, 2010 were as follows:

	2011							2010
	Gross		Accumulated					Gross			Accumulated
	Carrying		Impairment					Carrying			Impairment
	Amount		Loss			Net		Amount			Loss			Net
Beginning balance at January 1	$	279,434	$	(139,414	)	$	140,020	$	337,765		$	(193,254	)	$	144,511
Acquired goodwill (1)		—		—			—		2,292			—			2,292
Sale of discontinued operations (2)		—		—			—		(60,623	)		53,840			(6,783	)
Ending balance at June 30, 2011 and December 31, 2010	$	279,434	$	(139,414	)	$	140,020	$	279,434		$	(139,414	)	$	140,020

(1) In November 2010, the Company purchased a technology company for $2,447,000 to enhance its product portfolio. The Company recorded $2,292,000 of goodwill in connection with the acquisition.

12

MKS INSTRUMENTS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(Tables in thousands, except share and per share data)

 

(2) In May 2010, the Company sold its Ion Systems, Inc. (“Ion”) business and in August 2010 it sold the assets of its Yield Dynamics, LLC (“YDI”) business and as a result charged the related net goodwill to the gain on sale of discontinued operations.

Intangible Assets

Components of the Company’s intangible assets are comprised of the following:

			Accumulated
	Gross		Amortization			Net
As of June 30, 2011:
Completed technology	$	76,829	$	(76,536	)	$	293
Customer relationships		8,940		(8,228	)		712
Patents, trademarks, trade names and other		24,638		(24,400	)		238
	$	110,407	$	(109,164	)	$	1,243

			Accumulated
	Gross		Amortization			Net
As of December 31, 2010
Completed technology	$	76,829	$	(76,230	)	$	599
Customer relationships		8,940		(8,083	)		857
Patents, trademarks, trade names and other		24,638		(24,351	)		287
	$	110,407	$	(108,664	)	$	1,743

Aggregate amortization expense related to intangible assets for the three and six months ended June 30, 2011 was $250,000 and $500,000, respectively. Aggregate amortization expense related to intangible assets for the three and six months ended June 30, 2010 was $314,000 and $783,000, respectively. Estimated amortization expense for each of the three remaining fiscal years is as follows:

Year	Amount
2011 (remaining)	$	488
2012		389
2013		366

8) Debt

The Company’s Japanese subsidiary has lines of credit and short-term borrowing arrangements with two financial institutions which provide for aggregate borrowings as of June 30, 2011 of up to an equivalent of $30,941,000 U.S. dollars, which generally expire and are renewed at three month intervals. At June 30, 2011 total borrowings outstanding under these arrangements were $619,000 at an interest rate of 0.68%. There were no borrowings outstanding at December 31, 2010.

9) Product Warranties

The Company provides for the estimated costs to fulfill customer warranty obligations upon the recognition of the related revenue. While the Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component suppliers, the Company’s warranty obligation is affected by shipment volume, product failure rates, utilization levels, material usage, and supplier warranties on parts delivered to the Company. Should actual product failure rates, utilization levels, material usage, or supplier warranties on parts differ from the Company’s estimates, revisions to the estimated warranty liability would be required. The product warranty liability is included in other current liabilities in the consolidated balance sheets.

Product warranty activities were as follows:

	Six Months Ended June 30,
	2011			2010
Balance at January 1	$	9,865		$	6,560
Provision for product warranties		3,638			4,731
Direct charges to warranty liability		(3,832	)		(2,309	)
Balance at June 30	$	9,671		$	8,982

13

MKS INSTRUMENTS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(Tables in thousands, except share and per share data)

10) Income Taxes

The Company’s effective tax rate for both the three and six months ended June 30, 2011 was 33.0%. The Company’s effective tax rate for the three and six months ended June 30, 2010 was 34.0% and 33.0%, respectively. The effective tax rates for the six months ended June 30, 2011 and 2010, and the related income tax provisions were lower than the U.S. statutory tax rate primarily due to the geographic mix of income and profits earned by the Company’s international subsidiaries being taxed at rates lower than the U.S. statutory rate.

At June 30, 2011, the total amount of gross unrecognized tax benefits, which excludes interest and penalties, was approximately $16,749,000. At December 31, 2010, the total amount of gross unrecognized tax benefits, which excludes interest and penalties, was approximately $15,270,000. The net increase from December 31, 2010 was primarily attributable to an increase in reserves for existing uncertain tax positions. If these benefits were recognized in a future period, the timing of which is not estimable, the net unrecognized tax benefit of $12,789,000, excluding interest and penalties, would impact the Company’s effective tax rate. The Company accrues interest expense and, if applicable, penalties for any uncertain tax positions. Interest and penalties are classified as a component of income tax expense. At June 30, 2011 and December 31, 2010, the Company had accrued interest on unrecognized tax benefits of approximately $1,253,000 and $986,000, respectively.

The Company and its subsidiaries are subject to examination by federal, state and foreign tax authorities. The statute of limitations for the Company’s tax filings varies by tax jurisdiction between fiscal years 2001 through present.

While the Company believes it has adequately provided for all tax positions, amounts asserted by taxing authorities could materially differ from the Company’s accrued positions as a result of uncertain and complex application of tax regulations. Additionally, the recognition and measurement of certain tax benefits include estimates and judgment by management and inherently includes subjectivity. Accordingly, the Company could record additional provisions or benefits due to U.S. federal, state, and foreign tax-related matters in the future as it revises estimates or settles or otherwise resolves the underlying matters.

11) Discontinued Operations

During the second quarter of 2010, the Company committed to a plan to divest two product lines, as their growth potential no longer met the Company’s long-term strategic objectives. The Company completed the sale of Ion on May 17, 2010 for $15,097,000 of net cash proceeds after expenses and recorded a pre-tax gain on the sale of $4,228,000. As a result of committing to a plan to divest a second product line and, therefore, meeting the asset held for sale criteria, during the second quarter of 2010, the Company performed a fair value analysis of its YDI business in order to measure it at the lower of its carrying value or fair value less cost to dispose. Based on the analysis, the Company determined that the carrying value was less than the fair value, less costs to dispose, and therefore, no impairment charge was required. The YDI business was considered held for sale of June 30, 2010. The Company completed the sale of the assets of its YDI business on August 11, 2010 for $490,000 of net cash proceeds after expenses and recorded a pre-tax gain on the sale of $224,000.

The two product lines have been accounted for as discontinued operations. Accordingly, their results of operations have been reclassified to discontinued operations in the consolidated statements of operations for all periods presented. The assets and liabilities of these discontinued businesses have not been reclassified or segregated in the consolidated balance sheets or consolidated statements of cash flows due to their immaterial amounts. Net revenues and income from discontinued operations for the three and six months ended June 30, 2011 and 2010 are below:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2011		2010			2011		2010
Net revenues	$	—	$	3,881		$	—	$	9,784
Income from discontinued operations before income taxes	$	—	$	786		$	—	$	1,219
Gain from disposal of discontinued operations before income taxes		—		4,228			—		4,228
Income tax benefit		—		(619	)		—		(413	)
Income from discontinued operations	$	—	$	5,633		$	—	$	5,860

14

MKS INSTRUMENTS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(Tables in thousands, except share and per share data)

12) Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Numerator:
Income from continuing operations	$	38,601	$	33,144	$	76,644	$	62,142
Income from discontinued operations, net of tax		—		5,633		—		5,860
Net income	$	38,601	$	38,777	$	76,644	$	68,002
Denominator:
Shares used in net income per common share — basic		52,346,000		50,067,000		51,877,000		49,834,000
Effect of dilutive securities:
Stock options, restricted stock and employee stock purchase plan		560,000		803,000		769,000		901,000
Shares used in net income per common share — diluted		52,906,000		50,870,000		52,646,000		50,735,000
Basic income per common share:
Continuing operations	$	0.74	$	0.66	$	1.48	$	1.24
Discontinued operations		—		0.11		—		0.12
Net income	$	0.74	$	0.77	$	1.48	$	1.36
Diluted income per common share:
Continuing operations	$	0.73	$	0.65	$	1.46	$	1.22
Discontinued operations		—		0.11		—		0.12
Net income	$	0.73	$	0.76	$	1.46	$	1.34

Basic earnings per share (“EPS”) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding (using the treasury stock method) if securities containing potentially dilutive common shares (stock options and restricted stock units) had been converted to such common shares, and if such assumed conversion is dilutive.

As of June 30, 2011, stock options and restricted stock units relating to an aggregate of approximately 1,638,000 shares were outstanding. For the three and six months ended June 30, 2011, the potential dilutive effect of 331,000 and 256,000 weighted-average shares, respectively, of restricted stock units and stock options were excluded from the computation of diluted weighted-average shares outstanding as the shares would have an anti-dilutive effect on EPS.

As of June 30, 2010, stock options and restricted stock units relating to an aggregate of approximately 3,637,000 shares were outstanding. For the three and six months ended June 30, 2010, the potential dilutive effect of 1,201,000 and 1,295,000 weighted-average shares, respectively, of restricted stock units and stock options were excluded from the computation of diluted weighted-average shares outstanding as the shares would have an anti-dilutive effect on EPS.

15

MKS INSTRUMENTS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(Tables in thousands, except share and per share data)

13) Comprehensive Income

Components of comprehensive income were as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Net income	$	38,601		$	38,777		$	76,644		$	68,002
Other comprehensive income (loss):
Changes in value of financial instruments designated as cash flow hedges (net of tax)		(517	)		(905	)		(123	)		(690	)
Foreign currency translation adjustments		2,207			(2,953	)		5,331			(4,921	)
Unrealized (loss) gain on investments (net of tax)		(8	)		(40	)		37			(74	)
Other comprehensive income (loss)		1,682			(3,898	)		5,245			(5,685	)
Total comprehensive income	$	40,283		$	34,879		$	81,889		$	62,317

14) Geographic, Product and Significant Customer Information

The Company operates in one segment for the development, manufacturing, sales and servicing of products that measure, control, power and monitor critical parameters of advanced manufacturing processes. The Company’s chief decision-maker reviews consolidated operating results to make decisions about allocating resources and assessing performance for the entire Company.

Information about the Company’s operations in different geographic regions is presented in the tables below. Net revenues to unaffiliated customers are based on the location in which the sale originated. Transfers between geographic areas are at negotiated transfer prices and have been eliminated from consolidated net revenues.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Geographic net revenues:
United States	$	110,412	$	128,011	$	221,015	$	240,813
Japan		27,551		30,704		52,190		61,300
Europe		30,852		22,423		60,556		42,719
Asia (excluding Japan)		55,672		39,509		122,577		67,981
	$	224,487	$	220,647	$	456,338	$	412,813

	June 30, 2011		December 31, 2010
Long-lived assets (1):
United States	$	53,891	$	54,840
Japan		4,073		4,273
Europe		5,404		4,970
Asia (excluding Japan)		8,385		8,597
	$	71,753	$	72,680

(1) Long-lived assets include property, plant and equipment, net and certain other assets.

16

MKS INSTRUMENTS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(Tables in thousands, except share and per share data)

The Company groups its products into three product groups. Net product and service revenues for these product groups are as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Instruments and Control Systems	$	119,553	$	114,249	$	231,689	$	203,345
Power and Reactive Gas Products		83,523		87,693		180,005		173,464
Vacuum Products		21,411		18,705		44,644		36,004
	$	224,487	$	220,647	$	456,338	$	412,813

15) Commitments and Contingencies

The Company is subject to various legal proceedings and claims, which have arisen in the ordinary course of business.

In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s results of operations, financial condition or cash flows.

The Company reviewed its contractual obligations and commercial commitments as of June 30, 2011 and determined that there were no significant changes from the ones set forth in the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

16) Subsequent Events

Stock Repurchase Program

On July 25, 2011, MKS’ Board of Directors approved a share repurchase program for the repurchase of up to an aggregate of $200,000,000 of its common stock from time to time in open market purchases, privately negotiated transactions or through other appropriate means. The timing and quantity of any shares repurchased will depend upon a variety of factors, including business conditions, stock market conditions and business development activities, including but not limited to merger and acquisition opportunities. These repurchases may be commenced, suspended or discontinued at any time without prior notice.

Cash Dividend

On July 25, 2011, MKS’ Board of Directors authorized a quarterly cash dividend of $0.15 per share, payable on September 16, 2011 to shareholders of record as of September 1, 2011. Future dividend declarations, as well as the record and payment dates for such dividends, are subject to the final determination of the Company’s Board of Directors.

17

MKS INSTRUMENTS, INC.

     ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

     This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. When used herein, the words “believes,” “anticipates,” “plans,” “expects,” “estimates,” “would,” “will,” “intends” and similar expressions are intended to identify forward-looking statements. These forward-looking statements reflect management’s current opinions and are subject to certain risks and uncertainties that could cause results to differ materially from those stated or implied. While we may elect to update forward looking statements at some point in the future, we specifically disclaim any obligation to do so even if our estimates or expectations change. Risks and uncertainties include, but are not limited to those discussed in our Annual Report on Form 10-K for the year ended December 31, 2010 in the section entitled “Risk Factors” as referenced in Part II, Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q.

Overview

     We are a leading global provider of instruments, subsystems and process control solutions that measure, control, power, monitor and analyze critical parameters of advanced manufacturing processes to improve process performance and productivity. We also provide services relating to the maintenance and repair of our products, software maintenance, installation services and training.

     Our products are used in diverse markets, applications and processes. The primary markets we serve are manufacturers of capital equipment for semiconductor devices and for other thin film applications including flat panel displays, light emitting diodes (“LEDs”), solar cells, data storage media and other advanced coatings. We also leverage our technology into other markets with advanced manufacturing applications including medical equipment, pharmaceutical manufacturing, energy generation and environmental monitoring.

