UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C.  20549
                            FORM 10-Q
                                
__X__     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
          SECURITIES EXCHANGE ACT OF 1934
          For the quarterly period ended June 30, 1998

                               OR
                                
_____     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
          THE EXCHANGE ACT OF 1934
          For the transition period from __________ to ____________

                 Commission file number 0-21321
                                
                           CYMER, INC.
     (Exact name of registrant as specified in its charter)
                                
          Nevada                                              33-0175463
(State or other jurisdiction of incorporation             (I.R.S. Employer 
or organization)                                         Identification No.)

16750 Via Del Campo Court, San Diego, CA                      92127
(Address of principal executive offices)                    (Zip Code)

Registrant's telephone number, including area code         (619) 451-7300

Former name, former address and former fiscal year, if changed
since last report.
  N/A

                                
Indicate  by check mark whether the registrant (1) has filed  all
reports  required  to be filed by Section  13  or  15(d)  of  the
Securities  Exchange Act of 1934 during the preceding  12  months
(or  for such shorter period that the registrant was required  to
file  such  reports),  and (2) has been subject  to  such  filing
requirements for the past 90 days.

Yes   X   No

The  number  of  shares of Common Stock, with $0.001  par  value,
outstanding on July 30, 1998 was 28,567,319.


                           CYMER, INC.
                                
                            FORM 10-Q
                                
               For the Quarter Ended June 30, 1998
                                
                              INDEX
                                

                                                                 Page
                                                   
PART I.    FINANCIAL INFORMATION                     

                                                 
ITEM 1.    Consolidated Financial Statements         
                                                 
           Consolidated Balance Sheets as of                      3
            December 31, 1997 and June 30, 1998                    
                                                    
           Consolidated Statements of Income                      4
            for the three and six months ended June           
            30, 1997 and 1998
                                                    
           Consolidated Statements of Cash                        5
            Flows for the six months ended June 30, 1997            
            and 1998
                                                    
          Notes to Consolidated Financial                         7
            Statements
                                                    
ITEM 2.   Management's Discussion and Analysis of                11
           Financial Condition and Results of                  
           Operations
                                                    
PART II.  OTHER INFORMATION                            
                                                    
ITEM 1.   Legal Proceedings                                      26
                                                    
ITEM 2.   Changes in Securities                                  26
                                                    
ITEM 3.   Defaults upon Senior Securities                        26
                                                 
ITEM 4.   Submission of Matters to a Vote of                     26
           Security Holders
                                                    
ITEM 5.   Other Information                                      26
                                                 
ITEM 6.   Exhibits and Reports on Form 8-K                       26
                                                 
SIGNATURE PAGE                                                   27



                 PART I.  FINANCIAL INFORMATION
                                
CYMER, INC.                                                             
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)                                       
<TABLE>
<CAPTION>
                                                December 31,         June 30,  
ASSETS                                             1997                1998
                                                                   (unaudited)
CURRENT ASSETS:                                                         
<S>                                             <C>                  <C>
   Cash and cash equivalents                     $51,903              $74,631 
   Short-term investments                         80,387               20,336 
   Accounts receivable - net                      59,140               55,631 
   Foreign exchange contracts receivable          31,267               19,638 
   Inventories                                    47,502               59,318 
   Deferred income taxes                          12,690               12,638 
   Prepaid expenses and other                      2,847                2,994 
          Total current assets                   285,736              245,186 
                                                                        
PROPERTY - net                                    48,031               51,568 
LONG-TERM INVESTMENTS                             42,667               73,747 
OTHER ASSETS                                       8,446                8,476 
TOTAL ASSETS                                    $384,880             $378,977 
                                                                        
LIABILITIES AND STOCKHOLDERS' EQUITY                                    
                                                                        
CURRENT LIABILITIES:                                                    
   Revolving loan                                                      $9,480 
   Accounts payable                              $22,615               13,588 
   Accrued and other liabilities                  26,860               29,369 
   Foreign exchange contracts payable             27,278               17,389 
   Income taxes payable                            6,444                6,176 
          Total current liabilities               83,197               76,002 
                                                                       
CONVERTIBLE SUBORDINATED NOTES                   172,500              172,500 
OTHER LIABILITIES                                  3,566                3,501 
MINORITY INTEREST                                  1,077                1,121 
COMMITMENTS AND CONTINGENCIES (Note 7)                                  
                                                                        
STOCKHOLDERS' EQUITY:                                                   
   Preferred Stock - authorized 5,000,000                               
    shares; $.001 par value, no shares 
    issued or outstanding
   Common stock - authorized 50,000,000                                 
    shares; $.001 par value, issued and
    outstanding 28,724,000 and
    28,659,00 shares                                  29                   29 
   Paid-in capital                               109,367              110,493 
   Retained earnings                              18,637               23,028 
   Accumulated other comprehensive loss          (3,493)               (2,421) 
   Treasury stock at cost (305,000 common
    shares)                                                            (5,276) 
          Total stockholders' equity             124,540              125,853 
                                                                        
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $384,880             $378,977 
</TABLE>
                                                                        
See notes to consolidated financial statements.
                                
CYMER, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share data)
<TABLE>
<CAPTION>
                                                                
                                     For the three          For the six
                                        months                months
                                     ended June 30         ended June 30
                                     1997      1998       1997       1998
<S>                                <C>       <C>        <C>        <C>
REVENUES:                                                             
   Product sales                   $50,030   $52,946    $86,476    $102,574
   Other                               102        76        627         127
     Total revenues                 50,132    53,022     87,103     102,701
                                                                      
COSTS AND EXPENSES:                                                   
   Cost of product sales            31,003    34,154     52,700      64,784
   Research and development          6,344     8,292     10,592      16,109
   Sales and marketing               2,756     3,980      5,015       7,880
   General and administrative        2,059     2,605      3,856       5,083
     Total costs and expenses       42,162    49,031     72,163      93,856
                                                                      
OPERATING INCOME                     7,970     3,991     14,940       8,845
                                                                      
OTHER INCOME (EXPENSE):                                               
   Foreign currency exchange          
    gain (loss) - net                  470      (520)       (85)       (752)
  Interest and other income            507     1,847      1,204       3,855
  Interest and other expense          (158)   (2,802)      (275)     (5,583)
                                                                      
     Total other income
      (expense) - net                  819    (1,475)       844      (2,480)
                                                                      
INCOME BEFORE PROVISION FOR INCOME                                           
 TAXES AND MINORITY INTEREST         8,789     2,516     15,784       6,365
                                                                      
PROVISION FOR INCOME TAXES          (1,359)     (724)    (3,946)     (1,882)
MINORITY INTEREST                               (103)                   (91)
                                                                      
NET INCOME                          $7,430    $1,689    $11,838      $4,392
                                                                      
EARNINGS PER SHARE:                                                  
Basic:                                                                
    Earnings per share               $0.26     $0.06      $0.42       $0.15
    Weighted average common 
     shares outstanding             28,134    28,768     27,960      28,747
Diluted:                                                              
    Earnings per share               $0.24     $0.06      $0.39       $0.14
    Weighted average common and                                      
     common equivalent shares
     outstanding                    30,694    30,291     30,558      30,366
</TABLE>
                                                                      
See notes to consolidated financial statements.


CYMER, INC.                                                   
CONSOLIDATED STATEMENTS OF CASH FLOWS                         
(UNAUDITED)
(In thousands)
<TABLE>
<CAPTION>
                                                      For the six months
                                                        ended June 30
                                                       1997        1998
                                                                  
OPERATING ACTIVITIES:                                         
<S>                                                  <C>         <C>
   Net income                                        $11,838      $4,392
   Adjustments to reconcile net income 
    to net cash used for operating activities:                           
   Depreciation and amortization                       2,777       7,148
   Minority interest                                                  91
   Deferred income taxes                              (3,162)           
   Change in assets and liabilities:                                
    Accounts receivable                              (29,261)      1,968
    Foreign exchange contracts receivable            (15,991)     10,296
    Inventories                                      (20,812)    (12,078)
    Prepaid expenses and other assets                 (2,617)       (448)
    Accounts payable                                   8,638      (6,568)
    Accrued and other liabilities                     15,269         273
    Foreign exchange contracts payable                17,158      (8,711)
    Income taxes payable                               2,147      (2,200)
    Other                                                232           
                                                                      
      Net cash used for operating activities         (13,784)     (5,837)
                                                                      
INVESTING ACTIVITIES:                                                 
   Acquisition of property                           (15,391)    (10,550)
   Purchases of investments                          (26,278)    (45,558)
   Proceeds from sold or matured investments          20,867      74,480
                                                                      
    Net cash provided by (used for)         
     investing activities                            (20,802)     18,372
                                                                      
FINANCING ACTIVITIES:                                                 
   Net borrowings (payments) under revolving         
    loan and security agreements                        (500)     10,013
   Debt issue costs                                                  395
   Proceeds from issuance of common stock                272       1,126
   Purchase of treasury stock                                     (5,276)
   Payments on capital lease obligations                (159)       (299)
                                                                      
     Net cash provided by (used for)            
      financing activities                              (387)      5,959
                                                                      
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND                           
  CASH EQUIVALENTS                                    (1,472)      4,234
                                                                      
NET INCREASE (DECREASE) IN CASH AND CASH           
  EQUIVALENTS                                        (36,445)     22,728
CASH AND CASH EQUIVALENTS AT BEGINNING OF          
  PERIOD                                              55,405      51,903
                                                                      
CASH AND CASH EQUIVALENTS AT END OF PERIOD           $18,960     $74,631

                                                               
SUPPLEMENTAL DISCLOSURE OF CASH FLOW                           
 INFORMATION:
  Interest paid                                         $320      $3,305
  Income taxes paid                                   $2,963      $2,140
                                                               
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING                   
  AND FINANCING ACTIVITIES:                                    
   Capital lease obligations incurred for              
    furniture and equipment                             $839         $71
</TABLE>

See notes to consolidated financial statements.



