<PAGE>
 
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
 
                               ----------------
                                  FORM 10-K/A 
                               (Amendment No. 1)
 
    [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934
    [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934
 
For the fiscal year ended December 31, 1996     Commission File Number: 0-26482
 
                               ----------------
 
                           TRIKON TECHNOLOGIES, INC.
            (Exact name of registrant as specified in its charter)
 
              California                               95-4054321
    (State or other jurisdiction of         (I.R.S. Employer Identification No.)
     incorporation or organization)              
 
               9255 Deering Avenue, Chatsworth, California 91311
                   (Address of principal executive offices)
 
                                (818) 886-8000
             (Registrant's telephone number, including area code)
 
                     PLASMA & MATERIALS TECHNOLOGIES, INC.
                  (Former name, if changed since last report)
 
                               ----------------
 
Securities registered pursuant to Section 12(b) of the Act:  None
 
Securities registered pursuant to Section 12(g) of the Act:  Common Stock, No 
Par Value
 
                               ----------------
 
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 [_]
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [_]
 
The aggregate market value of the Common Stock held by non-affiliates of the
Registrant on March 31, 1997, based on the closing price of the Common Stock
as reported by the Nasdaq National Market on such date, was approximately
$86,920,484. Shares of Common Stock held by each officer and director and by
each person who owns 5% or more of the outstanding Common Stock have been
excluded from this computation in that such persons may be deemed to be
affiliates. This determination of affiliate status is not necessarily a
conclusive determination for other purposes.
 
As of March 31, 1997, the Registrant had outstanding 14,368,045 shares of
Common Stock.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
                                     None
 
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<PAGE>

     The Registrant hereby amends Item 1 of Part I of its Annual Report on Form 
10-K for the Fiscal Year Ended December 31, 1996, as set forth below, in order 
to correct the Company's backlog as of December 31, 1996, from an erroneously 
reported $23.5 million to $21.5 million. 


<PAGE>
 
                                    PART I
 
     This Annual Report on Form 10-K contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). These statements are in "Item 1. Business" in
paragraph 4 under "--Products--Planar 200 Flowfill(TM)," paragraph 3 under "--
Customers," paragraph 8 under "--Research, Development and Engineering,"
paragraph 4 under "--Joint Development Agreements," and the paragraph under
"--Environmental Matters." Such statements can also be found under "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of Trikon" in paragraphs 3 and 4 under "--Overview," paragraphs 2,
3, 5, 8 and 9 under "--Results of Operations" and paragraphs 7, 10 and 12
under "--Liquidity and Capital Resources." In addition, such statements can be
found in paragraph 2 under "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations of Electrotech--Administrative
Expenses." Forward-looking statements may also be found in various sections of
this Annual Report on Form 10-K that are not specifically set forth above.
Actual results could differ materially from those projected in the forward-
looking statements as a result of a number of factors, including those set
forth herein.
 
ITEM 1. BUSINESS
 
INTRODUCTION
 
     Trikon Technologies, Inc., formerly Plasma & Materials Technologies, Inc.
(together with its subsidiaries, "Trikon" or the "Company"), designs,
manufactures and markets advanced high density, low pressure plasma sources,
process modules and plasma processing systems, and develops, manufactures,
markets and services semiconductor fabrication equipment for the worldwide
semiconductor manufacturing industry. These products are used for etch,
physical vapor deposition (PVD, which is commonly referred to as "sputtering")
and chemical vapor deposition (CVD) applications and are sold to semiconductor
manufacturers worldwide. Trikon currently offers a modular line of etch
equipment which utilizes the Company's patented MORI(TM) source technology for
polysilicon and metal etch applications in the fabrication of semiconductor
devices and other products for the etch market, including its Omega(TM)
Inductively Coupled Plasma (ICP) system. In addition, semiconductor
manufacturers use the Company's patented MORI(TM) source technology for plasma
CVD of silicon dioxide films and photoresist stripping. Certain other
manufacturers also use the MORI(TM) source for the plasma etching of films in
the fabrication of large area active matrix liquid crystal displays. Some of
the customers that have purchased or have placed orders for the Company's
plasma processing systems include Texas Instruments, Dallas Semiconductor, LG
Semicon, Hyundai, Samsung, Toshiba and Canon Sales. Trikon also offers new
leading-edge products including the Sigma sputter system for PVD, with
optional Forcefill(TM) module, and the Planar 200 Flowfill(TM) system for
inter-metal dielectric CVD. Forcefill(TM) technology allows manufacturers to
eliminate the use of multistep CVD tungsten-plug based metallization processes
and to utilize an entirely aluminum-based PVD multi-level metal scheme in sub-
0.5 micron Integrated Circuit (IC) manufacturing. Trikon's new CVD process
technology, Flowfill(TM), forms high quality silicon dioxide layers which
possess the properties of both gap fill and planarization.
 
