<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20569

                                    FORM 10-Q

              [X ] Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                                       Or

              [ ] Transition Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

For the Quarterly Period Ended June 30, 2000    Commission file number   0-23150
                               -------------                             -------

                           Ibis Technology Corporation
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         Massachusetts                               04-2987600
--------------------------------------------------------------------------------
(State or other jurisdiction of                  (I.R.S. Employer
incorporation or organization)                  Identification No.)

                       32 Cherry Hill Drive, Danvers, MA          01923
--------------------------------------------------------------------------------
                     (Address of principal executive offices)  (Zip Code)

                                 (978) 777-4247
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

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
                                                      -----    -----

         8,309,442 shares of Common Stock, par value $.008, were outstanding on
August 8, 2000.

                                               Total Number of Pages     49
                                                                         --
                                               Exhibit Index at Page     20
                                                                         --

<PAGE>


                           IBIS TECHNOLOGY CORPORATION

                                      INDEX

<TABLE>
<CAPTION>
PART 1 - FINANCIAL  INFORMATION                                                              PAGE
                                                                                             NUMBER
                                                                                             ------
<S>                                                                                           <C>

  Item 1 - Financial Statements:

    Balance Sheets
        December 31, 1999 and June 30, 2000...................................................  3

    Statements of Operations
        Three Months Ended June 30, 1999 and 2000
        and Six Months Ended June 30, 1999 and 2000...........................................   4

    Statements of Cash Flows
       Six Months Ended June 30, 1999 and 2000................................................   5

    Notes to Financial Statements.............................................................   6

  Item 2 - Management's Discussion and Analysis of Financial
        Condition and Results of Operations...................................................  10

  Item 3 - Quantitative and Qualitative Disclosure About Market Risk..........................  16


PART II - OTHER INFORMATION

Item 1 - Legal Proceedings....................................................................  17

Item 2 - Changes in Securities................................................................  17

Item 3 - Defaults upon Senior Securities......................................................  17

Item 4 - Submission of Matters to a Vote of Security Holders..................................  17

Item 5 - Other Information....................................................................  17

Item 6 - Exhibits and Reports on Form 8-K.....................................................  18

Signatures....................................................................................  19

Exhibit Index.................................................................................  20
</TABLE>

<PAGE>


                           IBIS TECHNOLOGY CORPORATION

                                 BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                        DECEMBER 31,            JUNE 30,
                                                                            1999                   2000
                                                                       ------------           ------------
                                                                                               (UNAUDITED)
<S>                                                                    <C>                    <C>
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents ................................          $ 36,361,621           $ 28,226,960
   Accounts receivable, trade, net ..........................             3,585,824              7,221,718
   Unbilled revenue .........................................             1,469,215              1,863,428
   Inventories (note 3) .....................................             6,876,002              8,898,361
   Prepaid expenses and other current assets ................               333,742                237,236
                                                                       ------------           ------------
         Total current assets ...............................            48,626,404             46,447,703
                                                                       ------------           ------------
Property and equipment ......................................            14,346,200             19,132,237
   Less:  Accumulated depreciation and amortization .........            (9,370,156)            (9,896,519)
                                                                       ------------           ------------
         Net property and equipment .........................             4,976,044              9,235,718
Patents and other assets, net ...............................               125,056                106,518
                                                                       ------------           ------------
         Total assets .......................................          $ 53,727,504           $ 55,789,939
                                                                       ============           ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Capital lease obligation, current ........................          $      9,557           $     10,090
   Accounts payable .........................................             1,624,451              1,909,801
   Accrued liabilities ......................................             2,148,755              1,840,140
   Deferred revenue .........................................             1,534,369              3,453,379
                                                                       ------------           ------------
         Total current liabilities ..........................             5,317,132              7,213,410
Capital lease obligation, noncurrent ........................                30,073                 24,891
                                                                       ------------           ------------
         Total liabilities ..................................             5,347,205              7,238,301
                                                                       ------------           ------------

STOCKHOLDERS' EQUITY:
   Undesignated preferred stock, $.01 par value .............
    Authorized 2,000,000 shares; none issued ................                  --                     --
   Common stock, $.008 par value ............................
    Authorized 20,000,000 shares; issued 8,172,800 shares and
       8,306,440 shares in 1999 and 2000, respectively ......                65,382                 66,452
    Additional paid-in capital ..............................            63,543,777             64,108,529
    Accumulated deficit .....................................           (15,228,860)           (15,623,343)
                                                                       ------------           ------------
         Total stockholders' equity .........................            48,380,299             48,551,638
                                                                       ------------           ------------
         Total liabilities and stockholders' equity .........          $ 53,727,504           $ 55,789,939
                                                                       ============           ============
</TABLE>


                See accompanying notes to financial statements.


