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                                                                  EXHIBIT 10.46



                       FIRST AMENDMENT TO CREDIT AGREEMENT

     THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as of
October 23, 1998, is entered into by and among:

          (1)  SILICON VALLEY GROUP, INC., a Delaware corporation ("Borrower");

          (2)  Each of the financial institutions listed in Schedule I to the
     Credit Agreement referred to in Recital A below (collectively, the
     "Lenders"); and

          (3)  ABN AMRO BANK N.V., acting through its San Francisco
     International Branch, as agent for Lenders (in such capacity, "Agent").


                                    RECITALS

     A.   Borrower, the Lenders and Agent are parties to a Credit Agreement
dated as of June 30, 1998 (the "Credit Agreement").

     B.   Borrower has requested the Lenders and Agent to amend the Credit
Agreement in certain respects.

     C.   The Lenders and Agent are willing so to amend the Credit Agreement
upon the terms and subject to the conditions set forth below.


                                    AGREEMENT

     NOW, THEREFORE, in consideration of the above recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Borrower, the Lenders and Agent hereby agree as follows:

     1.   DEFINITIONS, INTERPRETATION. All capitalized terms defined above and
elsewhere in this Amendment shall be used herein as so defined. Unless otherwise
defined herein, all other capitalized terms used herein shall have the
respective meanings given to those terms in the Credit Agreement, as amended by
this Amendment. The rules of construction set forth in Section I of the Credit
Agreement shall, to the extent not inconsistent with the terms of this
Amendment, apply to this Amendment and are hereby incorporated by reference.

     2.   AMENDMENTS TO CREDIT AGREEMENT. Subject to the satisfaction of the
conditions set forth in Paragraph 4 below, the Credit Agreement is hereby
amended as follows:

          (a)  Subparagraph 5.03(b) is hereby amended to read in its entirety as
     follows:

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               (b)  Fixed Charge Coverage Ratio. Borrower shall not permit its
          Fixed Charge Coverage Ratio for any period set forth below to be less
          than the ratio set forth opposite such period below:

                    The quarter ending on
                         July 2, 1999                  2.00;

                   The consecutive two-quarter
                         period beginning on April
                         3, 1999 and ending on
                         October 1, 1999               2.50;

                   The consecutive three-quarter
                         period beginning on April
                         3, 1999 and ending on
                     December 31, 1999, and
                         each consecutive four-
                         quarter period ending
                         on the last day of each
                         quarter thereafter            3.50.

          (b)  Subparagraph 5.03(d) is hereby amended to read in its entirety as
     follows:

                    (d)  Tangible Net Worth. Borrower shall not permit its
               Tangible Net Worth on the last day of any fiscal quarter (such
               date to be referred to in this Subparagraph 5.03(d) as a
               "determination date") which occurs on or after October 2, 1998
               (such date to be referred to in this Subparagraph 5.03(d) as the
               "base date") to be less than the sum on such determination date
               of the following:

                         (i) Five Hundred Twenty Eight Million Seven Hundred
                    Seventy Seven Thousand Dollars ($528,777,000);

                                      plus

                         (ii) Eighty percent (80%) of the sum of Borrower's
                    consolidated quarterly net income (ignoring any quarterly
                    losses) for each fiscal quarter after the base date through
                    and including the fiscal quarter ending on the determination
                    date;

                                      plus

                         (iii) Seventy-five percent (75%) of the Net Proceeds of
                    all Equity Securities issued by Borrower and its
                    Subsidiaries (to Persons other than Borrower or its
                    Subsidiaries) during the period commencing on the base date
                    and ending on the determination

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                    date;

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                                      plus

                         (iv) Seventy-five percent (75%) of the principal amount
                    of all debt securities of Borrower and its Subsidiaries
                    converted into Equity Securities of Borrower and its
                    Subsidiaries during the period commencing on the base date
                    and ending on the determination date.

                                      minus

                         (v)  The lesser of (A) the aggregate amount paid by
                    Borrower (including reasonable expenses incurred in
                    connection therewith) to repurchase up to one million shares
                    of its common stock during the period commencing on the base
                    date and ending on the determination date and (B)
                    $10,000,000.

          (c)  Subparagraph 5.03(e) is hereby amended to read in its entirety as
     follows:

               (e)  Profitability.

                    (i)  For the quarter ending October 2, 1998, Borrower shall
               not permit its Adjusted Net Income to be a loss exceeding
               $30,000,000.

                    (ii) During the period October 3, 1998 - April 2, 1999,
               Borrower shall not permit (A) its Adjusted Net Income for any
               quarter to be a loss exceeding $15,000,000 or (B) the sum of all
               such quarterly losses (excluding any quarterly profits) to exceed
               $25,000,000.

                    (iii) During the period April 3, 1999 - December 31, 1999,
               Borrower shall not permit the sum of all quarterly losses based
               upon its Adjusted Net Income (excluding any quarterly profits) to
               exceed $5,000,000.

                    (iv) Thereafter, Borrower shall not permit (A) its Adjusted
               Net Income for any quarter to be a loss exceeding $10,000,000,
               (B) its Adjusted Net Income to be a loss in more than two
               quarters in any consecutive four-quarter period (commencing with
               the consecutive four-quarter period ending on March 31, 2000) or
               (C) its Adjusted Net Income for any consecutive four-quarter
               period (commencing with the consecutive four-quarter period
               ending on March 31, 2000) to be a loss.

