<PAGE>   1


                                  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:  September 30, 2000

                                       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:  0-11412


                              AMTECH SYSTEMS, INC.
--------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)

              Arizona                                      86-0411215
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  (State or other jurisdiction of                       (I.R.S. Employer
  incorporation or organization)                      Identification No.)

131 South Clark Drive, Tempe, Arizona                         85281
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(Address of principal executive offices)                    (Zip Code)


Registrant's telephone number, including area code: 480-967-5146

Securities registered pursuant to Section 12(b) of the Act:  None

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


                          Common Stock, $.01 Par Value
--------------------------------------------------------------------------------
                                (Title of Class)


                            Redeemable Public Warrant
--------------------------------------------------------------------------------
                                (Title of Class)
<PAGE>   2
      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 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] Yes

      The aggregate market value of voting stock held by non-affiliates of the
registrant: $20,570,000 as of December 15, 2000

              APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
                PROCEEDINGS DURING THE PRECEDING FIVE (5) YEARS:

      Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.  [  ] Yes [  ] No

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

      Indicate the number of shares outstanding of each of the registrant's
classes of Common Stock, as of the latest practicable date: 2,630,171 shares of
Common Stock, $.01 par value, outstanding as of December 15, 2000.

                       DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the Proxy Statement related to the registrant's 2001 Annual
Meeting of Shareholders, which Proxy Statement will be filed under the
Securities Exchange Act of 1934, as amended, within 120 days of the end of the
registrant's fiscal year ended September 30, 2000, are incorporated by
reference into Part III of this Form 10-K.

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<PAGE>   3

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                    Page
<S>                                                                                 <C>
ITEM 1.  BUSINESS.................................................................    4
            Background............................................................    4
            Financial Information about Industry Segments.........................    5
            Operating Strategy and Industry Overview..............................    5
            Principal Products....................................................    7
            Proposed New Products.................................................   10
            Manufacturing and Suppliers...........................................   11
            Order Backlog.........................................................   11
            Research, Development and Engineering.................................   12
            Patents...............................................................   12
            Sales and Marketing...................................................   13
            Competition...........................................................   14
            Employees.............................................................   15
            FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND
            EXPORT SALES..........................................................   16

ITEM 2.  PROPERTIES...............................................................   16

ITEM 3.  LEGAL PROCEEDINGS........................................................   16

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......................   17

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS' MATTERS..   17
            Market Information....................................................   17
            Holders...............................................................   17
            Dividends.............................................................   17

ITEM 6.  SELECTED FINANCIAL DATA..................................................   18

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
          OF OPERATIONS...........................................................   19
            Strategy for Expansion and Capital Resources..........................   19
            Results of Operations.................................................   20
            Fiscal 2000 Compared to Fiscal 1999...................................   21
            Fiscal 1999 Compared to Fiscal 1998...................................   24
            Liquidity And Capital Resources.......................................   25
            Accounting Pronouncements Not Yet Adopted.............................   25

          ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
                     ABOUT MARKET RISK............................................   26

          FORWARD-LOOKING STATEMENTS..............................................   27

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA..............................   28

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.......................   46

ITEM 10. EXECUTIVE COMPENSATION...................................................   46

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT...........   46

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...........................   46

ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.........   46
SIGNATURES........................................................................   49
POWER OF ATTORNEY.................................................................   49
</TABLE>
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<PAGE>   4
                                     PART I

ITEM 1. BUSINESS

BACKGROUND

      Amtech Systems, Inc. ("Amtech" or the "Company") was incorporated in
Arizona in October 1981, under the name Quartz Engineering & Materials, Inc.,
and changed to its present name in 1987. The Company also conducts operations
through two wholly-owned subsidiaries, Tempress Systems, Inc., a Texas
corporation with all its operations in the Netherlands ("Tempress Systems"), and
P.R. Hoffman Machine Products, Inc., an Arizona corporation ("P.R. Hoffman").

      The Company's initial business was the manufacture of quartzware
implements for sale to and use by manufacturers of semiconductor chips. The
Company is currently, and has been since 1987, engaged in the manufacture and
marketing of several items of capital equipment used by customers in the
manufacture of semiconductors, two of which are patented. The Company's
Processing/Robotic product line (Atmoscan(R), IBAL Automation and load stations)
is designed to enable its customers to increase the degree of control over their
semiconductor chip manufacturing environment, to reduce exposure to contaminants
by limiting human contact during the manufacturing process and improve employee
safety. The Company launched two new automation products, the S-300 and E-300,
at the Semicon West 2000 tradeshow in San Francisco in July 2000.

      In fiscal 1995, the Company began the complementary business of producing
and selling horizontal diffusion furnaces for use in semiconductor fabrication,
through its wholly-owned subsidiary, Tempress Systems. In fiscal 1998, the
Company's Tempress Systems operation began producing and selling conveyor
diffusion furnaces for use in precision thermal processing of electronic parts.
In fiscal 2000 the Company started producing high temperature and ultra high
temperature diffusion furnaces for use in the manufacture of optical components,
a new market the Company believes could grow to in excess of 25% of fiscal
2001's consolidated revenue. The Company's semiconductor equipment segment is
comprised of the Processing/Robotic and horizontal diffusion furnace product
lines.

      In July 1997, the Company acquired substantially all of the assets of P.R.
Hoffman Machine Products Corporation and began developing, manufacturing,
marketing and selling polishing supplies, i.e. carriers and semiconductor
polishing templates, double-sided precision lapping and polishing machines and
replacement parts through its wholly-owned subsidiary, P.R. Hoffman. These
products are used for high throughput precision surface processing of
semiconductor wafers, precision optics and other thin wafer materials, such as
computer disk media and ceramic components for wireless telecommunication
devices. The polishing supplies segment of the Company's business is comprised
solely of its P.R. Hoffman operation.

      In the fourth quarter of fiscal 1997, the Company began offering
manufacturing support services to one of its Texas-based customers. These
services consist of wet and dry cleaning of semiconductor machine processing
parts. The Company intends to offer manufacturing support services to other
customers and third parties as such opportunities become available. For segment
reporting purposes, the results of operation and assets of the manufacturing
support services operation have been aggregated with the semiconductor equipment
segment.

      In fiscal 1994, the Company added research and product development of new
technologies to its on-going development of new products and product
improvements based on existing technologies. From fiscal 1994 through the end of
fiscal 1998, the new technology under investigation consisted of photo-assisted
CVD (chemical vapor deposition) research conducted by and in conjunction with
the University of California at Santa Cruz (the "University"). In this regard,
the University studied several generations of higher intensity light sources,
none of which have yielded results that would enable the Company to produce a
commercially viable product. While this research was partially successful, it
was suspended indefinitely effective September 30, 1998, until such time as
reliable higher intensity lamps are available and success appears more probable.
Beginning in fiscal 1999, the Company began research on a new technology asher.
In November 1999, the Company announced a joint product development agreement
with PSK Tech, Inc. to develop a new technology ashing machine using the
Company's damage-free technology and PSK Tech's expertise in the design of
ashers and asher processes.


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<PAGE>   5
      Unless the context otherwise requires, the "Company" refers to Amtech
Systems, Inc., an Arizona corporation, and its wholly-owned subsidiaries. The
Company's principal executive offices are located at 131 South Clark Drive,
Tempe, Arizona 85281 and its telephone number is (480) 967-5146.



FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

      For information about industry segments see Note 9 of the Notes to the
Financial Statements included herein.

OPERATING STRATEGY AND INDUSTRY OVERVIEW

      The Company is engaged primarily in the design, manufacture and marketing
of several items of capital equipment and related consumables and spare parts
primarily used by customers in the manufacture and fabrication of semiconductors
and optical components of telecom networks and the silicon wafer substrate on
which such devices are fabricated. Semiconductors, or semiconductor "chips," and
optical components are fabricated on a silicon wafer substrate and are part of
the circuitry or electronic components of many products, including computers,
wireless telecommunication devices, automotive products, consumer goods,
industrial automation and control systems and high-speed switches for broadband
fiber optic telecommunication networks. The manufacture of semiconductors and
optical components involves repeating a complex series of process steps to a
silicon wafer. The three broad categories of wafer processing steps are
deposition, photolithography and etching. The Company's products currently
address deposition steps and the surface finishing steps in the production of
silicon wafers. See proposed new product regarding ashers, which perform one
step, the removal of the photoresist, within the broad category of
photolithography. The Company's products within the deposition area perform
oxidation/diffusion, low-pressure deposition ("LPCVD") steps and certain high
and ultra-high temperature processes used in the manufacture of optical
components. During these steps silicon wafers (the substrates from which chips
and optical components are made) are inserted in a diffusion furnace and
subjected to a precise flow of gases under very intense heat.

      The Company also manufactures and sells horizontal and conveyor diffusion
furnaces through its wholly-owned subsidiary, Tempress Systems. In addition, the
Company manufactures and sells a Processing/Robotic product line designed to
enable customers using horizontal diffusion furnaces to increase their degree of
control over the manufacturing environment, to reduce exposure to contaminants
by reducing the amount of human contact during the manufacturing process and to
improve employee safety. Following an industry trend, the size of individual
semiconductor chips has tended to decrease while the size of the wafers from
which chips are made has tended to increase. As a result, the value of each
wafer has increased because each is the source of an increased number of chips.
As the value of wafers increase, so too does the importance of control over the
manufacturing environment.

      There also is a trend in the semiconductor industry, related to the trend
to produce smaller chips, toward the use of vertical diffusion furnaces in
semiconductor manufacturing facilities with newer technology. Vertical
diffusion furnaces are more efficient to use than the horizontal diffusion
furnaces in certain manufacturing processes of smaller chips on larger wafers,
however, such furnaces are significantly more expensive to purchase than
horizontal diffusion furnaces. As a result of this trend and the fact that the
products of our semiconductor equipment segment consist of or are only useable
with horizontal diffusion furnaces, the Company expected to experience a
decline in that segment's sales of existing products. However, this trend has
not adversely affected us yet because of (i) significant orders from
manufacturers of optical components, (ii) increased demand from existing
markets, such as manufacturers of wireless communication devices and
micro-controllers used in a number of consumer applications, where certain
processes do not require the use of more expensive vertical furnaces, and (iii)
improvements in the automation of horizontal diffusion furnaces, such as our
robotic product line, which have  given us a competitive advantage for certain
processes relative to vertical furnaces than previously.

      The Company's target market for its Processing/Robotic product line
consists of customers who wish to increase the efficiency and safety (or
ergonomics) of their existing semiconductor manufacturing facilities equipped
with horizontal diffusion systems and those users of horizontal diffusion
furnaces that are upgrading or replacing


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<PAGE>   6
those systems to process 200 mm wafer sizes. Through its Tempress System
operations, the Company also provides its customers with efficient integrated
horizontal diffusion furnace systems for use in semiconductor fabrication, and,
to a lesser extent, conveyor diffusion furnace systems for use in precision
thermal processing of electronic parts. The Company's target market also
includes customers who do not require or cannot justify the higher priced
vertical diffusion furnace systems. The Company believes that a nearly equal
number of the worldwide semiconductor manufacturing facilities is equipped with
horizontal diffusion furnaces for at least some of their diffusion processes, as
compared with those facilities equipped solely with vertical diffusion furnaces.
We plan to increase our share of the diffusion furnace market by
expanding sales of our robotic line (i) with new products, such as S-300 and
E-300 models, introduced in the fourth quarter of fiscal 2000, (ii) increasing
awareness of users of horizontal furnace systems of the merits of our existing
products, such as IBAL, which now provides cassette to cassette functionality,
(iii) expand sales of horizontal diffusion furnaces by identifying and
penetrating new markets, such our sales to manufacturers of solar cells,
particularly in fiscal 1998 and optical components beginning in fiscal 2000, and
(iv) acquisition of complementary or competitive products or businesses, as part
of the industry's trend toward consolidation. See "Manufacturing and Suppliers,"
herein for a description of steps taken to increase capacity to accommodate this
growth in revenues. However, to the extent that the trend to use vertical
furnaces instead of horizontal diffusion furnaces continues, our revenues may
decline and our ability to generate income may be adversely affected.

      One element of our growth strategy is to expand revenue and profits
through strategic acquisitions. Our July 1997 acquisition of the P.R. Hoffman
product line of polishing supplies, i.e. carriers and semiconductor polishing
templates, and double-sided precision lapping and polishing machines and
replacement parts has broadened and expanded the markets served by the Company.
These markets, now include the producers of the silicon wafers used by
fabricators of semiconductor devices, as well as the fabricators themselves.
The P.R. Hoffman product line and operations is also known as the Company's
polishing supplies segment. Following the P.R. Hoffman acquisition, the Company
began joint marketing efforts to both markets in those limited number of
circumstances where the customer had requirements for products from the
Company's two operating segments.

      The Company's target market for its lapping and polishing machines and
related consumables and spare parts are producers of silicon wafers, certain
semiconductor fabricators that perform some silicon wafer processing steps
in-house and producers of thin wafers made of other materials, such as quartz,
ceramics and metals used in the manufacture of optics, computer storage disks
and components for wireless telecommunication devices. The Company's polishing
supplies segment's sales to customers processing optics, ceramics and materials
other than silicon were 15% and 13% of consolidated sales in fiscal 2000 and
fiscal 1999, respectively. The long-term demand for silicon wafer lapping and
polishing machines and related products has been fueled by the inherent need of
semiconductor device manufacturers to continually meet the growing demand for
such semiconductors caused by the rapid increase in the uses for such devices.
In order to produce today's higher density chips, semiconductor manufacturers
must maintain tighter tolerances with respect to the surface finish, flatness
and planerization of the bare silicon wafer, which in turn is requiring more
polishing steps and thus more surface processing supplies and equipment. A
similar trend is occurring in the computer disk industry as manufacturers strive
to produce higher density drives in order to satisfy end user demand for greater
storage capacity and reduced size.

      Industry Cycles and Trends. Sales of the Company's products depend in
large part upon the capital equipment expenditures and/or operating levels of
semiconductor manufacturers, which depend on current and/or anticipated market
demand for integrated circuits and products utilizing integrated circuits. The
semiconductor industry is highly cyclical and has historically experienced
periodic downturns, which often have had a material adverse effect on capital
and operating expenditures by semiconductor manufacturers. Semiconductor
industry downturns have and will in the future adversely affect the sales, gross
profit and operating results of suppliers that serve the industry, including the
Company. The industry is also experiencing the consolidation of semiconductor
manufacturing operations through mergers and the subcontracting out of the
production of semiconductors to foundries. The Company believes that growth in
its sales and profitability will continue to depend primarily upon increased
demand for semiconductors. During the second half of fiscal 1998 and the first
half of fiscal 1999, the Company experienced lower sales volume and
profitability as a result of an industry slowdown. From at least April 1, 1999
to the present, the semiconductor industry and the Company experienced a period
of cyclical expansion. However, there are many indications that the
semiconductor industry has built excess inventory and is experiencing a
correction that has resulted in at least a short-term and severe reduction in
the selling prices of certain semiconductor `devices. A number of analysts
expect that this will cause the suppliers to that industry to enter a period of
much


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<PAGE>   7
slower growth during calendar 2001. Since September 30, 2000, the Company has
been notified of the cancellation of one $894,000 system. Also, two major
customers, including the one that cancelled the system order and the Company's
largest customer in the optical component industry, have indicated that they may
wish to postpone shipment of other orders. However, in light of the increased
demand for the Company's Processing/Robotic products, including the two new
products introduced late in fiscal 2000, additional orders from other customers
in the optical component market, which could comprise in excess of 25% of fiscal
2001's consolidated revenue, it is too early to determine the extent the Company
will be affected by these recent developments. See "Trends" in Item 7.
Management's Discussion and Analysis for further information on the Company's
expectations for fiscal 2001.

PRINCIPAL PRODUCTS

SEMICONDUCTOR (PRODUCTION) EQUIPMENT SEGMENT

      Diffusion Furnaces

      Through its wholly-owned subsidiary, Tempress Systems, the Company
produces and sells horizontal and conveyor diffusion furnace systems, which
generally include a Tempress(R) load station, with the Tempress(R) trademark.
The Company's diffusion furnaces currently address several deposition steps,
including oxidation/diffusion, low-pressure deposition ("LPCVD") steps used by
semiconductor fabricators and certain high and ultra-high temperature processes
used in the manufacture of optical components. During these steps silicon wafers
(the substrates from which chips and optical components are made) are inserted
in a diffusion furnace and subjected to a precise flow of gases under very
intense heat. The Company's Tempress(R) diffusion furnaces are manufactured in
The Netherlands.

      These furnaces utilize existing industry technology and are sold to
customers who do not require the advanced automation of, or can not justify the
significantly higher expense of, vertical diffusion furnaces for some or all of
their diffusion processes. While the major advantage of vertical diffusion
furnaces is their susceptibility to increased automation, which decreases the
degree of human intervention in the manufacturing process, the use of horizontal
diffusion furnaces, with less automation, is more economical for larger size
chips and multi-model semiconductor manufacturing. The Company has also sold
these furnaces to manufacturers of solar cells. These diffusion furnaces are
often customized to meet the requirements of the customers' particular processes
and whenever possible sold in various combinations with the other products of
the semiconductor equipment segment.

      In fiscal 1998, the Company began producing and selling conveyor diffusion
furnace systems used to produce thick films for the electronics industry.
Conveyor furnace systems provide for precision thermal processing of electronic
parts for thick film applications, anneal, sealing, soldering, silvering,
curling, brazing, alloying, gloss-metal sealing and component packaging.

      Starting in the fourth quarter of fiscal 2000 the Company secured and made
initial shipments against significant orders for its horizontal diffusion
furnace systems from manufacturers of optical components of high-speed switches
used in broadband fiber optic telecommunications networks. These systems include
standard diffusion furnaces used to produce thick oxide layers on silicon
wafers and ultra-high temperature furnaces used for certain of the customers'
proprietary processes. While these products are similar in many respects to
those sold to the semiconductor industry, they are being sold into a new market
for the Company, which could represent 25% or more of fiscal 2001's consolidated
revenues.