                                       3
<PAGE>


                           IBIS TECHNOLOGY CORPORATION

                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                    THREE MONTHS ENDED                   SIX MONTHS ENDED
                                                                          JUNE 30,                             JUNE 30,
                                                                  1999            2000                  1999             2000
                                                               -----------     -----------           -----------      -----------
<S>                                                            <C>             <C>                   <C>              <C>
SALES AND REVENUE:
  Product sales .....................................          $ 1,348,980     $ 1,441,605           $ 2,648,465      $ 3,085,365
  Contract and other revenue ........................              114,460         254,772               400,086          334,180
  Equipment revenue .................................            3,643,986       4,223,853             6,506,738        4,539,797
                                                               -----------     -----------           -----------      -----------
     Total sales and revenue (notes 2 and 4) ........            5,107,426       5,920,230             9,555,289        7,959,342

COST OF SALES AND REVENUE:
  Cost of product sales .............................            1,140,562       1,150,821             2,386,646        2,083,841
  Cost of contract and other revenue ................              118,290         168,196               222,954          220,440
  Cost of equipment revenue .........................            2,581,765       2,748,947             4,552,731        2,881,201
                                                               -----------     -----------           -----------      -----------
     Total cost of sales and revenue ................            3,840,617       4,067,964             7,162,331        5,185,482
                                                               -----------     -----------           -----------      -----------

     Gross profit ...................................            1,266,809       1,852,266             2,392,958        2,773,860
                                                               -----------     -----------           -----------      -----------

OPERATING EXPENSES:
  General and administrative ........................              524,092         627,458               958,540        1,074,202
  Marketing and selling .............................              245,612         428,512               452,782          855,532
  Research and development ..........................              391,317       1,309,768               777,687        2,222,853
                                                               -----------     -----------           -----------      -----------
     Total operating expenses .......................            1,161,021       2,365,738             2,189,009        4,152,587
                                                               -----------     -----------           -----------      -----------

     Income (loss) from operations ..................              105,788        (513,472)              203,949       (1,378,727)
                                                               -----------     -----------           -----------      -----------

OTHER INCOME (EXPENSE):
  Interest income ...................................              142,545         495,744               299,040          997,404
  Interest expense ..................................              (13,373)           (967)              (31,525)          (8,295)
  Other .............................................               13,287          (4,489)               24,120           (3,609)
                                                               -----------     -----------           -----------      -----------
     Total other income .............................              142,459         490,288               291,635          985,500
                                                               -----------     -----------           -----------      -----------
     Income (loss) before income taxes ..............              248,247         (23,184)              495,584         (393,227)

Income tax expense ..................................                 --              --                   1,256            1,256
                                                               -----------     -----------           -----------      -----------

     Net income (loss) ..............................          $   248,247     $   (23,184)          $   494,328      $  (394,483)
                                                               ===========     ===========           ===========      ===========

Net income (loss) per common share:
 Basic ..............................................          $      0.04     $      0.00           $      0.07      $     (0.05)
                                                               ===========     ===========           ===========      ===========
 Diluted ............................................          $      0.03     $      0.00           $      0.07      $     (0.05)
                                                               ===========     ===========           ===========      ===========

Weighted average number of common shares outstanding:
 Basic ..............................................            6,957,567       8,295,062             6,918,261        8,252,858
                                                               ===========     ===========           ===========      ===========
 Diluted ............................................            7,469,603       8,295,062             7,347,431        8,252,858
                                                               ===========     ===========           ===========      ===========
</TABLE>

                See accompanying notes to financial statements.


                                       4
<PAGE>


                           IBIS TECHNOLOGY CORPORATION

                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                             SIX MONTHS ENDED

                                                                                               JUNE 30,

                                                                                          1999                    2000
                                                                                   ----------------       ----------------

CASH FLOWS FROM OPERATING ACTIVITIES:

<S>                                                                                <C>              <C>
   Net income (loss)............................................................   $      494,328   $        (394,483)
   Adjustments to reconcile net income (loss) to net cash provided by
      (used in) operating activities:

     Depreciation and amortization..............................................          685,106             680,987
     Loss on sale of equipment.................................................                --              (3,609)
     Changes in operating assets and liabilities:

         Accounts receivable, trade.............................................       (2,013,720)         (3,635,894)
         Unbilled revenue.......................................................       (1,019,106)           (394,213)
         Inventories...........................................................          (200,714)         (2,022,359)
         Prepaid expenses and other current assets.......................                  66,100              96,506
         Accounts payable...................................................            1,367,649             285,350
         Accrued liabilities and deferred revenue........................                 781,450           1,610,395
                                                                                     -------------      --------------
         Net cash provided by (used in) operating activities..............                161,093          (3,777,320)
                                                                                     -------------      --------------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Additions to property and equipment, net.....................................       (645,761)          (4,927,233)
   Other assets.................................................................          6,493               8,719
                                                                                   -------------      --------------

         Net cash used in investing activities..................................       (639,268)          (4,918,514)
                                                                                   --------------      ------------------

CASH FLOWS FROM FINANCING ACTIVITIES:

   Payments of capital lease obligations........................................       (268,080)              (4,649)
   Exercise of stock options ...................................................        767,888              565,822
                                                                                   --------------      ------------------

         Net cash provided by financing activities...........................           499,808              561,173
                                                                                   --------------      ------------------

         Net increase (decrease) in cash and cash equivalents............                21,633           (8,134,661)

Cash and cash equivalents, beginning of period..................................     12,819,366           36,361,621
                                                                                   --------------      ------------------

Cash and cash equivalents, end of period......................................$      12,840,999  $        28,226,960
                                                                                   =================  ====================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

   Cash paid during the period for interest...................................    $      31,525       $        8,295
                                                                                  =============       ==============
</TABLE>


                 See accompanying notes to financial statements.


                                       5
<PAGE>



                           IBIS TECHNOLOGY CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

(1)  INTERIM FINANCIAL STATEMENTS

         The accompanying financial statements are unaudited, except for the
Balance Sheet as of December 31, 1999, and have been prepared by Ibis in
accordance with generally accepted accounting principles.

