<PAGE>
================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            ------------------------

                                    FORM 10-K
(Mark One)

/X/      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

/ /      For the fiscal year ended December 31, 2001

                                       or

         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the transition period from     to

                         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
      incorporation or organization)                  Identification No.)
               Ringland Way,
  Newport, Gwent NP18 2TA, United Kingdom
 (Address of principal executive offices)              (Zip Code)

                               44 (0)1633 414 000
               Registrant's telephone number, including area code

          Securities registered pursuant to Section 12(b) of the Act:

Title of each class                 Name of each exchange on which registered
    NONE                              NONE

          Securities registered pursuant to Section 12(g) of the Act:
                           Common Stock, No Par Value
                                (Title of Class)

         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.  X  Yes       No
                                          ---      ---
         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (229.405 of this chapter) 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.  X
                                              ---

         The aggregate market value of the Common Stock held by non-affiliates
of the registrant on March 13, 2002, based on the closing price of the Common
Stock as (reported on the Nasdaq National Market) on such date, was
approximately $118,032,941 million. 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 13, 2002, the registrant had outstanding 12,890,026 shares
of Common Stock.

         Documents Incorporated by Reference: Part III of this Annual Report on
Form 10-K incorporates information by reference from the Registrant's Proxy
Statement for its 2002 Annual Meeting of Shareholders, which Proxy Statement
will be filed no later than 120 days after the end of the Registrant's fiscal
year.

===============================================================================


<PAGE>


                            TRIKON TECHNOLOGIES, INC.
===============================================================================

         Annual Report On Form 10-K For The Year Ended December 31, 2001

                                      Index
<TABLE>
<CAPTION>
                                                                                                               Page
<S>                                                                                                          <C>
Forward-looking statements........................................................................................1
Trademarks........................................................................................................1

PART I............................................................................................................2

ITEM 1.      BUSINESS.............................................................................................2
ITEM 2.      PROPERTIES...........................................................................................9
ITEM 3.      LEGAL PROCEEDINGS...................................................................................10
ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................................................10

PART II..........................................................................................................11

ITEM 5.      MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS...............................11
ITEM 6.      SELECTED CONSOLIDATED FINANCIAL DATA................................................................11
ITEM 7.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS...............13
ITEM 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK...........................................23
ITEM 8.      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.........................................................24
ITEM 9.      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE................24

PART III.........................................................................................................25

ITEM 10.     DIRECTORS AND EXECUTIVE OFFICERS....................................................................25
ITEM 11.     EXECUTIVE COMPENSATION..............................................................................25
ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT......................................25
ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS......................................................25

PART IV..........................................................................................................26

ITEM 14.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.....................................26

</TABLE>


<PAGE>
                           Forward-looking statements

         This Annual Report on Form 10-K and certain information incorporated
herein by reference contain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements included or incorporated by reference in
this Annual Report, other than statements that are purely historical are forward
looking statements. Words such as "expects," "anticipates, "intends," "plans,"
"believes," "seeks," "estimates" and other similar expressions or variations of
such words are intended to identify these forward-looking statements.

         These forward-looking statements, which include statements about
Trikon's development efforts in the field of low k dielectrics, acceptance of
Trikon's technological innovations and products, the length and severity of the
current downturn in the semiconductor industry, Trikon's capital requirements
and funding sources, Trikon's ability to cut costs and manage the current
downturn, Trikon's market size, share and demand, and Trikon's expectations and
objectives regarding future expected operating results, revenues and earnings
are not guarantees of future performance and are subject to risks and
uncertainties that could cause actual results to differ materially from the
results contemplated by the forward-looking statements.

         All forward-looking statements included or incorporated by reference in
this Annual Report are based on information available to Trikon as of the date
hereof, and Trikon assumes no obligation to update any such forward-looking
statements. Shareholders are cautioned not to place undue reliance on such
statements.

         The forward-looking statements and any expectations based on such
forward-looking statements are subject to risks and uncertainties and other
important factors, including, without limitation, the cyclical nature of the
semiconductor industry, the long sales cycle and implementation periods, the
acceptance of Trikon's technologies and products, Trikon's ability to respond to
technological change, Trikon's dependence on a limited number of customers and
other factors discussed under the heading "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Risk Factors" and elsewhere
in this Annual Report. The reader should also consult the cautionary statements
and risk factors listed from time to time in the reports Trikon files with the
Securities and Exchange Commission.

                                   Trademarks

         TRIKON(R), OMEGA(R), OMEGA ETCH(R), OMEGA 2(R), SOFT SPUTTER ETCH(R),
PLANAR 200(R), FORCEFILL(R), FLOWFILL(R), HI-FILL(R), SIGMA(R), ELECTROTECH(R),
PLASMAFAB(R) and DRY DIP(R) are registered trademarks of Trikon in
one or more of the territories in which Trikon sells its products. M0RI(TM),
ORION(TM), fxp(TM), LOW-K FLOWFILL(TM) and PLANAR(TM) are trademarks of Trikon.
Trikon has applied for trademark registration of these and other marks in the
major sales territories in which the Company operates.

         All other trademarks, service marks, or trade names referred to in this
prospectus are the property of their respective owners.



                                      -1-
<PAGE>


                                     PART I

ITEM 1.       Business

         Overview

         Trikon Technologies, Inc. and its subsidiaries ("Trikon" or the
"Company") design, manufacture, market and service a broad line of advanced
production equipment used to manufacture semiconductor devices. The Company's
products are used by its customers to manufacture silicon integrated circuits,
compound semiconductor devices and circuits and optical waveguides. These
circuits and devices are key components in most advanced electronic products,
such as telecommunications devices, consumer and industrial electronics and
computers.

         For the year ended December 31, 2001, approximately 52% of Trikon's
product sales were attributable to production equipment for silicon integrated
circuits, and the remaining 48% of product sales were attributable to production
equipment for compound semiconductor devices and circuits and optical
waveguides.

         Management believes that Trikon's leading technologies for the low k
(dielectric constant) and ultra low k markets represents a considerable
opportunity for the Company. The use of low k materials is crucial to the
development of faster and smaller integrated circuits. To that end, Trikon has
devoted a significant portion of its research and development budget to the
development of low k tools, and, despite the downturn in the semiconductor
industry, Trikon increased its spending on research and development in calendar
year 2001 by 15% over the prior year.

         The Company's strategy is to expand its position as a leading provider
of process solutions to the silicon semiconductor, compound semiconductor and
emerging optical and micro-electromechanical systems markets, and includes the
following key elements:

         Market its solutions over a broad range of applications in the silicon
         and compound semiconductor end markets. Trikon believes that its
         ability to identify and provide leading edge solutions to key growth
         markets will be critical to ensuring the Company's long-term success.
         Trikon offers innovative products incorporating new technologies. The
         Company's innovative development of its low k chemical vapor deposition
         ("CVD") dielectric solution presents a potentially sizable market
         opportunity within the silicon semiconductor end market.

         Maintain technological leadership. Trikon devotes significant resources
         to its research and development programs. The Company is currently
         developing leading edge technology that addresses CVD deposited low-k
         dielectrics, physical vapor deposition ("PVD") deposited
         barrier/liner/seed applications and advanced oxide/low k etch
         applications for silicon integrated circuits. Trikon is committed to
         improving its systems and its technologies and to developing new
         technologies and systems that compete effectively on the basis of
         performance and total cost of ownership.

         Leverage existing strong customer relationships with silicon and
         compound semiconductor manufacturers located throughout North America,
         Europe and the Asia/Pacific region. The Company works closely with each
         customer to identify and address specific product requirements. Trikon
         believes that timeliness of delivery along with the ability to service
         and support its customers on an international basis has been a
         competitive advantage and will continue to be critical to retaining its
         worldwide customer base.

         Offer lowest cost of ownership solutions for mature, non-critical
         processes. Trikon believes that its solutions for these markets have a
         lower cost of ownership, which is attributed to factors such as its
         efficient manufacturing process, its small footprint and low
         consumables.

         The Company's principal executive offices are located at Ringland Way,
Newport, South Wales NP18 2TA, United Kingdom, and the Company's telephone
number is 44 (0) 1633.414.000.



                                      -2-
<PAGE>

Trikon's Products

         Trikon's products, which typically sell for between $0.9 million and
$3.5 million, are used in certain processes necessary to fabricate an integrated
circuit, or semiconductor device, which includes hundreds of steps divided into
the following basic operations:

         o        deposition, or adding material to a substrate, typically a
                  silicon wafer;

         o        patterning, or printing a circuit outline on the substrate;
                  and

         o        etching, or removing layers, of material from the substrate.

These, and other processes, are repeated in multiple cycles, building up
microscopically thin layers, thereby interconnecting countless transistors.

         Trikon supplies production equipment for two of the most typical
deposition techniques, CVD and PVD, as well as plasma etching for selective
material removal.

         The Company's proprietary technologies and leading-edge wafer process
capabilities enable its customers to perform new and advanced fabrication
processes, thereby improving their products.

         Chemical Vapor Deposition

         Chemical Vapor Deposition is a process that can be used to deposit thin
films of dielectric (insulating) and, to a lesser extent, conductive materials.
During the CVD process, gases that contain atoms of the material to be deposited
chemically react to form a thin film on the wafer. Three types of dielectric
layers deposited by CVD include:

         o        the pre-metal dielectric ("PMD"), the insulating layer between
                  the active components and the first interconnect metal layer;

         o        the inter-metal dielectric ("IMD"), the insulating layer
                  between the different metal layers; and

         o        the final passivation layer that seals the completed device
                  from atmospheric moisture.

The most common insulating films deposited by CVD are silicon dioxide, which is
used for the PMD and IMD layers, and silicon nitride, which is used for the
final passivation layer.

         The Company's CVD products, Planar 200 Flowfill, Planar 200 Low k
Flowfill, Planar fxp Flowfill, Planar 300 and Delta are targeted towards the IMD
and PMD markets and utilize the Company's proprietary technologies. The IMD and
PMD markets require a suitable insulating material to separate the many levels
of microscopic wiring in an integrated circuit. The most common insulating
material is silicon dioxide, which, when deposited by conventional techniques,
is unable to fill the small gaps required by next generation integrated
circuits.

         Addressing the problems of conventional CVD technology, Planar 200
Flowfill and Planar fxP Flowfill products are CVD systems primarily directed
towards the gap fill market and are used to deposit a planarizing layer that in
some cases may be used without the need for chemical mechanical polishing. These
products are cluster tools with twin vacuum cassettes and 4 (Planar 200) or 6
(Planar fxP) process module positions.

         The Company's Flowfill process is a patented CVD technology that was
developed to form high quality silicon dioxide layers that possess the
properties of both gap fill and a high degree of planarization. When a high
degree of planarization is reached, the upper surface of the layer is relatively
flat, irrespective of the topography of the surface covered. Flowfill can fill
features less than 0.04 micron wide with a less than 8:1 height to width ratio
and simultaneously achieve a very high degree of planarization for large gaps up
to 20 microns.



                                      -3-
<PAGE>

         Trikon's Low k Flowfill product has similar gap filling and
planarization properties to the Flowfill product but provides a low k dielectric
process, which enables device manufacturers to speed up the performance of their
integrated circuits. The Company's Low k Flowfill technology is in production
with a tunable dielectric constant of between 2.8 and 3.3 and has the capability
of achieving a dielectric constant of 2.5.

         The ORION product, the Company's ultra low k offering, is aimed at
advanced copper damascene applications where a k value of 2.2 or below is
required. While independently verified at 2.15, the Company's internal
measurements on films deposited by the ORION product suggest that the k value
can be reduced to 1.8. The ORION films are deposited on the Planar 300 system, a
bridge tool that can process both 200mm and 300mm wafers. This tool has 6
process module positions and is also capable of running Flowfill and low k
Flowfill processes, therefore offering customers a progression path from
Flowfill to ORION technology at both 200 and 300 mm production.

         The Delta product is a low cost, small footprint, single wafer, single
chamber plasma enhanced CVD (PECVD) system primarily directed towards the
compound semiconductor and optical waveguide market.

         Physical Vapor Deposition

         Physical Vapor Deposition is a process used to deposit conducting,
liner and barrier metal layers on an integrated circuit. One of the primary PVD
methods is sputtering, a process in which an electrical discharge creates ions
of an inert gas, such as argon, which are then accelerated in a vacuum at a
target typically of pure metal or metal compound, such as aluminum, aluminum
compounds, tantalum or copper. The target atoms are sputtered away and deposited
on the wafer to form a thin film. Thin conductive films, when patterned by
lithography and etching, are used to wire an integrated circuit. These sputtered
thin films consist of:

         o        the bulk conducting layers;

         o        the barrier and liner metal layers to prevent diffusion or
                  reactions between metals and silicon regions; and

         o        the seed layer for electroplating.

         Trikon's Sigma 200 and Sigma fxP systems are cluster tools, which are
typically used to sputter uniform layers of pure metals or metal alloys. These
products are cluster tools with twin vacuum cassettes and 4 (Sigma 200) or 6
(Sigma fxP) process module positions.

         Trikon's Sigma systems are designed to be among the cleanest PVD
systems on the market, which is a key technology requirement for sputtering the
wafer with as high quality film as possible. Various process chambers are
available for specific functions. In particular, there are advanced PVD chambers
for depositing high quality barrier and liner layers for advanced metalization
structures. These consist of the "long throw" Hi-Fill and "ionised metal"
Advanced Hi-Fill PVD chambers for improved barrier and liner deposition into
high aspect ratio structures. A Forcefill chamber is also available which fills
contact holes on semiconductor wafers with deposited aluminum alloys by applying
heat and isostatic high pressure. Additional chambers consist of pre heat and
sputter etch. On the Sigma fxP there are additional wafer pre alignment and cool
down stations.

         Trikon is targeting both compound device makers and barrier and liner
applications for advanced silicon device production. The Company believes that
the Sigma systems have the lowest cost of ownership compared to the Company's
main competitors, an important factor for integrated circuit manufacturers.

         Plasma Etch

         Plasma etch is a process that removes precisely defined patterns from
the wafer surface by chemically converting exposed portions of the surface into
a gaseous by-product that is pumped away from the process chamber. Almost all
deposition processes create a film covering the entire wafer surface. Many
layers are required only in selected parts of the wafer, for example to create
wires of metal. These wires may be created by first coating the entire wafer
surface with sputtered aluminum alloys and its associated barrier layers. These
conductive layers are then coated with photo resist and are exposed to the
wiring pattern during the photolithography process. Plasma etching is then used
to remove the exposed conductive layer, thus replicating the wiring pattern. The
metal remains in place under the protective photo resist, which is then stripped
off.



                                      -4-
<PAGE>

         The Company's Omega plasma etch systems are available on a choice of
platforms.

         The Omega fxP is a multi-chambered cluster tool that combines the
Company's Omega plasma etch sources with the production proven fxP platform
already used for the Sigma(R) fxP, Planar fxP and Delta fxP. The Omega fxP
offers up to 6 process modules combined with tools for wafer alignment and
cool-down and two vacuum cassette stations. Multiple chambers provide high
throughput for the high volume user or the option to `mix and match' different
plasma sources so that advanced sequential etching processes can be addressed.

         The Omega 201 & 201+ feature Trikon's plasma source technologies in a
single chamber format that combines high performance etching with small
footprint and low costs. These attributes make the tool particularly well suited
to cost-sensitive manufacturing of silicon integrated circuits, compound device
makers and to the emerging photonics industry.

         Both platforms support Trikon's three main plasma sources, M0RI(TM),
Plasma Enhanced Reactive Ion Etch ("PERIE") and Inductively Coupled Plasma
("ICP"). Additional modules may also be added that provide secondary functions,
such as post etch corrosion processes. M0RI etch technology offers the highest
plasma density that provides process solutions for the most advanced
polysilicon, oxide and low k etch requirements. The PERIE offers medium plasma
density for silicon and dielectric etching where the feature sizes are less
challenging. The ICP is used extensively for high-density aluminium and
polysilicon etching as well as for a broad range of front and back face
processing on compound semiconductors.

         The Company believes the low cost of ownership, small footprint, high
reliability and process flexibility make the Omega particularly suitable for
consumer, compound integrated circuit and planar optical waveguides manufacture
where a wide range of layers can be etched on a limited number of systems.

History of the Company

         In August 1995, the Company completed its initial public offering of
common stock, in which it received net proceeds of $40.1 million.

         In November 1996, the Company acquired Electrotech Limited and
Electrotech Equipments Limited (collectively, "Electrotech"), both United
Kingdom companies, for a total consideration of $145.7 million. Of this
consideration, $86.0 million was attributed to purchased in-process technology
and was expensed in the Company's statement of operations for the year ended
December 31, 1996. The cash portion of the acquisition price was funded through
the issuance by the Company of its 7 1/8% convertible notes.

         During 1997, the semiconductor equipment industry entered a cyclical
downturn, which adversely affected the Company's revenues and cash flows. In
response to the downturn, the Company restructured its operations in the fourth
quarter of 1997. The restructuring included the closure of M0RI etch operations
in California and the sale of technology licenses. In the statement of
operations for the year ended December 31, 1997, the Company recognized charges
of $18.3 million for restructuring costs and $44.1 million for the write down of
M0RI etch assets. The Company also recognized in cost of goods sold a charge of
$20.7 million of inventory write-downs associated with the restructuring.

