UNITED STATES
                          SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C. 20549

                                   FORM 10-Q

[X]   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934 For the Quarterly Period Ended June 30, 1999

[ ]   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: 0-12254


                      SCIENTIFIC TECHNOLOGIES INCORPORATED
                      ------------------------------------
                                    (Issuer)


          Oregon                                        77-0170363
 -------------------------                ------------------------------
  (State of incorporation)               (I.R.S. Employer Identification Number)


 6550 Dumbarton Circle, Fremont, California                      94555
---------------------------------------------               ----------------
  (Address of principal executive offices)                     (Zip Code)


                               (510) 608-3400
            -----------------------------------------------------
                         (Issuers telephone number)


Check whether the issuer (1) filed all reports required to be filed by Section
13 OR 15(d) of the Securities Exchange Act during the past 12 months (or such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90  days.
Yes  X   No
   -----   -----

Common stock outstanding as of July 31, 1999 was 9,634,369 shares.


<PAGE>







                         PART 1 - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                      SCIENTIFIC TECHNOLOGIES INCORPORATED
                      CONDENSED CONSOLIDATED BALANCE SHEET
                     (In thousands, except per share data)
<TABLE>
<CAPTION>
                                                   June 30,  December 31,
                                                      1999         1998
                                                   -----------  -----------
<S>                                                <C>          <C>
                     Assets                        (unaudited)
Current assets:
    Cash and cash equivalents                         $1,009       $2,577
    Short-term investments                             9,631       10,798
    Accounts receivable, net                           7,511        6,612
    Inventories                                        6,784        5,812
    Deferred income taxes                              1,132        1,132
    Other assets                                       1,028          345
                                                   -----------  -----------
       Total current assets                           27,095       27,276
intangibles and other assets                           2,326         --
Property and equipment, net                            2,849        2,545
                                                   -----------  -----------
       Total assets                                  $32,270      $29,821
                                                   ===========  ===========

              Liabilities and Stockholders' Equity
Current liabilities:
    Trade accounts payable                            $2,835       $2,391
    Payable to Parent                                    237          --
    Accrued expenses                                   2,235        1,972
                                                   -----------  -----------
       Total current liabilities                       5,307        4,363
                                                   -----------  -----------

Stockholders' Equity
    Common stock                                          10           10
    Capital in excess of par value                     5,589        5,787
    Retained earnings                                 21,364       19,661
                                                   -----------  -----------
       Total stockholders' equity                     26,963       25,458
                                                   -----------  -----------
       Total liabilities and stockholders' equity    $32,270      $29,821
                                                   ===========  ===========
</TABLE>
   The accompanying notes are an integral part of these financial statements.
<PAGE>









                      SCIENTIFIC TECHNOLOGIES INCORPORATED
                    CONDENSED CONSOLIDATED STATEMENT OF INCOME
                      (In thousands, except per share data)
                                   (unaudited)
<TABLE>
<CAPTION>
                                     Three Months Ended
                                          June 30,
                                    ---------------------
                                       1999       1998
                                    ---------- ----------
<S>                                 <C>        <C>
Sales                                 $12,014    $11,344
Cost of goods sold                      5,950      5,676
                                    ---------- ----------
  Gross profit                          6,064      5,668
                                    ---------- ----------
Operating expenses
  Selling, general and
    administrative                      3,256      2,992
  Research and development              1,125        790
                                    ---------- ----------
   Total operating expenses             4,381      3,782
                                    ---------- ----------
   Income from operations               1,683      1,886

Interest and other income, net            121        348
                                    ---------- ----------
   Income before income taxes           1,804      2,234

Provision for income taxes                685        849
                                    ---------- ----------
        Net income                     $1,119     $1,385
                                    ========== ==========

 Net income per common share:
    Basic                               $0.12      $0.14
                                    ========== ==========
    Diluted                             $0.12      $0.14
                                    ========== ==========