         In the opinion of management, the interim financial statements include
all adjustments which consist only of normal and recurring adjustments necessary
for a fair presentation of Ibis' financial position and results of operations.
Results of operations for the interim periods are not necessarily indicative of
the results to be expected for the full year. These financial statements should
be read in conjunction with the financial statements of Ibis as of and for the
year ended December 31, 1999 which are included in the Annual Report on Form
10-K.

(2)  REVENUE RECOGNITION

         Product and spare part sales are recognized upon shipment. For
equipment sales, the Company previously used the percentage of completion method
for recognizing revenue because there was significant engineering effort and
milestone payments involved. The Company is now building its equipment to stock
and recognizes revenue upon shipment. Revenue derived from consulting and
support services are recognized upon performance. Contract revenue is recognized
on the percentage-of-completion method. Provisions for anticipated losses are
made in the period in which such losses become determinable. Unbilled revenue
represents revenue earned but not yet billable based on the terms of the
contract which include shipment of the product, achievement of milestones or
completion of the contract.

(3)  INVENTORIES
<TABLE>
<CAPTION>

         Inventories consist of the following:

                                                                            DECEMBER 31,             JUNE 30,
                                                                               1999                     2000
                                                                       -----------------        --------------------

<S>                                                                     <C>                           <C>
                  Raw materials...................................      $    129,786                  $ 116,105
                  Work in process.................................            46,639                    262,534
                  Finished goods..................................            28,685                     68,493
                                                                       -------------                -----------
                    Subtotal wafer inventory......................      $    205,110                  $ 447,132
                  Equipment inventory............................          6,670,892                  8,451,229
                                                                       -------------                ------------
                        Total inventories.........................      $  6,876,002                 $8,898,361
                                                                       =============                ============
</TABLE>




                                       6
<PAGE>



                           IBIS TECHNOLOGY CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

(4)  EARNINGS PER SHARE RECONCILIATION

         Net income (loss) per share of commons stock is computed based upon the
weighted average number of shares outstanding during each period and including
the dilutive effect, if any, of stock options and warrants. SFAS 128 requires
the presentation of basic and diluted earnings (loss) per share for all periods
presented. As Ibis was in a net loss position for the three months ended June
30, 2000 and the six months ended June 30, 2000, common stock equivalents of
410,827 and 508,246 shares, respectively, were excluded from the diluted loss
per share calculation as they would be antidilutive. As a result, diluted loss
per share is the same as basic loss per share for the three months ended June
30, 2000 and the six months ended June 30, 2000.

         The reconciliation of the numerators and denominators of the basic and
diluted net income (loss) per common share computations for the Company's
reported net income (loss) is as follows:
<TABLE>
<CAPTION>

                                                          THREE MONTHS ENDED                       SIX MONTHS ENDED
                                                               JUNE 30,                                 JUNE 30,
                                                 ------------------------------------        --------------------------------
                                                       1999                 2000                   1999             2000
                                                 ---------------       --------------        --------------------------------


<S>                                             <C>                  <C>              <C>                <C>
Basic net income (loss).........................$      248,247       $   (23,184)     $    494,328       $    (393,227)
                                                 ==============       ===========      ============       =============

Weighted average common
   shares outstanding-basic.......................   6,957,567             8,295,062           6,918,261            8,252,858
                                                   =============      ================       =============       ==============

Net additional common shares upon assumed
   exercise of stock options and warrants......        512,036                    --             429,170                   --
                                                 --------------       ------------------      ------------       ---------------

Weighted average common

   shares outstanding-diluted.....................   7,469,603             8,295,062           7,347,431            8,252,858
                                                   =============      ================       =============       ==============

Net income (loss) per common share:

         Basic.................................... $      0.04          $       0.00       $        0.07     $         (0.05)
                                                   =============      ================       =============       ==============

              Diluted..............................$      0.03          $       0.00       $        0.07     $         (0.05)
                                                    =============      ================       =============       ==============
</TABLE>

(5)  INDUSTRY SEGMENTS

         Ibis' reportable segments are SIMOX-SOI Wafer Products, SIMOX Equipment
and Other Products or Services. For purposes of segment reporting, equipment,
equipment spares and field service revenue are combined and reported as SIMOX
Equipment. Government contracts, other services and license revenue are combined
and reported as Other Products or Services. In previous financial statements
spares and field service revenue were included in the Other Products or Services
segment. This reclassification was made in the third quarter of 1999 and all
prior periods reflect this reclassification.

                                       7
<PAGE>



                           IBIS TECHNOLOGY CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

       The table below provides information for the six months ended June 30,
1999 and 2000 pertaining to Ibis' three industry segments.
<TABLE>
<CAPTION>

                                                   SIMOX
                                                   WAFER            SIMOX            OTHER PRODUCTS
                                                  PRODUCTS          EQUIPMENT          OR SERVICES           TOTAL

NET REVENUES
<S>                                              <C>                <C>                    <C>            <C>
Three Months Ended June 30, 1999                 $ 1,348,980        $ 3,643,986            $ 114,460      $ 5,107,426
Three Months Ended June 30, 2000                   1,441,605          4,223,853              254,772        5,920,230
Six Months Ended June 30, 1999                     2,648,465          6,506,738              400,086        9,555,289
Six Months Ended June 30, 2000                     3,085,365          4,539,797              334,180        7,959,342

OPERATING INCOME (LOSS)
Three Months Ended June 30, 1999                     142,308            491,402               (3,830)         629,880
Three Months Ended June 30, 2000                     (41,136)            68,544               86,577          113,985
Six Months Ended June 30, 1999                       128,538            856,819              177,132        1,162,489
Six Months Ended June 30, 2000                       273,861           (692,128)             113,741         (304,526)