         As part of the Company's efforts to make interest payments on its
7 1/8% convertible notes and to have sufficient working capital, in November
1997, the Company granted non-exclusive, worldwide, paid-up licenses to its M0RI
source and ForceFill technologies to Applied Materials for $29.5 million. In
addition, the Company restructured its M0RI etch operations and closed its M0RI
facility in California. The Company also wrote-down certain intangible assets
from the Electrotech acquisition. In March 1998, the Company granted a
non-exclusive, worldwide, paid-up license to its M0RI source technology to Lam
Research.

         Due to market conditions and dilution from a large number of shares
issued to convert debt to equity, the Company's stock price fell below $1.00 and
it was delisted from the Nasdaq National Market and moved to the OTC bulletin
board on November 11, 1998. On December 17, 1999, following an improvement in
its operating results, the Company effected a 10-for-1 reverse stock split, and
on May 10, 2000, the Company was relisted on the Nasdaq National Market.


                                      -5-
<PAGE>

         During 1999 and 2000 the Company grew its sales by 32% and 112%
respectively and the Company expanded its customer base and returned to
profitability. During fiscal 2001, while the semiconductor manufacturing
industry experienced a downturn, the Company reported a decline in sales of 9%
and an operating income equal to 14.6% of sales.

Customers

         Trikon sells its systems to semiconductor manufacturers located
throughout North America, Europe, and Asia/Pacific including South Korea and
Japan. Some of the Company's customers are: Agere, Epcos AG, Infineon AG, LSI
Logic, Philips, Samsung, Silterra, Tower Semiconductor and TriQuint.

         Historically, a significant percentage of the Company's total revenues
in each year has been attributable to a limited number of customers. The
Company's largest customers, however, may vary from year to year depending upon,
among other things, a customer's budget for capital expenditures, plans for new
fabrication facilities and new product introductions.

         Trikon's total revenue includes amounts from certain individual
customers that exceed 10% of its total revenue. For the year ended December 31,
2001, Infineon accounted for 17% and Philips accounted for 15% of the Company's
total revenues respectively. In 2000, Infineon, Philips, Tower Semiconductor and
TriQuint accounted for 23%, 16%, 12% and 11% of the Company's total revenues,
respectively.

         The Company must obtain export licenses from the Export Control
Organization of the United Kingdom Department of Trade and Industry for
shipments to certain countries, including South Korea and Israel. Although
Trikon has experienced no difficulty in obtaining these licenses, the failure to
obtain these licenses in the future could have an 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, 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 US dollars in order to reduce the risks associated
with such currency 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 has established multiple sales channels to market products and
services to match the Company's efforts in each region. Trikon currently markets
and sells its products and technologies primarily through direct sales and
agency and distributor arrangements.

         In North America, Trikon markets and sells its products principally
through the Company's direct sales organization supported by service operations
located in Orange County, CA; Dallas, TX; Portland, OR; New Haven, CT; and
Ottawa, Canada.

         In South Korea, Trikon markets and sells its products directly through
its wholly owned South Korean subsidiary. In Japan and Taiwan, the Company
operates with distribution supported by Trikon from its United Kingdom and South
Korea offices.

         In Europe and Israel, Trikon markets and sells its products primarily
through its direct sales and service operations in the United Kingdom, the
Netherlands, France and Germany.

         The Company uses a combination of sales agents and distributors in
other territories.

         Trikon provides customers with evaluation systems of the Company's new
products as part of its sales efforts. The provision of evaluation systems is an
important step in the lengthy sales cycle. The average duration of an evaluation
period for systems is approximately one year. Consequently, as the Company
expands its sales efforts, particularly in the low k market, Trikon believes
that it will need to significantly increase its investment in demonstration and
evaluation systems.


                                      -6-
<PAGE>

         Trikon has an international customer support department at Newport, UK
in addition to the local office service and support staff at regional centers.
Trikon has a dedicated training suite at its Newport facilities housing a clean
room with complete systems and the latest generation training aids. The factory
based support team is divided into CVD, PVD and plasma etch groups responsible
for quality and technical support, a training and support documentation group,
spares supply group and technical support for Asia.

Research, Development and Engineering

         Trikon believes that its future success will depend primarily upon its
ability to continue to improve its systems and its technologies and to develop
new technologies and systems that compete effectively on the basis of
performance and total cost of ownership. 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 its
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. Trikon believes that this commitment is evidenced by the 15%
increase in research and development expenditures in the year ended December 31,
2001 as compared to the prior year, despite the downturn in the semiconductor
industry.

         As of December 31, 2001, the Company employed 88 professional and
technical personnel in research, development and engineering. This group, which
management believes is highly qualified, has experienced low staff turnover and
represents a significant asset to the Company. 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 CVD deposited low k dielectrics, PVD deposited
barrier/liner/seed applications and advanced oxide/low k etch applications for
silicon integrated circuits and the deposition and etching of critical layers in
compound semiconductor and planar optical waveguide devices.

         Although the Company believes that it allocates sufficient resources to
its research, development and engineering efforts, the success of new systems
that are introduced 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.

Manufacturing

         Trikon manufacture the key technology components for its products at
its Newport, United Kingdom facility and uses components supplied by third
parties. This approach has enabled the Company to ensure quality control and
compliance with government regulation. Trikon's United Kingdom operations are
ISO 9000 accredited by the British Standards Institute.

         Trikon's Newport facility has a class 1000 clean manufacturing and
final test area, a class 100 engineering clean room and a class 10 process and
product demonstration room. This facility also has a dedicated training suite of
class rooms and a clean workshop stocked with its products, both current and
former generations, where the Company trains its own and its customers'
engineers.

         Trikon also operates two additional sites near the Newport facility
where assemblies are made. One is at Bristol, a sheet metal fabrication workshop
producing enclosures, panels and other parts and the other is a CNC machinery
center, producing chamber components and other parts and wafer transport
assemblies. In order to ensure that the facilities remain competitive in both
quality and price, and to help cover fixed costs, the CNC facility also produces
products for third parties.

Competition

         The markets served by Trikon are highly competitive and subject to
rapid technological change. Historically, new technologies have only gained
acceptance when industry leaders have concurrently adopted such new
technologies. Significant competitive factors include timing of new product
offerings, system performance, cost of ownership, size of installed base, depth
and breadth of product line and customer support.

         Trikon faces significant competition from various suppliers of systems
that utilize similar or alternative technologies. In the CVD market, Trikon's
primary competitors are Applied Materials, ASMI, Novellus and Unaxis, as well as
other CVD manufacturers and track manufacturers for spin on glass, or SOG,
deposition, such as Tokyo Electron. In the PVD market, Trikon's Sigma
technologies face competition from suppliers such as Anelva, Applied Materials,
Novellus, Ulvac, Unaxis, and Veeco. In the etch market, Trikon faces competition
from suppliers including Applied Materials, Hitachi, Lam Research, Tegal, Tokyo
Electron and Unaxis.

                                      -7-
<PAGE>

         Virtually all of the Company's primary competitors in the silicon-based
semiconductor equipment market are substantially larger companies, some with
broader product lines. They have well established reputations in the markets in
which the Company competes, greater experience with high volume manufacturing,
broader name recognition, substantially larger customer bases, and substantially
greater financial, technical, manufacturing and marketing resources. In the
compound semiconductor equipment market, the dominant silicon-based
semiconductor-equipment manufacturers may increase substantially their efforts
to enter, or increase their market share of, that market. In each market, 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
segments. There can be no assurance that the Company'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.

         Trikon has granted non-exclusive, worldwide, paid-up licenses of its
M0RI source and Force Fill PVD technologies to Applied Materials and granted a
non-exclusive, worldwide, paid-up license of the Company's M0RI source
technology to Lam Research. As a result, in the future the Company's PVD and
etch products may have to compete with products of Applied Materials or Lam
Research based on the Company's technologies. The license agreements do not
preclude the Company from utilizing, or licensing to other third parties, the
licensed technologies.

Backlog

         As of December 31, 2001, the Company's backlog was approximately $13.7
million, as compared to approximately $83.1 million at December 31, 2000. This
significant reduction in backlog is directly attributable to the downturn
experienced by the semiconductor equipment industry in 2001.

         The Company's backlog consists of system purchase orders that provide
for delivery within the following year and the uninvoiced portion of system
purchase orders that have been shipped but have not been recognized as revenue
under Trikon's revenue recognition policy.

         The Company's business is characterized by large purchase contracts for
standard products with related customized options. All orders may be subject to
cancellation or delay by the customer with limited or no penalties. 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. During the year ended December 31,
2001, $4.4 million of the Company's backlog at December 31, 2000 was canceled
and the Company collected $1.3 million in cancellation fees related to such
cancellations.

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. The Company currently holds 24 US and 51 foreign
patents. As of December 31, 2001, the Company had 22 patent applications pending
in the US and 153 patents pending in the rest of the world, and the Company
intends to file additional patent applications, as appropriate.

         The Company's success and ability to compete depends in large part upon
protecting its proprietary technology. The Company relies on a combination of
patent, trade secret, copyright and trademark laws, non-disclosure and other
contractual agreements and technical measures to protect its proprietary rights.

         There can be no assurance that patents will be issued on the Company's
pending patent applications or that competitors will not be able to legitimately
ascertain proprietary information embedded in the Company's products that is not
covered by patent or copyright. In such cases, 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 any of its
patents 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.



                                      -8-
<PAGE>

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 customer demonstrations and in
research and development activities. Public attention has increasingly been
focused on the environmental impact of operations that use hazardous materials.
In 1995, the United Kingdom adopted a new and comprehensive environmental law
known as the Environmental Act 1995, which, among other things, deals with the
allocation of responsibility for the clean up of contaminated property and
expands potential liability with respect to the remediation of such
contamination. The Company owns or leases a number of facilities in the United
Kingdom, and failure to comply with present or future regulations could result
in substantial liability to the Company, suspension or cessation of its
operations, restrictions on its 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. The Company believes that it
is in material compliance with all applicable environmental rules and
regulations and is in compliance with ISO14000 environmental standards.

Employees

         At December 31, 2001, Trikon had 398 full-time employees (including
employees on temporary contracts), including 88 engaged in research, development
and engineering, 24 in sales and marketing, 120 in customer support, 139 in
manufacturing, and 27 in general administration and finance.

         None of the Company's employees is covered by a collective bargaining
agreement. The Company has an employment agreement with Nigel Wheeler, the
Company's President and Chief Executive Officer, dated November 15, 1996 which
is renewed annually. Christopher D. Dobson, the Company's Chairman and Chief
Scientific Officer who had an employment agreement dated May 14, 1998, retired
as an executive of the Company during the year, while retaining the position of
Chairman of the Board. There are no other employment agreements with employees.

ITEM 2.       Properties

         Certain information concerning the Company's principal properties at
December 31, 2001 is set forth below:


<TABLE>
<CAPTION>

                                                                                               Square     Property
 Location          Type                             Principal Use                             Footage     Interest
-------------      -----------------------     -----------------------------------------    -----------  ----------

<S>                <C>                         <C>                                          <C>          <C>
Newport,           Office, Manufacturing       Headquarters, Manufacturing, Sales and           110,000     Leased
United Kingdom     & Laboratories              Customer Support, Research, Development
                                               and Engineering

Bristol,           Office, Manufacturing       Storage/Vacant                                    55,700     Owned
United Kingdom     & Warehouse

Cwmfelin-fach,     Office, Manufacturing       Manufacturing of Components                       20,000     Leased
United Kingdom     and Warehouse

Bristol,           Office, Manufacturing       Manufacturing of Components                        9,000     Leased
United Kingdom     & Warehouse

Orange County,USA  Office                      North American Headquarters, Sales and             1,600     Leased
                                               Customer Support
</TABLE>



                                      -9-
<PAGE>

         The Company has a number of smaller properties and field offices
located in the United States, the United Kingdom, Germany, France and South
Korea. The Company believes that its properties adequately serve its present
needs.

ITEM 3.       Legal Proceedings

         None.

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

         None.



                                      -10-
<PAGE>


                                     PART II

ITEM 5. Market for Registrant's Common Equity and Related Shareholder Matters

         Market for the Registrant's Common Equity

         The Company's common stock trades on the Nasdaq National Market under
the symbol "TRKN". The quarterly high and low sale prices for common stock as
reported by the Nasdaq National Market from May 10, 2000 and the OTC Bulletin
Board prior to that date, for the periods indicated below are as follows.

                                                  High        Low
              2000
              First Quarter ..................    $16.87     $  9.00
              Second Quarter..................    $22.06     $ 11.50
              Third Quarter...................    $28.06     $ 13.25
              Fourth Quarter..................    $16.87     $  9.75
              2001
              First Quarter...................    $15.63     $  9.44
              Second Quarter..................    $15.18     $  7.13
              Third Quarter...................    $14.05     $  7.95
              Fourth Quarter..................    $11.95     $  7.96

         As of March 13, 2002, there were 145 shareholders of record of Common
Stock.

         The Company has not declared or paid cash dividends to holders of its
shares of common stock. Dividends due to holders of Series H Preferred Stock
during 2001 were paid with 12,477 new shares of Series H Preferred Stock and
cash of $50,000. Dividends due to holders of Series H Preferred Stock during
2000 and 1999 totaling $849,010 and $2,448,100 were paid with 84,901 and 244,810
new shares of Series H Preferred Stock, respectively. As of June 29, 2001, there
were no shares of Series H Preferred Stock outstanding.

         The Company anticipates that any earnings in the near future will be
retained for the development and expansion of its business and, therefore, does
not anticipate paying dividends on its common stock in the foreseeable future.
In addition, any declaration of dividends on the common stock will depend, among
other things, upon levels of indebtedness, restrictions in debt agreements,
future earnings, the operating and financial condition of the Company, its
capital requirements, the ability to repatriate profits to the United States and
general business conditions.

         On March 13, 2002, the closing price of the common stock as reported on
the Nasdaq National Market was $14.40 per share.

         Unregistered Sales of Registrant's Equity Securities During Last Fiscal
Year

         During the year ended December 31 2001, the Company sold 925,930 shares
of common stock and a warrant to purchase 92,593 shares of common stock in a
private transaction with an institutional shareholder. The warrants are
exercisble for a fixed exercise price of $13.50 per share. The gross proceeds of
the sale were $10.0 million and the related costs amounted to approximately
$30,000, and all the net proceeds are and will continue to be be used for
working capital purposes. The common stock and warrants were issued to one
accredited investor in a transaction exempt from registration pursuant to
Section 4(2) of the Securities Act of 1933, and the rules and regulations
thereunder.

         In addition, the Company issued 148,644 new shares of common stock in
exchange for $1,863,300 face value of 7 1/8% Subordinated Convertible Notes due
2001 in a limited number of privately registered transactions with institutional
investors, which transactions were exempt from registration under Section 4(2)
of the Securities Act of 1933, and rules and regulations thereunder.

ITEM 6.       Selected Consolidated Financial Data

         The following selected consolidated financial data are qualified by
reference to and should be read in conjunction with the consolidated financial
statements and notes thereto of Trikon and "Management's Discussion and Analysis
of Financial Condition and Results of Operations," which are included elsewhere
in this annual report. The selected consolidated financial data set forth below
as of December 31, 2001, and 2000 and for the years ended December 31, 2001,
2000, and 1999 have been derived from the audited financial statements of Trikon
included elsewhere in this annual report. The selected consolidated financial
data set forth below as of December 31, 1999, 1998 and 1997 have been derived
from audited financial statements of Trikon not included in this annual report.

                                      -11-
<PAGE>

         As discussed in the "Management's Discussion and Analysis of Financial
Condition and Results of Operations", the Company changed its accounting policy
with respect to revenue recognition in the year ended December 31, 2000. In
accordance with Accounting Principles Board Opinion 20, the Company accounted
for the change as a cumulative effect on the prior years resulting from the
change to a different revenue recognition policy. As a result, the selected
consolidated financial data for the periods ending on and before December 31,
1999 have not been restated, but pro forma revenue, net income and earnings per
share are included as a footnote to the selected consolidated data. No pro forma
data is given for 1997 as the Company considers that the effect on net losses
for that year is not significant to the trend of the Company's financial
performance.