 Shares used to compute net income per common share:
    Basic                               9,658      9,645
                                    ========== ==========
    Diluted                             9,679      9,839
                                    ========== ==========

</TABLE>
  The accompanying notes are an integral part of these financial statements.
<PAGE>






                      SCIENTIFIC TECHNOLOGIES INCORPORATED
                    CONDENSED CONSOLIDATED STATEMENT OF INCOME
                      (In thousands, except per share data)
                                   (unaudited)
<TABLE>
<CAPTION>
                                       Six Months Ende
                                          June 30,
                                    ---------------------
                                       1999       1998
                                    ---------- ----------
<S>                                 <C>        <C>
Sales                                 $23,574    $22,457
Cost of goods sold                     11,758     11,062
                                    ---------- ----------
  Gross profit                         11,816     11,395
                                    ---------- ----------
Operating expenses
  Selling, general and
    administrative                      6,314      5,896
  Research and development              2,296      1,425
                                    ---------- ----------
   Total operating expenses             8,610      7,321
                                    ---------- ----------
   Income from operations               3,206      4,074

Interest and other income, net            250        468
                                    ---------- ----------
   Income before income taxes           3,456      4,542

Provision for income taxes              1,313      1,726
                                    ---------- ----------
        Net income                     $2,143     $2,816
                                    ========== ==========

 Net income per common share:
    Basic                               $0.22      $0.29
                                    ========== ==========
    Diluted                             $0.22      $0.29
                                    ========== ==========

 Shares used to compute net income per common share:
    Basic                               9,660      9,620
                                    ========== ==========
    Diluted                             9,663      9,822
                                    ========== ==========

</TABLE>
  The accompanying notes are an integral part of these financial statements.
<PAGE>
                      SCIENTIFIC TECHNOLOGIES INCORPORATED
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                               (In thousands)
                                 (unaudited)
<TABLE>
<CAPTION>
                                                         Six Months Ended
                                                             June 30,
                                                      -----------------------
                                                          1999        1998
                                                      ----------- -----------
<S>                                                   <C>         <C>
Cash flows from operating activities
  Net income                                              $2,143      $2,816
  Adjustments to reconcile net income to cash
    provided by operating activities:
    Depreciation and amortization                            586         473

    Changes in assets and liabilities:
      Accounts receivable, net                              (663)         71
      Inventories                                           (650)        195
      Payable to Parent                                      237       1,001
      Trade accounts payable                                 302        (132)
      Accrued expenses                                        85        (105)
      Other                                                 (663)       (260)
                                                      ----------- -----------
        Cash flows provided by operating activities        1,377       4,059
                                                      ----------- -----------

Cash flows from investing activities
  Acquisition of Lundahl Instruments, Inc.                (2,631)        --
  Investment in intangibles and fixed assets                (843)       (495)
  Sale (purchase) of short-term investments                1,167      (3,837)
                                                      ----------- -----------
        Cash flows used in investing activities           (2,307)     (4,332)
                                                      ----------- -----------

Cash flows from financing activities
   Dividends                                                (440)       (434)
   Issuance (repurchase) of common stock                    (198)         93
                                                      ----------- -----------
        Cash flows used in financing activities             (638)       (341)
                                                      ----------- -----------
Change in cash and cash equivalents                       (1,568)       (614)

Cash and cash equivalents at beginning of period           2,577       4,559
                                                      ----------- -----------
Cash and cash equivalents at end of period                $1,009      $3,945
                                                      =========== ===========

Supplemental disclosure of cash flow information:
  Cash paid to the Parent for income taxes                $1,313      $1,726
                                                      =========== ===========
</TABLE>
  The accompanying notes are an integral part of these financial statements.
<PAGE>


                 SCIENTIFIC TECHNOLOGIES INCORPORATED
             NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

     The consolidated financial statements as of June 30, 1999 and the three
and six months ended June 30, 1999 and 1998 are unaudited. In the opinion
of management, they reflect all adjustments (consisting only of normal
recurring adjustments) necessary for a fair statement of the results of
these periods but may not necessarily be indicative of the results to be
expected for the full fiscal year. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
consolidated or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. We suggest that these consolidated
financial statements be read in conjunction with the financial
statements and notes thereto included in Scientific Technologies
Incorporated's Annual Report to Shareholders on Form 10-K for the year
ended December 31, 1998.

