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CORRESP
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  KAYE SCHOLER LLP

  Rory A. Greiss

  212 836-8261

  Fax 212 836-8689

  rgreiss@kayescholer.com

  425 Park Avenue

  New York, New
  York 10022-3598

  212 836-8000

  Fax 212 836-8689

  www.kayescholer.com

August 3, 2005

BY EDGAR AND BY HAND

Jay Mumford, Esq.

Thomas A. Jones, Esq.

Securities and
Exchange Commission

450 Fifth Street,
N.W.

Washington,
D.C.  20549

Re:          Veeco
Instruments Inc.

Form 10-K for Fiscal Year Ending December 31, 2004

Filed March 16, 2005

File No. 0-16244

Dear Messrs. Mumford and Jones:

This letter is submitted
on behalf of Veeco Instruments Inc. (the “Company”) in response to the
comments of the staff (the “Staff”) of the Division of Corporation
Finance of the Securities and Exchange Commission with respect to the Company’s

Form 10-K for Fiscal Year Ending December 31, 2004 (File No. 0-16244),
as set forth in your letter to John F. Rein, Jr. dated July 28, 2005.

The text of each comment
contained in the Staff’s letter is set forth in italics below, followed by the
Company’s response.

Form 10-K
for the Fiscal Year Ended December 31, 2004

Item 3.  Legal
Proceedings, page 16

1.                                      In future filings, please quantify, if material,
the amount of your revenues from the asserted invalid and unenforceable patents
and the amount of royalties sought by Asylum.

RESPONSE:
In its lawsuit against Asylum, the Company has alleged that Asylum
infringes five of the Company’s patents (the “Asserted Patents”)
covering technology related to scanning probe microscopes (“SPMs”)
and/or atomic force microscopes (“AFMs”).  The five Asserted Patents represent a small
portion of

  New York

  Chicago

  Los Angeles

  Washington, D.C.

  West Palm Beach

  Frankfurt

  London

  Shanghai

the Company’s portfolio of over
100 patents covering SPMs and AFMs.  Multiple patents may apply to each of
the Company’s SPM and AFM products.  In
general, the Company does not derive royalties from the Asserted Patents, and
does not allocate product revenue to the Asserted Patents.  As such, it is impractical to quantify the
amount of revenues derived from the Asserted Patents.

Furthermore,
the Company views Asylum’s claims of invalidity and unenforceability as nothing
more than standard defenses in a patent infringement action.  The Company believes these claims are without
merit and intends to vigorously oppose these claims.

The
amount of royalties sought by Asylum is not material.

Item 7.  Management’s
Discussion and Analysis of Financial Condition and Results of Operations, page 21

2.                                      On pages 26, 29 and 30 of
your MD&A and on page 15
of your Form 10-Q for the Quarter Ended March 31, 2005, you disclose
non-GAAP financial measures consisting of gross profit excluding certain
items.  While these disclosures may be
helpful in describing operating results from period to period, they remove
focus from the excluded items.  Please
revise future filings to discuss changes in your GAAP-based results,
identifying those unique or material transactions or events that contributed to
the changes.  Alternatively, if you elect
to retain the current disclosures, revise future filings to comply with the
requirements of Item 10(e) of Regulation S-K.  We refer you to SEC Release 34-47226.  Please provide us with a sample of the
disclosures you intend to include in future filings.  Please note this comment also applies to your
Form 10-Q as of March 31, 2005.

RESPONSE:
The Company accepts the Staff’s comment and will revise future filings
to disclose changes in gross profit only on a GAAP basis.  As requested, the following paragraph is the
disclosure the Company anticipates including in its Form 10-Q for the
quarterly period ended June 30, 2005, pertaining to changes in gross
profit.

Gross
profit for the six months ended June 30, 2005 was 41.0%, as compared to
40.9% in the comparable period of 2004.
Gross profit in 2004 was negatively impacted by $1.5 million in purchase
accounting adjustments relating to the acquisitions of TurboDisc and Aii.  These purchase accounting adjustments
resulted from the required capitalization of profit in inventory and the
permanent elimination of certain deferred revenue.  The ion beam and mechanical process equipment
gross margins were 40.2% in the first six months of 2005, as compared to 34.9%
in the same period in 2004.  The increase
was primarily due to increased volume, favorable price mix and cost cutting
measures at the Plainview ion beam facility during the six months ended June 30,
2005 and the effect of the $1.5 million in purchase accounting adjustments in
2004 described above.  Epitaxial process
equipment gross margins in the first six months of 2005 were 20.4%, as

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compared to 21.3% in the prior
year period.  This decrease was primarily
due to higher warranty expenses for MOCVD products and an unfavorable product
mix in MBE products.  Metrology gross
margins decreased from 54.0% in the first six months of 2004 to 50.7% in the
first six months of 2005 due to less favorable product mix of AFM products.

