EXHIBIT 99.1


      RISK FACTORS THAT MAY AFFECT FUTURE RESULTS AND MARKET PRICE OF STOCK

     In this Form 10-K and from time to time, we may make forward looking
statements regarding, among other matters, our future strategy, product
development plans, productivity gains of its products, financial performance and
growth. The forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Forward
looking statements address matters which are subject to a number of risks and
uncertainties, including the following:


Our Sales Reflect the Cyclicality of the Semiconductor Industry Which Can Cause
Our Operating Results to Fluctuate Significantly and Could Cause Us to Fail to
Achieve Anticipated Sales.

     Our business, including the recently acquired businesses of the STEAG
Semiconductor Division and CFM, have depended in significant part upon capital
expenditures by manufacturers of semiconductor devices, including manufacturers
that are opening new or expanding existing fabrication facilities. The level of
capital expenditures by these manufacturers of semiconductor devices depends
upon the current and anticipated market demand for such devices and the products
utilizing such devices. The semiconductor industry is highly cyclical. Following
the very strong year in 2000, the semiconductor industry now faces a significant
downturn in 2001, and we and other industry participants are experiencing
significant order delays and cancellations. The severity and duration of the
downturn are unknown. When these downturns occur, our operating results and
financial condition may be adversely affected. We anticipate that a significant
portion of new orders will continue to depend upon are demand from semiconductor
manufacturers and independent foundries that build or expand large fabrication
facilities. If existing fabrication facilities are not expanded or new
facilities are not built, demand for our systems may not develop or increase,
and we may be unable to generate significant new orders for our systems. If we
are unable to develop new orders for our systems, we will not achieve
anticipated net sales levels. Any future downturns or slowdowns in the
semiconductor industry will materially and adversely affect our net sales and
operating results. Following the acquisition of the STEAG Semiconductor Division
and CFM, we are a larger, more geographically diverse company and may be less
able to react quickly to the cyclicality of the semiconductor business,
particularly in Europe and in other regions with restrictive laws relating to
termination of employees.


Most of Our Revenue Comes from a Small Number of Large Sales, and Any Delay in
the Timing of Individual Sales Could Cause Our Operating Results to Fluctuate
from Quarter to Quarter.

     A delay in a shipment or a customer acceptance event near the end of a
quarter may cause net sales in that quarter to fall below our expectations and
the expectations of market analysts or investors. Currently, we derive most of
our revenues from the sale of a relatively small number of expensive systems.
The list prices on these systems range from $500,000 to over $2.2 million. Each
sale, or failure to make a sale, could have a material effect on us. Our lengthy
sales cycle for each of our systems, coupled with customers' competing capital
budget considerations, make the timing of customer orders uneven and difficult
to predict. In addition, our backlog at the beginning of a quarter is not
expected to include all orders required to achieve our sales objectives for that
quarter. As a result, our net sales and operating results for a quarter depend
on our shipping orders as scheduled during that quarter as well as obtaining new
orders for systems to be shipped in that same quarter. Any delay in scheduled
shipments or acceptances or in shipments or acceptances from new orders would
materially adversely affect our operating results for that quarter, which could
cause our stock price to decline.

   In the past, we have experienced cancellation of orders, and there can be no
assurance that further order cancellations or reductions in order growth or the
level of overall orders for semiconductor capital equipment will not have a
further material adverse effect upon our business or results of operations. The
need for continued investment in research, development and engineering,
marketing, and customer satisfaction activities may limit our ability to reduce
expenses in response to continued or future downturns in the semiconductor
industry. Our net sales and results of operations could be materially adversely
affected when downturns or slowdowns in the semiconductor markets occur in the
future.


Our Ability to Integrate Successfully the Businesses of the STEAG Semiconductor
Division and CFM with Each Other and with Our Own Business is Uncertain.