      Processing/Robotic Equipment

      IBAL Automation

      "IBAL" is an acronym for "Individual Boats with Automated Loading." The
Company's IBAL automation system is a patented integrated automation system
composed of several modules, with the base module being called simply IBAL.
Boats are quartz trays that hold silicon wafers while they are being processed
in diffusion furnaces. IBAL Trolley is comprised of hardware and software, which
automatically places boats into Atmoscan(R) tubes or


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<PAGE>   8
onto a cantilever paddle system before they are inserted in the diffusion
furnace, and automatically removes the trays after completion of the diffusion
process.

      IBAL Butler is a robotics device that further automates the loading of
wafers into the diffusion furnace. The IBAL Butler automatically transfers wafer
carriers onto the IBAL Trolley of the appropriate furnace tube level, for
loading into the Atmoscan(R) or on the cantilever paddle system. IBAL Queue
provides a convenient staging area for the operator to place boats on a load
station and automates the loading of those boats onto the IBAL Butler. The first
IBAL Queue unit was shipped during the second quarter of fiscal 1994. The IBAL
Shuttle transfers wafers between the IBAL Queue and wafer transfer machines
manufactured by third parties, providing customers with complete
cassette-to-cassette wafer handling. The first IBAL Shuttle modules were sold
and shipped during fiscal 2000.

      During fiscal 2000 the Company introduced two new robotic products, the
S-300 and E-300. The S-300 model automatically transports a full batch of up to
300 wafers to the designated tube level and places them onto the cantilever
loader of a diffusion furnace at one time. The operator gives instructions to
the S-300 through a simple touch screen control panel. The Company demonstrated
the S-300 system throughout the Semicon West 2000 tradeshow in San Francisco in
July 2000. The S-300 can load cantilever paddles but not the Company's
Atmoscan(R) product. At Semicon West, the Company also displayed and operated
its new E-300 Full Batch Elevator, which transports up to 300 wafers to the
designated tube level, but does not load or unload the cantilever paddle. While
the E-300 model offers less functionality than the S-300, it proved to be
extremely reliable. Since the E-300 does not perform the actual loading, it can
be used, with or without the IBAL trolley, in connection with the Atmoscan(R)
product. In line with the Company's growth strategy, these products are designed
to capture additional diffusion equipment market share.

      Use of the IBAL products reduces human handling and, therefore, reduces
exposure of wafers to contaminants during the loading and unloading of the
process tubes and improves employee safety and ergonomics in semiconductor
manufacturing facilities. The Company has also sold IBAL products to
manufacturers of solar cells. The Company has not yet sold IBAL products to
manufacturers of optical components, because most of the processes involve very
long production cycles, reducing the frequency of loading and unloading.
However, the Company intends to address that market with its IBAL products
whenever it is appropriate. All of the IBAL modules have been designed by the
Company.

      The IBAL automation products described above are offered and sometimes
sold as a complete system, mounted on a device called a "load station," which
also includes an ultra-clean environment for wafer loading by filtering and
controlling the flow of air. The Company began shipping such high-end load
stations in fiscal 1992. Further, the IBAL automation products are at times sold
as part of fully integrated Tempress(R) diffusion furnaces, described above.

      Atmoscan(R)

      The Company's "Atmoscan(R)" is a patented controlled environment wafer
processing system for use with horizontal diffusion furnaces. When in use, it is
loaded with wafers and inserted into the diffusion furnace under a
nitrogen-controlled environment. The Atmoscan(R) technology is a processing
method that includes a cantilever tube used to load silicon wafers into a
diffusion furnace and through which a purging inert gas flows during the loading
and unloading processes.

      The Company believes that among the major advantages afforded by the
Atmoscan(R) product are increased control of the environment of the wafers
during the gaseous and heating process, thereby increasing yields and decreasing
manufacturing costs, and a decreased need for the cleaning of diffusion furnace
tubes, which ordinarily involves substantial expense and equipment down time.
Additional significant economies in the manufacturing process are also believed
to result.

      The Company has manufactured and sold Atmoscan(R) units to major
semiconductor manufacturers in the United States, the Pacific Rim and Europe,
including at various times to International Business Machines, Intel
Corporation, Samsung, Motorola, SGS-Thompson, SVG-Thermco and others. Sales of
Atmoscan(R) have declined


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<PAGE>   9
from their peak in 1989, due to an industry trend toward use of vertical
diffusion furnaces for many of the processes previously performed in horizontal
diffusion furnaces.

      The Company also has designed and sells an open cantilever paddle system,
which remains the most commonly used wafer loading system for horizontal
furnaces in the semiconductor industry. Similar systems have been used by the
industry since prior to the introduction of the Atmoscan(R), the Company's
alternative to the cantilevered processing system.

      There is a trend in the semiconductor industry, related to the trend to
produce smaller chips, toward the use of vertical furnaces in semiconductor
manufacturing facilities with newer technology. Vertical diffusion furnaces are
more efficient to use than the horizontal diffusion furnaces in certain
manufacturing processes of smaller chips on larger wafers, however, such
furnaces are significantly more expensive to purchase than horizontal diffusion
furnaces. The products of the semiconductor equipment segment consist of or are
only useable with horizontal diffusion furnaces. The Company had expected this
trend to cause a decline in that segment's sales of existing products. We
believe this trend has not adversely affected us yet because of (i) significant
orders from new markets, such as manufacturers of optical components, (ii)
increased demand from existing markets, such as manufacturers of wireless
telecommunication devices and micro-controllers used in a number of consumer
applications and companies that are increasing their semiconductor
manufacturing capacity by upgrading their production lines to use 200mm wafers,
where some or all of the processes do not require the use of more expensive
vertical furnaces, and (iii) improvements in the automation of horizontal
diffusion furnaces, such as our robotic product line, have given us a
competitive advantage for certain processes relative to vertical furnaces, than
previously.


POLISHING SUPPLIES (AND EQUIPMENT) SEGMENT

      Through its wholly-owned subsidiary, P.R. Hoffman, the Company develops,
manufactures, markets and sells double-sided precision lapping and polishing
machines and complementary products including carriers, semiconductor polishing
templates and parts, and is sometimes referred as the Company's polishing
supplies segment.

      Carriers

      Carriers are workholders where wafers are nested during the lapping and
polishing processes. Carriers are produced for the Company's line of lapping and
polishing machines as well as for competitors' systems. Substantially all of the
carriers are customized for specific applications. The Company produces custom
carriers in a variety of sizes, configurations and materials. A significant and
expanding category of the Company's steel carriers contain plastic inserts
molded into the work-holes of the carrier and are referred to as insert
carriers. Although standard steel carriers are preferred in many applications
because of their durability, rigidity and precise dimensions, they are typically
not suited for applications involving softer materials or when metal
contamination is an issue. Insert carriers provide the advantages of steel
carriers while reducing the potential for damage to the edges of sensitive
materials such as large semiconductor wafers.

      Semiconductor Polishing Templates

      The Company's single-sided polishing templates are used to polish silicon
wafers. Since the Company does not manufacture surface processing machines for
single-sided applications, templates are designed to work with machines
manufactured by other suppliers in this market segment. Polishing templates are
customized for specific applications and are manufactured to exacting
tolerances.


                                       9
<PAGE>   10
      Double-sided Planetary Lapping and Polishing Machines

      Double-sided lapping and polishing machines are designed to process thin
and fragile products such as semiconductor silicon wafers, precision optics,
computer disk media and ceramic components for wireless communication devices to
exact tolerances of thickness, flatness, parallelism and surface finish.

      The lapping machines process parts using an abrasive slurry and cast iron
plates. The material to be processed is positioned in carriers (work-holders),
which are driven with a planetary motion between the top and bottom plates. The
planetary action of the lapping machines simultaneously removes equal amounts of
material from both sides of the workpiece. Dimensional tolerances, surface
finish, quantity of material to be removed along with production rates required,
and cost of operation are the primary variables considered in determining the
best process for a specific application.

      The polishing machines are similar to the lapping machines. Polishing is
achieved by using a finer free abrasive slurry and plates equipped with
polishing pad material. The polishing process is used to improve the
characteristics of the surfaces of silicon wafers and similar materials.

      The following table summarizes the various models of surface processing
machines produced by the Company and the markets for each of these products:

                   DOUBLE-SIDED LAPPING AND POLISHING MACHINES


<TABLE>
<CAPTION>
    MODEL       YEAR INTRODUCED               MARKETS
    -----       ---------------               -------
<S>             <C>                <C>
    PR-1              1938         Quartz
    PR-2              1940         Quartz
    1500              1990         Quartz, ceramics, medical
    1900              1992         Ceramics, optics, computer disks
    3100              1995         Computer disks, optics, metal working, ceramics
    4800              1981         Silicon semiconductor, optics, metal working, ceramics
</TABLE>

      On average, the Company's surface processing systems are priced lower than
competing systems offered by the company's competitors.

      Plates, Gears, Wear Items and Other Parts

      Since lapping machinery involves abrasive slurries, the plates, gears and
carriers are often exposed to a high degree of abrasion and wear. Therefore, the
Company produces a wide assortment of plates, gears, parts and wear items for
its own machines as well as for machines manufactured by its competitors. In
addition to producing standard off-the-shelf parts, the Company has the ability
to produce highly customized parts.


PROPOSED NEW PRODUCTS

      During fiscal 1999, the Company began investigating an alternative to the
energy sources currently used in ashing processes. Ashers are used by the
semiconductor industry to remove photoresist materials from silicon wafers after
each lithography step. Plasma is the most common energy source used in current
ashers. While stripping the photoresist material from the wafers, plasma causes
damage to the silicon substrate, which the industry does not believe will be
acceptable as the line-width of the circuitry is reduced in future generations
of leading-edge semiconductors. In November 1999, Amtech announced that it had
reached an agreement with PSK Tech Inc. regarding the joint development of a new
ashing machine, using Amtech's damage-free ashing technology (a "New


                                       10
<PAGE>   11
Asher"). Amtech and PSK Tech believe that, if successful, the New Asher under
development will be damage free and thus will receive strong demand from the
high-end semiconductor manufacturers.

      The joint product development agreement provides that Amtech will provide
its patent pending, damage-free ashing technology and know-how and PSK Tech Inc.
will provide its expertise in the design and manufacture of ashers and asher
processes. The two companies will jointly own any resulting technology. Under
the agreement, Amtech will have exclusive selling and marketing rights to the
resulting New Asher for all of North America and Europe and PSK Tech will have
exclusive selling and marketing rights for all of Asia. Each company has agreed
to pay to the other a license fee of between two and five percent (2%-5%) of its
New Asher sales. Amtech has also agreed to sell the energy source assemblies to
PSK Tech for PSK's New Asher sales into Asia. Amtech will purchase from PSK Tech
ashers without the energy source assembly, for the platform of its New Asher to
be sold in the United States and Europe. The assemblies that each company sells
to the other will be at a price to be mutually agreed upon, but shall not exceed
1.334 times its cost of manufacturing. Development work has begun on a prototype
for the New Asher. The Company expects to be able to make a preliminary
assessment of the machine's capabilities and the size of the potential market
before June 30, 2001, using process results from the prototype. A Beta site
machine is projected to ship before December 31, 2001 and is expected to provide
further information regarding the capabilities of the New Asher and its
commercial viability.

      Ashing equipment manufactured by PSK Tech is currently being selected
almost exclusively by the world's present #1 semiconductor memory chip producers
for their ashing processes. PSK Tech, located near Seoul, South Korea, is
publicly owned and listed on the Korean stock market.


MANUFACTURING AND SUPPLIERS

      The Company assembles its equipment and systems from components and
fabricated parts manufactured and supplied by others, including quartz and metal
components. Certain parts are fabricated in the Company's machine shops. Many of
the items purchased from suppliers are manufactured to the Company's
specifications. The Company designs some of its products to customers'
specification or to meet customers' process requirements. All final assembly and
system tests are performed within the Company's manufacturing/assembly
facilities. Quality control is maintained through incoming inspection of
materials and components, in-process inspection during equipment assembly,
testing of assemblies and final inspection and, generally in regard to its IBAL
automation products, operation of manufactured equipment prior to shipment. The
Company's Processing/Robotic product line is manufactured at its Tempe, Arizona
plant. In December 2000, the Company expanded by 74% the square footage of its
leased office and manufacturing space in order to accommodate the increased
demand for its products.

      The Company conducts similar engineering, purchasing and assembly and test
operations in the manufacture of its diffusion furnaces in The Netherlands.
Initially these operations were conducted in rented facilities. In 1996, the
Company acquired a modern, high-tech manufacturing facility in Heerde, The
Netherlands, for its European operations, and moved its Tempress Systems
operations into this new facility. During fiscal 2000, the Company began renting
additional manufacturing space for the production of its diffusion furnaces due
to increased demand from a manufacturers of optical components.

      The Company's polishing supplies segment operations are conducted in a
Carlisle, Pennsylvania plant. The polishing supplies segment generally designs
its products to customers' specifications. This segment's facility is equipped
to perform a significantly higher percentage of the fabrication processes
required in the manufacturer of its products. Certain of the manufacturing
processes are subcontracted out to various third parties. In addition, this
segment relies on by this location include plastic injection, laser cutting and
wire EDM machining, and complex electrical wiring. Key suppliers including two
steel mills, an injection molder, pad supplier (sole sourced from a Japanese
company), and an adhesive manufacturer.

ORDER BACKLOG


                                       11
<PAGE>   12
      As of November 30, 2000, the Company's order backlog for semiconductor
equipment was approximately $15,895,000, compared to approximately $4,124,000 at
the same date in the previous year. The Company includes in its backlog all
credit approved customer purchase orders. Orders in the backlog may be canceled
by the customer, generally upon payment of mutually acceptable cancellation
charges. Substantially all of these orders are currently scheduled for shipment
in fiscal 2001. Two customers representing 43% of the November 30, 2000 backlog
have opened discussions regarding potentially delaying the shipment of orders
currently in the backlog. Because of possible order cancellations or customer
requested delays in shipment the backlog may not be a valid measure of revenue
for a future period. In addition, a backlog does not provide any assurance that
the Company will realize a profit from those orders.

RESEARCH, DEVELOPMENT AND ENGINEERING

      The markets served by the Company are characterized by evolving industry
standards and rapid technological change. To compete effectively in its markets,
the Company must continually improve its products and its process technologies
and develop new technologies and products that compete effectively on the basis
of price and performance and that adequately address current and future customer
requirements. The Company's research and development expenditures during fiscal
1998, 1999 and 2000 were approximately $438,000, $268,000 and $477,000,
respectively. Due to the suspension of the photo-assisted CVD project and the
general slowdown in the semiconductor industry, the Company reduced its research
and development expenditures during fiscal 1999. With the research and
development work on a new technology asher, the Company increased such
expenditures in fiscal 2000 and plans do so again in fiscal 2001.

      The Atmoscan(R) was acquired in 1983 through a licensing arrangement with
its inventor, who was not employed by the Company. The Company's other products
(excluding the Company's products acquired in the P.R. Hoffman acquisition) were
developed by Company personnel. The Company presently employs at its Tempe,
Arizona plant, three engineers, including one with a Ph.D. and one in the sales
department, and six technicians. The Company presently employs eight engineers,
one with a Ph.D., and seven technicians in its Netherlands operation. These
employees design and support the horizontal diffusion furnace and conveyor
furnace product lines manufactured in The Netherlands. Two engineers and one
technician are employed in the Company's Carlisle, Pennsylvania operation. They
design wafer lapping machines and carriers to meet the customers' processing
requirements.

      Historically, the Company's product development has been accomplished
through cooperative efforts with two key customers. While there can be no
assurance that such relationships will continue or that others will be
developed, such cooperative efforts are expected to continue to be a significant
element in the Company's future development projects. Although PSK Tech is not
currently a customer, the joint New Asher development project is another example
of the type of research and development cooperation the Company tries to
cultivate. The Company's relationships in such projects are generally
substantially dependent on the personal relations established by the Company's
President, Mr. Jong S. Whang.

PATENTS

      Generally, the effect of a patent is that the courts will grant to the
patent holder the right to prevent others from making, using and selling the
combination of elements or combination of steps covered by the patent. The
Company has several United States patents on the Atmoscan(R) system, each
reflecting an improvement to or modification of the previous patent. The two
Japanese patents on the Atmoscan(R) cover the first two U.S. patents listed in
the table below.

      The Company has two United States patents on its photo-assisted CVD
method, the second being an improvement on the first. In 1998, the Company was
granted a patent on its IBAL Cantilever Trolley and has a second patent pending
which is an improvement on the first. The cantilever itself, load stations, the
diffusion furnaces, lapping and polishing machines, semiconductor polishing
templates, and carriers, except for insert carriers manufactured under a license
with the patent holder, are not protected by patents.


                                       12
<PAGE>   13
      The following table shows the patents granted and the expiration date
thereof and the material patents pending for the Company's products in each of
the countries listed below:

<TABLE>
<CAPTION>
                                                    EXPIRATION DATE OR
PRODUCT                         COUNTRY             PENDING APPROVAL
-------                         -------             ----------------
<S>                             <C>                 <C>
Atmoscan(R)                     United States       July 10, 2001
Atmoscan(R)                     United States       July 2, 2002
Atmoscan(R)                     United States       August 30, 2005
Atmoscan(R)                     Japan               July 18, 2005
Atmoscan(R)                     United States       September 24, 2002
IBAL Cantilever Trolley         United States       July 10, 2015
IBAL Cantilever Trolley         United States       June 12, 2018
Photo CVD                       United States       June 1, 2010
Photo CVD                       United States       November 15, 2011
IBAL Model S-300                United States       Pending Approval
Proposed Damage-free            United States       Pending Approval
Asher
</TABLE>


      The Company's ability to compete may be enhanced by its ability to protect
its proprietary information, including the issuance of patents and trademarks.
While no intellectual property right of the Company has been invalidated or
declared unenforceable, there can be no assurance that such rights will be
upheld in the future. There can be no assurance that in the future products,
processes or technologies owned by others, necessary to the conduct of the
Company's business, can be licensed on commercially reasonable terms.

      In the normal course of business, the Company from time to time receives
and makes inquiries with regard to possible patent infringement. In dealing with
such inquiries, it may become necessary or useful for the Company to obtain and
grant licenses or other rights. However, there can be no assurance that mutually
agreeable terms can be negotiated for such license rights. Although there can be
no assurance about the outcome of such inquiries, the Company believes that it
is unlikely that their resolution will have a material adverse effect on its
results of operations or financial condition.