<TABLE>
<CAPTION>

                                                                        Year Ended December 31
                                                       ---------------------------------------------------------
                                                          2001       2000        1999       1998        1997
                                                       ---------------------------------------------------------
                                                       (In thousands of U.S. dollars, except share information)
<S>                                                   <C>          <C>         <C>        <C>        <C>
Operating Data:
Revenues:
 Product sales..............................              $97,046    $106,662    $48,363    $ 25,125   $ 55,609
 License revenues...........................                   --         350      2,144      13,000     29,500
                                                       ---------------------------------------------------------
   Total revenues...........................               97,046     107,012     50,507      38,125     85,109
                                                       ---------------------------------------------------------
Costs and expenses:
 Cost of goods sold.........................               51,749      55,847     27,735      20,378     61,974
 Research and development...................                9,650       8,395      6,545       8,087     17,033
 Selling, general and administrative........               21,492      22,617     15,723      19,533     34,734
 Amortization of intangibles................                   --          --         --          --      3,116
 Purchased in-process technology............                   --          --         --          --      2,975
 Restructuring costs........................                   --          --     (4,361)      1,843     18,273
 Impairment write-downs.....................                   --          --         --          --     44,135
                                                       ---------------------------------------------------------
   Total costs and expenses.................               82,891      86,859     45,642      49,841    182,240
                                                       ---------------------------------------------------------
Income (loss) from operations...............               14,155      20,153      4,865     (11,716)   (97,131)
Other income................................                  681          --         --          --         --
Interest:
 Interest expense...........................               (1,504)       (674)      (413)     (2,923)   (12,068)
 Interest income............................                1,350         325        222         590        674
                                                       ---------------------------------------------------------
Income (loss) before income tax
 provision (benefit)........................               14,682      19,804      4,674     (14,049)  (108,525)
Income tax provision (benefit)..............                3,432         824        100      (1,821)    (9,248)
                                                       ---------------------------------------------------------
Net income (loss) before extraordinary item and
 cumulative effect of change in accounting principle       11,250      18,980      4,574     (12,228)   (99,277)
Extraordinary item..........................                   --          --         --      20,293         --
Cumulative effect of change in accounting principle            --      (1,833)        --          --         --
                                                       ---------------------------------------------------------
Net income (loss)...........................              $11,250     $17,147     $4,574     $ 8,065  $ (99,277)
                                                       =========================================================
Net income (loss) applicable to common shares             $11,109     $16,121     $2,084      $6,579  $ (99,277)
                                                       =========================================================

Earnings (loss) per common share data (1):
Basic:
Earnings (loss) applicable to common
  shares before extraordinary item and cumulative
  effect of a change in accounting principle                $0.98       $1.82      $0.25     $ (2.38)   $(67.08)
Extraordinary gain..........................                   --          --         --        3.52         --
Cumulative effect of change in accounting principle            --       (0.19)        --          --         --
                                                       ---------------------------------------------------------
Earnings (loss).............................                $0.98       $1.63      $0.25       $1.14   $ (67.08)
                                                       =========================================================
Diluted:
Earnings (loss) applicable to common
  shares before extraordinary item and
  cumulative effect of a change in
  accounting principle shares
  before extraordinary item.................                $0.88       $1.58      $0.24     $ (2.33)   $(67.08)
Extraordinary gain..........................                   --          --         --        3.45         --
Cumulative effect of change in accounting principle            --       (0.16)        --          --         --
                                                       ---------------------------------------------------------
Earnings (loss).............................                $0.88       $1.42      $0.24       $1.12   $ (67.08)
                                                       =========================================================
Average common shares used
 in the calculation (1) - Basic.............               11,281       9,868      8,254       5,769      1,480
                        - Diluted...........               12,658      11,325      8,593       5,878      1,480
Earnings per common share data (Pro forma):
Pro-forma amounts assuming the accounting change
 is retrospectively applied
                             Revenue                                 $107,012    $47,473     $39,921
                             Net income                               $18,980     $3,071      $8,819
                             Earnings per share -                       $1.82      $0.07       $1.27
                             basic
                             Earnings per share -                       $1.58      $0.07       $1.25
                             fully diluted

</TABLE>



                                      -12-
<PAGE>

<TABLE>
<CAPTION>

                                                                                  December 31

                                                         --------------------------------------------------------------
                                                            2001        2000         1999           1998       1997
                                                            ----        ----         ----           ----       ----
                                                                        (In thousands of U.S. dollars)
<S>                                                         <C>          <C>          <C>          <C>       <C>
Balance Sheet Data:
Working capital (deficiency)(2).......................      $62,379      $33,346      $23,371      $13,191   $ (65,794)
Total assets..........................................      112,733       95,694       57,278       55,752      79,690
Long-term debt and capital lease
  obligations, less current portion...................       15,606        2,376            4           99         127
Convertible Subordinated Notes, less amounts                     --           --        4,147        4,147          --
  classified as current at December 31, 2000 and 1997.
Shareholders' equity (deficit), including redeemable
  convertible preferred stock.........................       65,453       49,920       31,604       26,940     (44,943)
</TABLE>
--------------
(1)      The average number of common shares used to compute per share amounts
         for 1998 and 1997 has been adjusted to reflect the one-for-ten reverse
         stock split effective December 17, 1999. See Note 1 of Notes to
         Consolidated Financial Statements in this Report for further
         explanation of the method used to determine the number of shares used
         to compute per share amounts.

(2)      Working capital deficiency in 1997 includes the Convertible Notes.



ITEM 7.  Management's Discussion and Analysis of Financial Condition
and Results of Operations

         Overview

         The Company entered fiscal 2001 with a backlog of $83.1 million. This
backlog helped the Company weather the economic downturn in the semiconductor
industry. Trikon ended 2001 with a backlog of $13.1 million. In fiscal 2001,
Trikon achieved significant milestones in the development and market acceptance
of its leading-edge low k products. Trikon believes that the increased spending
on research and development, despite lower sales, demonstrates its continued
commitment to development.

         Gross margins were affected by the lower utilization of Trikon's
facilities, but management implemented programs to control costs. During 2001,
in response to the downturn in the industry, Trikon reduced its quarterly
operating expense run rate from approximately $9.2 million in the first quarter
to $7.4 million in the fourth quarter, after adjusting for unusual items.
Management does not expect that it will be able to achieve further significant
cost reductions in 2002.

         Trikon also increased its cash reserves by drawing $21.4 million on its
credit lines and raising approximately $10.0 million in net proceeds in a
private placement of common stock and warrants. In addition, the Company
generated $15.6 million in cash from operations for the year ended December 31,
2001.

                                      -13-
<PAGE>

         The Company expects that the effects of the global slowdown in the
semiconductor industry will continue to have a significant adverse impact on the
future sales of the Company for at least the first half of fiscal 2002 and
potentially until 2003. Management believes, however, that the Company has the
cash resources available to manage the continuing slowdown and maintain its high
level of operations, customer support and research and development.

Significant Accounting Policies

         Revenue Recognition

         The Company's product revenues consist primarily of system, spare parts
and service sales. The Company changed its revenue recognition policy in 2000 to
implement the accounting rules of Securities and Exchange Commission Staff
Accounting Bulletin 101 ("SAB 101") and in accordance with APB 20, the Company
implemented the change in revenue recognition as a cumulative adjustment to the
results reported in fiscal 2000 and prior periods were not restated.

         Functional Currency

         The functional currency for most of the Company's operations is the UK
pounds sterling. System sales are generally in US dollars and spares and service
in various currencies. Changes in foreign currency exchange rates have resulted
in currency gains and losses, which are charged to the Company's selling,
general and administrative expenses. Translation losses were $994,000,
$3,078,000 and $1,426,000 during the years ended December 31, 2001, 2000 and
1999 respectively. Periodic differences in the value of non-US net assets as a
result of movements of foreign currency exchange rates are treated as changes to
the cumulative translation adjustment on the Company's balance sheet.

         Research and Development

         Research and development are core elements of the Company's business.
The Company develops annual budgets for research and development expenses based
upon anticipated developments in the technologies for the Company's products.
Research and development costs are expensed as incurred.

Results of Operations

         The following table sets forth certain operating data as a percentage
of total revenue for the periods indicated:

<TABLE>
<CAPTION>
                                                           Years Ended December 31,
                                                         2001        2000       1999
                                                        -----       -----       -----
<S>                                                 <C>          <C>         <C>
Consolidated Statements of Operations Data:
Revenues:
  Product sales ...................................     100.0%       99.7%       95.8%
  License revenues ................................       0.0         0.3         4.2
                                                        -----       -----       -----
     Total revenues ...............................     100.0       100.0       100.0
Costs of goods sold ...............................      53.3        52.2        54.9
                                                        -----       -----       -----
Gross profit ......................................      46.7        47.8        45.1
Operating expenses:
  Research and development ........................       9.9         7.9        13.0
  Selling, general and administrative .............      22.2        21.1        31.1
  Restructuring costs .............................        --          --        (8.6)
                                                        -----       -----       -----
     Total operating expenses .....................      32.1        29.0        35.5
                                                        -----       -----       -----
Income from operations ............................      14.6        18.8         9.6
Other Income ......................................       0.7          --          --
                                                        -----       -----       -----
Interest expense, net .............................      (0.2)       (0.3)       (0.4)
                                                        -----       -----       -----
Income before income tax charge ...................      15.1        18.5         9.2
Income tax charge .................................       3.5         0.8         0.2
                                                        -----       -----       -----
Net income before cumulative effect of a change in
 accounting principle .............................      11.6        17.7         9.0
Cumulative effect of change in accounting principle        --        (1.7)         --
                                                        -----       -----       -----
Net income ........................................     11.6 %       16.0%        9.0%
                                                        =====       =====       =====
</TABLE>


                                      -14-
<PAGE>

Comparison of the Years Ended December 31, 2001 and 2000

         Product Sales. Product sales for the year ended December 31, 2001
decreased 9% to $97.0 million compared to $106.7 million for the year ended
December 31, 2000. Shipments for the year ended December 31, 2001 were $92.8
million compared to $112.2 million shipped in the prior year. The decline in
sales and shipments in the quarter reflects the effects of the global slowdown
in the semiconductor industry in 2001, and would have been more pronounced had
the Company not had a backlog of $83.1 million at the start of the fiscal year.
Order levels dropped significantly in fiscal 2001 as the Company's customers
sharply reduced capital expenditures due to excess integrated circuit inventory
levels and overcapacity in the semiconductor industry. Revenues for the year
ended December 31, 2001 also include a $1.4 million cancellation fee.

         Sales by product are as follows:

                                               Year Ended
                                              December 31,
                                      ------------------------------
                                                2001           2000
                                      --------------- --------------
                PVD                              48%            51%
                CVD                               8%            21%
                Etch                             34%            15%
                Spares                           10%            13%
                                      --------------- --------------
                Total                           100%           100%
                                      --------------- --------------



         Sales outside of the United States accounted for approximately 68% and
73% of total revenues for the years ended December 31, 2001 and 2000,
respectively. The Company expects that sales outside of the United States will
continue to represent a significant percentage of the Company's product sales
through 2002. In addition, because of the large unit price associated with the
Company's systems, the Company anticipates that its product sales will continue
to be made to a small number of customers in each quarter. The quantity of
product shipped may fluctuate significantly from quarter to quarter and the
individual customers to whom these products are sold can also change from
quarter to quarter. Given the significance of each individual sale, the
percentage of sales made outside of the United States may also fluctuate
significantly from quarter to quarter.

         The Company expects that the effects of the global slowdown in the
semiconductor industry will continue to have a significant adverse impact on the
future sales of the Company for at least the first half of fiscal 2002 and
potentially until 2003.

         License Revenues. License revenues of $350,000 in the year ended
December 31, 2000 related to power supply technology. No license revenues were
earned during the year ended December 31, 2001.

         Gross Margin on Product Sales. The gross margin on product revenues for
the year ended December 31, 2001 was 46.7% as compared to 47.6% for the year
ended December 31, 2000. Cost of sales for the year ended December 31, 2001
included $302,000 relating to the costs of a reduction in workforce and a non
cash charge of $1.0 million with respect to write off of inventory associated
with the current downturn in the semiconductor business. In addition,
underutilization of manufacturing and customer support facilities and personnel
negatively affected the gross margin in the year ended December 31, 2001. Sales
of higher margin products and a receipt of fees for order cancellations offset,
somewhat, the factors contributing to the reduced gross margin.

                  Research and Development Expenses. Research and development
expenses for the year ended December 31, 2001 were $9.7 million or 9.9% of total
revenues compared with $8.4 million or 7.8% of total revenues for the prior
year. The major focus of the Company's research and development efforts
continues to be the development of new processes in further advancing the
Company's proprietary PVD, CVD and etch technologies as well as adding
enhancements to its existing products. The Company is committed to continued
investment in its research and development and expects that its research and
development expenses for 2002 will continue to be incurred at similar levels to
fiscal 2001.

                                      -15-
<PAGE>

         Selling, General and Administrative Expenses. Selling, general and
administrative expenses for the year ended December 31, 2001 were $21.5 million,
or 22.2% of total revenues, compared to $22.6 million, or 21.1% of total
revenues, in the year ended December 31, 2000. Selling, general and
administrative expenses in the year ended December 31, 2001 include gains
arising from foreign currency adjustments of $1.1 million compared to gains of
$0.9 million recognized in the prior year.

         Income from Operations. As a result of the decrease in revenue for the
year ended December 31, 2001, income from operations decreased to $14.2 million
or 14.6% of revenue compared with $20.2 million or 18.8% in the prior year.

         Other Income. The Company earned $681,000 in connection with the sale
of property it no longer required for its operations.

         Interest Expense, Net. Net interest expense was $154,000 for the year
ended December 31, 2001 compared with net interest expense of $349,000 for the
year ended December 31, 2000. The decrease in net interest expense in the
current year is due primarily to interest income received on increased cash
balances offsetting interest expense on the bank term loan. In addition,
interest cost on the Company's 7 1/8% subordinated convertible notes decreased
in 2001 compared to fiscal 2000 because certain of the notes were converted into
common stock and the remaining notes were paid in full in October 2001.

         Income Taxes. For the year ended December 31, 2001, the Company
recorded tax charges of $3.4 million compared to $824,000 for year ended
December 31, 2000 resulting in an effective income tax rate of 23.4% and 4.2%,
respectively.

         For the year ended December 31, 2001 and 2000, the Company has
generated the significant portion of its consolidated pre-tax income within the
United Kingdom, which has a lower statutory rate of 30% compared to the US
federal rate of 35%. In addition to the lower statutory rate, the Company
utilized United Kingdom net operating losses for which no deferred tax asset had
been recognized in 2001 and 2000. While in fiscal 2000 all the profits generated
within the United Kingdom were offset against net operating losses, only a
residual amount was available to offset against the fiscal 2001 profits. See
Note 5 to the notes to the financial statements for a detailed reconciliation of
the tax rate for 2001 and 2000.

         As of December 31, 2001, the Company had utilized all of its United
Kingdom net operating losses, but continues to have US federal and state
operating losses which can be offset against future US based income. The
Company's ability to use its remaining US federal and state net operating losses
and credit carry forwards will depend upon the ability to generate future income
within the United States to utilize these losses.

         In addition to the United States and the United Kingdom, the Company
has operating subsidiaries in several other countries, and each of these
subsidiaries are taxed based on the laws of the jurisdiction in which it
operates. Because taxes are incurred at the subsidiary level, and one
subsidiary's tax losses cannot be used to offset the taxable income of
subsidiaries in other jurisdictions, the Company's consolidated effective tax
rate can vary significantly to the extent it reports tax losses in some
subsidiaries and taxable income in others. The Company also assumes that its
profits generated in overseas jurisdictions are reinvested overseas. The payment
of dividends or distributions by the subsidiaries to the United States may be
subject to withholding taxes in the country of domicile and further taxation by
federal or state authorities subject to the terms or relevant double tax
treaties.

Comparison of the Years Ended December 31, 2000 and 1999

         Product Sales. Product sales for the year ended December 31, 2000
increased 120.5% to $106.7 million as compared to $48.4 million for the same
period in 1999. The growth of product sales increased in excess of the estimated
growth in the semiconductor equipment market overall and product revenues
achieved were a record for the Company. Sales for the year ended December 31,
2000 included $3.8 million of revenue also reported in fiscal 1999 ("recycled
revenue").

         Sales of Sigma PVD systems were $54.9 million in 2000 compared with
$25.2 million in 1999, an increase of 118%. Sales of Omega etch systems
increased 55% to $16.3 million in fiscal 2000 compared with $10.5 million in
fiscal 1999. Sales of CVD systems and spares account for the remainder of
product sales.

         Product sales outside of the United States accounted for 73% and 69% of
product revenues for the years ended December 31, 2000 and 1999, respectively.


                                      -16-
<PAGE>

                  License Revenues. License revenues earned during the year
ended December 31, 2000 amounted to $0.3 million compared to $2.1 million for
the year ended December 31, 1999. License revenues in the year ended December
31, 2000 related to the grant of a non-exclusive license to use a unique power
supply. License revenues in the year ended December 31, 1999 primarily resulted
from the grant of a non-exclusive license of M0RITM source technology to Lam
Research.

                  Gross Margin on Product Sales. For the year ended December 31,
2000, the gross margin on product sales was 47.6% as compared to 42.7% for the
same period in 1999. Gross margins in the year ended December 31, 1999 were
adversely affected by low sales volumes during the first half of the year.

                  Research and Development Expenses. For the year ended December
31, 2000, research and development expenses were $8.4 million, or 7.9% of total
revenues, as compared to $6.5 million, or 13.0% of total revenues for the year
ended December 31, 1999. While as a percentage of revenue research and
development expenses declined, overall these expenses increased 28% over 1999.
The major focus of the Company's research and development efforts during the
year ended December 31, 2000 was the development of new processes in its
proprietary PVD, CVD and etch technologies as well as adding enhancements to its
existing products.