     We are managed as one operating segment. We group our products into three product groups: Instruments and Control Systems, Power and Reactive Gas Products and Vacuum Products. Our products are derived from our core competencies in pressure measurement and control, materials delivery, gas composition analysis, control and information technology, power and reactive gas generation and vacuum technology.

     We have a diverse base of customers that includes manufacturers of semiconductor capital equipment and semiconductor devices, thin film capital equipment used in the manufacture of flat panel displays, LEDs, solar cells, data storage media, and other coating applications; and industrial, medical, pharmaceutical manufacturing, energy generation, environmental monitoring and other advanced manufacturing companies, as well as university, government and industrial research laboratories. For the six months ended June 30, 2011 and the full year ended December 31, 2010, we estimate that 62% and 64% of our net sales, respectively, were to semiconductor capital equipment manufacturers and semiconductor device manufacturers. We expect that sales to semiconductor capital equipment manufacturers and semiconductor device manufacturers will continue to account for a substantial portion of our sales.

     Through the second quarter of 2011, we saw an improvement in the global economy, which contributed to an increase in our business, financial condition and results of operations for the six months ended June 30, 2011 compared to the same period for the prior year. As a result of the improved global economy, our net revenues to semiconductor capital equipment manufacturers and semiconductor device manufacturers increased 7% for the six months ended June 30, 2011 compared to the same period for the prior year. Although our business levels increased for the six months ended June 30, 2011 compared to the same period for the prior year, the semiconductor capital equipment industry is subject to rapid demand shifts, which are difficult to predict, and we are uncertain as to the timing or extent of future demand or any future weakness in the semiconductor capital equipment industry. As we recently reported, we have recently begun to see a moderation in our semiconductor capital equipment manufacture and semiconductor devise manufacture customers’ order rates.

     Our net revenues sold to other advanced markets, which exclude semiconductor capital equipment and semiconductor device product applications, increased 18% for the six months ended June 30, 2011 compared to the same period for the prior year. The increase was mainly due to product revenues from a thin film solar customer in China during the first quarter of 2011. These advanced and growing markets include LED, medical, biopharm, environmental, thin films, solar and other markets and we anticipate that these markets will continue to grow and will represent a larger portion of our revenue.

     A significant portion of our net sales is to customers in international markets. International net sales include sales by our foreign subsidiaries, but exclude direct export sales. For the six months ended June 30, 2011 and the year ended December 31, 2010, international net sales accounted for approximately 52% and 43% of our net sales, respectively. A significant portion of our international net sales were in Japan and China. We expect that international net sales will continue to represent a significant percentage of our total net sales.

18

Critical Accounting Policies and Estimates

     The preparation of our consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported. There have been no material changes in our critical accounting policies since December 31, 2010. For further information, please see the discussion of critical accounting policies in our Annual Report on Form 10-K for the year ended December 31, 2010 in the section captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates.”

Results of Operations

     The following table sets forth, for the periods indicated, the percentage of total net revenues of certain line items included in MKS’ consolidated statements of operations data.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Net revenues:
Product		88.5	%		90.2	%		89.0	%		89.6	%
Services		11.5			9.8			11.0			10.4
Total net revenues		100.0			100.0			100.0			100.0
Cost of revenues:
Cost of product revenues		46.8			50.4			47.4			49.7
Cost of service revenues		6.4			5.5			6.3			6.0
Total cost of revenues		53.2			55.9			53.7			55.7
Gross profit		46.8			44.1			46.3			44.3
Research and development		6.9			7.3			7.1			7.7
Selling, general and administrative		14.2			14.0			14.1			14.2
Amortization of intangible assets		0.1			0.2			0.1			0.2
Gain on sale of asset		—			—			—			(0.2	)
Income from operations		25.5			22.6			25.0			22.4
Interest income, net		0.1			0.1			0.1			0.1
Income from continuing operations before income taxes		25.7			22.7			25.1			22.5
Provision for income taxes		8.5			7.7			8.3			7.4
Income from continuing operations		17.2			15.0			16.8			15.1
Income from discontinued operations, net of taxes		—			2.6			—			1.4
Net income		17.2	%		17.6	%		16.8	%		16.5	%

Net Revenues (dollars in millions)

	Three Months Ended June 30,							Six Months Ended June 30,
	2011		2010		% Change			2011		2010		% Change
Net Revenues:
Product	$	198.7	$	198.9		(0.1	)%	$	406.2	$	370.0		9.8	%
Service		25.8		21.7		18.6			50.1		42.8		17.1
Total net revenues	$	224.5	$	220.6		1.7	%	$	456.3	$	412.8		10.5	%

     Product revenues decreased $0.2 million and increased $36.2 million during the three and six months ended June 30, 2011, respectively, compared to the same periods for the prior year. For the three months ended June 30, 2011 our product revenues related to our semiconductor capital equipment manufacturer and semiconductor device manufacturer customers increased by $2.9 million, or 2.3%. Although we have seen a recovery in the global economy since late 2009, which has contributed to an increase in demand for our products in many of the markets we serve, we have recently seen a moderation in our semiconductor capital equipment manufacturer and semiconductor device manufacturer customers’ order rates. Our product revenues sold to other advanced markets, which exclude semiconductor capital equipment and semiconductor device product applications decreased $3.1 million, or 4.3%, during the three months ended June 30, 2011 compared to the same period for the prior year primarily due to a reduction in product sales to the solar market.

     For the six months ended June 30, 2011 our product revenues related to our semiconductor capital equipment manufacturer and semiconductor device manufacturer customers increased by $17.3 million, or 7.4%. Our product revenues sold to other advanced markets, which exclude semiconductor capital equipment and semiconductor device product applications increased $18.9 million, or 13.8% during the

19

six months ended June 30, 2011 compared to the same period for the prior year. The increase in demand in our other markets included the LED, biopharm, environmental, thin films, solar and other markets. A significant portion of this increase was due to product revenues from a thin film solar customer in China during the first quarter of 2011.

     Service revenues consisted mainly of fees for services relating to the maintenance and repair of our products, software maintenance, installation services and training. Service revenues increased $4.1 million, or 18.6%, and $7.3 million, or 17.1%, during the three and six months ended June 30, 2011, respectively, compared to the same periods for the prior year, as a result of the improvement in the global economy, increase in product sales and due to our investment to grow our service business in Asia.

     Total international net revenues, including product and service, were $114.1 million, and $235.3 million, or 50.8% and 51.6% of net revenues for the three and six months ended June 30, 2011, respectively. Total international net revenues, including product and service, were $92.6 million, and $172.0 million, or 42.0% and 41.7% of net revenues, for the three and six months ended June 30, 2010, respectively. The increases are due to a general increase in worldwide demand from many of the markets we serve as a result of improvement in the global economy. A significant portion of the increase in international net revenues for the six months ended June 30, 2011 was due to product revenues from a thin film solar customer in China during the first quarter of 2011.

Gross Profit

	Three Months Ended June 30,									Six Months Ended June 30,
	2011			2010			% Points Change			2011			2010			% Points Change
Gross profit as percentage of net revenues:
Product		47.1	%		44.1	%		3.0	%		46.8	%		44.5	%		2.3	%
Service		44.0			43.8			0.2			42.8			42.2			0.6
Total gross profit percentage		46.8	%		44.1	%		2.7	%		46.3	%		44.3	%		2.0	%

     Gross profit on product revenues increased by 3.0 percentage points for the three months ended June 30, 2011, compared to the same period for the prior year. The increase is due to an increase of 4.8 percentage points due to favorable product mix and an increase of 1.0 percentage points from favorable foreign exchange fluctuations. These increases were partially offset by 1.8 percentage points due to higher overhead and 1.4 percentage points related to higher excess and obsolete inventory related net charges. The higher overhead spending is due to higher salary and fringe related costs for additional personnel due to the higher business levels and an increase in incentive compensation.

     Gross profit on product revenues increased by 2.3 percentage points for the six months ended June 30, 2011, compared to the same period for the prior year. The increase is due to an increase of 4.4 percentage points due to favorable product mix, and an increase of 0.9 percentage points from favorable foreign exchange fluctuations. These increases were partially offset by 1.9 percentage points due to higher overhead and 1.0 percentage points related to higher excess and obsolete inventory related net charges. The higher overhead spending is due to higher salary and fringe related costs for additional personnel due to the higher business levels and an increase in incentive compensation.

     Cost of service revenues consists primarily of costs of providing services for repair and training which includes salaries and related expenses and other fixed costs. Service gross profit increased by 0.2 percentage points and 0.6 percentage points for the three and six months ended June 30, 2011, respectively, compared to the same periods for the prior year. The increase is mainly a result of higher service revenues since a majority of our overhead costs are fixed.

Research and Development (dollars in millions)

	Three Months Ended June 30,							Six Months Ended June 30,
	2011		2010		% Change			2011		2010		% Change
Research and development expenses	$	15.6	$	16.2		(3.5	)%	$	32.5	$	31.8		2.0	%

     Research and development expense decreased $0.6 million during the three months ended June 30, 2011, compared to the same period for the prior year. The decrease includes a $0.4 million decrease in spending on project materials due to changes in the timeline of certain projects and a $0.2 million decrease in patent and other legal related costs.

     Research and development expense increased $0.7 million during the six months ended June 30, 2011, compared to the same period for the prior year. The increase includes a $1.2 million increase in compensation expense and a $0.2 million increase in patent and other legal related costs offset by a $0.9 million decrease in spending on project materials. The increase in compensation expense is due to higher salary costs for additional personnel and an increase in stock-based compensation costs. In addition, compensation costs increased as fringe related costs were higher as a result of increased taxes related to an incentive compensation payment and the restoration in the second quarter of 2010 of the employer match portion of the 401(k) profit-sharing plan and employee stock purchase plans.

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     Our research and development is primarily focused on developing and improving our instruments, components, subsystems and process control solutions to improve process performance and productivity.

     We have thousands of products and our research and development efforts primarily consist of a large number of projects related to these products, none of which is individually material to us. Current projects typically have a duration of 3 to 30 months depending upon whether the product is an enhancement of existing technology or a new product. Our current initiatives include projects to enhance the performance characteristics of older products, to develop new products and to integrate various technologies into subsystems. These projects support in large part the transition in the semiconductor industry to smaller integrated circuit geometries and in the flat panel display and solar markets to larger substrate sizes, which require more advanced process control technology. Research and development expenses consist primarily of salaries and related expenses for personnel engaged in research and development, fees paid to consultants, material costs for prototypes and other expenses related to the design, development, testing and enhancement of our products as well as legal costs associated with maintaining and defending our intellectual property.

     We believe that the continued investment in research and development and ongoing development of new products are essential to the expansion of our markets, and we expect to continue to make significant investment in research and development activities. We are subject to risks if products are not developed in a timely manner, due to rapidly changing customer requirements and competitive threats from other companies and technologies. Our success primarily depends on our products being designed into new generations of equipment for the semiconductor industry and other advanced technology markets. We develop products that are technologically advanced so that they are positioned to be chosen for use in each successive generation of semiconductor capital equipment. If our products are not chosen to be designed into our customers’ products, our net revenues may be reduced during the lifespan of those products.

Selling, General and Administrative (dollars in millions)

	Three Months Ended June 30,							Six Months Ended June 30,
	2011		2010		% Change			2011		2010		% Change
Selling, general and administrative expenses	$	31.9	$	30.9		3.1	%	$	64.6	$	58.7		10.0	%

     Selling, general and administrative expenses increased $1.0 million for the three months ended June 30, 2011, compared to the same period for the prior year. The increase includes a $0.5 million increase in consulting and professional fees, a $0.5 million unfavorable impact from foreign exchange and a $0.4 million increase in stock-based compensation expense, partially offset by a $0.3 million decrease in depreciation expense.

     Selling, general and administrative expenses increased $5.9 million for the six months ended June 30, 2011, compared to the same period for the prior year. The increase includes a $2.8 million increase in compensation expense, a $2.3 million increase in consulting and professional fees, a $0.5 million increase in travel related expenses, a $0.3 million unfavorable impact from foreign exchange and a $0.3 million increase in the provision for uncollectable accounts partially offset by a $0.6 million decrease in depreciation expense. The increase in compensation expense is due to higher salary costs for additional personnel and an increase in stock-based compensation costs. In addition, fringe related costs increased as a result of increased taxes related to an incentive compensation payment and the restoration in the second quarter of 2010 of the employer match portion of the 401(k) profit-sharing plan and employee stock purchase plans.

Amortization of Intangible Assets (dollars in millions)

	Three Months Ended June 30,							Six Months Ended June 30,
	2011		2010		% Change			2011		2010		% Change
Amortization of intangible assets	$	0.3	$	0.3		—	%	$	0.5	$	0.8		(36.1	)%

     Amortization expense for the six months ended June 30, 2011 decreased $0.3 million compared to the same period for the prior year as certain intangible assets became fully amortized during 2010.

Gain on Sale of Asset (dollars in millions)

	Three Months Ended June 30,							Six Months Ended June 30,
	2011		2010		% Change			2011		2010		% Change
Gain on sale of asset	$	—	$	—		—	%	$	—	$	0.7		(100.0	)%

     During the first quarter of 2010, we sold two vacated facilities for proceeds of $2.1 million and recorded a $0.7 million net gain on the sale.

Interest Income, Net (dollars in millions)

	Three Months Ended June 30,							Six Months Ended June 30,
	2011		2010		% Change			2011		2010		% Change
Interest income, net	$	0.3	$	0.3		—	%	$	0.6	$	0.6		—	%

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     Interest income, net was unchanged for the three and six months ended June 30, 2011 compared to the same periods for the prior year. Although the total cash and marketable securities balance was approximately $170 million higher on average for the six months ended June 30, 2011 compared to the same period for the prior year, interest income, net was unchanged due to a reduction in interest rates and a change in the mix of the investment portfolio.