     After consummating the acquisition of the STEAG Semiconductor Division and
CFM, we are in the process of integrating three previously independent and
separate business operations. The integration of the three businesses is
complex, time-consuming and expensive, particularly where these businesses have
substantial international business operations. The integration requires
significant efforts from each company, including the coordination of their
research and development and sales and marketing efforts. We may find it
difficult to integrate the operations of the STEAG Semiconductor Division and
CFM. Our combined company has a large number of employees in widely dispersed
operations in California, Pennsylvania, Germany, and other locations, which will
increase the difficulty of integrating operations. Current personnel may leave
us, the STEAG Semiconductor Division or CFM because of the recent business
combinations. The challenges involved in this integration include, but are not
limited to, the following:

     .    retaining existing customers of each company;

     .    retaining and integrating our management and other key employees with
          those of the STEAG Semiconductor Division and CFM;

     .    transitioning all world-wide facilities to common accounting and
          information technology systems;

     .    integrating purchasing and procurement operations in multiple
          locations;

     .    coordinating research and development activities to enhance
          introduction of new products and technologies;

     .    combining product offerings and product lines effectively and quickly;

     .    integrating sales and marketing efforts so that customers can
          understand and do business easily with the combined company;

     .    coordinating manufacturing operations in a rapid and efficient manner;

     It is not certain that the STEAG Semiconductor Division and CFM can be
successfully integrated with us in a timely manner or at all or that any of the
anticipated benefits will be realized. Risks from unsuccessful integration of
the companies include:

     .    the impairment of relationships with employees, customers, and
          suppliers;

     .    the potential disruption of the combined company's ongoing business
          and distraction of its management;

     .    delay in introducing new product offerings by the combined company;
          and

     .    unanticipated expenses related to integration of the three companies.

     We may not succeed in addressing these risks. Further, we cannot assure you
that the growth rate of the combined company will equal the historical growth
rates experienced by us, the STEAG Semiconductor Division, or CFM, individually.


To Effectively Manage Our Growth and Greatly Expanded Operations Following the
Completion of the Transactions with STEAG and CFM, We Will Need To Improve
Existing and Implement New Systems, Procedures, and Controls.

     Following consummation of the merger, we are responsible for integrating
and managing expanded operations, including operations in new geographic
locations that may place a significant strain on our management information
systems and our administrative, financial, and operational resources. We are
making additional significant investments in research and development to support
product development. We have grown from 349 employees at December 31, 1998, to
443 at December 31, 1999, to 641 employees at December 31, 2000, to over 2,000
employees world-wide at January 31, 2001, following consummation of the merger.
This expansion will continue to result in substantial demands on our management
resources. To accommodate continued anticipated growth and expansion following
completion of the transactions, we will be required to:

     .    improve existing, and implement new, operational and financial
          systems, procedures, and controls;

     .    manage the financial and strategic position of the acquired and
          developed products, services and technologies;

     .    hire, train, manage, retain, and motivate qualified personnel;

     .    and obtain additional facilities and suppliers.

     These measures may place additional burdens on our management and internal
resources.

     The STEAG Semiconductor Division and CFM Have Experienced Financial Losses
and May Require Significant Financial Support from us.

   The STEAG Semiconductor Division and CFM have suffered losses from operations
in recent periods. These acquired businesses may experience further losses that
affect our financial results, reduce our earnings per share, and require us to
fund those businesses to sustain their operations. In addition, the acquisition
of these new businesses could reduce cost efficiencies or profitability, or
result in unanticipated costs. If losses continue at historic levels for the
STEAG Semiconductor Division and CFM, we may be required to use a significant
portion of our cash balances.


The Transactions with STEAG and CFM May Fail to Achieve Beneficial Synergies.

   We entered into the merger transaction with the expectation that it would
result in beneficial synergies between and among the semiconductor equipment
businesses of the three combining companies. Achieving these anticipated
synergies and their potential benefits will depend on a number of factors, some
of which include:

     .    our ability to timely develop new products and integrate the products
          and sales efforts of the combined company;

     .    the risk that our customers, CFM's customers and the customers of the
          STEAG Semiconductor Division may defer purchasing decisions;

     .    the risk that it may be more difficult to retain key management,
          marketing, and technical personnel after the consummation of the
          transactions; and

     .    competitive conditions and cyclicality in the semiconductor
          manufacturing process equipment market.

     Even if we are able to integrate operations, there can be no assurance that
the anticipated synergies will be achieved. The failure to achieve such
synergies could have a material adverse effect on our business, results of
operations, and financial condition.


Our Reported Financial Results Will Suffer as a Result of Purchase Accounting
Treatment and the Impact of Amortization of Goodwill and Other Intangibles, and
Restructuring Charges Relating to the Transactions.