ASSETS
June 30, 2000                                      9,648,176         14,936,271              280,875       24,865,322

CAPITAL EXPENDITURES
Three Months Ended June 30, 1999                     324,024              7,576                   --          331,600
Three Months Ended June 30, 2000                   1,535,179            378,959                   --        1,914,138
Six Months Ended June 30, 1999                       489,572              7,576                   --          497,148
Six Months Ended June 30, 2000                     4,372,094            408,604                   --        4,780,698

DEPRECIATION AND AMORTIZATION
OF PROPERTY AND EQUIPMENT
Three Months Ended June 30, 1999                     294,748             32,211                3,619          330,578
Three Months Ended June 30, 2000                     311,799             74,124                  626          386,549
Six Months Ended June 30, 1999                       586,411             44,176                3,619          634,206
Six Months Ended June 30, 2000                       561,030             85,070                1,486          647,586
</TABLE>


                                       8
<PAGE>



                           IBIS TECHNOLOGY CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

         The table below provides the reconciliation of reportable segment
operating income (loss) and assets to Ibis' totals.
<TABLE>
<CAPTION>

                                                                                        SIX MONTHS ENDED JUNE 30,
                                                                                        ---------------------------
SEGMENT RECONCILIATION                                                                  1999                   2000
                                                                                        ----                   ----

Income (Loss) Before Income Taxes:
<S>                                                                              <C>                     <C>
    Total operating income (loss) for reportable segments                        $ 1,162,489             $ (304,526)
    Corporate general & administrative expenses                                     (958,540)            (1,074,201)
    Net other income                                                                 291,635                985,500
                                                                                ------------           ------------
    Income (loss) before income taxes                                                495,584               (393,227)
                                                                                ============           ============

Capital Expenditures:
    Total capital expenditures for reportable segments                               497,148              4,780,698
    Corporate capital expenditures                                                   148,613                146,535
                                                                                ------------           ------------
    Total capital expenditures                                                       645,761              4,927,233
                                                                                ============            ===========

Depreciation and Amortization:
    Total depreciation and amortization for reportable segments                      634,206                647,586
    Corporate depreciation and amortization                                           50,900                 33,401
                                                                                ------------            -----------
    Total depreciation and amortization                                              685,106                680,987
                                                                                 ===========             ==========



                                                                                    12/31/99                6/30/00
                                                                                    --------                -------

Assets:

    Total assets for reportable segments                                          16,703,042             24,865,322
    Cash & cash equivalents not allocated to segments                             36,361,621             28,226,960
    Other unallocated assets                                                         662,841              2,697,657
                                                                                ------------            -----------
    Total assets                                                                  53,727,504             55,789,939
                                                                                  ==========            ===========
</TABLE>



                                       9
<PAGE>


                           IBIS TECHNOLOGY CORPORATION

                                 PART I - ITEM 2

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

         Ibis Technology Corporation ("Ibis") was formed in October 1987 and
commenced operations in January 1988. Ibis' initial activities consisted of
producing and selling SIMOX-SOI wafers and conducting research and development
activities. This research led to the development of a proprietary second
generation implanter, the Ibis 1000, which we began selling in 1996, and to
other proprietary process technology.

         Initially, much of our revenue was derived from research and
development contracts and sales of wafers for military applications. Over the
years, there has been a shift in revenue to sales of SIMOX-SOI wafers for
commercial applications and sales of Ibis 1000 implanters. To date, most of our
customers that have purchased wafers for commercial applications have done so
solely for the purpose of characterizing and evaluating the wafers or for pilot
production. Thus, historical sales are not necessarily indicative of future
operations because such sales would not be considered of a recurring nature.

         During 1999 and 2000, Ibis experienced quarterly fluctuations due to
the timing of receipt of equipment orders, use of the implanters for SIMOX-SOI
development, and dependence on a limited number of customers. In addition, we
previously used the percentage of completion method for recognizing revenue on
implanter sales because there was significant engineering effort and milestone
payments involved. Ibis is now building the implanters to stock and recognizes
revenue upon shipment. Consequently each Ibis 1000 sale has a significant impact
on revenue for the period in which it is shipped. We may also experience
fluctuations in revenue due to shifts in customer demands during the various
stages of the SIMOX-SOI adoption cycle and also as a result of the variety of
wafer sizes and product demand placed on the finite number of Ibis 1000 systems
producing wafers.

RESULTS OF OPERATIONS

SECOND QUARTER ENDED JUNE 30, 2000 COMPARED TO SECOND QUARTER ENDED JUNE 30,
1999

         PRODUCT SALES. Wafer product sales increased $92,625, or 7%, to
$1,441,605 for the second quarter ended June 30, 2000 from $1,348,980 for the
second quarter ended June 30, 1999. The increase in product sales is
attributable to increased wafer sales to customers in Europe. Wafer sales by
Ibis in the United States and Japan decreased overall during this three month
period.

         CONTRACT AND OTHER REVENUE. Contract and other revenue includes revenue
derived from government contracts, license agreements, characterization and
other services. Contract and other revenue increased for the second quarter
ended June 30, 2000 to $254,772 from $114,460 for the second quarter ended June
30, 1999, an increase of $140,312 or 123%. This increase is attributable to an
increase in revenues derived from government contracts and increased license
revenues.