                           CYMER, INC.
                                
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            Three and Six Months Ended June 30, 1998
                           (Unaudited)

1.   BASIS OF PRESENTATION

     The accompanying consolidated financial information has been
prepared  by  Cymer, Inc.,  its wholly-owned subsidiaries,  Cymer
Japan,  Inc.,  (Cymer Japan), Cymer Singapore,  Pte  Ltd.  (Cymer
Singapore),  and Cymer B.V. in the Netherlands (Cymer  B.V.)  and
its  majority-owned subsidiaries, Cymer Korea, Inc. (Cymer Korea)
and  Cymer  Southeast Asia, Inc. (Cymer SEA)  (collectively,  the
"Company"), without audit, in accordance with the instructions to
Form  10-Q  and  therefore does not include all  information  and
footnotes   necessary  for  a  fair  presentation  of   financial
position, results of operations and cash flows in accordance with
generally accepted accounting principles.

      Principles  of  Consolidation - The consolidated  financial
statements  include the accounts of Cymer, Inc., its wholly-owned
subsidiaries,  Cymer Japan, Cymer Singapore and Cymer  B.V.,  and
its  majority-owned  subsidiaries, Cymer  Korea  and  Cymer  SEA.
Cymer,  Inc. owns 70% of Cymer Korea and 75% of Cymer  SEA.   The
Company sells its excimer lasers in Japan primarily through Cymer
Japan.   Cymer Korea, Cymer SEA, Cymer Singapore and  Cymer  B.V.
are  field  service offices for customers in those regions.   All
significant   intercompany  balances  have  been  eliminated   in
consolidation.

       Accounting  Estimates  -  The  preparation  of   financial
statements  in  conformity  with  generally  accepted  accounting
principles  requires management to make estimates and assumptions
that  affect  the reported amounts of assets and liabilities  and
disclosure  of contingent assets and liabilities at the  date  of
the financial statements and the reported amounts of revenues and
expenses during the reporting period.  Actual results may  differ
from those estimates.

      Statement of Financial Accounting Standards No. 132 - In
February, 1998 the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 132,
"Employers' Disclosures about Pensions and Other Postretirement Benefits",
effective for fiscal years beginning after December 15, 1997.  SFAS No. 132
revises employers' disclosures about pension and other postretirement
benefit plans, but does not change the measurement or recognition of
those plans.  The Company adopted SFAS No. 132 for the year ended
December 31, 1998.  Management has determined that this pronouncement
does not materially effect the Company's current disclosures of its
retirement plan.

      Unaudited  Interim  Financial Data  -  In  the  opinion  of
management,  the unaudited consolidated financial statements  for
the interim periods presented reflect all adjustments, consisting
of   only  normal  recurring  accruals,  necessary  for  a   fair
presentation of the financial position and results of  operations
as  of  and  for  such  periods  indicated.   These  consolidated
financial  statements  and  notes  thereto  should  be  read   in
conjunction with the consolidated financial statements and  notes
thereto  included  in the Company's Annual Report  on  Form  10-K
(including items incorporated by reference therein) for the  year
ended December 31, 1997 and the Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31, 1998.  Results for the interim
periods  presented  herein  are  not  necessarily  indicative  of
results which may be reported for any other interim period or for
the entire fiscal year.


2.   EARNINGS PER SHARE

     Earnings  Per  Share  -  In  February  1997,  the  FASB issued
SFAS No. 128,  "Earnings  Per  Share," effective  for  financial 
statements issued  after  December  15, 1997.   SFAS  No. 128 requires 
dual presentation of  "Basic"  and "Diluted"  EPS  by  entities  with  
complex  capital  structures, replacing  "Primary"  and "Fully Diluted" 
EPS  under  Accounting Principles  Board  ("APB") Opinion No. 15.   Basic  
EPS  excludes dilution  from  common  stock  equivalents  and  is  computed  
by dividing income available to common stockholders by the weighted-
average  number  of  common shares outstanding  for  the  period.
Diluted  EPS  reflects the potential dilution from  common  stock
equivalents,  similar to fully diluted EPS,  but  uses  only  the
average stock price during the period as part of the computation.
The  Company adopted the new method of reporting EPS for the year
ended December 31, 1997.  Reconciliation of the basic and diluted
EPS is as follows:
<TABLE>
<CAPTION>
     
                              Three months ended         Six months ended
                                   June 30                    June 30
                                1997      1998             1997     1998
                               (In thousands, except per share amounts)
<S>                           <C>        <C>             <C>       <C>
Net income                    $7,430     $1,689          $11,838   $4,392
                                                           
Basic earnings per share       $0.26      $0.06            $0.42    $0.15
Basic weighted average                                     
 common shares outstanding    28,134     28,768           27,960   28,747
                                                           
Effect of dilutive securities:
 Warrants                        221        119              221      118
 Options                       2,339      1,404            2,377    1,501
Diluted weighted average                                   
 common and common equivalent
 shares outstanding           30,694     30,291           30,558   30,366
Diluted earnings per share     $0.24      $0.06            $0.39    $0.14
</TABLE>
     
     
3.   BALANCE SHEET DETAILS
<TABLE>
<CAPTION>
                                        December 31,          June 30,
                                            1997                1998
                                                 (in thousands)
<S>                                       <C>                 <C>
INVENTORIES:                                             
  Raw Materials                           $24,365             $27,877
  Work-in-progress                         18,394              18,760
  Finished goods                            4,743              12,681
Total                                     $47,502             $59,318
                                                         
ACCRUED AND OTHER LIABILITIES:                           
  Warranty and installation reserves      $15,730             $16,400
  Payroll and payroll related               2,735               2,431
  Interest                                  3,920               5,757
  Other                                     4,475               4,781
Total                                     $26,860             $29,369
</TABLE>

4.   STOCKHOLDERS' EQUITY

      Stock Split - On August 7, 1997, the Company declared a  2-
for-1  stock split of its common stock effective August 21, 1997.
All  share  amounts  and  earnings  per  share  for  all  periods
presented have been adjusted to give effect to this stock split.

     Treasury Stock - On January 28, 1998, the Company's Board of
Directors  authorized  the  Company to  repurchase  up  to  $50.0
million  of the Company's common stock from time to time  on  the
open  market or in privately negotiated transactions.  As of June
30, 1998, the Company had repurchased 305,000 shares at a cost of
$5.3  million.   Subsequent to June 30,  1998,  the  Company  has
purchased an additional 100,000 shares, bringing the total shares
repurchased to date of 405,000 shares at a cost of $6.9 million.

      Option Repricing - On January 28, 1998, the Company's Board
of  Directors  authorized  an incentive  stock  option  repricing
effective  March  2,  1998 at a new option price  of  $22.56  per
share.   The  repricing  took  effect  on  839,020  options  with
original  prices ranging from $21.03 to $33.75 per share  granted
from  December 1996 through October 1997.  The four year  vesting
period  of the repriced options also began on March 2,  1998  and
the term of such options was set at ten years.

      Stockholder  Rights  Plan  -  On  February  13,  1998,  the
Company's  Board of Directors adopted a Stockholder Rights  Plan.
Under  the  terms  of  the plan, rights  were  distributed  as  a
dividend at a rate of one preferred share purchase right on  each
outstanding  share  of  the  Company's  common  stock   held   by
stockholders of record as of close of business on March 2,  1998.
The  dividend  distribution was made on or about April  20,  1998
with  rights  expiring  on February 13,  2008.   The  rights  are
designed to assure that all Company stockholders receive fair and
equal  treatment  in the event of any proposed  takeover  of  the
Company  and  to  guard against partial tender offers  and  other
abusive tactics to gain control of the Company without paying all
stockholders the fair value of their shares, including a  control
premium.

      1996  Stock Option Plan (the "1996 Stock Plan")  -  At  the
Company's  Annual  Meeting  of  Stockholders  on  May  15,  1998,
stockholders  of the Company approved a 1,250,000 share  increase
in  shares  issuable under the 1996 Stock Plan.  These additional
shares  bring  the  total  shares  issuable  under  the  plan  to
4,250,000.   The  1996  Stock  Plan provides  for  the  grant  of
incentive stock options within the meaning of Section 422 of  the
Internal  Revenue  Code  of 1986, as amended  (the  "Code"),  and
nonqualified   stock   options  to   employees,   directors   and
consultants  of  the  Company.  Incentive stock  options  may  be
granted  only  to employees.  The 1996 Stock Plan is administered
by  the  Board  of Directors or by a committee appointed  by  the
Board  of  Directors,  which  determines  the  terms  of  options
granted,  including the exercise price and the number  of  shares
subject  to  the  option.  The exercise price of incentive  stock
options granted under the 1996 Stock Plan must be at least  equal
to  the  fair market value of the Company's common stock  on  the
date  of  grant  and  the  exercise price of  nonqualified  stock
options must be at least equal to 85% of the fair market value of
the  Company's common stock on the date of grant.  Options issued
under  the  1996 Plan expire five to ten years after the  options
are granted and generally become exercisable ratably over a four-
year period following the date of grant.