Item 9A.  Controls and
Procedures, page 45

3.                                      We note your disclosure that “as a result of the
discovery by management of improper accounting entries made at its TurboDisc
business unit which led to adjustments requiring the restatement of the Company’s
financial statements for the quarterly periods ended March 31, 2004, June 30,
2004 and September 30, 2004, management has now determined that a
deficiency existed in the internal control over financial reporting at the end
of such quarterly periods.”  We also note
your disclosure on page F-40 of your financial statements that “there was
no evidence found of embezzlement or diversion of corporate assets” as a result
of your internal investigation.  Please
respond to the following comments:

•                                          Tell
us in greater detail the nature of the improper accounting entries.

•                                          Please
tell us what your investigation concluded as to the reasons why these improper
accounting entries were made.

•                                          Clarify
whether this issue was determined to be a significant deficiency or a material
weakness, as those terms are defined in paragraphs 9-10 of PCAOB Auditing
Standard No. 2.  Please provide us
with a basis for the determination.

•                                          Describe
in detail the specific corrective actions you have taken.  Tell us what you mean when you discuss the
implementation of “a new accounting system and attendant control process.”  Describe the new controls put in place and
why you believe these will prevent future occurrences.

RESPONSE:  The improper accounting
entries at the TurboDisc business unit discovered by the Company’s internal
audit staff and corporate financial management included entries in the accounts
relating to inventory (including work in process, labor and overhead, research
and development projects and certain other accounts), revenue (including sales
and material), accounts receivable (including accounts relating to amounts due
from Emcore Corporation), accounts payable (including accounts relating to
payments due to Emcore Corporation and certain other vendors), warranty
reserve, accrued expenses and deferred gross profit.

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The
investigation concluded that there were not sufficient facts to come to a
conclusion on whether the improper accounting entries were made intentionally
or, assuming such entries were made intentionally, what motive the former Controller
of TurboDisc (the individual found to have been responsible for such entries)
may have had in making such entries.

In
accordance with Section 404 of the Sarbanes-Oxley Act of 2002, management
of the Company assessed the design and effectiveness of internal control over
financial reporting and concluded in its Report on Internal Control Over
Financial Reporting that it believes that the Company maintained effective
control over financial reporting as of December 31, 2004, the date as of
which such assessment is required to be made under Section 404.  In addition, the Company’s independent
registered public accounting firm, Ernst & Young LLP, reported that
the Company maintained, in all material respects, effective internal control
over financial reporting as of December 31, 2004, based on the “COSO
criteria.”

As a
result of the discovery by management of the improper accounting entries at the
TurboDisc business unit which led to adjustments requiring the restatement of
the Company’s financial statements for the quarterly periods ended March 31,
2004, June 30, 2004 and September 30, 2004, management determined
that a deficiency existed in the internal control over financial reporting at
the end of such quarterly periods.
However, since such discovery occurred after the end of such quarterly
periods management was not required to, and did not,
determine whether the nature of the deficiency was a significant deficiency or
a material weakness (as such terms are defined in paragraphs 9-10 of PCAOB
Auditing Standard No. 2) at the end of such quarterly periods.  In addition, management concluded that the
corrective actions taken by it remedied the deficiency in control over
financial reporting that led to the restatement and, as described above, that
Veeco maintained effective control over financial reporting, and that no
material weaknesses or significant deficiencies existed, as of December 31,
2004.

The
corrective actions taken in connection with the discovery of the improper
accounting entries at the TurboDisc business unit consisted of the termination
or reassignment of personnel and the implementation of a new accounting
software system at the business unit.
More specifically, the Company effectuated a management reorganization
of its epitaxial process equipment group, which consists of the TurboDisc
business unit, located in Somerset, New Jersey, and the Molecular Beam Epitaxy
(“MBE”) business unit, located in St. Paul, Minnesota.  In the reorganization, the General Manager of
the epitaxial process equipment group was replaced, the controller of the
TurboDisc business unit was

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replaced and new management positions were created,
including General Manager of the TurboDisc business unit and General Manager of
the St. Paul MBE business unit.
Previously, a single manager presided over the TurboDisc business unit
and the St. Paul MBE business unit.

