<PAGE>   1


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

                                    FORM 10-Q
            (MARK ONE)

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

         For The Quarterly Period Ended September 2, 2000

       / / 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 0-26784

                               SPEEDFAM-IPEC, INC.
              (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S>                                                                          <C>
                                ILLINOIS                                            36-2421613
     (State Or Other Jurisdiction Of Incorporation Or Organization)             (I.R.S. Employer
                                                                              Identification Number)

                305 North 54th Street, Chandler, Arizona                             85226
                (Address of principal executive offices)                           (Zip Code)
</TABLE>


        Registrant's telephone number, including area code (480) 705-2100

     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
                       YES    /x/            No / /


     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date (September 29, 2000).

                  Common Stock, no par value: 29,912,569 shares
<PAGE>   2
                               SPEEDFAM-IPEC, INC.

                                      INDEX




<TABLE>
<CAPTION>
                                                                                                                          Page
                                                                                                                          ----
<S>                                                                                                                       <C>
PART I            FINANCIAL INFORMATION

       Item 1.    Financial Statements
                           Condensed Consolidated Balance Sheets
                                September 2, 2000 and June 3, 2000.....................................................    2

                           Condensed Consolidated Statements of Operations
                               Quarter Ended September 2, 2000 and August 31, 1999.....................................    3

                           Condensed Consolidated Statements of Cash Flows
                               Quarter Ended September 2, 2000 and August 31, 1999.....................................    4

                           Notes to Condensed Consolidated Financial Statements........................................    5

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

       Item 3.   Quantitative and Qualitative Disclosures about Market Risk............................................   20


PART II           OTHER INFORMATION

       Item 6.    Exhibits and Reports on Form 8-K......................................................................  20

SIGNATURE...............................................................................................................  21

EXHIBIT INDEX
</TABLE>


                                       1
<PAGE>   3
                         PART I - FINANCIAL INFORMATION

                               SPEEDFAM-IPEC, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)



<TABLE>
<CAPTION>
                                                                               September 2,       June 3,
                                                                                   2000             2000
                                                                               -----------        ---------
<S>                                                                            <C>                <C>
ASSETS
Current assets:
   Cash and cash equivalents                                                     $  81,800        $  72,060
   Short-term investments                                                           35,723           28,236
   Trade accounts receivable, net                                                  106,053          129,102
   Inventories                                                                     100,572           81,192
   Other current assets                                                              7,223            3,301
                                                                                 ---------        ---------
      Total current assets                                                         331,371          313,891
Investments in affiliates                                                               --           19,810
Property, plant and equipment, net                                                  84,862           87,913
Other assets                                                                        11,136           13,466
                                                                                 ---------        ---------
      Total assets                                                               $ 427,369        $ 435,080
                                                                                 =========        =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Current portion of long-term debt                                             $   1,288        $   1,077
   Accounts payable and due to affiliates                                           54,288           51,354
   Accrued liabilities                                                              38,233           23,264
                                                                                 ---------        ---------
      Total current liabilities                                                     93,809           75,695
                                                                                 ---------        ---------
 Long-term liabilities:
   Long-term debt                                                                  115,449          115,162
   Other liabilities                                                                 7,138            7,253
                                                                                 ---------        ---------
      Total long-term liabilities                                                  122,587          122,415
                                                                                 ---------        ---------
Stockholders' equity:
   Common stock, no par value, 96,000 shares authorized, 29,911 and 29,703
       shares issued and outstanding at September 2, 2000
       and June 3, 2000, respectively                                                    1                1
   Additional paid-in capital                                                      433,413          430,706
   Retained earnings (deficit)                                                    (223,675)        (194,489)
   Accumulated other comprehensive income                                            1,234              752
                                                                                 ---------        ---------
      Total stockholders' equity                                                   210,973          236,970
                                                                                 ---------        ---------
         Total liabilities and stockholders' equity                              $ 427,369        $ 435,080
                                                                                 =========        =========
</TABLE>


     See Accompanying Notes to Condensed Consolidated Financial Statements.


                                       2
<PAGE>   4
                SPEEDFAM-IPEC, INC. AND CONSOLIDATED SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               Quarter Ended September 2, 2000 and August 31, 1999
            (dollars and shares in thousands, except per share data)



<TABLE>
<CAPTION>
                                                                      Quarter Ended
                                                              September 2,     August 31,
                                                              ------------     ----------
                                                                  2000            1999
                                                                --------        --------

<S>                                                           <C>              <C>
Net sales                                                       $ 74,707        $ 50,327
Cost of sales                                                     54,988          35,160
                                                                --------        --------
      Gross margin                                                19,719          15,167
                                                                --------        --------
Operating expenses:
Research and development                                          16,557          12,890
Selling, general and administrative                               16,453          12,260
Restructuring charges                                              5,123              --
                                                                --------        --------
      Total operating expenses                                    38,133          25,150
      Operating loss                                             (18,414)         (9,983)
Other expense, net                                                  (121)            (88)
                                                                --------        --------
      Loss before income taxes and equity earnings (loss)        (18,535)        (10,071)
Income taxes                                                          --              --
                                                                --------        --------
      Loss before equity earnings (loss)                         (18,535)        (10,071)
Loss on disposal of investment in affiliate                      (10,763)             --
Equity in net earnings (loss) of affiliates
                                                                     110            (892)
                                                                --------        --------
      Net loss attributable to common stockholders              $(29,188)       $(10,963)
                                                                ========        ========

Net loss per share - basic and diluted                          $  (0.98)       $  (0.37)
                                                                ========        ========

Weighted average number of shares - basic and diluted             29,818          29,404
                                                                ========        ========
</TABLE>


     See Accompanying Notes to Condensed Consolidated Financial Statements.