5.   REVOLVING LOAN FACILITY

      The Company has a Loan Agreement (the "Agreement") with two
financial institutions which provide for two revolving loan facilities 
with combined borrowings of up to a maximum of  $15.0  million.   The
Agreement  provides  for the following:  (i)  an  unsecured  $5.0
million  revolving bank line of credit for domestic borrowing  at
an interest rate of prime or LIBOR plus 140 basis points and (ii)
an  unsecured  $10.0  million  United  States  dollar  equivalent
revolving line of credit in Optional Currency at an interest rate
of TIBOR plus 140 basis points.  As of June 30, 1998 there was 1.3 
billion yen (approximately $9.5 million) outstanding on the Optional 
Currency line of credit in Japan.

     The  Agreement  requires the Company to maintain  compliance
with  certain financial statement and other covenants  including,
among  other  items,  tangible net  worth  and  cash  flow  ratio
requirements.  As of June 30, 1998, the Company was in compliance
with all such covenants.


6.   REPORTING COMPREHENSIVE INCOME

  Effective  January 1, 1998, the Company adopted SFAS  No.  130,
Reporting Comprehensive Income.  SFAS No. 130 requires reporting  and
displaying  comprehensive income and its components,  which,  for
the Company, include foreign currency translation adjustments and
unrealized  holding  gains  and  losses  on  available  for  sale
securities that are currently being presented by the Company as a
component of stockholders' equity.  The adoption of SFAS No.  130
had no impact on the Company's results of operations or financial
position.   In  accordance  with SFAS No.  130,  the  accumulated
balance  of other comprehensive income (loss) is disclosed  as  a
separate component of stockholders' equity.  Prior year financial
statements  have been reclassified to conform to the requirements
of SFAS No. 130.
  
  Comprehensive   income   consisted   of   the   following   (in
thousands):
<TABLE>
<CAPTION>
                                   Three months ended        Six months ended
                                        June 30,                 June 30,
                                    1997        1998         1997        1998  

<S>                               <C>         <C>          <C>         <C>
Net income                        $7,430      $1,689       $11,838     $4,392
Other comprehensive income
 (loss), net of tax:
 Foreign currency translation
  adjustments                        (26)         35          (180)       733
 Total unrealized holding gains
  (losses) on available for
   sale investments                   36         (26)           11         20
Other comprehensive income
 (loss), net of tax:                  10           9          (169)       753
Comprehensive income              $7,440      $1,698       $11,669     $5,145
</TABLE>

7.   CONTINGENCIES

      The  Company's  Japanese  manufacturing  partner  has  been
notified  that its manufacture of the Company's laser systems  in
Japan  may  infringe a Japanese patent held by  another  Japanese
company.   The  Company  has  agreed to  indemnify  its  Japanese
manufacturing  partner against patent infringement  claims  under
certain  circumstances.   The Company believes,  based  upon  the
advice  of  counsel, that the Company's products do not  infringe
any valid claim of the asserted patent.


   Item 2.  Management's Discussion and Analysis of Financial
                  Condition and Results of Operations
                                

      AN  ASTERISK  ("*")  DENOTES  A  FORWARD-LOOKING  STATEMENT
REFLECTING   CURRENT   EXPECTATIONS  THAT   INVOLVE   RISKS   AND
UNCERTAINTIES.  ACTUAL RESULTS MAY DIFFER FROM THOSE DISCUSSED IN
SUCH  FORWARD-LOOKING STATEMENTS, AND STOCKHOLDERS OF CYMER, INC.
(THE   "COMPANY"  OR  "CYMER"  )  SHOULD  CAREFULLY  REVIEW   THE
CAUTIONARY STATEMENTS SET FORTH IN THIS FORM 10Q, INCLUDING "RISK
FACTORS" BEGINNING ON PAGE 17 HEREOF.  THE COMPANY MAY FROM  TIME
TO   TIME   MAKE  ADDITIONAL  WRITTEN  AND  ORAL  FORWARD-LOOKING
STATEMENTS,  INCLUDING  STATEMENTS  CONTAINED  IN  THE  COMPANY'S
FILINGS  WITH THE SECURITIES AND EXCHANGE COMMISSION AND  IN  ITS
REPORTS  TO  STOCKHOLDERS.  THE COMPANY  DOES  NOT  UNDERTAKE  TO
UPDATE  ANY FORWARD-LOOKING STATEMENT THAT MAY BE MADE FROM  TIME
TO TIME BY OR ON BEHALF OF THE COMPANY.

Results of Operations

  The  following table sets forth certain items in the  Company's
statements  of income as a percentage of total revenues  for  the
periods indicated:
<TABLE>
<CAPTION>
                                  Three months ended        Six months ended
                                       June 30,                  June 30,
                                  1997          1998        1997        1998
Revenues:
<S>                              <C>           <C>         <C>         <C>
 Product sales                    99.8%         99.8%       99.3%       99.9%
 Other                             0.2           0.2         0.7          .1
  Total revenues                 100.0%        100.0%      100.0%      100.0%

Cost and expenses:
 Cost of product sales            61.8          64.4        60.5        63.1
 Research and development         12.7          15.6        12.2        15.7
 Sales and marketing               5.5           7.5         5.8         7.7
 General and administrative        4.1           4.9         4.4         4.9
  Total costs and expenses        84.1          92.4        82.9        91.4

Operating income                  15.9           7.6        17.1         8.6
Other income (expense) - net       1.6          (2.8)        1.0        (2.4)

Income before provision for
 income taxes and minority
 interest                         17.5           4.8        18.1         6.2

Provision for income taxes        (2.7)         (1.4)       (4.5)       (1.8)
Minority interst                                (0.2)                   (0.1)

Net income                        14.8%          3.2%       13.6%        4.3%

Gross margin on product sales     38.0%         35.6%       39.1%       36.8%
</TABLE>


Three Months Ended June 30, 1997 and 1998

     Revenues.   The Company's total revenues consist of  product
sales,  which include sales of laser systems and spare parts  and
service and training, and other revenues, which primarily include
revenues   from  funded  development  activities  performed   for
customers  and  for  SEMATECH.  Revenue  from  product  sales  is
generally  recognized  at the time of shipment,  unless  customer
agreements contain inspection or other conditions, in which  case
revenue  is recognized at the time such conditions are satisfied.
Funded development contracts are accounted for on the percentage-
of-completion method based on the relationship of costs  incurred
to  total  estimated costs, after giving effect to  estimates  of
costs to complete the development project.

     Product  sales increased 6% from $50.0 million in the  three
months  ended June 30, 1997 to $52.9 million in the three  months
ended  June  30, 1998, primarily due to increased  sales  of  DUV
photolithography spare parts and higher average sales  prices  on
laser  systems  in  1998.  As a result of  the  increase  in  the
Company's  installed  base of lasers, the Company  believes  that
revenues from spares, replacement parts and services will  be  an
increasingly   larger  component  of  product   sales.*    Funded
development revenues decreased from $102,000 for the three months
ended June 30, 1997 to $76,000 in the three months ended June 30,
1998,  primarily due to substantial completion of  various  laser
research  projects  sponsored  by  customers  and  SEMATECH.  The
Company expects that funded development revenues will continue to
decrease as a percentage of total revenues as the Company focuses
on product sales.*
     
      The Company's sales are generated primarily by shipments to
customers  in  Japan,  the Netherlands, and  the  United  States.
Approximately  81%, 89% and 89% of the Company's sales  in  1996,
1997 and the first six months of 1998, respectively, were derived
from  customers outside the United States.  The Company maintains
a  wholly-owned Japanese subsidiary which sells to the  Company's
Japanese  customers.  Revenues from Japanese customers, generated
primarily by this subsidiary, accounted for 61%, 65% and  48%  of
revenues  from  1996,  1997 and the first  six  months  of  1998,
respectively.     The   activities  of  the  Company's   Japanese
subsidiary are limited to sales and service of products purchased
by  the  subsidiary from the parent corporation.   All  costs  of
development  and production of the Company's products,  including
costs  of  shipment to Japan, are recorded on the  books  of  the
parent company.  The Company anticipates that international sales
will  continue to account for a significant portion  of  its  net
sales.*
     
     Cost  of  Product  Sales.   Cost of product  sales  includes
direct  material  and  labor, warranty  expenses,  license  fees,
manufacturing  and service overhead, and foreign  exchange  gains
and losses on foreign currency exchange contracts associated with
purchases  of  the Company's products by the Japanese  subsidiary
for resale under firm third-party sales commitments.
     
     Cost  of  product sales rose 10% from $31.0 million for  the
three  months ended June 30, 1997 to $34.2 million for the  three
months  ended  June 30, 1998 due to the increase in  spare  parts
sales volume and an additional $2.5 million inventory reserve  in
1998.    The  additional  inventory  reserve  accounts  for   the
sunsetting of some of the Company's older products as well as reserving
for  lower revision levels of current products.  The gross margin
on  these  sales decreased from 38.0% for the three months  ended
June  30, 1997 to 35.6% for the same three month period in  1998.
This  reduction  was  primarily due to the  additional  inventory
costs,  additional  costs  of  the  Company's  new  manufacturing
facility, which was completed in late 1997,  the related reduced
capacity utilization of the manufacturing facility in the first six 
months of 1998, as well as an increase in field support overhead costs as
the  Company  continued  to  build its  worldwide  field  support
infrastructure in order to provide fast and responsive service to
the semiconductor manufacturers.
     
     Net gains or losses from foreign currency exchange contracts
are  included  in  cost  of  product sales  in  the  consolidated
statements  of  operations as the related sales  are  recognized.
The  Company  recognized  net gains on  such  contracts  of  $1.4
million and $861,000 for the three months ended June 30, 1997 and
1998, respectively.
  
