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 June 30, 1999

                                       OR

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

                         Commission file number 1-10938

                                SEMX CORPORATION
                    (Name of Business Issuer in its charter)


            Delaware                                             13-3584740
  (State of other jurisdiction                                (I.R.S. Employer
of incorporation or organization)                            Identification No.)


                 1 LABRIOLA COURT, ARMONK, NY 10504 (Address of
                principal executive offices, including zip code)

                                 (914) 273-5500
              (Registrant's telephone number, including area code)

      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.

                               (1) Yes |X| No |_|

                               (2) Yes |X| No |_|

      The number of shares outstanding of the Registrant's sole class of common
stock, as of July 31, 1999 was 6,043,516 shares.

<PAGE>

                                TABLE OF CONTENTS

                                                                         Page No
                                                                         -------

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

    Consolidated Balance Sheet at June 30, 1999 and December 31, 1998.   3

    Consolidated Statement of Operations and Comprehensive Income
    (Loss) for the three and six months ended June 30, 1999 and 1998.    4

    Consolidated Statement of Cash Flows for the three and
    six months ended June 30, 1999 and 1998.                             5

    Notes to Consolidated Financial Statements                           6

Item 2. Management's Discussion and Analysis of
        Financial Condition and Results of Operations                    8

PART II OTHER INFORMATION

Item 4 Submission of Matters to a Vote of Security Holders               15

Item 6 Exhibits and Reports on Form 8-K                                  15

Signatures                                                               15

FORWARD LOOKING INFORMATION

Portions of the narrative set forth in this document that are not historical in
nature are forward looking statements. These forward-looking statements speak
only as of the date of this document, and the Company expressly disclaims any
obligation or undertaking to publicly release any updates or revisions to any
forward-looking statements contained herein. The Company's actual performance
may differ materially from that contemplated by the forward looking statements
as a result of a variety of factors that include, but are not limited to, the
completion of the sale of the wafer reclaim business, the availability of
continuing credit from the Company's banks, the general economic or business
climate, business conditions of the microelectronic and semiconductor markets
and the automotive and communications industry which the Company serves and the
economic volatility in geographic markets, such as Asia.


                                       2

<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                        SEMX CORPORATION AND SUBSIDIARIES
                           Consolidated Balance Sheet
                             (Dollars in thousands)

                                                        June 30,    December 31,
ASSETS                                                   1999           1998
                                                      (Unaudited)    (Audited)
                                                      -----------   ------------

Current Assets:
  Cash  and cash equivalents                           $  1,265      $  1,141
  Accounts receivable, less
    allowance for doubtful accounts
    of $398 and $245, respectively                        7,228         8,007
  Inventories                                             4,835        10,447
  Prepaid expenses and other
    current assets                                        1,240           948
  Deferred income tax assets                                 --         5,643
                                                       --------      --------
Total current assets                                     14,568        26,186
                                                       --------      --------

Property, Plant and Equipment-at cost,
  net of accumulated depreciation
  and amortization of $15,746
  and $13,974, respectively                              35,363        38,352
                                                       --------      --------

Other Assets-net of accumulated amortization
  Technology rights and intellectual
    property                                                927           963
  Goodwill                                                8,541        15,938
  Other                                                     783           885
                                                       --------      --------
Total other assets                                       10,251        17,786
                                                       --------      --------
Total Assets                                           $ 60,182      $ 82,324
                                                       ========      ========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
  Accounts payable                                     $  3,285      $  5,262
  Current portion of long-term debt                       1,152        17,593
  Revolving credit facility                               5,627        11,800
  Current portion of obligations
    under capital leases                                  2,560         2,648
  Accrued expenses                                        2,940         2,947
  Income Taxes Payable                                      292            --
                                                       --------      --------
Total current liabilities                                15,856        40,250

Deferred income taxes                                     1,745         2,329
Long-term debt                                            6,035         6,657
Obligations under capital leases                          5,156         6,398
                                                       --------      --------
Total Liabilities                                        28,792        55,634
                                                       --------      --------

Minority Interest in Subsidiary                           1,177         1,319
                                                       --------      --------
Shareholders' Equity:
  Preferred stock-$.10 par value;
    authorized 1,000,000 shares,
    none issued                                              --            --
  Common stock-$.10 par value;
    authorized 20,000,000 shares,
     issued 6,378,116 and 6,375,616
     shares                                                 638           638
  Additional paid-in-capital                             28,203        28,199
  Accumulated other comphrehensive
    income                                                 (628)         (322)
  Retained earnings (accumulated
    deficit)                                              2,212        (2,932)
                                                       --------      --------
                                                         30,425        25,583
  Less: Treasury stock:
    334,600 shares at cost                                  212           212
                                                       --------      --------
Shareholders' Equity                                     30,213        25,371
                                                       --------      --------
Total Liabilities And
  Shareholders' Equity                                 $ 60,182      $ 82,324
                                                       ========      ========