SALES AND MARKETING

      The market for the Company's semiconductor equipment product line consists
of semiconductor manufacturers in the United States, Korea, Western Europe,
Taiwan, Japan, India, Australia and the People's Republic of China, optical
component manufacturers in the United Kingdom and United States and solar cell
manufacturers in Spain and India. This market is comprised of two major types of
customers, those who are installing new semiconductor manufacturing facilities
and customers who wish to install new equipment systems or upgrade equipment
already in use in existing facilities. The Company's products are sold to meet
both of those customer situations. The Company has increased and intends to
continue to increase its share of that market for semiconductor equipment by
expanding sales of horizontal diffusion furnaces manufactured by the Company in
its Netherlands facility and increasing its sales, marketing and manufacturing
capabilities in Europe. This plan has and is expected to increase revenue not
only through added sales of horizontal furnaces or Processing/Robotic products,
but also by making each of the products more competitive by offering them as
part of a broader complement of diffusion products with greater capabilities.
For example, the Company expects to generate increased sales of diffusion
furnaces by offering them together with Atmoscan(R) and IBAL products. One
element of this strategy is to sell these products under the Amtech/Tempress
name, where appropriate. The Company also expects to obtain orders for its
horizontal diffusion furnaces from former Tempress, B.V. customers. The
Company's diffusion furnaces have not captured a significant share of the market
in the United States, one of the largest market for such equipment. However,
recent orders from optical component manufacturers based in the United States
and to a limited extent other components of that market indicates that the
Company's share of that market may increase in fiscal 2001. European optical
component manufacturers with requirements for diffusion furnaces are currently
the Company's largest single source of new orders. Based upon the order backlog,
which is not necessarily a good


                                       13
<PAGE>   14
indicator of future sales, Amtech's sales to optical component manufacturers
worldwide are expected to grow from 6% in fiscal 2000 to more than 25% of
consolidated revenues in fiscal 2001.

      The Company has historically marketed its polishing supplies and machines
and related parts to manufacturers of silicon wafers for the semiconductor
industry, products that have optical components but are not related to telecom
industry, disk media for the computer industry, and ceramic components for
wireless communication products. The Company also sells diffusion furnace and
processing/robotic products to some of these customers, as it did prior to the
P.R. Hoffman acquisition. Further, the Company believes the process of sales
lead generation will be enhanced by the sharing of leads among its increased
number of product lines, including those acquired in the P.R. Hoffman
acquisition transaction.

      The Company's installed base of customers (facilities at which the
Company's products are installed and operating) includes Intel, Lucent
Technologies, Motorola, Texas Instruments, Phillips, SGS-Thomson, Samsung,
Hyundai, ITT Night Vision, UMC and BP ("British Petroleum") Amoco Solar. Of
these corporations, Motorola, Intel Corporation, SGS-Thomson and Samsung have
been customers of the Company for approximately 15 years.

      The Company markets its products by direct customer contact through
Company sales personnel, which consists of eight persons based in the United
States, including the President, three other outside salespersons and an inside
sales and marketing staff of four persons. The Company employs seven sales and
marketing personnel in The Netherlands. The Company also markets its products
through a network of domestic and international independent sales
representatives and distributors. The Company's promotional activities have
consisted of direct sales contacts, an internet website, advertising in trade
magazines and the distribution of product brochures. The Company also
participates in trade shows, including Semicon West, Semicon Europa, Diskcon and
one large optics show per year. The Company is primarily dependent on its
President, Jong S. Whang, for its sales and marketing activities in Asia and its
sales are enhanced by his active involvement with the accounts of certain other
key customers.

      During fiscal 2000, no one customer accounted for 10% or more of
consolidated revenue. For a more complete analysis of significant customers, see
Note 8 of the Notes to Consolidated Financial Statements included herein (the
"Financial Statements").

      There are presently 22 independent sales representatives and seven
international distributors, each covering a specified geographical area on an
exclusive basis. The areas now covered by representatives are the New England
and Midwest regions, Pennsylvania, Texas, Washington, Oregon, the United
Kingdom, Central Europe (including Germany, Switzerland and Austria), India,
Italy, Japan, Korea, Singapore, Malaysia, Taiwan, Thailand and the People's
Republic of China. Representatives are paid a commission as specified from time
to time in the Company's commission schedule, which at present is generally
higher for complete systems and lower for spare parts and accessories. Further,
a discount has been granted for the Atmoscan(R) to a customer who is a competing
manufacturer of diffusion furnaces.

      Semiconductor equipment sales fluctuate primarily with the level of
capital spending in the semiconductor industry. Sales volume of the polishing
supplies segment primarily fluctuates with the operating levels of semiconductor
fabricators. The semiconductor business is highly cyclical.

COMPETITION

      The Company is not aware of any significant product that directly competes
with the Atmoscan(R); however, there are several processing systems and various
configurations of existing manufacturing products that provide advantages
similar to those that the Company believes the Atmoscan(R) provides to
semiconductor manufacturers. Notwithstanding this competition, the Company
believes that Atmoscan(R) provides better results in terms of more uniform wafer
temperature and dispersion of heated gases in the semiconductor manufacturing
process, less exposure of semiconductor wafers to contaminants, and other
technical advantages which afford to its users a higher yield and, therefore, a
lower per item cost in the manufacture of semiconductors. While the industry
trend is toward the use of vertical diffusion furnaces (with which Atmoscan(R)
is not useable), the Company believes that a number of customers are and will
continue to be willing to buy Atmoscan(R) units and horizontal diffusion
furnaces because for all but production runs of smaller geometry chips on larger
wafers, there is a higher productivity with horizontal


                                       14
<PAGE>   15
furnaces and because many applications do not involve the processing of smaller
devices on larger silicon wafers and thus do not require the much more expensive
vertical furnaces.

      The Company is aware of several products in the market that perform the
same or similar functions as the IBAL automation product line. However, the
Company does not know of any similar products that are capable of loading
Atmoscan(R) systems, a competitive advantage of the IBAL automation. The Company
believes that the IBAL automation products require less of the expensive clean
room floor space, are generally less expensive and easier to operate than those
of the competition. The Company's two new models of automation, the S-300 and
E-300, introduced during fiscal 2000, are believed to benefit even more from
these competitive advantages. The target market for the IBAL automation products
is those customers who do not require the sophistication of the more complex
competing systems or do not have or are not willing to provide additional clean
room space. Load stations are sold to customers that are purchasing Tempress(R)
furnaces, upgrading their existing diffusion furnace equipment or as part of a
larger equipment package to customers starting-up new or expanding existing
facilities. Certain models of load stations provide a cleaner environment than
those they replace and the higher-end models can reduce the down-time for the
upgrade or installation of the Company's Processing/Robotic products as they are
specifically designed to accept those automation products without further
modification. Several well-established firms, larger than the Company, sell
products competitive with the Company's load station. The cantilever paddle
system is designed for easy assembly and disassembly to minimize downtime
during maintenance. The Company has generally sold its horizontal diffusion
furnaces to customers who purchase them in small quantities. While it is
expected that sales of these diffusion furnaces will most likely continue to be
sold in small quantities, the Company secured two large orders for such systems
during the second half of fiscal 2000, one for five systems and the other for
eleven systems. Amtech intends to maintain or improve its competitive position
by its willingness to design products to meet the customer's specific process
requirements, providing competitive prices and product support services levels
and targeting customers with significant numbers of Tempress(R) furnaces
manufactured by the former Tempress B.V.

      There are competitors for the carriers, wafer lapping and polishing
machines and related replacement parts and semiconductor polishing templates
that are larger than the Company. The Company believes that it is able to
effectively compete with other manufacturers of carriers by continually updating
its product line to keep pace with the rapid changes in its customers'
requirements and higher level of customer service. The Company is able to
capture a small share of the semiconductor polishing template market primarily
by meeting the industry's perceived need for a second source to avoid continued
dependence upon the dominant industry leader. The Company believes that its
ability to compete for sales of all of its products, including machines, is
enhanced by the reputation of its double-sided planetary lapping and polishing
machines, which are highly regarded for applications involving delicate and thin
(approximately 100 microns) wafers made of various materials. The Company
believes these products compare favorably to the competition with respect to the
following factors: durability, maintaining close thickness tolerances of wafers
and other parts and quality, reliability, performance and price.

EMPLOYEES

      At November 30, 2000, the Company employed 107 people (including corporate
officers); 63 in manufacturing, 17 in engineering, 12 in administration and 15
in sales. Of these employees, 26 are based at the Company's corporate offices
and manufacturing facility in Tempe, Arizona, 35 are employed at its
manufacturing plant in Carlisle, Pennsylvania, 36 at its facility in Heerde, The
Netherlands, and 10 in the Company's contract semiconductor manufacturing
support services business located in Austin, Texas. Of the 35 people employed at
the Company's Carlisle, Pennsylvania facility, 22 are represented by the United
Auto Workers Union - Local 1443. The Company has never experienced a work
stoppage or strike. The Company considers its employee relations to be good.


                                       15
<PAGE>   16
                       FINANCIAL INFORMATION ABOUT FOREIGN
                    AND DOMESTIC OPERATIONS AND EXPORT SALES

      The following table shows the amounts of revenue attributable to the
Company's foreign sales for the past three fiscal years (the sales to customers
in the United States are included in the table for comparison purposes). All
revenues shown in the table represent sales to customers not affiliated with the
Company.

<TABLE>
<CAPTION>
                                2000                         1999                         1998
                        ---------------------        ---------------------        ---------------------
<S>                     <C>               <C>        <C>               <C>       <C>               <C>
United States (1)       $11,615,000        61%       $ 8,728,000        59%       $ 9,029,000        55%
Far East (2)              3,581,000        19            754,000         5          1,228,000         8
Europe (3)                3,781,000        20          4,216,000        29          5,030,000        31
Australia                    50,000         0          1,068,000         7            927,000         6
                        -----------       ---        -----------       ---        -----------       ---
TOTAL                   $19,027,000       100%       $14,766,000       100%       $16,214,000       100%
                        ===========       ===        ===========       ===        ===========       ===
</TABLE>

(1)   Includes sales in Canada and less than 1% in Central and South America.

(2)   Includes Korea, Singapore, Taiwan, Japan, the People's Republic of China,
      Hong Kong, Indonesia, India and Malaysia.

(3)   Includes sales in Israel and Africa, which are not material.

      For a further description of foreign sales, see Note 8 of the Notes to the
Financial Statements included herein.

ITEM 2. PROPERTIES

      The Company's semiconductor equipment business and corporate offices are
located in 15,700 square feet of office and manufacturing space at its principal
address. These facilities are leased at a current rate of $8,096 per month, on a
triple net basis, for a term to expire on August 31, 2003. Manufacturing support
services are performed in customer facilities.

      The Company owns a 9,900 square foot building located in Heerde, The
Netherlands. Beginning in August 2000 the Company began leasing an additional
2,370 square feet of manufacturing space approximately five miles from the
Heerde plant. These facilities are leased at a current rate of approximately
$790 per month, for a term that expires August 14, 2001. Unless cancelled by
either party at least three months prior to expiration, the lease automatically
renews for another six months. The Company has begun searching for larger
alternative facilities in The Netherlands, so that its Dutch operations can be
combined into a single location.

      The Company leases a 21,740 square foot building located in Carlisle,
Pennsylvania from John R. Krieger, the former owner of that business and current
Director of Corporate Development for the Company. These facilities are leased
at a current rate of $10,300 per month, on a triple net basis, for a term that
expires on June 30, 2004. The Company has the option to renew the lease for five
successive terms of one year each.

      The Company considers the above facilities suitable and adequate to meet
the Company's current requirements.

ITEM 3. LEGAL PROCEEDINGS

      On or about August 31, 2000, a "P.R. Hoffman Machine Products" was one of
11 companies named in a legal action being brought by North Middleton Township
in Carlisle, Pennsylvania, the owner of a landfill allegedly found to be
contaminated. No detailed allegations have been filed as part of this legal
action, which appears to have been filed to preserve the right to file claims
for contribution to the clean-up of the landfill at a later date. The Company
acquired the assets of P.R. Hoffman in an asset transaction consummated on July
1, 1997. The landfill was closed and has not been used by the acquired
operations since sometime prior to the date of acquisition. Therefore the
Company believes that the named company is the prior owner of the acquired
assets. Under the terms of the Asset Purchase Agreement governing the
acquisition, the prior owner, P.R. Hoffman Machine Products Corporation, is


                                       16
<PAGE>   17
obligated to indemnify us for any breaches of its representations and warranties
in the Asset Purchase Agreement, including representations relating to
environmental matters. Management believes the costs, if any, to resolve this
matter will not be material to the Company's results of operations or financial
position.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      None.

                                     PART II

ITEM 5.     MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS'
            MATTERS

MARKET INFORMATION

      The Company's common stock, par value $.01 per share ("Common Stock") is
traded in the over-the-counter market and on The Nasdaq SmallCap Market(R) under
the symbol "ASYS." In December 2000, the Company applied for listing on The
Nasdaq National Market(R).

      The following table sets forth the range of the high and low bid price for
the shares of the Company's Common Stock for each quarter of fiscal years 2000
and 1999 as reported by the NASDAQ Small Cap Market.

<TABLE>
<CAPTION>
       QUARTER ENDED              HIGH               LOW
       -------------              ----               ---
<S>                             <C>               <C>
Fiscal 2000:

   December 31, 1999            $ 5.75            $ 1.88
   March 31, 2000                 8.00              3.50
   June 30, 2000                  5.09              2.00
   September 30, 2000            26.50              3.72

Fiscal 1999:

   December 31, 1998            $ 2.13            $ 1.00
   March 31, 1999                 1.75               .94
   June 30, 1999                  3.06              1.25
   September 30, 1999             3.00              1.69
</TABLE>

     In order to maintain listing of its Common Stock on the Nasdaq SmallCap
Market, the Company is required to satisfy certain quantitative and qualitative
requirements. Effective with the close of business on March 15, 1999, each two
shares of the Company's Common Stock were combined and reclassified into one
share of the Common Stock. All shares and per share amounts have been restated
to give effect to this one for two reverse stock split. Any fractional shares
resulting from the reverse split were rounded to the next highest whole number.

HOLDERS

      As of December 15, 2000, there were approximately 1,403 shareholders of
record of the Company's Common Stock.

DIVIDENDS

      The Company has never paid dividends. Its present policy is to apply cash
to investment in product development, acquisition or expansion; consequently, it
does not expect to pay dividends within the foreseeable future.


                                       17
<PAGE>   18
ITEM 6. SELECTED FINANCIAL DATA

      The selected financial data set forth with respect to the Company's
operations for each of the years in the three year period ended September 30,
2000 and with respect to the balance sheets at September 30, 2000 and 1999 are
derived from audited financial statements that have been audited by Arthur
Andersen LLP, independent public accountants, which are included elsewhere in
this Report and are qualified by reference to such financial statements. Data
from the statements of operations for the fiscal years ended September 30, 1997
and 1996 and the balance sheet data at September 30, 1998, 1997 and 1996 are
derived from financial statements not included in this Report. The selected
financial data should be read in conjunction with Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of Operations," and
the Company's financial statements (including the related notes thereto)
contained elsewhere in this Report.

<TABLE>
<CAPTION>
                                                               FISCAL YEARS ENDED SEPTEMBER 30,
                                                -----------------------------------------------------------------------------
                                                    2000            1999             1998             1997            1996
                                                -----------    ------------     ------------     ------------     -----------
<S>                                             <C>            <C>              <C>              <C>              <C>
OPERATING DATA:
From Continuing Operations:
  Revenues                                      $19,027,446    $ 14,766,075     $ 16,213,904     $ 11,111,142     $ 8,414,005
  Operating Profit (Loss)(1)(4)                   1,982,280         567,776         (904,334)         215,420         120,813
  Income (Loss) from
    Continuing Operations(1)(4)                   1,325,421         362,307         (589,887)         237,709         197,591
Net Income (Loss)(1)(3)(4)                      $ 1,325,421    $    362,307     $   (589,887)    $    237,709     $   508,683
Diluted Earnings (Loss) Per Share: (1)(2)(4)
  Continuing Operations (Loss)                  $       .56    $        .17     $       (.28)    $        .10     $       .07
  Net Income (Loss) (3)                         $       .56    $        .17     $       (.28)    $        .10     $       .19

BALANCE SHEET DATA:
Cash and Short-Term Investments                 $ 5,784,500    $  1,124,685     $  1,351,542     $  1,975,040     $ 4,458,337
Working Capital                                  10,933,683       5,374,231        4,993,455        5,271,320       5,480,452
Total Assets                                     17,483,260       8,744,558        9,325,479        9,355,092       8,458,614
Total Current Liabilities                         4,666,787       1,747,513        2,530,723        2,108,165       1,568,994
Long-Term Obligations                               236,590         286,828          347,667          318,721         265,355
Retained Earnings
  (Accumulated Deficit)                             923,463        (401,958)        (764,265)        (174,378)       (412,087)
Shareholders' Equity                             12,579,883       6,710,217        6,447,089        6,928,206       6,624,265
</TABLE>


(1)   The results for the fiscal years 1998, 1997 and 1996 include approximately
      $170,000, $85,000 and $132,000, respectively, of expenses related to the
      photo-assisted CVD research and development project suspended at the end
      of fiscal 1998. In addition, in fiscal 1998 the Company took a charge of
      $184,000 for the write-off of certain long-lived assets.

(2)   The results shown have been restated to reflect the one-for-two reverse
      split of Common Stock that was effective March 15, 1999.

(3)   The results for fiscal 1996 include $311,092 of income from and gain on
      the disposal of discontinued operations.

(4)   Income from continuing operations for fiscal 1997 includes a $115,487 gain
      from the disposition of the Company's interest in the Seil Semicon joint
      venture. Income from continuing operations for fiscal 1996 includes the
      Company's $65,063 equity in the losses of the Seil Semicon joint venture.