     Research and Development.  Research and development expenses
include  costs of internally-funded and customer-funded  projects
as  well  as continuing research support expenses which primarily
include  employee and material costs, depreciation  of  equipment
and  other  engineering related costs.  Research and  development
expenses  increased  31% from $6.3 million in  the  three  months
ended  June  30, 1997 to $8.3 million in the three  months  ended
June  30, 1998, due primarily to the development and introduction
of  the  Company's new ELS-5010 laser system, development efforts
on  the  Company's  next generation Orion laser  system,  product
support efforts associated with the Company's 5000 series lasers,
the  hiring  of additional technical personnel and the  continued
development  of  new  laser products.  As a percentage  of  total
revenues,  such  expenses increased from 12.7% to  15.6%  in  the
respective  periods as the Company continues  to  invest  in  the
development of new products and product enhancements.*
  
     Sales  and Marketing.  Sales and marketing expenses  include
the  expenses of the sales, marketing and customer support staffs
and  other  marketing  expenses.  Sales  and  marketing  expenses
increased  44% from $2.8 million for the three months ended  June
30,  1997 to $4.0 million in the three months ended June 30, 1998,
due  primarily to increased product management and sales  support
efforts  and marketing activities as more lasers were  placed  in
the  field.   As  a  percentage of total revenues,  such  expense
increased from 5.5% to 7.5% in the respective periods due to  the
new  product  introduction  of the ELS-5010  and  the  continuing
infrastructure development in order to support system integrators
as well as chip manufacturers.
  
     General  and  Administrative.   General  and  administrative
expenses  consist  primarily  of  management  and  administrative
personnel   costs,   professional  services  and   administrative
operating  costs.  General and administrative expenses  increased
27% from $2.1 million in the three months ended June 30, 1997  to
$2.6 million for the three months ended June 30, 1998, due to  an
increase  in general and administrative support as the  Company's
sales  volume,  manufacturing capacity, employee  headcount,  and
overall level of business activity increased.  As a percentage of
total  revenues,  such  expenses remained  relatively  flat  from
period to period.
  
     Other  Income  (Expense) - net.  Net other income  (expense)
consists  primarily  of interest income and expense  and  foreign
currency   exchange   gains  and  losses  associated   with   the
fluctuations in the value of the Japanese yen against the  United
States  dollar. Net other income decreased from $819,000 for  the
three  months  ended June 30, 1997 to $1.5 million of  net  other
expense  for the three months ended June 30, 1998, primarily  due
to the increase in interest income associated with the investment
of  excess cash, offset by interest expense associated  with  the
convertible  subordinated notes issued  in  August  1997,  and  a
foreign currency exchange loss for the first six months of  1998.
Foreign currency exchange gain totaled $470,000, interest  income
totaled  $507,000 and interest expense totaled $158,000  for  the
three months ended June 30, 1997, compared to an exchange loss of
$520,000,  interest income of $1.8 million and  $2.8  million  in
interest expense for the three months ended June 30, 1998.
  
     The   Company's  results  of  operations  are   subject   to
fluctuations in the value of the Japanese yen against the  United
States  dollar.  Sales by the Company to its Japanese  subsidiary
are  denominated  in  dollars, and sales  by  the  subsidiary  to
customers  in  Japan  are  denominated  in  yen.   The  Company's
Japanese subsidiary manages its exposure to such fluctuations  by
entering  into foreign currency exchange contracts to  hedge  its
purchase  commitments to the Company.  The gains or  losses  from
these  contracts are recorded as a component of cost  of  product
sales,  while the remaining foreign currency exposure is recorded
as  other  income  (expense)  in the consolidated  statements  of
operations.   Gains  and losses resulting from  foreign  currency
translation   are   accumulated  as  a  separate   component   of
consolidated stockholders' equity.
  
     Provision  for  Income  Taxes.  The provision for income taxes
of  $1.4 million  for  the  three months ended June 30,  1997  reflects  
a current period 15% tax rate.  The 1997 annual effective tax  rate
was  reduced from a 37% annual effective tax rate for  the  three
month period ended March 31, 1997 to an annual effective tax rate
of  25%  due  to  a  partial reduction of a  deferred  tax  asset
valuation  allowance carried over from 1996.  Had this rate  been
applied during the full six month period ended June 30, 1997, the
tax provision for the three months ended June 30, 1997 would have
been  increased to $2.2 million. The provision for  income  taxes
for the three months ended June 30, 1998 of $724,000 reflects  an
annual effective tax rate of 30% as the Company had no additional
loss  or valuation allowance carryovers from previous periods  to
be applied in 1998.
     

Six Months Ended June 30, 1997 and 1998

     Revenues.  Product sales increased 19% from $86.5 million in
the  six months ended June 30, 1997 to $102.6 million in the  six
months  ended June 30, 1998, primarily due to increased sales  of
DUV photolithography laser systems and spare parts and a rise  in
average sale price of laser systems in 1998.  As a result of  the
increase  in the Company's installed base of lasers, the  Company
believes  that  revenues  from  spares,  replacement  parts   and
services  will  be  an increasingly larger component  of  product
sales.*  Funded development revenues decreased from $627,000  for
the  six months ended June 30, 1997 to $127,000 in the six months
ended  June 30, 1998, primarily due to substantial completion  of
various  laser  research  projects  sponsored  by  customers  and
SEMATECH.  The  Company expects that funded development  revenues
will  continue to decrease as a percentage of total  revenues  as
the Company focuses on product sales.*
     
     Cost  of Product Sales.  Cost of product sales rose 23% from
$52.7  million  for the six months ended June 30, 1997  to  $64.8
million  for  the  six  months ended June 30,  1998  due  to  the
increase in sales volume and additional inventory reserves.   The
gross  margin  on these sales decreased from 39.1%  for  the  six
months ended June 30, 1997 to 36.8% for the same six month period
in  1998.   This  reduction was primarily due to  the  additional
costs  of  the  Company's new manufacturing  facility, which  was
completed   in  late  1997,  the  related  reduced  capacity
utilization of the manufacturing facility in the first six months of 
1998, as well as an increase in field support overhead  costs  as  the
Company   continued   to  build  its  worldwide   field   support
infrastructure in order to provide fast and responsive service to
the semiconductor manufacturers.
     
     The   Company  recognized  net  gains  on  foreign  currency
exchange  contracts associated with the sale of laser systems  of
$3.4  million and $3.2 million for the six months ended June  30,
1997 and 1998, respectively.
  
     Research   and   Development.    Research  and   development
expenses increased 52% from $10.6 million in the six months ended
June  30, 1997 to $16.1 million in the six months ended June  30,
1998,  due primarily to the development and introduction  of  the
Company's new ELS-5010 laser system, development efforts  on  the
Company's  next  generation Orion laser system,  product  support
efforts  associated with the Company's 5000 series  lasers,   the
hiring  of  additional  technical  personnel  and  the  continued
development  of  new  laser products.  As a percentage  of  total
revenues,  such  expenses increased from 12.2% to  15.7%  in  the
respective  periods as the Company continues  to  invest  in  the
development of new products and product enhancements.*
  
     Sales   and   Marketing.    Sales  and  marketing   expenses
increased 57% from $5.0 million for the six months ended June 30,
1997  to  $7.9 million in the six months ended June 30, 1998  due
primarily  to  increased  product management  and  sales  support
efforts  and marketing activities as more lasers were  placed  in
the  field.   As  a  percentage of total revenues,  such  expenses
increased from 5.8% to 7.7% in the respective periods due to  the
new  product  introduction  of the ELS-5010  and  the  continuing
infrastructure development in order to support system integrators
as well as chip manufacturers.
  
     General  and  Administrative.   General  and  administrative
expenses increased 32% from $3.9 million in the six months  ended
June  30, 1997 to $5.1 million for the six months ended June  30,
1998, due to an increase in general and administrative support as
the  Company's  sales  volume, manufacturing  capacity,  employee
headcount, and overall level of business activity increased.   As
a percentage of total revenues, such expenses remained relatively
flat from period to period.
  
     Other  Income  (Expense) - net.  Net other income  decreased
from  $844,000  for the six months ended June 30,  1997  to  $2.5
million  of net other expense for the six months ended  June  30,
1998, primarily due to the increase in interest income associated
with  the  investment of excess cash, offset by interest  expense
associated  with  the convertible subordinated  notes  issued  in
August  1997, and a foreign currency exchange loss for the  first
six  months  of  1998.  Foreign currency exchange losses  totaled
$85,000,  interest  income  totaled  $1.2  million  and  interest
expense totaled $275,000 for the six months ended June 30,  1997,
compared to an exchange loss of $752,000, interest income of $3.9
million  and $5.6 million in interest expense for the six  months
ended June 30, 1998.
  
     Provision for Income Taxes.  The provision for income taxes
of $3.9 million for the six months ended June 30, 1997 reflects a 25%
annual  effective  tax  rate due to  a  partial  reduction  of  a
deferred  tax asset valuation allowance carried over  from  1996.
The  provision for income taxes for the six months ended June 30,
1998 of $1.9 million reflects an annual effective tax rate of 30%
as  the  Company  had  no additional loss or valuation  allowance
carryovers from previous periods to be applied in 1998.
     
     To  date, inflation has not had a significant effect on  the
Company or its results of operations.