                                       3
<PAGE>   5
                               SPEEDFAM-IPEC, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
               Quarter Ended September 2, 2000 and August 31, 1999
                             (dollars in thousands)

<TABLE>
<CAPTION>

                                                                                    Quarter Ended
                                                                             September 2,    August 31,
                                                                                2000            1999
                                                                             ------------    ----------
<S>                                                                          <C>             <C>
 CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                                   $(29,188)       $(10,963)
   Adjustments to reconcile net loss to net cash used
   in operating activities:
       Equity in net (earnings) loss of affiliates                                (110)            892
       Depreciation and amortization                                             4,523           4,421
       Loss on disposal of investment in affiliate                              10,763              --
       Fixed asset impairments                                                   2,391              --
       Restructuring charges                                                     8,474              --
       Changes in operating assets and liabilities:
         (Increase) decrease in trade accounts receivable                       28,699          (1,587)
         (Increase) decrease in inventories                                    (21,614)            697
         (Increase) decrease in other current assets                            (1,843)            175
         Increase (decrease) in accounts payable and due to affiliates           8,493          (1,170)
         Increase (decrease) in customer deposits and accrued expenses           9,242          (7,348)
                                                                              --------        --------
   Net cash provided by (used in) operating activities                          19,830         (14,883)
                                                                              --------        --------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of short-term
investments                                                                     (7,268)         (26,024)
   Maturities of short-term investments                                             --           10,918
   Proceeds from licensing technology and transfer of associated assets             --           2,335
   Capital expenditures                                                         (3,596)         (2,233)
   Other investing activities                                                   (1,497)            603
                                                                              --------        --------
   Net cash provided by (used in) investing activities                         (12,361)         (14,401)
                                                                              --------        --------
CASH FLOWS FROM FINANCING ACTIVITIES;
   Proceeds from exercise of stock options and employee stock
      purchases                                                                  2,710             123
   Principal payments on long-term debt                                           (285)           (169)
                                                                              --------        --------
   Net cash provided by (used in) financing activities                           2,425             (46)
   Effects of foreign currency rate changes on cash                               (154)             28
                                                                              --------        --------
   Net increase (decrease) in cash and cash equivalents                          9,740         (29,302)
                                                                              --------        --------
   Cash and cash equivalents at beginning of the year                           72,060          97,003
                                                                              --------        --------
   Cash and cash equivalents at end of period                                 $ 81,800        $ 67,701
                                                                              ========        ========
   Supplemental cash flow information:
       Unrealized gain on securities                                          $    220        $     --
</TABLE>


     See Accompanying Notes to Condensed Consolidated Financial Statements.


                                       4
<PAGE>   6
                               SPEEDFAM-IPEC, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(1)      BASIS OF PRESENTATION

          The accompanying unaudited condensed consolidated financial statements
     have been prepared in accordance with accounting principles generally
     accepted in the United States for interim financial information and with
     the instructions to Form 10-Q and Article 10 of Regulation S-X.
     Accordingly, they do not include all of the information and footnotes
     required by accounting principles generally accepted in the United States
     for complete financial statements. In the opinion of management, all
     adjustments (consisting of normal recurring items) considered necessary for
     a fair presentation have been included. Actual results may differ from
     these estimates. Operating results for the quarter ended September 2, 2000
     are not necessarily indicative of the results that may be expected for the
     year ending June 2, 2001. For further information, refer to the
     consolidated financial statements and notes thereto included in the
     Company's annual Report on Form 10-K for the year ended June 3, 2000.

          The Company has changed its fiscal year from the twelve-month period
     ended May 31 to a 52 or 53 week period ending on the Saturday nearest May
     31. Accordingly, the 2001 fiscal year ends on June 2, 2001 and contains 52
     weeks whereas the 2000 fiscal year ended on June 3, 2000 and contained 53
     weeks. All references to years relate to fiscal years unless otherwise
     noted.

          Since 1971, the Company had owned a 50% interest in SpeedFam-IPEC Co.,
     Ltd. (together with its subsidiaries and joint ventures, also known as the
     Far East Joint Venture) which was accounted for using the equity method of
     accounting. The remaining 50% was owned by Obara Corporation, a publicly
     traded Japanese company that supplies products to the automotive industry.
     On August 30, 2000, the Far East Joint Venture between the Company and
     Obara Corporation was officially dissolved. Under the terms of the Master
     Reorganization Agreement, ownership of the CMP operations of the Far East
     Joint Venture was transferred to the Company. The CMP operations, as of the
     date of acquisition, have been consolidated in the accompanying unaudited
     condensed consolidated financial statements.

(2)      INVENTORIES

             The components of inventory were (in thousands):
<TABLE>
<CAPTION>
                     September 2, 2000     June 3, 2000
                     -----------------     ------------
<S>                  <C>                   <C>
Raw materials             $ 54,177           $ 54,058
Work-in-process             35,510             21,396
Finished goods              10,885              5,738
                          --------           --------
                          $100,572           $ 81,192
                          ========           ========

</TABLE>



(3)      SHORT-TERM INVESTMENTS

              The Company's short-term investments are classified as
        available-for-sale and recorded at their fair market value. An
        unrealized loss of approximately $0.3 million and $0.5 million is
        included as part of accumulated other comprehensive income within
        stockholders' equity at September 2, 2000 and June 3, 2000,
        respectively.


                                       5
<PAGE>   7
(4)      ACCRUED LIABILITIES

         Accrued liabilities are summarized as follows (in thousands):
<TABLE>
<CAPTION>
                                                          September 2, 2000    June 3, 2000
                                                          -----------------    ------------
<S>                                                       <C>                  <C>
Accrued warranty and installation costs                        $13,141           $ 8,665
Accrued payroll and benefits                                     5,850             4,588
Accrued merger, integration, and restructuring costs             4,678             1,952
Other accrued liabilities                                       14,564             8,059
                                                               -------           -------
                                                               $38,233           $23,264
                                                               =======           =======

</TABLE>


(5)      COMPREHENSIVE LOSS
           The Company's comprehensive loss was as follows (in thousands):
<TABLE>
<CAPTION>
                                                           Quarter Ended
                                                September 2, 2000     August 31, 1999
                                                -----------------     ---------------
<S>                                             <C>                   <C>
Net loss                                             $(29,188)           $(10,963)
Other comprehensive income (loss):
  Unrealized gain on securities                           220                  --
  Foreign currency translation adjustments                262                 933
                                                     --------            --------
Comprehensive loss                                   $(28,706)           $(10,030)
                                                     ========            ========