                                       18
<PAGE>   19
ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

      The following discussion and analysis provides information which
management believes is relevant to an assessment and understanding of the
Company's results of operations and financial condition. This discussion should
be read in conjunction with the financial statements and notes thereto set forth
elsewhere herein and the "Forward-Looking Statements" explanation included
herein.

STRATEGY FOR EXPANSION AND CAPITAL RESOURCES

      The Company is engaged primarily in the manufacture and marketing of
several items of capital equipment, spare parts and related consumables used in
the fabrication of semiconductor chips. The business is comprised of two
segments, polishing supplies and semiconductor equipment. The polishing
supplies segment sells polishing supplies and equipment to manufacturers of
silicon wafers, the raw material used in the manufacture of semiconductor chips
and optical components of high-speed telecom switches. The semiconductor
equipment segment sells capital equipment used in the fabrication of
semiconductor chips and optical components. Some of the products of the
polishing supplies segment, comprising approximately 15% and 13% of
consolidated sales in fiscal 2000 and 1999, respectively, are also sold for use
in the production of optics, wireless communications, memory disk media,
ceramics and other products. The Company also provides contract semiconductor
manufacturing support services, accounting for an estimated 2% and 3% of
consolidated sales in fiscal 2000 and 1999, respectively. The Company intends
to expand its revenue and operating profits derived from the sale of polishing
supplies and equipment sold to manufacturers of silicon wafers and
semiconductor production equipment sold to fabricators of semiconductors and
optical components. For purposes of this analysis and segment reporting, the
manufacture support service business and any difference between the planned
corporate expenses, which are allocated to the segments based upon their
revenue and the Company's investment in each, and actual corporate expenses are
aggregated in the semiconductor equipment segment.

There are several components to the Company's growth strategy. The Company is
seeking to expand its revenue and operating profits through the development of
new products that serve these markets and to further penetrate these and other
markets with existing and new products. During the fourth quarter of fiscal
2000, the Company received in excess of $8 million of orders for semiconductor
production equipment from manufacturers of optical components. This is a
significant new market for the Company, which is expected to significantly
contribute to higher revenues in fiscal 2001. The Company also sells production
equipment to the manufacturers of solar cells. During July 2000, Amtech launched
two new automation products, the S-300 and E-300, in order to expand and further
penetrate the markets for its products. These are just a few examples of how
Amtech continues to seek out new markets for its existing products and further
penetrates existing markets with its current and new products based on exiting
technologies.

      Acquisitions. The acquisition of new businesses or products is a
significant part of the Company's growth strategy. During fiscal 1995, the
Company hired engineers that had been employees of the former Tempress, B.V.,
developed its first models of the Tempress(R) diffusion furnace product and
started Tempress Systems operations in The Netherlands. That operation has grown
significantly, particularly during fiscal 2000, and now is a major contributor
to the Company's revenues and profit. Similarly, in July 1, 1997, the Company
acquired substantially all of the assets and related liabilities of P.R. Hoffman
Machine Products Corporation. The total cost of the acquisition, including the
liabilities assumed and related transaction costs, was $3,505,000, including the
estimated contingent purchase price accrued during fiscal 2000. See Note 3 to
the Consolidated Financial Statements, included herein, for further details of
the acquisition.

      During the fourth quarter of fiscal 1997, the Company began providing
contract semiconductor manufacturing support services, which is included in the
semiconductor production equipment (and services) segment. Although the Company
is currently providing such services to only one customer, its fiscal 2000
revenue attributable to such services was $435,000 and the operation is making a
positive contribution to operating profit.

      Furthermore, the Company continues to evaluate other potential product or
business acquisitions that might complement its existing business. Based upon
the Company's acquisition criteria, such an acquisition could require


                                       19
<PAGE>   20
more capital resources than used to acquire P.R. Hoffman. The determination of
the appropriateness of a potential acquisition is expected to take into
consideration many factors, including the status and potential capital
requirements for developing a new technology asher, the economic terms of the
acquisition under review, and the potential synergy of the business opportunity
with the Company's existing business. Net proceeds of $4.6 million from a
private placement completed in September 2000 and a much higher market price for
the Company's common stock, compared to September 1999, have increased the
capital resources the Company has to implement its growth strategy. Because the
Company has almost no debt, it is also possible that Amtech could raise
additional capital by negotiating term loans. In October 2000, the Company
secured a $2 million line of credit, adding further to its resources for
financing growth.

      Research and Development. In fiscal 1994, the Company added research and
development of new technologies to its on-going development of new products and
product improvements based on existing technologies. From fiscal 1994 through
the end of fiscal 1998, the new technology under investigation consisted of
photo-assisted CVD (chemical vapor deposition) research conducted by and in
conjunction with the University of California at Santa Cruz (the "University").
The University studied several generations of higher intensity light sources,
none of which yielded results that would enable the Company to produce a
commercially viable product. The Company's aggregate expenditures on
photo-assisted CVD development from fiscal 1994 through September 30, 1998 were
$743,000. While this research was partially successful, it was suspended
indefinitely effective September 30, 1998, until such time as reliable higher
intensity lamps are available and success appears more probable.

      Beginning in fiscal 1999, the Company began research on a new technology
asher. In November 1999, the Company announced a joint product development
agreement with PSK Tech, Inc., to develop a new technology ashing machine using
Amtech's damage-free technology and PSK Tech's expertise in the design of ashers
and asher processes. During fiscal years 2000, 1999 and 1998, the Company
expended a total of $477,000, $268,000 and $438,000, respectively, on research
and development of new semiconductor production equipment products and
improvement to current products, based on new and existing technologies. The
Company intends to make these types of expenditures in the foreseeable future.
Should the new technology asher prove to be feasible, expenditures on research
and development are expected to increase starting in the second half of fiscal
2001. The Company may approve new projects of that nature, depending on their
merit and anticipated effect on earnings. Any expenditure made with respect to
the development of products and services will negatively impact the Company's
future operating results until such project achieves profitability, if ever.

      The Company's currently available cash and short-term investments are
expected to be sufficient for existing operations, planned research and
development and possibly an acquisition depending on size. Therefore,
significant unplanned development of new products or larger acquisitions may
require additional capital resources that are expected to be obtained from one
or more sources of financing, such as a private placement, a public offering,
working capital loans or term loans from banks or other financial institutions,
equipment leasing, mortgage financing and internally generated cash flow from
operations. There can be no assurance of the availability or sufficiency of
these or any other source of funding for those purposes.

RESULTS OF OPERATIONS

       The following table sets forth certain operational data as a percentage
of net revenue for the three fiscal years ended September 30, 2000:


                                       20
<PAGE>   21
<TABLE>
<CAPTION>
                                            Fiscal Years Ended
                                              September 30,
                                    ------------------------------------
                                      2000           1999           1998
                                    ------         ------         ------
<S>                                 <C>            <C>            <C>
Net revenue                          100.0%         100.0%         100.0%
Cost of product sales                 65.2           71.8           77.0
                                    ------         ------         ------
     Gross margin                     34.8           28.2           23.0

Selling, general and
  administrative expenses             21.9           22.6           25.9
Research and development               2.5            1.8            2.7
                                    ------         ------         ------
     Operating profit (loss)          10.4%           3.8%          (5.6)%
                                    ======         ======         ======
</TABLE>



FISCAL 2000 COMPARED TO FISCAL 1999

            Revenues. Consolidated revenues were $19,027,000 in fiscal 2000, an
increase of $4,261,000, or 29%, compared to $14,766,000 in fiscal 1999. This is
a record for the Company's current businesses. The increase in consolidated
revenues in fiscal 2000 was due primarily to increased capital spending and the
higher operating levels by the semiconductor industry, which benefited both
operating segments. Revenues of the semiconductor equipment segment increased by
$2,007,000, or 23%, to $10,860,000 in fiscal 2000 from $8,853,000 in fiscal
1999. The higher revenues of the semiconductor equipment segment resulted
primarily from revenue growth from the sale of IBAL automation products. During
fiscal years 2000 and 1999, revenues of the polishing supplies segment were
$8,168,000 and $5,913,000, respectively, an increase of $2,255,000, or 38%.
Revenues for the fourth quarter ended September 30, 2000 were $5,922,000, 35%
higher than in the fourth quarter of the previous fiscal year and a record for
quarterly revenues. The first shipments of the more than $8 million in orders
from optical component manufacturers, a new market for the Company's
semiconductor equipment segment, occurred in the fourth quarter, contributing to
the record revenues for the quarter and fiscal year.

            Gross Margins. Consolidated gross margin was $6,629,000 in fiscal
2000 or $2,463,000, or 59%, higher compared to the gross margin of $4,166,000 in
fiscal 1999. As a percentage of sales, the consolidated gross margin was 35% of
sales in fiscal 2000, compared to 28% in fiscal 1999, which is attributable to
improved profitability of both segments, as discussed below. Approximately
one-half of the 59% increase in gross margin resulted from the 29% increase in
revenue discussed above.

            While the semiconductor equipment segment accounted for 47% of the
higher consolidated revenues, it contributed 59% of the increase in consolidated
gross margin. The gross margin of the semiconductor segment increased by 54% on
23% higher revenues, primarily due to an improved product mix, increased
efficiencies and less intense price competition. As a result of those factors,
gross margin as a percentage of semiconductor equipment product sales increased
to 38% in fiscal 2000, from 30% in fiscal 1999.

            The gross margin of the polishing supplies segment was 68% higher in
fiscal 2000, compared to the previous year, partially due to the 38% increase in
sales volume. The rest of the increase in revenue resulted from improved margin
as a percentage of revenue. The gross margin as a percentage of sales for the
polishing supplies segment increased to 31% in fiscal 2000, from 25% in fiscal
1999, primarily as a result of lower unit costs of materials and subcontract
costs, improved labor efficiencies and a more favorable product mix. The lower
material costs is partially due to a change in suppliers. However, much of the
unit cost reductions are attributable to larger orders and the cost efficiencies
from longer production runs, which reduces the cost of scrap and set-ups.


            Selling, General and Administrative Expenses. Consolidated selling,
general and administrative expenses increased by $840,000, or 25%, to $4,170,000
in fiscal 2000, from $3,330,000 in fiscal 1999. The selling, general and
administrative expenses attributable to the semiconductor equipment segment
increased $534,000 as a result of a 29% increase in personnel costs and a 113%
increase in commission and royalty expense; which was partially offset by a 1%
decrease in other expenses. The selling, general and administrative expenses
attributable to the


                                       21
<PAGE>   22
polishing supplies segment increased $306,000 as a result of the 114% increase
in commissions and royalties on the increased sales volume, and higher sales
personnel costs arising from additions to the sales and marketing staff.
Commission expense varies based upon the geographic regions in which the sales
occur, as some sales represent direct sales and others are through sales
representatives. Since the rate of growth in consolidated revenues exceeded the
rate of increase in consolidated selling, general and administrative costs in
fiscal 2000, the total of these expenses decreased as a percentage of
consolidated revenues to 22% in fiscal 2000 from 23% in fiscal 1999. See
Strategy for Expansion and Capital Resources -- Research and Development for a
discussion of research and development expenses.

            Operating Profit. The semiconductor equipment industry continued its
cyclical recovery in fiscal 2000. As a result of this recovery, customer
acceptance of the Company's new product offerings, and other factors discussed
above, the Company earned $1,982,000 operating profit in fiscal 2000, compared
to an operating profit of $568,000 in fiscal 1999, an increase of 249%. Both
segments contributed nearly equally to consolidated operating profit in both
fiscal years. For the semiconductor equipment segment operating profit as a
percentage of revenue increased to 9% from 3% in the prior fiscal year. For the
polishing supplies segment operating profit as a percentage of revenue increased
to 12% from 5% in the prior year, as a result of the increased sales volume and
cost reductions discussed above.

            Income before income taxes includes operating income, discussed
above, and net interest income. Net interest income was $93,000 in fiscal 2000,
compared to $35,000 in fiscal 1999, an increase of $58,000, or 166%. The
increase in interest income is the result of a higher average cash balance in
fiscal 2000, partially due to the private placement in September 2000 and
interest received on refunded income taxes. As a result, income before income
taxes increased to $2,075,000, or 11% of consolidated revenue, compared to
$602,000, or 4% of consolidated revenue, in fiscal 1999.

            Net income. The income tax provision is $750,000 in fiscal 2000,
compared to $240,000 in fiscal 1999. The effective tax rate in fiscal 2000 is
36%, compared to 40% in fiscal 1999. In both years the effective tax rate is
higher than the 34% statutory rate primarily due to the differences between
income for financial reporting and taxable income and in fiscal 1999, the
provision for state income taxes. The reason for the decline in the effective
tax rate in fiscal 2000 is that the Company reversed the $93,000 valuation
allowance for deferred state income taxes in the fourth quarter, based upon its
belief that it is more likely than not that those deferred tax benefits will
ultimately be realized. After taking into consideration the income tax
provision, the fiscal 2000 net income is $1,325,000, or $.56 per diluted share,
compared to $362,000, or $.17 per share, in fiscal 1999.

            Trends. As a result of the Company's entry into the optical
component equipment market, positive customer response to the Company's new
IBAL automation products, and the current level of demand from the
semiconductor industry for the Company's previously existing products,
annualized consolidated revenue for the last quarter of fiscal 2000 was
$23,690,000, or 25% higher than the fiscal 2000 revenue of $19,027,000.
Furthermore, the backlog at September 30, 2000 was $14,499,000, compared to
$3,759,000 at September 30, 1999 and $14,151,000 at June 30, 2000. As a result
of these factors, the Company believes that the value of shipments for fiscal
2001 could exceed the amount computed by annualizing the fourth quarter
revenues of fiscal 2000, because fiscal 2001 is expected to benefit more from
the increase in orders from the optical component market and for the new IBAL
products than reflected by the fourth quarter revenue. Accordingly, the Company
believes that the growth in shipments will continue into fiscal 2001. However,
no assurance can be given regarding that forecast or how long the current trend
will continue. See "Accounting Pronouncements Not Yet Adopted," below,
regarding how such pronouncements might adversely affect reported revenue in
fiscal 2001.

            During fiscal 2000, approximately $131,000 of net income was earned
in the first quarter, $267,000 in the second quarter, $292,000 in the third
quarter, and $635,000 in the fourth fiscal quarter. In fiscal 2001, the Company
is increasing its hiring in order to meet higher demand for its products, which
may result in a loss of some of the labor efficiencies gained in fiscal 2000.
The Company may also incur increased costs from its vendors either because they
use pricing to allocate their available capacity or as they attempt to pass on
cost increases caused by general inflation. State income tax expense will
increase as a percentage of before tax income in fiscal 2001, because the
Company's Arizona state net operating loss carryforwards have been nearly fully
utilized and the Company will not have any items comparable to the $93,000
fourth quarter reversal of the valuation allowance for deferred state income
taxes. As a result the effective tax rate for fiscal 2001 is expected to be
approximately 38%.


                                       22
<PAGE>   23
However, in light of the current level of expansion in the semiconductor
industry, the historically high backlog level, the Company's new IBAL
automation products, and the expansion into optical component equipment market,
discussed above, the Company believes the value of shipments in fiscal 2001
will exceed $24 million and therefore net income for fiscal 2001 will be at
least at or near the annualized level experienced in the last quarter of fiscal
2000, based upon the application of the accounting principles described in the
Company's financial statements for the three years ended September 30, 2000.
However, should revenues plateau at $23.7 million in fiscal 2001, net income
for that year will be less than $2,540,000, the annualized net income of the
fourth quarter of fiscal 2000, because of the anticipated increases in costs
and the effective tax rate, described above.  Since September 30, 2000, a
customer has cancelled a $894,000 order. Two customers representing 43% of the
November 30, 2000 backlog have opened discussions regarding potentially
delaying the shipment of orders currently in the backlog. Although these
forward looking statements and the order backlog as of November 30, 2000,
reflect that cancelled order, further significant cancellations or postponed
shipments or a slowdown in the semiconductor industry would materially and
adversley affect the Company's results of operations, causing them to fall
significantly below that indicated. The Company has not evaluated the effects
of Staff Accounting Bulletin No. 101 ("SAB No. 101"), as the industry lacks
sufficient consistent guidance on its application. Therefore, these
forward-looking statements do not take into consideration that accounting
pronouncement. See "Accounting Pronouncements Not Yet Adopted," below.  How SAB
No. 101 is applied to Amtech's operations may materially and adversely affect
the Company's results of operations, causing them to fall significantly below
that indicated here.

            The Company has been and will continue to be affected by trends in
the semiconductor industry. The revenue of our semiconductor equipment segment,
which accounts for more than 50% of consolidated revenues, is comprised of
horizontal diffusion furnaces and our Processing/Robotic product line. Our
Processing/Robot product line is useable only with horizontal diffusion
furnaces. There is a trend in the semiconductor industry, related to the trend
to produce smaller chips, toward the use in semiconductor manufacturing
facilities of newer technology, such as vertical diffusion furnaces. Vertical
diffusion furnaces are more efficient to use than the horizontal diffusion
furnaces in certain manufacturing processes of smaller chips on larger wafers.
Because of this trend, we had expected that demand for our horizontal diffusion
furnaces would decline. We believe this trend has not adversely affected us yet
primarily because:

      -     we have received significant orders for our horizontal diffusion
            furnaces from optical component manufacturers, a new market for us;

      -     we have experienced increased demand from manufacturers that do not
            require the more expensive vertical furnaces for certain processes,
            such as from manufacturers of wireless communication chips and
            micro-controllers used in a number of consumer applications; and

      -     we believe that because of improvements in automation for horizontal
            diffusion furnaces, such as our robotic product line, horizontal
            diffusion furnaces may be becoming a more favorable alternative to
            the vertical furnaces than they previously had been for certain
            processes.

However, to the extent that the trend to use vertical diffusion furnaces over
horizontal diffusion furnaces continues, our revenues may decline and our
ability to generate income may be adversely affected.

            Furthermore, the Company's semiconductor equipment products may be
used to upgrade, retro-fit or replace existing horizontal furnaces in order to
extend their useful lives or otherwise avoid the necessity for the customer to
acquire more expensive vertical furnaces. Horizontal furnaces are also sold for
use in new facilities that do not require vertical furnaces for the particular
process. Another important factor is the growth of semiconductor manufacturing
using the less capital-intensive horizontal diffusion furnaces in the
manufacturing of solar cells, and for other less demanding processes, which
could further prolong the commercial life of the Company's existing
semiconductor equipment products.