   1. INVENTORIES
    Inventories consist of the following (in thousands):

                                               June 30,    December 31,
                                                 1999           1998
                                             ------------   ------------
         Finished goods                         $2,100           $2,421
         Work in process                           741              482
         Subassemblies                           1,669              541
         Raw materials                           2,274            2,368
                                             ------------   ------------
                                                $6,784           $5,812
                                             ============   ============

2. NET INCOME PER SHARE
A reconciliation of the numerators and denominators of the basic and
diluted income per common share computations is provided below.

                                           (In Thousands)       (Per Share)
Three months ended June 30, 1999        Income        Shares       Amount
--------------------------------------------------------------------------
Basic earnings per share calculation    $1,119         9,658        $0.12
Effect of dilutive securities
          Stock options                    -              21           -
                                         -----         -----         ----
Diluted earnings per share calculation  $1,119         9,679        $0.12
                                         =====         =====         ====

Three months ended June 30, 1998
--------------------------------
Basic earnings per share calculation    $1,385         9,645        $0.14
Effect of dilutive securities
          Stock options                    -             194           -
                                         -----         -----         ----
Diluted earnings per share calculation  $1,385         9,839        $0.14
                                         =====         =====         ====

Six months ended June 30, 1999
------------------------------
Basic earnings per share calculation    $2,143         9,660        $0.22
Effect of dilutive securities
          Stock options                    -               3           -
                                         -----         -----         ----
Diluted earnings per share calculation  $2,143         9,663        $0.22
                                         =====         =====         ====

Six months ended June 30, 1998
------------------------------
Basic earnings per share calculation    $2,816         9,620        $0.29
Effect of dilutive securities
          Stock options                    -             202           -
                                         -----         -----         ----
Diluted earnings per share calculation  $2,816         9,822        $0.29
                                         =====         =====         ====


3. DIVIDEND PAID
       On May 27, 1999, the Company declared a cash dividend of $.0475 per
share on all outstanding shares of its common stock, payable on July 1,
1999, to shareholders of record on June 18, 1999. A dividend of $.0475
was paid on April 1, 1999 to shareholders of record on March 19, 1999.
Approximately 86% of the outstanding common stock of the Company is
beneficially owned by Scientific Technology Incorporated, a California
corporation under common control with the Company. Dividends paid to
Scientific Technology Incorporated were applied to the Payable to Parent
account.

4. COMPREHENSIVE INCOME
        For the three and six months ended June 30, 1999 and 1998, there is
no difference between net income and comprehensive income.

5. ACQUISITION OF LUNDAHL INSTRUMENTS, INC.
        On April 1, 1999, the Company acquired all of the outstanding
capital stock of Lundahl Instruments, Inc. ("LII"). In the transaction,
accounted for as a purchase, the Company paid $2,631 in cash of which
$2,307 was allocated to goodwill and is being amortized using the
straight-line method over twenty years. The operations and financial
position of LII were accounted in the consolidated financial statements
of the Company beginning in April 1999. LII designs and manufactures
non-contact ultrasonic sensors and controllers, for use in the
automation of industrial processes for applications involving level and
flow control, environmental monitoring, automated vehicle collision
avoidance and material positioning.