Liquidity and Capital Resources

     Since  inception,  the  Company has  funded  its  operations
primarily through the private sale of equity securities  totaling
approximately  $27.1  million, borrowings  from  certain  of  its
investors  for  bridge financings, bank borrowings, the  September
18,  1996 initial public offering, which resulted in net proceeds
to  the  Company  of  approximately  $29.7  million,  the  public
offering on December 12, 1996, which resulted in net proceeds  of
approximately $50.0 million, and net proceeds of $167.3 million in 
a convertible subordinated note offering on August 6, 1997.  As of
June  30,  1998, the Company had approximately $74.6  million  in
cash   and   cash   equivalents,  $20.3  million  in   short-term
investments,  $73.7  million  in  long-term  investments,  $169.2
million in working capital and $9.5 million in bank debt.
  
     Net  cash  used  for operating activities was  approximately
$13.8  million  for the six months ended June 30, 1997  and  $5.8
million for the six months ended June 30, 1998.  The decrease  in
cash used in operations for the six months ended June 30, 1997 as
compared  to  1998 was primarily attributable to  a  decrease  in
accounts receivable offset by lower increases in inventory and  a
decrease in accounts payable during the period.
  
     Net  cash   used  for investing activities was approximately
$20.8  million for the six months ended June 30, 1997 as compared
to net cash provided by investing activities of $18.4 million for
the  six months ended June 30, 1998.  The cash used for investing
activities during 1997 primarily reflects the investment activity
of  funds  received  through the Company's  public  offerings  in
September  and  December,  1996  and  the  purchase  of  computer
equipment,  test  equipment,  research  and  development   tools,
manufacturing  process machinery and tenant improvements  to  the
manufacturing  facility  in  order to  accommodate  the  business
expansion  for  the period.  The net cash provided  by  investing
activities during the first six months of 1998 primarily reflects
continued  property  acquisitions  to  accommodate  the  business
expansion and focus, offset by the timing of short and long  term
investments maturing and being reinvested during the  period  and
an increase in long term investments.
  
     Net  cash  used  for financing activities was  approximately
$387,000  for the six months ended June 30, 1997, as compared  to
net cash provided by financing activities of $6.0 million for the
six months ended June 30, 1998.  During the six months ended June
30,  1997,  the Company decreased it bank borrowings by $500,000.
For  the  six months ended June 30, 1998, the Company received  a
net  $1.1 million through the issuance of common stock, and $10.0
million  in bank borrowings offset by  treasury stock repurchases
of $5.3 million.
  
     The Company requires substantial working capital to fund its
business,  particularly  to  finance  inventories  and   accounts
receivable  and  for capital expenditures.  The Company's  future
capital  requirements will depend on many factors, including  the
rate  of  the Company's manufacturing expansion, the  timing  and
extent  of  spending to support product development  efforts  and
expansion  of sales and marketing and field service and  support,
the  timing of introductions of new products and enhancements  to
existing   products,  and  market  acceptance  of  the  Company's
products.*   The Company believes that it has sufficient  working
capital  and  available  bank credit to  sustain  operations  and
provide for the future expansion of its business for at least the
next 12 months.*
     
Recent Accounting Pronouncements

      In  June  1997,  the FASB issued SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information."   SFAS
No.  131  establishes  standards for disclosure  about  operating
segments  in annual financial statements and selected information
in  interim financial reports.  It also establishes standards for
related disclosures about products and services, geographic areas
and  major  customers.  This statement supersedes  SFAS  No.  14,
"Financial  Reporting for Segments of a Business Enterprise."   The
new  standard  becomes  effective for the Company  for  the  year
ending  December   31,  1998,  and  requires  that  comparative
information  from  earlier years be restated to  conform  to  the
requirements  of  this  standard.   Interim  reporting  of   this
standard  is  not  required. The Company  does  not  expect  this
pronouncement   to   materially  change  the  Company's   current
reporting and disclosures.*

      In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities."  SFAS No. 133
establishes accounting and reporting standards for derivative
instruments and for hedging activities.  The new standard will 
become effective for the Company for the year ending December 31,
2000.  Interim reporting of this standard will be required.  The
Company has not yet assessed the effect of this standard on the
Company's current reporting and disclosures.     
  
Impact of Year 2000 Issue

       The Company is reviewing its data processing systems as
well as computer applications and to date has determined that the
Company's data processing will not be materially impacted by  any
date-sensitive  calculations related  to  the  year  2000.*   The
Company  has  initiated  efforts to remedy  all  currently  known
situations  and expects all programs to be corrected  and  tested
prior  to the year 2000.*  The incremental costs of this  project
will  not  have  a material effect on the Company's  consolidated
financial statements.*
  
  RISK FACTORS
  
      Likely  Fluctuations in Operating Results.   The  Company's
operating  results have in the past fluctuated and are likely  in
the future to fluctuate significantly depending upon a variety of
factors.  Such factors may include: the demand for semiconductors
in  general  and,  in particular, for leading edge  devices  with
smaller  circuit  geometries;  the rate  at  which  semiconductor
manufacturers  take delivery of photolithography tools  from  the
Company's  customers; cyclicality in the market for semiconductor
manufacturing equipment; the timing and size of orders  from  the
Company's small base of customers; the ability of the Company  to
manufacture, test and deliver laser systems in a timely and  cost
effective  manner; the mix of shipments between  new  lasers  and
lower-margin  replacement  parts; the ability  of  the  Company's
competitors  to  obtain orders from the Company's customers;  the
entry of new competitors into the market for DUV photolithography
illumination  sources; the ability of the Company to  manage  its
costs  as  it  supplies its products in higher volumes;  and  the
Company's  ability to manage effectively its exposure to  foreign
currency exchange rate fluctuations, principally with respect  to
the  Japanese  yen  (in  which sales by  the  Company's  Japanese
subsidiary   are  denominated).   In  addition,   the   Company's
operating results may be affected by reductions in customer laser
inventories as customers become more efficient at integrating the
Company's lasers into their photolithography tools.

      The  Company has historically derived a substantial portion
of  its  quarterly  and  annual  revenues  from  the  sale  of  a
relatively  small number of systems.   As a result,  the  precise
timing  of the recognition of revenue from an order for  a  small
number  of systems can have a significant impact on the Company's
total  revenues  and  operating results for a particular  period.
The Company's operating results for a particular period could  be
adversely  affected if orders for a small number of  systems  are
canceled or rescheduled by customers or cannot be filled in  time
to  recognize  revenue during that period due  to,  for  example,
unanticipated   manufacturing,  testing,  shipping   or   product
acceptance  delays. The Company's expense levels  are  based,  in
large  part, on the Company's expectations as to future  revenues
and  are,  therefore, relatively fixed in  the  short  term.   If
revenue  levels  fall  below expectations,  net  income  will  be
disproportionately and adversely affected.  The impact  of  these
and other factors on the Company's revenues and operating results
in  any  future  period cannot be forecast  with  any  degree  of
certainty.

      The  Company believes that semiconductor manufacturers  are
currently  developing capability for pilot production  of  0.25um
devices.*  The Company also believes that demand for its  excimer
lasers  for DUV photolithography tools is currently being  driven
by  the  efforts to develop such capability.*  Once semiconductor
manufacturers have acquired such capability, the Company believes
that  they will continue to invest in DUV photolithography  tools
to  expand their capacity to manufacture 0.25um devices  only  to
the   degree   to   which  their  sales  forecasts   and   0.25um
manufacturing    process   yields   justify   such    investment.
Accordingly,  the Company currently expects that demand  for  its
DUV  excimer  lasers will be subject to such demand  and  process
development constraints.*

      Recently, the Company has significantly increased the scale
of  its  operations  and  its manufacturing  capacity,  including
hiring  additional  personnel  and substantially  increasing  the
number of systems in production.  This expansion has resulted  in
higher   materials  and  work-in-process  inventory  levels   and
significantly  higher operating expenses, and  has  required  the
Company  to  implement a variety of new systems,  procedures  and
controls.   If  orders received by the Company do not  result  in
sales,  or  if the Company is unable to sustain its  revenues  at
anticipated  levels,  the Company's operating  results  would  be
materially adversely affected.

     Due to the foregoing factors, as well as other unanticipated
factors,  it is likely that in some future quarter the  Company's
operating results will be below the expectations of public market
analysts or investors.  In such event, the price of the Company's
Common Stock would be materially adversely affected.

      Dependence  on  Single Product Line.   The  Company's  only
product  line is excimer lasers, the primary market for which  is
for use in DUV photolithography equipment for manufacturing deep-
submicron   semiconductor  devices.   Demand  for  the  Company's
products  will  depend in part on the rate at which semiconductor
manufacturers adopt excimer lasers as the illumination source for
their  photolithography  tools.   Impediments  to  such  adoption
include  a  shortage  of engineers with experience  implementing,
utilizing  and  maintaining  DUV  photolithography  systems  that
incorporate  excimer laser illumination sources,  instability  of
photoresists  used  in DUV photolithography  and  a  shortage  of
specialized glass used in DUV optics.  There can be no  assurance
that such impediments can or will be overcome, and, in any event,
such  impediments  may  materially  reduce  the  demand  for  the
Company's  products.   In  addition,  to  the  extent  that  such
manufacturers  are  able to produce semiconductors  with  smaller
critical  feature sizes by extending the performance capabilities
of  mercury  lamp  illumination  sources  used  in  existing  DUV
photolithography  tools, the demand for  the  Company's  products
would  also  be  materially reduced.  Further, if  the  Company's
customers  experience  reduced demand  for  DUV  photolithography
tools,  or  if  the  Company's  competitors  are  successful   in
obtaining  significant orders from such customers, the  Company's
financial condition and results of operations would be materially
adversely affected.
     
