<TABLE> <S> <C>

<ARTICLE>                     5
<LEGEND>
THIS  SCHEDULE  CONTAINS  SUMMARY  FINANCIAL   INFORMATION  EXTRACTED  FROM  THE
CONSOLIDATED  BALANCE  SHEET AT MARCH  31,  1998  AND THE  RELATED  CONSOLIDATED
STATEMENTS OF INCOME AND OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1998
OF  THREE-FIVE  SYSTEMS,  INC.  AND ITS  SUBSIDIARIES  AND IS  QUALIFIED  IN ITS
ENTIRETY BY REFERENCE TO SUCH  FINANCIAL  STATEMENTS.  THIS EXHIBIT SHALL NOT BE
DEEMED  FILED FOR  PURPOSES  OF  SECTION  11 OF THE  SECURITIES  ACT OF 1933 AND
SECTION 18 OF THE SECURITIES  EXCHANGE ACT OF 1934, OR OTHERWISE  SUBJECT TO THE
LIABILITY  OF SUCH  SECTIONS,  NOR SHALL IT BE DEEMED A PART OF ANY OTHER FILING
WHICH INCORPORATES THIS REPORT BY REFERENCE,  UNLESS SUCH OTHER FILING EXPRESSLY
INCORPORATES THIS EXHIBIT BY REFERENCE.
</LEGEND>
<MULTIPLIER>                                   1,000
<CURRENCY>                                     U.S. DOLLARS
       
<S>                             <C>
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                              DEC-31-1998
<PERIOD-START>                                 JAN-01-1998
<PERIOD-END>                                   MAR-31-1998
<EXCHANGE-RATE>                                          1
<CASH>                                              13,943
<SECURITIES>                                             0
<RECEIVABLES>                                       13,398
<ALLOWANCES>                                           590
<INVENTORY>                                         12,865
<CURRENT-ASSETS>                                    45,061
<PP&E>                                              43,910
<DEPRECIATION>                                      13,466
<TOTAL-ASSETS>                                      75,777
<CURRENT-LIABILITIES>                               15,533
<BONDS>                                                  0
<PREFERRED-MANDATORY>                                    0
<PREFERRED>                                              0
<COMMON>                                                79
<OTHER-SE>                                               0
<TOTAL-LIABILITY-AND-EQUITY>                        75,777
<SALES>                                             18,479
<TOTAL-REVENUES>                                    18,479
<CGS>                                               13,687
<TOTAL-COSTS>                                       16,995
<OTHER-EXPENSES>                                        17
<LOSS-PROVISION>                                         0
<INTEREST-EXPENSE>                                       0
<INCOME-PRETAX>                                      1,659
<INCOME-TAX>                                           664
<INCOME-CONTINUING>                                    995
<DISCONTINUED>                                           0
<EXTRAORDINARY>                                          0
<CHANGES>                                                0
<NET-INCOME>                                           995
<EPS-PRIMARY>                                         0.13
<EPS-DILUTED>                                         0.12
                                               

</TABLE>