         EQUIPMENT REVENUE. Equipment revenue represents revenue recognized from
the sale of Ibis 1000 implanters, sales of spare parts and field service
revenue. Equipment revenue increased to $4,223,853 for the second quarter ended
June 30, 2000 from $3,643,986 for the second quarter ended June 30, 1999. This
increase is attributable to Ibis 1000 implanter sales, the sale of spare parts
and field service revenue. Ibis previously used the percentage of completion
method for recognizing revenue on implanter sales, which resulted in Ibis
recognizing revenue on a portion of multiple implanters for the quarter ended
June 30, 1999 compared to revenue recognized

                                       10
<PAGE>



                           IBIS TECHNOLOGY CORPORATION

                                 PART I - ITEM 2

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

on one full implanter for the quarter ended June 30, 2000. Field Service revenue
accounted for $69,300 of equipment revenue for the second quarter ended June 30,
2000 as compared to $41,336 of equipment revenue for the second quarter ended
June 30, 1999. Sales of spare parts accounted for $224,553 of equipment revenue
for the second quarter ended June 30, 2000 as compared to $90,650 of equipment
revenue for the second quarter ended June 30, 1999.

         TOTAL SALES AND REVENUE. Total sales and revenue for the second quarter
ended June 30, 2000 was $5,920,230, an increase of $812,804, or 16%, from total
revenue of $5,107,426 for the second quarter ended June 30, 1999. This increase
resulted from increases in equipment revenue, contract and other revenue and
product sales.

         TOTAL COST OF SALES AND REVENUE. Cost of product sales for the second
quarter ended June 30, 2000 was $1,150,821, as compared to $1,140,562 for the
second quarter ended June 30, 1999, an increase of $10,259 or 1%. Cost of
contract and other revenue for the second quarter ended June 30, 2000 was
$168,196, as compared to $118,290 for the second quarter ended June 30, 1999, an
increase of $49,906, or 42%. Cost of equipment revenue for the second quarter
ended June 30, 2000 was $2,748,947 as compared to $2,581,765 for the second
quarter ended June 30, 1999, an increase of $167,182 or 7%. The gross margin for
all sales was 31% for the second quarter ended June 30, 2000 as compared to 25%
for the second quarter ended June 30, 1999. The increase in gross margin
percentage is attributable to improved margins on all products and services. The
fundamental fixed cost nature of product sales, which was absorbed by a larger
number of wafers sold during the second quarter of 2000 as compared to the same
quarter in the previous year, resulted in a positive impact on margins. The
equipment margin percentage increased primarily due to improved overhead
absorption and favorable material spending. Cost of contract and other revenue
consists of labor and materials expended during the quarter. Contract margins
can vary from year to year based on the type of contracts that Ibis enters into.
Additionally, different fee arrangements and indirect cost absorption can
contribute to margin variability.

         GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
expenses for the second quarter ended June 30, 2000 were $627,458 (or 11% of
total revenue) as compared to $524,092 (or 10% of total revenue) for the second
quarter ended June 30, 1999, an increase of $103,366, or 20%. The increase is
due to increases in payroll and payroll related expenses and professional
service fees incurred in the quarter.

         MARKETING AND SELLING EXPENSES. Marketing and selling expenses for the
second quarter ended June 30, 2000 were $428,512 (or 7% of total revenue) as
compared to $245,612 (or 5% of total revenue) for the second quarter ended June
30, 1999, an increase of $182,900, or 75%. The increase in marketing and selling
expenses is primarily a result of an increase in the number of customer support
personnel, public relations, and product samples.

         RESEARCH AND DEVELOPMENT EXPENSES. Internally funded research and
development expenses increased by $918,451 or 235%, to $1,309,768 (or 22% of
total revenue) for the second quarter ended June 30, 2000, as compared to
$391,317 (or 8% of total revenue) for the second quarter ended June 30, 1999.
The increase is primarily due to an increase in personnel and consultants hired
for the Ibis design and development effort on our next generation oxygen
implanter, the Ibis 2000, and increased material expenses on Ibis' wafer
development program.

                                       11
<PAGE>




                           IBIS TECHNOLOGY CORPORATION

                                 PART I - ITEM 2

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

         INCOME (LOSS) FROM OPERATIONS. The loss from operations for the second
quarter ended June 30, 2000 was $513,472 as compared to income of $105,788 for
the second quarter ended June 30, 1999, a decrease of $619,260, or 585%. The
decrease in income from operations is the result of increased operating expenses
which was partially offset by increased revenue.

         OTHER INCOME (EXPENSE). Total other income for the second quarter ended
June 30, 2000 was $490,288 as compared to $142,459 for the second quarter ended
June 30, 1999, an increase of $347,829, or 244%. The increase in total other
income is primarily attributable to increased interest income earned primarily
on the proceeds from the August 1999 public stock offering and reduced interest
expense on capitalized leases.

         INCOME (LOSS) BEFORE INCOME TAXES. The loss before income taxes was
$23,184 for the second quarter ended June 30, 2000, as compared to income of
$248,247 for the second quarter ended June 30 , 1999. The decrease of $271,431,
or 109%, is due to increased operating expenses, which were partially offset by
increased revenue and interest income.

SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO SIX MONTHS ENDED JUNE 30, 1999

         PRODUCT SALES. Wafer product sales increased $436,900, or 17%, to
$3,085,365 for the six months ended June 30, 2000 from $2,648,465 for the six
months ended June 30, 1999. The increase in product sales is attributable to
increased wafer sales by Ibis in Europe. Wafer sales by Ibis in the United
States and Japan decreased overall during this six month period.