            The Company's products tend to serve niche markets. Accordingly,
future revenues are and will continue to be dependent upon increasing market
share in existing markets; identifying and penetrating new markets such as
optical component manufacturers and producers of solar cells; and the
introduction or acquisition of new products. Examples include sales of standard
and ultra-high temperature diffusion furnaces to manufacturers of optical
components, a new market for the Company, and the two new IBAL automation
products introduced during fiscal


                                       23
<PAGE>   24
2000. Product or business acquisitions are also a part of the Company's strategy
for growth, as evidenced by the acquisition of P.R. Hoffman's product line of
double-sided precision lapping and polishing machines and related consumable
products in the fourth quarter of fiscal 1997. The Company is pursuing
acquisitions of other businesses or products that complement its existing
product lines.

            The semiconductor industry upon which the Company's business depends
is highly cyclical. The adverse effects of the last industry slow-down were
partially offset by the operating results of P.R. Hoffman, acquired July 1,
1997. Thus the acquired operation was included for all of fiscal 1998, the year
the slow down began, compared to one quarter of the preceding year. That
operation has a higher percentage of consumable sales than sales of capital
equipment. The Company believes that sales of consumable products are somewhat
less volatile than that of capital equipment. Also, because the sales of
consumable products are closely tied to the production levels of the
semiconductor industry, the Company is alerted to and can react more quickly to
changes within the industry. Further, Amtech's sales of equipment to producers
of solar cells and more recently optical components provides a diversification
of markets, which may partially protect the Company from the semiconductor
industry's cycles. However, the majority of the Company revenues is dependent
on the semiconductor industry and will continue to be affected by the cycles of
that industry, as well as the cycles of the solar and optical industries.


FISCAL 1999 COMPARED TO FISCAL 1998

            Revenues. Consolidated revenues decreased by $1,448,000, or 9%, to
$14,766,000 in fiscal 1999 from $16,214,000 in fiscal 1998. Revenues of the
semiconductor equipment segment decreased by $1,413,000, or 14%, to $8,853,000
in fiscal 1999 from $10,266,000 in fiscal 1998. The decline in sales of capital
equipment by the semiconductor equipment segment accounted for nearly all of the
reduction in consolidated revenues and was caused by the industry slowdown that
began in fiscal 1998. During fiscal years 1999 and 1998, revenues of the
polishing supplies segment were $5,913,000 and $5,948,000, respectively,
representing a year-to-year decline of less than 1%. The polishing supplies
segment was the first to be affected by the industry slowdown and the first to
benefit from the recovery the industry is currently experiencing.

            Gross Margins. Despite a 9% decline in consolidated revenues, the
consolidated gross margin increased by $443,000, or 12%, in fiscal 1999. All of
the increase in gross margin was attributable to the semiconductor equipment
segment. The gross margin as a percentage of semiconductor equipment product
sales increased to 30% in fiscal 1999, from 22% in fiscal 1998, as a result of
decreased labor and overhead costs and a more favorable product mix. In fiscal
1999, the revenues and gross margin of the polishing supplies segment remained
at nearly the same levels as in fiscal 1998. As a percentage of sales, the
consolidated gross margin was 28% of sales in fiscal 1999, compared to 23% in
fiscal 1998, which also is attributable to improved profitability of the
semiconductor equipment segment discussed above.

            Selling, General and Administrative Expenses. Consolidated selling,
general and administrative expenses decreased by $859,000, or 21%, to $3,330,000
in fiscal 1999, from $4,189,000 in fiscal 1998. The selling, general and
administrative expenses of the semiconductor equipment segment decreased
$648,000 as a result of the following factors: (i) the reduction of personnel
and other costs; (ii) reduction of expenses related to evaluating potential
acquisitions; and (iii) no fiscal 1999 charge comparable to the $184,000 charge
taken by the Company in fiscal 1998 for the write-off of a demonstration unit.
The selling, general and administrative expenses of the polishing supplies
segment decreased $211,000 as a result of the Company's cost reduction program
implemented in the last quarter of fiscal 1998. As a result of these cost
reductions, consolidated selling and general expenses declined to 23% of revenue
in fiscal 1999 as compared to 26% of revenue in fiscal 1998. Research and
development expenses are discussed separately above.

            Operating Profit (Loss). The semiconductor equipment industry is
experiencing a cyclical recovery. As a result of this recovery and other factors
discussed above, the Company had an operating profit of $568,000 in fiscal 1999,
compared to an operating loss of $904,000 in fiscal 1998. Revenues declined for
both of the Company's operating segments in fiscal 1999, but operating income
increased in both segments due to a cost reduction program implemented by the
Company in the last quarter of fiscal 1998 and the first quarter of fiscal 1999.
Income (loss) from continuing operations before income taxes includes operating
income (loss), discussed above, and net interest income. Net interest income was
$20,000 lower in fiscal 1999, as compared to fiscal 1998, due to a decline in
cash


                                       24
<PAGE>   25
balances during fiscal 1999. As a result of the above items, income from
continuing operations before income taxes increased by $1,452,000 to $602,000 in
fiscal 1999.

            Net income (loss). The income tax provision was $240,000 in fiscal
1999, compared to an income tax benefit of $260,000 in fiscal 1998, which
resulted from the Company's net loss in 1998. The effective tax rate for fiscal
1999 was 40%, which is higher than the 34% statutory rate due to the provision
for state income taxes and items that are not deductible for federal income
taxes. See Note 10 to the Consolidated Financial Statements for further details
including an analysis of the differences between the statutory rate and the
effective rate for fiscal 1999 and 1998. After taking into consideration the
income tax provision (benefit), the fiscal 1999 net income was $362,000, or $.17
per share, compared to a net loss of $590,000, or $(.28) per share, in fiscal
1998.


LIQUIDITY AND CAPITAL RESOURCES

            As of September 30, 2000 and 1999, cash and cash equivalents were
$5,785,000 and $1,125,000, respectively. The fiscal 2000 increase in cash and
cash equivalents of $4,660,000 was primarily attributable to $4,616,000 of net
cash proceeds realized from a private placement of the Company's Common Stock in
September 2000. The Company believes there is sufficient liquidity for current
operations and it expansion plans. See "Plans for Expansion and Capital
Resources," above, for an explanation of factors that would give rise to
requirements for additional sources of liquidity and working capital, and
possible sources to meet those needs.

            Working capital at September 30, 2000 was $10,934,000, an increase
of $5,560,000, compared to the $5,374,000 of working capital at September 30,
1999. The ratio of current assets to current liabilities decreased to 3.3:1 from
4.1:1, as of those same dates. Cash and cash equivalents comprise 33% of total
assets and stockholders' equity accounts for 72% of total assets at September
30, 2000. These are measures of financial condition.


ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

            In June 1998, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 133 -
"Accounting for Derivative Instruments and Hedging Activities." This statement
establishes accounting and reporting standards for derivative instruments,
including derivative instruments embedded in other contracts, and for hedging
activities. In June 1999, the FASB issued SFAS No. 137 - "Accounting for
Derivative Instruments and Hedging Activities - Deferral of the Effective Date
of FASB Statement No. 133--an Amendment of FASB Statement No 133." This
statement defers the effective date of SFAS No. 133 to the Company's quarter
ending December 31, 2000. Management is in the process of evaluating the
effects that SFAS Nos. 133 and 137 may have on the Company's results of
operations or financial position.

            In December 1999, the Securities and Exchange Commission ("SEC")
issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition," which
provides the SEC Staff's views on selected revenue recognition issues. Based
upon the prevailing interpretations of SAB No. 101, the Company may be required
to delay recognition of at least a portion of its sales of semiconductor
production systems until installation has been completed and customer
acceptance has occurred. The Company's current policy is to recognize revenue at
the time the customer takes title to the product, generally at the time of
shipment, because the Company has routinely met its installation obligations
and installation costs represent an insignificant percentage of total costs.
The Company believes its current accounting policies on revenue recognition are
consistent with those generally used in its industry and have been consistently
applied since the inception of the Company. Therefore, if the Company is
required to change its revenue recognition policies in order to comply with SAB
No. 101, a significant cumulative charge related to a change in an accounting
principle may be required. The guidance in SAB No. 101 must be adopted no later
than the fourth quarter of the Company's fiscal year 2001, ending September 30,
2001, with a restatement of the first three quarters of that fiscal year. The
Company, in conjunction with the semiconductor capital equipment industry
association, is seeking clarification on the requirements of SAB No. 101 as
they relate to the semiconductor capital equipment industry. As a result,
management has not completed its evaluation of the effects that SAB No. 101
will have on the Company's income statement presentation, operating results or
financial position. However, management believes that SAB No. 101, to the
extent that it affects Amtech, will not affect the underlying strength or
weakness of our business operations as measured by the dollar value of our
product shipments and cash flows.


                                       25
<PAGE>   26
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

            The Company is exposed to financial market risks, including changes
in foreign currency exchange rates and interest rates. Its operations in the
United States are conducted in United States dollars. The Company's operation in
The Netherlands, a component of the semiconductor equipment segment, conducts
business primarily in The Netherlands' guilder, the United States dollar and the
British pound. As of January 1, 1999, the European Union, of which The
Netherlands is a member, established a fixed conversion rate between their
existing sovereign currencies and the Euro and adopted the Euro as their common
legal currency. Certain other European currencies in which the Company's
Netherlands operation conducts business also have fixed exchange rates with the
Euro. Currently, the functional currency of the Company's Netherlands operation
is The Netherlands guilder. It is anticipated, by the end of the three year
transition period, the functional currency of that operation will be the Euro.

            The Company estimates that more than 95% of its transactions are
denominated in one of its two functional currencies or currencies that have
fixed exchange rates with one of its functional currencies. As of September 30,
2000, the Company did not hold any stand alone or separate derivative
instruments. The Company incurred a net foreign currency transaction gain of
$25,000 in fiscal 2000 and losses of $83,000 and $11,000 in fiscal 1999 and
1998, respectively. The Company's investment in and advances to its Netherlands'
operation total $1,528,000. A 10% change in the value of The Netherlands guilder
relative to the United States dollar would cause a $153,000 foreign currency
translation adjustment, a type of other comprehensive income (loss), which would
be a direct adjustment to stockholders' equity. During fiscal 2000, The
Netherlands operation conducted net transaction, sales in excess of purchases,
of approximately $980,000 denominated in United States dollars and $1,240,000
denominated in British pounds. A 10% change in both currencies could have
affected before tax income by as much as $222,000. However, certain contracts
denominated British pounds allow price adjustments should the exchange rate
change by more than 3% during the term of the contract. Therefore, the Company
believes that a 10% change in the exchange rates of both the United States
dollar and the British pound would have affected before tax income by $135,000.
The exposure to changes in exchange rates in fiscal 2001 could be significantly
greater than indicated above, because of The Netherlands operation has over $8
million of backlog orders denominated in British pounds ($5.5 million) and
United States dollars ($2.9 million). A 10% change in exchange rates on both
currencies relative to The Netherlands guilder and price adjustments for any
fluctuations in the British Pound in excess of 3% would be expected to affect
before tax operating profit by approximately $455,000.

            When the value of The Netherlands guilder declines relative to the
value of the United States dollar, operations in The Netherlands can be more
competitive against the United States based equipment suppliers and the cost of
purchases denominated in United States dollars become more expensive. When the
value of The Netherlands guilder increases relative to the value of the United
States dollar, operations in The Netherlands must raise prices to those
customers that normally make purchases in United States dollars, in order to
maintain the same profit margins. When this occurs, this operation attempts to
have transactions denominated in The Netherlands guilder or the Euro and to
increase its purchases denominated in United States dollars. The Company
estimates that its fiscal 2000 purchases and sales of this foreign operation
that are denominated in currencies not linked to its functional currency,
including United States dollars and British pounds, are approximately $3,400,000
and $1,300,000, respectively. Most of those purchases are denominated in United
States dollars and provide a partial hedge against fluctuations in exchange
rates on sales denominated in that currency. Because it is difficult to predict
the volume of dollar denominated transactions arising from The Netherlands
operations and due to protection from exchange rate fluctuations provided in
certain sales contracts, the Company does not hedge against the effects of
exchange rate changes on future transactions. The Netherlands guilder is near
its historically low value relative to the United States dollar, giving the
Company's operation based in The Netherlands a competitive advantage over other
suppliers based in the United States. However, a future increase in the relative
value of The Netherlands guilder could have a materially adverse effect on
future results of the Company's operations.

            The polishing supplies segment makes annual purchases of
approximately $600,000 through direct or indirect sources from Japan or Germany.
While these purchases are denominated in United States dollars, the price of
materials purchased from Japan is directly affected by the value of the yen
relative to the dollar. The Company believes the price of steel produced in
Germany is relatively unaffected by fluctuations in the value of German mark, as
the supplier sets the price based on an average exchange rate. However, assuming
the price of German sourced


                                       26
<PAGE>   27
steel also fluctuated with currency exchange rates, a 10% change in the value of
Japanese yen and the German mark relative to the United States dollar would
affect the cost of this segment's purchases by $60,000.

FORWARD-LOOKING STATEMENTS

            The statements contained in this Annual Report on Form 10-K that are
not historical fact are forward-looking statements (as such term is defined in
the Private Securities Litigation Reform Act of 1995). These statements can be
identified by the use of forward looking terminology such as "believes,"
"expects," "may," "will," "should," "anticipates," or "possible," or the
negative thereof or other written variations thereof or comparable terminology.
The forward-looking statements contained herein are based on current
expectations that involve a number of risks and uncertainties. Among others,
these forward-looking statements are based on assumptions that (a) the Company
will not lose a significant customer or customers, (b) the Company will not
experience significant reductions in demand or rescheduling or cancellation of
customer purchase orders, (c) the Company's products will remain accepted within
their respective markets and will not be significantly further replaced by newer
technology equipment, (d) competitive conditions within the Company's markets
will not materially deteriorate, (e) the Company's efforts to improve its
products and maintain its competitiveness in the markets in which it competes
will continue to progress and that the savings associated with these
expenditures and/or the increased product demand resulting therefrom justifies
such development costs, (f) the Company will be able to retain, and when needed,
add key technical and management personnel, (g) business or product
acquisitions, if any, will be successfully integrated and the results of
operations therefrom will support the acquisition price, (h) the Company's
forecasts will accurately anticipate market demand, (i) there will be no
material adverse changes in the Company's existing operations, (j) the Company
will be able to obtain sufficient equity or debt funding to increase its capital
resources by the amount needed for new business or product acquisitions, if any,
(k) the semiconductor equipment industry will not enter a period of slowdown
during fiscal 2001, (l) the condition in the Asian markets will continue to
improve, (m) the Company will be able to continue to control costs, (n) the
Company will not, either directly or indirectly, incur any material Year 2000
issues, (o) demand for the Company's products will not be adversely and
significantly influenced by trends within the semiconductor industries,
including consolidation of semiconductor manufacturing operations through
mergers and the subcontracting out of the production of semiconductors to
foundries, and (p) the effects of adopting SAB No. 101 will largely be offset by
increased sales. Assumptions related to the foregoing involve judgments with
respect to, among other things, future economic, competitive and market
conditions, all of which are beyond the control of the Company. Although the
Company believes that the assumptions underlying the forward-looking statements
are reasonable, any of the assumptions could prove inaccurate and, therefore,
there can be no assurance that the results contemplated in forward-looking
statements will be realized. In addition, the business and operations of the
Company are subject to substantial risks, which increase the uncertainty
inherent in such forward-looking statements. In light of the significant
uncertainties inherent in the forward-looking information included herein, such
information should not be regarded as a representation by the Company, or any
other person, that the objectives or plans for the Company will be achieved.


                                       27
<PAGE>   28
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                      INDEX


<TABLE>
<CAPTION>
                                                                                       Page
<S>                                                                                    <C>
Report of Independent Public Accountants........................................        29

Financial Statements -


   Consolidated Balance Sheets
   September 30, 2000 and 1999..................................................        30

   Consolidated Statements of Operations for
   the years ended September 30, 2000, 1999 and 1998............................        31

   Consolidated Statements of Stockholders'
   Equity for the years ended September 30,
   2000, 1999 and 1998..........................................................        32

   Consolidated Statements of Cash Flows for
   the years ended September 30, 2000, 1999 and 1998............................        33

   Notes to Consolidated Financial Statements
    September 30, 2000, 1999 and 1998...........................................        34

Financial Statement Schedule for the years ended September 30, 2000, 1999 and
   1998:

   Schedule II - Valuation and Qualifying Accounts..............................        45
</TABLE>


      All Schedules, other than the Schedule listed above, are omitted as the
information is not required, is not material or is otherwise furnished.

                                       28
<PAGE>   29
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS






To AMTECH SYSTEMS, INC.:

We have audited the accompanying consolidated balance sheets of AMTECH SYSTEMS,
INC. (an Arizona corporation) and subsidiaries (the "Company") as of September
30, 2000 and 1999, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years ended September
30, 2000. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements 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
audits 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 financial position of the Company as of September 30,
2000 and 1999, and the results of its operations and its cash flows for each of
the three years ended September 30, 2000, in conformity with accounting
principles generally accepted in the United States.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index of
financial statements is presented for purposes of complying with the Securities
and Exchange Commission's rules and is not a required part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in our audits of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.



                                        /s/  ARTHUR ANDERSEN LLP
                                        ---------------------------
                                        ARTHUR ANDERSEN LLP





Phoenix, Arizona,
  December 15, 2000.