<PAGE>








ITEM 2 . MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
--------------------------------------------------------------------------
RESULTS OF OPERATIONS
----------------------

          (Amounts in thousands except percentages)

       This interim report on Form 10-Q contains trend analysis and
other forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Act of
1934. Such statements include expectations, beliefs, intentions or
strategies regarding future operating results, future expenditures,
future cash requirements, and future industry conditions that involve
risks and uncertainties. The Company's actual results could differ
materially from those projected in such forward-looking statements as a
result of many factors, including, without limitation, those set forth
under this section, the section entitled "Business Factors" below and
elsewhere in this report on Form 10Q.

Results of Operations

       Scientific Technologies Incorporated designs, manufactures and
distributes electrical and electronic industrial controls. The Company's
products include safety light guards, profiling scanners, factory
automation sensors, controls, components, microcomputers, fiber optics,
power monitoring devices, safety mats, and other electronic equipment
supplied to industrial automation, commercial and defense customers.

        Sales for the three months ended June 30, 1999 increased 6% to
$12,014 from $11,344 in the second quarter of 1998. This increase was
the result of sales generated by LII (See Note 5 of Notes to
Consolidated Financial Statements), and an increase in units of safety
products shipped. For the first six months of 1999, net sales increased
5% to $23,574 from $22,457. This resulted primarily from an increase in
sales of units of the Company's safety products, as well as increased
sales generated by LII in the second quarter of 1999.

        Gross margin as a percent of sales was 50% during the second
quarters of 1999 and 1998 and the first six months of 1999 compared to
49% for the comparable six-month period in 1998. This was attributable
to a change in product mix wherein sales of products with a lower
relative gross margin increased as a percentage of total sales.

        Selling, general and administrative expenses increased 9% to $3,256
in the second quarter of 1999 from $2,992 in second quarter of 1998, and
increased 7% to $6,314 in the six months ended June 30, 1999 from $5,896
in the six months ended June 30, 1998. This increase was the result of
increased selling expenses associated with the higher levels of revenue,
as well expenses incurred by LII during the second quarter. Selling,
general and administrative expenses as a percent of sales were 27% in
the three and six months ended June 30, 1999, compared to 26% for the
comparable 1998 periods.

       Reflecting the Company's continuing commitment to new product
development, research and development expenses increased 42% and 61% to
$1,125 and $2,296 in the second quarter and first six months of 1999,
from $790 and $1,425, respectively, in the comparable periods in 1998.
Research and development expenses were 9% of sales for the three and six
months ended June 30, 1999 compared to 7% for the comparable 1998
periods. The Company anticipates that it will continue to make
substantial investments in research and development in subsequent
quarters.

Liquidity and Capital Resources

        At June 30, 1999 the Company's working capital was $24,260, a 6%
increase from the $22,913 reported at December 31, 1998. This was due to
positive cash flows from operations, resulting in increased accounts
receivable, inventories and lower accounts payable, which offset
increased Payable to Parent, accrued expenses and lower short-term
investments.

        Available bank borrowings were $6,100,000 at June 30, 1999. The
Company believes that cash from operations, together with its cash
resources and available bank borrowings, will be sufficient to fund its
working capital requirements for the next twelve months.

Year 2000 Compliance

      The Company believes that it has substantially completed upgrading
its information systems to Year 2000 compliant, and does not anticipate
any internal Year 2000 issues from its own information systems. However,
the Company cannot assure you that all of its products will contain all
of the necessary data code changes to prevent processing errors
potentially arising from calculations using the Year 2000 date, or that
disruptions relating to the Year 2000 will not occur. Furthermore, the
Company could be adversely impacted by Year 2000 issues faced by major
distributors, suppliers, customers, vendors and financial service
organizations. An assessment of the impact that third parties that are
not Year 2000 compliant may have on the operations of the Company is
essentially complete and we anticipate no significant impact from any
non-compliance.