      Dependence  on  Small Number of Customers.   The  Company's
primary   customer  base  is  composed  of  a  small  number   of
manufacturers of DUV photolithography tools.  Four  large  firms,
ASM  Lithography, Canon, Nikon and SVG Lithography (a  subsidiary
of  Silicon  Valley  Group, Inc.), dominate the  photolithography
tool  business and collectively accounted for approximately  90%,
94%,  and 95% of the Company's total revenues in 1996, 1997,  and
the  first  six  months  of  1998, respectively.   Sales  to  ASM
Lithography,  Canon,  Nikon  and SVG  Lithography  accounted  for
approximately  42%,  21%,  27% and  6%,  respectively,  of  total
revenues for the first six months of 1998 and 24%, 25%,  39%  and
6%, respectively, of total revenues in 1997.  The Company expects
that  sales  of its systems to these customers will  continue  to
account  for substantially all of its revenues in the foreseeable
future.*   None  of  the  Company's  customers  is  obligated  to
purchase a minimum number of the Company's products.  The loss of any
significant  business  from  any one  of  these  customers  or  a
significant reduction in orders from any one of these  customers,
including   reductions  caused  by  changes   in   a   customer's
competitive position, a decision to purchase illumination sources
from  other suppliers or economic conditions in the semiconductor
and  photolithography  tool industries,  would  have  a  material
adverse effect on the Company's business, financial condition and
results of operations.

     Risk  of  Excessive  Inventory Buildups by  Photolithography
Tool Manufacturers.  Substantially all of the Company's customers
are photolithography tool manufacturers, which in turn sell their
systems   to   semiconductor   manufacturers.    Current   market
conditions in the industry are causing the Company's customers to
reduce  their orders for new laser systems as they try to  manage
their  inventories  to  appropriate levels which  better  reflect
their expected sales forecasts.  The Company is working with  its
customers   to  better  understand  end  user  demand   for   DUV
photolithography tools.  However, there can be no assurance  that
the  Company  will  be  successful in this regard,  or  that  its
customers  will not build excessive laser inventories.  Excessive
customer laser inventories could result in a material decline  in
the Company's revenues and operating results in future periods as
such inventories are brought into balance.
     
      Dependence on Key Suppliers.  Certain of the components and
subassemblies  included in the Company's  products  are  obtained
from  a  single  supplier or a limited group  of  suppliers.   In
particular, there are no alternative sources for certain  of  the
components   and   subassemblies,   including   certain   optical
components  and  pre-ionizer tubes used in the Company's  lasers.
In   addition,  the  Company  is  increasingly  outsourcing   the
manufacture  of  various subassemblies.   Although  to  date  the
Company  has  been  able  to  obtain  adequate  supplies  of  the
components  and  subassemblies used  in  the  production  of  the
Company's laser systems in a timely manner from existing sources,
the  Company has only recently commenced volume production of its
laser  systems,  which has caused many of its suppliers  to  also
commence  volume  production  of  the  Company's  components  and
subassemblies.

     Due  to  the  nature  of the Company's  product  development
requirements, it is often necessary for key suppliers to  rapidly
advance  their own technologies in order to support the Company's
new  product introduction schedule.  These suppliers may  or  may
not  be  able  to satisfy the Company's schedule requirements  in
providing new modules and subassemblies to the Company.   If  the
Company  is  unable  to  obtain  sufficient  quantities  of  such
materials, components or subassemblies, or if such items  do  not
meet  the  Company's quality standards, delays or  reductions  in
product  shipments could have a material adverse  effect  on  the
Company's   business,   financial  condition   and   results   of
operations.
     
     Limited Production Use of Excimer Lasers.  The Company first
shipped  its  lasers for photolithography applications  in  1988.
There  can be no assurance that the Company's products will  meet
production  specifications over time when subjected to  prolonged
and   intense   use   in  volume  production   in   semiconductor
manufacturing processes. If any semiconductor manufacturer is not
able  to successfully achieve or sustain volume production  using
the Company's lasers, the Company's reputation with semiconductor
manufacturers  or  the  limited number of  photolithography  tool
manufacturers  could  be damaged, which  would  have  a  material
adverse effect on the Company's business, financial condition and
results of operations.

      Need  to  Manage a Changing Business.  The Company recently
has  dramatically  expanded the scope of its operations  and  the
number  of  employees  in  most of  its  functional  areas.   For
example,  the Company increased the number of its employees  from
136  at December 31, 1995 to 336 at December 31, 1996, to 809  at
December  31,  1997  and to 816 at June 30,  1998.   The  Company
installed  new  management  information  systems  and  has   also
substantially expanded its facilities and manufacturing capacity.
For  example,  since December 31, 1996 the Company  has  occupied
three  additional buildings covering approximately 187,000 square
feet.   In   a  cyclical  environment  of  dramatic   growth   or
contraction,  the  Company  will be required  to  continue  close
management of these areas, to improve its management, operational
and  financial  systems, including accounting and other  internal
management  systems,  its  quality control,  delivery  and  field
service and customer support capabilities.*  The Company will also be
required  to  attract, train and retain key technical  personnel,
including  both  hardware and software  engineers,  in  order  to
support  the  Company's growth and/or contraction.*  The  Company
will   be   required  to  manage  effectively  its  international
operations, including the operations of its Japan, Korea, Taiwan,
Singapore  and  Netherlands subsidiaries, its field  service  and
support  presence  in Asia and Europe and its  relationship  with
Seiko  as  a  manufacturer of its photolithography lasers.*   The
Company  must  also effect timely deliveries of its products  and
maintain  the  product quality and reliability  required  by  its
customers.   Any  failure  to  manage  the  Company's  growth  or
contraction  would  materially adversely effect  the  Company's
financial condition and results of operations.

     Need to Expand Field Service and Support Organization.   The
Company  believes  that the need to provide fast  and  responsive
service  to the semiconductor manufacturers using its  lasers  is
critical  and  that it will not be able to depend solely  on  its
direct   customers   to   provide  this   specialized   service.*
Therefore,  the  Company believes it is essential  to  establish,
through trained third-party sources or through its own personnel,
a  rapid response capability to service its lasers throughout the
world.   Accordingly,  the  Company is  currently  expanding  its
direct  support  infrastructure in  the  United  States,   Japan,
Europe,  Korea,  Singapore,  Taiwan  and  Southeast  Asia.   This
expansion entails recruiting and training qualified field service
personnel and building effective and highly trained organizations
that  can  provide service to customers in various  countries  in
their assigned regions.  The Company has historically experienced
difficulties  in  effectively training field  service  personnel.
There  can  be  no  assurance that the Company will  be  able  to
attract   and  train  qualified  personnel  to  establish   these
operations successfully or that the costs of such operations will
not  be  excessive.  A failure to implement this plan effectively
could  have a material adverse effect on the Company's  business,
financial condition and results of operations.
     
      Competition.   The  Company currently has  two  significant
competitors   in  the  market  for  excimer  laser  systems   for
photolithography applications,  Lambda-Physik and Komatsu.   Both
of  these  companies are larger than the Company, have access  to
greater  financial, technical and other resources than  does  the
Company  and  are  located in closer proximity to  the  Company's
customers  than  is the Company.  Although the  Company  believes
that  these competitors are not yet supplying excimer  lasers  in
volume  for  photolithography applications, the Company  believes
that  both  companies  are aggressively seeking  to  gain  larger
positions  in  this  market.   The  Company  believes  that   its
customers  have  each purchased one or more products  offered  by
these  competitors  and  that  its  customers  will  continue  to
actively qualify these competitors' lasers in their search for  a
second source.*  If competitors successfully qualify their lasers
for  use  with  the Company's customers, the Company  could  lose
market  share and its growth could slow or even decline.  In  the
future, the Company will likely experience competition from other
technologies,  such  as  EUV,  X-ray,  electron  beam   and   ion
projection   processes.   To  remain  competitive,  the   Company
believes  that  it  will be required to manufacture  and  deliver
products  to  customers on a timely basis and without significant
defects  and  that it will also be required to  maintain  a  high
level of investment in research and development and in sales  and
marketing.*  There can be no assurance that the Company will have
sufficient   resources  to  continue  to  make  the   investments
necessary to maintain its competitive position.  In addition, the
market  for excimer lasers is still small and immature and  there
can  be  no  assurance that larger competitors with substantially
greater  financial  resources, including other  manufacturers  of
industrial  lasers, will not attempt to enter the market.   There
can be no assurance that the Company will remain competitive.   A
failure  to  remain  competitive would have  a  material  adverse
effect on the Company's business, financial condition and results
of operations.

      Dependence on Semiconductor Industry.  Substantially all of
the  Company's  revenues are derived from  photolithography  tool
manufacturers  that  in  turn depend  on  the  demand  for  their
products   from   semiconductor   manufacturers.    Semiconductor
manufacturers   correspondingly  depend  on   the   demand   from
manufacturers of end-products or systems that use semiconductors.
The   semiconductor   industry  is  highly   cyclical   and   has
historically  experienced  periodic  and  significant  downturns,
which  often  have  had  a  severe  effect  on  the  demand   for
semiconductor manufacturing equipment, including photolithography
tools.   The Company believes that downturns in the semiconductor
manufacturing industry will continue to occur, and will result in decreased
demand  for semiconductor manufacturing equipment.*  In addition,
the  Company  believes that its ability to reduce expenses  in  a
future  downturn  will be constrained by the need  for  continual
investment in research and development, and the need to  maintain
extensive  ongoing  customer  service  and  support  capability.*
Accordingly,  downturns in the semiconductor  industry  could
have  a  material  adverse  effect  on  the  Company's  business,
financial condition and results of operations.