                                       29
<PAGE>   30
                      AMTECH SYSTEMS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           SEPTEMBER 30, 2000 AND 1999


<TABLE>
<CAPTION>
                                                                            2000                1999
                                                                        ------------         -----------
<S>                                                                     <C>                  <C>
                                    ASSETS
CURRENT ASSETS:
 Cash and cash equivalents                                              $  5,784,500         $ 1,124,685
 Accounts receivable - net                                                 4,929,948           3,208,488
 Inventories                                                               4,229,546           2,259,657
 Deferred income taxes                                                       577,000             421,000
 Income taxes refundable                                                          --              34,000
 Prepaid expenses                                                             79,476              73,914
                                                                        ------------         -----------
          Total current assets                                            15,600,470           7,121,744

PROPERTY, PLANT AND EQUIPMENT - net                                        1,093,707           1,098,313

GOODWILL AND OTHER ASSETS -  net                                             789,083             524,501
                                                                        ------------         -----------
          TOTAL ASSETS                                                  $ 17,483,260         $ 8,744,558
                                                                        ============         ===========

                    LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable                                                      $  2,144,197         $   627,445
  Accrued compensation and related taxes                                     635,354             458,277
  Accrued warranty expense                                                   218,693             146,590
  Accrued installation expense                                               266,101             196,349
  Deferred revenue and deposits                                              245,663              83,242
  Income taxes payable                                                       670,000                  --
  Other accrued liabilities                                                  486,779             235,610
                                                                        ------------         -----------
          Total current liabilities                                        4,666,787           1,747,513
                                                                        ------------         -----------

LONG-TERM OBLIGATIONS                                                        236,590             286,828
                                                                        ------------         -----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
  Preferred stock; no specified terms;
    100,000,000 shares authorized; none issued                                    --                  --
  Common stock; $0.01 par value; 100,000,000 shares authorized;
    2,571,808 (2,108,679 in 1999) shares issued and outstanding               25,718              21,087
  Additional paid-in capital                                              12,133,058           7,400,152
  Accumulated other comprehensive loss -
    Cumulative foreign currency translation adjustment                      (502,356)           (309,064)
  Retained earnings (accumulated deficit)                                    923,463            (401,958)
                                                                        ------------         -----------
          Total stockholders' equity                                      12,579,883           6,710,217
                                                                        ------------         -----------
          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                    $ 17,483,260         $ 8,744,558
                                                                        ============         ===========
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       30
<PAGE>   31
                      AMTECH SYSTEMS, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF OPERATIONS
             For The Years Ended September 30, 2000, 1999 and 1998


<TABLE>
<CAPTION>
                                                 2000               1999                1998
                                             -----------        -----------        ------------
<S>                                          <C>                <C>                <C>
Net product sales                            $19,027,446        $14,766,075        $ 16,213,904
Cost of product sales                         12,398,560         10,599,708          12,490,631
                                             -----------        -----------        ------------
         Gross margin                          6,628,886          4,166,367           3,723,273

Selling, general and administrative            4,169,631          3,330,348           4,189,387
Research and development                         476,975            268,243             438,220
                                             -----------        -----------        ------------
        Operating profit (loss)                1,982,280            567,776            (904,334)

Interest income - net                             93,141             34,531              54,447
                                             -----------        -----------        ------------

Income (loss) before income taxes              2,075,421            602,307            (849,887)
Income tax provision (benefit)                   750,000            240,000            (260,000)
                                             -----------        -----------        ------------

NET INCOME (LOSS)                            $ 1,325,421        $   362,307        $   (589,887)
                                             ===========        ===========        ============




EARNINGS (LOSS) PER SHARE:
  Basic                                      $       .61        $       .17        $       (.28)
  Weighted average shares outstanding          2,158,562          2,109,815           2,106,741

  Diluted                                    $       .56        $       .17        $       (.28)
  Weighted average shares outstanding          2,336,497          2,189,201           2,106,741
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       31
<PAGE>   32
                      AMTECH SYSTEMS, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
              FOR THE YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998


<TABLE>
<CAPTION>

                                                        COMMON STOCK                    ACCUMULATED     RETAINED
                                              ----------------------      ADDITIONAL       OTHER        EARNINGS         TOTAL
                                                 NUMBER                    PAID-IN     COMPREHENSIVE  (ACCUMULATED    STOCKHOLDERS'
                                               OF SHARES     AMOUNT        CAPITAL     INCOME (LOSS)     DEFICIT)        EQUITY
                                              ----------    --------    ------------    -----------    -----------    ------------
<S>                                           <C>          <C>         <C>             <C>            <C>            <C>
BALANCE AT SEPTEMBER 30, 1997                  2,092,553    $ 20,925    $  7,366,112    $  (284,453)   $  (174,378)   $  6,928,206

  Net loss                                            --          --              --             --       (589,887)       (589,887)
  Translation adjustment                              --          --              --         68,115             --          68,115
                                                                                                                      ------------
     Comprehensive loss                                                                                                   (521,772)
                                                                                                                      ------------

 Stock options exercised                           9,000          90          16,160             --             --          16,250
 Employee stock bonus -
      net of stock repurchases                     8,750          88          24,317             --             --          24,405
                                              ----------    --------    ------------    -----------    -----------    ------------
BALANCE AT SEPTEMBER 30, 1998                  2,110,303      21,103       7,406,589       (216,338)      (764,265)      6,447,089

  Net income                                          --          --              --             --        362,307         362,307
  Translation adjustment                              --          --              --        (92,726)            --         (92,726)
                                                                                                                      ------------
       Comprehensive income                                                                                                269,581
                                                                                                                      ------------

 Employee stock bonus -
      net of stock repurchases                    (1,624)        (16)         (6,437)            --             --          (6,453)
                                              ----------    --------    ------------    -----------    -----------    ------------
BALANCE AT SEPTEMBER 30, 1999                  2,108,679      21,087       7,400,152       (309,064)      (401,958)      6,710,217

  Net income                                          --          --              --             --      1,325,421       1,325,421
  Translation adjustment                              --          --              --       (193,292)            --        (193,292)
                                                                                                                      ------------
       Comprehensive income                                                                                              1,132,129
                                                                                                                      ------------

  Issuance of common
    stock - net of related expenses              383,000       3,830       4,612,117             --             --       4,615,947
  Stock options exercised and other,
    including a $59,000 related tax benefit       80,129         801         120,789             --             --         121,590
                                              ----------    --------    ------------    -----------    -----------    ------------

BALANCE AT SEPTEMBER 30, 2000                  2,571,808    $ 25,718    $ 12,133,058    $  (502,356)   $   923,463    $ 12,579,883
                                              ==========    ========    ============    ===========    ===========    ============
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       32
<PAGE>   33
                      AMTECH SYSTEMS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998

<TABLE>
<CAPTION>
                                                                  2000                1999                1998
                                                               -----------         -----------         -----------
<S>                                                            <C>                 <C>                 <C>
OPERATING ACTIVITIES:
  Net income (loss)                                            $ 1,325,421         $   362,307         $  (589,887)
  Adjustments to reconcile net income (loss) to net
    cash provided by (used in) operating activities:
      Depreciation and amortization                                294,122             312,371             361,046
      Provision for inventory and receivable write-offs             76,851             142,490             135,642
      Loss on disposals of long-lived assets                           431                  --             183,872
      Deferred income taxes                                       (156,000)            (28,000)           (120,000)
  (Increase) decrease in:
      Accounts receivable                                       (1,973,716)           (473,383)            160,719
      Inventories, prepaid expenses and other assets            (2,593,647)            (60,958)           (429,450)
  Increase (decrease) in:
      Accounts payable                                           1,636,815            (542,561)            240,963
      Accrued liabilities and customer deposits                    846,877            (155,788)            244,643
      Income taxes payable                                         759,672             364,063            (522,059)
                                                               -----------         -----------         -----------
   Net Cash Provided By (Used In) Operating Activities             216,826             (79,459)           (334,511)
                                                               -----------         -----------         -----------

INVESTING ACTIVITIES:
  Maturities of short-term investments - net                            --                  --             579,191
  Purchases of property, plant and equipment                      (322,292)           (158,232)           (310,962)
                                                               -----------         -----------         -----------
   Net Cash Provided by  (Used In) Investing Activities           (322,292)           (158,232)            268,229
                                                               -----------         -----------         -----------

FINANCING ACTIVITIES:
  Proceeds from stock options exercised and other                   62,590                  --              16,250
  Employee stock bonus  - net of stock repurchases                      --              (6,453)             24,405
  Net proceeds from private placement of common stock            4,615,947                  --                  --
  Payments on mortgage loan                                        (10,605)            (12,062)            (12,069)
                                                               -----------         -----------         -----------
   Net Cash Provided By (Used In) Financing Activities           4,667,932             (18,515)             28,586
                                                               -----------         -----------         -----------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                             97,349              29,349              (6,611)
                                                               -----------         -----------         -----------

CASH AND CASH EQUIVALENTS:
  Net increase (decrease)                                        4,659,815            (226,857)            (44,307)
  Beginning of year                                              1,124,685           1,351,542           1,395,849
                                                               -----------         -----------         -----------
END OF YEAR CASH AND CASH EQUIVALENTS                          $ 5,784,500         $ 1,124,685         $ 1,351,542
                                                               ===========         ===========         ===========


SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid during the year for:
     Interest                                                  $    12,805         $    10,169         $    15,731
     Income taxes paid (refunded)                                  143,000            (102,000)            387,000
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       33
<PAGE>   34
                      AMTECH SYSTEMS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE YEARS ENDED SEPTEMBER 30, 2000, 1999, AND 1998


(1)  NATURE OF OPERATIONS:

     Amtech Systems, Inc. (an Arizona corporation), P. R. Hoffman Machine
Products, Inc., a wholly-owned subsidiary formed in July 1997 ("P. R.
Hoffman"), both based in the United States, and Tempress Systems, Inc., a
wholly-owned subsidiary formed in September 1994 and based in The Netherlands
("Tempress"), comprise the "Company".  The Company designs, assembles, sells
and installs capital equipment and related consumables used in the manufacture
of wafers of various materials, primarily silicon wafers for the semiconductor
industry, and in certain semiconductor fabrication processes. These products
are sold to manufacturers of silicon wafers and semiconductors worldwide,
particularly in the United States, Korea, and Northern Europe. The Company
also provides semiconductor manufacturing support services.

     The Company serves a niche market in an industry which experiences rapid
technological advances and which in the past has been very cyclical. Therefore,
the Company's future profitability and growth depend on its ability to develop
or acquire and market profitable new products and its ability to adapt to
cyclical trends.


(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

     BASIS OF PRESENTATION - The accompanying consolidated financial statements
include the accounts of Amtech Systems, Inc. and its wholly-owned subsidiaries,
P. R. Hoffman (see Note 3), and Tempress. All significant intercompany accounts
and transactions have been eliminated in consolidation. Certain
reclassifications have been made to the September 30, 1998 financial statements
to conform to the September 30, 2000 presentation.

     REVENUE RECOGNITION - Revenue is recognized on the accrual basis when the
customer takes title to the product, generally upon shipment. On occasion, the
Company will recognize revenue prior to shipment. When this occurs, the Company
ensures that title has passed, the customer has committed to take delivery of
the goods in a reasonable period of time, there is a legitimate business purpose
requested by the customer to not ship the product, the product is complete and
ready for shipment and is segregated from existing inventory and there are no
material contingencies. Upon shipment, the Company recognizes all revenue and
accrues the estimated costs of installation.

     Service revenues are recognized as services are performed.

     CASH EQUIVALENTS - Cash equivalents consist of money market mutual funds,
time certificates of deposit and U.S. treasury bills. The Company considers
certificates of deposit and treasury bills to be cash equivalents if their
original maturity is 90 days or less.

     INVENTORIES - Inventories are stated at the lower of cost (first-in,
first-out method) or market. The components of inventory as of September 30,
2000 and 1999 are as follows:


<TABLE>
<CAPTION>
                                 2000              1999
                              ----------        ----------
<S>                           <C>               <C>
      Purchased parts         $1,931,524        $1,237,348
      Work-in-progress         1,874,818           605,769
      Finished goods             423,204           416,540
                              ----------        ----------
                              $4,229,546        $2,259,657
                              ==========        ==========
</TABLE>

     PROPERTY, PLANT AND EQUIPMENT - Maintenance and repairs are charged to
expense as incurred. The costs of additions and improvements are capitalized.
The cost of property retired or sold and the related accumulated depreciation
are removed from the applicable accounts when disposition occurs and any gain or
loss is recognized. Depreciation expense for fiscal years 2000, 1999 and 1998
was approximately $241,000, $256,000 and $273,000, respectively.

     Depreciation is computed using the straight-line method. Useful lives for
equipment, machinery and leasehold improvements are from three to five years;
for furniture and fixtures from five to ten years; and for buildings twenty
years.


                                       34
<PAGE>   35
     Long-lived assets are reviewed for impairment whenever events or
circumstances indicate that the carrying amount of the asset may not be
recoverable. If the sum of the undiscounted expected cash flows from an asset to
be held and used in operations is less than the carrying value of the asset, an
impairment loss is recognized.

     Due to model changes in 1998, the Company reviewed a Tempress diffusion
furnace built for use at tradeshows and determined that the net present value
of expected cash flows from this furnace were less than the carrying value of
the asset. Accordingly, a loss of $184,000, the cost of the furnace less
accumulated depreciation, was included in selling, general and administrative
expense in fiscal 1998.

     The following is a summary of property, plant and equipment as of September
30, 2000 and 1999:

<TABLE>
<CAPTION>
                                              2000                1999
                                          -----------         -----------
<S>                                       <C>                 <C>
      Land, building and leasehold        $   545,633         $   588,324
      improvements
      Equipment and machinery               1,191,298           1,046,247
      Furniture and fixtures                  532,677             471,884
                                          -----------         -----------
                                            2,269,608           2,106,455
      Accumulated depreciation             (1,175,901)         (1,008,142)
                                          -----------         -----------
                                          $ 1,093,707         $ 1,098,313
                                          ===========         ===========
</TABLE>

     GOODWILL - The purchase price in excess of net assets acquired, commonly
referred to as goodwill, is being amortized over fifteen years using the
straight-line method. Goodwill amortization was approximately $37,000 per year
for fiscal years 2000, 1999 and 1998.

     WARRANTY - The Company provides free of charge a limited warranty,
generally twelve to twenty-four months, to all purchasers of its new products
and systems. Warranty expense for fiscal 2000, 1999 and 1998 amounted to
approximately $109,000, $190,000, and $240,000, respectively. Management
believes this amount is sufficient for all future warranty costs on systems sold
through September 30, 2000.

     RESEARCH AND DEVELOPMENT EXPENSES - The Company expenses product
development costs as they are incurred. The Company's Research and Development
expenses relate to the development of a new ashing machine, research on
photo-assisted CVD (chemical vapor deposition) equipment and processes, the
development of diffusion furnaces and the improvement of IBAL ("Individual Boats
with Automated Loading") and other products.

     FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION - Financial information
relating to the Company's foreign subsidiary is reported in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 52, "Foreign Currency
Translation". Net income includes a gain from foreign currency transactions of
$25,000 in 2000 and losses of $83,000 in 1999 and $11,000 in 1998. The
functional currency of Tempress is The Netherlands guilder. The gains or losses
resulting from the translation of Tempress' financial statements have been
included as a separate component of stockholders' equity.

     INCOME TAXES - The Company files consolidated federal income tax returns
and computes deferred income tax assets and liabilities based upon cumulative
temporary differences between financial reporting and taxable income,
carryforwards available and enacted tax law. (See Note 12).

     EARNINGS PER COMMON SHARE - The Company calculates basic and diluted
earnings per share in accordance with SFAS No. 128, "Earnings Per Share"
("EPS").  (See Note 13).

     Effective with the close of business on March 15, 1999, each two shares of
the $0.01 par value common stock of the Company were converted and reclassified
into one share. All shares and per share amounts have been restated to give
effect for this one-for-two reverse stock split. Any fractional shares resulting
from the reverse split were rounded to the next highest whole number.

     STOCK-BASED COMPENSATION - The Company accounts for its employee
stock-based compensation plans under SFAS No. 123, "Accounting for Stock-Based
Compensation". SFAS No. 123 permits companies to record employee stock-based
transactions under Accounting Principles Board Opinion ("APB") No. 25, under
which no compensation cost is recognized and to disclose the pro forma effects
on earnings and earnings per share as if the fair market value approach had been
adopted. (See Note 14).


                                       35
<PAGE>   36
     USE OF ESTIMATES - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the year. Actual results could differ from those
estimates.

     FAIR VALUE OF FINANCIAL INSTRUMENTS - The carrying values of the Company's
current assets and current liabilities approximate fair value due to the
short-term in which these instruments mature. The carrying value of the
Company's long-term debt is not materially different than its fair value
(see Note 5).

      ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED - In June 1998, the Financial
Accounting Standards Board ("FASB") issued SFAS No. 133 - "Accounting for
Derivative Instruments and Hedging Activities." This statement establishes
accounting and reporting standards for derivative instruments, including
derivative instruments embedded in other contracts, and for hedging activities.
In June 1999, the FASB issued SFAS No. 137 - "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective Date of FASB
Statement No. 133 -- an Amendment of FASB Statement No. 133." This statement
defers the effective date of SFAS No. 133 to the Company's quarter ending
December 31, 2000.  Management is evaluating the effects that SFAS Nos. 133 and
137 may have on the Company's results of operations or financial position.

      In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition," which
provides the SEC Staff's views on selected revenue recognition issues. Based
upon the prevailing interpretations of SAB No. 101, the Company may be required
to delay recognition of at least a portion of its sales of semiconductor
production systems until installation has been completed and customer
acceptance has occurred. The Company's current policy is to recognize revenue
at the time the customer takes title to the product, generally at the time of
shipment, because the Company has routinely met its installation obligations
and installation costs represent an insignificant percentage of total costs.
The Company believes its current accounting policies on revenue recognition are
consistent with those generally used in its industry and have been consistently
applied since the inception of the Company. Therefore, if the Company is
required to change its revenue recognition policies in order to comply with SAB
No. 101, a significant cumulative charge related to a change in an accounting
principle may be required. The guidance in SAB No. 101 must be adopted no later
than the fourth quarter of the Company's fiscal year 2001, ending September 30,
2001, with a restatement of the first three quarters of that fiscal year. The
Company, in conjunction with the semiconductor capital equipment industry
association, is seeking clarification on the requirements of SAB No. 101 as
they relate to the semiconductor capital equipment industry. As a result,
management has not completed its evaluation of the effects that SAB No. 101
will have on the Company's income statement presentation, operating results or
financial position. However, management believes that SAB No. 101, to the
extent that it affects Amtech, will not affect the underlying strength or
weakness of the Company's business operations as measured by the dollar value
of its product shipments and cash flows.