                 See Notes to Consolidated Financial Statements


                                          page 3

<PAGE>

                        SEMX CORPORATION AND SUBSIDIARIES
                      Consolidated Statement of Operations
                                   (Unaudited)
             (Dollar amounts in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                   For The Three Months     For The Six Months
                                                      Ended June 30,          Ended June 30,
                                                     1999        1998        1999        1998

<S>                                                <C>         <C>         <C>         <C>
Net Sales                                          $ 11,780    $ 11,030    $ 22,705    $ 25,484
Service Revenue                                       4,268       3,969       8,236       9,407
                                                   --------    --------    --------    --------
Total Revenue                                        16,048      14,999      30,941      34,891
                                                   --------    --------    --------    --------

Cost of Goods Sold                                    7,443       7,602      14,794      17,395
Cost of Services Performed                            3,143       3,172       6,314       7,814
                                                   --------    --------    --------    --------
  Total                                              10,586      10,774      21,108      25,209
                                                   --------    --------    --------    --------
Gross Profit                                          5,462       4,225       9,833       9,682

Selling, General and Administrative
  Expense                                             3,390       3,376       6,689       7,307
Restructuring Charge                                     --          --          --       1,950
                                                   --------    --------    --------    --------
Operating Income (Loss)                               2,072         849       3,144         425

Gain on Sale of Connector Business                       --          --       8,430          --

Interest Expense (Net)                                  511         889       1,211       1,708
                                                   --------    --------    --------    --------

Income (Loss) Before Provision for
  Income Taxes and Minority Interest
  in Consolidated Subsidiary                          1,561         (40)     10,363      (1,283)
Provision (Credit) for Income Taxes                     556          18       5,213        (434)
                                                   --------    --------    --------    --------
Income (Loss) Before Minority Interest
  in Consolidated Subsidiary                          1,005         (57)      5,150        (849)

Minority Interest in (Income)  Loss
  of Consolidated Subsidiary                            (14)         73          (6)        206
                                                   --------    --------    --------    --------
Net Income (Loss)                                  $    991    $     16    $  5,144    $   (643)
                                                   ========    ========    ========    ========

Other Comprehensive Income:
Foreign currency translation net of
  tax benefit of $114 and $3; and
  $157 and $17, respectively                           (222)         (6)       (306)        (32)
                                                   --------    --------    --------    --------

  Comprehensive Income (Loss)                      $    769    $     10    $  4,838    $   (675)
                                                   ========    ========    ========    ========

Basic Income (Loss) per Common Share               $    .16    $    .00    $    .85    $   (.11)
Diluted Income (Loss) per Common Share             $    .16    $    .00    $    .84    $   (.11)

Weighted Average Number of Common
Shares Outstanding - Basic                            6,041       6,058       6,041       6,067
Weighted Average Number of Common
Shares Outstanding - Diluted                          6,183       6,112       6,112       6,067
</TABLE>

                 See Notes To Consolidated Financial Statements


                                     page 4

<PAGE>

                        SEMX CORPORATION AND SUBSIDIARIES
                      Consolidated Statement of Cash Flows
                                   (Unaudited)
                             (Dollars in thousands)

                                                           For The Six Months
                                                             Ended June 31
                                                          1999            1998
                                                       --------        --------

Cash Flows From Operating Activities:

Net Income  (Loss)                                     $  5,144        $   (643)
  Adjustments To Reconcile Net
    Income To Net
  Cash Used In Operating Activities:
    (Gain) Loss on Sales of
      Connector Business                                 (8,430)             --
    Depreciation And Amortization
      of Property And Equipment                           2,506           2,565
    Other Amortization                                      340             523
    Deferred Income Taxes                                 5,373            (107)
    Minority Interest in Subsidiary
      (Income) Loss                                           6            (206)
  Changes In Operating Assets And
    Liabilities:
    (Increase) Decrease In Accounts
      Receivable                                         (1,527)          1,871
    Increase In Inventory                                  (419)         (2,879)
    (Increase) Decrease  In Prepaid
      Expenses And
    Other Current Assets                                   (425)            522
  Decrease In Accounts Payable                           (1,062)         (1,435)
    Increase (Decrease) In Accrued
      Expenses                                              184             414
    Increase (Decrease) In Income
      Taxes Payable                                         292            (735)
                                                       --------        --------
Net Cash Provided By (Used In)
  Operating Activities                                    1,982            (110)
                                                       --------        --------