     We will account for the transactions as purchases of the STEAG
Semiconductor Division and CFM by us under the purchase method of accounting.
Under purchase accounting, we will record the fair value of the consideration
given to STEAG in exchange for the stock of the STEAG Semiconductor Division, as
well as the fair value of the consideration given in exchange for the
outstanding CFM common stock and for the outstanding options to purchase CFM
common stock assumed by us, plus the amount of direct transaction costs, as the
cost of acquiring the STEAG Semiconductor Division and CFM. We will allocate
these costs to the individual assets and liabilities of the companies being
acquired, including various identifiable intangible assets such as acquired
technology, acquired trademarks and trade names and acquired workforce, and to
in-process research and development, based on their respective fair values.
Intangible assets, including goodwill, will be generally amortized over a three-
to seven-year period.

     The amount of purchase cost allocated to goodwill and other intangibles is
estimated to be less than $200 million. Assuming goodwill and other intangible
assets were amortized in equal quarterly amounts over 5 years following
completion of the transactions, the accounting charge attributable to these
items would be approximately $10 million per quarter or $40 million per fiscal
year. As a result, purchase accounting treatment of the transactions could have
a material adverse effect on the market value of our common stock following
completion of the transactions. We may incur restructuring costs in order to
achieve desired synergies after the transactions, which will adversely impact
future financial results. These restructuring costs could be a result of, but
not limited to, the following:

     .    severance costs associated with possible headcount reductions due to
          duplication; and

     .    asset write-offs associated with manufacturing and facility
          consolidations.


Uncertainty Related to the Transactions with STEAG and CFM Could Harm Us.

   In response to the announcement of the merger, our customers or suppliers, or
those of the STEAG Semiconductor Division and CFM, may delay or defer product
purchase or other decisions. Any delay or deferral in product purchase or other
decisions by customers or suppliers could have a material adverse effect on our
business.


The Transactions with STEAG and CFM Could Adversely Affect Combined Financial
Results.

     We expect to incur direct transaction costs of approximately $10.5 million
in connection with the merger. If the benefits of the merger do not exceed the
costs associated with the transactions, including any dilution to our
stockholders resulting from the issuance of shares in connection with the
transactions, our financial results, including earnings per share, could be
adversely affected.


Our Quarterly Financial Results Fluctuate Significantly and May Fall Short of
Anticipated Levels, Which Could Cause Our Stock Price to Decline.

     We intend to base our operating expenses on anticipated revenue levels, and
a substantial percentage of our expenses may be fixed in the short term. As a
result, any delay in generating or recognizing revenues could cause our
operating results to be below the expectations of market analysts or investors,
which could cause the price of our common stock to decline. Our quarterly
revenue and operating results have varied significantly in the past and may vary
significantly in the future due to a number of factors, including:

     .    difficulty of assimilating the operations, products and personnel of
          the acquired businesses, particularly where these involve
          international operations;

     .    market acceptance of our systems and the products of our customers;

     .    substantial changes in revenues from significant customers;

     .    increased manufacturing overhead expenses due to reductions in the
          number of systems manufactured;

     .    timing of announcement and introduction of new systems by us and our
          competitors;

     .    sudden changes in component prices or availability;

     .    changes in product mix;

     .    delays in orders due to customer financial difficulties;

     .    manufacturing inefficiencies caused by uneven or unpredictable order
          patterns, reducing our gross margins; and

     .    higher fixed costs due to increased levels of research and development
          or patent litigation costs and expansion of our worldwide sales and
          marketing organization.

     Due to the foregoing factors, we believe that period-to-period comparisons
of our operating results should not be relied upon as an indicator of our future
performance.


We Incurred Net Operating Losses for the Fiscal Years 1998 and 1999. We May Not
Achieve or Maintain Profitability on an Annual Basis, and If We Do Not, We May
Not Utilize Deferred Tax Assets.

     Although profitable in 2000, we incurred net losses of approximately $22.4
million for the year ended December 31, 1998 and $0.8 million for the year ended
December 31, 1999. We expect to continue to incur significant research and
development and selling, general and administrative expenses. We will need to
generate significant increases in net sales to achieve and maintain
profitability on an annual basis, and we may not be able to do so. Our ability
to realize our deferred tax assets in future periods will depend on our ability
to achieve and maintain profitability on an annual basis. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" for a
further discussion of our net operating losses.