(3)  PURCHASE OF P. R. HOFFMAN'S ASSETS:

     On July 1, 1997, the Company acquired substantially all of the assets
and operating liabilities of P. R. Hoffman.  P. R. Hoffman specializes in the
development, manufacture and marketing of double-sided lapping and polishing
machines and related consumables used in the manufacture of semiconductor
silicon wafers.


                                       36
<PAGE>   37
     The former owner of P. R. Hoffman is entitled to additional payments equal
to 50% of pretax income of the P. R. Hoffman operation in excess of $800,000 per
year for a period of 5 years ending September 30, 2002, limited to a maximum
aggregate of $2 million of such payments. Those payments are payable in cash or
the Company's common stock, at the Company's option, with a minimum of
thirty-five percent (35%) of such payments being either cash or registered
shares. This additional consideration will be treated as part of the purchase
price to the extent earned and will be amortized over the remainder of the
fifteen-year period that began on the July 1, 1997 acquisition date. Contingent
consideration of $313,000 was earned in fiscal 2000. No contingent consideration
was earned in fiscal 1999 or 1998. The Company intends to use common shares to
satisfy the fiscal 2000 earn-out obligation. For the purposes of the diluted
earnings per share calculations, the number of shares to be issued was
calculated based on a market price of $9.25 per share, the closing market price
on December 12, 2000.

     As a part of the transaction, the Company subleases a 21,740 square foot
building, located in Carlisle, Pennsylvania, from John R. Krieger, the Company's
Director of Corporate Development and former owner of the P. R. Hoffman
operation. The lease requires monthly payments of $10,300 on a triple net basis,
expires on June 30, 2004, and includes an option to renew the lease for five
successive one-year terms. Monthly lease payments increase to $10,700, $10,810
and $10,860 on July 1, 2001, 2002 and 2003, respectively. The Company also
entered into an employment agreement with Mr. Krieger that requires payments
of $150,000 per year and expires on June 30, 2001.


(4)  LINES OF CREDIT

     In October 1998, the Company obtained a line of credit in the amount of
750,000 of The Netherlands' guilders, approximately $300,000 as of September 30,
2000, at an interest rate of 2% over a Netherlands bank's basic interest rate,
5.5% as of September 30, 2000. The line of credit is secured by a $125,000
second lien on the Company's land and building in the Netherlands, and certain
accounts receivable, which amounted to $1,328,000 as of September 30, 2000. As
of September 30, 2000 and 1999, the unused portion of this line of credit was
approximately $250,000 and $300,000, respectively.

     On October 20, 2000, the Company obtained an additional revolving line
of credit of $2 million, with a variable interest rate of one-half percent over
the lender's prime rate, for an interest rate of 10% as of the date of the
agreement. The line of credit is subject to the terms and conditions described
in the credit agreement and expires on October 19, 2001. The revolving line of
credit is secured by substantially all of the assets of the Company, subject to
the liens described above and in Note 5, Long-term obligations.


(5)  LONG-TERM OBLIGATIONS:

     Long-term debt included in long-term obligations includes a twenty-year
mortgage secured by the Company's land and building located in The Netherlands.
The non-current portion of the long-term debt was $142,000 and $185,000 as of
September 30, 2000 and 1999, respectively. As of September 30, 2000, the
collateral has a carrying value of $386,000. Principal payments of $11,000 per
year are payable in The Netherlands guilder in 240 equal monthly payments, with
the payments for fiscal 2001 included in accounts payable as of September 30,
2000. Interest is fixed at 6.95% through June 2001, after which the rate will be
adjusted to the prevailing market rate. There is a penalty for prepayment of the
loan prior to June 2001.


(6)  STOCKHOLDERS' EQUITY:

     On September 8, 2000, the Company issued 383,000 shares of common stock,
and warrants to purchase an aggregate of up to 59,300 shares of common stock,
pursuant to a Stock and Warrant Purchase Agreement and related commitments. One
share and one warrant for one-tenth of a share were sold at a combined price of
$13.75. An additional 21,000 warrants were issued to the placement agents. The
warrants are exercisable at a price per share of $15.12 and expire at 11:59
p.m., Eastern Time, on September 8, 2005. The Company has registered the resale
of the shares issued in the transaction, including most of those issuable upon
exercise of the warrants. Gross proceeds in the transaction were $5,266,000.
Net proceeds to the Company were $4,616,000.

     During May 1999, the Company's Board of Directors adopted a shareholder
rights plan, which authorized the distribution of one right for each outstanding
common share to purchase one one-hundredth of a share of Series A


                                       37
<PAGE>   38

Participating Preferred Stock, at a purchase price of $8.50, subject to certain
antidilution adjustments. The rights will expire 10 years after issuance and
will be exercisable if (a) a person or group becomes the beneficial owner of 15%
or more of the Company's common stock or (b) a person or group commences a
tender or exchange offer that would result in the offeror beneficially owning
15% or more of the common stock (a "Stock Acquisition Date"). If a Stock
Acquisition Date occurs, each right, unless redeemed by the Company at $.01 per
right, entitles the holder to purchase an amount of common stock of the Company,
or in certain circumstances a combination of securities and/or assets or the
common stock of the acquirer, having an equivalent market value of $17.00 per
right at a purchase price of $8.50. Rights held by the acquiring person or group
will become void and will not be exercisable.


(7)   COMMITMENTS AND CONTINGENCIES:

      Key suppliers include two steel mills, one domestic and one German,
capable of meeting the material specification the Company requires; an injection
molder that provides plastic insets for steel carriers; a pad supplier that
produces a unique material used to attach semiconductor wafers to the polishing
template (sole sourced from a Japanese company); and an adhesive manufacturer
that supplies the critical glue used in the production of the semiconductor
polishing templates. As of September 30, 2000, the Company had unconditional
commitments to purchase $435,000 of steel. Due to minimum order quantities for
this steel and long lead times, the Company has made purchase commitments that
may be in excess of future production requirements, and it could take several
years to use all of the steel commitments in production of the Company's
products. These purchase commitments are not expected to result in any
significant losses.

      The Company has engaged an investment banker to assist it in identifying
potential acquisition candidates and to assist with financing transactions.
Upon closing any transaction(s) prior to August 17, 2001, with one of the
acquisition candidates introduced to the Company by the investment bankers
prior to August 17, 2000 where the proceeds and/or aggregate consideration
equal to $1 million or more in which the investment banker has earned a
contingent fee, the Company will issue to the investment banker 100,000 five
year warrants to purchase the Company's common stock. Warrants issued in
connections with such transactions, if any, will have an exercise price of
$2.625 per share and will be exercisable upon issuance.

      On or about August 31, 2000, a "P.R. Hoffman Machine Products" was one of
11 companies named in a legal action being brought by North Middleton Township
in Carlisle, Pennsylvania, the owner of a landfill allegedly found to be
contaminated. No detailed allegations have been filed as part of this legal
action, which appears to have been filed to preserve the right to file claims
for contribution to the clean-up of the landfill at a later date. The Company
acquired the assets of P.R. Hoffman in an asset transaction consummated on July
1, 1997. The landfill was closed and has not been used by the acquired
operations since sometime prior to the date of acquisition. Therefore the
Company believes that the named company is the prior owner of the acquired
assets. Under the terms of the Asset Purchase Agreement governing the
acquisition, the prior owner, P.R. Hoffman Machine Products Corporation, is
obligated to indemnify the Company for any breaches of its representations and
warranties in the Asset Purchase Agreement, including representations relating
to environmental matters. Management believes the costs, if any, to resolve this
matter will not be material to the Company's results of operations or financial
position.


(8)   MAJOR CUSTOMERS AND FOREIGN SALES:

      The Company had no major customers accounting for more than 10% of sales
for the fiscal year ended September 30, 2000. In fiscal 1999 and 1998, three
different customers accounted for 10% or more of sales in those years, as
follows:

                                       38
<PAGE>   39
<TABLE>
<CAPTION>
                                    2000      1999       1998
                                    ----      ----       ----
<S>                                 <C>       <C>        <C>
      Customer 1                      --%       14%        --%
      Customer 2                      --        --         12
      Customer 3                      --        --         12
                                    ----      ----       ----
                                      --%       14%        24%
                                    ====      ====       ====
</TABLE>

     Receivables from two customers comprise 40% of accounts receivable at
September 30, 2000. Receivables from one customer comprised 16% of accounts
receivable at September 30, 1999, representing a concentration of credit risk as
defined by SFAS No. 105, "Disclosure of Information about Financial Instruments
with Off-Balance-Sheet Risk and Financial Instruments with Concentrations of
Credit Risk".

     The Company's sales were to customers in the following geographic regions:

<TABLE>
<CAPTION>
                                                        2000        1999        1998
                                                        ----        ----        ----
<S>                                                    <C>         <C>         <C>
      United States & Canada (including 1%               61%         59%         55%
         or less to Central and South
         America)
      Far East (Korea, People's Republic of              19           5           8
         China, Taiwan, Japan, Singapore, Indonesia,
         Malaysia and India)
      Europe (including 1% or less to                    20          29          31
         Israel and Africa)
      Australia                                          --           7           6
                                                        ---         ---         ---
                                                        100%        100%        100%
                                                        ===         ===         ===
</TABLE>

(9)  BUSINESS SEGMENT INFORMATION:

     The Company classifies its products into two core business segments. The
semiconductor equipment segment which designs, manufactures and markets
semiconductor wafer processing and handling equipment used in the fabrication
of integrated circuits. The manufacture support service business and any
difference between actual and budgeted corporate expenses are aggregated with
the semiconductor equipment segment. Budgeted corporate expenses are allocated
to the two segments based upon their revenue and the Company's investment in
each. The polishing supplies segment, designs, manufactures and markets
carriers, templates, and equipment used in the lapping and polishing of wafer
thin materials, including silicon wafers used in the production of
semiconductors. Information concerning the Company's business segments in 2000,
1999, and 1998 is as follows:

<TABLE>
<CAPTION>
                                                   2000               1999                1998
                                               -----------        -----------        ------------
<S>                                            <C>                <C>                <C>
      Net product sales
        Semiconductor equipment                $10,859,625        $ 8,852,590        $ 10,266,265
        Polishing supplies                       8,167,821          5,913,485           5,947,639
                                               -----------        -----------        ------------
                                               $19,027,446        $14,766,075        $ 16,213,904
                                               ===========        ===========        ============
      Operating profit (loss)
        Semiconductor equipment                $   985,157        $   281,789        $   (985,614)
        Polishing supplies                         997,123            285,987              81,280
                                               -----------        -----------        ------------
      Total segment operating profit             1,982,280            567,776            (904,334)
      (loss)
        Interest income - net                       93,141             34,531              54,447
                                               -----------        -----------        ------------
      Income (loss) before income taxes        $ 2,075,421        $   602,307        $   (849,887)
                                               ===========        ===========        ============
</TABLE>


                                       39
<PAGE>   40
<TABLE>
<CAPTION>
                                               2000               1999              1998
                                           -----------        -----------        ----------
<S>                                        <C>                <C>                <C>
      Identifiable assets
        Semiconductor equipment            $13,460,752        $ 5,236,460
        Polishing supplies                   4,022,508          3,508,098
                                           -----------         ----------
                                           $17,483,260         $8,744,558
                                           ===========         ==========
      Capital expenditures
        Semiconductor equipment            $   206,740        $    90,036        $  255,478
        Polishing supplies                     115,552             68,196            55,484
                                           -----------        -----------        ----------
                                           $   322,292        $   158,232        $  310,962
                                           ===========        ===========        ==========
      Depreciation and amortization
      expense
        Semiconductor equipment            $   176,526        $   201,785        $  259,117
        Polishing supplies                     117,596            110,586           101,929
                                           -----------        -----------        ----------
                                           $   294,122        $   312,371        $  361,046
                                           ===========        ===========        ==========
</TABLE>

     The Company has manufacturing operations in the United States and The
Netherlands. Revenues, operating profit (loss) and identifiable assets by
geographic region of the locations for the fiscal years ended 2000, 1999 and
1998 are as follows:

<TABLE>
<CAPTION>
                                         2000                1999                 1998
                                     -----------        ------------         ------------
<S>                                  <C>                <C>                  <C>
      Revenues
        United States                $13,923,506        $  9,307,085         $ 10,481,408
        The Netherlands                5,103,940           5,458,990            5,732,496
                                     -----------        ------------         ------------
                                     $19,027,446        $ 14,766,075         $ 16,213,904
                                     ===========        ============         ============
      Operating profit (loss)
        United States                $ 1,474,950        $    610,381         $   (376,754)
        The Netherlands                  507,330             (42,605)            (527,580)
                                     -----------        ------------         ------------
                                     $ 1,982,280        $    567,776         $   (904,334)
                                     ===========        ============         ============
      Identifiable assets
        United States                $13,952,931        $  6,528,205
        The Netherlands                3,530,329           2,216,353
                                     ------------       ------------
                                     $17,483,260        $  8,744,558
                                     ============       ============
</TABLE>

(10)  LEASES:

     The Company leases buildings, vehicles and equipment. As of September 30,
2000, minimum rental commitments under noncancellable operating leases total
$809,000, of which $246,000, $241,000, $224,000 and $98,000 are payable in
fiscal years 2001, 2002, 2003 and 2004, respectively.

     Rental expense, net of sublease income, for fiscal years 2000, 1999 and
1998 was approximately $220,000, $231,000 and $234,000, respectively.

(11)  PROPRIETARY PRODUCT RIGHTS:

     The Company acquired the proprietary product rights to Atmoscan in 1983,
which provides an improved method for the automatic loading of silicon wafers
into diffusion furnaces. The Company agreed to pay the inventor royalties for a
period of 17 years, which ended on November 22, 2000.


     Through the acquisition of the net assets of P. R. Hoffman (see Note 3),
the Company acquired the license for the design of its steel carriers with
plastic inserts for abrasive machining of silicon wafers.  In 1995, P. R.
Hoffman Machine Products Corporation licensed the patent rights from the
patent holder.


                                       40
<PAGE>   41
     Royalty expense for all licenses included in cost of product sales totaled
approximately $108,000, $73,000 and $82,000 in 2000, 1999 and 1998,
respectively.


(12)  INCOME TAXES:

     The provision for (benefit from) income taxes consists of:


<TABLE>
<CAPTION>
                                  2000              1999              1998
                                ---------         ---------         ---------
<S>                             <C>               <C>               <C>
      Current
        Domestic federal        $ 705,000         $ 250,000         $ (28,000)
        Foreign                   125,000           (25,000)         (133,000)
        Domestic state             76,000            43,000            21,000
                                ---------         ---------         ---------
                                  906,000           268,000          (140,000)
                                ---------         ---------         ---------
      Deferred
        Domestic federal          (89,000)          (31,000)          (70,000)
        Foreign                     3,000            13,000           (45,000)
        Domestic state            (70,000)          (10,000)           (5,000)
                                ---------         ---------         ---------
                                 (156,000)          (28,000)         (120,000)
                                ---------         ---------         ---------
                                $ 750,000         $ 240,000         $(260,000)
                                =========         =========         =========
</TABLE>

     The provision for income taxes on continuing operations is different from
the amount that would be computed by applying the United States corporate income
tax rate to the income (loss) from operations before income taxes. The
differences as of September 30 are summarized as follows:

<TABLE>
<CAPTION>
                                               2000              1999              1998
                                            ---------         ---------         ---------
<S>                                         <C>               <C>               <C>
      Provision (benefit) at the            $ 706,000         $ 205,000         $(289,000)
      federal rate
      Effect of expenses not                   32,000            15,000            19,000
      deductible for tax
      State tax provision                     105,000            42,000           (38,000)
      Change in valuation allowance           (93,000)          (22,000)           54,000
      Other items                                  --                --            (6,000)
                                            ---------         ---------         ---------
      Income tax provision (benefit)        $ 750,000         $ 240,000         $(260,000)
                                            =========         =========         =========
</TABLE>

     The tax assets (liabilities) comprising the net deferred tax asset as of
September 30, 2000 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                2000              1999
                                             ---------         ---------
<S>                                          <C>               <C>
      Allowance for doubtful accounts        $  59,000         $  56,000
      Uniform capitalization of                112,000            58,000
      inventory costs
      Inventory write-downs not                147,000           125,000
      currently deductible
      Book vs. tax depreciation                 (7,000)            7,000
      Unrealized currency gains                 (7,000)           (4,000)
      State net operating loss                  13,000            50,000
        carryforwards
      Liabilities not currently                260,000           222,000
      deductible
      Valuation allowance                                        (93,000)
                                             ---------         ---------
                                             $ 577,000         $ 421,000
                                             =========         =========
</TABLE>

     Management believes that it is more likely than not that the Company will
realize all deferred tax assets.


                                       41
<PAGE>   42
(13)  EARNINGS (LOSS) PER SHARE:

     All EPS data presented have been restated as required by SFAS No. 128. EPS
were calculated as follows:

<TABLE>
<CAPTION>
                                                      2000                1999                  1998
                                                  -----------         -----------         -------------
<S>                                               <C>                 <C>                 <C>
      Net income (loss)                           $ 1,325,421         $   362,307         $    (589,887)
      Amortization of  contingent
         consideration (Note 3)                       (17,155)                 --                    --
                                                  -----------         -----------         -------------
                                                  $ 1,308,266         $   362,307         $    (589,887)
                                                  ===========         ===========         =============

      Weighted average shares outstanding:
       Common stock                                 2,158,562           2,109,815             2,106,741
       Common stock equivalents issuable
         upon exercise of warrants
         and stock options (1)                        144,053              79,386                    --
       Estimated common shares issuable as
         contingent consideration (Note 3)             33,882                  --                    --
                                                  -----------         -----------         -------------
                                                    2,336,497           2,189,201             2,106,741
                                                  ===========         ===========         =============
      Earnings (Loss) Per Share:
       Basic                                      $       .61         $       .17         ($        .28)
                                                  ===========         ===========         =============
       Diluted                                    $       .56         $       .17         ($        .28)
                                                  ===========         ===========         =============
</TABLE>


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

(1)   Number of common stock equivalents calculated using the treasury stock
      method and the average market price during the period. Options and
      warrants on 143,300 shares and 1,492,500 shares had an exercise price
      greater than the average market price during the years ended September 30,
      2000 and September 30, 1999, respectively, and therefore did not enter
      into the EPS calculation. In fiscal 1998, all options and warrants,
      totaling 1,685,792, were anti-dilutive due to the net loss and therefore
      did not enter into the EPS calculation. Of these options and warrants,
      1,645,792 had an exercise price greater than the average market price
      during fiscal 1998.