         CONTRACT AND OTHER REVENUE. Contract and other revenue decreased for
the six months ended June 30, 2000 to $334,180 from $400,086 for the six months
ended June 30, 1999, a decrease of $65,906 or 17%. This decrease is attributable
to a decrease in revenues derived from government contracts, other services, and
decreased license revenue.

         EQUIPMENT REVENUE. Equipment revenue decreased to $4,539,797 for the
six months ended June 30, 2000 from $6,506,738 for the six months ended June 30,
1999. This decrease is attributable to the decrease in equipment revenue which
was partially offset by an increase in field service revenue and the sale of
spare parts. Ibis previously used the percentage of completion method for
recognizing revenue on implanter sales, which resulted in Ibis recognizing
revenue on a portion of multiple implanters in the first six months of 1999
compared to revenue recognized on one full implanter in the first six months of
2000. Field service revenue accounted for $143,100 of equipment revenue for the
six months ended June 30, 2000 as compared to $80,961 of equipment revenue for
the six months ended June 30, 1999. Sales of spare parts accounted for $466,697
of equipment revenue for the six months ended June 30, 2000 as compared to
$123,777 of equipment revenue for the six months ended June 30, 1999.

                                       12
<PAGE>




                           IBIS TECHNOLOGY CORPORATION

                                 PART I - ITEM 2

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

         TOTAL SALES AND REVENUE. Total sales and revenue for the six months
ended June 30, 2000 was $7,959,342, a decrease of $1,595,947, or 17%, from total
revenue of $9,555,289 for the six months ended June 30, 1999. This decrease
resulted from decreases in equipment revenue and contract and other revenue
which was partially offset by increased product sales.

         TOTAL COST OF SALES AND REVENUE. Cost of product sales for the six
months ended June 30, 2000 was $2,083,841, as compared to $2,386,646 for the six
months ended June 30, 1999, a decrease of $302,805 or 13%. Cost of contract and
other revenue for the six months ended June 30, 2000 was $220,440, as compared
to $222,954 for the six months ended June 30, 1999, a decrease of $2,514, or 1%.
Cost of equipment revenue for the six months ended June 30, 2000 was $2,881,201
as compared to $4,552,731 for the six months ended June 30, 1999, a decrease of
$1,671,530 or 37%. The gross margin for all sales was 35% for the six months
ended June 30, 2000 as compared to 25% for the six months ended June 30, 1999.
The increase in gross margin percentage is attributable to improved margins on
all products and services. The fundamental fixed cost nature of product sales,
which was absorbed by a larger number of wafers sold during the first six months
of 2000 as compared to the same period in the previous year, resulted in a
positive impact on margins. The equipment margin percentage increased primarily
due to improved overhead absorption and favorable material spending. Cost of
contract and other revenue consists of labor and materials expended during the
period. Contract margins can vary from year to year based on the type of
contracts that Ibis enters into. Additionally, different fee arrangements and
indirect cost absorption can contribute to margin variability.

         GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
expenses for the six months ended June 30, 2000 were $1,074,202 (or 13% of total
revenue) as compared to $958,540 (or 10% of total revenue) for the six months
ended June 30, 1999, an increase of $115,662, or 12%. The increase is due to
increases in payroll and payroll related expenses and professional services
incurred in the six months ended June 30, 2000.

         MARKETING AND SELLING EXPENSES. Marketing and selling expenses for the
six months ended June 30, 2000 were $855,532 (or 11% of total revenue) as
compared to $452,782 (or 5% of total revenue) for the six months ended June 30,
1999, an increase of $402,750, or 89%. The increase in marketing and selling
expenses is primarily a result of an increase in the number of customer support
personnel, and expenses related to public relations and product samples.

         RESEARCH AND DEVELOPMENT EXPENSES. Internally funded research and
development expenses increased by $1,445,166 or 186%, to $2,222,853 (or 28% of
total revenue) for the six months ended June 30, 2000, as compared to $777,687
(or 8% of total revenue) for the six months ended June 30, 1999. The increase is
primarily due to an increase in personnel and consultants hired for Ibis' design
and development effort on our next generation oxygen implanter, the Ibis 2000,
and increased material expenses on Ibis' wafer development program.


                                       13
<PAGE>




                           IBIS TECHNOLOGY CORPORATION

                                 PART I - ITEM 2

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

         INCOME (LOSS) FROM OPERATIONS. The loss from operations for the six
months ended June 30, 2000 was $1,378,727 as compared to income of $203,949 for
the six months ended June 30, 1999, a decrease of $1,582,676, or 776%. The
decrease in income from operations is the result of decreases in equipment
revenue and contract and other revenue, as well as increased operating expenses,
which were partially offset by increased product sales.

         OTHER INCOME (EXPENSE). Total other income for the six months ended
June 30, 2000 was $985,500 as compared to $291,635 for the six months ended June
30, 1999, an increase of $693,865, or 238%. The increase in total other income
is primarily attributable to increased interest income earned primarily on the
proceeds from the August 1999 public stock offering and reduced interest expense
on capitalized leases.

         INCOME (LOSS) BEFORE INCOME TAXES. The loss before income taxes was
$393,227 for the six months ended June 30, 2000, as compared to income of
$495,584 for the six months ended June 30, 1999. The decrease of $888,811, or
179%, is due to decreased equipment revenue and contract and other revenue and
increased operating expenses, which were partially offset by increased product
sales and interest income.