                  Selling, General and Administrative Expenses. For the year
ended December 31, 2000, selling, general and administrative expenses were $22.6
million, or 21.1% of total revenues as compared to $15.7 million, or 31.1% of
total revenues for the fiscal 1999. Selling, general and administrative expenses
for the year ended December 31, 2000 include a charge of $1.5 million in respect
of a conditional bonus due to the Company's Chairman and exchange gains of $0.9
million. Selling, general and administrative expenses for the year ended
December 31, 1999 include a credit for the release of an allowance for doubtful
debts of $1.1 million.

                  Restructuring Costs. In the fourth quarter of 1997, the
Company commenced a restructuring that included the closure of its M0RI etch
operations located in Chatsworth, California. The cost of the restructuring was
estimated to be $18.3 million, which was charged to operations in the year ended
December 31, 1997. The restructuring reserve included provision for certain M0RI
etch related product returns and vendor claims. During 1999 the Company
concluded negotiations with customers and vendors and as a result released $4.4
million of the allowance set up for this matter. During the year to December 31,
1998 the Company set up an additional reserve of $1.8 million for future support
costs relating to M0RI equipment supplied to customers prior to the commencement
of restructuring in November 1997. During 1999 and 2000, the restructuring
reserves were reduced by actual payments made by the Company and were
extinguished as at December 31, 2000. Management believes that no further
reserve is necessary.

                  Income from Operations. For the year ended December 31, 2000,
the Company realized income from operations of $20.2 million, or 18.8% of total
revenues as compared with $4.9 million, or 9.6% of total revenues for the same
period in 1999.

         Interest Expense. For the year ended December 31, 2000, interest
expense increased to $674,000 as compared to $413,000 for the year ended
December 31, 1999. The increase arises primarily as a result of interest on a
bank loan which was advanced to the Company during the year. The increase caused
by the loan interest was offset by a reduced interest expense on the convertible
notes arising from the exchange of $2.6 million of 7?% convertible notes for
shares of common stock during the first half of the year ended December 31,
2000.

                  Interest Income. For the year ended December 31, 2000,
interest income was $0.3 million as compared to $0.2 million for the year ended
December 31, 1999.

                  Income Taxes. For the year ended December 31, 2000, the
Company has recorded a tax charge of $0.8 million compared with a tax charge of
$0.1 million for the year ended December 31, 1999. The tax charge for the years
ended December 31, 2000 and 1999 was in respect of taxes on non US income. The
effective tax rate differs from the statutory federal tax rate due to use of
operating loss carry forwards for which no benefit had previously been taken.
See Note 5 of Notes to Consolidated Financial Statements. During fiscal 2000 the
Company utilized substantially all of the United Kingdom operating loss carry
forwards which will result in more normal tax rates in future years.

Liquidity and Capital Resources

         At December 31, 2001, the Company had $44.7 million in cash and cash
equivalents compared to $7.1 million at December 31, 2000. The cash and cash
equivalent balances increased as a result of strong cash flow from operations
($15.6 million) and net financing activities ($23.1 million). The Company's
financing activities generated a net cashflow of $24.1 million in the year ended
December 31, 2001 and was offset by investments in property, plant and
equipment.

                                      -17-
<PAGE>

         During the year ended December 31, 2001, the Company drew down a term
loan of (pound)15 million (approximately $21.9 million at year end exchange
rates) from a British bank. The term loan carries a variable rate of interest
and is repayable in three equal annual installments on March 21, 2002, 2003 and
2004. Interest is payable at the London Interbank Borrowing Rate (LIBOR) plus
1.25% (presently payable at the rate of 5.32%) per annum and the loan carries no
prepayment penalties. During the year ended December 31, 2000, the Company drew
down a (pound)5 million two-year term loan with a British bank and made
repayments totaling (pound)1.25 million during fiscal 2000 and (pound)2.5
million in fiscal 2001 (approximately $3.6 million). As a result, at December
31, 2001, the Company had (pound)16.2 million (approximately $23.7 million at
year end exchange rates) in bank loans outstanding. The Company also has an
overdraft (credit) facility with the same bank of up to (pound)1.5 million for
use against standby letters of credit and guarantees (approximately $2.1 million
at the year end exchange rates). No amount is presently outstanding under this
facility.

         In addition, during the year ended December 31, 2001 the Company sold
925,930 shares of common stock and a warrant to purchase 92,593 shares of common
stock in a private transaction with an institutional shareholder. The gross
proceeds of the sale were $10.0 million and the related costs amounted to
approximately $30,000.

         During the year ended December 31, 2001, the Company also repaid the
remaining 7 1/8% convertible note and redeemed shares of its Series H Preferred
Stock for a total expenditure, including outstanding dividends and interest of
$4.2 million.

         The Company's cash and cash equivalents balance of $44.7 million,
combined with cash generated by operations will be the primary sources of
liquidity for the Company. During fiscal 2002, the Company expects that it will
use part of its cash balance to fund operations and to make scheduled principal
payments of (pound)6.25 million ($9.1 million at year end exchange rates). If
the downturn continues longer than anticipated, the Company will have to rely on
its cash resources to fund operations, but management believes that the current
cash balances and the availability of loans under the existing and new credit
facilities, will be sufficient to fund the Company's operations over the fiscal
year ending December 31, 2002. The Company may seek to raise additional sources
of cash, which could include sales of common stock, preferred stock, convertible
securities or convertible debt.

Risk Factors

The semiconductor industry is experiencing a downturn, which could harm Trikon's
sales and profitability.

         Trikon sells its products to the semiconductor industry, which is
subject to sudden variations in product supply and demand. The industry is
experiencing a downturn at this time, the length and severity of which are
difficult to estimate, but is continuing through 2002 and may extend to 2003 and
beyond. The Company's sales and revenues have been harmed by the current
downturn.

         The timing, length and severity of these cycles are difficult to
predict. In some cases, these cycles have lasted more than a year. Semiconductor
manufacturers may contribute to these cycles by misinterpreting conditions in
the industry and over- or under-investing in semiconductor manufacturing
capacity and equipment. Trikon has little ability to anticipate or respond
effectively to these industry cycles.

         Downturns in the semiconductor industry often occur in connection with,
or anticipation of, maturing product cycles for both semiconductor companies and
their customers and declines in general economic conditions. Industry downturns
have been characterized by reduced demand for semiconductor devices and
equipment, production over-capacity and accelerated declines in average selling
prices. During a period of declining demand, Trikon must be able to quickly and
effectively reduce expenses and motivate and retain key employees. Many of the
Company's expenses are fixed and the Company's ability to reduce other expenses
in response to any downturn in the semiconductor industry is limited by the
Company's need for continued investment in engineering and research and
development and extensive ongoing customer service and support requirements. In
2001 management reduced expenses but the ability to continue to cut costs is
limited.

         In addition, the long lead time for production and delivery of the
Company's products, and the possibility of customer order cancellations, creates
a risk that the Company may incur expenditures or purchase inventories for
products which the Company cannot sell.


                                      -18-
<PAGE>

         Industry upturns have been characterized by abrupt increases in demand
for semiconductor devices and equipment and production under-capacity. During a
period of increasing demand and rapid growth, the Company must be able to
quickly hire, train and assimilate a sufficient number of qualified personnel,
particularly engineers, and obtain sufficient components in order to increase
production to meet customer demand. If the Company is unable to increase
production on a timely basis in times of increased demand, some of the Company's
existing or potential customers could place orders with the Company's
competitors and, as a result, the Company's financial results could suffer.

If semiconductor manufacturers do not accept the Company's technological
solutions, the Company's future growth will be limited.

         The Company's future growth also depends on the market's acceptance of
the Company's latest technological solutions, Flowfill, Low k Flowfill and
Orion. If these technologies are not accepted by semiconductor manufacturers,
the Company's business will be materially adversely affected.

The Company's industry is subject to rapid technological change. The Company may
not be able to forecast or respond to commercial and technical trends.

         The semiconductor industry and the semiconductor equipment industry are
subject to rapid technological change and frequent introductions of enhancements
to existing products, and if the Company is unable to develop and incorporate
new technologies in the Company's products, the Company will be unable to
compete effectively and the Company's business will be materially and adversely
affected. Technological trends have had and will continue to have a significant
impact on the Company's business. The Company's results of operations and
ability to remain competitive are largely based upon the Company's ability to
accurately anticipate customer and market requirements.

         The Company's success in developing, introducing and selling new and
enhanced products depends upon a variety of factors, including:

         o        appropriate technology and product selection;

         o        timely and efficient completion of product design and
                  development;

         o        timely and efficient implementation of manufacturing and
                  assembly processes;

         o        effective sales and marketing;

         o        product performance in the field; and

         o        product support and service.

         The Company may not be able to accurately forecast or respond to
commercial and technical trends in the semiconductor industry or respond to
specific product announcements by the Company's competitors. The Company's
competitors may be developing technologies and products that are more effective
than the Company's or that may achieve more widespread acceptance. In addition,
the Company may incur substantial costs to ensure the functionality and
reliability of the Company's current and future products. If the Company's
products are unreliable or do not meet the Company's customers' expectations,
then reduced orders, higher manufacturing costs, delays in collecting accounts
receivable or additional service and warranty expense could result. The Company
may also experience delays and technical and manufacturing difficulties in
future introductions or volume production of new systems or enhancements.
Significant delays can occur between a product's introduction and the
commencement of volume production of that product. Any of these events could
negatively affect the Company's ability to generate the return the Company
intends to achieve on the Company's investments in these new products.

The Company must adapt its products for use with copper and copper processes,
low k films and larger diameter wafers.

         Copper generally is expected to replace aluminum as the standard
conducting material for many semiconductors. Not all of the Company's products
may be used with copper and copper processes. In particular, the Company's
Forcefill(R) product is not compatible with copper. If the Company fails to make
the Company's products compatible with copper and copper processes at the time
the Company's competitors offer copper compatible products, the Company's
revenues and market share will be negatively affected.


                                      -19-
<PAGE>

         Currently the physical characteristics of low k films make the
manufacturing process significantly more difficult than with existing insulating
materials and, as a result, device manufacturers have been slow to adopt the use
of low k materials. Device manufacturers may find alternative methods to
manufacture devices at smaller feature sizes, and forgo the development and use
of low k materials. Also, there can be no assurance that the industry will adopt
a CVD method for the deposition of low k films. Other technologies for which the
Company does not manufacture equipment could also be use for the deposition of
low k films. If the Company fails to continue to develop its low k CVD solution
to achieve all the specifications required by device manufacturers, or the
Company's competitors develop competing low k solutions, then the Company's
ability to grow its revenues and market share from these products would be
negatively affected.

         The semiconductor industry also has historically moved to larger
diameter wafers requiring new equipment as a strategy to reduce manufacturing
costs. The maximum diameter of silicon wafers used in production is increasing
from 200mm to 300mm. The Company is developing 300mm systems. There can be no
assurance, however, that the Company will be able to complete the development of
300mm systems in time to meet market demand. If the Company's current products
or future 300mm systems are not competitive or available at the correct time,
the Company may lose customers or fail to gain new business from potential
customers, which would have a material adverse effect on the Company's revenues
and net earnings.

The Company's operational results could be negatively affected by currency
fluctuations.

         The Company is based in the United Kingdom, and most of the Company's
operating expenses are incurred in UK pounds. The Company's revenues, however,
are denominated in US dollars and the Company reports its financial results in
US dollars. Accordingly, if the UK pound increases in value against the US
dollar, the Company's expenses as a percentage of revenues will increase and
gross margins and net income will be negatively affected.

The Company faces competition or potential competition from many companies with
greater resources than the Company's. If the Company is unable to compete
effectively with these companies, the Company's market share may decline and the
Company's business could be harmed.

         Virtually all of the Company's primary competitors in the silicon-based
semiconductor equipment market are substantially larger companies and some of
them have broader product lines than the Company's. They have well established
reputations in the markets in which the Company competes, 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 does. The dominant silicon-based
semiconductor-equipment manufacturers may determine to enter, or attempt to
increase their market share, in the compound semiconductor equipment market. In
each market, the Company also faces potential competition from new entrants,
including established manufacturers in other segments of the semiconductor
capital equipment market who may decide to diversify into the Company's market
segments of CVD, PVD and plasma etch. The Company may also face competition from
products using certain of the Company's technologies that were licensed to third
parties.

Semiconductor manufacturers may be loyal to their current semiconductor
equipment supplier, which may make it difficult for the Company to obtain new
customers.

         The Company believes that once a semiconductor manufacturer has
selected a supplier's equipment for a particular fabrication line, the
manufacturer often will continue to rely on that supplier's equipment for future
requirements, including new generations of similar products. If the Company is
unable to sell its products to potential customers who currently are using other
supplier's equipment, it could be difficult for the Company to increase its
revenues or market share. Changing from one equipment supplier to another may be
expensive and may require a substantial investment of resources by the customer.
Accordingly, the Company may experience difficulty in achieving significant
sales to a customer using another supplier's equipment. At the same time,
however, there can be no assurance that the Company's existing customers will
continue to use the Company's equipment in the future.

The Company's products generally have long sales cycles and implementation
periods, which increase the Company's costs of obtaining orders and reduce the
predictability of the Company's earnings.

         The Company's products are technologically complex. Prospective
customers generally must commit significant resources to test and evaluate the
Company's products and to install and integrate them into larger systems. In
addition, customers often require a significant number of product presentations
and demonstrations, in some instances evaluating equipment on site, before
reaching a sufficient level of confidence in the product's performance and
compatibility with their requirements to place an order. As a result, the
Company's sales process is often subject to delays associated with lengthy
approval processes that typically accompany the design and testing of new
products. The sales cycles of the Company's products often last for many months
or even years. Longer sales cycles require the Company to invest significant
resources in attempting to make sales and delay the generation of revenue. In
addition, the Company may incur significant costs in supporting evaluation
equipment at the Company's customers' facilities.

                                      -20-
<PAGE>

         Long sales cycles also subject the Company to other risks, including
customers' budgetary constraints, internal acceptance reviews and cancellations.
In addition, orders expected in one quarter could shift to another because of
the timing of customers' purchase decisions. The time required for the Company's
customers to incorporate the Company's products into their manufacturing
processes can vary significantly with the needs of the Company's customers and
generally exceeds several months, which further complicates the Company's
planning processes and reduces the predictability of the Company's operating
results.

The Company depends upon sole suppliers for certain key components.

         The Company depends on a number of sole suppliers for key components
used in the manufacture of the Company's products. If the Company is unable to
obtain timely delivery of sufficient quantities of these components, the Company
would be unable to manufacture the Company's products to meet customer demand,
unless the Company is able to locate replacement components. Most significantly,
the Company's Sigma fxP and Planar fxP systems are designed around an automation
module supplied by Brooks Automation. Due to the high cost of these modules, the
Company keeps very few in inventory. If Brooks Automation fails to deliver the
component on a timely basis, delivery of the Company's Sigma fxP and Planar fxP
systems will be delayed and sales may be lost. If Brooks Automation is unable to
deliver any such modules for a prolonged period of time, the Company will have
to redesign the Company's Sigma fxP and Planar fxP systems so that the Company
may utilize other wafer transport systems. There can be no assurance that the
Company will be able to do so, or that customers will adopt the redesigned
systems.

The Company's final assembly and testing is concentrated in one facility.

         The Company's final assembly and testing activity is concentrated in
the Company's facility in Newport, United Kingdom. The Company has no
alternative facilities to allow for continued production if it is required to
cease production in this facility, as a result of a fire, natural disaster or
otherwise. In such event the Company will be unable to produce any products
until the facility is replaced. Any such interruption in the Company's
manufacturing schedule could cause it to lose sales and customers.

The Company is subject to the risk of business interruptions from implementing a
new enterprise resource planning system.

         The Company is in the process of implementing an enterprise resource
planning system to integrate management information, purchasing, accounting and
finance, sales, billing, payroll and benefits and regulatory compliance systems.
While the major components of the system have been installed, the Company is
still configuring part of this system. Significant interruption of the Company's
business resulting from post implementation issues, such as system response
time, vendor software application code errors or system design and configuration
problems, could result in delayed product deliveries or manufacturing
inefficiencies, which could materially and adversely affect the Company's
financial condition and results of operations. In addition, the deployment of
this system is a complex, time consuming and expensive process and will continue
to require significant attention from management and other personnel resources,
which may distract attention from oversight of day-to-day business. The
diversion of management's attention and any difficulties associated with
deploying the system could have a material adverse effect on revenues, levels of
expenses and operating results.

If the Company is unable to hire and retain a sufficient number of qualified
personnel, the Company's ability to manage growth will be negatively affected.

         The Company's business and future operating results depend in part upon
its ability to attract and retain qualified management, technical, sales and
support personnel for its operations on a worldwide basis. Competition for
qualified personnel is intense, and the Company cannot guarantee that it will be
able to continue to attract and retain qualified it personnel. The Company's
operations could be negatively affected if it loses key executives or employees
or is unable to attract and retain skilled executives and employees as needed.