Cash Flows From Investing Activities:
  Purchase Of Property And Equipment                       (696)         (1,983)
  Proceeds From Sale of Connector
    Business                                             22,191              --
  (Increase) Decrease  In Other Assets                      (68)           (301)
  Acquisition of Subsidiary                                  --            (391)
                                                       --------        --------
Net Cash Provided by (Used In)
  Investing Activities                                   21,427          (2,675)
                                                       --------        --------

Cash Flows From Financing Activities:
  Purchase of Treasury Stock                                 --            (212)
  Proceeds From Exercise Of
    Stock Options                                             4
  Proceeds From Long-Term Debt                               --           1,064
  (Repayment) Borrowing Under
    Revolving Credit                                     (6,173)          5,650
  Payment Under Capital Leases                           (1,409)           (885)
  Payment Under Term Loan Agreements                    (15,637)         (3,434)
  Borrowing under Term Loan Agreements                       --              --
                                                       --------        --------
Net Cash Provided By (Used In)
  Financing Activities                                  (23,215)          2,183
                                                       --------        --------

Effect of Exchange Rate Change on Cash                      (70)            (66)

Net Increase (Decrease) In Cash                             124            (668)
Cash At Beginning Of Period                               1,141           2,260
                                                       --------        --------

Cash At End Of Period                                  $  1,265        $  1,592
                                                       ========        ========

Supplemental schedule of noncash
  investing and financing activity:
  Machinery and equipment acquired
    under capital leases                               $    890        $    781

                 See Notes to Consolidated Financial Statements


                                     page 5

<PAGE>

                        SEMX CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                             (Amounts in Thousands)
                                   (Unaudited)

Note 1. Basis of Presentation

The consolidated financial statements include the accounts of SEMX Corporation
("SEMX") and its wholly and majority owned subsidiaries. As used herein, the
term "Company" refers to SEMX, its predecessors and its subsidiaries unless the
context indicates otherwise. The Consolidated Balance Sheet at June 30, 1999,
and the Consolidated Statement of Operations and Cash Flows for the three and
six months ended June 30, 1999 and 1998, have been prepared by the Company and
are unaudited. In the opinion of management, the financial statements reflect
all adjustments necessary to present fairly the results for the interim periods.
Such results are not necessarily indicative of results to be expected for the
year. The Consolidated Balance Sheet at December 31, 1998 has been derived from
the audited financial statements at that date. These financial statements should
be read in conjunction with the Company's Annual Report on Form 10-K for the
year ended December 31, 1998. The comparative financial statements for 1998 have
been reclassified to conform to the current period's presentation.

Note 2. Earnings Per Share

Basic earnings per share are computed based on the weighted average number of
common shares outstanding during the period. Diluted earnings per share gives
effect to all dilutive potential common shares outstanding during the period.
Potential dilutive common shares include shares issuable upon exercise of the
Company's stock options.

Note 3.  Dispositions

In February 1999, the Company sold its connector businesses, Retconn
Incorporated ("Retconn") and ST Electronics, Inc. ("ST") to Litton Corporation
("Litton"). Litton acquired the specified assets and assumed certain liabilities
of Retconn and ST, as defined in the purchase agreement, in consideration for a
cash payment to the Company of $23,871. The liabilities assumed by Litton
amounted to approximately $3,500. The purchase price is subject to adjustment
for changes in Retconn's closing date balance sheet. In addition, the Company is
prevented from directly competing in the connector business for a period of
three years. The Company recorded a gain during the first quarter of 1999, of
$3,903 on the transaction, net of applicable income taxes of $4,527.


                                       6
<PAGE>

Note 4. Inventory

Inventories consisted of the following:

                                                June 30,     December 31,
                                                  1999          1998
                                                --------     ------------

   Precious Metals                               $  931        $ 1,245
   Non Precious Metals                            3,904          9,202
                                                 ------        -------
                                                 $4,835        $10,447
                                                 ------        -------

Inventories, which consist principally of work-in-process inventory, include raw
materials, labor and manufacturing expenses and are stated at the lower of cost,
determined by the first-in, first-out method, or market.