RECENT DEVELOPMENTS
 
     Electrotech Acquisition. On November 15, 1996, Trikon acquired all the
issued and outstanding shares (the "Acquisition") of Electrotech Limited and
Electrotech Equipments Limited (collectively, "Electrotech"). Electrotech
develops, manufactures, markets and services semiconductor fabrication
equipment for the worldwide semiconductor manufacturing industry. The
aggregate purchase price paid by the Company in the Acquisition, excluding
$7,976,995 in acquisition costs, was $145,700,000 consisting of $75,000,000
paid in cash and the issuance of 5,600,000 shares of common stock of the
Company ("Common Stock") with an estimated fair market value of $70,700,000,
based on the last sales price for the Common Stock on the day prior to the
public announcement of the parties agreement to the terms of the Acquisition.
Following consummation of the Acquisition, Christopher D. Dobson, former
majority owner of Electrotech, and Nigel Wheeler, former President of
Electrotech, became the Chairman of the Board of Directors, and President and
Chief Operating Officer, respectively, of the Company. Unless the context
otherwise requires, all references herein to "Trikon" or the "Company" include
Electrotech with respect to all periods on and after November 15, 1996.

                                       1
<PAGE>

     Name Change. On March 31, 1997, the Company changed its name to Trikon
Technologies, Inc. The Company believes that the Trikon name better suits a
company with a multi-continent presence and a number of non-plasma based
products.
 
PRODUCTS
 
     Trikon offers a line of modular solutions which are designed to meet the
varying requirements of its customers for etching of polysilicon, metal and
oxide films, stripping of photoresist, metal deposition and CVD of oxide
films. Trikon's line of equipment includes the MORI(TM) plasma source, the
MORI(TM) stand-alone process module for etch, strip or CVD applications, the
PINNACLE 8000/*/ system and the PINNACLE 8000R(TM) system. In addition, the
Electrotech-originated product line includes the Sigma Forcefill(TM) system,
the Delta 201 system, the Planar 200 Flowfill(TM) system and the Omega(TM)
201-2 system.
 
ETCH
 
     PINNACLE 8000/*/ and PINNACLE 8000R(TM)
 
     In December 1995, Trikon introduced its PINNACLE 8000R(TM) cluster tool
platform, a more compact version of its existing PINNACLE 8000* system, that
includes certain additional features that enable increased ease in operation.
Each of Trikon's PINNACLE 8000/*/ and PINNACLE 8000R(TM) systems is a dual wafer
cassette, vacuum loadlocked cluster tool which can incorporate up to four
MESC-compatible process modules. The dual wafer cassette loadlock
configuration enables the system to continuously process wafers. System
throughput varies, and is primarily dependent on the film application, the
operating configuration and the number of process modules attached to the
system. For a typical polysilicon etch process, with each process module
performing the same process, throughput varies from 40-60 wafers per hour for
a two module configuration, to 70-90 wafers per hour for a four module
configuration. This compares to a throughput of 30-40 wafers per hour for
competitive two module systems. Floorspace required for a PINNACLE 8000R(TM)
is approximately 44 square feet with two process modules and 65 square feet
with four process modules. By comparison, floorspace required for a Pinnacle
8000/*/ is approximately 88 square feet with four process modules. List prices
for the PINNACLE 8000/*/ and PINNACLE 8000R(TM) currently range from $1,800,000
for a standard two module system to $2,800,000 for a four module system, and
from $1,900,000 for a standard two module system to $3,400,000 for a four
module system, respectively.
 
     MORI(TM)
 
     Trikon's MORI(TM) plasma source is also sold as a subsystem on a limited
geographic and application basis to OEM licensees of Trikon's MORI(TM)
technology. Trikon currently sells the MORI(TM) source to Leybold of Germany
for incorporation into Leybold's systems that are sold worldwide for etching
large area, active matrix liquid crystal displays. Trikon sells its MORI(TM)
source to Canon Sales for incorporation into Canon Sales' systems for
photoresist stripping that are sold in the Japanese and Korean markets, and to
NEC Anelva for incorporation into NEC Anelva's systems for metal and oxide
etching that are sold in the Japanese market. Trikon's stand-alone process
module, common to Trikon's PINNACLE 8000/*/ and PINNACLE 8000R(TM) systems,
incorporates the MORI(TM) plasma source and can be configured for etch, strip
or CVD applications. The process module can be sold to customers either to
increase the capacity of existing system platforms, or to provide additional
process capability. List price for a standard process module configured for
etch applications is currently $500,000.
 
                                       2
<PAGE>
 
     Omega(TM) 201-2
 
     Trikon's Omega(TM) 201-2 metal etch system integrates the field-proven 200-
series hardware as used on other current Trikon products with Trikon's ICP
technology.  Although mainly targeted at metal interconnect, the technology is
also able to address oxide and polysilicon etch and is compatible with all etch
applications.  The Omega(TM) 201-2 metal etch system has been designed to
address the special requirements of metal etch while minimizing the space
utilized in the clean room.  The system has a passivation unit which minimizes
post-etch corrosion by combining the use of a downstream plasma with radiant
heating of the wafer backside to maximize photoresist strip rates and drive off
involatile chlorine-containing materials.  The Omega(TM) 201-2 also has a wafer
temperature control system which ensures that etch residues are minimized and
often eliminates the need to harden the photoresist using a deep UV process.  
The price for Trikon's Omega(TM) etch system ranges from approximately $700,000
to approximately $1,400,000, depending on the configuration of the system.
 