</TABLE>


                     Accumulated Other Comprehensive Income

<TABLE>
<CAPTION>
                                                                      Unrealized
                                            Foreign Currency        Gain (Loss) on            Accumulated Other
                                               Translation            Securities         Comprehensive Income (Loss)
                                            ----------------        --------------       --------------------------
<S>                                         <C>                     <C>                  <C>
Balance at June 3, 2000                         $ 1,239                $  (487)                    $   752
Three month period change                           262                    220                         482
                                                -------                -------                     -------
Balance at September 2, 2000                    $ 1,501                $  (267)                    $ 1,234
                                                =======                =======                     =======


Balance at May 31, 1999                         $    22                $  (252)                    $  (230)
Three month period change                           933                     --                         933
                                                -------                -------                     -------
Balance at August 31, 1999                      $   955                $  (252)                    $   703
                                                =======                =======                     =======
</TABLE>


(6)    RESTRUCTURING AND OTHER CHARGES ASSOCIATED WITH THE DISPOSAL OF THE FAR
       EAST JOINT VENTURE

           On August 30, 2000, the Far East Joint Venture was officially
     dissolved. Under the terms of the Master Reorganization Agreement with
     Obara Corporation (Obara), ownership of the CMP operations of the Far East
     Joint Venture was transferred to the Company and specific personnel
     involved in CMP efforts became employees of the Company. Obara will
     continue the non-CMP activities of the Joint Venture which include the
     manufacture of silicon wafer and thin film memory disk polishing products.
     Under the terms of a distributor agreement signed on August 31, 2000, the
     Company will continue to act as


                                       6
<PAGE>   8
    a direct distributor in the United States and Europe for the wafer and disk
    polishing products manufactured by Obara and is prohibited from
    manufacturing these products.

         The Company recorded charges totaling $10.8 million related to the loss
    on disposal of the Company's 50% investment interest in the Far East Joint
    Venture and $8.4 million related to the Company's exit from the
    manufacturing of wafer and disk polishing products as the Company is
    prohibited from manufacturing these products. The $8.4 million is comprised
    of inventory write-offs of raw materials and spare parts related to silicon
    wafer and thin film memory disk polishing products; impairment of fixed
    assets of the exited operations; severance costs for three employees
    including a former executive of the Far East Joint Venture and other charges
    associated with the Company's plan to exit the manufacturing of wafer and
    disk polishing products. As of September 2, 2000, no expenses had been paid
    or charged to the liability. The following table summarizes the components
    of the restructuring and other charges (in thousands):

<TABLE>
<CAPTION>
                                                          September 2, 2000
                                                          -----------------
<S>                                                       <C>
Loss on disposal of investment in affiliate                    $10,763
Inventory write-offs                                             3,351
Fixed asset impairments                                          2,700
Severance costs                                                  1,191
Other costs                                                      1,232
                                                               -------
   Total                                                       $19,237
                                                               =======
</TABLE>

              These costs are classified in the statement of operations for the
    quarter ended September 2, 2000 in cost of sales, loss on disposal of
    investment in affiliate and operating expenses. The following table
    summarizes the classification of the restructuring and other charges (in
    thousands):

<TABLE>
<S>                                                            <C>
Cost of sales                                                  $ 3,351
Restructuring charges                                            5,123
Loss on disposal of investment in affiliate                     10,763
                                                               -------
   Total                                                       $19,237
                                                               =======
</TABLE>

              In addition, the Company recorded $2.4 million of asset impairment
    charges for CMP equipment that was designed by the Far East Joint Venture
    that will no longer be used in ongoing research and development programs.
    These charges were classified in the statement of operations for the quarter
    ended September 2, 2000 as research and development expenses.


                                       7
<PAGE>   9
(7)    MERGER, INTEGRATION, AND RESTRUCTURING COSTS ASSOCIATED WITH THE 1999
       MERGER

              In connection with the merger of SpeedFam International, Inc. and
       Integrated Process Equipment Corp. in April 1999, the Company recorded
       various merger, integration and restructuring costs. Direct merger costs
       primarily consisted of professional fees related to investment banking,
       legal and accounting services incurred through the date of the merger.
       The Company recorded integration and restructuring costs for lease
       terminations, the write-off of duplicative equipment previously used for
       demonstration purposes, the write-down of inventory and equipment related
       to product lines that will no longer be supported, and severance costs
       resulting from workforce reductions.

              The severance and other related employee costs provided for the
       reduction of approximately 70 employment positions resulting from
       facility closures, and the elimination of duplicate positions or
       positions no longer necessary due to the streamlining of operations.

              Through September 2, 2000, the Company incurred $27.0 million in
       asset write-downs and paid and charged to the liability $18.6 million.
       The remaining restructuring accrual for lease termination, severance and
       other expenses associated with the merger is approximately $8.3 million
       which the Company believes is adequate to cover the remaining
       liabilities. Lease termination costs on certain vacated facilities (which
       were included in the restructuring charge) primarily related to remaining
       rent, related utilities and common area maintenance on the closed
       Phoenix, Arizona manufacturing and administrative facility not
       recoverable through sublease income. Sublease activity began in May 2000
       (as reflected in the remaining accrual) and is projected to be carried
       out through the end of the Company's lease term. The Company's management
       has been and is currently in the process of securing additional subleases
       or other negotiated agreements for the Phoenix, Arizona manufacturing and
       administrative facility. The following table summarizes the components of
       the merger, integration, and restructuring costs (in thousands):

<TABLE>
<CAPTION>
                                                                         Quarter Activity
                                                  Accrued          ------------------------------         Accrued
                                                Liability at                   Cash                     Liability at
                                                June 3, 2000                Expenditures              September 2, 2000
                                                ------------                ------------              -----------------

<S>                                             <C>                         <C>                       <C>
        Lease termination costs                   $ 8,565                      (651)                     $ 7,914
        Severance costs                               372                      (213)                         159
        Other costs                                   264                        --                          264
                                                  -------                      ----                      -------
                                                  $ 9,201                      (864)                     $ 8,337
                                                  =======                      ====                      =======
</TABLE>


                                       8
<PAGE>   10
(8)      BUSINESS SEGMENT INFORMATION
              The Company classifies its products into three core business
       segments: (i) the CMP Group, which is comprised of the Company's
       development and production of chemical mechanical planarization systems;
       (ii) the Surface Technology Group, which is comprised of the distribution
       of high-throughput precision surface processing equipment used in thin
       film memory disk media and silicon wafer industries and the manufacture
       of polyvinyl alcohol products; and (iii) the Industrial Applications
       Group, which is comprised of the development and production of
       high-throughput precision surface processing equipment used in general
       industrial applications. Information concerning the Company's business
       segments during the quarter ended September 2, 2000 and August 31, 1999
       is as follows (in thousands):