Note 5.  Debt

On February 19, 1999, the Company entered into an agreement with First Union and
Fleet (the "Bank") concerning the distribution of $23,871 in proceeds from the
sale of Retconn and ST. Pursuant to the agreement, the Company repaid $15,050 of
term indebtedness and $7,141 of revolving credit borrowings. In addition, the
Company paid approximately $1,680 of transaction-related fees and severance
payments. The agreement also provided for the bank's forbearance of
noncompliance with certain existing covenants and an extension of its revolving
credit and interim term loan facilities through June 30, 1999.

During June 1999, the Company and the Bank entered into an agreement to extend
its bank facilities through August 31, 1999. The Company is in discussions with
its Bank to extend of its bank facilities through October 31, 1999.

The Company is in compliance with all of its bank covenants at June 30, 1999 and
continues to make monthly interest payments to the bank and began making nominal
principal payments in the second quarter of 1999. The Company is currently
pursuing a number of courses of action to refinance its debt with the Bank.
These include continuing negotiations with the Bank, discussions with other
prospective lenders and entering into a letter of intent to sell its wafer
reclaim business as a means of repaying its debt obligations.


                                       7
<PAGE>

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

RESULTS OF OPERATIONS (for the three and six month periods ended June 30, 1999
compared to the three and six month periods ended June 30, 1998)

Revenue:

Total revenue for the three-month period ended June 30, 1999 of $16,048,000,
increased $1,049,000, or 7% and decreased $3,950,000, or 11% for the six month
period as compared to the comparable 1998 periods. On February 19, 1999, the
Company sold its connector business, ("Retconn") as described herein. Retconn
had sales through the February 1999 disposition date of $2,122,000 compared to
sales of $4,701,000 for the three months and $9,707,000 for the six months ended
June 30, 1998. Excluding Retconn sales for all periods presented, total revenue
for the 1999 second quarter increased $5,750,000 or 56% and for the six month
period ended June 30, 1999, increased $3,635,000, or 14% from the prior year
periods.

Excluding Retconn, the Materials Groups 1999 second quarter sales of $11,780 000
increased $5,451,000, or 86% and six month sales of $20,583,000 increased
$4,806,000, or 30%, from the comparable 1998 periods. SPM's 1999 sales increased
by $115,000 or 4% in the second quarter and decreased by $458,000 or 7% in the
six months period, as compared to the comparable 1998 periods. The decrease in
SPM's 1999 six month sales was caused by lower sales to a customer serving the
cellular market, partially offset by increased sales of gold wire during the
second quarter. Polese Company's 1999 sales increased by $5,336,000, or 173% for
the second quarter and increased by $5,264,000, or 60% for the six month period
as compared to the prior year periods. Polese sales have increased due to
improved sales of microprocessor lids, cellular base station heat dissipation
products and the introduction of new products.

The Company's Services Group 1999 revenues increased $299,000 to $4,268,000 for
the second quarter and decreased $1,171,000 to $8,236,000 for the six month
period as compared to the prior year periods. The Services Group six month
revenue decrease was the result of a slowdown in the demand for reclaimed wafers
and pricing pressures caused by a downturn in the semiconductor industry.
Further, in July of 1998, the Company closed its Texas operations and
consolidated all of ASP's domestic business into its Rhode Island facility. The
three and six month periods ended June 30, 1998, included $0 and $1,537,000,
respectively, in revenue from the Texas operation. The Service Group's revenue
from ASP's U.S. and European operations for the second quarter increased a total
of $111,000, or 3% and decreased $1,738,000 or 20%, for the six month period
ended June 30, 1999 as compared to the comparable 1998 periods. Revenue from
International Semiconductor Products Pte. Ltd ("ISP") of $682,000 for the second
quarter of 1999 increased by $188,000 or 38% and six month revenue of $1,299,000
increased $567,000, or 78% over the comparable 1998 periods.

Direct sales of the Company's products into foreign markets as a percentage of
consolidated revenue during 1999 was 32% for the second quarter and 23% for the
six month period, as compared to 21% and 14%, respectively, for the three and
six month periods ended June 30, 1998. The Company currently maintains foreign
manufacturing operations in the Netherlands ("ASP B.V."), in Morocco,
Semiconductor Materials S.A. R. L. ("S.A.R.L."), and in Singapore, ISP. In the
three and six month periods ended June 30, 1999, the Company derived revenue
from ASP B.V. of $818,000 and


                                       8
<PAGE>

$1,647,000 respectively, from S.A.R.L. of $192,000 and $289,000, respectively,
and from ISP of $682,000 and $1,299,000, respectively. Foreign sales made
through the Company's domestic operations are made through foreign
manufacturer's representatives and are priced and paid for in U.S. dollars.
Sales for ASP B.V., S.A.R.L. and ISP are conducted in the local currencies of
Dutch Guilders, Dirhams, and Singapore Dollars, respectively, and account for
11% in the second quarter and 10% in the six months ended June 30, 1999.