     Physical Vapor Deposition
 
     Sigma
 
     Layers of metal alloys can be deposited by Trikon's Sigma product line, a
sputtering machine with multiple process chambers. This product deposits a
very thin uniform layer of interconnect metal on the whole surface of the
semiconductor wafer. Subsequent lithography and etching turns this layer into
an intricate pattern of interconnect wiring on the many individual
semiconductor devices, each a complex and integrated functioning circuit.
Sigma is designed to be one of the cleanest PVD systems on the market, with
particular application in multi-layer metallization. Trikon's strategy is to
offer semiconductor manufacturers, who are currently using 0.8 micron to 1.0
micron design rules, a way to avoid the adoption of CVD tungsten, a relatively
difficult, dirty and expensive process. Trikon offers system configurations
which bridge the gap from non-hole-fill technology, at approximately 1.0
micron, to the adoption of Trikon's Forcefill(TM) technology onto the Sigma
platform, which is capable of filling holes smaller than 0.25 micron. The
selling price for the Sigma system ranges from approximately $1.5 million to
approximately $2.5 million, depending on the configuration of the system.
 
     Sigma Forcefill(TM)
 
     The Sigma Forcefill(TM) system is being developed to extend Trikon's
standard Sigma metallization product capability into the sub-0.5 micron
market. The Forcefill(TM) technology is used with traditional aluminum
techniques and eliminates the relatively complicated and difficult use of
tungsten. The process can be carried out on a standard Sigma series system
with an attached Forcefill(TM) module, which involves depositing a layer of
aluminum such that it forms a bridge over the holes. When adequate bridging is
achieved, the wafer is transferred under vacuum to the Forcefill(TM) module
where the aluminum is heated and forced under very high pressure into the
hole, thus achieving a void-free fill. Forcefill(TM) allows manufacturers to
eliminate the use of CVD tungsten and to utilize an entirely aluminum-based
multi-level metal scheme. DRAM and logic applications are both target markets
for Forcefill(TM), since the cost saving per layer is substantial, and the
interconnect speed is improved. The average selling price of the Sigma
Forcefill(TM) system ranges from approximately $3.5 million to approximately
$4.0 million, depending on the configuration of the system. Sigma
Forcefill(TM) products continue to be subject to customer review and
evaluation and Trikon is presently applying considerable efforts to attain
functionality and reliability levels acceptable to Trikon's target markets.
 
                                       3
<PAGE>
 
     Chemical Vapor Deposition
 
     Planar 200 Flowfill(TM)
 
     The planarized intermetal dielectric market requires a suitable insulating
material to protect the microscopic wiring in a chip, a number of which have
various undesirable characteristics. The most common insulating material is
silicon dioxide, which, when deposited by conventional techniques, is unable
to fill the increasingly small gap spacing required by next generation ICs.
Trikon has developed a new CVD process technology, Flowfill(TM), to form high
quality silicon dioxide layers which possess the properties of both gap fill
and planarization. In the Planar 200 Flowfill(TM) multi-chambered cluster
system, the advanced planarization layer consists of three films which are
deposited sequentially. The plasma CVD films are deposited in one module and
the CVD planarizing flow layer is deposited in the Flowfill(TM) module with no
vacuum breaks between the process steps. The flow layer has the ability to
fill sub-micron features less than 0.2 micron wide, with a 5 to 1 height to
width ratio, and achieve typical planarization of 80% for gaps up to 20
microns.
 
     Alternative technologies to Trikon's Flowfill(TM) system include spin on
glass (SOG) and high density plasma (HDP) combined with chemical mechanical
polishing (CMP). SOG is deposited in single or multiple spins. This technique
is complex and slow due to the number of steps involved. In addition, although
each individual step may be clean, the combination can lead to a high number
of added particles, which can decrease yield. HDP gap fills a wafer with
silicon dioxide in one system, but the rough spots on the wafer must be
planarized using a CMP process in a second system.
 
     For a number of reasons, Trikon's initial shipments of the Planar 200
Flowfill(TM) have targeted the DRAM market. First, due to the competitive
nature of the DRAM market, cost is a primary concern to DRAM manufacturers.
Certain DRAM manufacturers have indicated that Flowfill(TM) will offer
significant cost advantages for next generation DRAMs relative to both the SOG
and HDP processes. Second, due to the circuit designs of a DRAM, the maximum
distance between metal lines is 80 to 100 microns; Flowfill(TM) provides a
high level of planarity for gaps of this size. The selling price for the
Planar 200 Flowfill(TM) system ranges from approximately $1.4 million to
approximately $2.5 million, depending on the configuration of the system.
Flowfill(TM) systems continue to be subject to customer review and evaluation
and Trikon is presently applying considerable efforts to attain functionality
and reliability levels acceptable to Trikon's target market.
 
     In February 1997, the Company announced an advance in the depositing of low
dielectric constant (low-k) materials used in IC layering and production using
the Flowfill(TM) technologies (the "Flowfill(TM) CVD Development"). By
lowering the dielectric constant, the speed of an IC increases. Trikon has
tested a low-k material for use in its Flowfill(TM) system that mixes
methylsilane gas with hydrogen peroxide to produce a high quality insulatory
layer that is self-planarizing. While management believes that this low-k
process is a significant advancement in the intermetal dielectric market,
additional testing is necessary. There can be no assurance that this process
will result in the successful manufacture and production of ICs. See Note 12
of Notes to Consolidated Financial Statements.
 