<TABLE>
<CAPTION>
                                                                        Quarter Ended
                                                               September 2,          August 31,
                                                                  2000                  1999
                                                               ------------          ----------
<S>                                                            <C>                   <C>
Net sales:
CMP Group                                                       $ 65,305              $ 39,784
Surface Technology Group                                           5,534                 7,694
Industrial Applications Group                                      3,868                 2,849
                                                                --------              --------
Total net sales to unaffiliated customers                         74,707                50,327
                                                                --------              --------
Segment operating profit (loss):
CMP Group                                                         (4,452)               (5,339)
Surface Technology Group                                          (3,112)                 (400)
Industrial Applications Group                                        929                   230
                                                                --------              --------
Total segment operating loss                                      (6,635)               (5,509)
General corporate expense, net                                   (11,556)               (4,303)
Interest expense, net                                               (344)                 (259)
                                                                --------              --------
Loss before income taxes and equity earnings (loss)             $(18,535)             $(10,071)
                                                                ========              ========
</TABLE>


                                       9
<PAGE>   11
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

               The Company sells its products and services to three market
     segments: (1) semiconductor device manufacturers (CMP Group), (2) thin film
     memory disk media and silicon wafer manufacturers (Surface Technology
     Group), and (3) manufacturers of general industrial components (Industrial
     Applications Group).

               On August 30, 2000, the 30-year-old Far East Joint Venture
     between the Company and Obara Corporation was officially dissolved. Under
     the terms of the Master Reorganization Agreement with Obara Corporation,
     ownership of the CMP sales and service operations of the Far East Joint
     Venture was transferred to the Company and specific personnel involved in
     CMP efforts became employees of the Company. Obara Corporation will
     continue the non-CMP activities of the former Joint Venture, which include
     the manufacturing of silicon wafer and thin film memory disk polishing
     products. The Company will not compete with the non-CMP business and Obara
     will not compete with the CMP business for an initial period of five (5)
     years. The Company will indemnify Obara for any claims relating to the CMP
     business and Obara will indemnify the Company for any claims relating to
     the non-CMP business. Under the terms of a distributor agreement signed on
     August 31, 2000, the Company will continue to act as a direct distributor
     in the United States and Europe for the wafer and disk polishing products
     manufactured by Obara Corporation and is prohibited from manufacturing
     these products.

              The Company has changed its fiscal year from the twelve-month
     period ended May 31 to a 52 or 53 week period ending on the Saturday
     nearest May 31. Accordingly, the 2001 fiscal year ends on June 2, 2001 and
     contains 52 weeks whereas the 2000 fiscal year ended on June 3, 2000 and
     contained 53 weeks. All references to years relate to fiscal years unless
     otherwise noted.

     RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>
                                                                                   Quarter Ended
                                                                     September 2, 2000        August 31, 1999
                                                                     -----------------        ---------------
<S>                                                                  <C>                      <C>
        Net sales                                                            100.0%                100.0%
        Cost of sales                                                         73.6                  69.9
                                                                             -----                 -----
           Gross margin                                                       26.4                  30.1
           Research and development                                           22.1                  25.6
           Selling, general and administrative                                22.0                  24.3
           Restructuring charges                                               6.9                    --
                                                                             -----                 -----
        Operating loss                                                       (24.6)                (19.8)
        Other expense, net                                                    (0.2)                 (0.2)
                                                                             -----                 -----
        Loss from consolidated companies before income                       (24.8)                (20.0)
            taxes
        Income taxes                                                           0.0                   0.0
                                                                             -----                 -----
        Loss from consolidated companies                                     (24.8)                (20.0)
        Loss on disposal of investment in affiliate                          (14.3)                   --
        Equity in net earnings (loss) of affiliates                            0.1                  (1.8)
                                                                             -----                 -----
        Net loss                                                             (39.0)%               (21.8)%
                                                                             =====                 =====
</TABLE>


                                       10
<PAGE>   12
              Net Sales. Net sales for the first quarter of 2001 were $74.7
    million, up 48.5% from net sales of $50.3 million in the first quarter of
    2000. Net sales of CMP systems for the first quarter of 2001 totaled $65.3
    million or 87.4% of total net sales compared to $39.8 million or 79.0% of
    total net sales in the first quarter of 2000. Net sales for the first
    quarter of 2001 increased compared to the same quarter last year due to
    strong demand for semiconductor manufacturing equipment as the semiconductor
    manufacturing industry continued to recover from an industry downturn.
    Increased sales volume was driven by customer investments in both capacity
    and advanced technology to meet rising demand. Moreover, the increase in CMP
    system sales to almost 88% of total net sales signifies the Company's focus
    on the CMP market. In addition, the Company's recent agreement with Obara
    Corporation to transfer full ownership of the CMP sales and services of the
    former Far East Joint Venture to the Company will allow the Company to have
    direct control and tailor regional staffing to more aggressively take
    advantage of opportunities in the CMP markets of the Far East. From a
    geographic standpoint, for the first quarter of 2001, over 60% of the CMP
    revenue was generated in the Far East with just under 20% of CMP revenue
    each in Europe and the United States.

              Net sales of the Surface Technology Group in the first quarter of
    2001 accounted for $5.5 million, or 7.3% of total net sales, as compared to
    $7.7 million, or 15.2% of total net sales in the first quarter of 2000.
    During the first quarter of 2001, thin film memory disk manufacturers
    continued to experience manufacturing over-capacity which in turn reduced
    capital spending. The thin film memory disk industry continues to feel
    "price per unit" pressures which in turn has forced a reduction in capital
    spending for equipment the Company supplies from its U.S. operations. With
    the dissolution of the Far East Joint Venture, the Company has exited from
    the manufacturing of silicon wafer and thin film memory disk polishing
    equipment, as required by the agreement with Obara Corporation. However, the
    Company does not anticipate any significant changes in financial reporting
    and trends as it will continue to act as a direct distributor in the United
    States and Europe for the wafer and disk polishing products manufactured by
    Obara Corporation.