Year-To-Year Changes in Our List of Major Customers Make It Difficult to
Forecast Our Revenue and Achieve Our Sales Goals.

     Our list of major customers changes substantially from year to year, and we
cannot predict that a major customer in one year will make significant purchases
from us in future years. Accordingly, it is difficult for us to accurately
forecast our revenues and operating results from year to year. While we actively
pursue new customers, if we are unable to successfully make significant sales to
new customers or sell additional systems to existing customers, we may not
achieve anticipated net sales levels and our business and operating results
would suffer.


Our Lengthy Sales Cycle Increases Our Costs and Reduces the Predictability of
Our Revenue.

     Sales of our systems depend upon the decision of a prospective customer to
increase or replace manufacturing capacity. That decision typically involves a
significant capital commitment. Accordingly, the purchase of our systems
typically involves time consuming internal procedures associated with the
evaluation, testing, implementation, and introduction of new technologies into
our customers' manufacturing facilities. For many potential customers, an
evaluation as to whether new semiconductor manufacturing equipment is needed
typically occurs infrequently. Following an evaluation by the customer as to
whether these systems meet their qualification criteria, we have experienced in
the past and expect to continue to experience in the future, delays in
finalizing system sales while our customers evaluate and receive approval for
the purchase of systems and construct new facilities or expand existing
facilities. Due to these factors, our systems typically have lengthy sales
cycles during which we may have had to expend substantial funds and management
effort. The time between our first contact with a customer regarding a specific
potential purchase and the customer's placing its first order typically lasts
from nine to twelve months and is often even longer. This lengthy sales cycle is
expected to make it difficult to accurately forecast future sales and
potentially causing our quarterly and annual revenue and operating results to
fluctuate significantly from period to period. If anticipated sales from a
particular customer are not realized in a particular period due to this lengthy
sales cycle, our operating results may be adversely affected.


We Are Highly Dependent on Our International Sales, Particularly Sales in Asian
Countries, and If We Are Unable to Sustain and Increase Our International Sales,
We May Not Achieve Anticipated Revenue Growth.

     Asia has been a particularly important region for our business and is
expected to continue to be important for us. Our sales to Taiwan, Japan, and
other Asian countries accounted for 54% of our total sales in 2000, 59% in 1999,
and 50% in 1998. All of our international sales accounted for 69% of our total
net sales in 2000, 71% in 1999 and 67% in 1998. We anticipate that international
sales will continue to account for a significant portion of our net sales.
Because of our anticipated continuing dependence upon international sales in
general and on sales to Taiwan, Japan, and other Asian countries in particular,
we expect to be subject to risk from the effects of regional economic problems.
Asian economies have been highly volatile and prone to recession in recent
years. Our international sales are expected to continue to be subject to a
number of additional risks, including:

     .    unexpected changes in law or regulations resulting in more burdensome
          governmental controls, tariffs, restrictions, embargoes, or export
          license requirements;

     .    exchange rate volatility;

     .    political and economic instability, particularly in Asia;

     .    difficulties in accounts receivable collections;

     .    difficulties in managing distributors or representatives;

     .    difficulties in staffing and managing foreign subsidiary operations;
          and

     .    potentially adverse tax consequences.

     Our sales to date have been denominated primarily in U.S. dollars, with the
exception of sales in Japan, which are denominated in Japanese Yen. The sales to
date of CFM have been denominated in U.S. dollars. The sales to date of the
STEAG Semiconductor Division have been denominated in various currencies,
primarily U.S. dollars and German marks. We have sales in foreign currencies and
are exposed to the risk of currency fluctuation risks. For U.S. dollar sales in
foreign countries, our products become less price competitive in countries with
currencies that are declining in value in comparison to the dollar. This could
cause us to lose sales or force us to lower our prices, which would reduce our
gross margins.


We May Not Achieve Anticipated Revenue Growth if We Are Not Selected as "Vendor
Of Choice" for New or Expanded Fabrication Facilities and If Our Systems and
Products Do Not Achieve Broader Market Acceptance.

     Because semiconductor manufacturers must make a substantial investment to
install and integrate capital equipment into a semiconductor fabrication
facility, these manufacturers will tend to choose semiconductor equipment
manufacturers based on established relationships, product compatibility, and
proven financial performance.