Provision for Income Taxes (dollars in millions)

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Provision for income taxes	$	19.0	$	17.1	$	37.7	$	30.6

     Our effective tax rate for both the three and six months ended June 30, 2011 was 33.0%. Our effective tax rate for the three and six months ended June 30, 2010 was 34.0% and 33.0%, respectively. The effective tax rates for the six months ended June 30, 2011 and 2010, and the related income tax provisions were lower than the U.S. statutory tax rate primarily due to the geographic mix of income and profits earned by our international subsidiaries being taxed at rates lower than the U.S. statutory rate.

     At June 30, 2011, our total amount of gross unrecognized tax benefits, which excludes interest and penalties, was approximately $16.7 million. At December 31, 2010, our total amount of gross unrecognized tax benefits, which excludes interest and penalties, was approximately $15.3 million. The net increase from December 31, 2010 was primarily attributable to an increase in reserves for existing uncertain tax positions. If these benefits were recognized in a future period, the timing of which is not estimable, the net unrecognized tax benefit of $12.8 million, excluding interest and penalties, would impact our effective tax rate. We accrue interest expense and, if applicable, penalties for any uncertain tax positions. Interest and penalties are classified as a component of income tax expense. At June 30, 2011 and December 31, 2010, we had accrued interest on unrecognized tax benefits of approximately $1.3 million and $1.0 million, respectively.

     We and our subsidiaries are subject to examination by federal, state and foreign tax authorities. The statute of limitations for our tax filings varies by tax jurisdiction between fiscal years 2001 through present.

     Our future effective income tax rate depends on various factors, such as tax legislation and the geographic composition of our pre-tax income. We monitor these factors and timely adjust our effective tax rate accordingly. Additionally, the effective tax rate could be adversely affected by changes in the valuation of deferred tax assets and liabilities. In particular, the carrying value of deferred tax assets, which are predominantly in the United States, is dependent on our ability to generate sufficient future taxable income in the United States. While we believe we have adequately provided for all tax positions, amounts asserted by taxing authorities could materially differ from our accrued positions as a result of uncertain and complex application of tax regulations. Additionally, the recognition and measurement of certain tax benefits include estimates and judgment by management and inherently includes subjectivity. Accordingly, we could record additional provisions or benefits due to U.S. federal, state, and foreign tax-related matters in the future as we revise estimates or settle or otherwise resolve the underlying matters.

Discontinued Operations

	Three Months Ended June 30,							Six Months Ended June 30,
	2011		2010		% Change			2011		2010		% Change
Income from discontinued operations, net of taxes	$	—	$	5.6		(100.0	)%	$	—	$	5.9		(100.0	)%

     During the second quarter of 2010, we committed to a plan to divest two product lines as their growth potential no longer met our long-term strategic objectives. We completed the sale of Ion Systems, Inc. in May 2010 for $15.1 million of net cash proceeds after expenses and recorded a pre-tax gain on the sale of $4.2 million. We sold of the assets of our Yield Dynamics, LLC business in August 2010 for a total of $0.5 million of net cash proceeds after expenses and recorded a $0.2 million pre-tax gain on the sales.

     The two product lines have been accounted for as discontinued operations. Accordingly, their results of operations have been reclassified to discontinued operations in the consolidated statements of operations for 2010. The assets and liabilities of these discontinued product lines have not been reclassified or segregated in the consolidated balance sheets or consolidated statements of cash flows due to their immaterial amounts.

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Liquidity and Capital Resources

     Cash, cash equivalents, long-term and short-term investments totaled $501.6 million at June 30, 2011 compared to $431.9 million at December 31, 2010. This increase was mainly attributable to our net cash provided by operating activities as a result of our net income and net proceeds related to employee stock awards, partially offset by dividend payments to our common shareholders and capital expenditures.

     Net cash provided by operating activities of $58.7 million for the six months ended June 30, 2011, resulted mainly from net income of $76.6 million which included non-cash charges of $18.9 million, partially offset by an increase of $34.4 million in working capital. The increase in working capital consisted primarily of a $12.9 million increase in inventory and an $11.0 million increase in trade accounts receivable, both a result of our increased business levels, and a $9.9 million increase in other current assets partially due to an increase in our value-added tax receivable.

     Net cash provided by operating activities of $39.2 million for the six months ended June 30, 2010, resulted mainly from net income of $68.0 million and non-cash charges of $16.3 million, partially offset by a $41.8 million change in working capital. The increase in working capital consisted primarily of a $58.0 million increase in trade accounts receivable and an increase of $28.3 million of inventory as a result of our increased business levels. The increase in net operating assets was partially offset by an increase of $14.0 million in accounts payable related to inventory purchases to support our increased business levels, an increase of $17.3 million in accrued compensation and an increase of $10.4 million in accrued liabilities. The increase in accrued liabilities is mainly related to an increase in non-income taxes payable.

     Net cash used in investing activities of $11.1 million for the six months ended June 30, 2011, resulted primarily from $6.3 million in purchases of production related equipment and the net purchases of $4.6 million of short-term and long-term available-for-sale investments. Net cash provided by investing activities of $1.9 million for the six months ended June 30, 2010, resulted primarily from $15.1 million in net proceeds from the sale of a discontinued operation and proceeds of $2.1 million from the sale of two vacated facilities, partially offset by $7.2 million of net purchases of available-for-sale investments and by $6.6 million in purchases of property, plant and equipment.

     Net cash provided by financing activities was $14.9 million for the six months ended June 30, 2011 and consisted primarily of $29.3 million cash received from the exercise of previously issued stock options and $5.2 million from excess tax benefits from stock-based compensation. These increases were partially offset by two dividend payments to common stockholders of an aggregate of $15.6 million and $5.1 million in taxes paid upon the vesting of restricted stock units. Net cash provided by financing activities was $2.4 million for the six months ended June 30, 2010 and consisted primarily of $2.3 million related to cash received from the exercise of previously issued stock options.

     Our Japanese subsidiary has lines of credit and short-term borrowing arrangements with two financial institutions which provide for aggregate borrowings as of June 30, 2011 of up to an equivalent of $30.9 million U.S. dollars, which generally expire and are renewed at three month intervals. At June 30, 2011 total borrowings outstanding under these arrangements were $0.6 million at an interest rate of 0.68%. There were no borrowings outstanding at December 31, 2010.

     On July 25, 2011, our Board of Directors approved a share repurchase program for the repurchase of up to an aggregate of $200 million of our common stock from time to time in open market purchases, privately negotiated transactions or through other appropriate means. The timing and quantity of any shares repurchased will depend upon a variety of factors, including business conditions, stock market conditions and business development activities, including but not limited to merger and acquisition opportunities. These repurchases may be commenced, suspended or discontinued at any time without prior notice.

     On July 25, 2011, our Board of Directors authorized a quarterly cash dividend of $0.15 per share, payable on September 16, 2011 to shareholders of record as of September 1, 2011. On May 2, 2011, our Board of Directors authorized a quarterly cash dividend of $0.15 per share, paid on June 17, 2011 to shareholders of record as of June 1, 2011. Our cash payment for the dividend on June 17, 2011 was $7.9 million. On February 1, 2011, our Board of Directors authorized a quarterly cash dividend of $0.15 per share, paid on March 18, 2011 to shareholders of record as of March 1, 2011. Our cash payment for the dividend on March 18, 2011 was $7.8 million. Future dividend declarations, if any, as well as the record and payment dates for such dividends, are subject to the final determination of our Board of Directors.

     We believe that our current cash position and available borrowings will be sufficient to satisfy our estimated working capital and planned capital expenditure requirements through at least the next 12 months and the foreseeable future.

Off-Balance Sheet Arrangements

     We do not have any financial partnerships with unconsolidated entities, such as entities often referred to as structured finance, special purpose entities or variable interest entities, which are often established for the purpose of facilitating off-balance sheet arrangements or for other contractually narrow or limited purposes. Accordingly, we have no off-balance sheet arrangements that have or are reasonably expected

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to have a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Contractual Obligations

     We reviewed our contractual obligations and commercial commitments as of June 30, 2011 and determined that there were no significant changes from the ones set forth in the notes to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2010.

Recently Issued Accounting Pronouncements

     In June 2011, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) which eliminates the option to present the components of other comprehensive income as part of the statement of equity and requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments are effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2011. The ASU requires changes in presentation only and we do not expect it will have a material effect on our consolidated financial statements.

     In May 2011, the FASB issued an ASU which applies to all reporting entities that are required or permitted to measure or disclose the fair value of an asset, a liability, or an instrument classified in a reporting entity’s shareholders’ equity in the financial statements. The amendments do not extend the use of fair value accounting, but provide guidance on how it should be applied where its use is already required or permitted by other standards within U.S. GAAP. The amendments change the wording used to describe many requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. Additionally, the ASU clarifies the FASB’s intent about the application of existing fair value measurements. The amendments in this ASU are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. Early application by public entities is not permitted. We do not expect the new ASU to have a material effect on our financial position, results of operations or cash flows.

     In October 2009, the FASB issued an ASU that established new accounting and reporting provisions for arrangements including multiple revenue-generating activities. This ASU provides amendments to the criteria for separating deliverables, measuring and allocating arrangement consideration to one or more units of accounting. The amendments in this ASU also established a selling price hierarchy for determining the selling price of a deliverable. Significantly enhanced disclosures are also required to provide information about a vendor’s multiple-deliverable revenue arrangements, including information about the nature and terms, significant deliverables, and its performance within arrangements. The amendments also require providing information about the significant judgments made and changes to those judgments and about how the application of the relative selling-price method affects the timing or amount of revenue recognition. The amendments in this ASU were effective prospectively for revenue arrangements entered into or materially modified in the fiscal years beginning on or after June 15, 2010. We adopted the new ASU in the first quarter of 2011 and the adoption did not have a material impact on our financial position, results of operations, or cash flows.

     In October 2009, the FASB issued an ASU that changed the accounting model for revenue arrangements that include both tangible products and software elements that are “essential to the functionality,” and scoped these products out of current software revenue guidance. The new ASU includes factors to help companies determine what software elements are considered “essential to the functionality.” The amendments now subject software-enabled products to other revenue guidance and disclosure requirements, such as guidance surrounding revenue arrangements with multiple-deliverables. The amendments in this ASU were effective prospectively for revenue arrangements entered into or materially modified in the fiscal years beginning on or after June 15, 2010. We adopted the new ASU in the first quarter of 2011 and the adoption did not have a material impact on our financial position, results of operations, or cash flows.

     ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     Information concerning market risk is contained in the section entitled “Quantitative and Qualitative Disclosures About Market Risk” contained in our Annual Report on Form 10-K for the year ended December 31, 2010 filed with the Securities and Exchange Commission on February 25, 2011. As of June 30, 2011, there were no material changes in our exposure to market risk from December 31, 2010.

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     ITEM 4. CONTROLS AND PROCEDURES.

     Evaluation of Disclosure Controls and Procedures

     Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2011. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2011, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosure.

     Changes in Internal Control over Financial Reporting

     There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

     PART II. OTHER INFORMATION

     ITEM 1. LEGAL PROCEEDINGS.

     We are subject to various legal proceedings and claims, which have arisen in the ordinary course of business.

     In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on our results of operations, financial condition or cash flows.

     ITEM 1A. RISK FACTORS.

     Information regarding risk factors affecting the Company’s business are discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 in the section entitled “Risk Factors.” There have been no material changes from the risks disclosed therein.

     ITEM 6. EXHIBITS.

Exhibit No.	Exhibit Description
3.1(1)	Restated Articles of Organization
3.2(2)	Articles of Amendment, as filed with the Secretary of State of Massachusetts on May 18, 2001
3.3(3)	Articles of Amendment, as filed with the Secretary of State of Massachusetts on May 16, 2002
3.4(4)	Amended and Restated By-Laws
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101*	The following materials from MKS Instruments, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, formatted in XBRL (Extensible Business Reporting Language):
	(i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) Notes to Unaudited Consolidated Financial Statements.

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*	Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
(1)	Incorporated by reference to the Registration Statement on Form S-4 (File No. 333-49738) filed with the Securities and Exchange Commission on November 13, 2000.
(2)	Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001.
(3)	Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002.
(4)	Incorporated by reference to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 28, 1999, as amended.

SIGNATURE

     Pursuant to the requirements 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.