      Rapid  Technological  Change;  New  Product  Introductions.
Semiconductor manufacturing equipment and processes  are  subject
to  rapid  technological change.  The Company believes  that  its
future  success will depend in part upon its ability to  continue
to   enhance  its  excimer  laser  products  and  their   process
capabilities  and  to develop and manufacture new  products  with
improved  capabilities.*   In order to enhance  and  improve  its
products  and  develop  new products,  among  other  things,  the
Company must work closely with its customers, particularly in the
product  development  stage, to integrate  its  lasers  with  its
customers'  photolithography tools.  There can  be  no  assurance
that  future technologies, such as EUV, X-ray, electron beam  and
ion  projection processes, will not render the Company's  excimer
laser  products  obsolete or that the Company  will  be  able  to
develop  and  introduce  new  products  or  enhancements  to  its
existing  products and processes in a timely manner that  satisfy
customer needs or achieve market acceptance.  The failure  to  do
so  could  materially  adversely affect the  Company's  business,
financial condition and results of operations.

      Risks Associated with Japan Manufacturing.  The Company has
qualified  Seiko  Instruments,  Inc.  ("Seiko")  of  Japan  as  a
contract manufacturer of its photolithography lasers.  Seiko  has
been  advised by Komatsu, Ltd. ("Komatsu"), a competitor  of  the
Company,  that  certain  aspects of the  Company's  lasers  might
infringe  certain  patents that have been issued  to  Komatsu  in
Japan  and that Komatsu intends to enforce its rights under  such
patents   against   Seiko  if  Seiko  engages  in   manufacturing
activities  for  the Company.  In the event that, notwithstanding
its  manufacturing  agreement  with  the  Company,  Seiko  should
determine  not  to continue manufacturing the Company's  products
until  resolution  of  the  matter with  Komatsu,  the  Company's
ability to meet the anticipated demand for its products could  be
materially  adversely  affected.  See  -  "Uncertainty  Regarding
Patents and Protection of Proprietary Technology."

      Uncertainty Regarding Patents and Protection of Proprietary
Technology.   The  Company  believes  that  the  success  of  its
business  depends more on such factors as the technical expertise
of  its  employees,  as  well  as  their  innovative  skills  and
marketing  and  customer  relations  ability,  than  on  patents,
copyrights,   trade  secrets  and  other  intellectual   property
rights.*  Nevertheless, the success of the Company may depend  in
part  on  patents, and as of June 30, 1998, the Company owned  29
United  States  patents  covering certain aspects  of  technology
associated with excimer lasers which expire from January 2008  to
May  2017 and had applied for 40 additional patents in the United
States,  two  of  which have been allowed.  One of  Cymer's  U.S.
patents  is currently being challenged in the U.S. Patent  Office
by  attorneys  representing Komatsu.  As of June  30,  1998,  the
Company  owned  four  foreign patents and had  filed  112  patent
applications in other countries.  There can be no assurance  that
the   Company's  pending  patent  applications  or   any   future
applications will be approved, that any patents will  provide  it
with  competitive advantages or will not be challenged  by  third
parties,  or that the patents of others will not have an  adverse
effect  on the Company's ability to do business. In this  regard,
due  to  cost constraints, the Company did not begin  filing  for
patents  in  Japan or other countries with respect to  inventions
covered  by  its  United States patents and  patent  applications
until  recently and has therefore lost the right to  seek  patent
protection  in  those countries for certain  of  its  inventions.
Additionally, because foreign patents may afford less  protection
under  foreign  law than is available under United States  patent
law,  there can be no assurance that any such patents  issued  to
the  Company  will  adequately protect the Company's  proprietary
information.  Furthermore, there can be no assurance that  others
will  not  independently develop similar products, duplicate  the
Company's  products  or, if patents are issued  to  the  Company,
design around the patents issued to the Company.

      Others  may  have filed and in the future may  file  patent
applications  that  are  similar or identical  to  those  of  the
Company.   To  determine the priority of inventions, the  Company
may  have to participate in interference proceedings declared  by
the  United States Patent and Trademark Office that could  result
in  substantial cost to the Company.*  No assurance can be  given
that  any  such  patent application will not have  priority  over
patent applications filed by the Company.

      The  Company  also  relies  upon trade  secret  protection,
employee  and  third-party  nondisclosure  agreements  and  other
intellectual   property  protection  methods   to   protect   its
confidential and proprietary information.  Despite these efforts,
there  can  be  no  assurance that others will not  independently
develop  substantially  equivalent  proprietary  information  and
techniques  or  otherwise  gain access  to  the  Company's  trade
secrets  or  disclose  such technology or that  the  Company  can
meaningfully protect its trade secrets.

      The Company has in the past funded a significant portion of
its   research   and  development  expenses  from  research   and
development   revenues   received  from   photolithography   tool
manufacturers   and  from  SEMATECH,  a  semiconductor   industry
consortium,  in  connection with the design  and  development  of
specific  products.   Although  the Company's  arrangements  with
photolithography tool manufacturers and SEMATECH seek to  clarify
the  ownership of the intellectual property arising from research
and  development services performed by the Company, there can  be
no assurance that disputes over the ownership or rights to use or
market  such  intellectual property will not  arise  between  the
Company  and  such  parties.  Any such dispute  could  result  in
restrictions on the Company's ability to market its products  and
could  have a material adverse effect on the Company's  business,
financial condition and results of operations.

      The Company has in the past been, and may in the future be,
notified  that it may be infringing intellectual property  rights
possessed   by   third   parties.*    The   Company's    Japanese
manufacturing partner, Seiko, has been notified by  Komatsu,  one
of  the  Company's  competitors,  that  certain  aspects  of  the
Company's  lasers  might infringe three patents  that  have  been
issued  to Komatsu in Japan, and that Komatsu intends to  enforce
its  rights  under  the Komatsu Patents against  Seiko  if  Seiko
engages   in  manufacturing  activities  for  the  Company.    In
connection  with  its  manufacturing agreement  with  Seiko,  the
Company  has agreed to indemnify Seiko against such claims  under
certain  circumstances.  The Company has engaged  in  discussions
with  Komatsu with respect to the Komatsu Patents, in the  course
of  which Komatsu has also identified to the Company a number  of
pending  applications and additional patents.  The  Company,   in
consultation   with  Japanese  patent  counsel,   has   initiated
oppositions to the Komatsu Patents and  the applications  in  the
Japanese Patent Office.  However, there can be no assurance  that
litigation will not ensue with respect to these claims, that  the
Company and Seiko would ultimately prevail in any such litigation
or  that  Komatsu  will  not  assert  infringement  claims  under
additional patents.

     Any patent litigation would at a minimum be costly and could
divert the efforts and attention of the Company's management  and
technical  personnel, which could have a material adverse  effect
on  the  Company's business, financial condition and  results  of
operations.   Furthermore, there can be no assurance  that  other
infringement  claims  by  third  parties  or  other  claims   for
indemnification  by  customers or  end  users  of  the  Company's
products  resulting from infringement claims will not be asserted
in the future or that such assertions, if proven to be true, will
not materially adversely affect the Company's business, financial
condition  and  results of operations.  If any  such  claims  are
asserted  against the Company, the Company may seek to  obtain  a
license  under  the third party's intellectual  property  rights.
There  can  be  no  assurance, however, that a  license  will  be
available  on  reasonable terms or at  all.   The  Company  could
decide,  in the alternative, to resort to litigation to challenge
such  claims  or to design around the patented technology.   Such
actions  could  be  costly  and  would  divert  the  efforts  and
attention  of  the Company's management and technical  personnel,
which  would materially adversely affect the Company's  business,
financial condition and results of operations.

     The Company has registered the trademark CYMER in the United
States  and  certain  other countries and is  seeking  additional
registrations  in  certain countries.  In  Japan,  the  Company's
application for registration was rejected on the grounds that  it
is  similar  to a trademark previously registered by  a  Japanese
company for a broad range of products.  The Company is seeking  a
partial  nullification of the other registration with respect  to
laser  devices and related components and does not  believe  that
the  holder  of  the other trademark is engaged in  any  business
similar to that of the Company.  For this reason, the Company  is
continuing to use the trademark CYMER in Japan and believes  that
it  will  ultimately be permitted to register such mark  for  use
with  its  products  and  that it is  not  infringing  the  other
company's trademark.*  There can be no assurance that the Company
will  ultimately succeed in its efforts to register its trademark
in  Japan  or  that  it will not be subjected to  an  action  for
trademark infringement, which could be costly to defend  and,  if
successful,  would require the Company to cease use of  the  mark
and, potentially, to pay damages.

       Dependence  on  Key  Personnel.   The  Company  is  highly
dependent on the services of a number of key employees in various
areas, including engineering, research and development, sales and
marketing and manufacturing.  In particular, there are a  limited
number  of  experts  in  excimer laser technology  and  there  is
intense competition for such personnel, as well as for the highly-
skilled  hardware  and software engineers the  Company  requires.
The  Company  has  in  the  past experienced,  and  continues  to
experience, difficulty in hiring personnel, including experts  in
excimer laser technology.  The Company believes that, to a  large
extent,  its  future  success  will  depend  upon  the  continued
services of its engineering, research and development, sales  and
marketing  and  manufacturing and service personnel  and  on  its
ability to attract, train and retain highly skilled personnel  in
each  of  these  areas.*  The Company does  not  have  employment
agreements  with any of its employees, and there is no  assurance
that  the Company will be able to retain its key employees.   The
failure  of the Company to hire, train and retain such  personnel
could  have a material adverse effect on the Company's  business,
financial condition and results of operations.