              Net sales of the Industrial Applications Group in the first
    quarter of 2001 increased to $3.9 million or 5.2% of total net sales
    compared to $2.8 million or 5.8% of total net sales for the same period last
    year due to increased shipments in European markets.

              Included in net sales for the first quarter of 2001 are
    commissions from affiliates totaling $0.6 million. No commissions were
    recorded in the first quarter of 2000 due to the slowdown in the thin film
    memory and silicon wafer markets.

              In December 1999, the Staff of the Securities and Exchange
    Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 101, "Revenue
    Recognition in Financial Statements". SAB 101 provides guidance on the
    recognition, presentation and disclosure of revenue in financial statements
    of all publicly held companies. The semiconductor capital equipment industry
    association and a number of association members have met with the Staff of
    the SEC to discuss and evaluate the applicability of SAB 101 and various
    practical implementation considerations. On June 26, 2000, the Staff of the
    SEC issued Staff Accounting Bulletin No. 101B (SAB 101B), which permitted
    the delay in the Company's implementation date of SAB 101 until the fourth
    quarter of 2001. Accordingly, any shipments previously reported as revenue,
    including revenue reported during the first nine months of 2001, which do
    not meet SAB 101's guidance will be recorded as revenue in future periods.
    Changes in our revenue recognition policy resulting from the interpretation
    of SAB 101 and SAB 101B would not involve the restatement of prior financial
    statements, but would, to the extent applicable, be reported as a change in
    accounting principle at the end of 2001.

              Management believes that SAB 101 and SAB 101B, to the extent that
    they impact the Company, will not affect the underlying strength or weakness
    of the business operations as measured by the dollar value of the Company's
    product shipments and cash flows.


                                       11
<PAGE>   13
              Gross Margin. In the first quarter of 2001, gross margin was $19.7
     million, or 26.4% of net sales, compared to $15.2 million, or 30.1% of net
     sales in the first quarter of 2000. Included in gross margin for the first
     quarter of 2001 is $3.4 million of inventory write-offs associated with the
     Company's exit from the manufacturing of wafer and disk polishing
     equipment. Excluding these restructuring charges, gross margin in dollars
     and as a percentage of net sales increased primarily due to the increase in
     total sales volume in the first quarter of 2001 compared to the prior year
     period.

              Research and Development. In the first quarter of 2001, research
     and development expense increased to $16.6 million, or 22.1% of net sales,
     compared to $12.9 million, or 25.6% of net sales in the first quarter of
     2000. The increase primarily results from $2.4 million of asset impairment
     charges for CMP equipment that was designed by the Far East Joint Venture
     that will no longer be used in ongoing research and development programs.

              Selling, General and Administrative. In the first quarter of 2001,
     selling, general and administrative expenses increased to $16.5 million, or
     22.0% of net sales, from $12.3 million, or 24.3% of total net sales in the
     first quarter of 2000. The dollar amount increase in selling, general and
     administrative expenses primarily results from significant marketing and
     promotional costs incurred in connection with product launch activities
     related to the introduction of the Company's new products, the Momentum
     (TM) and the Auriga Vision. (TM)

              Restructuring Charges. During the quarter ended September 2, 2000,
     the Company recorded charges of $5.1 million that primarily related to
     restructuring associated with the Company's plan to exit from the
     manufacturing of silicon wafer and thin film memory disk polishing
     equipment, as required by the distribution agreement with Obara
     Corporation. Approximately $2.7 million related to the impairment of fixed
     assets of the exited operations; $1.2 million related to severance costs
     for three employees including a former executive of the Far East Joint
     Venture; $1.2 million related to other restructuring charges associated
     with the Company's plan to exit the manufacturing of wafer and disk
     polishing products.

              Provision for Income Taxes. At the end of the first quarter of
     2001 and 2000, the Company established a valuation allowance for deferred
     tax assets generated by its operating losses and is in a net operating loss
     carryforward position. As a result, the effective tax rate for the first
     quarter of 2001 and 2000 was zero. While the Company will reassess its tax
     situation each quarter, the Company expects that its effective tax rate
     will approximate zero throughout 2001.

              Loss on Disposal of Investment in Affiliate and Equity in Net
     Earnings (Loss) of Affiliates. At the end of the first quarter of 2001, the
     Company reported a $10.8 million loss on disposal of investment in
     affiliate in connection with the dissolution of the Far East Joint Venture.
     The 30-year-old Far East Joint Venture between the Company and Obara
     Corporation was officially dissolved on August 30, 2000. Under the terms of
     the Master Reorganization Agreement with Obara Corporation, ownership of
     the CMP sales and service operations of the Far East Joint Venture was
     transferred to the Company and specific personnel involved in CMP efforts
     became employees of the Company. Obara Corporation will continue the
     non-CMP activities of the former Joint Venture, which includes the
     manufacturing of wafer and disk polishing products. The Company will
     continue to act as a direct distributor in the United States and Europe for
     the wafer and disk polishing products manufactured by Obara Corporation.

               For the first quarter of 2001, equity in net earnings (loss) of
     affiliates increased to $0.1 million compared to ($0.9 million) in the
     first quarter of 2000. This increase was due to increased sales revenue of
     the Far East Joint Venture. With the integration of the former Far East
     Joint Venture's CMP operations into current operations, the Company does
     not anticipate any significant changes in financial reporting and trends.
     Historically, the Company recorded the CMP costs of the joint venture in
     operating expenses under


                                       12
<PAGE>   14
    a cost-plus arrangement. With the integration of CMP operations related to
    the previous Far East Joint Venture, the Company will incur these same costs
    as direct expenses and will no longer be reporting equity in net earnings
    (loss) of affiliates on the income statement.

LIQUIDITY AND CAPITAL RESOURCES

              As of September 2, 2000, the Company had $117.5 million in cash,
    cash equivalents and short-term investments, compared to $100.3 million at
    June 3, 2000. During the first quarter of 2001, the Company had $19.8
    million of cash provided by operating activities compared to cash used of
    $14.9 million in operating activities during the same period in 2000.
    Approximately, $23.0 million in cash was provided due to a decrease in
    working capital. Cash provided by operations in the first quarter of 2001
    also included the net loss of $29.2 million adjusted for non-cash items
    totaling $21.6 million: $10.8 million related to the loss on disposal of
    investment in affiliate; $8.4 million primarily related to non-cash
    restructuring charges incurred in connection with the Company's plan to exit
    the manufacturing of wafer and disk polishing products and $2.4 million
    related to fixed asset impairments. In addition, $4.5 million related to
    depreciation and amortization expense.