		MKS INSTRUMENTS, INC.
August 5, 2011	By:	/s/ Seth H. Bagshaw
		Seth H. Bagshaw
		Vice President, Chief Financial Officer and Treasurer
		(Principal Financial Officer)

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EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(a)/RULE 15d-14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Leo Berlinghieri, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of MKS Instruments, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2011	/s/ Leo Berlinghieri
	Leo Berlinghieri
	Chief Executive Officer and President (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a)/RULE 15d-14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Seth H. Bagshaw, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of MKS Instruments, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2011	/s/ Seth H. Bagshaw
	Seth H. Bagshaw
	Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

          In connection with the Quarterly Report on Form 10-Q of MKS Instruments, Inc. (the “Company”) for the period ended June 30, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Leo Berlinghieri, Chief Executive Officer and President of the Company, and Seth H. Bagshaw, Vice President, Chief Financial Officer and Treasurer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, based on his knowledge:

(1)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 5, 2011	/s/ Leo Berlinghieri
	Leo Berlinghieri
	Chief Executive Officer and President
Dated: August 5, 2011	/s/ Seth H. Bagshaw
	Seth H. Bagshaw
	Vice President, Chief Financial Officer and Treasurer

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Net Income Per Share (Details) (USD $) In Thousands, except Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Numerator:
Income from continuing operations	$ 38,601	$ 33,144	$ 76,644	$ 62,142
Income from discontinued operations, net of tax		5,633		5,860
Net income	$ 38,601	$ 38,777	$ 76,644	$ 68,002
Denominator:
Shares used in net income per common share - basic	52,346,000	50,067,000	51,877,000	49,834,000
Effect of dilutive securities:
Stock options, restricted stock and employee stock purchase plan	560,000	803,000	769,000	901,000
Shares used in net income per common share - diluted	52,906,000	50,870,000	52,646,000	50,735,000
Basic income per common share:
Continuing operations	$ 0.74	$ 0.66	$ 1.48	$ 1.24
Discontinued operations		$ 0.11		$ 0.12
Net income	$ 0.74	$ 0.77	$ 1.48	$ 1.36
Diluted income per common share:
Continuing operations	$ 0.73	$ 0.65	$ 1.46	$ 1.22
Discontinued operations		$ 0.11		$ 0.12
Net income	$ 0.73	$ 0.76	$ 1.46	$ 1.34
Net Income Per Share (Textuals) [Abstract]
Stock options and restricted stock units	1,638,000	3,637,000	1,638,000	3,637,000
Number of shares excluded from dilutive computation	331,000	1,201,000	256,000	1,295,000

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Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)	Jun. 30, 2011	Dec. 31, 2010
Stockholders' equity:
Preferred Stock, par value	$ 0.01	$ 0.01
Preferred Stock, shares authorized	2,000,000	2,000,000
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0
Common Stock, par value	$ 0	$ 0
Common Stock, shares authorized	200,000,000	200,000,000
Common Stock, shares issued	52,439,231	50,648,601
Common Stock, shares outstanding	52,439,231	50,648,601

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Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Net revenues
Products	$ 198,737	$ 198,930	$ 406,184	$ 370,001
Services	25,750	21,717	50,154	42,812
Total net revenues	224,487	220,647	456,338	412,813
Cost of revenues
Cost of products	105,086	111,117	216,301	205,256
Cost of services	14,413	12,211	28,688	24,743
Total cost of revenues	119,499	123,328	244,989	229,999
Gross profit	104,988	97,319	211,349	182,814
Research and development	15,582	16,154	32,478	31,829
Selling, general and administrative	31,851	30,902	64,558	58,714
Amortization of intangible assets	250	314	500	783
Gain on sale of asset				(682)
Income from operations	57,305	49,949	113,813	92,170
Interest income	309	284	585	631
Interest expense		30	5	52
Income from continuing operations before income taxes	57,614	50,203	114,393	92,749
Provision for income taxes	19,013	17,059	37,749	30,607
Income from continuing operations	38,601	33,144	76,644	62,142
Income from discontinued operations, net of taxes	0	5,633	0	5,860
Net income	$ 38,601	$ 38,777	$ 76,644	$ 68,002
Basic income per share:
Continuing operations	$ 0.74	$ 0.66	$ 1.48	$ 1.24
Discontinued operations		$ 0.11		$ 0.12
Net income	$ 0.74	$ 0.77	$ 1.48	$ 1.36
Diluted income per share:
Continuing operations	$ 0.73	$ 0.65	$ 1.46	$ 1.22
Discontinued operations		$ 0.11		$ 0.12
Net income	$ 0.73	$ 0.76	$ 1.46	$ 1.34
Cash dividends per common share	$ 0.15		$ 0.30
Weighted average common shares outstanding:
Basic	52,346	50,067	51,877	49,834
Diluted	52,906	50,870	52,646	50,735

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Geographic, Product and Significant Customer Information (Details 1) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Net product and service revenues from product groups
Service revenues from product groups	$ 224,487	$ 220,647	$ 456,338	$ 412,813
Instruments and Control Systems [Member]
Net product and service revenues from product groups
Service revenues from product groups	119,553	114,249	231,689	203,345
Power and Reactive Gas Products [Member]
Net product and service revenues from product groups
Service revenues from product groups	83,523	87,693	180,005	173,464
Vacuum Products [Member]
Net product and service revenues from product groups
Service revenues from product groups	$ 21,411	$ 18,705	$ 44,644	$ 36,004

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Cash and Cash Equivalents and Investments (Tables)

6 Months Ended

Jun. 30, 2011

Cash Cash Equivalents and Investments [Abstract]

Fair value of short-term and long-term available-for-sale investments

The fair value of short-term available-for-sale investments with maturities or estimated lives of less than one year consists of the following:

	June 30, 2011		December 31, 2010
Time deposits and drafts	$	1,597	$	15,716
Equity mutual funds		517		491
U.S. treasury and agency obligations		267,635		253,250
	$	269,749	$	269,457

The fair value of long-term available-for-sale investments with maturities or estimated lives of more than one year consists of the following:

	June 30, 2011		December 31, 2010
U.S. treasury and agency obligations	$	5,277	$	—

Gross unrealized gains and losses aggregated by investment category

The following table shows the gross unrealized gains and (losses) aggregated by investment category:

			Gross		Gross
			Unrealized		Unrealized
	Cost		Gains		(Losses)			Estimated Fair Value
As of June 30, 2011:
Money market funds	$	16,792	$	—	$	—		$	16,792
Time deposits and drafts		31,053		—		—			31,053
Equity mutual funds		659		—		(142	)		517
U.S. treasury and agency obligations		347,865		60		(15	)		347,910
	$	396,369	$	60	$	(157	)	$	396,272
Reported as follows:
Cash and cash equivalents (1)	$	121,245	$	1	$	—		$	121,246
Short-term investments		269,846		58		(155	)		269,749
Long-term marketable securities		5,278		1		(2	)		5,277
	$	396,369	$	60	$	(157	)	$	396,272

			Gross		Gross
			Unrealized		Unrealized
	Cost		Gains		(Losses)			Estimated Fair Value
As of December 31, 2010:
Money market funds	$	7,032	$	—	$	—		$	7,032
Time deposits and drafts		18,554		—		—			18,554
Equity mutual funds		659		—		(168	)		491
U.S. treasury and agency obligations		298,034		42		(35	)		298,041
	$	324,279	$	42	$	(203	)	$	324,118
Reported as follows:
Cash and cash equivalents (1)	$	54,664	$	—	$	(3	)	$	54,661
Short-term investments		269,615		42		(200	)		269,457
	$	324,279	$	42	$	(203	)	$	324,118

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Document and Entity Information (USD $)	6 Months Ended
	Jun. 30, 2011	Jul. 29, 2011	Jun. 30, 2010
Document and Entity Information [Abstract]
Entity Registrant Name	MKS INSTRUMENTS INC
Entity Central Index Key	0001049502
Document Type	10-Q
Document Period End Date	Jun. 30, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 938,960,587
Entity Common Stock, Shares Outstanding		52,460,897

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Discontinued Operations (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Net revenues and income (loss) from discontinued operations
Net revenues	$ 0	$ 3,881	$ 0	$ 9,784
Income from discontinued operations before income taxes	0	786	0	1,219
Gain from disposal of discontinued operations before income taxes	0	4,228	0	4,228
Income tax benefit	0	(619)	0	(413)
Income from discontinued operations	$ 0	$ 5,633	$ 0	$ 5,860

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Inventories (Tables)

6 Months Ended

Jun. 30, 2011

Inventories [Abstract]

Inventories

	June 30, 2011		December 31, 2010
Raw materials	$	81,967	$	82,012
Work-in-process		22,606		21,891
Finished goods		59,877		52,526
	$	164,450	$	156,429

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Income Taxes (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
Income Taxes (Textuals) [Abstract]
Effective tax rate	33.00%	34.00%	33.00%	33.00%
Gross unrecognized tax benefits excluding interest and penalties	$ 16,749,000		$ 16,749,000		$ 15,270,000
Unrecognized tax benefit that would impact effective tax rate	12,789,000		12,789,000
Accrued interest on unrecognized tax benefits	$ 1,253,000		$ 1,253,000		$ 986,000

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Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2011

Goodwill and Intangible Assets [Abstract]

Goodwill and Intangible Assets

7) Goodwill and Intangible Assets

Goodwill

The Company tests goodwill for impairment on an annual basis, which has been determined to be as of October 31 of each fiscal year. The Company also tests goodwill between annual tests if an event occurs or circumstances change that indicate that the fair value of a reporting unit may be below its carrying value.

Goodwill impairment is determined using a two-step process. The first step involves a comparison of the estimated fair value of a reporting unit to its carrying amount, including goodwill. In performing the first step, the Company determines the fair value of a reporting unit using a discounted cash flow (“DCF”) analysis. Determining fair value requires the exercise of significant judgment, including judgments about appropriate discount rates, perpetual growth rates, and the amount and timing of expected future cash flows. Discount rates are based on a weighted average cost of capital (“WACC”), which represents the average rate a business must pay its providers of debt and equity. The WACC used to test goodwill was derived from a group of comparable companies. The cash flows employed in the DCF analysis were derived from internal earnings and forecasts and external market forecasts. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired and the second step of the impairment test is not necessary. If the carrying amount of a reporting unit exceeds its estimated fair value, then the second step of the goodwill impairment test must be performed.

The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with its carrying amount of goodwill to measure the amount of impairment loss, if any. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination, whereby the estimated fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.

As of October 31, 2010, the Company performed its annual impairment assessment of goodwill and determined that no impairment charges were required, as the fair value of each reporting unit exceeded its book value.

The changes in the carrying amount of goodwill and accumulated impairment losses during the six months ended June 30, 2011 and twelve months ended December 31, 2010 were as follows:

	2011							2010
	Gross		Accumulated					Gross			Accumulated
	Carrying		Impairment					Carrying			Impairment
	Amount		Loss			Net		Amount			Loss			Net
Beginning balance at January 1	$	279,434	$	(139,414	)	$	140,020	$	337,765		$	(193,254	)	$	144,511
Acquired goodwill (1)		—		—			—		2,292			—			2,292
Sale of discontinued operations (2)		—		—			—		(60,623	)		53,840			(6,783	)
Ending balance at June 30, 2011 and December 31, 2010	$	279,434	$	(139,414	)	$	140,020	$	279,434		$	(139,414	)	$	140,020

(1) In November 2010, the Company purchased a technology company for $2,447,000 to enhance its product portfolio. The Company recorded $2,292,000 of goodwill in connection with the acquisition.

(2) In May 2010, the Company sold its Ion Systems, Inc. (“Ion”) business and in August 2010 it sold the assets of its Yield Dynamics, LLC (“YDI”) business and as a result charged the related net goodwill to the gain on sale of discontinued operations.

Intangible Assets

Components of the Company’s intangible assets are comprised of the following:

			Accumulated
	Gross		Amortization			Net
As of June 30, 2011:
Completed technology	$	76,829	$	(76,536	)	$	293
Customer relationships		8,940		(8,228	)		712
Patents, trademarks, trade names and other		24,638		(24,400	)		238
	$	110,407	$	(109,164	)	$	1,243

			Accumulated
	Gross		Amortization			Net
As of December 31, 2010
Completed technology	$	76,829	$	(76,230	)	$	599
Customer relationships		8,940		(8,083	)		857
Patents, trademarks, trade names and other		24,638		(24,351	)		287
	$	110,407	$	(108,664	)	$	1,743

Aggregate amortization expense related to intangible assets for the three and six months ended June 30, 2011 was $250,000 and $500,000, respectively. Aggregate amortization expense related to intangible assets for the three and six months ended June 30, 2010 was $314,000 and $783,000, respectively. Estimated amortization expense for each of the three remaining fiscal years is as follows:

Year	Amount
2011 (remaining)	$	488
2012		389
2013		366

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Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2011

Goodwill and Intangible Assets [Abstract]

Goodwill

The changes in the carrying amount of goodwill and accumulated impairment losses during the six months ended June 30, 2011 and twelve months ended December 31, 2010 were as follows:

	2011							2010
	Gross		Accumulated					Gross			Accumulated
	Carrying		Impairment					Carrying			Impairment
	Amount		Loss			Net		Amount			Loss			Net
Beginning balance at January 1	$	279,434	$	(139,414	)	$	140,020	$	337,765		$	(193,254	)	$	144,511
Acquired goodwill (1)		—		—			—		2,292			—			2,292
Sale of discontinued operations (2)		—		—			—		(60,623	)		53,840			(6,783	)
Ending balance at June 30, 2011 and December 31, 2010	$	279,434	$	(139,414	)	$	140,020	$	279,434		$	(139,414	)	$	140,020

(1) In November 2010, the Company purchased a technology company for $2,447,000 to enhance its product portfolio. The Company recorded $2,292,000 of goodwill in connection with the acquisition.

(2) In May 2010, the Company sold its Ion Systems, Inc. (“Ion”) business and in August 2010 it sold the assets of its Yield Dynamics, LLC (“YDI”) business and as a result charged the related net goodwill to the gain on sale of discontinued operations.