(14)  STOCK-BASED COMPENSATION:

     STOCK WARRANTS - In fiscal 1995, the Company issued an aggregate of
1,312,500 redeemable warrants to the public (1,207,500) and the underwriter
(105,000) in connection with a secondary public offering, which had an exercise
price of $5.50 per share and expired on December 15, 1999. On December 15, 1999,
the Company's Board of Directors extended the expiration date of the publicly
traded redeemable warrants to January 14, 2000.

     In connection with the acquisition of the net assets of P.R. Hoffman
Machine Products Corporation during fiscal 1997, the Company issued 75,000
warrants to purchase one share each of $.01 par value common stock at a per
share exercise price of $6.00. These warrants have been valued at $167,000 using
the Black-Scholes valuation method. The primary assumptions used in the
valuation of these warrants were a risk free rate of 6.29%, expected dividend
yield of 0%, average holding period of 2.5 years, and 69% volatility. The value
of these warrants has been included in the acquisition cost associated with the
purchase of the P. R. Hoffman net assets.

     On September 8, 2000 the Company issued 59,300 warrants to purchase one
share each of the $.01 par value common stock in connection with the issuance of
383,000 shares of common stock. The warrants are exercisable at a price per
share of $15.12 and expire on September 8, 2005.


                                       42
<PAGE>   43


        STOCK OPTION PLANS - The Board of Directors has reserved 25,000 shares
of common stock for issuance upon exercise of the outstanding options issued to
employees under the 1983 Incentive Stock Option Plan, which expired in 1993.
Another 15,000 shares of common stock are reserved for the exercise of stock
purchase rights granted to directors under Director Stock Purchase Agreements
prior to 1996. The Non-Employee Directors Stock Option Plan was approved by the
stockholders in 1996 for the issuance of up to 100,000 shares of common stock to
directors. The Amended and Restated 1995 Stock Option Plan and the 1995 Stock
Bonus Plan were also approved by stockholders in 1996 under which a combined
total of 160,000 shares were authorized. The 1998 Employee Stock Option Plan,
under which 50,000 shares may be granted, was adopted by the Board of Directors
on January 31, 1998 and approved by shareholders on March 20, 1998. All of the
plans, with the exception of the 1983 Incentive Stock Option Plan, expire in
2006. Qualified stock options issued under the terms of the plans have or will
have an exercise price equal to or greater than the fair market value of the
common stock at the date of the option grant and expire no later than 10 years
from the date of grant, with the most recent grant expiring July 7, 2010. Under
the terms of the 1995 Stock Option Plan, nonqualified stock options may also be
issued. Options issued in fiscal years 2000, 1999 and 1998 vest at the rate of
20% - 33% per year. As of September 30, 2000, the Company had 74,458 options
available for issuance under the plans. On October 13, 2000, the Board of
Directors authorized a new stock option plan with 250,000 options available,
subject to shareholder approval at the next annual meeting.

        The stock option transactions and the options outstanding for the three
years ended September 30, 2000, are summarized as follows:
<TABLE>
<CAPTION>

                                                   2000                         1999                               1998
                                           -----------------------       -------------------------        -----------------------
                                                           Weighted                        Weighted                        Weighted
                                                            Average                         Average                         Average
                                                            Exercise                        Exercise                        Exercise
                                          Options             Price       Options             Price       Options            Price
                                          -------             -----       -------             -----       -------            -----
<S>                                       <C>              <C>           <C>               <C>            <C>              <C>
Outstanding at beginning of year          227,292          $   1.17       192,292          $   4.52       191,042          $   4.34
Granted                                    25,000              4.75        41,500              1.38        27,000              4.66
Exercised                                 (89,275)             1.14            --                --        (9,000)             1.80
Terminated                                     --                --        (6,500)             1.13       (16,750)             4.46
                                          -------                         -------                         -------
Outstanding at end of year                163,017          $   1.74       227,292          $   1.17       192,292          $   4.52
                                          =======                         =======                         =======
Exercisable at end of year                 59,544          $   1.16        72,117          $   1.13        48,959          $   4.74

Weighted average estimated fair
value of options granted                                   $   3.08                        $   1.55                        $   2.94
</TABLE>

         On October 14, 1998, the Company re-priced all stock option outstanding
as of that date to the closing market price on that date of $1.13 per share.
Vesting schedules and expiration dates remain unchanged. In accordance with APB
No. 25, "Accounting for Stock Issued to Employees", the Company is not required
to record compensation expense related to this re-pricing and no such expense
has been recorded in these financial statements. The incremental value
attributed to the re-pricing of the stock options was $58,000. No compensation
expense has been recognized, as all options have been granted with an exercise
price equal to the fair value of the Common Stock upon date of grant. No
adjustment has been made for the non-transferability of the options or for the
risk of forfeiture at the time of issuance. Forfeitures are instead recorded as
incurred. The fair value of each option grant has been estimated as of the date
of grant using the Black-Scholes option pricing model with the following
weighted average assumptions:

<TABLE>
<CAPTION>
                                                                  For the Years Ended September 30,
                                                                  ---------------------------------
                                                         2000                    1999                    1998
                                                   -----------------       -----------------      ----------------
<S>                                                  <C>                   <C>                    <C>
Risk free interest rate                              6.1% to 6.7%            4.3% to 5.4%                4.5%
Expected life                                        4 to 6 years            4 to 6 years              5 years
Dividend rate                                             0%                      0%                      0%
Expected volatility                                 64.6% to 76.0%          66.9 to 85.8%               63.1%
</TABLE>

         Had the effects of stock-based compensation been accounted for in the
financial statements for fiscal 2000, the net income and the basic and diluted
earnings per share would have been approximately as follows:

                                       43

<PAGE>   44
<TABLE>
<CAPTION>

                                                      Years Ended September 30,
                                              ---------------------------------------------------
                                                2000                  1999                 1998
                                            ------------          -------------       ----------------
<S>                                        <C>                   <C>                 <C>
Basic Earnings (loss) per share:
Net Income(loss):
    As reported ..................         $   1,325,421         $     362,307       $    (589,887)
    Proforma .....................             1,240,000               232,000            (681,000)
Earnings(loss) per share:
    As reported ..................         $         .61         $         .17       $        (.28)
    Proforma .....................                   .57                   .11                (.32)

Diluted Earnings (loss) per share:
Net Income(loss):
    As reported ..................         $   1,308,266         $     362,307       $    (589,887)
    Proforma .....................             1,223,000               232,000            (681,000)
Earnings(loss) per share:
    As reported ..................         $         .56         $         .17       $        (.28)
    Proforma .....................                   .52                   .11                (.32)
</TABLE>

         The following table summarizes information about stock options
outstanding at September 30, 2000:

<TABLE>
<CAPTION>
                                           Options Outstanding                                 Options Exercisable
--------------------------------------------------------------------------------------     ----------------------------
                                                              Weighted
                                           Number             Average        Weighted         Number           Weighted
                                        Outstanding           Remaining       Average        Exercisable       Average
                                        at September         Contractual      Exercise       at September      Exercise
       Exercise Price                    30, 2000              Life           Price          30, 2000          Price
        --------------                    --------              ----           -----          --------          -----
 <S>                                     <C>                  <C>             <C>             <C>               <C>
            $1.13                          109,017              5.18           $1.13            52,677          $1.13
             1.25                            5,000              8.26            1.25             1,000           1.25
             1.50                           24,000              8.41            1.50             5,867           1.50
             2.00                            3,500              9.00            2.00                 0           2.00
             3.25                            5,000              9.63            3.25                 0           3.25
             4.56                            7,500              9.77            4.56                 0           4.56
             6.81                            9,000              9.41            6.81                 0           6.81
                                         ---------                                           ----------
                                           163,017              6.39            1.74            59,544           1.16
                                         =========                                           ==========
</TABLE>

(15)     SELECTED QUARTERLY DATA (UNAUDITED):

<TABLE>
<CAPTION>
                                           First               Second            Third                  Fourth
                                          Quarter              Quarter           Quarter                Quarter
                                          -------              -------           -------                -------
<S>                                     <C>                  <C>                 <C>                 <C>
Fiscal Year 2000:
   Net product sales                    $ 3,862,512          $ 4,549,100         $ 4,693,430         $ 5,922,404
   Gross margin                         $ 1,226,594          $ 1,680,868         $ 1,672,613         $ 2,048,811
   Net income                           $   130,827          $   267,170         $   292,495         $   634,929

   Net income per share:
      Basic                             $       .06          $       .13         $       .14         $       .28
      Diluted                           $       .06          $       .12         $       .13         $       .26

Fiscal Year 1999:
   Net product sales                    $ 3,378,708          $ 3,593,204         $ 3,403,801         $ 4,390,362
   Gross margin                         $   783,913          $ 1,149,286         $   954,863         $ 1,278,305
   Net income (loss)                    $   (53,022)         $   167,526         $    27,998         $   219,805

   Net income (loss) per share:
      Basic                             $      (.03)         $       .08         $       .01         $       .10
      Diluted                           $      (.03)         $       .08         $       .01         $       .10
</TABLE>

                                       44
<PAGE>   45









                      AMTECH SYSTEMS, INC. AND SUBSIDIARIES


                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

              FOR THE YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998




<TABLE>
<CAPTION>

                             For the Year            Balance at         Charged
                                Ended                Beginning        (Credited)                       Balance at
                            September 30,             of Year         to Expense      Write-offs       End of Year
                            -------------             -------         ----------      ----------      -----------
<S>                         <C>                       <C>             <C>             <C>              <C>
1. Allowance for
     Doubtful Accounts
                                 2000                 $140,000         $ 11,579        $  2,579         $149,000

                                 1999                  143,000           29,144          32,144          140,000

                                 1998                  130,000           25,198          12,198          143,000

2. Deferred Tax
     Valuation Allowance
                                 2000                 $ 93,000        $ (93,000)           $  -              $ -

                                 1999                  115,000          (22,000)              -           93,000

                                 1998                   61,000           54,000               -          115,000
</TABLE>

                                       45

<PAGE>   46
                                    PART III

         Pursuant to Paragraph G(3) of the General Instructions to Form 10-K,
portions of the information required by Part III of Form 10-K are incorporated
by reference from the Company's Proxy Statement to be filed with the Securities
and Exchange Commission in connection with the 2001 Annual Meeting of
Stockholders (the "Proxy Statement").


ITEM 9.           DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The information required by this item is incorporated by reference to
the Company's Proxy Statement.

ITEM 10.          EXECUTIVE COMPENSATION

         The information required by this item is incorporated by reference to
the Company's Proxy Statement.

ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information required by this item is incorporated by reference to
the Company's Proxy Statement.

ITEM 12.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information required by this item is incorporated by reference to
the Company's Proxy Statement.



                                     PART IV

ITEM 13.       EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)      FINANCIAL STATEMENTS.

         The following is a list of all financial statements filed as a part of
this Report:

         1.       Consolidated Balance Sheets - September 30, 2000 and 1999

         2.       Consolidated Statements of Operations for the years ended
                  September 30, 2000, 1999 and 1998

         3.       Consolidated Statements of Stockholders' Equity for the years
                  ended September 30, 2000, 1999 and 1998

         4.       Consolidated Statements of Cash Flows for the years ended
                  September 30, 2000, 1999 and 1998

         5.       Notes to Consolidated Financial Statements - September 30,
                  2000, 1999 and 1998

(b)      FINANCIAL STATEMENT SCHEDULES

         The following is a list of a financial statement schedules required to
be filed as a part of this Report:

         1.       Schedule II - Valuation and Qualifying Accounts

         All schedules other than the Schedule listed above are omitted as the
         information is not required, is not material or is otherwise furnished.


                                       46
<PAGE>   47

(c)      EXHIBITS.
<TABLE>
<CAPTION>

    EXHIBIT NO.       DESCRIPTION                                                                METHOD OF FILING
    -----------       -----------                                                                ----------------
<S>                   <C>                                                                           <C>
        3.1           Articles of Incorporation                                                      A
        3.2           Articles of Amendment to Articles of Incorporation, dated April                A
                      27, 1983
        3.3           Articles of Amendment to Articles of Incorporation, dated May 19,              B
                      1987
        3.4           Articles of Amendment to Articles of Incorporation, dated May 2,               C
                      1988
        3.5           Articles of Amendment to Articles of Incorporation, dated May 28,              F
                      1993
        3.6           Articles of Amendment to Articles of Incorporation, dated March 14, 1999       O
        3.7           Amended and Restated Bylaws                                                    D
        4.1           Rights Agreement dated May 17, 1999                                            M
        10.1          Amended and Restated 1995 Stock Option Plan                                    H
        10.2          1995 Stock Bonus Plan                                                          H
        10.3          Non-Employee Director Stock Option Plan                                        I
        10.4          Employment Agreement with Robert T. Hass, dated May 19, 1992                   E
        10.5          Registration Rights Agreement with J.S. Whang, dated January 24,               F
                      1994
        10.6          Employment Agreement with J.S. Whang, dated February 28, 1997                  K
        10.7          Contract of Sale (Real Property) dated June 21, 1996 between                   G
                      Tempress Systems, Inc. and Orgelmakerij Gedr. Rell B.V.
        10.8          Employment Agreement, dated July 1, 1997, between the Registrant               J
                      and John R. Krieger
        10.9          Registration Rights Agreement, dated July 1, 1997, between the                 J
                      Registrant and John R. Krieger
       10.10          Asset Purchase Agreement, dated July 1, 1997, among the                        J
                      Registrant, P.R. Hoffman Machines Corporation and John R. Krieger
       10.11          1998 Employee Stock Option Plan                                                L
       10.12          1999 Amendment to Employment Agreement, between the Registrant and             Q
                      John R. Krieger
       10.13          Sublease Agreement, dated July 1, 1999, between the Registrant and             Q
                      John R. Krieger
       10.14          Warrant to Purchase Common Stock, dated September 8, 2000                      P
       10.15          Stock and Warrant Purchase Agreement, dated September 8, 2000                  P
         21           Subsidiaries of the Registrant                                                 N
         23           Consent of Independent Public Accountant                                       *
         24           Powers of Attorney                                                    See Signature Page
         27           Financial Data Schedule                                                        *

</TABLE>

                                       47
<PAGE>   48

*        Filed herewith.

A        Incorporated by reference to the Company's Form S-18 Registration
         Statement No. 2-83934-LA.

B        Incorporated by reference to the Company's Annual Report on Form 10-K
         for the fiscal year ended September 30, 1987.

C        Incorporated by reference to the Company's Annual Report on Form 10-K
         for the fiscal year ended September 30, 1988.

D        Incorporated by reference to the Company's Annual Report on Form 10-K
         for the fiscal year ended September 30, 1991.

E        Incorporated by reference to the Company's Annual Report on Form 10-K
         for the fiscal year ended September 30, 1993.

F        Incorporated by reference to the Company's Form S-1 Registration
         Statement No. 33-77368.

G        Incorporated by reference to the Company's Form S-3 Registration
         Statement No. 333-09917.

H        Incorporated by reference to the Company's Form S-8 Registration
         Statement relating to the Amended and Restated 1995 Stock Option Plan
         and the 1995 Stock Bonus Plan filed with the Securities and Exchange
         Commission on September 9, 1997.

I        Incorporated by reference to the Company's Form S-8 Registration
         Statement relating to the Non-Employee Directors Stock Option Plan
         filed with the Securities and Exchange Commission on August 8, 1996.

J        Incorporated by reference to the Company's Current Report on Form 8-K,
         dated July 1, 1997.


K        Incorporated by reference to the Company's Quarterly Report on Form
         10-Q for the quarter ended June 30, 1997.

L        Incorporated by reference to the Company's Proxy Statement for
         shareholders meeting held on March 20, 1998.

M        Incorporated by reference to the Company's Current Report on Form 8-K,
         dated May 17,1999.


N        Incorporated by reference to the Company's Annual Report on Form 10-K
         for the fiscal year ended September 30, 1997.

O        Incorporated by reference to the Company's Proxy Statement for the
         annual shareholders meeting held on February 26, 1999.

P        Incoroporated by reference to the Company's Current Report on Form
         8-K, dated September 22, 2000.

Q        Incorporated by reference to the Company's Annual Report on Form 10-K
         for the fiscal year ended September 30, 1999.

(d)      Reports on Form 8-K

         The Company filed a Form 8-K on May 28, 1999, disclosing the adoption
         of a rights agreement dated May 17, 1999, between Amtech Systems, Inc.
         and American Securities Transfer & Trust, Inc.


                                       48
<PAGE>   49



                                   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.

                                      AMTECH SYSTEMS, INC.

December 22, 2000                     By:/s/  Jong S. Whang
                                        ----------------------------------------
                                              Jong S. Whang, President



                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints JONG S. WHANG and ROBERT T. HASS, and
each of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Form 10-K Annual
Report, 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 and about the premises, as fully and 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 his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report on Form 10-K 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/  Jong S. Whang                    Chairman of the Board, President                  December 22, 2000
-----------------------                                                                 ---------------------
Jong S. Whang                         (Principal Executive Officer)

/s/  Robert T. Hass                   Vice President-Finance and Director               December 22, 2000
-----------------------                                                                 ---------------------
Robert T. Hass                        (Chief Financial & Accounting Officer)

/s/  Donald F. Johnston               Director                                          December 22, 2000
-----------------------                                                                 ---------------------
Donald F. Johnston

/s/  Alvin Katz                       Director                                          December 22, 2000
-----------------------                                                                 ---------------------
Alvin Katz

/s/  Bruce R. Thaw                    Director                                          December 22, 2000
-----------------------                                                                 ---------------------
Bruce R. Thaw
</TABLE>



                                       49