     Delta 201
 
     Trikon's Delta 201 is a versatile, single-chamber production system for
producing films, including silicon dioxide or silicon nitride. The films
deposited by this system are used to insulate the interconnect wiring of a
semiconductor wafer. The Delta 201 is a relatively low-cost system and its
small dimensions make it attractive to customers, who are often short of
cleanroom space. The Delta 201 also addresses the gallium arsenide
semiconductor market and incorporates a wafer handling mechanism that is
suited to handle fragile and high-cost gallium arsenide wafers. The average
selling price for the Delta 201 system is approximately $600,000.
 
                                       4
<PAGE>
 
Customers
 
     The Company sells its systems to semiconductor manufacturers located
throughout the United States, Europe, Asia/Pacific, Korea and Japan. The
following is a list of customers who have purchased, leased or have current
orders for Trikon products either directly with the Company or through its
distribution and OEM relationships:
 
<TABLE>
<S>                          <C>                                  <C>
AT&T                         LSI Logic                            Philips
Daewoo                       Matsushita                           Ricoh
Dallas Semiconductor         Micron Technology                    Samsung
Fujitsu                      Mitsubishi                           Sharp
GEC Plessey                  Motorola                             Siemens
Hitachi                      National Semiconductor               Sony
Hyundai                      NEC                                  TEMIC
IBM                          OKI                                  Texas Instruments
IC Works                     Olivetti                             Toshiba
LG Semicon                   Orbit Semiconductor                  TriQuint
Leybold                                                           Tower Semiconductor
</TABLE>

     Trikon's total revenue includes amounts from certain individual customers
that exceed 10% of total revenue. Revenue from Hyundai and Siemens represents
19% and 12% of total revenue, respectively, for the year ended December 31,
1996. Revenue from five customers represented 19%, 15%, 12%, 11% and 11% each
of total revenue for the year ended December 31, 1995 and revenue from six
customers represented 19%, 17%, 17%, 15%, 15% and 12% each of total revenue
for the ten months ended December 31, 1994. During the year ended December 31,
1995, sales to Alcan-Tech, Canon Sales and NEC Anelva in Japan, and to LG
Semicon and Hyundai in Korea, accounted for 25% and 18% of the Company's total
revenue, respectively, for that period. During the ten months ended December
31, 1994, sales to Canon Sales and NEC Anelva in Japan, and to Samsung and
Hyundai in Korea, accounted for 31% and 32% of the Company's total revenue,
respectively, for that period. The Company's operating results could be
materially adversely affected by the loss of business from or the cancellation
of orders by or decreases in the prices of products sold to these or other
customers located in Germany, Japan and Korea. See Note 1 of Notes to
Consolidated Financial Statements.
 
     Sales other than in the United States accounted for approximately 77%, 47%
and 66% of total revenue in the years ended December 31, 1996 and 1995, and
the ten months ended December 31, 1994, respectively. The Company anticipates
that sales outside the United States will continue to account for a
significant portion of its total revenue. In addition, with the acquisition of
Electrotech, which sells primarily to international locations including
Germany, Japan and Israel, the Company expects that sales to Japanese, Korean,
and European semiconductor manufacturers will continue to represent a
significant percentage of the Company's product sales through at least 1997.
 
     All export sales by the Company must be licensed by the Office of Export
Administration of the U.S. Department of Commerce and related U.K. and other
foreign agencies performing similar functions. Although Trikon has experienced
no difficulty in obtaining these licenses, the Company's failure to obtain
these licenses in the future could have a material adverse effect on Trikon's
results of operations. A number of other risks arise in the international
market place, including unexpected changes in regulatory requirements,
exchange rates, tariffs and other barriers, political and economic
instability, difficulties in accounts receivable collections, extended payment
terms, the challenges of maintaining a readily available supply of spare
parts, difficulties in managing distributors or representatives, difficulties
in staffing and managing foreign subsidiary operations, potentially adverse
tax consequences, and the fluctuation of foreign currency exchange rates.
Wherever possible, international sales of Trikon's products are denominated in
U.S. dollars in order to reduce the risks associated with such currency
 
                                       5
<PAGE>
 
fluctuation. There can be no assurance that the Company will be able to avoid
these and other risks relating to the conduct of business internationally.
 
Marketing, Sales and Customer Support
 
     Trikon's long range goal is to market its products and services directly to
all end use customers to the extent it is efficient and cost effective. In the
current stage of Trikon's growth, it is not efficient or cost effective to
market products and services through a direct sales force in all regions.
Consequently, Trikon has established multiple sales channels to market
products and services to match Trikon's efforts in each region. Trikon
currently markets and sells its products primarily through three separate
sales channels, direct sales, distributor arrangements and OEM agreements. In
selected regions and countries, Trikon uses a combination of direct sales,
distributor arrangements, OEM agreements and sales representatives.
 