Intangible Assets

Intangible Assets

Components of the Company’s intangible assets are comprised of the following:

			Accumulated
	Gross		Amortization			Net
As of June 30, 2011:
Completed technology	$	76,829	$	(76,536	)	$	293
Customer relationships		8,940		(8,228	)		712
Patents, trademarks, trade names and other		24,638		(24,400	)		238
	$	110,407	$	(109,164	)	$	1,243

			Accumulated
	Gross		Amortization			Net
As of December 31, 2010
Completed technology	$	76,829	$	(76,230	)	$	599
Customer relationships		8,940		(8,083	)		857
Patents, trademarks, trade names and other		24,638		(24,351	)		287
	$	110,407	$	(108,664	)	$	1,743

Estimated amortization expense

Year	Amount
2011 (remaining)	$	488
2012		389
2013		366

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Goodwill and Intangible Assets (Details 2) (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011
Estimated amortization expense
2011 (remaining)	$ 488
2012	389
2013	$ 366

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Derivatives (Details 2) (Forward exchange contracts [Member], Cash Flow Hedging [Member], USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Forward exchange contracts [Member] | Cash Flow Hedging [Member]
Derivatives Designated as Cash Flow Hedging Relationships
Net (loss) recognized in OCI	$ (157)	$ (1,097)	$ (319)	$ (741)
Net (loss) gain reclassified from OCI into income	$ (949)	$ 371	$ (1,475)	$ 384

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Derivatives (Tables)

6 Months Ended

Jun. 30, 2011

Derivatives [Abstract]

Summary of the primary net hedging positions and corresponding fair values

	June 30, 2011
	Gross Notional
Currency Hedged (Buy/Sell)	Value		Fair Value (1)
U.S. Dollar/Japanese Yen	$	33,626	$	(1,632	)
U.S. Dollar/South Korean Won		21,123		(1,296	)
U.S. Dollar/Euro		9,462		(294	)
U.S. Dollar/U.K. Pound Sterling		6,033		(5	)
Total	$	70,244	$	(3,227	)

	December 31, 2010
	Gross Notional
Currency Hedged (Buy/Sell)	Value		Fair Value (1)
U.S. Dollar/Japanese Yen	$	50,104	$	(2,876	)
U.S. Dollar/South Korean Won		27,574		(563	)
U.S. Dollar/Euro		6,934		305
U.S. Dollar/U.K. Pound Sterling		3,054		40
Total	$	87,666	$	(3,094	)

(1) Represents the net receivable (payable) amount included in the consolidated balance sheets.

Summary of the fair value amounts of the Company's derivative instruments

Derivatives Designated as Hedging Instruments	June 30, 2011			December 31, 2010
Derivative assets:
Forward exchange contracts	$	74		$	369
Derivative liabilities:
Forward exchange contracts		(3,301	)		(3,463	)
Total net derivative liability designated as hedging instruments (1)	$	(3,227	)	$	(3,094	)

(1) The derivative asset of $74,000 and derivative liability of $3,301,000 are classified in other current assets and other current liabilities, respectively, in the consolidated balance sheet as of June 30, 2011. The derivative asset of $369,000 and derivative liability of $3,463,000 are classified in other current assets and other current liabilities, respectively, in the consolidated balance sheet as of December 31, 2010.

Summary of the gain (losses) on derivatives designated as hedging instruments

Derivatives Designated as Cash Flow Hedging Relationships	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
Forward exchange contracts:	2011			2010			2011			2010
Net (loss) recognized in OCI (1)	$	(157	)	$	(1,097	)	$	(319	)	$	(741	)
Net (loss) gain reclassified from OCI into income (2)		(949	)		371			(1,475	)		384

(1)	Net change in the fair value of the effective portion classified in OCI.
(2)	Classified in selling, general and administrative.

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Net Income Per Share

6 Months Ended

Jun. 30, 2011

Net Income Per Share [Abstract]

Net Income Per Share

12) Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Numerator:
Income from continuing operations	$	38,601	$	33,144	$	76,644	$	62,142
Income from discontinued operations, net of tax		—		5,633		—		5,860
Net income	$	38,601	$	38,777	$	76,644	$	68,002
Denominator:
Shares used in net income per common share — basic		52,346,000		50,067,000		51,877,000		49,834,000
Effect of dilutive securities:
Stock options, restricted stock and employee stock purchase plan		560,000		803,000		769,000		901,000
Shares used in net income per common share — diluted		52,906,000		50,870,000		52,646,000		50,735,000
Basic income per common share:
Continuing operations	$	0.74	$	0.66	$	1.48	$	1.24
Discontinued operations		—		0.11		—		0.12
Net income	$	0.74	$	0.77	$	1.48	$	1.36
Diluted income per common share:
Continuing operations	$	0.73	$	0.65	$	1.46	$	1.22
Discontinued operations		—		0.11		—		0.12
Net income	$	0.73	$	0.76	$	1.46	$	1.34

Basic earnings per share (“EPS”) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding (using the treasury stock method) if securities containing potentially dilutive common shares (stock options and restricted stock units) had been converted to such common shares, and if such assumed conversion is dilutive.

As of June 30, 2011, stock options and restricted stock units relating to an aggregate of approximately 1,638,000 shares were outstanding. For the three and six months ended June 30, 2011, the potential dilutive effect of 331,000 and 256,000 weighted-average shares, respectively, of restricted stock units and stock options were excluded from the computation of diluted weighted-average shares outstanding as the shares would have an anti-dilutive effect on EPS.

As of June 30, 2010, stock options and restricted stock units relating to an aggregate of approximately 3,637,000 shares were outstanding. For the three and six months ended June 30, 2010, the potential dilutive effect of 1,201,000 and 1,295,000 weighted-average shares, respectively, of restricted stock units and stock options were excluded from the computation of diluted weighted-average shares outstanding as the shares would have an anti-dilutive effect on EPS.

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Cash and Cash Equivalents and Investments

6 Months Ended

Jun. 30, 2011

Cash Cash Equivalents and Investments [Abstract]

Cash and Cash Equivalents and Investments

3) Cash and Cash Equivalents and Investments

The fair value of short-term available-for-sale investments with maturities or estimated lives of less than one year consists of the following:

	June 30, 2011		December 31, 2010
Time deposits and drafts	$	1,597	$	15,716
Equity mutual funds		517		491
U.S. treasury and agency obligations		267,635		253,250
	$	269,749	$	269,457

The fair value of long-term available-for-sale investments with maturities or estimated lives of more than one year consists of the following:

	June 30, 2011		December 31, 2010
U.S. treasury and agency obligations	$	5,277	$	—

The following table shows the gross unrealized gains and (losses) aggregated by investment category:

			Gross		Gross
			Unrealized		Unrealized
	Cost		Gains		(Losses)			Estimated Fair Value
As of June 30, 2011:
Money market funds	$	16,792	$	—	$	—		$	16,792
Time deposits and drafts		31,053		—		—			31,053
Equity mutual funds		659		—		(142	)		517
U.S. treasury and agency obligations		347,865		60		(15	)		347,910
	$	396,369	$	60	$	(157	)	$	396,272
Reported as follows:
Cash and cash equivalents (1)	$	121,245	$	1	$	—		$	121,246
Short-term investments		269,846		58		(155	)		269,749
Long-term marketable securities		5,278		1		(2	)		5,277
	$	396,369	$	60	$	(157	)	$	396,272

			Gross		Gross
			Unrealized		Unrealized
	Cost		Gains		(Losses)			Estimated Fair Value
As of December 31, 2010:
Money market funds	$	7,032	$	—	$	—		$	7,032
Time deposits and drafts		18,554		—		—			18,554
Equity mutual funds		659		—		(168	)		491
U.S. treasury and agency obligations		298,034		42		(35	)		298,041
	$	324,279	$	42	$	(203	)	$	324,118
Reported as follows:
Cash and cash equivalents (1)	$	54,664	$	—	$	(3	)	$	54,661
Short-term investments		269,615		42		(200	)		269,457
	$	324,279	$	42	$	(203	)	$	324,118

(1) The cash and cash equivalent amounts presented in the tables above do not include cash amounts of $105,292,000 and $107,815,000 as of June 30, 2011 and December 31, 2010, respectively.

Interest income is accrued as earned. Dividend income is recognized as income on the date the stock trades “ex-dividend.” The cost of marketable securities sold is determined by the specific identification method and realized gains or losses are reflected in income and were not material for the three and six months ended June 30, 2011 and 2010.

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Fair Value Measurements (Details) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Available-for-sale securities:
Total assets	$ 1,080,615	$ 982,413
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale securities:
Cash and Cash equivalents	91,790	51,823
Derivatives currency forward contracts	0	0
Total assets	365,219	305,564
Short-term investments	268,152	253,741
Long-term marketable securities	5,277
Other current assets, fair value	0	0
Total assets	365,219	305,564
Liabilities:
Derivatives currency forward contracts	0
Other liabilities, fair value disclosure	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | Money Market Funds [Member]
Available-for-sale securities:
Cash and Cash equivalents	16,792	7,032
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | Time deposits and drafts [Member]
Available-for-sale securities:
Cash and Cash equivalents	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | Equity Securities [Member]
Available-for-sale securities:
Equity mutual funds	517	491
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | U.S. treasury and agency obligations [Member]
Available-for-sale securities:
Equity mutual funds	347,910	298,041
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale securities:
Cash and Cash equivalents	29,456	2,838
Derivatives currency forward contracts	74	369
Total assets	31,127	18,923
Short-term investments	1,597	15,716
Long-term marketable securities	0
Other current assets, fair value	74	369
Total assets	31,127	18,923
Liabilities:
Derivatives currency forward contracts	3,301	3,463
Other liabilities, fair value disclosure	3,301	3,463
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Money Market Funds [Member]
Available-for-sale securities:
Cash and Cash equivalents	0	0
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Time deposits and drafts [Member]
Available-for-sale securities:
Cash and Cash equivalents	31,053	18,554
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Equity Securities [Member]
Available-for-sale securities:
Equity mutual funds	0	0
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | U.S. treasury and agency obligations [Member]
Available-for-sale securities:
Equity mutual funds	0	0
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale securities:
Cash and Cash equivalents	0	0
Derivatives currency forward contracts	0	0
Total assets	0	0
Short-term investments	0	0
Long-term marketable securities	0
Other current assets, fair value	0	0
Total assets	0	0
Liabilities:
Derivatives currency forward contracts	0
Other liabilities, fair value disclosure	0	0
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member] | Money Market Funds [Member]
Available-for-sale securities:
Cash and Cash equivalents	0	0
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member] | Time deposits and drafts [Member]
Available-for-sale securities:
Cash and Cash equivalents	0	0
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member] | Equity Securities [Member]
Available-for-sale securities:
Equity mutual funds	0	0
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member] | U.S. treasury and agency obligations [Member]
Available-for-sale securities:
Equity mutual funds	0	0
Fair Value, Measurements, Recurring [Member]
Available-for-sale securities:
Cash and Cash equivalents	121,246	54,661
Derivatives currency forward contracts	74	369
Total assets	396,346	324,487
Short-term investments	269,749	269,457
Long-term marketable securities	5,277
Other current assets, fair value	74	369
Total assets	396,346	324,487
Liabilities:
Derivatives currency forward contracts	3,301	3,463
Other liabilities, fair value disclosure	3,301	3,463
Fair Value, Measurements, Recurring [Member] | Money Market Funds [Member]
Available-for-sale securities:
Cash and Cash equivalents	16,792	7,032
Fair Value, Measurements, Recurring [Member] | Time deposits and drafts [Member]
Available-for-sale securities:
Cash and Cash equivalents	31,053	18,554
Fair Value, Measurements, Recurring [Member] | Equity Securities [Member]
Available-for-sale securities:
Equity mutual funds	517	491
Fair Value, Measurements, Recurring [Member] | U.S. treasury and agency obligations [Member]
Available-for-sale securities:
Equity mutual funds	$ 347,910	$ 298,041

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Product Warranties

6 Months Ended

Jun. 30, 2011

Product Warranties [Abstract]

Product Warranties

9) Product Warranties

The Company provides for the estimated costs to fulfill customer warranty obligations upon the recognition of the related revenue. While the Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component suppliers, the Company’s warranty obligation is affected by shipment volume, product failure rates, utilization levels, material usage, and supplier warranties on parts delivered to the Company. Should actual product failure rates, utilization levels, material usage, or supplier warranties on parts differ from the Company’s estimates, revisions to the estimated warranty liability would be required. The product warranty liability is included in other current liabilities in the consolidated balance sheets.

Product warranty activities were as follows:

	Six Months Ended June 30,
	2011			2010
Balance at January 1	$	9,865		$	6,560
Provision for product warranties		3,638			4,731
Direct charges to warranty liability		(3,832	)		(2,309	)
Balance at June 30	$	9,671		$	8,982

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Geographic, Product and Significant Customer Information

6 Months Ended

Jun. 30, 2011

Geographic, Product and Significant Customer Information [Abstract]

Geographic, Product and Significant Customer Information

14) Geographic, Product and Significant Customer Information

The Company operates in one segment for the development, manufacturing, sales and servicing of products that measure, control, power and monitor critical parameters of advanced manufacturing processes. The Company’s chief decision-maker reviews consolidated operating results to make decisions about allocating resources and assessing performance for the entire Company.

Information about the Company’s operations in different geographic regions is presented in the tables below. Net revenues to unaffiliated customers are based on the location in which the sale originated. Transfers between geographic areas are at negotiated transfer prices and have been eliminated from consolidated net revenues.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Geographic net revenues:
United States	$	110,412	$	128,011	$	221,015	$	240,813
Japan		27,551		30,704		52,190		61,300
Europe		30,852		22,423		60,556		42,719
Asia (excluding Japan)		55,672		39,509		122,577		67,981
	$	224,487	$	220,647	$	456,338	$	412,813

	June 30, 2011		December 31, 2010
Long-lived assets (1):
United States	$	53,891	$	54,840
Japan		4,073		4,273
Europe		5,404		4,970
Asia (excluding Japan)		8,385		8,597
	$	71,753	$	72,680

(1) Long-lived assets include property, plant and equipment, net and certain other assets.

The Company groups its products into three product groups. Net product and service revenues for these product groups are as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Instruments and Control Systems	$	119,553	$	114,249	$	231,689	$	203,345
Power and Reactive Gas Products		83,523		87,693		180,005		173,464
Vacuum Products		21,411		18,705		44,644		36,004
	$	224,487	$	220,647	$	456,338	$	412,813

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Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes [Abstract]

Income Taxes

10) Income Taxes

The Company’s effective tax rate for both the three and six months ended June 30, 2011 was 33.0%. The Company’s effective tax rate for the three and six months ended June 30, 2010 was 34.0% and 33.0%, respectively. The effective tax rates for the six months ended June 30, 2011 and 2010, and the related income tax provisions were lower than the U.S. statutory tax rate primarily due to the geographic mix of income and profits earned by the Company’s international subsidiaries being taxed at rates lower than the U.S. statutory rate.