The Company's consolidated backlog as of June 30, 1999 was $22,110,000 and
excludes backlog from the Retconn business which was sold February 19, 1999.
Excluding Retconn, the Company's backlog was $14,496,000 at June 30, 1998 and
$15,161,000 at December 31, 1998. The Polese backlog which was $5,003,000 at the
end of 1998, has improved to $12,666,000 as of June 30, 1999. The backlogs for
ASP and SPM have decreased $405,000 and $309,000, respectively, since the end of
1998 but have increased from beginning of year levels. The Company expects the
consolidated backlog to remain strong for the remainder of 1999.

Gross Profit:

Gross profit of $5,462,000 for the three month period and $9,833,000 for six
month period ended June 30, 1999 increased $1,237,000, or 29% and $151,000, or
2%, respectively, from the comparable 1998 periods. Excluding Retconn from all
periods presented, 1999 gross profit increased by $2,786,000, or 104% during the
second quarter, and increased by $2,634,000, or 41% for the six months period
from the comparable 1998 periods. The Materials Group's gross profit increases
primarily reflected the increased sales at Polese Company. The Service Group's
gross profit of $1,125,000 and $1,922,000 for the three and six month periods
ended June 30, 1999, increased $327,000 or 41% and $329,000 or 21% respectively,
as compared to the comparable periods in 1998 primarily due to the effects of
cost reductions during 1999.

Gross Margins:

The Company's gross margins increased from 28% to 34% and 28% to 32%,
respectively, for the three and six month periods ended June 30, 1999 over the
comparable 1998 periods. Excluding Retconn, the Company's gross margin for the
three and six month periods increased from 26% to 34 % and 26% to 32%,
respectively. The Materials Group's gross margin increased from 31% to 37% and
32% to 35%, respectively, for the three and six month periods ended June 30,
1999 from the comparable 1998 periods. The Service Group's gross margins
increased from 20% to 26% and 17% to 23%, respectively, for the three and six
month periods ended June 30, 1999 from the comparable 1998 periods, reflecting
the consolidation of domestic operations and improved performance at ISP.

Selling, General and Administrative:

Selling, general and administrative ("SG&A") expenses in the three and six month
periods ended June 30, 1999 increased $14,000, or 0% and decreased $618,000 or
8%, respectively, from the comparable 1998 periods. The decrease in SG&A in the
six month period reflects savings realized by the closing of the Services Group
Texas Plant during the second quarter of 1998 as well as reductions in SG&A due
to the sale of Retconn. Excluding Retconn, 1999 SG&A increased by $816,000, or
32% for the second quarter and increased by $497,000, or 9% for the six month
period ending June 30, 1999. The increase in SG&A during 1999 was due to
increased sales and includes bank charges related to extensions of the Company's
lending facilities of $105,000 and $143,000 during the second quarter and six
months periods, respectively. SG&A expenses as a percentage of revenue decreased
from 23% to 21% for the second quarter and increased from 21% to 22% for the six
months ended June 30, 1999 from the comparable 1998 periods.


                                       9
<PAGE>

Restructuring Charge:

The six month period ended June 30, 1998 includes a restructuring charge of
$1,950,000 associated with the closing of ASP's Texas operation and the
relocation of the equipment and other assets.

Gain on Sale of Connector Business

Income before Income Taxes and Minority Interest for the six months ended June
30, 1999 include a gross $8,430,000 gain on the sale of the Company's Connector
Business to Litton Corporation on February 19, 1999 as described below in
Liquidity and Capital Resources.

Interest Expense (Net):

Net interest expense for the three and six month periods ended June 30, 1999
decreased $378,000 and $497,000,respectively, from the comparable 1998 periods .
The decrease in net interest expense is due to reduced debt levels from February
19, 1999 forward due to the principal repayments from proceeds from the sale of
the Retconn business.

Provision (Credit) for Income Taxes:

A provision of $556,000 and $5,213,000 for income taxes has been made for the
three and six month periods ended June 30, 1999 as compared a provision of
$18,000 and credit of $434,000 for the comparable 1998 periods. The provision
for the six month period ended June 30, 1999 includes a provision of $4,527,000
associated with the gain on the sale of Retconn. The Company has Federal Net
Operating Loss carryforwards available to offset a substantial portion of the
income tax return liability associated with the gain. The credit for the six
month period ended June 30, 1998 includes a $759,000 income tax credit
associated with the restructuring charge.