LIQUIDITY AND CAPITAL RESOURCES

         As of June 30, 2000, Ibis had cash and cash equivalents of $28,226,960,
reflecting in large part our receipt of approximately $25 million in net
proceeds from the August 1999 sale of 1,000,000 shares of Common Stock. During
the six months ended June 30, 2000, the Company used $3,777,320 in cash from
operating activities as compared to cash provided by operations in the amount of
$161,093 for the same period in 1999. Depreciation and amortization expense for
the six months ended June 30, 2000 and 1999 was $680,987 and $685,106,
respectively. This accounted for 9% and 7% of total revenue, respectively. Due
to the capital intensive nature of Ibis' business and the anticipated expansion
of its facilities and production capacity, management expects that depreciation
and amortization will continue to be a significant portion of its expenses. To
date, Ibis' working capital requirements have been funded primarily through debt
and equity financings. The principal use of cash during the six months ended
June 30, 2000 was to fund additions to property and equipment which totaled
$4,927,233. As of June 30, 2000, the Company had invested $21,072,265 in
property and equipment. At June 30, 2000, Ibis had commitments to purchase
approximately $7,742,189 in material or subassemblies to be used for
manufacturing Ibis 1000 implanters currently under construction and $2,097,513
in capital equipment purchases.

         We anticipate that we may be required to raise substantial additional
capital in the future in order to finance further expansion of our manufacturing
capacity and our research and development programs. Our existing cash resources
together with funds generated from operations are believed to be sufficient to
support Ibis' operations on our anticipated scale for at least the next eighteen
months. Management of Ibis currently believes that this anticipated scale of
operations will include the addition of Ibis 1000 oxygen implanters (in addition
to our oxygen implanters currently on-line), the purchase of support equipment,
the expansion of Ibis' facilities, and the design and development of the next
generation oxygen implanter, the Ibis 2000. Additional implanters are expected
to be transferred to production at various times as additional capacity is
needed to meet demand.

                                       14
<PAGE>



                           IBIS TECHNOLOGY CORPORATION

                                 PART I - ITEM 2

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

NEW ACCOUNTING PRONOUNCEMENTS

         In June 1998, the Financial Accounting Standards Board issued SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133") that
establishes accounting and reporting requirements for derivative instruments and
for hedging activities. SFAS 133 requires companies to recognize all derivatives
as either assets or liabilities in the statement of financial position at fair
value. If certain conditions are met, a derivative may be specifically
designated as a hedge of the exposures to changes in fair value of recognized
assets or liabilities or unrecognized firm commitments, a hedge of the exposure
to variable cash flows of a forecasted transaction, or a hedge of the foreign
currency exposure of a net investment in a foreign operation, unrecognized firm
commitments, an available-for-sale security or a foreign-currency denominated
forecasted transaction. The accounting for changes in fair value under SFAS 133
depends on the intended use of the derivative and the resulting designation. In
June 1999, the FASB decided that the effective date for adopting the
requirements of SFAS 133 should be delayed to fiscal years beginning after June
15, 2000. This delay, published as SFAS 137, applies to quarterly and annual
financial statements. In June 2000, the FASB issued SFAS 138, which addresses a
limited number of issues causing implementation difficulties for numerous
entities that apply SFAS 133. Ibis is currently evaluating the effect SFAS 133
will have on the results of its operations and its financial position.

         In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB No. 101"), "Revenue Recognition in Financial
Statements". This bulletin, as amended, established guidelines for revenue
recognition and was originally effective for periods beginning after March 15,
2000. In June 2000, the SEC announced that the effective date of SAB 101 was
being delayed until no later than the quarter ending December 31, 2000.

         In March 2000, the FASB issued Interpretation No. 44, "Accounting for
Certain Transactions Involving Stock Compensation", an interpretation of APB
Opinion No. 25, "Accounting for Stock Issued to Employees". This interpretation
clarified the application of Opinion 25, among other issues: (a) the definition
of an employee for purposes of applying Opinion 25, (b) the criteria for
determining whether a stock ownership plan qualifies as noncompensatory, (c) the
accounting implications of various modifications to the terms of a previously
fixed stock option or award, and (d) the accounting for the exchange of stock
compensation awards in a business combination. The Interpretation is effective
July 1, 2000 and the effects of applying the Interpretation are recognized on a
prospective basis. The Company does not expect that the adoption of this
Interpretation will have a material impact on its financial condition or results
of operations.

EFFECTS OF INFLATION

         The Company believes that over the past three years inflation has not
had a significant impact on the Company's sales or operating results.

BUSINESS OUTLOOK

         This Form 10-Q contains forward-looking statements within the meaning
of the "safe harbor" provisions of the Private Securities Litigation Reform Act
of 1995 including statements regarding the continuation of fluctuations in
revenue, the expectation that depreciation and amortization will continue to be
a significant portion