              Net cash used in investing activities totaled $12.4 million in the
     first quarter of 2001 compared with net cash used of $14.4 million during
     the same period in 2000. Cash was primarily used to purchase short-term
     investments totaling approximately $7.3 million. In addition, there were
     capital expenditures of $3.6 million in the first quarter of 2001. The
     majority of the cash expenditures was used to fund additional building
     construction, software and equipment purchases.

              Financing activities provided cash of $2.4 million during the
     first quarter of 2001 compared with cash used in financing activities of
     approximately $0.1 million during the same period of 2000. The sale of
     stock to employees and the exercise of stock options generated proceeds of
     $2.7 million during the first quarter of 2001. Principal payments on
     capital lease obligations amounted to $0.3 million during the first quarter
     of 2001.

              The Company believes that its current cash, cash equivalents and
     short-term investments will be sufficient to meet the Company's cash needs
     during the next 12 months.

              Statement of Financial Accounting Standards (SFAS) No. 133,
    "Accounting for Derivative Instruments and Hedging Activities" and No. 138,
    "Accounting for Certain Derivative Instruments and Certain Hedging
    Activities", established accounting and reporting standards for derivative
    financial instruments and hedging activities. These statements require that
    the Company recognize all derivatives as either assets or liabilities on the
    balance sheet and measure those instruments at fair value. Derivatives that
    are not hedges must be adjusted to fair value through income. If the
    derivative is a hedge, depending on the nature of the hedge, changes in the
    fair value of derivatives will either be offset against changes in the fair
    value of the hedged assets, liabilities, or firm commitments through
    earnings or recognized in other comprehensive income until the hedged item
    is recognized in earnings. The ineffective portion of a derivative's change
    in fair value will be immediately recognized in earnings. The Company will
    adopt SFAS No. 133 and No. 138 in the first quarter of 2002, and does not
    expect the adoption to have a material effect on its financial condition or
    results of operations.

              In December 1999, the Staff of the Securities and Exchange
    Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 101, "Revenue
    Recognition in Financial Statements". SAB 101 provides guidance on the
    recognition, presentation and disclosure of revenue in financial statements
    of all publicly held companies. The semiconductor capital equipment industry
    association and a number of association members have met with the Staff of
    the SEC to discuss and evaluate the applicability of SAB 101 and various
    practical implementation considerations. On June 26, 2000, the Staff of the
    SEC issued Staff Accounting Bulletin No. 101B (SAB 101B), which permitted
    the delay in the Company's implementation date of SAB 101 until the fourth
    quarter of 2001. Accordingly, any shipments previously reported as


                                       13
<PAGE>   15
    revenue, including revenue reported during the first nine months of 2001,
    which do not meet SAB 101's guidance will be recorded as revenue in future
    periods. Changes in our revenue recognition policy resulting from the
    interpretation of SAB 101 and SAB 101B would not involve the restatement of
    prior financial statements, but would, to the extent applicable, be reported
    as a change in accounting principle at the end of 2001.

              Management believes that SAB 101 and SAB 101B, to the extent that
    they impact the Company, will not affect the underlying strength or weakness
    of the business operations as measured by the dollar value of the Company's
    product shipments and cash flows.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

              This report contains forward-looking statements within the meaning
    of Section 27A of the Securities Act of 1933 and Section 21E of the
    Securities Exchange Act of 1934. Actual results could differ materially from
    those projected in the forward-looking statements because of a number of
    factors, risks and uncertainties, including the risk factors described in
    this discussion and elsewhere in this report. Such forward-looking
    statements include, but are not limited to, statements that relate to the
    Company's future revenue, product development, product backlog, customers,
    demand, acceptance and market share, competitiveness, gross margins, levels
    of research and development and operating expenses, intellectual property,
    management's plans and objectives for current and future operations of the
    Company, the effects of the Company's reorganization of the Far East Joint
    Venture, and the markets in which the Company does business. In addition,
    the words "anticipate", "expect", "intend", "believe" and similar
    expressions generally identify forward-looking statements. The information
    included in this report is as of the filing date with the Securities and
    Exchange Commission and future events or circumstances could differ
    significantly from the forward-looking statements included herein.


                                       14
<PAGE>   16
                CERTAIN FACTORS AFFECTING THE COMPANY'S BUSINESS

              The Company's business is subject to numerous risks, including
    those discussed below. If any of the events described in these risks occurs,
    the Company's business, financial condition and results of operations could
    be seriously harmed.

              The Company depends on selling a small number of high-priced
     machines. The Company derives a significant portion of its revenue from the
     sale of a relatively small number of CMP systems. Thus, order and delivery
     delays and cancellations, even of one or two systems, may cause the Company
     to miss quarterly revenue and profit expectations.

              The Company's quarterly operating results may fluctuate for
    reasons not within its control, which may affect the Company's stock price.
    The Company's quarterly operating results may fluctuate due to a variety of
    factors, including:

    -  industry demand for capital equipment, which depends on economic
       conditions in the semiconductor, memory disk and silicon wafer markets

    -  timing of new product introductions

    -  ability to develop and implement new technologies

    -  timing, cancellation or delay of customer orders and shipments

    -  unexpected costs associated with sales and service of the CMP tools and
       processes

    -  foreign currency exchange rates

    -  changes in analysts' earnings estimates

    -  announcements regarding restructurings, technological innovations,
       departures of key officers or employees, or the introduction of new
       products

              Results of operations in any period are not an indication of
    future results. Fluctuations in the Company's operating results may also
    result in fluctuations in the Company's common stock price. The Company's
    stock price may also fluctuate due to factors specific to the semiconductor
    industry, which has experienced significant price fluctuations in recent
    years. Investors in the Company's stock should be willing to incur the risk
    of such price fluctuations.