     Once a semiconductor manufacturer selects a particular vendor's capital
equipment, the manufacturer generally relies for a significant period of time
upon equipment from this "vendor of choice" for the specific production line
application. In addition, the semiconductor manufacturer frequently will attempt
to consolidate its other capital equipment requirements with the same vendor.
Accordingly, we may face narrow windows of opportunity to be selected as the
"vendor of choice" by substantial new customers. It may be difficult for us to
sell to a particular customer for a significant period of time once that
customer selects a competitor's product, and we may not be successful in
obtaining broader acceptance of our systems and technology. If we are unable to
achieve broader market acceptance of our systems and technology, we may be
unable to grow our business and our operating results and financial condition
will be adversely affected.


Unless We Can Continue To Develop and Introduce New Systems that Compete
Effectively on the Basis Of Price and Performance, We May Lose Future Sales And
Customers, Our Business May Suffer, and Our Stock Price May Decline.

     Because of continual changes in the markets in which we and our customers
compete, our future success will depend in part upon out ability to continue to
improve our systems and technologies. These markets are characterized by rapidly
changing technology, evolving industry standards, and continuous improvements in
products and services. Due to the continual changes in these markets, our
success will also depend upon our ability to develop new technologies and
systems that compete effectively on the basis of price and performance and that
adequately address customer requirements. In addition, we must adapt our systems
and processes to technological changes and to support emerging target market
industry standards.

     The success of any new systems we introduce is dependent on a number of
factors. These factors include timely completion of new system designs and
market acceptance. We may not be able to improve our existing systems or develop
new technologies or systems in a timely manner. In particular, the transition of
the market to 300 millimeter wafers will present us with both an opportunity and
a risk. To the extent that we are unable to introduce 300 millimeter systems
which meet customer requirements on a timely basis, our business could be
harmed. The success of new system introductions is dependent on a number of
factors, including timely completion of new system designs, system performance,
and market acceptance, and may be adversely affected by manufacturing
inefficiencies associated with the start up of such new introductions and the
challenge of producing systems in volume which meet customer requirements.
Because it is generally not possible to predict the time required and costs
involved in reaching certain research, development and engineering objectives,
actual development costs could exceed budgeted amounts and estimated product
development schedules may require extension. Any delays or additional
development costs could have a material adverse effect on our business and
results of operations. There can be no assurance that we will successfully
develop and introduce new products or enhancements to our existing products on a
timely basis or in a manner which satisfies potential customers or achieves
widespread market acceptance. Because of the complexity of our systems,
significant delays can occur between the introduction of systems or system
enhancements and the commencement of commercial shipments. From time to time, we
have experienced delays in the introduction of, and certain technical and
manufacturing difficulties with, certain systems and enhancements, and may
experience such delays and technical and manufacturing difficulties in future
introductions or volume production of new systems or enhancements. Our inability
to overcome such difficulties, to meet the technical specifications of any new
systems or enhancements, or to manufacture and ship these systems or
enhancements in volume and in a timely manner, would materially adversely affect
our business and results of operations, as well as our customer relationships.
In addition, we from time to time may incur unanticipated costs to ensure the
functionality and reliability of our products early in their life cycles, which
costs can be substantial. If new products or enhancements experience reliability
or quality problems, we could encounter a number of difficulties, including
reduced orders, higher manufacturing costs, delays in collection of accounts
receivable, and additional service and warranty expenses, all of which could
materially adversely affect our business and results of operations.


We May Not Be Able To Continue To Successfully Compete in the Highly Competitive
Semiconductor Industry.

     The semiconductor equipment industry is both highly competitive and subject
to rapid technological change. Significant competitive factors include the
following:

     .    system performance;

     .    cost of ownership;

     .    size of installed base;

     .    breadth of product line; and

     .    customer support.

     The following characteristics of our major competitors' systems give them a
competitive advantage over us:

     .    broader product lines;

     .    longer operating history;

     .    greater experience with high volume manufacturing;

     .    broader name recognition;

     .    substantially larger customer bases; and

     .    substantially greater financial, technical, and marketing resources.