At the
time of the Company’s acquisition of substantially all of the assets of
TurboDisc from Emcore Corporation in November 2003, Emcore’s accounting
system utilized accounting software from JD Edwards.  At that time, the Company’s other businesses
utilized accounting software from other vendors and the Company was in the
process of transitioning all of its business units to an accounting system
utilizing accounting software from SAP.
It was determined at the time of the acquisition that TurboDisc would
continue utilizing the JD Edwards software (which was not utilized by any other
Veeco business unit) until such time as TurboDisc could be transitioned to the
SAP accounting software system, which the rest of the Company would be
using.  The transition to the SAP
accounting software system took place at TurboDisc in November 2004.  At the same time, the responsibility for
maintaining the general ledger at the TurboDisc business unit was moved from
the controller at TurboDisc to the newly created position of group controller
of the epitaxial process equipment group.
It was principally as a result of these two events that the internal
audit staff and corporate financial management began to become aware of the
improper accounting entries.

Management
believes that the personnel changes and additional supervisory management
positions created, together with the improved reporting and control gained as a
result of the transition of TurboDisc to a “common” accounting software system
with Veeco, will prevent or detect on a timely basis any such further
occurrence.

Item 13.  Certain
Relationships and Related Transactions

4.                                      In future filings, please describe in detail the
material terms of the agreement with Mr. Scherr, such as the length of the
agreement, payment terms and what “certain other matters” cover.  Also, please file this agreement as an
exhibit.

RESPONSE:
Mr. Scherr did not stand for reelection upon expiration of his term
as a Director which expired at the Company’s Annual Meeting of Stockholders
held on May 25, 2005.  Furthermore, Mr. Scherr is not an officer
of the Company or other person covered by Item 404 of Regulation S-K.  As such, disclosure of the terms of his
agreement or filing the agreement as an exhibit in future filings would not be
required by Item 601 of Regulation S-K.

For
your information, the prior agreement between the Company and Mr. Scherr
provided for (a) a one-year duration, renewable upon mutual agreement,

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(b) payments to Mr. Scherr of approximately $7,500 per
month, and (c) consulting services to be provided by Mr. Scherr
contemplated to be approximately 80 hours per month related to acquisitions,
new business opportunities and such other matters as mutually agreed by the
Company and Mr. Scherr.

5.                                      In future filings, please discuss the nature of
the services provided by Mr. Simone.

RESPONSE:
The Company will disclose the nature of services previously provided by Mr. Simone
in future filings.  These services
included market analysis, evaluation of new business opportunities and related
due diligence.

Consolidated
Statements of Operations, page F-6

6.                                      We note your disclosure on page 12 that
approximately 17% of your net sales for the year ended December 31, 2004
constituted revenues from part sales, service and support.  If service
revenue is in excess of 10% of your total revenue in future filings, revise
this statement to separately present service revenues and the related cost of
services as required by Item 5-03(b)(1) and (2) of Regulation S-X.

RESPONSE:
Service revenue did not constitute in excess of 10% of the Company’s
total revenues for any of the fiscal years ended 2002, 2003 or 2004.

Note 1.  Description of
Business and Significant Accounting Policies, page F-9

Long-Lived
Assets, page F-11

7.                                      Please revise future filings to include the
disclosures required by paragraph 45(a) and (b) of
SFAS 142 related to your intangible assets.

RESPONSE:
The Company has reviewed paragraph 45(a) and (b) of SFAS 142
related to intangible assets and, for the Staff’s convenience, has included
such requirements below with the Company’s response.

FAS
142

45.  The following information shall be disclosed
in the financial statements or the notes to the financial statements for each
period for which a statement of position is presented:

a.             For
intangible assets subject to amortization:

(1)           The gross
carrying amount and accumulated amortization, in total and by major intangible
asset class.

RESPONSE:
The Company discloses this information in its consolidated balance
sheets (page F-5) for each major class of intangible assets (purchased

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technology and other intangible
assets).  The Company defines each major
class of intangible asset as those greater than 5% of total assets, in
accordance with Sections 5-02.15 and 5-02.16 of Regulation S-X.

(2)           The
aggregate amortization expense for the period.

RESPONSE:
The Company discloses this information in its consolidated statements of
operations (page F-6).

(3)           The
estimated aggregate amortization expense for each of the five succeeding fiscal
years.

RESPONSE:
The Company discloses aggregate amortization expense for each of the
five succeeding fis