Minority Interest:

In the three and six month periods ended June 30, 1999 and 1998, the Company has
included income of $14,000 and $6,000, and a loss of $73,000 and $206,000
respectively, associated with ISP in its income (loss) before minority interest
in loss of consolidated subsidiary, net of tax. The Company has a 50.1% interest
in the joint venture and has accordingly, excluded 49.9% of such loss from its
consolidated net income. See the section ISP Joint Venture for further details
herein.

Net Income:

As a result of the above, Net Income of $991,000 for the second quarter
increased by $975,000 from the comparable 1998 period. Net Income of $5,144,000
for the six month period ended June 30, 1999 increased by $5,787,000 from the
comparable period in 1998.

Year 2000

The year 2000 problem arises since many computer programs and some pieces of
computer hardware manipulate and store dates as a two-digit field and are unable
to recognize dates past December 31, 1999.

The Company has completed its initial assessment of the systems and software at
all of its operations, including external interfaces with critical suppliers and
customers. The Company is in the process of replacing non-compliant hardware,
installing new manufacturing enterprise computer software systems at SPM and
installing software upgrades that are year 2000 compliant at its other
locations. The Company expects to complete the installation and testing of these
new systems and upgrades by the end of 1999. Outside suppliers, and customers
have been contacted and requested to complete the Company's assessment
questionnaire. The Company has completed its review of all of the assessment
questionnaires received and is re-contacting third parties who have not
responded to date.


                                       10
<PAGE>

The Company has expended approximately $300,000 to date and estimates that the
remaining incremental cost of addressing the potential Year 2000 problem beyond
those expenditures already incurred will be less than $250,000 based upon the
information assembled to date.

In the event that the Company's internal software project is not completed, the
Company anticipates that the existing systems could continue functioning without
undue business interruption while the new software installation and testing is
completed. Failure of the Company to achieve year 2000 compliance is not
anticipated to have a material adverse impact on the operations of the Company.
The Company can not predict the potential effect of third parties "Year 2000"
issues on its business for those third parties that either do not complete their
own Year 2000 compliance or do not respond to the Company's assessment
questionnaire in a timely manner.

LIQUIDITY AND CAPITAL RESOURCES

General

To support the Company's growth the Company has historically made significant
capital expenditures to support its facilities and manufacturing processes as
well as working capital needs. The Company has financed its capital needs
through cash flow from operations, its line of credit facility, term loans from
the Bank, other bank financing including gold consignment supply agreements, and
capital leases. The Company has Bank short term debt maturities, standby letter
of credit maturities, gold consignment agreements and debt service requirements
which are presently deferred until August 31, 1999 under a limited forbearance
agreement with its banks. The Company is in discussions with its Bank to extend
of its bank facilities through October 31, 1999. The Company completed the sale
of its Retconn business on February 19, 1999 and repaid $22,191,000 of existing
Bank debt. As discussed herein, the Company is pursuing several additional
courses of action to address its remaining Bank indebtedness, gold consignment
supply needs and refinancing needs.

Summary of 1999 Activity

At June 30, 1999, the Company had cash and cash equivalents of $1,265,000 and an
available balance on its revolving credit facility of $1,000,000 as compared to
$1,141,000 and $200,000 respectively at December 31, 1998.

Net cash provided by operating activities in the six months ended June 30, 1999
amounted to $1,982,000 as compared to a use of $110,000 in the comparable 1998
period. Cash provided by operations increased compared to the first six months
of 1998 principally as a result of 1999 income and working capital changes. The
decrease in the deferred tax assets is due to utilization of net operating loss
carryforwards generated by the 1998 losses.

Cash provided by investing activities amounted to $21,427,000 in the period
ended June 30, 1999. On February 19, 1999 the Company completed the sale of its
Connector business and realized cash proceeds of $22,191,000. During the six
months ended June 30, 1999 and 1998, the Company invested $696,000 and
$1,938,000, respectively, in property and equipment. This investment excludes
$890,000 and $781,000, respectively, in the 1999 and 1998 periods for equipment
acquired under capital leases. At June 30, 1999, the Company had capital
expenditure commitments of approximately $536,000.