At June 30, 2011, the total amount of gross unrecognized tax benefits, which excludes interest and penalties, was approximately $16,749,000. At December 31, 2010, the total amount of gross unrecognized tax benefits, which excludes interest and penalties, was approximately $15,270,000. The net increase from December 31, 2010 was primarily attributable to an increase in reserves for existing uncertain tax positions. If these benefits were recognized in a future period, the timing of which is not estimable, the net unrecognized tax benefit of $12,789,000, excluding interest and penalties, would impact the Company’s effective tax rate. The Company accrues interest expense and, if applicable, penalties for any uncertain tax positions. Interest and penalties are classified as a component of income tax expense. At June 30, 2011 and December 31, 2010, the Company had accrued interest on unrecognized tax benefits of approximately $1,253,000 and $986,000, respectively.

The Company and its subsidiaries are subject to examination by federal, state and foreign tax authorities. The statute of limitations for the Company’s tax filings varies by tax jurisdiction between fiscal years 2001 through present.

While the Company believes it has adequately provided for all tax positions, amounts asserted by taxing authorities could materially differ from the Company’s accrued positions as a result of uncertain and complex application of tax regulations. Additionally, the recognition and measurement of certain tax benefits include estimates and judgment by management and inherently includes subjectivity. Accordingly, the Company could record additional provisions or benefits due to U.S. federal, state, and foreign tax-related matters in the future as it revises estimates or settles or otherwise resolves the underlying matters.

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Geographic, Product and Significant Customer Information (Tables)

6 Months Ended

Jun. 30, 2011

Geographic, Product and Significant Customer Information [Abstract]

Company's operations in different geographic regions

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Geographic net revenues:
United States	$	110,412	$	128,011	$	221,015	$	240,813
Japan		27,551		30,704		52,190		61,300
Europe		30,852		22,423		60,556		42,719
Asia (excluding Japan)		55,672		39,509		122,577		67,981
	$	224,487	$	220,647	$	456,338	$	412,813

	June 30, 2011		December 31, 2010
Long-lived assets (1):
United States	$	53,891	$	54,840
Japan		4,073		4,273
Europe		5,404		4,970
Asia (excluding Japan)		8,385		8,597
	$	71,753	$	72,680

(1) Long-lived assets include property, plant and equipment, net and certain other assets.

Net product and service revenues from product groups

The Company groups its products into three product groups. Net product and service revenues for these product groups are as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Instruments and Control Systems	$	119,553	$	114,249	$	231,689	$	203,345
Power and Reactive Gas Products		83,523		87,693		180,005		173,464
Vacuum Products		21,411		18,705		44,644		36,004
	$	224,487	$	220,647	$	456,338	$	412,813

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Debt

6 Months Ended

Jun. 30, 2011

Debt [Abstract]

Debt

8) Debt

The Company’s Japanese subsidiary has lines of credit and short-term borrowing arrangements with two financial institutions which provide for aggregate borrowings as of June 30, 2011 of up to an equivalent of $30,941,000 U.S. dollars, which generally expire and are renewed at three month intervals. At June 30, 2011 total borrowings outstanding under these arrangements were $619,000 at an interest rate of 0.68%. There were no borrowings outstanding at December 31, 2010.

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Geographic, Product and Significant Customer Information (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
Geographic net revenues:
Geographic net revenues	$ 224,487	$ 220,647	$ 456,338	$ 412,813
Long-lived assets:
Long-lived assets	71,753		71,753		72,680
Unites States [Member]
Geographic net revenues:
Geographic net revenues	110,412	128,011	221,015	240,813
Long-lived assets:
Long-lived assets	53,891		53,891		54,840
Japan [Member]
Geographic net revenues:
Geographic net revenues	27,551	30,704	52,190	61,300
Long-lived assets:
Long-lived assets	4,073		4,073		4,273
Europe [Member]
Geographic net revenues:
Geographic net revenues	30,852	22,423	60,556	42,719
Long-lived assets:
Long-lived assets	5,404		5,404		4,970
Asia (excluding Japan) [Member]
Geographic net revenues:
Geographic net revenues	55,672	39,509	122,577	67,981
Long-lived assets:
Long-lived assets	$ 8,385		$ 8,385		$ 8,597

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Basis of Presentation

6 Months Ended

Jun. 30, 2011

Basis of Presentation [Abstract]

Basis of Presentation

1) Basis of Presentation

The terms “MKS” and the “Company” refer to MKS Instruments, Inc. and its subsidiaries. The interim financial data as of June 30, 2011 and for the three and six months ended June 30, 2011 and 2010 are unaudited; however, in the opinion of MKS, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. The consolidated balance sheet presented as of December 31, 2010 has been derived from the audited consolidated financial statements as of that date. The unaudited consolidated financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by United States generally accepted accounting principles (“U.S. GAAP”). The consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the MKS Annual Report on Form 10-K for the year ended December 31, 2010 filed with the Securities and Exchange Commission on February 25, 2011.

The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, stock-based compensation, inventory, intangible assets, goodwill and other long-lived assets, acquisition expenses, income taxes and investments. Management bases its estimates and judgments on historical experience and on various other factors 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.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

4) Fair Value Measurements

In accordance with the provisions of fair value accounting, a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability and defines fair value based upon an exit price model.

The fair value measurement guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of inputs that may be used to measure fair value:

Level 1	Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 assets and liabilities include money market funds and debt and equity securities.
Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes certain time deposits, time drafts and non-exchange traded derivative contracts.
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

The following tables provide a summary of assets and liabilities of the Company measured at fair value on a recurring basis as of June 30, 2011 and December 31, 2010:

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
Description	June 30, 2011		(Level 1)		(Level 2)		(Level 3)
Assets:
Available-for-sale securities:
Money market funds	$	16,792	$	16,792	$	—	$	—
Time deposits and drafts		31,053		—		31,053		—
Equity mutual funds		517		517		—		—
U.S. treasury and agency obligations		347,910		347,910		—		—
Derivatives — currency forward contracts		74		—		74		—
Total assets	$	396,346	$	365,219	$	31,127	$	—
Liabilities:
Derivatives — currency forward contracts	$	3,301	$	—	$	3,301	$	—

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
Description	June 30, 2011		(Level 1)		(Level 2)		(Level 3)
Reported as follows:
Assets:
Cash and cash equivalents	$	121,246	$	91,790	$	29,456	$	—
Short-term investments		269,749		268,152		1,597		—
Long-term marketable securities		5,277		5,277		—		—
Other current assets		74		—		74		—
	$	396,346	$	365,219	$	31,127	$	—
Liabilities:
Other current liabilities	$	3,301	$	—	$	3,301	$	—

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in		Significant Other		Significant
			Active Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
Description	December 31, 2010		(Level 1)		(Level 2)		(Level 3)
Assets:
Available-for-sale securities:
Money market funds	$	7,032	$	7,032	$	—	$	—
Time deposits and drafts		18,554		—		18,554		—
Equity mutual funds		491		491		—		—
U.S. treasury and agency obligations		298,041		298,041		—		—
Derivatives — currency forward contracts		369		—		369		—
Total assets	$	324,487	$	305,564	$	18,923	$	—
Liabilities:
Derivatives — currency forward contracts	$	3,463	$	—	$	3,463	$	—
Reported as follows:
Assets:
Cash and cash equivalents	$	54,661	$	51,823	$	2,838	$	—
Short-term investments		269,457		253,741		15,716		—
Other current assets		369		—		369		—
	$	324,487	$	305,564	$	18,923	$	—
Liabilities:
Other current liabilities	$	3,463	$	—	$	3,463	$	—

Money market funds

As of June 30, 2011 and December 31, 2010, this asset class consisted mainly of a money market portfolio that comprises Federal government agency and U.S. treasury securities. The asset class is classified within Level 1 of the fair value hierarchy because its underlying investments are valued using quoted market prices in active markets for identical assets.

Time deposits and drafts

As of June 30, 2011, this asset class consisted primarily of time deposits denominated in the Euro currency and time drafts guaranteed by a financial institution. As of December 31, 2010, this asset class consisted of time deposits denominated in the Euro currency. The asset class is valued using other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities and are classified within Level 2 of the fair value hierarchy.

Equity mutual funds

As of June 30, 2011 and December 31, 2010, this asset class consisted of certain U.S. and international equity mutual funds, classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in an active market for identical assets. The equity mutual funds are associated with the Company’s supplemental defined contribution retirement obligations.

U.S. treasury and agency obligations

As of June 30, 2011 and December 31, 2010, this asset class consisted of U.S. treasury and agency obligations classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in an active market for identical assets.

Derivatives

As a result of the Company’s global operating activities, the Company is exposed to market risks from changes in foreign currency exchange rates, which may adversely affect its operating results and financial position. When deemed appropriate, the Company minimizes its risks from foreign currency exchange rate fluctuations through the use of derivative financial instruments. The principal market in which the Company executes its foreign currency contracts is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants usually are large commercial banks. The forward foreign currency exchange contracts are valued using broker quotations, or market transactions and are classified within Level 2 of the fair value hierarchy.

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Inventories (Details) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Inventories:
Raw materials	$ 81,967	$ 82,012
Work-in-process	22,606	21,891
Finished goods	59,877	52,526
Inventories	$ 164,450	$ 156,429

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Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2011

Comprehensive Income [Abstract]

Components of comprehensive income

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Net income	$	38,601		$	38,777		$	76,644		$	68,002
Other comprehensive income (loss):
Changes in value of financial instruments designated as cash flow hedges (net of tax)		(517	)		(905	)		(123	)		(690	)
Foreign currency translation adjustments		2,207			(2,953	)		5,331			(4,921	)
Unrealized (loss) gain on investments (net of tax)		(8	)		(40	)		37			(74	)
Other comprehensive income (loss)		1,682			(3,898	)		5,245			(5,685	)
Total comprehensive income	$	40,283		$	34,879		$	81,889		$	62,317

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Comprehensive Income (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Components of comprehensive income
Net income	$ 38,601	$ 38,777	$ 76,644	$ 68,002
Other comprehensive income (loss):
Changes in value of financial instruments designated as cash flow hedges (net of tax)	(517)	(905)	(123)	(690)
Foreign currency translation adjustments	2,207	(2,953)	5,331	(4,921)
Unrealized (loss) gain on investments (net of tax)	(8)	(40)	37	(74)
Other comprehensive income (loss)	1,682	(3,898)	5,245	(5,685)
Total comprehensive income	$ 40,283	$ 34,879	$ 81,889	$ 62,317

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Derivatives

6 Months Ended

Jun. 30, 2011

Derivatives [Abstract]

Derivatives

5) Derivatives

The Company enters into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments and those utilized as economic hedges. The Company operates internationally and, in the normal course of business, is exposed to fluctuations in interest rates and foreign exchange rates. These fluctuations can increase the costs of financing, investing and operating the business. The Company has used derivative instruments, such as forward contracts, to manage certain foreign currency exposure.

By nature, all financial instruments involve market and credit risks. The Company enters into derivative instruments with major investment grade financial institutions and no collateral is required. The Company has policies to monitor the credit risk of these counterparties. While there can be no assurance, the Company does not anticipate any material non-performance by any of these counterparties.

The Company hedges a portion of its forecasted foreign currency denominated intercompany sales of inventory, over a maximum period of eighteen months, using forward foreign exchange contracts accounted for as cash-flow hedges related to Japanese, South Korean, British and European currencies. To the extent these derivatives are effective in off-setting the variability of the hedged cash flows, and otherwise meet the hedge accounting criteria, changes in the derivatives’ fair value are not included in current earnings but are included in other comprehensive income (“OCI”) in stockholders’ equity. These changes in fair value will subsequently be reclassified into earnings, as applicable, when the forecasted transaction occurs. To the extent that a previously designated hedging transaction is no longer an effective hedge, any ineffectiveness measured in the hedging relationship is recorded currently in earnings in the period it occurs. The cash flows resulting from forward exchange contracts are classified in the consolidated statements of cash flows as part of cash flows from operating activities. The Company does not enter into derivative instruments for trading or speculative purposes.

To the extent the hedge accounting criteria is not met, the related foreign currency forward contracts are considered as economic hedges and changes in the fair value of these contracts are recorded immediately in earnings in the period in which they occur. These include hedges that are used to reduce exchange rate risks arising from the change in fair value of certain foreign currency denominated assets and liabilities (i.e., payables, receivables) and other economic hedges where the hedge accounting criteria were not met.

As of June 30, 2011 and December 31, 2010, the Company had outstanding forward foreign exchange contracts with gross notional values of $70,244,000 and $87,666,000, respectively. The following tables provide a summary of the primary net hedging positions and corresponding fair values held as of June 30, 2011 and December 31, 2010:

	June 30, 2011
	Gross Notional
Currency Hedged (Buy/Sell)	Value		Fair Value (1)
U.S. Dollar/Japanese Yen	$	33,626	$	(1,632	)
U.S. Dollar/South Korean Won		21,123		(1,296	)
U.S. Dollar/Euro		9,462		(294	)
U.S. Dollar/U.K. Pound Sterling		6,033		(5	)
Total	$	70,244	$	(3,227	)

	December 31, 2010
	Gross Notional
Currency Hedged (Buy/Sell)	Value		Fair Value (1)
U.S. Dollar/Japanese Yen	$	50,104	$	(2,876	)
U.S. Dollar/South Korean Won		27,574		(563	)
U.S. Dollar/Euro		6,934		305
U.S. Dollar/U.K. Pound Sterling		3,054		40
Total	$	87,666	$	(3,094	)

(1) Represents the net receivable (payable) amount included in the consolidated balance sheets.