     In addition, to expand our sales we must often replace the systems of our
competitors or sell new systems to customers of our competitors. Our competitors
may develop new or enhanced competitive products that will offer price or
performance features that are superior to our systems. Our competitors may also
be able to respond more quickly to new or emerging technologies and changes in
customer requirements, or to devote greater resources to the development,
promotion, and sale of their product lines. We may not be able to maintain or
expand our sales if competition increases and we are unable to respond
effectively.


We Depend Upon a Limited Number of Suppliers for Many Components and
Subassemblies, and Supply Shortages or the Loss of These Suppliers Could Result
In Increased Cost or Delays in Manufacture and Sale of Our Products.

     We rely to a substantial extent on outside vendors to manufacture many of
the components and subassemblies of our systems. We may obtain many of these
components and subassemblies from a sole source or a limited group of suppliers.
Because of our anticipated reliance on outside vendors generally, and on a sole
or a limited group of suppliers in particular, we may be unable to obtain an
adequate supply of required components.

     In addition, we may have reduced control over pricing and timely delivery
of components. We often quote prices to our customers and accept customer orders
for our products prior to purchasing components and subassemblies from our
suppliers. If our suppliers increase the cost of components or subassemblies, we
may not have alternative sources of supply and may not be able to raise the cost
of the system being evaluated by our customers to cover all or part of the
increased cost of components.

     The manufacture of some of these components and subassemblies is an
extremely complex process and requires long lead times. As a result, we have in
the past and we may in the future experience delays or shortages. If we are
unable to obtain adequate and timely deliveries of our required components or
subassemblies, we may have to seek alternative sources of supply or manufacture
such components internally. This could delay our ability to manufacture or
timely ship our systems, causing us to lose sales, incur additional costs, delay
new product introductions, and harm our reputation.


We Are Highly Dependent on Our Key Personnel to Manage Our Business and Their
Knowledge of Our Business, Management Skills, and Technical Expertise Would Be
Difficult to Replace.

     Our success will depend to a large extent upon the efforts and abilities of
Brad Mattson, our chief executive officer, our current management and technical
staff, as well as key managerial and technical employees of the STEAG
Semiconductor Division and CFM who joined us in connection with the
transactions, any of whom would be difficult to replace. The loss of Mr. Mattson
or other key employees could limit or delay our ability to develop new products
and adapt existing products to our customers' evolving requirements and result
in lost sales and diversion of management resources.

     Similarly, current and prospective employees may experience uncertainty
about their future roles with us until our strategies with regard to the
integration of our operations with those of the STEAG Semiconductor Division and
CFM are announced or executed. This may adversely affect our ability to attract
and retain key management, sales, marketing, and technical personnel.


Because of Competition for Additional Qualified Personnel, We May Not Be Able To
Recruit or Retain Necessary Personnel, Which Could Impede Development or Sales
of Our Products.

     Our growth will depend on our ability to attract and retain qualified,
experienced employees. There is substantial competition for experienced
engineering, technical, financial, sales, and marketing personnel in our
industry. In particular, we must attract and retain highly skilled design and
process engineers. Competition for such personnel is intense in all of our
locations, but particularly in the San Francisco Bay Area where our headquarters
is located. If we are unable to retain existing key personnel, or attract and
retain additional qualified personnel, we may from time to time experience
inadequate levels of staffing to develop and market our products and perform
services for our customers. As a result, our growth could be limited due to our
lack of capacity to develop and market our products to our customers, or we
could fail to meet our delivery commitments or experience deterioration in
service levels or decreased customer satisfaction.


If We Are Unable to Protect Our Intellectual Property, We May Lose a Valuable
Asset, Experience Reduced Market Share, Fail to Prevail in Existing Litigation
or Experience Additional Costly Litigation, Including Pending Litigation
Involving CFM, to Protect Our Proprietary Technology.

     We rely on a combination of patents, copyrights, trademark and trade secret
laws, non-disclosure agreements, and other intellectual property protection
methods to protect our proprietary technology. Despite our efforts to protect
our intellectual property, our competitors may be able to legitimately ascertain
the non-patented proprietary technology embedded in our systems. If this occurs,
we may not be able to prevent the use of such technology. Our means of
protecting our proprietary rights may not be adequate and our patents may not be
sufficiently broad to protect our technology. In addition, any patents owned by
us could be challenged, invalidated, or circumvented and any rights granted
under any patent may not provide adequate protection to us. Furthermore, we may
not have sufficient resources to protect our rights. Our competitors may
independently develop similar technology, duplicate our products, or design
around patents that may be issued to us. In addition, the laws of some foreign
countries may not protect our proprietary rights to as great an extent as do the
laws of the United States and it may be more difficult to monitor the use of our
products in such foreign countries. As a result of these threats to our
proprietary technology, we may have to resort to costly litigation to enforce
our intellectual property rights.