     As a result of the Acquisition, Trikon expanded its field sales and support
organizations worldwide, focusing on marketing within each product division.
The Company now has sales and marketing offices located in the United States,
United Kingdom, Europe and Asia to enable sales and service personnel to
provide dedicated worldwide support to new and existing customers. The field
based sales, service, and applications personnel now report into a unified
management structure based on country geography. This gains efficiency through
cross training and critical mass for support. Sales staff now represent the
full Trikon product line to its customers, gaining leverage in the selling
cycle. In select international countries, Trikon will continue to use
distributor or representative organizations for sales, but is moving to full
direct support organizations for customer control and satisfaction.

     In the United States, Trikon markets and sells its products principally
through its direct sales organization. In Korea, Trikon markets and sells its
products direct through the sales staff of its wholly owned Korean subsidiary.
The Korean market is served by a direct sales group in order to meet Korean
semiconductor manufacturers' requirements of having direct local
representation for sales, customer support and spare parts. In Hong Kong,
Taiwan, Singapore and China, the Company has sales agents which has increased
flexibility and responsiveness to customer needs in those areas. The European
market is served by a direct sales group in the United Kingdom which offers
sales, customer support and spare parts.
 
     Trikon currently believes that the most efficient strategy for penetrating
the Japanese market is to have a distribution agreement with a well
established and experienced sales organization. Trikon has appointed Canon
Sales as its exclusive etch system distributor in Japan, and in July 1995
entered into a definitive agreement for such appointment. The agreement is
year-to-year, renewable automatically unless either party terminates at least
90 days before the end of the year, and establishes the price to Canon as a
specified percentage discount from Trikon's then-current published U.S. list
price. Although management believes that it maintains a good relationship with
Canon Sales, there can be no assurance that the relationship will continue. In
addition, PVD and CVD sales in Japan are distributed through Innotech
Corporation. Trikon has also set up a sales staff located at its wholly owned
Japanese subsidiary to help establish its own experienced sales organization.
 
     In addition, Trikon has established a distributor relationship with
Techlink for the Taiwan market.  Trikon maintains active OEM agreements in Japan
and Europe. Trikon currently sells the MORI(TM) source to Leybold of Germany for
incorporation into Leybold's systems that are sold worldwide for etching large
area, active matrix liquid crystal displays.  Trikon sells its MORI(TM) source
to NEC Anelva for incorporation into NEC Anelva's systems for metal and oxide
etching which are sold in the Japanese market, and to Canon Sales for
incorporation into Canon Sales' systems for photoresist stripping that are sold
in the Japanese and Korean markets.
 
     Trikon believes that providing its customers with evaluation systems of its
equipment products is critical to its sales efforts. The ability to evaluate
Trikon's systems on a trial basis is expected by the semiconductor
manufacturing customers to whom Trikon markets. The average duration of a
trial period for systems is 
 
                                       6
<PAGE>
 
approximately one year. Consequently, as Trikon expands its sales efforts, it
believes that it will need to significantly increase its investment in
demonstration and evaluation systems.  The failure or inability of Trikon to
convert a demonstration system placed with a customer to a final sale could have
a material adverse effect on the Company.
 
     Trikon believes that high quality customer support, customer training, and
field consultation are key components in a customer's decision in selecting a
semiconductor equipment supplier. The ability to provide a processing system
with a high degree of reliability, low cost, high yield, high uptime and high
mean time between failure greatly influences a customer's purchase decision.
This requires experienced, responsive local support with quality personnel and
the ready availability of spare parts. Trikon believes that a focused field
support organization that works closely with its customers provides invaluable
feedback from customers with respect to system cost effectiveness, and
typically results in technical advances through continuous design improvement.
To further ensure customer satisfaction, Trikon also provides service and
maintenance training as well as process application training for its
customers' personnel on a fee basis. Trikon maintains an extensive inventory
of spare parts which allows Trikon to provide overnight delivery for many
parts.
 
Research, Development and Engineering
 
     Trikon believes that its future success will depend, in part, upon its
ability to continue to improve its systems and its process technologies and to
develop new technologies and systems that compete effectively on the basis of
total cost of ownership and performance. These technologies and systems will
also need to meet customer requirements and emerging industry standards.
Accordingly, Trikon devotes a significant portion of its personnel and the
financial resources to research and development programs and seeks to maintain
close relationships with its customers in order to remain responsive to their
product needs.

     As of December 31, 1996, the Company employed 159 professional and
technical personnel in research, development and engineering.  These employees
are organized in the following departments: research and development, hardware
engineering, software engineering, customer specials engineering, systems
engineering, documentation and manufacturing engineering, and customer
applications.
 
     The research and development group is responsible for identifying new
technology applications and developing processes to meet customer
requirements. Major research and development programs currently address PVD
and CVD applications, polysilicon and integrated stack etch applications,
metal etch applications, including aluminum, and oxide etch applications.
 
     Research and development activities for the Company is run by a general
manager of each of the two product divisions. The etch division, which is
managed by a U.S. based general manager, conducts most its development
activities in Chatsworth, California. There are approximately 55 individuals
currently engaged in research and development activities for the etch
division, 46 of which work in the U.S. and nine of which work in the UK.
 