The following table provides a summary of the fair value amounts of the Company’s derivative instruments:

Derivatives Designated as Hedging Instruments	June 30, 2011			December 31, 2010
Derivative assets:
Forward exchange contracts	$	74		$	369
Derivative liabilities:
Forward exchange contracts		(3,301	)		(3,463	)
Total net derivative liability designated as hedging instruments (1)	$	(3,227	)	$	(3,094	)

(1) The derivative asset of $74,000 and derivative liability of $3,301,000 are classified in other current assets and other current liabilities, respectively, in the consolidated balance sheet as of June 30, 2011. The derivative asset of $369,000 and derivative liability of $3,463,000 are classified in other current assets and other current liabilities, respectively, in the consolidated balance sheet as of December 31, 2010.

The following table provides a summary of the gains (losses) on derivatives designated as hedging instruments:

Derivatives Designated as Cash Flow Hedging Relationships	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
Forward exchange contracts:	2011			2010			2011			2010
Net (loss) recognized in OCI (1)	$	(157	)	$	(1,097	)	$	(319	)	$	(741	)
Net (loss) gain reclassified from OCI into income (2)		(949	)		371			(1,475	)		384

(1)	Net change in the fair value of the effective portion classified in OCI.
(2)	Classified in selling, general and administrative.

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Goodwill and Intangible Assets (Details 1) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, Gross	$ 110,407	$ 110,407
Accumulated Amortization	(109,164)	(108,664)
Intangible assets, net	1,243	1,743
Completed Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, Gross	76,829	76,829
Accumulated Amortization	(76,536)	(76,230)
Intangible assets, net	293	599
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, Gross	8,940	8,940
Accumulated Amortization	(8,228)	(8,083)
Intangible assets, net	712	857
Patents Trademarks Trade Names And Other [Member]
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, Gross	24,638	24,638
Accumulated Amortization	(24,400)	(24,351)
Intangible assets, net	$ 238	$ 287

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Product Warranties (Tables)

6 Months Ended

Jun. 30, 2011

Product Warranties [Abstract]

Product warranty activities

Product warranty activities were as follows:

	Six Months Ended June 30,
	2011			2010
Balance at January 1	$	9,865		$	6,560
Provision for product warranties		3,638			4,731
Direct charges to warranty liability		(3,832	)		(2,309	)
Balance at June 30	$	9,671		$	8,982

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Cash and Cash Equivalents and Investments (Details) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Fair value of short-term available-for-sale investments
Fair value of short-term available-for-sale investments	$ 269,749	$ 269,457
Fair value of long-term available-for-sale investments
Fair value of long-term available-for-sale investments	5,277	0
Time deposits and drafts [Member]
Fair value of short-term available-for-sale investments
Fair value of short-term available-for-sale investments	1,597	15,716
Equity mutual fund [Member]
Fair value of short-term available-for-sale investments
Fair value of short-term available-for-sale investments, Equity mutual funds	517	491
U.S. treasury and agency obligations [Member]
Fair value of short-term available-for-sale investments
Fair value of short-term available-for-sale investments, U.S. treasury and agency obligations	267,635	253,250
Fair value of long-term available-for-sale investments
Fair value of long-term available-for-sale investments	$ 5,277	$ 0

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Goodwill and Intangible Assets (Details) (USD $) In Thousands	12 Months Ended
	Dec. 31, 2010	Jun. 30, 2011	Dec. 31, 2009
Goodwill
Goodwill, Beginning balance	$ 337,765	$ 279,434
Acquired goodwill	2,292
Sale of discontinued operation, accumulated impairment loss	53,840
Goodwill, Ending balance	279,434	279,434
Sale of discontinued operation goodwill, net	(6,783)
Impairment losses gross carrying amount	(60,623)
Accumulated impairment loss	(139,414)	(139,414)	(193,254)
Goodwill	$ 140,020	$ 140,020	$ 144,511

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Net Income Per Share (Tables)

6 Months Ended

Jun. 30, 2011

Net Income Per Share [Abstract]

Computation of basic and diluted net income per share

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Numerator:
Income from continuing operations	$	38,601	$	33,144	$	76,644	$	62,142
Income from discontinued operations, net of tax		—		5,633		—		5,860
Net income	$	38,601	$	38,777	$	76,644	$	68,002
Denominator:
Shares used in net income per common share — basic		52,346,000		50,067,000		51,877,000		49,834,000
Effect of dilutive securities:
Stock options, restricted stock and employee stock purchase plan		560,000		803,000		769,000		901,000
Shares used in net income per common share — diluted		52,906,000		50,870,000		52,646,000		50,735,000
Basic income per common share:
Continuing operations	$	0.74	$	0.66	$	1.48	$	1.24
Discontinued operations		—		0.11		—		0.12
Net income	$	0.74	$	0.77	$	1.48	$	1.36
Diluted income per common share:
Continuing operations	$	0.73	$	0.65	$	1.46	$	1.22
Discontinued operations		—		0.11		—		0.12
Net income	$	0.73	$	0.76	$	1.46	$	1.34

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Comprehensive Income

6 Months Ended

Jun. 30, 2011

Comprehensive Income [Abstract]

Comprehensive Income

13) Comprehensive Income

Components of comprehensive income were as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Net income	$	38,601		$	38,777		$	76,644		$	68,002
Other comprehensive income (loss):
Changes in value of financial instruments designated as cash flow hedges (net of tax)		(517	)		(905	)		(123	)		(690	)
Foreign currency translation adjustments		2,207			(2,953	)		5,331			(4,921	)
Unrealized (loss) gain on investments (net of tax)		(8	)		(40	)		37			(74	)
Other comprehensive income (loss)		1,682			(3,898	)		5,245			(5,685	)
Total comprehensive income	$	40,283		$	34,879		$	81,889		$	62,317

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Inventories

6 Months Ended

Jun. 30, 2011

Inventories [Abstract]

Inventories

6) Inventories

Inventories consist of the following:

	June 30, 2011		December 31, 2010
Raw materials	$	81,967	$	82,012
Work-in-process		22,606		21,891
Finished goods		59,877		52,526
	$	164,450	$	156,429

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Subsequent Events

6 Months Ended

Jun. 30, 2011

Subsequent Events [Abstract]

Subsequent Events

16) Subsequent Events

Stock Repurchase Program

On July 25, 2011, MKS’ Board of Directors approved a share repurchase program for the repurchase of up to an aggregate of $200,000,000 of its common stock from time to time in open market purchases, privately negotiated transactions or through other appropriate means. The timing and quantity of any shares repurchased will depend upon a variety of factors, including business conditions, stock market conditions and business development activities, including but not limited to merger and acquisition opportunities. These repurchases may be commenced, suspended or discontinued at any time without prior notice.

Cash Dividend

On July 25, 2011, MKS’ Board of Directors authorized a quarterly cash dividend of $0.15 per share, payable on September 16, 2011 to shareholders of record as of September 1, 2011. Future dividend declarations, as well as the record and payment dates for such dividends, are subject to the final determination of the Company’s Board of Directors.

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Derivatives (Details Textuals) (USD $)	Jun. 30, 2011	Dec. 31, 2010
Derivatives (Textuals) [Abstract]
Maximum period for hedging a portion of forecasted foreign currency denominated intercompany sales of inventory	18 months
Gross notional values of outstanding forward foreign exchange contracts	$ 70,244,000	$ 87,666,000
Other Current Assets [Member] | Designated as Hedging Instrument [Member]
Derivatives (Textuals) [Abstract]
Derivative asset classified in other current assets	74,000	369,000
Other Current Liabilities [Member] | Designated as Hedging Instrument [Member]
Derivatives (Textuals) [Abstract]
Derivative liability classified in other current liabilities	(3,301,000)	(3,463,000)
Designated as Hedging Instrument [Member]
Derivatives (Textuals) [Abstract]
Derivative asset classified in other current assets	74,000	369,000
Derivative liability classified in other current liabilities	$ 3,301,000	$ 3,463,000

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Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2011

Discontinued Operations [Abstract]

Net revenues and income (loss) from discontinued operations

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2011		2010			2011		2010
Net revenues	$	—	$	3,881		$	—	$	9,784
Income from discontinued operations before income taxes	$	—	$	786		$	—	$	1,219
Gain from disposal of discontinued operations before income taxes		—		4,228			—		4,228
Income tax benefit		—		(619	)		—		(413	)
Income from discontinued operations	$	—	$	5,633		$	—	$	5,860

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Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Cash flows from operating activities:
Net income	$ 76,644	$ 68,002
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	6,374	7,037
Stock-based compensation	6,048	4,310
Provision for excess and obsolete inventory	6,458	4,926
Gain on disposal of discontinued operations	0	(4,228)
Deferred income taxes	2,485	2,280
Excess tax benefits from stock-based compensation	(5,218)	(640)
Other	299	(722)
Changes in operating assets and liabilities:
Trade accounts receivable	(10,953)	(57,994)
Inventories	(12,880)	(28,280)
Income taxes	(365)	3,519
Other current assets	(9,885)	(696)
Accrued expenses and other current liabilities	2,614	27,700
Accounts payable	(2,897)	13,959
Net cash provided by operating activities	58,724	39,173
Cash flows from investing activities:
Purchases of short-term and long-term available-for-sale investments	(197,574)	(111,767)
Maturities, sales and settlements of short-term and long-term available-for-sale investments	192,944	104,544
Purchases of property, plant and equipment	(6,265)	(6,627)
Proceeds from sale of assets	4	2,113
Net proceeds from sales of discontinued operations		15,097
Other	(170)	(1,438)
Net cash (used in) provided by investing activities	(11,061)	1,922
Cash flows from financing activities:
Proceeds from short-term borrowings	13,404	71,795
Payments on short-term borrowings	(12,791)	(72,319)
Net proceeds related to employee stock	24,662	2,265
Dividend payments to common stockholders	(15,628)
Excess tax benefits from stock-based compensation	5,218	640
Net cash provided by financing activities	14,865	2,381
Effect of exchange rate changes on cash and cash equivalents	1,534	(2,963)
Increase in cash and cash equivalents	64,062	40,513
Cash and cash equivalents at beginning of period	162,476	111,009
Cash and cash equivalents at end of period	$ 226,538	$ 151,522

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Recently Issued Accounting Pronouncements (Policies)

6 Months Ended

Jun. 30, 2011

Recently Issued Accounting Pronouncements [Abstract]

Adoption of new accounting and reporting provisions

In June 2011, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) which eliminates the option to present the components of other comprehensive income as part of the statement of equity and requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments are effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2011. The ASU requires changes in presentation only and the Company does not expect it will have a material effect on its consolidated financial statements.

In May 2011, the FASB issued an ASU which applies to all reporting entities that are required or permitted to measure or disclose the fair value of an asset, a liability, or an instrument classified in a reporting entity’s shareholders’ equity in the financial statements. The amendments do not extend the use of fair value accounting, but provide guidance on how it should be applied where its use is already required or permitted by other standards within U.S. GAAP. The amendments change the wording used to describe many requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. Additionally, the ASU clarifies the FASB’s intent about the application of existing fair value measurements. The amendments in this ASU are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. Early application by public entities is not permitted. The Company does not expect the new ASU to have a material effect on its financial position, results of operations or cash flows.

In October 2009, the FASB issued an ASU that established new accounting and reporting provisions for arrangements including multiple revenue-generating activities. This ASU provides amendments to the criteria for separating deliverables, measuring and allocating arrangement consideration to one or more units of accounting. The amendments in this ASU also established a selling price hierarchy for determining the selling price of a deliverable. Significantly enhanced disclosures are also required to provide information about a vendor’s multiple-deliverable revenue arrangements, including information about the nature and terms, significant deliverables, and its performance within arrangements. The amendments also require providing information about the significant judgments made and changes to those judgments and about how the application of the relative selling-price method affects the timing or amount of revenue recognition. The amendments in this ASU were effective prospectively for revenue arrangements entered into or materially modified in the fiscal years beginning on or after June 15, 2010. The Company adopted the new ASU in the first quarter of 2011, and the adoption did not have a material impact on the Company’s financial position, results of operations or cash flows.

In October 2009, the FASB issued an ASU that changed the accounting model for revenue arrangements that include both tangible products and software elements that are “essential to the functionality,” and scoped these products out of current software revenue guidance. The new ASU includes factors to help companies determine what software elements are considered “essential to the functionality.” The amendments now subject software-enabled products to other revenue guidance and disclosure requirements, such as guidance surrounding revenue arrangements with multiple-deliverables. The amendments in this ASU were effective prospectively for revenue arrangements entered into or materially modified in the fiscal years beginning on or after June 15, 2010. The Company adopted the new ASU in the first quarter of 2011, and the adoption did not have a material impact on the Company’s financial position, results of operations or cash flows.