Net Cash used by financing activities amounted to $23,215,000 in the period
ended June 30, 1999 as


                                       11
<PAGE>

compared to cash provided of $2,183,000 during the 1998 period. During the six
months ended June 30, 1999 the Company's repaid $15,637,000 under term loans and
$6,173,000 under its Bank revolving line of credit. In addition, the Company
made payments of $1,409,000 under capital leases obligations.

Factors Affecting Future Liquidity

In January 1997, the Company entered into a $21,000,000 five-year term loan
("Term Loan") with First Union Bank and Fleet National Bank (collectively the
"Bank"). Under a limited forbearance agreement, as amended, the Bank extended a
previous waiver of the Term Loan's financial ratio covenants, agreed to waive
principal payments of $350,000 per month from August 1, 1998 forward and set the
maturity of the Term Loan at June 30, 1999. On February 19, 1999 the Company
repaid the remaining $15,050,000 principal balance outstanding under this Term
Loan.

In January 1997, the Company entered into a $15,000,000 line of credit with the
Bank that originally expired in February 1999. As part of the limited
Forbearance Agreement, as amended, the Bank extended the maturity to August 31,
1999. This credit line includes a standby letter of credit for ISP in the amount
of approximately $3,000,000. Interest is payable monthly at the lower of the
Bank's loan pricing rate or a Eurodollar rate plus 2.25%. The line of credit is
collateralized by substantially all of the company's assets and provides for
limited availability based upon the eligible percentages of the Company's
receivables and inventory. The line of credit, as amended, is subject to various
restrictions and financial covenants.. On February 19, 1999 the Company repaid
$7,141,000 of the outstanding borrowings under this facility.


                                       12
<PAGE>

On June 19, 1998 the Company entered into a 90-day note for $1,000,000 ("Interim
Term Loan") with the Bank to supplement the Company's working capital
requirements. The Interim Term Loan note provided for the payment of interest
monthly and for the repayment of principal on October 1, 1998. As part of the
limited Forbearance Agreement, as amended, the Bank extended the maturity to
August 31, 1999. The Company in compliance with its financial ratio covenants
and continues to make monthly interest payments. On July 1, 1999 the Company
began making monthly principal payments of $11,905 on the Interim Term Loan.

In December 1996, the Company entered into a consignment agreement (the "Gold
Consignment Agreement") with Fleet Precious Metals ("FPM") which expired
December 23, 1998. As part of the limited Forbearance Agreement, as amended, the
Bank extended the maturity to August 31, 1999. Under the Gold Consignment
Agreement, the Company purchases gold used in its manufacturing of materials.
The Gold Consignment Agreement provides for gold on consignment not to exceed
the lesser of 5,000 troy ounces of gold or gold having a market value of
$1,870,000. The Gold Consignment Agreement requires the Company to pay a
consignment fee of 5.0 % per annum based upon the value of all gold consigned to
the Company. The Company is currently in discussions with FPM to extend and/or
negotiate a new agreement.

The limited Forbearance Agreement discussed herein, was originally signed in
August 1998 and later amended in 1998 and 1999. The Forbearance Agreement, as
amended, waived Term Loan principal payments of $350,000 per month from August 1
forward, extended a previous waiver of financial ratio covenants, set the Term
Loan maturity date to August 31, 1999 and also extended the maturity of the
Interim Term Loan, the Revolving Credit Agreement, the standby letter of credit
and the Gold Consignment agreement to August 31, 1999. The Company is pursuing a
number of courses of action to restructure or refinance its existing debt and
Gold Consignment agreement. These include continuing negotiations with the
current lenders regarding the Banks proposal to extend the facilities through
October 31, 1999, discussions with other prospective lenders and the sale of its
wafer reclaim businesses pursuant to a letter of intent dated May 1999 as a
means of paying its debt obligations. On February 19, 1999, the Company sold its
Retconn business and used $22,191,000 of the cash proceeds to repay $15,050,000
of bank term debt and $7,141,000 of line of credit borrowings. Although the
Company is presently meeting all of the Bank's covenants, as amended, and is
paying interest as due on its obligations, there is no assurance that the
Company will be able to successfully renegotiate the terms of its existing
credit/consignment agreements and/or negotiate new financing arrangements and/or
realize cash through the sale of its wafer reclaim business. Failure to achieve
the necessary financing could have a material adverse effect on the Company.