     The deposition division is managed by a United Kingdom based General
Manager. Research and development activities for the deposition division are
conducted in the United Kingdom with peripheral support by U.S. personnel.
There are 104 individuals in the U.K. engaged in research in the deposition
division. Coordination of research and development activities for both the
etch and deposition product divisions is managed by Nigel Wheeler, the
President and Chief Operating Officer of Trikon, who resides in the United
Kingdom. In addition, the etch and deposition divisions are run as separate
profit centers with each General Manager having profit and loss responsibility
for their respective operations.
 
     Trikon's research, development and engineering expenses were $10.1 million,
$4.6 million and $3.6 million for the years ended December 31, 1996 and 1995,
and the ten months ended December 31, 1994, respectively, and 
 
                                       7
<PAGE>

represented 24.0%, 21.5% and 41.2% of total revenue for these three periods,
respectively.  In addition to direct research and development expenses, the
Company recognized a one-time charge of $86.0 million for acquisition related 
in-process research and development, in the year ended December 31, 1996, due to
the Acquisition.
 
     In addition to the Company's direct research, development and engineering
expenses, significant expenditures in research, development and engineering
have been made by Leybold, Canon Sales and NEC Anelva, with whom the Company
has entered into OEM agreements. These arrangements provide the Company with
expanded resources and knowledge to broaden the use of Trikon's MORI(TM)
plasma technology in the etch, PVD and CVD markets. No information on the
amount of these expenditures has been disclosed to the Company, however, the
Company believes that total expenditures exceed the Company's direct
expenditures for the same applications over the same periods identified above.
 
     Although Trikon believes that it has allocated sufficient resources to its
research, development and engineering efforts, the success of new system
introductions is dependent on a number of factors, including timely completion
of new system designs and market acceptance. There can be no assurance that
the Company will be able to improve its existing systems and process
technologies or develop new technologies or systems. In addition, the Company
may incur substantial unanticipated costs to establish the functionality and
reliability of its future product introductions early in the product's life
cycle.
 
Joint Development Arrangements
 
     In April 1996, Trikon entered into an agreement with NEC Anelva to jointly
develop a high density plasma dielectric CVD system. Pursuant to the
agreement, the two companies intended to jointly develop, market, and
manufacture such CVD system based upon Trikon's MORI(TM) source. As a result
of the Flowfill(TM) CVD Development, the Company and NEC Anelva have jointly
determined to discontinue their joint development effort in this area.
 
     On March 29, 1996, Trikon entered into a number of agreements with PMT CVD
Partners, L.P. (the "CVD Partnership") and the limited partners thereof (the
"Limited Partners"). The CVD Partnership was sponsored by Trikon to fund
research and development costs and expenses relating to CVD technology and
applications using MORI(TM) source technology. An aggregate of approximately
$5,350,000 was invested by the Limited Partners in the CVD Partnership to fund
such research and development efforts, which were performed by Trikon under an
agreement with the CVD Partnership. Trikon has been paid for such services in
an amount equal to its actual direct costs, as defined, plus a stated
percentage of such costs. During the year ended December 31, 1996, the amount
of such research and development payments to Trikon by the CVD Partnership was
$2,841,427. Under the applicable agreement, Trikon is obligated to pay stated
royalties to the CVD Partnership on sales of developed CVD products, and the
royalty percentage will vary based on the geographic location of the sale.
 
     In connection with the Flowfill(TM) CVD Development, the Company announced
that it would henceforth focus all of its CVD resources to further evaluate
and develop products based on the Flowfill(TM) technology. In that regard,
Trikon advised the Limited Partners that it had decided to discontinue the
research and development efforts of the CVD Partnership. One of the Limited
Partners has indicated that it believes such action was inconsistent with the
terms of the research and development agreement entered into between the
Company and the CVD Partnership, and that, accordingly, a settlement of any
and all claims that the Limited Partners may have in connection with such
discontinuance is appropriate. The parties have had only preliminary
discussions regarding the resolution of this dispute, though all funding by
the CVD Partnership of MORI(TM) source-based CVD research and development has
been discontinued. See Notes 6 and 12 to Consolidated Financial Statements.
 
     Trikon and LG Semicon have agreed to jointly develop an oxide etch process
utilizing Trikon's PINNACLE 8000R(TM) cluster tool. Trikon's wholly owned
Korean subsidiary will manage the process development work, which will be
conducted at LG Semicon's Cheong-Ju research and development facility in South
Korea and at Trikon's 
 
                                       8
<PAGE>
 
headquarters in California. Trikon believes that this joint development project
will help Trikon's PINNACLE 8000R(TM) system achieve acceptance in the oxide
etch market.  Although management believes that it maintains a good relationship
with LG Semicon, there can be no assurance that the relationship will remain
positive, or that the joint development project will be successfully completed.
In the event of a termination of Trikon's agreement with LG Semicon, or the
failure by the parties to successfully develop an oxide etch process based on
Trikon's PINNACLE 8000R(TM) cluster tool, Trikon's ability to penetrate the
oxide etch market would be adversely affected.
 