      Risks of International Sales and Operations.  Approximately
81%,  89% and 89% of the Company's revenues in 1996, 1997 and the
six  months ended June 30, 1998, respectively, were derived  from
customers   located  outside  the  United  States.    Because   a
significant  majority  of the Company's principal  customers  are
located  in  other  countries,  particularly  Asia,  the  Company
anticipates that international sales will continue to account for
a  significant portion of its revenues.*  In order to support its
overseas customers, the Company maintains subsidiaries in  Japan,
Korea,  Taiwan, Singapore and the Netherlands, is  expanding  its
field service and support operations worldwide, and will continue
to  work  with Seiko as a manufacturer of its products in Japan.*
There can be no assurance that the Company will be able to manage
these operations effectively or that the Company's investment  in
these  activities  will  enable it  to  compete  successfully  in
international markets or to meet the service and support needs of
its  customers.   Additionally,  a  significant  portion  of  the
Company's sales and operations could be subject to certain risks,
including  tariffs and other barriers, difficulties  in  staffing
and  managing foreign subsidiary and branch operations,  currency
exchange  risks  and exchange controls, potentially  adverse  tax
consequences  and  the  possibility  of  difficulty  in  accounts
receivable  collection.  Because many of the Company's  principal
customers,  as  well as many of the end-users  of  the  Company's
laser  systems, are located in Asia, the recent economic problems
and  currency fluctuations affecting that region could  intensify
the Company's international risk.  Further, while the Company has
experienced no difficulty to date in complying with United States
export controls, these rules could change in the future and  make
it  more  difficult or impossible for the Company to  export  its
products  to  various countries.  There can be no assurance  that
any  of these factors will not have a material adverse effect  on
the  Company's  business,  financial  condition  and  results  of
operations.

       The  Company's  results  of  operations  are  subject   to
fluctuations  in the value of the Japanese yen against  the  U.S.
dollar  due  to  sales by the Company to its Japanese  subsidiary
being  dominated  in  dollars, and sales  by  the  subsidiary  to
customers  in  Japan  being  dominated  in  yen.   The  Company's
Japanese subsidiary manages its exposure to such fluctuations  by
entering  into foreign currency exchange contracts to  hedge  its
purchase  commitments.   Although  management  will  continue  to
monitor  the  Company's exposure to currency  fluctuations,  and,
when  appropriate, use financial hedging techniques  to  minimize
the  effect of these fluctuations, there can be no assurance that
exchange  rate  fluctuations will not  have  a  material  adverse
effect  on  the  Company's  results of  operations  or  financial
condition.  In the future, the Company could be required to  sell
its products in other currencies, which would make the management
of currency fluctuations more difficult and expose the Company to
greater risks in this regard.*

      The  Company's  products are subject  to  numerous  foreign
government  standards and regulations that are continually  being
amended.    Although  the  Company  endeavors  to  meet   foreign
technical  and  regulatory standards, there can be  no  assurance
that  the Company's products will continue to comply with foreign
government standards and regulations, or changes thereto, or that
it  will  be  cost  effective for the  Company  to  redesign  its
products  to  comply  with such standards and  regulations.   The
inability of the Company to design or redesign products to comply
with  foreign standards could have a material adverse  effect  on
the  Company's  business,  financial  condition  and  results  of
operations.

      Environmental  and Other Government Regulations.   Federal,
state  and  local  regulations impose  various  controls  on  the
storage, handling, discharge and disposal of substances  used  in
the Company's manufacturing process and on the facility leased by
the Company.  The Company believes that its activities conform to
present governmental regulations applicable to its operations and
its current facilities, including those related to environmental,
land  use,  public  utility utilization and  fire  code  matters.
There can be no assurance that such governmental regulations will
not  in  the  future  impose  the  need  for  additional  capital
equipment  or  other  process requirements upon  the  Company  or
restrict  the  Company's ability to expand its  operations.   The
adoption of such measures or any failure by the Company to comply
with  applicable  environmental and land use  regulations  or  to
restrict the discharge or hazardous substances could subject  the
Company  to  future  liability or could cause  its  manufacturing
operations to be curtailed or suspended.

      Risks  of  Product Liability Claims.  The Company  faces  a
significant risk of exposure to product liability claims  in  the
event that the use of its products results in personal injury  or
death,  and there can be no assurance that the Company  will  not
experience material product liability losses in the future.   The
Company maintains insurance against product liability claims, but
there can be no assurance that such coverage will continue to  be
available  on  terms  acceptable to  the  Company  or  that  such
coverage  will  be  adequate for liabilities  actually  incurred.
Also, in the event that any of the Company's products prove to be
defective, the Company may be required to recall or redesign such
products.   A  successful claim brought against  the  Company  in
excess  of available insurance coverage, or any claim or  product
recall that results in significant adverse publicity against  the
Company,  could have a material adverse effect on  the  Company's
business, financial condition and results of operations.

     Possible Price Volatility of Common Stock.  The market price
of  the Company's Common Stock has been, and may continue to  be,
extremely  volatile.   The market price of Common  Stock  may  be
significantly  affected by factors such as actual or  anticipated
fluctuations in the Company's operating results, announcements of
technological innovations, new products or new contracts  by  the
Company  or its competitors, developments with respect to patents
or  proprietary rights, conditions and trends in the laser device
and  other  technology industries, changes in financial estimates
by  securities  analysts, general market  conditions,  and  other
factors.   In addition, the stock market has experienced  extreme
price and volume fluctuations that have particularly affected the
market  price  for many high technology companies and  that  have
often  been  unrelated  to  the operating  performance  of  these
companies.   The market price of the Company's Common  Stock  has
fluctuated  substantially in recent periods, rising from  $4  3/4
(all  prices are adjusted to reflect the Company's 2-for-1  stock
split  effective as of August 21, 1997) at the Company's  initial
public  offering on September 18, 1996 to $48 3/4 on  August  22,
1997, and declining to $14 7/8 on January 16, 1998.  In the past,
following  periods  of  volatility  in  the  market  price  of  a
particular   company's   securities,  securities   class   action
litigation  has  often been brought against that  company.   Such
litigation,  if  brought  against the Company,  could  result  in
substantial  costs and a diversion of management's attention  and
resources.

     Anti-Takeover  Effect of Nevada Law and  Charter  and  Bylaw
Provisions; Availability of Preferred Stock for Issuance.  Nevada
law  and  the  Company's  Articles of  Incorporation  and  Bylaws
contain provisions that could discourage a proxy contest or  make
more  difficult  the acquisition of a substantial  block  of  the
Company's  Common Stock.  In addition, the Board of Directors  is
authorized  to  issue,  without  shareholder  approval,   up   to
5,000,000  shares of Preferred Stock with voting, conversion  and
other rights and preferences that may be superior to those of the
Common Stock and that could adversely affect the voting power  or
other  rights  of the holders of Common Stock.  The  issuance  of
Preferred Stock or of rights to purchase Preferred Stock could be
used to discourage an unsolicited acquisition proposal.

                   PART II.  OTHER INFORMATION
                                
ITEM 1.   Legal Proceedings

          None.

ITEM 2.   Changes in Securities

          None.

ITEM 3.   Defaults upon Senior Securities

          None.

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

          The Company held its Annual Meeting of Stockholders  on
          May 15, 1998.  Out of 28,805,945 shares of common stock
          entitled to vote at such meeting, there were present or
          by proxy 22,807,599 shares.  At the Annual Meeting, the
          stockholders  of  the  Company approved  the  following
          matters:

          (a)  The election of Robert P. Akins, Richard P. Abraham, Kenneth
               M. Deemer, Peter J. Simone and F. Duwaine Townsen as directors of
               the Company for the ensuing year and until their successors are
               elected.  The vote for the nominated directors was as follows:

               Robert  P.  Akins,  22,685,573 votes  cast  for  and
               122,026 votes withheld;
               Richard  P. Abraham, 22,682,887 votes cast  for  and
               124,712 votes withheld;
               Kenneth  M.  Deemer, 22,669,918 votes cast  for  and
               137,681 votes withheld;
               Peter  J.  Simone,  22,659,568 votes  cast  for  and
               148,031 votes withheld;
               F.  Duwaine Townsen, 22,688,562 votes cast  for  and
               119,037 votes withheld;
             
          (b)  Approval of a 1,250,000 share increase in shares issuable
               under the 1996 Stock Option Plan.  18,684,831 votes were cast for
               approval; 3,276,407 votes were cast against, 146,917 votes  
               abstained and 699,444 Broker Non-Votes.
             
          (c)  Ratification  of  the  appointment  of  Deloitte   &
               Touche  LLP  as  the  independent  auditors  of  the
               Company  for  the  year ending  December  31,  1998.
               22,657,030  votes  were cast  for  approval;  80,473
               votes were cast against and 70,096 votes abstained.

ITEM 5.   Other Information

          None.

ITEM 6.   Exhibits And Reports On Form 8-K
          
          (a)  Exhibits

                  Financial Data Schedules (submitted for SEC use only)
     
          (b)  Reports on Forms 8-K.

          None.


                           SIGNATURES
                                
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.


                                   CYMER, INC.
                                   (Registrant)


Date:  July 31, 1998               By:  /s/ WILLIAM A.ANGUS, III

                                       William A. Angus, III
                                       Sr. Vice President and
                                       Chief Financial Officer