                                       15
<PAGE>



                           IBIS TECHNOLOGY CORPORATION

                                 PART I - ITEM 2

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

of expenses, the need for future additional capital and the sufficiency of our
current capital, and the anticipated scale of Ibis' operations. Such statements
are based on our current expectations and are subject to a number of factors and
uncertainties which could cause actual results to differ materially from those
described in the forward-looking statements. Such factors and uncertainties
include, but are not limited to, the uncertainty that the performance advantages
of SIMOX-SOI wafers will continue to be realized commercially or that a
commercial market for SIMOX-SOI wafers will continue to develop; the dependence
by Ibis on key customers (during 1997, 1998 and 1999, revenues from two
customers averaged in the aggregate between 39% and 81% of our revenues, so that
the loss of one or more of these major customers and the failure of Ibis to
obtain other sources of revenue could have a material adverse impact on us); the
loss of the services of one or more of our key individuals, which could have a
material adverse impact on Ibis; the dependence by Ibis on key suppliers, so
that the loss of services of one or more suppliers could have a material adverse
impact on us; the development of competing or superior technologies and products
from manufacturers, many of which have substantially greater financial,
technical and other resources than us; Ibis' lack of experience in producing
commercial quantities of our products at acceptable costs; our ability to
successfully complete the manufacture of our implanters and that these
implanters will be accepted by our customers; Ibis' ability to develop and
maintain strategic alliances for the manufacturing, marketing and distribution
of our products and sale of equipment; the cyclical nature of the semiconductor
industry, which has negatively affected our sales of SIMOX-SOI wafers during
industry downturns and which could continue to do so in the future; the limited
availability of critical materials and components for wafer products and
implanters, as a shortage of such materials and components or a significant
increase in the price thereof could have a material adverse effect on our
business and results of operations; the availability of additional capital to
fund expansion on acceptable terms, if at all; and general economic conditions.

                                 PART I - ITEM 3

           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The exposure of market risk associated with risk-sensitive instruments
is not material to the Company, as the Company does not transact its sales
denominated in other than United States dollars, invests primarily in short-term
commercial paper, holds its investments until maturity and has not entered into
hedging transactions.

                                       16
<PAGE>


                           IBIS TECHNOLOGY CORPORATION

                                     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 Annual Meeting of Stockholders of Ibis was held on May 4, 2000. The
following matters were voted on at the meeting:

         (1) Two persons were elected to the Board of Directors of the Company
            to serve for a term ending in 2003 and until their successors are
            duly elected and qualified. The following is a table setting forth
            the number of votes cast for and withheld for each nominee for
            Director.
<TABLE>
<CAPTION>

              NAME                       VOTE FOR              VOTE WITHHELD
<S>                                      <C>                      <C>
              Geoffrey Ryding            7,503,797                177,034
              Leslie B. Lewis            7,502,777                178,054
</TABLE>

            Dimitri Antoniadis, Robert L. Gable and Martin J. Reid continue to
            serve as Directors for terms which expire in 2001 and Peter H. Rose,
            Donald F. McGuinness and Lamberto Raffaelli continue to serve as
            Directors for terms which expire in 2002.

         (2) The stockholders of the Company approved the adoption of the
            Company's 2000 Employee Stock Purchase Plan and the reservation of
            300,000 shares of Common Stock for issuance under this plan. This
            proposal was approved with 7,608,019 votes for, 60,787 votes against
            and 12,025 abstentions.

         (3) The stockholders of the Company ratified the appointment of KPMG as
            the Company's independent public accountants for the fiscal year
            ending December 31, 2000. This proposal was approved with 7,655,190
            votes for, 7,935 votes against and 17,706 abstentions.

         (4) The stockholders of the Company approved the amendment to the
            Company's Articles of Organization to increase the number of
            authorized shares of Common Stock from 20,000,000 shares to
            50,000,000 shares. This proposal was approved with 7,387,456 votes
            for, 268,506 votes against and 24,869 abstentions.

Item 5 - OTHER INFORMATION
         None


                                       17
<PAGE>


                           IBIS TECHNOLOGY CORPORATION

                                     PART II

                                OTHER INFORMATION

                   Item 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits furnished as Exhibits hereto:

         10.46    Lease Agreement dated April 4, 2000 between the Company and
                  Thomas J. Flatley d/b/a The Flatley Company

         27       Financial Data Schedule

(b)      Reports on Form 8-K:

         The Company filed with the Securities and Exchange Commission on April
         13, 2000 a Current Report on Form 8-K for (i) the April 12, 2000 event
         announcing the receipt of $6 million in orders for an Ibis 1000 oxygen
         implanter and capacity reservation for additional equipment and/or
         SIMOX-SOI wafers from its largest customer, a leading domestic
         semiconductor manufacturer and (ii) the April 12, 2000 event
         announcing, based on preliminary analysis, the results for the first
         quarter ended March 31, 2000.

         The Company filed with the Securities and Exchange Commission on April
         24, 2000 a Current Report on Form 8-K for the April 19, 2000 event
         announcing the final results for the first quarter ended March 31,
         2000.

         The Company filed with the Securities and Exchange Commission on June
         26, 2000 a Current Report on Form 8-K for the June 21, 2000 event
         announcing the receipt of $5.0 million in SIMOX-SOI wafer orders from
         Bookham Technology, one of Ibis' largest wafer customers.

                                       18
<PAGE>




                           IBIS TECHNOLOGY CORPORATION

                                   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.


                            Ibis Technology Corporation

Date:  August 11, 2000      By:      /s/Debra L. Nelson
                                ------------------------------------------------
                                    Debra L. Nelson

                                   Chief Financial Officer, Treasurer and Clerk
                                   (principal financial and accounting officer)

Date:  August 11, 2000      By:      /s/Thomas F. Lacey
                                  ----------------------------------------------
                                    Thomas F. Lacey
                                    Controller and Assistant Treasurer



                                       19
<PAGE>




                           IBIS TECHNOLOGY CORPORATION

                                  EXHIBIT INDEX
<TABLE>
<CAPTION>

EXHIBIT NO.                                 DESCRIPTION                                   PAGE

<S>      <C>                                                                               <C>
10.46    Lease Agreement dated April 4, 2000 between the Company and Thomas J.
         Flatley d/b/a The Flatley Company                                                  21


27       Financial Data Schedule                                                            49

</TABLE>












                                       20