Manufacturing
 
     In order to maintain close control of its manufacturing processes, Trikon's
deposition division operates in a vertically integrated manner at the
Company's South Wales facility, taking full responsibility for the
manufacturing of virtually all components for Trikon's systems. This approach
has enabled the Company to ensure quality control and reduce dependence on
third party suppliers for its PVD and CVD products. On the other hand, the
manufacturing operations of Trikon's etch division, located in Chatsworth,
California, is a horizontally integrated structure consisting of materials
planning and procurement, assembly, system integration and final test.
 
     Trikon's modular product line, which is designed around the SEMI MESC
industry standard, enables the Company to use a large number of components and
sub-assemblies which are common not only to the Company's product line but
also to systems manufactured by other companies in the industry, both
competitive and non-competitive. Examples of common sub-assemblies are wafer
aligners and vacuum cassette elevators obtained from Brooks Automation in
Massachusetts, and RF power supplies obtained from RF Power Products in New
Jersey. Examples of sub-assemblies obtained from outside suppliers that are
unique to the Company's systems products include gas box assemblies and
fabricated vacuum chambers.
 
     Trikon's Chatsworth, California operations rely on outside suppliers to
manufacture substantially all of the components and a portion of sub-
assemblies used in their plasma processing systems. Certain of these are
obtained from a sole supplier or a limited group of suppliers. For example,
the wafer cassette elevator load locks used in the Company's PINNACLE 8000/*/ 
and PINNACLE 8000R(TM) plasma processing systems are sole sourced from Brooks
Automation.  The Company relies on outside suppliers generally, and a sole or
limited group of suppliers an adequate supply of required components, as well as
reduced control over pricing and timely delivery of components.  Because the
manufacture of certain of these components and sub-assemblies is a complex
process and can require long lead times, there can be no assurance that delays
or shortages caused by suppliers will not occur.  Any inability to obtain
adequate deliveries or any other circumstance that would require the Company to
seek alternate sources of supply or to manufacture such components internally
could delay the Company's ability to ship its systems and could have a
materially adverse effect on the Company.
 
Competition
 
     The markets served by Trikon's products are highly competitive and subject
to rapid technological change. Significant competitive factors include system
performance, cost of ownership (which is dependent upon yield, throughput and
reliability), size of installed base, depth and breadth of product line and
customer support.
 
     Trikon faces significant competition from various suppliers of systems that
utilize alternative technologies, including other manufactures of HDP systems.
In the etch market, the Company faces competition from suppliers of reactive
ion etch (RIE) systems, including Applied Materials, Lam Research and Tokyo
Electron. Trikon's MORI(TM) based etch systems also face competition from ICP
based etch systems marketed by Applied Materials and Lam Research, as well as
the electron cyclotron resonance (ECR) based etch system marketed by Hitachi.
In the high density plasma CVD market, Trikon's primary competitors are
Applied Materials, Novellus and Lam Research. In the PVD market, Trikon's
Forcefill(TM) technology faces competition from suppliers of aluminum and
tungsten-plug PVD systems, such as Applied Materials, and a number of other
competitors, including NEC Anelva, MRC, 
 
                                       9
<PAGE>
 
Novellus, Varian and Ulvac.  Trikon's Flowfill(TM) technology faces competition
from other CVD manufacturers, including Applied Materials, Lam Research,
Novellus and Watkins-Johnson.
 
     Virtually all of the Company's primary competitors are substantially larger
companies with broader product lines, and have well established reputations in
the etch, PVD, CVD and SOG markets, longer operating histories, greater
experience with high volume manufacturing, broader name recognition,
substantially larger customer bases, and substantially greater financial,
technical, manufacturing and marketing resources than the Company. Trikon also
faces potential competition from new entrants in the market, including
established manufacturers in other segments of the semiconductor capital
equipment market, who may decide to diversify into the Company's market
segment. There can be no assurance that Trikon's competitors will not develop
enhancements to or future generations of competitive products that will offer
price and performance features that are superior to those offered by the
Company's systems.
 
Intellectual Property
 
     Trikon relies on a variety of types of intellectual property protection to
protect its proprietary technology, including patent, copyright, trademark and
trade secret laws, non-disclosure agreements, and other intellectual property
protection methods. Although the Company believes that its patents and
trademarks may have value, the Company believes that its future success will
also depend on the innovation, technical expertise and marketing abilities of
its personnel. The Company currently holds eleven patents in the United
States, two patents in the United Kingdom, two patents in Taiwan, one patent
in each of Germany, France, Italy and the Netherlands. The Company currently
has approximately 49 patent applications pending worldwide and intends to file
additional patent applications, as appropriate. The Company's patents and
patent applications pending are all in the field of semiconductor manufacture
and are predominantly concerned with inductively coupled plasma etching (ICP),
deposition of dielectric layers by plasma and thermal means and in particular
to Trikon's MORI(TM) plasma source, the global planarization by a dielectric
film (Flowfill(TM)) and the process of filling semiconductor contact holes by
deformation of interconnect metal by high pressure (Forcefill(TM)) and the
equipment related to these processes. The Company also holds a copyright on
its MACSE(TM) proprietary software. The Company also has five trademarks that
are registered with the United States patent and trademark office, including
PINNACLE 8000/*/ and PINNACLE 8000R(TM) and uses a number of trademarks that are
registered or for which an application for registration has been filed in the
United States and certain other countries, including Forcefill(TM) and
Flowfill(TM).
 