     3.   REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to Agent and the Lenders that the following are true and correct on the
date of this Amendment and

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that, after giving effect to the amendments set forth in Paragraph 2 above, the
following will be true and correct on the Effective Date (as defined below):

          (a)  The representations and warranties of Borrower and its
     Subsidiaries set forth in Paragraph 4.01 of the Credit Agreement and in the
     other Credit Documents are true and correct in all material respects;

          (b)  No Default has occurred and is continuing; and

          (c)  Each of the Credit Documents is in full force and effect.

(Without limiting the scope of the term "Credit Documents," Borrower expressly
acknowledges in making the representations and warranties set forth in this
Paragraph 3 that, on and after the date hereof, such term includes this
Amendment.)

     4.   EFFECTIVE DATE. The amendments effected by Paragraph 2 above shall
become effective on October 23, 1998 (the "Effective Date"), subject to receipt
by Agent and the Lenders on or prior to the Effective Date of the following,
each in form and substance satisfactory to Agent, the Lenders and their
respective counsel:

          (a)  This Amendment duly executed by Borrower, the Required Lenders
     and Agent;

          (b)  A Certificate of the Secretary of Borrower, dated the Effective
     Date, certifying that the Restated Certificate of Incorporation and Bylaws
     of Borrower, in the form delivered to Agent on the Closing Date, are in
     full force and effect and have not been amended, supplemented, revoked or
     repealed since such date;

          (c)  A nonrefundable amendment fee equal to 0.075% of each Lender's
     Commitment to be paid to each Lender that executes this Amendment on or
     before October 23, 1998; and

          (d)  Such other evidence as Agent or any Lender may reasonably request
     to establish the accuracy and completeness of the representations and
     warranties and the compliance with the terms and conditions contained in
     this Amendment and the other Credit Documents.

     5.   EFFECT OF THIS AMENDMENT. On and after the Effective Date, each
reference in the Credit Agreement and the other Credit Documents to the Credit
Agreement shall mean the Credit Agreement as amended hereby. Except as
specifically amended above, (a) the Credit Agreement and the other Credit
Documents shall remain in full force and effect and are hereby ratified and
confirmed and (b) the execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power, or remedy of the Lenders or Agent, nor constitute a waiver of any
provision of the Credit Agreement or any other Credit Document.

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     6.   MISCELLANEOUS.

          (a)  Counterparts. This Amendment may be executed in any number of
     identical counterparts, any set of which signed by all the parties hereto
     shall be deemed to constitute a complete, executed original for all
     purposes.

          (b)  Headings. Headings in this Amendment are for convenience of
     reference only and are not part of the substance hereof.

          (c)  Governing Law. This Amendment shall be governed by and construed
     in accordance with the laws of the State of California without reference to
     conflicts of law rules.

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IN WITNESS WHEREOF, Borrower, Agent and the Lenders have caused this Amendment
to be executed as of the day and year first above written.

BORROWER:                      SILICON VALLEY GROUP, INC.

                               By: /s/ Russell G. Weinstock
                                  -----------------------------------------
                               Name:  Russell G. Weinstock
                                    ---------------------------------------
                               Title  Vice President of Finance and CFO
                                     --------------------------------------

AGENT:                         ABN AMRO BANK, N.V.

                               By: /s/ Robin S. Yim
                                  -----------------------------------------
                               Name:  Robin S. Yim
                                    ---------------------------------------
                               Title: Group Vice President
                                     --------------------------------------

                               By: /s/ Richard R. DaCosta
                                  -----------------------------------------
                               Name:  Richard R. DaCosta
                                    ---------------------------------------
                               Title: Vice President
                                     --------------------------------------


LENDERS:                       ABN AMRO BANK, N.V.

                               By: /s/ Robin S. Yim
                                  -----------------------------------------
                               Name:  Robin S. Yim
                                    ---------------------------------------
                               Title: Group Vice President
                                     --------------------------------------

                               By: /s/ Richard R. DaCosta
                                  -----------------------------------------
                               Name:  Richard R. DaCosta
                                    ---------------------------------------
                               Title: Vice President
                                     --------------------------------------


                               COMERICA BANK-CALIFORNIA

                               By: /s/ Alan Jepsen
                                  -----------------------------------------
                               Name:  Alan Jepsen
                                    ---------------------------------------
                               Title: Vice President and Assistant Manager
                                     --------------------------------------

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                               FLEET NATIONAL BANK

                               By: /s/ Mathew M. Glauninger
                                  -----------------------------------------
                               Name:  Mathew M. Glauninger
                                    ---------------------------------------
                               Title: Vice President
                                     --------------------------------------


                               KEYBANK NATIONAL ASSOCIATION

                               By: /s/ Mary K. Young
                                  -----------------------------------------
                               Name:  Mary K. Young
                                    ---------------------------------------
                               Title: Assistant Vice President
                                     --------------------------------------


                               WELLS FARGO BANK, N.A.

                               By: /s/ Karen Barone
                                  -----------------------------------------
                               Name:  Karen Barone
                                    ---------------------------------------
                               Title: Vice President
                                     --------------------------------------

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