              If the market price of the Company's stock is adversely affected,
     the Company may experience difficulty in raising capital or making
     acquisitions. In addition, the Company may become the object of securities
     class action litigation. If the Company is sued in a securities class
     action, the Company may incur substantial costs and management's attention
     and resources may be diverted.

              The Company's current business model is predicated on closing and
     fulfilling expected orders for its Momentum product. A significant portion
     of the Company's projected revenue for the fiscal year ending June 2, 2001
     depends on sales of its Momentum product. If the Company is unable to close
     anticipated orders for the Momentum product or fulfill orders for the
     Momentum product in its fiscal year ending June 2, 2001, the Company's
     revenue for that period will be adversely affected.


              The Company must succeed in selling CMP equipment for 300
     millimeter and copper applications in order to increase its revenue and
     maintain market share. Semiconductor manufacturers currently purchase CMP
     equipment predominantly to manufacture 200 millimeter wafers, using CMP to
     polish the tungsten and oxide layers of these wafers. Many of those same
     manufacturers are now beginning to develop the ability to make 300
     millimeter wafers and to process copper layers for both 200 millimeter and
     300 millimeter wafers. Many of these manufacturers are currently qualifying
     CMP equipment for 300 millimeter tungsten, 300 millimeter oxide and for
     copper layers for both the 200 millimeter and 300 millimeter wafers. In the
     future, it is anticipated that semiconductor manufacturers will purchase
     CMP equipment for volume production of 300 millimeter and/or copper-based
     wafers. If the Company does not win qualification contests for 300
     millimeter and/or copper-based wafers, it may experience difficulty
     achieving volume sales of this next-generation equipment to semiconductor
     manufacturers, which could result in declining  revenues.

              The Company faces intense competition, including from companies
     with greater resources. Several companies currently market CMP systems that
     directly compete with the Company's products, including Applied Materials,
     Inc. and Ebara Corporation. For several reasons, the Company may not
     compete effectively with competitors. These reasons include:

    -  Some competitors may have greater financial resources than the Company.
       They also may have more extensive engineering, manufacturing, marketing
       and customer service and support capabilities.


                                       15
<PAGE>   17
    -  Some competitors may supply a broader range of semiconductor capital
       equipment than the Company. As a result, these competitors may have
       better relationships with semiconductor manufacturers, including current
       and potential customers of the Company.

    -  The Company expects competitors to continue to improve their existing
       technology and introduce new products. This could cause a decline in the
       Company's sales or lead to intensified price-based competition.

    -  Other capital equipment manufacturers not currently involved in the
       development of CMP systems may enter the market or develop technology
       that reduces the need for the Company's products.

    -  Once a semiconductor manufacturer commits to purchase a competitor's
       equipment, the manufacturer generally relies on that equipment for an
       entire production line and continues to purchase that equipment
       exclusively for an extended period of time.

              Increased competitive pressure could lead to lower prices for the
    Company's products, thereby damaging the Company's business. There can be no
    assurance that the Company will be able to compete successfully in the
    future.

              The Company may not develop products in time to meet changing
    technologies. Semiconductor manufacturing equipment and processes are
    subject to rapid technological changes and product obsolescence. The success
    of the Company in developing, introducing and selling new and enhanced
    systems depends upon a variety of factors including:

    -  product selection

    -  timely and efficient completion of product design and development

    -  timely and efficient implementation of manufacturing and assembly
       processes

    -  product performance in the field

    -  effective sales and marketing

              The Company's business is highly cyclical. The Company's business
    depends substantially on the capital expenditures of semiconductor
    manufacturers and, to a lesser extent, thin film memory disk and silicon
    wafer manufacturers. These industries are highly cyclical and have
    historically experienced periodic downturns, which have had a material
    adverse effect on the acquisition of capital equipment and other products
    used in the manufacturing process, including products offered by the
    Company. These downturns have in the past and are expected in the future to
    materially adversely affect the business and operating results of the
    Company. The semiconductor device industry has recently experienced a
    slowdown and the memory disk and silicon wafer industries are currently
    experiencing a slowdown. These events have negatively impacted the Company's
    results of operations.

              Product or process development problems could harm the Company's
    results of operations. The Company's products are complex, and from time to
    time have defects or bugs that are difficult and costly to fix. This can
    harm results of operations for the Company, in two ways:

    -  The Company incurs substantial costs to ensure the functionality and
       reliability of products earlier in their life cycle. This can reduce
       orders, increase manufacturing costs, adversely impact working capital
       and increase service and warranty expenses.

    -  The Company requires significant lead-times between product introduction
       and commercial shipment. As a result, the Company may have to write off
       inventory and other assets related to products and could lose


                                       16
<PAGE>   18
       customers and revenue.

              There can be no assurance that the Company will be successful in
    preventing product and process development problems that could potentially
    harm the Company's results of operations.

              The Company depends on a small number of major customers.
    Currently, and for the foreseeable future, the Company expects that it will
    sell machines to a limited number of major customers. To date, the CMP
    process has been used primarily to fabricate advanced semiconductors, which
    accounts for only a portion of the overall semiconductor market. The loss of
    a significant customer or a substantial reduction in orders by any
    significant customer, including reductions due to customer departures from
    recent buying patterns, market, economic or competitive conditions in the
    semiconductor industry, could damage the Company's business.

              Orders in backlog may not result in future revenue if customers
    cancel or reschedule orders. The Company includes in backlog only those
    customer orders for which it has accepted purchase orders. Expected revenue
    may be lower if customers cancel or reschedule orders, which they can
    generally do without penalty.

              The Company's success depends on international sales, particularly
    in Asia and Europe. International sales accounted for 67.9% of the
    Company's total revenue for the first quarter of 2001, 69.6% for 2000, and
    37.4% for 1999. The Company expects that international sales will continue
    to account for a significant portion of total revenue in future periods.
    International sales are subject to risks, including:

    -  foreign exchange issues

    -  political, economic and regulatory environment of the countries where
       customers are located

    -  collectibility of accounts receivable

    -  inadequate intellectual property protection

    -  intense price competition

              The Company derives a substantial portion of its revenues from
    customers in Asian countries particularly Taiwan and Korea. Economic
    developments in late 1997 and early 1998 resulted in decreased capital
    investments by Asian customers. Recent economic developments indicate that
    the economies of Taiwan, Korea and other Asian countries have recovered
    somewhat from 1997 and 1998 levels. Any negative economic developments or
    delays in the economic recovery of Asian countries could result in the
    cancellation or delay of orders for the Company's products from Asian
    customers, thus damaging the Company's business.