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Goodwill and Intangible Assets (Details Textuals) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Nov. 30, 2010
Goodwill And Intangible Assets (Textuals) [Abstract]
Purchased amount of a technology company					$ 2,447,000
Goodwill in connection with acquisition					2,292,000
Aggregate amortization expense related to acquired intangibles	$ 250,000	$ 314,000	$ 500,000	$ 783,000

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2011

Fair Value Measurements [Abstract]

Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis

The following tables provide a summary of assets and liabilities of the Company measured at fair value on a recurring basis as of June 30, 2011 and December 31, 2010:

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
Description	June 30, 2011		(Level 1)		(Level 2)		(Level 3)
Assets:
Available-for-sale securities:
Money market funds	$	16,792	$	16,792	$	—	$	—
Time deposits and drafts		31,053		—		31,053		—
Equity mutual funds		517		517		—		—
U.S. treasury and agency obligations		347,910		347,910		—		—
Derivatives — currency forward contracts		74		—		74		—
Total assets	$	396,346	$	365,219	$	31,127	$	—
Liabilities:
Derivatives — currency forward contracts	$	3,301	$	—	$	3,301	$	—

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
Description	June 30, 2011		(Level 1)		(Level 2)		(Level 3)
Reported as follows:
Assets:
Cash and cash equivalents	$	121,246	$	91,790	$	29,456	$	—
Short-term investments		269,749		268,152		1,597		—
Long-term marketable securities		5,277		5,277		—		—
Other current assets		74		—		74		—
	$	396,346	$	365,219	$	31,127	$	—
Liabilities:
Other current liabilities	$	3,301	$	—	$	3,301	$	—

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in		Significant Other		Significant
			Active Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
Description	December 31, 2010		(Level 1)		(Level 2)		(Level 3)
Assets:
Available-for-sale securities:
Money market funds	$	7,032	$	7,032	$	—	$	—
Time deposits and drafts		18,554		—		18,554		—
Equity mutual funds		491		491		—		—
U.S. treasury and agency obligations		298,041		298,041		—		—
Derivatives — currency forward contracts		369		—		369		—
Total assets	$	324,487	$	305,564	$	18,923	$	—
Liabilities:
Derivatives — currency forward contracts	$	3,463	$	—	$	3,463	$	—
Reported as follows:
Assets:
Cash and cash equivalents	$	54,661	$	51,823	$	2,838	$	—
Short-term investments		269,457		253,741		15,716		—
Other current assets		369		—		369		—
	$	324,487	$	305,564	$	18,923	$	—
Liabilities:
Other current liabilities	$	3,463	$	—	$	3,463	$	—

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Recently Issued Accounting Pronouncements

6 Months Ended

Jun. 30, 2011

Recently Issued Accounting Pronouncements [Abstract]

Recently Issued Accounting Pronouncements

2) Recently Issued Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) which eliminates the option to present the components of other comprehensive income as part of the statement of equity and requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments are effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2011. The ASU requires changes in presentation only and the Company does not expect it will have a material effect on its consolidated financial statements.

In May 2011, the FASB issued an ASU which applies to all reporting entities that are required or permitted to measure or disclose the fair value of an asset, a liability, or an instrument classified in a reporting entity’s shareholders’ equity in the financial statements. The amendments do not extend the use of fair value accounting, but provide guidance on how it should be applied where its use is already required or permitted by other standards within U.S. GAAP. The amendments change the wording used to describe many requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. Additionally, the ASU clarifies the FASB’s intent about the application of existing fair value measurements. The amendments in this ASU are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. Early application by public entities is not permitted. The Company does not expect the new ASU to have a material effect on its financial position, results of operations or cash flows.

In October 2009, the FASB issued an ASU that established new accounting and reporting provisions for arrangements including multiple revenue-generating activities. This ASU provides amendments to the criteria for separating deliverables, measuring and allocating arrangement consideration to one or more units of accounting. The amendments in this ASU also established a selling price hierarchy for determining the selling price of a deliverable. Significantly enhanced disclosures are also required to provide information about a vendor’s multiple-deliverable revenue arrangements, including information about the nature and terms, significant deliverables, and its performance within arrangements. The amendments also require providing information about the significant judgments made and changes to those judgments and about how the application of the relative selling-price method affects the timing or amount of revenue recognition. The amendments in this ASU were effective prospectively for revenue arrangements entered into or materially modified in the fiscal years beginning on or after June 15, 2010. The Company adopted the new ASU in the first quarter of 2011, and the adoption did not have a material impact on the Company’s financial position, results of operations or cash flows.

In October 2009, the FASB issued an ASU that changed the accounting model for revenue arrangements that include both tangible products and software elements that are “essential to the functionality,” and scoped these products out of current software revenue guidance. The new ASU includes factors to help companies determine what software elements are considered “essential to the functionality.” The amendments now subject software-enabled products to other revenue guidance and disclosure requirements, such as guidance surrounding revenue arrangements with multiple-deliverables. The amendments in this ASU were effective prospectively for revenue arrangements entered into or materially modified in the fiscal years beginning on or after June 15, 2010. The Company adopted the new ASU in the first quarter of 2011, and the adoption did not have a material impact on the Company’s financial position, results of operations or cash flows.

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Discontinued Operations

6 Months Ended

Jun. 30, 2011

Discontinued Operations [Abstract]

Discontinued Operations

11) Discontinued Operations

During the second quarter of 2010, the Company committed to a plan to divest two product lines, as their growth potential no longer met the Company’s long-term strategic objectives. The Company completed the sale of Ion on May 17, 2010 for $15,097,000 of net cash proceeds after expenses and recorded a pre-tax gain on the sale of $4,228,000. As a result of committing to a plan to divest a second product line and, therefore, meeting the asset held for sale criteria, during the second quarter of 2010, the Company performed a fair value analysis of its YDI business in order to measure it at the lower of its carrying value or fair value less cost to dispose. Based on the analysis, the Company determined that the carrying value was less than the fair value, less costs to dispose, and therefore, no impairment charge was required. The YDI business was considered held for sale of June 30, 2010. The Company completed the sale of the assets of its YDI business on August 11, 2010 for $490,000 of net cash proceeds after expenses and recorded a pre-tax gain on the sale of $224,000.

The two product lines have been accounted for as discontinued operations. Accordingly, their results of operations have been reclassified to discontinued operations in the consolidated statements of operations for all periods presented. The assets and liabilities of these discontinued businesses have not been reclassified or segregated in the consolidated balance sheets or consolidated statements of cash flows due to their immaterial amounts. Net revenues and income from discontinued operations for the three and six months ended June 30, 2011 and 2010 are below:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2011		2010			2011		2010
Net revenues	$	—	$	3,881		$	—	$	9,784
Income from discontinued operations before income taxes	$	—	$	786		$	—	$	1,219
Gain from disposal of discontinued operations before income taxes		—		4,228			—		4,228
Income tax benefit		—		(619	)		—		(413	)
Income from discontinued operations	$	—	$	5,633		$	—	$	5,860

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Subsequent Events (Details) (USD $)	3 Months Ended
	Jun. 30, 2011
Subsequent Events (Textuals) [Abstract]
Repurchase of common stock	$ 200,000,000
Cash dividend declared	$ 0.15

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Cash and Cash Equivalents and Investments (Details 1) (USD $)	Jun. 30, 2011	Dec. 31, 2010
Gross unrealized gains and losses aggregated by investment category
Cost	$ 396,369,000	$ 324,279,000
Gross Unrealized Gains	60,000	42,000
Gross Unrealized (Losses)	(157,000)	(203,000)
Estimated Fair Value	396,272,000	324,118,000
Cash and Cash Equivalents and Investments (Textuals) [Abstract]
Cash	105,292,000	107,815,000
Time deposits and drafts [Member]
Gross unrealized gains and losses aggregated by investment category
Cost	31,053,000	18,554,000
Gross Unrealized Gains	0	0
Gross Unrealized (Losses)	0	0
Estimated Fair Value	31,053,000	18,554,000
Money Market Funds [Member]
Gross unrealized gains and losses aggregated by investment category
Cost	16,792,000	7,032,000
Gross Unrealized Gains	0	0
Gross Unrealized (Losses)	0	0
Estimated Fair Value	16,792,000	7,032,000
Equity mutual fund [Member]
Gross unrealized gains and losses aggregated by investment category
Cost	659,000	659,000
Gross Unrealized Gains	0	0
Gross Unrealized (Losses)	(142,000)	(168,000)
Estimated Fair Value	517,000	491,000
U.S. treasury and agency obligations [Member]
Gross unrealized gains and losses aggregated by investment category
Cost	347,865,000	298,304,000
Gross Unrealized Gains	60,000	42,000
Gross Unrealized (Losses)	(15,000)	(35,000)
Estimated Fair Value	347,910,000	298,041,000
Cash and cash equivalents [Member]
Gross unrealized gains and losses aggregated by investment category
Cost	121,245,000	54,664,000
Gross Unrealized Gains	1,000	0
Gross Unrealized (Losses)	0	(3,000)
Estimated Fair Value	121,246,000	54,661,000
Short term investment [Member]
Gross unrealized gains and losses aggregated by investment category
Cost	269,846,000	269,615,000
Gross Unrealized Gains	58,000	42,000
Gross Unrealized (Losses)	(155,000)	(200,000)
Estimated Fair Value	269,749,000	269,457,000
Long-term marketable securities [Member]
Gross unrealized gains and losses aggregated by investment category
Cost	5,278,000
Gross Unrealized Gains	1,000
Gross Unrealized (Losses)	(2,000)
Estimated Fair Value	$ 5,277,000

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2011

Commitments and Contingencies [Abstract]

Commitments and Contingencies

15) Commitments and Contingencies

The Company is subject to various legal proceedings and claims, which have arisen in the ordinary course of business.

In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s results of operations, financial condition or cash flows.

The Company reviewed its contractual obligations and commercial commitments as of June 30, 2011 and determined that there were no significant changes from the ones set forth in the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

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Consolidated Balance Sheets (Unaudited) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 226,538	$ 162,476
Short-term investments	269,749	269,457
Trade accounts receivable, net	150,980	138,181
Inventories	164,450	156,429
Deferred income taxes	13,872	13,775
Other current assets	24,120	12,577
Total current assets	849,709	752,895
Property, plant and equipment, net	69,653	68,976
Long-term marketable securities	5,277	0
Goodwill	140,020	140,020
Intangible assets, net	1,243	1,743
Other assets	14,713	18,779
Total assets	1,080,615	982,413
Current liabilities:
Short-term borrowings	619	0
Accounts payable	33,754	36,427
Accrued compensation	29,201	29,944
Income taxes payable	490	5,347
Other current liabilities	37,919	37,968
Total current liabilities	101,983	109,686
Other liabilities	29,666	25,688
Commitments and contingencies (Note 15)
Stockholders' equity:
Preferred Stock, $0.01 par value, 2,000,000 shares authorized; none issued and outstanding	0	0
Common Stock, no par value, 200,000,000 shares authorized; 52,439,231 and 50,648,601 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively	113	113
Additional paid-in capital	699,458	663,792
Retained earnings	232,372	171,356
Accumulated other comprehensive income	17,023	11,778
Total stockholders' equity	948,966	847,039
Total liabilities and stockholders' equity	$ 1,080,615	$ 982,413

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Derivatives (Details) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Currency Hedged (Buy/Sell)
Currency Hedged (Buy/Sell), Gross Notional Value, Net	$ 70,244	$ 87,666
Currency Hedged (Buy/Sell), Fair Value, Net	(3,227)	(3,094)
U.S. Dollar/Japanese Yen [Member]
Currency Hedged (Buy/Sell)
Currency Hedged (Buy/Sell), Gross Notional Value, Net	33,626	50,104
Currency Hedged (Buy/Sell), Fair Value, Net	(1,632)	(2,876)
U.S. Dollar/South Korean Won [Member]
Currency Hedged (Buy/Sell)
Currency Hedged (Buy/Sell), Gross Notional Value, Net	21,123	27,574
Currency Hedged (Buy/Sell), Fair Value, Net	(1,296)	(563)
U.S. Dollar/Euro [Member]
Currency Hedged (Buy/Sell)
Currency Hedged (Buy/Sell), Gross Notional Value, Net	9,462	6,934
Currency Hedged (Buy/Sell), Fair Value, Net	(294)	305
U.S. Dollar/U.K. Pound Sterling [Member]
Currency Hedged (Buy/Sell)
Currency Hedged (Buy/Sell), Gross Notional Value, Net	6,033	3,054
Currency Hedged (Buy/Sell), Fair Value, Net	$ (5)	$ 40

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Discontinued Operations (Details Textuals) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain from disposal of discontinued operations before income taxes	$ 0	$ 4,228,000	$ 0	$ 4,228,000
Discontinued Operations (Textuals) [Abstract]
Discontinued operation, number of product lines sold		2
Ion [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net proceeds from sale of discontinued operations			15,097,000
Gain from disposal of discontinued operations before income taxes			4,228,000
YDI [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net proceeds from sale of discontinued operations			490,000
Gain from disposal of discontinued operations before income taxes			$ 224,000

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Debt (Details) (USD $)	6 Months Ended
	Jun. 30, 2011	Dec. 31, 2010
Debt (Textuals) [Abstract]
Number of financial institutions that provide for aggregate borrowings	2
Aggregate borrowings	$ 30,941,000
Aggregate borrowings expire and renewed	3 month intervals
Total borrowings outstanding	$ 619,000	$ 0
Interest rate of borrowing amounts	0.68%

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Product Warranties (Details) (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Product warranty activities
Product Warranty Accrual, Beginning Balance	$ 9,865	$ 6,560
Provision for product warranties	3,638	4,731
Direct charges to warranty liability	(3,832)	(2,309)
Product Warranty Accrual, Ending Balance	$ 9,671	$ 8,982

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Geographic, Product and Significant Customer Information (Details Textuals)	6 Months Ended
	Jun. 30, 2011
Geographic, Product and Significant Customer Information (Textuals) [Abstract]
Number of product groups	3

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Derivatives (Details 1) (USD $)	Jun. 30, 2011	Dec. 31, 2010
Derivative liabilities:
Total net derivative liability designated as hedging instruments	$ (3,227,000)	$ (3,094,000)
Designated as Hedging Instrument [Member]
Derivative assets:
Derivative assets	74,000	369,000
Derivative liabilities:
Derivative liabilities	(3,301,000)	(3,463,000)
Total net derivative liability designated as hedging instruments	$ (3,227,000)	$ (3,094,000)