Business Factors

        Because of the variety of factors and uncertainties affecting the
Company's operating results, past financial performance and historic
trends may not be a reliable indicator of future performance. These
factors, as well as other factors affecting the Company's operating
performance, may result in significant volatility in the Company's
common stock price. Among the factors which could affect future results:

Variability of operating results
        The Company has experienced fluctuations in annual and quarterly
operating results and anticipates that these fluctuations will continue.
These fluctuations are caused by a number of factors, including the
level and timing of customer orders, the mix of products sold,
fluctuations in complementary third party products with which STI
products are sold, the timing of operating expenditures and general
economic conditions in the U.S. and abroad, particularly in Asia and
Europe.

Seasonality
        The industrial manufacturing equipment industry can be subject to
seasonality. This is also true with respect to European markets where
business activity declines due to vacations taken in the summer months.

Competition
        The market for industrial sensors is highly competitive. Many of the
Company's competitors have substantially greater name recognition and
technical, marketing and financial resources than the Company.
Competitive pressures could reduce market acceptance of the Company's
products and result in price reductions and increases in expenses.

Rapid technological change and new product development
      The Company's future success will depend on its ability to enhance
its current products, develop new products and respond to emerging
industry standards, all on a timely and cost-effective basis. The
introduction of new products also requires the Company to devote
substantial resources in order to manage the transition from older
products in order to minimize disruption of customer orders, avoid
excessive levels of older product inventories and ensure that adequate
supplies of new products can be delivered to meet customer demands.

Dependence on indirect distribution channel
        A majority of the Company's products are sold through third party
distributors, system integrators and original equipment manufacturers.
These resellers are not required to offer the Company's products
exclusively and there can be no assurance that any of the Company's
resellers will continue to offer the Company's products.

International sales
        The Company's international sales may be disrupted by currency
fluctuations or other international events beyond the Company's control,
including political or regulatory changes and changes in general
economic conditions.

Protection and Enforcement of Intellectual Property Rights
        The Company relies on a combination of patent, trademark and trade
secret laws and contractual restrictions to establish and protect
certain proprietary rights in its products and services. There can be no
assurance that the Company's patents, trademarks, or contractual
arrangements or other steps taken by the Company to protect its
intellectual property will prove sufficient to prevent misappropriation
of the Company's technology or defer independent third party development
of similar technologies. Moreover, there can be no assurance that the
technology licenses granted to the Company from its Parent will continue
to be available on satisfactory terms or at all. The loss of any of the
Company's proprietary technology could require the Company to obtain
technology of lower quality or performance standards or at greater cost,
which could materially adversely affect the Company's business, results
of operations and financial condition. Furthermore, the laws of certain
foreign countries may not protect the Company's products, services or
intellectual property rights to the same extent as do the laws of the
United States.

Risks Associated with Potential Acquisitions, Investments or Other
Ventures
      The Company may acquire or make investments in complementary
businesses, technologies, services or products if appropriate
opportunities arise. From time to time, the Company has discussions and
negotiations with other companies regarding acquiring or investing in
such companies' businesses, products, services or technologies, and the
Company regularly engages in such discussions and negotiations in the
ordinary course of its business. For example, on April 1, 1999, the
Company completed the acquisition of Lundahl Instruments, Inc ("LII") by
purchasing all of the outstanding shares of its capital stock. In
addition, there can be no assurance that the Company will be able to
identify future suitable acquisition or investment candidates, or if it
does identify suitable candidates, that it will be able to make such
acquisitions or investments on commercially acceptable terms or at all.
If the Company acquires or invests in another company, it could have
difficulty in assimilating that company's personnel, operations,
technology and software or integrating the acquired products, services
or technologies in its operations. In addition, the key personnel of the
acquired company may decide not to work for the Company. These
difficulties could disrupt the Company's ongoing business, distract its
management and employees, increase its expenses and adversely affect its
result of operations. Furthermore, the Company may incur indebtedness or
issue equity securities to pay for any future acquisitions. The issuance
of equity securities would be dilutive to the Company's existing
shareholders.