The Company's 50.1% owned Singapore operation ("ISP") is currently in
discussions with its bank and may not be able to meet its financing obligations
through cash flow from operations without a change in its existing arrangements.
The Company and ISP are pursuing a number of courses of action designed to
provide future capital resources including discussions with its ISP's lenders to
obtain principal repayment forbearance as well as discussions with other
investors who would provide a new source of equity capital. There is no
assurance that ISP will be able to successfully renegotiate the terms of its
existing credit agreements and/or realize cash through an equity investor.
Failure to achieve the necessary financing would have a material adverse effect
on ISP. In addition, ISP's bank could draw down the S$5,000,000 (approximately
$3,000,000 at June 30, 1999) standby letter of credit provided by the Company's
Bank. There is no assurance that the Company would have the resources available
to repay the Bank immediately as required by the Company's Bank agreement in
which case an event of default would exist. Failure to repay the drawn Letter of
Credit would have a material adverse effect on the


                                       13
<PAGE>

Company.

In conjunction with the Company's acquisition of Polese Company on May 27, 1993,
the Company acquired from Frank J. Polese, the former sole shareholder of Polese
Company, all of the rights, including a subsequently issued patent, for certain
powdered metal technology and its application to the electronics industry. For a
period of ten years from May 1993, Mr. Polese has the right to receive 10% of
(i) the pre-tax profit from the copper tungsten product line, after allocating
operating costs and (ii) the proceeds of the sale, if any, by the Company of the
powdered metal technology. During 1999, the Company charged against operations a
total of $229,300 under this agreement, $75,000 of which have been paid through
June 30, 1999.

On December 18, 1997, the Board of Directors authorized the Company to
repurchase up to $2,000,000 of SEMX common stock on the open market. Repurchased
shares will be held as Treasury shares and may be reissued in the future or may
be reissued pursuant to the Company's stock option programs. During 1998 the
Company had repurchased 34,600 shares at a cost of $212,000. The Company has
suspended the repurchase of any further stock at this time.

The Company continually seeks to broaden its product lines by various means,
including through acquisitions. The Company intends to pursue only those
acquisitions for which it will be able to arrange the necessary financing by
means of the issuance of additional equity, the use of its cash or, through bank
or other debt financing.

The Company is uncertain that without a restructuring or refinancing of Bank
Debt, its working capital and internally generated funds and other sources of
financing will be sufficient to satisfy the Company's currently anticipated cash
requirements on both a short-term and long-term basis.


                                       14
<PAGE>

PART II OTHER INFORMATION

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

      On May 26, 1999, the registrant conducted its annual meeting. At such
      meeting, stockholders of record as of the close of business on April 9,
      1999 were entitled to notice of and to vote at the meeting. Out of a total
      of 6,041,016 shares entitled to vote at the meeting, 5,008,730 shares, or
      83%, were present in person or by proxy at said meeting. The matters voted
      on at the meeting were limited to: the election of seven directors to
      serve for one year and until their successors are elected and qualify and
      the ratification of the appointment of Goldstein Golub Kessler LLP as the
      Company's auditors for the year ending December 31, 1999.

      The following Directors were elected at such meeting:

      Mark A. Pinto                       Richard D. Fain
      John U. Moorhead, II                Steven B. Sands
      Gilbert D. Raker                    Frank J. Polese
      Andrew Lozyniak

      The following votes were cast in the election of Goldstein Golub Kessler
      LLP as the Company's auditors.

      Affirmative                 Against                   Abstain
      -----------                 -------                   -------
      4,964,360 Shares            24,919 Shares             19,451 Shares


Item 6. Exhibits and Reports on Form 8-K

      (a) Exhibits

      10.66 Seventh Amendment and Forbearance Agreement among SEMX Corporation
            and Subsidiaries and First Union National Bank dated as of June 29,
            1999

      10.67 Employment agreement dated as of August 1, 1999 between the Company
            and Gilbert D. Raker

      10.68 Employment agreement dated as of August 1, 1999 between the Company
            and Frank J. Polese

      (b) Current Reports on Form 8-K

            Form 8-K, Item 5, filed on June 24, 1999, related to the Company's
            adoption of a shareholder rights plan.


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<PAGE>

                                   SIGNATURES

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

                                SEMX CORPORATION


          Date: August 13, 1999            By: /s/ Gilbert D. Raker
                                               ---------------------------------
                                           Name:   Gilbert D. Raker
                                           Title:  Chairman of the Board
                                                   and Chief Executive Officer


          Date: August 13, 1999            By: /s/ Mark A. Koch
                                               ---------------------------------
                                           Name:   Mark A. Koch
                                           Title:  Controller and Secretary
                                                   (Principal Financial and
                                                   Accounting Officer)


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