                                      -21-
<PAGE>

The Company's ability to compete could be jeopardized if it is unable to protect
its intellectual property rights from challenges by third parties.

         The Company's success and ability to compete depend in large part upon
protecting its proprietary technology. The Company relies on a combination of
patent, trade secret, copyright and trademark laws, non-disclosure and other
contractual agreements and technical measures to protect its proprietary rights.

         There can be no assurance that patents will be issued on the Company's
pending patent applications or that competitors will not be able to ascertain
legitimately proprietary information embedded in the Company's products that 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 any of the
Company's patents 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.

Claims or litigation regarding intellectual property rights could seriously harm
the Company's business or require it to incur significant costs.

         In recent years, there has been significant litigation in the United
States in the semiconductor equipment industry involving patents and other
intellectual property rights. There can be no assurance that infringement claims
will not be asserted against the Company in the future nor that, if such claims
are made, the Company would be able to defend against such claims successfully
or, if necessary, obtain licenses on reasonable terms.

         Any claim that the Company's products infringe proprietary rights of
others would force it to defend itself and possibly its customers against the
alleged infringement. These claims and any resulting lawsuit, if successful,
could subject the Company to significant liability for damages and invalidation
of its proprietary rights. These lawsuits, regardless of their outcome, would
likely be time-consuming and expensive to resolve and would divert management
time and attention. Any potential intellectual property litigation could force
the Company to do one or more of the following:

         o        lose or forfeit its proprietary rights;

         o        stop manufacturing or selling its products that incorporate
                  the challenged intellectual property;

         o        obtain from the owner of the infringed intellectual property
                  right a license to sell or use the relevant technology, which
                  license may not be available on reasonable terms or at all and
                  may involve significant royalty payments;

         o        pay damages, including treble damages and attorney's fees in
                  some circumstances; or

         o        redesign those products that use the challenged intellectual
                  property.

         If the Company is forced to take any of the foregoing actions, its
business could be severely harmed.

The Company's sales are characterized by low volume sales of high cost systems
and it derives a significant percentage of its revenue from sales to a small
number of customers. If the Company is not able to retain these customers, or if
these customers reschedule, reduce or cancel orders, the Company's revenues will
be reduced and its financial results will suffer.

         To date, the Company's product sales have been highly concentrated,
with approximately 32% of its product revenues for year ended December 31, 2001
derived from sales to two customers, approximately 61% of its product revenues
for year ended December 31, 2000 derived from sales to four customers and
approximately 46% of its product revenues for the year ended December 31, 1999
derived from sales to three customers. The Company may not be able to retain
its key customers or these customers may cancel purchase orders or reschedule
or decrease their level of purchases from the Company. Any substantial decrease
or delay in sales to one or more of the Company's key customers could harm the
Company's sales and financial results. There can be no assurance that these
customers will continue to purchase systems and technology from the Company at
current levels, or at all. Sales to these large customers have varied
significantly from year to year and will continue to fluctuate in the future.
These sales also may fluctuate significantly from quarter to quarter.



                                      -22-
<PAGE>

The Company's operations are subject to health and safety and environmental laws
that may expose the Company to liabilities for noncompliance.

         The Company is subject to a variety of governmental regulations
relating to the use, storage, discharge, handling, manufacture and disposal of
all materials present at, or the output from, the Company's facilities,
including the toxic or other hazardous chemical by-products of the Company's
manufacturing processes. Environmental claims against the Company or the
Company's failure to comply with any present or future regulations could result
in:

         o        the assessment of damages or imposition of fines against the
                  Company;

         o        the suspension of production of the Company's products; or

         o        the cessation of the Company's operations.

         New regulations could require the Company to purchase costly equipment
or to incur other significant expenses. The Company's failure to control the use
or adequately restrict the discharge of hazardous substances could subject us to
future liabilities, which could negatively affect its earnings and financial
position.

Any acquisitions the Company may make could disrupt the Company's business and
severely harm the Company's financial condition.

         From time to time, the Company may consider investments in
complementary companies, products or technologies. While the Company has no
current agreements or specific plans to do so, the Company may acquire
businesses, products or technologies in the future. In the event of any future
acquisitions, the Company could:

         o        issue stock that would dilute the Company's current
                  shareholders' percentage ownership;

         o        incur debt;

         o        assume liabilities;

         o        incur amortization expenses related to goodwill and other
                  tangible assets; or

         o        incur large and immediate accounting write-offs.

         The Company's operation of any acquired business will also involve
numerous risks, including:

         o        problems integrating the purchased operations, technologies or
                  products;

         o        unanticipated costs and liabilities for which the Company is
                  not able to obtain indemnification from the sellers;

         o        diversion of management's attention from the Company's core
                  business;

         o        adverse effects on existing business relationships with
                  customers;

         o        risks associated with entering markets in which the Company
                  have no or limited prior experience; and

         o        potential loss of key employees, particularly those of the
                  purchased organizations.

ITEM 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         The Company's earnings and cash flow are subject to fluctuations in
foreign currency exchange rates. Significant factors affecting the risk include
the Company's manufacturing and administrative cost base which is predominately
in UK pounds sterling and product sales outside the United States which may be
expressed in currencies other than the United States dollar. The Company
constantly monitors currency exchange rates and matches currency availability
and requirements whenever possible. The Company may from time to time enter into
forward foreign exchange transactions in order to minimize risk from firm future
positions arising from trading. As at December 31, 2001 and 2000 the Company had
no open forward currency transactions.



                                      -23-
<PAGE>

         Based upon budgeted income and expenditures, a hypothetical increase of
10% in the value of the UK pound sterling against all other currencies in the
first quarter of 2002 would have no material effect on revenues expressed in
United States dollars and would increase operating costs and reduce cash-flow by
approximately $2.2 million for the quarter. The same increase in the value of
the UK pound sterling would increase the value of the net assets of the Company
expressed in United States dollars by approximately $2.3 million. The effect of
this hypothetical change in exchange rates ignores the effect this movement may
have on other variables including competitive risk. If it were possible to
quantify this impact, the results could well be different from the sensitivity
effects shown above. In addition, it is unlikely that all currencies would
uniformly strengthen or weaken relative to the UK pound sterling. In reality,
some currencies may weaken while others may strengthen.

ITEM 8.  Financial Statements and Supplementary Data

         See the Index included at "Item 14. Exhibits and Financial Statements
Schedules and Reports on Form 8-K."

ITEM 9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

         None.



                                      -24-
<PAGE>


                                    PART III

ITEM 10.      Directors and Executive Officers.

         The information required by this item is included under "Proposal No.
1: Election of Directors," "Other Information - Executive Officers" and
"Compliance with Section 16(a) of the Exchange Act" in the Company's Definitive
Proxy Statement to be filed in connection with its 2002 Annual Meeting of
Shareholders and is incorporated herein by reference.

ITEM 11.      Executive compensation.

         The information required by this item is included under "Other
Information - Executive Compensation" in the Company's Definitive Proxy
Statement to be filed in connection with its 2002 Annual Meeting of Shareholders
and is incorporated herein by reference.

ITEM 12.      Security Ownership of Certain Beneficial Owners and Management.

         The information required by this item is included under "Other
Information - Security Ownership of Certain Beneficial Owners and Management" in
the Company's Definitive Proxy Statement to be filed in connection with its 2002
Annual Meeting of Shareholders and is incorporated herein by reference.

ITEM 13.      Certain Relationships and Related Transactions.

         The information required by this item is included under "Other
Information - Certain Transactions" in the Company's Definitive Proxy Statement
to be filed in connection with its 2002 Annual Meeting of Shareholders and is
incorporated herein by reference.




                                      -25-
<PAGE>


                                     PART IV

ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

         (a) The following documents are filed as part of this Annual Report on
Form 10-K

         (1)  Financial Statements:
                                                                        Page
                                                                        ----
         Report of Independent Auditors................................. F-1
         Consolidated Balance Sheets--December 31, 2001, and 2000....... F-2
         Consolidated Statements of Operations--Years
            ended December 31, 2001, 2000 and 1999...................... F-3
         Consolidated Statements of Shareholders' Equity--Years
            ended December 31, 2001, 2000 and 1999...................... F-4
         Consolidated Statements of Cash Flows--Years ended
            December 31, 2001, 2000 and 1999............................ F-5
         Notes to Consolidated Financial Statements..................... F-6

         (2) Financial Statement Schedule:

         Schedule II -- Valuation and Qualifying Accounts

         All other schedules for which provision is made in the applicable
         accounting requirements of the Securities and Exchange Commission
         are not required under the related instructions or are not
         applicable and therefore have been omitted.

         (3)        Exhibits:

                  2.1      Share Purchase Agreement, dated July 17, 1996 (the
                           "Share Purchase Agreement"), among the Company,
                           Electrotech and the shareholders of Electrotech.
                           (Previously filed as an exhibit to the Company's
                           Current Report on Form 8-K on November 27, 1996, and
                           incorporated by reference herein.)

                  2.2      Amendment No. 1 to the Share Purchase Agreement dated
                           September 9, 1996. (Previously filed as an exhibit to
                           the Company's Current Report on Form 8-K on November
                           27, 1996, and incorporated by reference herein.)

                  2.3      Amendment No. 2 to the Share Purchase Agreement dated
                           October 16, 1996. (Previously filed as an exhibit to
                           the Company's Current Report on Form 8-K on November
                           27, 1996, and incorporated by reference herein.)

                  2.4      Amendment No. 3 to the Share Purchase Agreement dated
                           November 13, 1996. (Previously filed as an exhibit to
                           the Company's Current Report on Form 8-K on November
                           27, 1996, and incorporated by reference herein.)

                  3.1      Seventh Restated Articles of Incorporation of the
                           Company. (Previously filed as an exhibit to the
                           Company's Annual Report on Form 10-K for the year
                           ended December 31, 1996, and incorporated by
                           reference herein.)

                  3.2      Certificate of Ownership of Plasma & Materials
                           Technologies, Inc., amending the Company's Seventh
                           Restated Articles of Incorporation to effect the
                           change of its name to Trikon Technologies, Inc.
                           (Previously filed as an exhibit to the Company's
                           Annual Report on Form 10-K for the year ended
                           December 31, 1996, and incorporated by reference
                           herein.)

                  3.3      Certificate of Amendment to the Company's Seventh
                           Restated Articles of Incorporation. (Previously filed
                           as an exhibit to the Company's Annual Report on Form
                           10-K for the year ended December 31, 2000, and
                           incorporated by reference herein.)

                                      -26-
<PAGE>

                  3.4      Bylaws of the Company, as amended and currently in
                           effect. (Previously filed as an exhibit to the
                           Company's Annual Report on Form 10-K for the year
                           ended December 31, 1996, and incorporated by
                           reference herein.)

                  4.1      Common Stock Purchase Warrant, dated May 23, 2001,
                           granted by Trikon Technologies, Inc. to Spinner
                           Global Technology Fund, Ltd. (Previously filed as an
                           exhibit to the Company's Current Report on Form 8-K
                           dated May 24, 2001, and incorporated by reference
                           herein.)

                  10.1*    1991 Stock Option Plan of the Company, as amended to
                           date. (Previously file as an exhibit to the Company's
                           Proxy Statement for the 2001 Annual Meeting of
                           Stockholders, and incorporated herein by reference.)

                  10.2*    Employment Agreement, dated as of November 15, 1995,
                           between that Company and Nigel Wheeler. (Previously
                           filed as an exhibit to the Company's Current Report
                           on Form 8-K on November 27, 1996, and incorporated by
                           reference herein.)

                  10.3     Registration Agreement dated as of November 15, 1996
                           between the Company and Christopher D. Dobson.
                           (Previously filed as an exhibit to the Company's
                           Current Report on Form 8-K on November 27, 1996, and
                           incorporated by reference herein.)

                  10.4     International Technology License and Sales Agreement
                           between the Company and Alcan-Tech Co., Inc. dated
                           November 15, 1991. (Previously filed as an exhibit to
                           Amendment No. 3 to the Company's Registration
                           Statement on Form S-1, and incorporated herein by
                           reference.)+

                  10.5     International Technology License and Sales Agreement
                           between the Company and Anelva Corporation, dated
                           February 7, 1992. (Previously filed as an exhibit to
                           Amendment No. 3 to the Company's Registration
                           Statement on Form S-1, and incorporated herein by
                           reference.)+

                  10.6     Technology License and Sales Agreement between the
                           Company and Leybold AG dated December 8, 1992.
                           (Previously filed as an exhibit to the Company's
                           Registration Statement on Form S-1, and incorporated
                           herein by reference.)+

                  10.7     Technology License and Sales Agreement between the
                           Company and Watkins-Johnson Company dated December
                           23, 1993. (Previously filed as an exhibit to
                           Amendment No. 3 to the Company's Registration
                           Statement on Form S-1, and incorporated herein by
                           reference.)+

                  10.8     Royalty Agreement dated October 3, 1986 by and
                           between the Company and Messrs. Conn, Campbell and
                           Goebel. (Previously filed as an exhibit to the
                           Company's Registration Statement on Form S-1, and
                           incorporated herein by reference.)+

                  10.9     Assignment of Royalty Rights dated June 8, 1990
                           executed by Messrs. Conn and Campbell in favor of the
                           Company. (Previously filed as an exhibit to the
                           Company's Registration Statement on Form S-1, and
                           incorporated herein by reference.)

                  10.10    Agreement entered into the 25th day of June 1986 by
                           and between the Company and Leybold-Heraeus GmbH.
                           (Previously filed as an exhibit to the Company's
                           Registration Statement on Form S-1, and incorporated
                           herein by reference.)

                  10.11    Distribution Agreement dated July 1, 1995 by and
                           between the Company and Canon Sales. (Previously
                           filed as an exhibit to Amendment No. 1 to the
                           Company's Registration Statement on Form S-1, and
                           incorporated herein by reference.)+

                  10.12    Lease dated July 5, 1985 concerning the Company's
                           facilities at Newport, Gwent, United Kingdom, as
                           assigned to Electrotech Limited effective January 19,
                           1995. (Previously filed as an exhibit to the
                           Company's Annual Report on Form 10-K for the year
                           ended December 31, 1996, and incorporated by
                           reference herein.)

                                      -27-
<PAGE>

                  10.13    M0RI(TM) Source Technology License Agreement between
                           the Company and Applied Materials. (Previously filed
                           as an exhibit to the Company's Quarterly Report on
                           Form 10-Q for the quarter ended September 30, 1997,
                           and incorporated herein by reference.)+

                  10.14    FORCEFILL(TM) Technology License Agreement between
                           Trikon Equipment Limited and Applied Materials.
                           (Previously filed as an exhibit to the Company's
                           Quarterly Report on Form 10-Q for the quarter ended
                           September 30, 1997, and incorporated herein by
                           reference.)+

                  10.15    FORCEFILL(TM) Technology License Agreement between
                           Trikon Technologies Limited and Applied Materials.
                           (Previously filed as an exhibit to the Company's
                           Quarterly Report on Form 10-Q for the quarter ended
                           September 30, 1997, and incorporated herein by
                           reference.)+

                  10.16    M0RI(TM) Source Technology License Agreement between
                           the Company and Lam Research Corporation. (Previously
                           filed as an exhibit to the Company's Quarterly Report
                           on Form 10-Q for the quarter ended September 30,
                           1997, and incorporated herein by reference.)+

                  10.17*   Employment Agreement, dated as of May 14, 1998, among
                           Christopher D. Dobson, the Company and Trikon
                           Technologies Limited. (Previously filed as an exhibit
                           to the Company's Quarterly Report on Form 10-Q for
                           the quarter ended June 30, 1998, and incorporated
                           herein by reference.)

                  10.18    Letter Agreement, dated as of May 14, 1998, between
                           Christopher D. Dobson and the Company. (Previously
                           filed as an exhibit to the Company's Quarterly Report
                           on Form 10-Q for the quarter ended June 30, 1998, and
                           incorporated herein by reference.)

                  10.19    1998 Directors Stock Option Plan, as amended to date.
                           (Previously filed as an exhibit to the Company's
                           Registration Statement on Form S-8, No. 333-73445).

                  10.20    Term Loan Agreement, dated March 6, 2001, between the
                           Company and Lloyds TSB Bank plc. (Previously filed as
                           an exhibit to the Company's Quarterly Report on Form
                           10-Q for the quarter ended March 31, 2001, and
                           incorporated herein by reference.)

                  10.21    Amendment to Term Loan Agreement, dated October 8,
                           2001, between the Company and Lloyds TSB Bank plc.

                  21       Subsidiaries of the Registrant

                  23.1     Consent of Ernst & Young

                  24.1**   Power of Attorney

*        Indicates a management contract or compensatory plan or arrangement, as
         required by Item 14(a)3.

**       Set forth in the signature page hereto.

+        Certain portions of this exhibit have been omitted from the copy filed
         and are subject to an order granting confidential treatment with
         respect thereto.

     (b) The Company did not file a report on Form 8-K during its fourth fiscal
quarter of 2001.




                                      -28-
<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: March 21, 2002

                               TRIKON TECHNOLOGIES, INC.