PART II - OTHER INFORMATION

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of shareholders held on May 27, 1999, the
shareholders reelected the following to the Board of Directors, Anthony
R. Lazzara: 9,460,275 shares for, Joseph J. Lazzara: 9,460,275 shares
for, James A. Lazzara: 9,459,275 shares for, James A. Ashford: 9,459,775
shares for, Carl H. Frei: 9,460,275 shares for, and Bernard L. Ploshay:
9,459,775 shares for. The shareholders also approved the selection of
PricewaterhouseCoopers LLP as the Company's independent accountants by a
vote of 9,462,865 shares for, 3,230 shares against and 6,545 shares
abstaining.

<PAGE>

Item 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a)  The following documents are filed as a part of this Report:

        Exhibit  3.1 - Articles of Incorporation, as amended, are
                       incorporated by reference to the Registrant's
                       Registrant's Form 10-K for the year ended December
                       31, 1988, Exhibit 3.1.

        Exhibit  3.3 - By-Laws are incorporated by reference to the
                       Registrant's Form 10-K for the year ended December
                       31, 1985, Exhibit 3.

        Exhibit  4.1 - 1997 Employee Stock Purchase Plan is incorporated
                       by reference to the Registrant's Registration
                       Statement on Form S-8 dated October 2, 1998.

        Exhibit  4.2 - 1997 Stock Plan is incorporated by reference to the
                       Registrant's Registration Statement on Form S-8 dated
                       October 2, 1998.

        Exhibit 10.1 - Lease agreement dated February 21, 1995 for 6550
                       Dumbarton Circle, Fremont, California 94555,
                       is incorporated by reference to the Registrant's
                       Form 10-KSB for the year ended December 31, 1994,
                       Exhibit 10.4

        Exhibit 10.2 - Bank agreement dated November 29, 1994 with Bank of
                       The West is incorporated by reference to the Registrant's
                       Form 10-KSB for the year ended December 31, 1994,
                       Exhibit 10.3.

        Exhibit 10.3 - Amendment dated May 31, 1998 to Bank Agreement
                       dated November 29, 1994 is incorporated by
                       reference to the Registrant's Form 10-K for
                       the year ended December 31, 1998, Exhibit 10.3.

        Exhibit 10.4 - Lease agreement dated November 21, 1995  is
                       is incorporated by reference to the Registrant's
                       Form 10-KSB for the year ended December 31, 1995,
                       Exhibit 10.4

        Exhibit 10.5 - Agreement dated January 1, 1997 with Scientific
                       Technology Inc. for the purchase of the level
                       sensor product line.

        Exhibit 21.1 - Subsidiaries of the Registrant  is incorporated by
                       reference to the Registrant's Form 10-K
                       for the year ended December 31, 1998, Exhibit 21.1

        Exhibit 23.1 - Consent of Independent Accountants is incorporated
                       by reference to the Registrant's Form 10-K for
                       the year ended December 31, 1998, Exhibit 23.1

        Exhibit 24.1 - Power of Attorney is incorporated by reference to
                       the Registrant's Form 10-K for the year ended
                       ended December 31, 1998, Exhibit 24.1

        Exhibit 27.0 - Financial Data Schedule.

(b)   No Reports on Form 8-K were filed during the first quarter of
1999.
<PAGE>













                                    SIGNATURES


       Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.




                                            SCIENTIFIC TECHNOLOGIES INCORPORATED
                                            ------------------------------------
                                                        Registrant


Date:  August 13, 1999                            /s/Joseph J. Lazzara
       -----------------                       ---------------------------------
                                                     Joseph J. Lazzara
                                               President and Chief Executive
                                                          Officer
                                                 (Principal Executive and
                                                     Financial officer)







Date:  August 13, 1999                           /s/ Richard O. Faria
       -----------------                     ----------------------------------
                                                     Richard O. Faria
                                                  Vice-President, Finance &
                                                      Administration
                                                (Principal Accounting Officer)