              The Company may not realize the potential benefits of the
    reorganization of the Far East Joint Venture. The reorganization of the Far
    East Joint Venture makes the Company more dependent on the CMP business. If
    this market fails to continue to develop, the Company will suffer.

              Also, the success of the Company's CMP operations in Asia after
    the reorganization depends upon its ability to retain key employees. None of
    the key employees in Asia have long-term employment contracts. The Company
    does not have any direct experience managing operations in Asia. Some
    employees may decide to leave after the reorganization for this and other
    reasons. This may negatively affect the Company's operations in Asia, which
    represent a large portion of the Company's total revenue.

              If the Company is unable to protect its intellectual property, its
    business could suffer. The Company's intellectual property portfolio is very
    important to its success. However, the Company may not be


                                       17
<PAGE>   19
    able to protect its technology because:

    -  pending and new patent applications may not be approved in a timely
       manner or approved at all

    -  third parties may try to challenge or invalidate existing patents and new
       patents

    -  policing unauthorized use of intellectual property is difficult and
       expensive

    -  the laws of some foreign countries do not protect intellectual property
       rights as much as U.S. laws

    -  competitors may independently develop similar technology or design around
       intellectual property owned by the Company

              The Company's growth depends on continued and increased acceptance
    of CMP among semiconductor manufacturers. While CMP is used by a number of
    advanced logic semiconductor manufacturers, CMP has been used to manufacture
    advanced memory devices only in the past 3 years. Continued and increased
    acceptance of CMP systems depends on many factors considered by potential
    customers, including:

    -  cost of ownership

    -  throughput

    -  process flexibility

    -  performance

    -  reliability

    -  customer support

              Failure to adequately meet potential customers' needs with respect
    to one or more of these factors may result in decreased acceptance of CMP
    and, therefore, the Company's CMP systems, which may in turn negatively
    impact the Company's profitability.

              Third parties may prevent the Company from selling products that
    allegedly infringe on those third parties' intellectual property rights. The
    Company cannot be certain that third parties will not in the future claim
    that its products infringe their intellectual property rights. Third parties
    may

     - bring claims of patent, copyright or trademark infringement

     - obtain patents or other intellectual property rights that limit the
       Company's ability to do business or require the Company to license or
       cross-license technology

     - bring costly, time consuming lawsuits

              Third parties hold many patents relating to CMP machines and
    processes. In the event the Company loses any of its intellectual property
    rights or otherwise determines that it needs to obtain licenses to third
    party intellectual property, there is no assurance that the Company will be
    able to obtain such licenses on reasonable terms, if at all. The Company
    currently licenses the right to manufacture CMP machines employing an
    orbital motion in its Avant Gaard 676, 776, 876 and Momentum (TM) from a
    semiconductor manufacturer.


                                       18
<PAGE>   20
              The Company may be subject to risks associated with acquisitions
    and dispositions. The Company continually evaluates strategic acquisitions
    of other businesses and dispositions of portions of its business that it
    determines are not complementary to its strategy. If the Company were to
    consummate an acquisition, the Company would be subject to a number risks,
    including the following:

    -  difficulty in assimilating the acquired operations and retaining acquired
       personnel

    -  limits on the Company's ability to retain acquired distribution channels
       and customers

    -  disruption of the Company's ongoing business

    -  limits on the Company's ability to successfully incorporate acquired
       technology and rights into its service offerings

    -  maintenance of uniform standards, controls, procedures and policies

              The Company is dependent on key management and technical
    personnel. The Company's performance and ability to execute is substantially
    dependent on the performance of the Company's executive officers and key
    technical and engineering employees. The loss of the services of any of
    these executive officers or key employees could damage the Company's
    business.

              The Company's future success also depends on its ability to
    identify, hire, train and retain other highly qualified managerial and
    technical personnel. Competition for such personnel is intense. If the
    Company is not successful in identifying, hiring, training and retaining
    such personnel, it could damage the Company's business.

              The Company uses financial instruments that potentially subject it
    to concentrations of credit risk. The Company enters into foreign exchange
    contracts to hedge certain firm commitments denominated in foreign
    currencies, principally Japanese Yen. The Company also invests its cash in
    deposits in banks, money market funds, government and corporate debt
    securities. The Company does not use derivative financial instruments in its
    investment portfolio. The Company places its investments with high credit
    quality issuers and by policy, limits the amount of credit exposure to any
    one issuer. The Company mitigates default risk by investing in only the
    safest and highest credit quality securities and by monitoring the credit
    rating of investment issuers. The portfolio includes only marketable
    securities with active secondary or resale markets to ensure portfolio
    liquidity. To date, the Company has not experienced material losses on these
    investments. However, there can be no assurance that the Company will not in
    the future experience losses that could damage the Company's business.


                                       19
<PAGE>   21
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

      For financial market risks related to changes in interest rates and
foreign currency exchange rates, refer to Part II, Item 7A, Quantitative and
Qualitative Disclosures About Market Risk, in the Company's Annual Report on
Form 10-K for the year ended June 3, 2000.


PART II - OTHER INFORMATION

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

             (a)    Exhibits.

                           Exhibit 27.1 Financial Data Schedule

             (b) Reports on Form 8-K.

                           None


                                       20
<PAGE>   22
                               SPEEDFAM-IPEC, INC.

                                    SIGNATURE

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

                               SPEEDFAM-IPEC, INC.



<TABLE>
<S>                                                    <C>
Date:     October 17, 2000                             /s/  J. Michael Dodson
          --------------------                         ----------------------
                                                       J. Michael Dodson
                                                       Secretary and Chief Financial Officer
                                                       (Principal Financial Officer)


Date:     October 17, 2000                             /s/ G. Michael Latta
          --------------------                         ---------------------
                                                       G. Michael Latta
                                                       Corporate Controller
                                                       (Principal Accounting Officer)
</TABLE>


                                       21
<PAGE>   23
                                  EXHIBIT INDEX

EXHIBIT
NUMBER              DESCRIPTION

27.1               Financial Data Schedule


                                       22