                               By: /s/ Nigel Wheeler
                                   ----------------------------------------
                                   Nigel Wheeler
                                   Chief Executive Officer, President
                                      and Chief Operating Officer

                               By: /s/William J. Chappell
                                   ----------------------------------------
                                   William J. Chappell
                                   Chief Financial Officer


                           POWER OF ATTORNEY

         KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Nigel Wheeler and William J. Chappell,
and each of them with all power to act without the other, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, to sign any and all amendments (including post-effective
amendments) to this Annual Report on Form 10-K and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, or any of them, shall do or cause to be done by
virtue hereof.

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
          Signature                             Title                               Date
          ---------                             ----                                -----
<S>                                      <C>                                       <C>
       /s/ Nigel Wheeler                 Chief Executive Officer, President         March 21, 2002
--------------------------------         and Chief Operating Officer and
         Nigel Wheeler                   Director (Principal Executive Officer)



    /s/ William J. Chappell              Chief Financial Officer and Secretary       March 21, 2002
--------------------------------         (Principal Financial and Accounting
       William Chappell                  Officer)


   /s/ Christopher D. Dobson             Chairman of the Board, Director             March 21, 2002
--------------------------------
     Christopher D. Dobson

      /s/ Richard M Conn                 Director                                    March 21, 2002
--------------------------------
        Richard M. Conn

   /s/ Stephen N. Wertheimer             Director                                    March 21, 2002
--------------------------------
     Stephen N. Wertheimer

     /s/ Robert R. Anderson              Director                                    March 21, 2002
--------------------------------
      Robert R. Anderson

</TABLE>


                                      -29-
<PAGE>



REPORT OF INDEPENDENT AUDITORS

To: The Board of Directors
      Trikon Technologies, Inc.


         We have audited the accompanying consolidated balance sheets of Trikon
Technologies, Inc. and subsidiaries as of December 31, 2001 and 2000 and the
related consolidated statements of operations, shareholders' equity and cash
flows for each of the three years in the period ended December 31, 2001. Our
audits also included the financial statement schedule listed in the Index at
Item 14(a). These financial statements and schedule are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.

         We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Trikon
Technologies, Inc. at December 31, 2001 and 2000, and the consolidated results
of their operations and their consolidated cash flows for the three years ended
December 31, 2001, in conformity with accounting principles generally accepted
in the United States. Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.



                                          ERNST & YOUNG LLP

Bristol, England
                                          February 01, 2002


                                      F-1
<PAGE>


                            TRIKON TECHNOLOGIES, INC.

                           CONSOLIDATED BALANCE SHEETS
                      (In thousands, except for share data)

<TABLE>
<CAPTION>

                                                                                        December 31,
                                                                                  ------------------------
                                      Assets                                       2001             2000
                                                                                  ---------      ---------
<S>                                                                               <C>            <C>
Current assets
       Cash and cash equivalents ............................................     $  44,667      $   7,076
       Accounts receivable, less allowances of $53 and $104
         at December 31, 2001 and 2000, respectively ........................        19,775         29,537
       Inventories ..........................................................        21,624         30,872
       Other current assets .................................................         3,084          6,728
                                                                                  ---------      ---------
       Total current assets .................................................        89,150         74,213
Property, plant and equipment, net ..........................................        20,425         19,045
Demonstration systems, net ..................................................         2,962          2,210
Other assets ................................................................           196            226
                                                                                  ---------      ---------
       Total assets..........................................................     $ 112,733      $  95,694
                                                                                  =========      =========

                      Liabilities and shareholders' equity
Current liabilities:
      Accounts payable ......................................................     $   3,153      $  16,233
      Accrued expenses ......................................................         2,340          3,735
      Warranty and related expenses .........................................         1,504          1,545
      Current portion of long-term debt and capital lease obligations .......         9,636          5,421
      Deferred revenue ......................................................         5,106          9,330
      Other .................................................................         5,032          4,277
                                                                                  ---------      ---------
      Total current liabilities .............................................        26,771         40,541
Long-term debt and capital lease obligations, less current portion ..........        15,606          2,376
Pension obligations .........................................................         3,372          1,793
Other .......................................................................         1,531          1,064
                                                                                  ---------      ---------
    Total liabilities .......................................................        47,280         45,774

Commitments and Contingencies (Note 7)

Shareholders' Equity:
Preferred Stock
      Authorized shares -- 20,000,000 Series H Preferred Stock, no par value,
      $10 per share liquidation preference
      Designated shares - 3,500,000 at December 31, 2001 and 2000
      Issued and outstanding None at December 31, 2001 and 442,967 at
      December 31,2000 ......................................................            --          4,430
Common Stock, no par value
      Authorized shares - 50,000,000
      Issued and outstanding -12,855,279 at December 31, 2001
      and 11,709,757 at December 31, 2000 ...................................       242,725        230,788
Other Comprehensive Income ..................................................        (9,774)        (5,255)
Deferred compensation .......................................................        (2,086)        (3,603)
Accumulated deficit .........................................................      (165,412)      (176,440)
                                                                                  ---------      ---------
Total shareholders' equity ..................................................        65,453         49,920
                                                                                  ---------      ---------
Total liabilities and shareholders' equity ..................................     $ 112,733      $  95,694
                                                                                  =========      =========
</TABLE>

        See accompanying notes to the consolidated financial statements.



                                      F-2
<PAGE>

                            TRIKON TECHNOLOGIES, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In thousands, except for per share data)

<TABLE>
<CAPTION>
                                                                         Year Ended December 31
                                                                    ----------------------------------
                                                                       2001         2000        1999
                                                                    ---------    ---------   ---------
<S>                                                                  <C>          <C>          <C>
Revenues:
         Product sales ...........................................   $  97,046    $ 106,662    $ 48,363
         License revenues ........................................          --          350       2,144
                                                                     ---------    ---------   ---------
                                                                        97,046      107,012      50,507
                                                                     ---------    ---------   ---------
Costs and expenses:
         Cost of goods sold ......................................      51,749       55,847      27,735
         Research and development ................................       9,650        8,395       6,545
         Selling, general and administrative .....................      21,492       22,617      15,723
         Restructuring costs .....................................          --           --      (4,361)
                                                                     ---------    ---------   ---------
                                                                        82,891       86,859      45,642
                                                                     ---------    ---------   ---------

Income from operations ...........................................      14,155       20,153       4,865

Other income .....................................................         681           --          --

Interest:
         Interest expense ........................................      (1,504)        (674)        (413)
         Interest income .........................................       1,350          325          222
                                                                     ---------    ---------   ----------
Income before income tax charge ..................................      14,682       19,804        4,674
Income tax charge ................................................       3,432          824          100
                                                                     ---------    ---------   ---------

Net income before cumulative effect of change in accounting ......      11,250       18,980        4,574
principle
Cumulative effect of change in accounting principle relating to
revenue recognition ..............................................          --       (1,833)          --
                                                                     ---------    ---------   ----------
Net income .......................................................   $  11,250    $  17,147    $   4,574
                                                                     ---------    ---------   ----------
Net income applicable to common shares ...........................   $  11,109    $  16,121    $   2,084
                                                                     ---------    ---------   ----------
Earnings per common share data:
  Basic:
         Income applicable to common shares before cumulative
         effect of a change in accounting principle ..............   $    0.98    $    1.82   $    0.25
         Cumulative effect of change in accounting principle .....          --        (0.19)         --
                                                                     ---------    ---------   ---------
         Net income ..............................................   $    0.98    $    1.63   $    0.25
                                                                     ---------    ---------   ---------
 Diluted:
         Income applicable to common shares cumulative effect of a
         change in accounting principle ..........................   $    0.88    $    1.58   $    0.24
         Cumulative effect of change in accounting principle .....          --        (0.16)         --
                                                                     ---------    ---------   ---------
         Net income ..............................................   $    0.88    $    1.42   $    0.24
                                                                     =========    =========   =========

Average common shares used in the
         calculation   --  Basic.................................       11,281        9,868       8,254

                       --  Diluted...............................       12,658       11,325       8,593

</TABLE>





        See accompanying notes to the consolidated financial statements.


                                      F-3
<PAGE>


                            TRIKON TECHNOLOGIES, INC.

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                                    Other
                                                  Series H                               Accum-     Comp-     Deferred
                                               Preferred Stock        Common Stock       ulated    rehensive   Compen-
                                              Shares      Amount    Shares    Amount    Deficit    Income      sation      Total
                                              -------     -------   ------   --------   --------   --------  -----------  -------
<S>                                           <C>         <C>       <C>      <C>        <C>        <C>       <C>          <C>
Balance at January 1, 1999 ..................   2,953    $ 29,531   94,023   $199,019   $(194,222) $   (751)  $ (6,637)  $26,940
    Exercises of employee stock options .....      --          --       22         --         --         --         --        --

    Adjustment arising on reverse
      stock split (note 1) ..................      --          --   (84,641)       --         --         --         --        --
    Amortization of restricted stock ........      --          --       --         --         --         --      1,516     1,516

    Cumulative translation adjustments ......      --          --       --         --         --     (1,426)        --    (1,426)
    Net income ..............................      --          --       --         --      4,574         --         --     4,574
                                                                                                                         -------
    Comprehensive income ....................      --          --       --         --         --         --         --     3,148
    Preference dividend .....................     245       2,448       --         --     (2,448)        --         --        --
                                               ------     -------   ------   --------   --------   --------   --------   -------
Balance at December 31, 1999 ................   3,198      31,979    9,404    199,019   (192,096)    (2,177)    (5,121)   31,604
    Exercises of employee stock options......      --          --       49         44         --         --         --        44
    Conversion of preferred stock............  (2,839)    (28,398)   2,008     28,398         --         --         --        --
    Conversion of convertible bond...........      --          --      204      2,685         --         --         --     2,685
    Conversion of accrued preferred dividend.      --          --       45        642       (642)        --         --        --
    Amortization of restricted stock.........      --          --       --         --         --         --      1,518     1,518
    Cumulative translation
    Adjustments .............................      --          --       --         --         --     (3,078)        --    (3,078)
    Net income...............................      --          --       --         --     17,147         --         --    17,147
                                                                                                                         -------
    Comprehensive income ....................      --          --       --         --         --         --         --    14,069
    Preference dividend .....................      84         849       --         --       (849)        --         --        --
                                               ------     -------   ------   --------   --------   --------   --------   -------
Balance at December 31, 2000 ................     443       4,430   11,710    230,788   (176,440)    (5,255)    (3,603)   49,920
    Issuance of stock .......................      --          --      926      9,970         --         --         --     9,970
    Exercises of employee stock options .....      --          --       71         57         --         --         --        57
    Conversion of preferred stock ...........    (186)     (1,863)     148      1,910        (97)        --         --       (50)
    Redemption of preferred stock ...........    (269)     (2,692)      --         --         --         --         --    (2,692)
    Amortization of restricted stock ........      --          --       --         --         --         --      1,517     1,517

    Cumulative translation Adjustments ......      --          --       --         --         --       (994)        --      (994)
    Deficit on defined benefit plan .........      --          --       --         --         --     (3,525)        --    (3,525)
    Net income ..............................      --          --       --         --     11,250         --         --    11,250
                                                                                                                         -------
    Comprehensive income ....................      --          --       --         --         --         --         --     6,731
    Preference dividend .....................      12         125       --         --       (125)        --         --        --
                                               ------     -------   ------   --------   --------   --------   --------   -------
    Balance at December 31, 2001 ............      --          --   12,855   $242,725  $(165,412)  $ (9,774)  $ (2,086)  $ 65,453
                                               ------     -------   ------   --------   --------   --------   --------   -------

</TABLE>


     1. The shares of common stock in issue at December 17, 1999 were subject to
a reverse stock split of one for ten.



        See accompanying notes to the consolidated financial statements.



                                      F-4
<PAGE>


                            TRIKON TECHNOLOGIES, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (In thousands of dollars)

<TABLE>
<CAPTION>

                                                                                  Year Ended December 31
                                                                         -----------------------------------------
                                                                              2001          2000         1999
                                                                         -----------------------------------------
<S>                                                                      <C>           <C>          <C>
Operating activities
Net income ...........................................................     $ 11,250      $ 17,147      $  4,574
Adjustments to reconcile net income to net cash used in operating
activities:
     Depreciation and amortization of plant, equipment, leasehold
          improvements, and demonstration systems ....................        3,618         2,858         3,294
     Gain on sale of property plant and equipment ....................         (681)           --            --
     Amortization of financing costs .................................           27            28            28
     Amortization of deferred compensation ...........................        1,517         1,518         1,516
     Net recognized pension fund obligation ..........................         (152)
     Provision for loss on accounts receivable .......................          (51)           58        (2,493)
     Changes in operating assets and liabilities:
         Accounts receivable .........................................        9,813       (14,124)       (6,856)
         Inventories (including demonstration systems) ...............        4,334       (17,094)         (306)
         Other current assets ........................................        3,644        (4,558)          727
         Sales returns ...............................................           --        (3,664)       (7,054)
         Restructuring cost ..........................................           --          (183)         (916)
         Accounts payable and other liabilities ......................      (14,494)       12,136         6,420
         Income tax payable ..........................................        1,011           506           (14)
         Other current liabilities ...................................           --            --          (807)
         Deferred revenue ............................................       (4,224)        9,330            --
                                                                           --------      --------      --------
Net cash provided by (used in) operating activities ..................       15,612         3,958        (1,887)
Investing Activities
Purchases of property, equipment and leasehold improvements ..........         (416)       (2,899)       (1,560)
Proceeds from sale of property, equipment and leasehold improvements .        1,008             0         1,112
Other assets and liabilities .........................................       (1,599)       (1,416)         (579)
                                                                           --------      --------      --------
Net cash (used in) provided by investing activities ..................       (1,007)       (4,315)       (1,027)
Financing Activities
Issuance of stock ....................................................       10,027            44            --
Preferred stock dividend .............................................          (50)           --            --
Redemption of preferred stock ........................................       (2,692)           --            --
Redemption of 7 1/8% convertible debt ................................       (1,505)           --            --
Borrowings under bank credit lines ...................................       21,450         7,550            --
Repayments under bank credit lines ...................................       (3,776)       (1,888)           --
Payments on capital lease obligations ................................         (382)         (295)         (227)
                                                                           --------      --------      --------
Net cash provided by (used in) financing activities ..................       23,072         5,411          (227)
Effect of exchange rate changes in cash ..............................          (86)       (1,905)         (823)
                                                                           --------      --------      --------
Net increase (decrease) in cash and cash equivalents .................       37,591         3,149        (3,964)
Cash and cash equivalents at beginning of year .......................        7,076         3,927         7,891
                                                                           --------      --------      --------
Cash and cash equivalents at end of year .............................       44,667      $  7,076      $  3,927
                                                                           ========      ========      ========


Supplemental Statements of Cash Flows Information
     Cash paid during the year for:
     Interest ........................................................     $  1,046      $    554      $    365
     Taxes (primarily foreign) .......................................     $  2,284      $    172      $     54
Non-cash investing and financing activities:
     Equipment acquired under capital lease ..........................     $  1,165      $    914            --

</TABLE>

         See accompanying notes to the consolidated financial statement


                                      F-5
<PAGE>


                            TRIKON TECHNOLOGIES, INC.

                          NOTES TO FINANCIAL STATEMENTS



1.       SIGNIFICANT ACCOUNTING POLICIES

Background

     Trikon Technologies, Inc. and its subsidiaries (collectively the "Company")
operate in one segment, designing, manufacturing and marketing semiconductor
processing equipment. These products are used for chemical and physical vapor
deposition and for etch applications and are sold to semiconductor manufacturers
worldwide.

         The consolidated financial statements of the Company include the
accounts of its subsidiaries all of which are wholly owned. All significant
intercompany accounts and transactions have been eliminated.

Revenue Recognition

     The Company derives its revenues from three sources - equipment sales,
spare parts sales and service contracts, and adopted Staff Accounting Bulletin
101 issued by the staff of the Securities and Exchange Commission, in fiscal
2000.

         In accordance with this SAB, revenues related to equipment sales are
recognized upon shipment and transfer of title when the equipment has been
pre-tested in the factory under conditions similar to which the customer intends
to operate the equipment and meets all of the customers defined specifications.
For new customers, or new products, revenue is recognized only on final
acceptance unless the customer attends and approves the pre-testing procedures
and the customer and the Company is satisfied that the performance of the
equipment, once installed and operated, will continue to meet the
customer-defined specifications. Equipment sold as demonstration or evaluation
units are recognized for revenue on transfer of title and either final
acceptance, or satisfactory completion of testing to demonstrate that the
equipment meets all the customer defined specifications.

         Equipment sales generally include the provision of installation and
commissioning services, which are not essential to the functionality of the
equipment but have contractual payment terms linked to the final acceptance. The
Company has deferred revenue recognition on the portion of revenue contractually
linked to final acceptance, or the fair value of the installation services, if
greater, until after acceptance of the machine.

         Revenue related to spare parts is recognized on shipment and revenue
related to service contracts is recognized ratably over the duration of the
contracts.

Use of Estimates

         The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Cash Equivalents

         Cash equivalents represent short-term investments that are highly
liquid, are of limited credit risk and have original maturities of three months
or less when purchased.