     There can be no assurance that patents will be issued on the pending
applications or that competitors will not be able to legitimately ascertain
proprietary information embedded in the Company's products which is not
covered by patent or copyright. In such case, the Company may be precluded
from preventing the competitor from making use of such information. In
addition, should the Company wish to assert its patent rights against a
particular competitor's product, there can be no assurance that any claim in a
Company patent will be sufficiently broad nor, if sufficiently broad, any
assurance that the Company's patent will not be challenged, invalidated or
circumvented, or that the Company will have sufficient resources to prosecute
its rights. The Company's policy is to vigorously protect and defend its
patents, trademarks and trade secrets.
 
     The Company has abandoned its ICP patent in Europe and does not intend to
renew the related patents in the United States. Trikon is opposing an issued
German patent held by a competitor which relates to a process similar to
Forcefill(TM). The Company's management and its advisors believe this patent
is too broadly worded and as presently worded there is some possibility that
an infringement by Trikon might be alleged. There can be no assurance as to
the outcome of these proceedings.
 
     The Company's involvement in any patent or other intellectual property
dispute or in any action to protect trade secrets and know-how, even if
successful, could have a material adverse effect on the Company and its
business. Adverse determinations in any such action could subject the Company
to significant liabilities, require the Company to seek licenses from third
parties, which might not be available, and possibly prevent the Company 
 
                                      10
<PAGE>
 
from manufacturing and selling its products, any of which could have a material
adverse effect on the Company and its business.
 
Environmental Matters
 
     The Company is subject to a variety of federal, state and local laws, rules
and regulations relating to the use, storage, discharge and disposal of
hazardous chemicals and gases used during its customer demonstrations and in
research and development activities. Public attention has increasingly been
focused on the environmental impact of operations which use hazardous
materials. In 1995, the United Kingdom adopted a new and comprehensive
environmental law known as the Environmental Act of 1995 (the "Environmental
Act"), which, among other things, deals with the allocation of responsibility
for the cleanup of contaminated property and expands potential liability with
respect to the remediation of such contamination. Trikon owns or leases a
number of facilities in the United Kingdom, and compliance with the
Environmental Act is anticipated to result in certain expenses. A reserve of
$435,000 for the estimated potential liability of these expenses has been
recorded in connection with the Acquisition. There can be no assurance that
such expenses will not exceed present estimates. Failure to comply with
present or future regulations could result in substantial liability to the
Company, suspension or cessation of the Company's operations, restrictions on
the Company's ability to expand at its present locations, or requirements for
the acquisition of significant equipment or other significant expense. To
date, compliance with environmental rules and regulations has not had a
material effect on the Company's operations. At the present time, the Company
believes that it is in material compliance with all applicable environmental
rules and regulations.
 
Backlog

     As of December 31, 1996, the Company's backlog was $21.5 million, as
compared to $8.7 million at December 31, 1995. The Company's backlog at
December 31, 1996 consisted primarily of orders for its PVD, CVD and etch
products, a substantial majority of which consisted of Electrotech products.
The Company includes in its backlog all purchase orders that provide for
delivery within twelve months. The Company's business is characterized by
large purchase contracts for standard products with related customized
options. All orders are subject to cancellation or delay by the customer with
limited or no penalty. Because of possible changes in delivery schedules and
cancellations of orders, the Company's backlog at any particular date is not
necessarily representative of actual sales for any succeeding periods. 
 
Employees
 
     At December 31, 1996, the Company had 678 regular employees, including 159
engaged in research, development and 44 in sales and marketing, 171 in
customer support, 255 in manufacturing, and 49 in general administration and
finance. In March 1997, the Company announced an approximate 8% workforce
reduction affecting all such employee groups.
 
     The Company believes its future success will depend in large part on its
ability to attract and retain highly skilled employees, particularly those
highly skilled design, process and test engineers involved in the manufacture
of existing systems and the development of new systems and processes. The
competition for such personnel is intense. The Company faces the task of
quickly identifying, recruiting, training and integrating new employees. There
can be no assurances that the Company will be successful in doing so or, if
successful, in retaining such employees.
 
     None of the employees of the Company are covered by a collective bargaining
agreement, and the Company has not entered into employment agreements with any
of its employees, with the exception of a three-year employment agreement
entered into with Nigel Wheeler, the Company's President and Chief Operating
Officer, as of November 15, 1996. The Company considers its relationships with
its employees to be good.
 
                                      11
<PAGE>
 
Financial Information Relating to Foreign and Domestic Operations and Export
Sales
 
  See Note 3 of Notes to Consolidated Financial Statements.

<PAGE>
 

                                   SIGNATURES
                                   ----------

     Pursuant to the requirements of Section 13 or 15(d) 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.

Date:  June 3, 1997                 Trikon Technologies, Inc.

                                    By:   /s/ John W. LaValle
                                          -------------------
                                      John W. LaValle
                                      Senior Vice President, Chief Financial
                                      Officer and Secretary