                                      F-6
<PAGE>


                           TRIKON TECHNOLOGIES, INC.

                    NOTES TO FINANCIAL STATEMENTS Continued



Inventories

     Inventories are stated at the lower of cost (first-in, first-out method) or
market and consist of the following ;

                                                   December 31,
                                                 2001         2000
                                            -------------------------
                                                  (In thousands)
Components                                       $11,879     $15,592
Work-in-process and spares                         8,510      14,540
Finished goods                                     1,235         740
                                            -------------------------
                                                 $21,624     $30,872
                                            =========================


Property, plant and equipment

         Property, plant and equipment are stated at cost. Depreciation and
amortization is computed using the straight-line method over the estimated
useful lives of the assets (five years) or the lease term. Owned buildings are
depreciated using the straight-line method over 50 years.

         The components of property, plant and equipment are as follows:

                                                        December 31,
                                                     2001         2000
                                                   --------------------
                                                       (In thousands)
Land .........................................     $ 1,145     $ 1,610
Machinery and equipment ......................      18,608      13,803
Furniture and fixtures .......................       3,651       3,460
Leasehold improvements .......................      10,455      10,545
                                                   --------------------
                                                    33,859      29,418
Less accumulated depreciation and amortization      13,434      10,373
                                                   --------------------
                                                   $20,425     $19,045
                                                   --------------------


Demonstration Systems

         Demonstration or evaluation systems are completed systems located at
certain strategic customer sites or at the Company's facilities. The Company
provides these demonstration systems at no charge for a specified evaluation
period. The customer pays all operating costs incurred during the evaluation
period. At the conclusion of the agreed upon evaluation period, provided that
the equipment performs to required specifications, management expects that the
customer, while not obligated to do so, will purchase the system. Demonstration
systems are stated at the lower of cost or estimated net realizable value and
are depreciated on a straight-line method over four years, if the product is not
sold after one year.

Accounting for Income Taxes

     The Company accounts for income taxes using the liability method in
accordance with SFAS No. 109, Accounting for Income Taxes.

Research and Development Costs

         Research and development costs are expensed as incurred.



                                      F-7
<PAGE>


                           TRIKON TECHNOLOGIES, INC.

                    NOTES TO FINANCIAL STATEMENTS Continued

Stock-based Compensation

         The Company grants stock options for a fixed number of shares to
employees with an exercise price equal to the fair value of the shares at the
date of grant. The Company accounts for stock option grants in accordance with
Accounting Principles Board Opinion (APB) No. 25 `Accounting for Stock Issued to
Employees' which generally measures compensation expense based on the excess of
the quoted market price of the Company's Common Stock over the option price on
the measurement date. In October 1995, SFAS No. 123 `Accounting for Stock Based
Compensation' was issued. SFAS No. 123 provides alternative accounting treatment
to APB No. 25 with respect to stock-based compensation and requires certain
additional disclosures, including disclosures if the Company elects not to adopt
the accounting requirements of SFAS No. 123. The Company has adopted the
disclosure requirements of SFAS No. 123 and has elected to continue to measure
compensation costs following present accounting rules under APB No. 25, and,
accordingly, recognizes no compensation for the stock option grants, since the
exercise price of stock options granted equals the quoted market price of the
underlying stock at the date of grant.

Earnings Per Share

         Basic and diluted earnings per share is calculated in accordance with
FASB Statement No. 128, `Earnings Per Share,' which specifies the computation,
presentation and disclosure requirements for earnings per share. The following
table sets forth the computation of basic and diluted earnings per share.

<TABLE>
<CAPTION>
                                                                          Years ended December 31
                                                                      2001          2000          1999
                                                                    --------      --------      --------
                                                                              (In thousands)
<S>                                                                 <C>           <C>           <C>
Numerator:
    Net income before cumulative effect of change in accounting
    policy ....................................................     $ 11,250      $ 18,980      $  4,574
    Cumulative effect of change in accounting policy ..........           --        (1,833)           --
                                                                    --------      --------      --------
    Net income ................................................       11,250        17,147         4,574
    Dividend applicable to Preferred Stock ....................          141         1,026         2,490
                                                                    --------      --------      --------
    Net income applicable to common shares ....................     $ 11,109      $ 16,121      $  2,084
                                                                    --------      --------      --------
Denominator:
    For basic earnings per share
    Weighted average shares outstanding .......................       12,430        11,017         9,403
    Restricted shares .........................................       (1,149)       (1,149)       (1,149)
                                                                    --------      --------      --------
                                                                      11,281         9,868         8,254
                                                                    --------      --------      --------
    For diluted earnings per share
    Adjusted weighted average shares outstanding ..............       11,281         9,868         8,254
    Effect of dilutive securities
    Employee stock options ....................................          463           583           339
    Restricted shares .........................................          914           874            --
                                                                    --------      --------      --------
                                                                      12,658        11,325         8,593
                                                                    --------      --------      --------
</TABLE>


         Basic earnings per share for the years ended December 31, 2001, 2000
and 1999 exclude the effect of 1,149,281 restricted shares of common stock,
which are contingently issuable to the Company's Chairman of the Board.

         The number of shares used in the denominator for the year ended
December 31, 1999 has been adjusted to reflect the one for ten reverse stock
split effected on December 17, 1999.

Comprehensive Income

         Comprehensive income comprises net income, provisions for unfunded
accumulated benefit obligations with respect to the Company's defined benefit
pension plan and currency translation losses for each year. Translation losses
were $994,000, $3,078,000 and $1,426,000 during the years ended December 31,
2001, 2000 and 1999 respectively. Comprehensive income for the year ended
December 31, 2001includes an amount of $3,525,000 to reflect an additional
minimum unfunded liability in the Company's defined benefit pension plan (see
note 6 to financial statements). No such amounts were required in prior years.



                                      F-8
<PAGE>


                           TRIKON TECHNOLOGIES, INC.

                    NOTES TO FINANCIAL STATEMENTS Continued

Foreign Currency Translation

         The functional currency of most of the Company's foreign subsidiaries
is the local currency. The Company translates the assets and liabilities of its
foreign subsidiaries at the rate of exchange in effect at the balance sheet date
and translates the statement of operations items at the average exchange rate
for the year. Translation adjustments are recorded as a component of
shareholders' equity on the line item "other Comprehensive Income" in the
consolidated balance sheet. Transaction gains and losses, other than those that
relate to transactions deemed to be of a long-term nature, are recognized in
earnings. During the years ended December 31, 2001, 2000 and 1999, the
transaction exchange gains credited to selling, general and administrative costs
were $1,149,000, $910,000 and $149,000, respectively.


2. FINANCIAL INFORMATION RELATING TO FOREIGN AND DOMESTIC OPERATIONS AND
   EXPORT SALES


                                                Year Ended December 31
                                        ---------------------------------------
                                           2001         2000          1999
                                        ---------      ---------      ---------
                                                   (In thousands)
Revenues:
Unaffiliated Customers
    North America .................     $  32,095      $  29,180      $  17,027
    Foreign (primarily Europe) ....        64,951         77,832         33,480
    Inter-geographic:
    North America .................         2,040            482            314
    Foreign (primarily Europe) ....        25,113         29,290          9,193
    Eliminations ..................       (27,153)       (29,772)        (9,507)
                                        ---------      ---------      ---------
                                        $  97,046      $ 107,012      $  50,507
                                        =========      =========      =========
Operating income:
    North America .................     $    (671)     $     416      $   4,328
    Foreign (primarily Europe) ....        14,826         19,737            537
                                        ---------      ---------      ---------
                                        $  14,155      $  20,153      $   4,865
                                        =========      =========      =========
IdIdentifiable assets:
    United States .................     $  17,498      $   9,559      $   5,184
    Foreign (primarily Europe) ....        95,235         86,135         52,094
                                        ---------      ---------      ---------
                                        $ 112,733      $  95,694      $  57,278
                                        =========      =========      =========
Export sales from the United States     $   5,860      $   3,947      $     500
                                        =========      =========      =========

License revenue of $350,000 and $2,144,000 for each of the years ended December
31, 2000 and 1999 have been included within North America.




                                      F-9
<PAGE>

                           TRIKON TECHNOLOGIES, INC.

                    NOTES TO FINANCIAL STATEMENTS Continued


3        LONG-TERM DEBT

Long-term debt includes the following (in thousands):

                                                          December 31
                                                      2001           2000
                                                ----------------------------
Convertible notes                                        $--         $1,505
Bank debt                                             23,725          5,587
Capital lease obligations                              1,517            705
                                                ----------------------------
Total                                                 25,242          7,797
Less current portion:                                (9,636)        (5,421)
                                                ----------------------------
Long term portion                                    $15,606         $2,376
                                                ============================


Subordinated Convertible Notes

         The Company had outstanding $1,505,000 of subordinated convertible
notes as at December 31, 2000. The subordinated convertible notes bore interest
at 7?% which was payable semi-annually on April 15 and October 15. The
Subordinated convertible notes matured on October 15, 2001 and were repaid at
face value.

Bank Debt

         During the year ended December 31, 2001, the Company entered into a
three-year term loan facility of (pound)15 million (approximately $21.9 million
at year-end exchange rates) from a British bank. The term loan carries a
variable rate of interest and is repayable in three equal annual installments on
March 21, 2002, 2003 and 2004. Interest is payable at the London Interbank
Borrowing Rate (LIBOR) plus 1.25% (as at December 31, 2001 payable at the rate
of 5.32%) per annum and the loan carries no prepayment penalties. In addition,
during fiscal 2000 the Company entered a two-year term loan facility of (pound)5
million (approximately $7.3 million the year-end exchange rates), which incurs
interest at 1.5% over the three-month London Interbank borrowing rate (as at
December 31, 2001 a rate of 5.61%). This loan is repayable in equal quarterly
installments through June 2002 and can also be prepaid without penalty.

         Both loan facilities include financial covenants that require the
Company to maintain the ratio of net borrowings to net worth less than 0.5:1.0
and to maintain interest cost at below 10% of profit before interest and taxes.
In October 2001, the Company amended the loan agreements to provide that the
Company is not required to maintain its interest cost at below 10% of operating
income for fiscal 2002. Rather, the Company will be allowed to incur net
interest of (pound)400,000 in 2002 ($588,000 at the year end exchange rate)
under the terms of the replacement covenant.

          The Company also has an overdraft (credit) facility with the same bank
of up to (pound)1.5 million for use against standby letters of credit and
guarantees (approximately $2.2 million at the year end exchange rate). No amount
is presently outstanding under this facility.


4.       PREFERRED AND RESTRICTED STOCK

Preferred Stock

         The Board of Directors has the authority to issue up to 20,000,000
shares of Preferred Stock in one or more series with rights, preferences,
privileges and restrictions to be determined at the Board of Director's
discretion.

         In May 1998, in conjunction with an exchange offer made to the holders
of convertible notes, the Company issued 2,855,754 new shares of Series H
Preferred Stock. The Series H Preferred Stock were redeemable at the option of
the Company for cash at a redemption price equal to $10 per share plus accrued
but unpaid dividends. During the year, prior to final redemption, the Company
exchanged a total of 186,330 shares of Series H Preferred Stock plus accrued,
but unpaid, dividends for 148,644 shares of Common stock. On June 29, 2001, the
Company redeemed for $2,742,000 the remaining outstanding shares of Series H
Preferred Stock together with the accrued but unpaid dividends.



                                      F-10
<PAGE>


                           TRIKON TECHNOLOGIES, INC.

                    NOTES TO FINANCIAL STATEMENTS Continued

Restricted Stock

         In connection with the consummation of a capital reorganization in
fiscal 1998, the Company issued 1,149,281 shares of restricted Common Stock to
the Company's Chairman of the Board. Subject to certain conditions, the
restricted stock will vest 100% upon the earlier of (i) May 14, 2003, or (ii)
the sale of all or substantially all of the assets of the Company. The
restricted stock represents approximately 9% of the outstanding Common Stock
(after giving effect to the elimination of the restrictions on the stock). The
restricted stock was valued at $7.6 million based upon average traded prices
immediately after the grant. This amount has been accounted for as an addition
to Common Stock and as deferred compensation within the Statement of
Shareholders Equity. The deferred compensation is being amortized on a
straight-line basis over a five-year period resulting in a charge against
operations of $1.5 million during each of the years ended December 31, 2001,
2000 and 1999.

5.       INCOME TAXES

         The income tax provision consists of the following:


<TABLE>
<CAPTION>

                                               Year Ended December 31
                                       --------------------------------------
                                        2001            2000           1999
                                       ------          ------          ------
                                                 (In thousands)
<S>                                   <C>          <C>               <C>
 Current:
  Federal ...................             $--          $   11            $---
  State .....................             110               1              53
  Foreign ...................           2,720             812              47
                                       ------          ------          ------
                                        2,830             824             100
Deferred (foreign): .........             602              --              --
                                       ------          ------          ------
  Total .....................          $3,432          $  824          $  100
                                       ------          ------          ------
</TABLE>

A reconciliation of income taxes provided at the federal statutory rate (35% in
all years) to actual income tax expense is as follows:

<TABLE>
<CAPTION>
                                                                       Year Ended December 31
                                                                --------   ---------    ----------
                                                                  2001         2000       1999
                                                                --------   ---------    ----------
<S>                                                               <C>          <C>         <C>
Income taxes at the statutory federal income tax rate ......      35.0%        35.0%       35.0%
Foreign taxes at lower rates than the federal statutory rate      (3.0)        (3.3)       (0.5)
                                                                  ----         ----        ----
                                                                  32.0         31.7        34.5
State taxes payable ........................................       0.7          0.2         1.2
Effect of Stock compensation amortization ..................       3.6          2.7        11.3
Change in valuation reserve due to:
   Foreign NOL's utilized in the period ....................      (6.4)        (23.5)        --
   Other ...................................................      (3.6)        (6.9)       (44.9)
Other ......................................................      (2.9)          --          --
                                                                  ----         ----        ----
                                                                  23.4%         4.2%        2.1%
                                                                  ====         ====        ====
</TABLE>


         The income before income taxes of the Company's non-US subsidiaries for
the years ended December 31, 2001, 2000 and 1999 was approximately $14,415,000,
$19,822,000 and $633,000 respectively.

         As of December 31, 2001, the Company had federal net operating loss
carry forwards of approx. $16.6 million (adjusted for the estimated effects of a
change of ownership under s382 of the internal revenue code of 1986, as amended
(the "code")) and state operating loss carry forwards of $18.4 million. US
federal net operating losses include $753,000 of losses arising from the
exercise of stock options (against which a full valuation reserve is
established) which, when utilized will result in the benefit being reflected as
a component of shareholders equity. The net operating loss carryforwards will
expire at various dates beginning in years 2003 through 2019, if not utilized.


                                      F-11
<PAGE>

                           TRIKON TECHNOLOGIES, INC.

                    NOTES TO FINANCIAL STATEMENTS Continued

               Utilization of the net operating losses and credits is subject to
 a substantial annual limitation due to the ownership change limitations
 provided by the Code and similar state provisions. The annual limitation may
 result in the expiration of net operating losses before utilization.

         Significant components of the Company's deferred tax liabilities and
assets are as follows at December 31:

                                                                December 31
                                                             2001        2000
                                                           -------     -------
                                                              (in thousands)

Deferred tax assets:
Domestic:
   Allowances and accruals not deducted for current taxes  $    56     $   566
   Net operating loss carry forwards ....................    5,802       5,680
Foreign:
   Allowances and accruals not deducted for current taxes      501       1,020
   Net operating loss carry forwards ....................       57       1,038
                                                           -------     -------
                                                             6,416       8,304
Less valuation reserve ..................................   (5,914)     (7,390)

Deferred tax (liabilities)
Domestic: ...............................................       --          --
Foreign:
   Depreciation .........................................   (1,104)       (914)
                                                           -------     -------
Net deferred tax (liability)/asset ......................  $  (602)        $--
                                                           =======     =======


6.       PENSIONS AND OTHER POSTRETIREMENT BENEFITS

United States 401(k)

         In November 1993, the Company established a 401(k) plan covering
substantially all of its US employees. The 401(k) plan allows eligible employees
to contribute up to 15% of their compensation. Company contributions are
voluntary and at the discretion of the Board of Directors. There were no
contributions made by the Company for the years ended December 31, 2001, 2000,
and 1999.

United Kingdom Pension Plan

         The Company operates a pension plan known as "The Electrotech
Retirement Benefits Scheme" (the "Plan"), which undertakes to provide retirement
benefits to participating employees based upon their final pensionable salary.
The assets of the Plan are administered by the Trustees and do not belong to the
Company.

         In March 2001, the Company decided to curtail the Plan effective April
6, 2001. As a result, participants do not earn additional defined benefits for
service after April 6, 2001. Further the Company is investigating the full wind
up the scheme such that the Company would pay a final cash payment to the Plan,
which would relieve the Company of any further obligations to the Plan. As at
December 31, 2001, no settlement of the Plan had occurred. As a result of the
curtailment of the Plan in April 2001, benefits under the Plan are restricted to
the number of years of service to April 5, 2001 and the employee remuneration,
as defined, at that date.

         Information required in respect of the net periodic benefit cost and
related obligation determined in accordance with SFAS 87, 88 and 132 is given
below.

                                      F-12
<PAGE>


                           TRIKON TECHNOLOGIES, INC.

                    NOTES TO FINANCIAL STATEMENTS Continued

         Plan funding policy prior to April 5, 2001 was based on annual
contributions at a rate that is intended to fund benefits as a level percentage
of pay over the working lifetime of the Plan participants. Subsequent to April
5, 2001, the Company has funded $36,500 per month to reduce the deficit of the
Plan. The assets of the Plan are invested primarily in equities, UK fixed
interest stocks and property.

         Assumptions used to determine the net periodic benefit cost and related
benefit obligations are shown below.

                                                    Year Ended December 31,
                                                 2001       2000        1999
                                              --------    --------     ------
Discount rate                                   6.25%       6.00%        6.00%
Long term rate of return on plan assets         7.50%       7.50%        7.75%
Increase in compensation levels                 5.00%       5.00%        5.50%


         The actuarial calculations in respect of the Plan assume a rate of
increase of pensions in payment accrued after April 6, 2001 of 3.00%. Fixed
pension increase rates apply for pension in respect of service before that date.

         The components of net benefit expense are detailed in the table below.

                                                 Year Ended December 31,
                                           2001        2000        1999
                                         ---------- ----------- ------------
                                                 (in Thousands)
Service cost                                  $ 82       $ 329        $ 331
Interest cost on benefit obligation            868         846          731
Expected return on plan assets               (826)       (691)        (561)
Net amortization and deferral:
-  recognized losses                            57          51           30
                                         ---------- ----------- ------------
Net benefit expense                           $181       $ 535        $ 531
                                         ========== =========== ============


         The funded status of the Plan is summarized in the table below.

                                                   December 31,
                                                2001        2000
                                             ----------- -----------
                                                 (in thousands)





Actuarial present value of
  accumulated benefit obligation               $13,703     $12,174
                                             ----------- -----------

Projected benefit obligation                     13,753      14,384
Fair value of plan assets                        10,331      10,390
                                             ----------- -----------
Benefit obligation in excess of plan assets       3,422       3,994
Unrecognized prior service cost                       -           -
Unrecognized net loss                             3,574       2,201
                                             ----------- -----------
Net amount recognized at end of year             $(152)      $1,793
                                             =========== ===========


The Company amortizes the unrecognized net loss or gain as a component of
pension costs, to the extent that the unrecognized net gain or loss exceeds 10%
of the greater of the projected benefit obligation or the market related value
of plan assets. The Company amortizes this adjusted gain or loss over the
remaining service life of the participants of the Plan. At December 31, 2001,
the accumulated benefit obligation exceeded the fair value of the Plan assets
and accordingly the Company recognized an additional minimum liability, and, as
there was no unrecognized prior service cost an equal amount was charged to
other comprehensive income.


                                      F-13
<PAGE>


                           TRIKON TECHNOLOGIES, INC.

                    NOTES TO FINANCIAL STATEMENTS Continued


Change in benefit obligation
                                                       December 31
                                                  -----------------------
                                                     2001        2000
                                                  ----------- -----------
                                                      (in thousands)


Benefit obligation at start of year                  $14,384     $12,733
Translation difference                                 (361)       (969)
Service cost                                              82         329
Interest cost                                            868         846
Contributions by plan participants                        46          98
Actuarial losses (gains)                               (111)       1,434
Impact of curtailment                                (1,080)
Benefits paid                                           (75)        (87)
                                                  ----------- -----------
Benefit obligation at end of year                    $13,753     $14,384
                                                  =========== ===========






                                                       December 31
                                                  -----------------------
                                                     2001        2000
                                                  ----------- -----------
                                                      (in thousands)
Fair value of plan assets at start of year           $10,390      $9,343
Translation difference                                 (265)       (710)
Actual (loss) return on plan assets                  (1,824)        (64)
Contributions by plan participants                        46          98
Contributions by employer                              2,059       1,810
Benefits (paid)                                         (75)        (87)
                                                  ----------- -----------
Fair value of plan assets at end of year             $10,331     $10,390
                                                  =========== ===========


There are no other post retirement benefits provided to employees.

         The Company also makes contributions to a group personal pension plan
and total contributions to this plan for the years ended December 31, 2001, 2000
and 1999 amounted to $588,000, $333,000 and $277,000 respectively.


7. COMMITMENTS AND CONTINGENCIES

Leases:

         The Company leases certain equipment under capital leases. The Company
also leases its offices, manufacturing facilities and certain equipment under
non-cancelable operating lease agreements. Certain leases are subject to
escalation clauses based on applicable inflation indexes.

         Cost of equipment under capital leases included in property and
equipment at December 31, 2001 and 2000 was $1,956,000 and $825,000
respectively, and accumulated amortization was $342,000 and $96,000,
respectively. Amortization expense under these leases is included in
depreciation expense.

         Future minimum lease payments under capital leases and non-cancelable
operating leases with initial terms of one year or more consisted of the
following at December 31, 2001:


                                      F-14
<PAGE>


                           TRIKON TECHNOLOGIES, INC.

                    NOTES TO FINANCIAL STATEMENTS Continued


                                                       Capital       Operating
                                                       Leases          Leases
                                                  ---------------------------
                                                           (In thousands)
2002...........................................         $574           $1,664
2003...........................................          558            1,548
2004...........................................          458            1,325
2005...........................................          132              946
2006...........................................           --              927
                                                  ----------------------------
                                                       1,722           $6,410
                                                                      ========
Less amounts representing imputed interest.....         205
                                                  -----------
Present value of net minimum lease
  payments, including  amounts
  classified as current........................       $1,517
                                                  ===========

         Rental expense for operating leases was $1.7 million, $1.6 million and
$1.6 million for the years ended December 31, 2001, 2000, and 1999,
respectively.

Contingencies:

         In the ordinary course of business the Company is involved with various
types of claims and legal proceedings, which may result in litigation, or other
legal proceedings. The Company does not anticipate that any of these proceedings
will have a material adverse effect on the Company's financial position, cash
flow or results of operations.

8.       FINANCIAL INSTRUMENTS

         The Company's financial instruments consist primarily of cash, cash
equivalents, accounts receivable, accounts payable, capital lease obligations,
and the convertible subordinated notes. The carrying amounts at December 31,
2001 of these financial instruments approximates their fair value,

         The Company from time to time enters into foreign exchange contracts of
a short-term nature (typically 1 month or less) that are generally matched to
the estimated collection of accounts receivable. These contracts are for the
sale of US Dollars into British Pounds. No contracts were outstanding at
December 31, 2001 or 2000. The Company has not entered into any other derivative
financial instrument and does not hold or use financial instruments for
speculative purposes.

Major Customers and Concentration of Credit Risk

         Accounts receivable consist primarily of amounts due from original
equipment manufacturers, end use customers, and distributors within the
Company's industry. At December 31, 2001 three customers represented 21%, 19%
and 12% of the total accounts receivable. At December 31, 2000 four customers
represented 27%, 20%, 16%, and 15% of the total accounts receivable.

         The Company performs credit evaluations and analysis of amounts due
from its customers; however, the Company does not require collateral. Credit
losses have been within management's expectations and an estimate of
un-collectible accounts has been provided for in the financial statements.

         Total revenue includes amounts from certain individual customers that
exceed 10% of total revenue. Revenue from two customers represented 17% and 15%
each of total revenue for the year ended December 31, 2001. Revenue from four
customers represented 23%, 16% 12% and 11% each of total revenue for the year
ended December 31, 2000 and revenue from three customers represented 23%, 11%
and 10% each of total revenue for the year ended December 31, 1999.


                                      F-15
<PAGE>

                           TRIKON TECHNOLOGIES, INC.

                    NOTES TO FINANCIAL STATEMENTS Continued


9.       REVENUE BY GEOGRAPHIC AREA

         The Company's revenue by geographic area was as follows:

                                       Year Ended December 31,
                                ---------------------------------------
                                    2001         2000         1999
                                ---------------------------------------
                                            (In thousands)
United States................        $32,095       $29,180    $ 17,027
Europe.......................         57,536        68,484      31,201
Asia Pacific.................          7,415         9,348       2,279
                                ---------------------------------------
Total........................        $97,046      $107,012    $ 50,507
                                =======================================

10.      STOCK OPTIONS

         In October 1996, the Company changed its "Non-Qualified" Employee
Option Plan to an Incentive Stock Option Plan (the "Option Plan"). At the Annual
Meetings of Shareholders held on June 14, 1999, May 31, 2000 and May 15, 2001,
the number of shares of Common Stock reserved for issuance under the Option Plan
was increased from 887,000 to 1,050,000 then to, 1,500,000 and then to
2,250,000, at each of these dates. The Company also has a Directors Plan that
provides for the issue of up to 50,000 shares of Common Stock to Non-Employee
Directors. The Option Plan provides options to purchase shares of the Company's
Common Stock for officers, directors, and key employees, at an exercise price
equal to the fair market value on the date of grant as determined by the Board
of Directors. The shares issued under the Option Plan shall become vested over
periods up to five years and have a maximum term of ten years. A summary of the
changes in the status of options is as follows:

                                                                    Weighted
                                                                    Average
                                     Options      Price Range Per     Price
                                   Outstanding        Share         Per Share
                                    -----------------------------------------
Outstanding at January 1, 1999...    304,400      0.50 -    14.38       5.90
Granted..........................    473,046      0.31 -    13.75      16.80
Cancelled........................   (21,192)      1.33 -    14.38       8.54
                                     -------
Outstanding at December 31, 1999.    756,254      0.31 -    14.38       3.38
Granted..........................    239,700      10.7 -    25.25      15.94
Cancelled........................   (26,489)      1.25 -    14.38       5.87
Exercised........................   (48,177)      0.31 -    14.38       0.92
                                     -------
Outstanding at December 31, 2000.    921,288      0.31 -    25.25       6.71
Granted..........................    197,970      9.44 -     12.1      10.82
Cancelled........................   (49,666)      0.47 -    14.38       9.91
Exercised........................   (70,948)      0.46 -     6.25       0.80
                                     -------
Outstanding at December 31, 2001.    998,644      0.31 -    25.25       7.78
                                     -------

         At December 31, 2001, 2000 and 1999, 473,199, 316,840 and 178,000
shares were exercisable at weighted-average prices of $6.22, $4.89 and $4.78
respectively. There were 1,149,367 option shares available for grant under the
Option Plan and 6,150 under the Directors Plan at December 31, 2001.




                                      F-16
<PAGE>


         Information regarding stock options outstanding as of December 31, 2001
is as follows:


<TABLE>
<CAPTION>
                 Price Range                 Options Outstanding             Options Exercisable
                 -----------         ----------------------------------------------------------------
                                                           Weighted
                                         Weighted          Average                      Weighted
                                         Average          Remaining                     Average
                    Shares            Exercise Price   Contractual Life    Shares    Exercise Price
                    ------           ----------------------------------------------------------------
<S>                                  <C>                 <C>          <C>            <C>
From $0.31 to $10.00.............        $ 1.76              7.42         300,641        $1.37
     $10.00 to $25.25............        $14.01              8.32         172,558        $14.67
</TABLE>

Fair Value Disclosure

         SFAS No. 123, "Accounting for Awards of Stock-Based Compensation to
Employees" requires the use of option valuation models to provide supplemental
information regarding options granted after 1994. Pro forma information
regarding net income (loss) and earnings per share shown below was determined as
if the Company had accounted for its employee stock options under the fair value
method of that statement.

         The fair value of the options was estimated at the date of grant using
a Black-Scholes option pricing model with the following weighted-average
assumptions for 2001, 2000, and 1999, respectively: Risk-free interest rates of
4.04%, 7.1%, and 6.7%; a zero dividend yield in all three years; volatility
factors of the expected market price of the Company's Common Stock of 63.1%,
112.5% and 158.1% and an expected life of the options of 3.9 years, 4.2 years
and 4.6 years. These assumptions resulted in weighted-average fair values of
$4.02, $5.23, and $3.06 per share for stock options granted in 2001, 2000, and
1999, respectively.

         The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options. The Company's employee stock
options have characteristics significantly different from those of traded
options such as vesting restrictions and extremely limited transferability. In
addition, the assumptions used in option valuation models (see above) are highly
subjective, particularly the expected stock price volatility of the underlying
stock. Because changes in these subjective input assumptions can materially
affect the fair value estimate, in management's opinion, the existing models do
not provide a reliable single measure of the fair value of its employee stock
options.

         For purposes of pro forma disclosures, the estimated fair value of the
options is amortized over the options' vesting periods. The Company's pro forma
information is as follows:



<TABLE>
<CAPTION>
                                                                            Years ended December 31
                                                                    2001             2000             1999
                                                             --------------      --------------      --------------

<S>                                                          <C>                 <C>                 <C>
Pro forma net income ...................................     $   10,371,000      $   15,902,000      $    4,103,000
Pro forma earnings per common share:
  Basic:
        Income applicable to common shares before
          Cumulative effect of change  in accounting
           principle ...................................     $         0.92      $         1.69      $         0.20
        Cumulative change in accounting principle ......                 --               (0.19)                 --
                                                             --------------      --------------      --------------
        Net income .....................................     $         0.92      $         1.50      $         0.20
                                                             ==============      ==============      ==============
  Diluted:
      Income applicable to common shares before
        cumulative effect of change accounting principle     $         0.82      $         1.47      $         0.19
      Cumulative change in accounting principle ........                 --               (0.16)                 --
                                                             --------------      --------------      --------------
      Net income .......................................     $         0.82      $         1.31      $         0.19
                                                             ==============      ==============      ==============

</TABLE>


                                      F-17
<PAGE>

                           TRIKON TECHNOLOGIES, INC.

                    NOTES TO FINANCIAL STATEMENTS Continued




11.      UNAUDITED QUARTERLY CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                               Quarter                          Fiscal
                                                            First        Second        Third       Fourth        Year
                                                         ------------ ------------- ------------ ------------ ------------
2001
<S>                                                      <C>          <C>          <C>         <C>          <C>
Net Sales                                                   $37,648      $27,653      $19,738     $12,007      $ 97,046
Gross Margin                                                $18,208      $14,053      $ 9,432     $ 3,604      $ 45,297
Net income (loss)                                           $ 6,763      $ 3,842      $   894     $  (249)     $ 11,250
Income (loss) per diluted share                             $  0.56      $  0.30      $  0.07     $ (0.02)     $   0.88

2000
Net Sales:
    as reported                                             $18,642      $26,001      $31,465     $34,057      $110,165
     Effect of change in accounting principle               $  (622)     $(1,325)     $(1,206)          -      $ (3,153)
     As restated, or as reported in Q4                      $18,020      $24,676      $30,259     $34,057      $107,012

Gross Margin:
    as reported                                             $ 8,824      $11,888      $15,105     $16,863      $ 52,680
     Effect of change in accounting principle               $  (299)     $  (636)     $  (580)          -      $  1,515
     As restated, or as reported in Q4                      $ 8,525      $11,252      $14,525     $16,863      $ 51,165

Net income (loss):
    as reported                                            $  1,899      $ 3,670      $ 7,114     $ 7,812      $ 20,495
     Effect of change in accounting principle              $   (299)     $  (636)     $  (580)          -      $ (1,515)
     Cumulative effect of change in accounting principle   $ (1,833)           -            -           -      $ (1,833)

     As restated, or as reported in Q4                     $   (233)      $3,034      $ 6,534     $ 7,812       $17,147

Earnings (loss) per diluted share:
    As reported                                            $   0.13       $ 0.30      $  0.58     $  0.65       $  1.66
     Effect of change in accounting principle              $  (0.03)      $ 0.06      $  0.05           -       $ (0.08)
     Cumulative effect of change in accounting principle   $  (0.18)           -            -           -       $ (0.16)

     As restated, or as reported in Q4                     $  (0.08)      $ 0.24      $  0.53      $ 0.65       $ 1.42

</TABLE>



                                      F-18
<PAGE>



                            TRIKON TECHNOLOGIES, INC.

                  SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS

                  Years ended December 31, 2001, 2000 and 1999






<TABLE>
<CAPTION>

                                                                 Additions              Deductions
                                                      ------------------------------------------------
            Description                 Balance at        Charged       Charged to    Amount Charged    Balance at
                                       Beginning of    (Credited) to  Other Accounts  to Reserve Net      End of
                                          Period         Costs and                          of            Period
                                                         Expenses                      Reinstatement
------------------------------------- -------------------------------------------------------------------------------

<S>                                    <C>              <C>                <C>          <C>              <C>
Year ended December 31, 2001            $  104,000       $    (20,000)      $ --         $   31,000       $  53,000
Allowance for doubtful items
Year ended December 31, 2000
Allowance for doubtful items            $   46,000       $     58,000       $ --         $       --       $ 104,000
Year ended December 31, 1999
Allowance for doubtful items            $2,539,000       $ (1,145,000)      $ --         $1,348,000       $ 46,000
</TABLE>