     Our CFM subsidiary is currently litigating three ongoing cases involving
CFM's intellectual property. See "Item 3--Legal Proceedings". As a result of
such litigation, we may incur significant and ongoing legal costs. There can be
no assurance as to the outcome of such litigation. Defenses or counterclaims in
these proceedings could result in the nullification of any or all of the subject
patents.


We Might Face Intellectual Property Infringement Claims that May Be Costly To
Resolve and Could Divert Management Attention Including the Potential for Patent
Infringement Litigation as a Result of Our Increased Market Strength in RTP and
Entry into the Wet Processing Market.

     We may from time to time be subject to claims of infringement of other
parties' proprietary rights. Certain subsidiaries comprising the STEAG
Semiconductor Division have in the past been sued by competitors alleging
infringement of such competitors' patents. Although all of such lawsuits have
been settled or terminated, the risk of further intellectual property litigation
for us may be increased following the completion of the transactions with STEAG.

     Our involvement in any patent dispute or other intellectual property
dispute or action to protect trade secrets, even if the claims are without
merit, could be very expensive to defend and could divert the attention of our
management. Adverse determinations in any litigation could subject us to
significant liabilities to third parties, require us to seek costly licenses
from third parties, and prevent us from manufacturing and selling our products.

     Any of these situations could have a material adverse effect on our
business and operating results in one or more countries.


Our Failure to Comply with Environmental Regulations Could Result in Substantial
Liability.

     We are subject to a variety of federal, state, local, and foreign laws,
rules, and regulations relating to environmental protection. These laws, rules,
and regulations govern the use, storage, discharge, and disposal of hazardous
chemicals during manufacturing, research and development and sales
demonstrations. If we fail to comply with present or future regulations, we
could be subject to substantial liability for clean up efforts, personal injury,
and fines or suspension or cessation of our operations. As a result of the
merger, we may be exposed to liability if there are past or future violations by
CFM or the STEAG Semiconductor Division. Restrictions on our ability to expand
or continue to operate our present locations could be imposed upon us or we
could be required to acquire costly remediation equipment or incur other
significant expenses.


The Price of Our Common Stock Has Fluctuated in the Past and May Continue To
Fluctuate Significantly in the Future, Which May Lead to Losses By Investors or
to Securities Litigation.

     The market price of our common stock has been highly volatile in the past,
and our stock price may decline in the future. We believe that a number of
factors could cause the price of our common stock to fluctuate, perhaps
substantially, including:

     .    general conditions in the semiconductor industry or in the worldwide
          economy;

     .    announcements of developments related to our business;

     .    fluctuations in our operating results and order levels;

     .    announcements of technological innovations by us or by our
          competitors;

     .    new products or product enhancements by us or by our competitors;

     .    developments in patent litigation or other intellectual property
          rights; or

     .    developments in our relationships with our customers, distributors,
          and suppliers.

     In addition, in recent years the stock market in general, and the market
for shares of high technology stocks in particular, have experienced extreme
price fluctuations. These fluctuations have frequently been unrelated to the
operating performance of the affected companies. Such fluctuations could
adversely affect the market price of our common stock. In the past, securities
class action litigation has often been instituted against a company following
periods of volatility in its stock price. This type of litigation, if filed
against us, could result in substantial costs and divert our management's
attention and resources.


Any Future Business Acquisitions May Disrupt Our Business, Dilute Stockholder
Value, or Distract Management Attention.

     As part of our ongoing business strategy, we may consider additional
acquisitions of, or significant investments in, businesses that offer products,
services, and technologies complementary to our own. Such acquisitions could
materially adversely affect our operating results and/or the price of our common
stock. Acquisitions also entail numerous risks, including:

     .    difficulty of assimilating the operations, products, and personnel of
          the acquired businesses;

     .    potential disruption of our ongoing business;

     .    unanticipated costs associated with the acquisition;

     .    inability of management to manage the financial and strategic position
          of acquired or developed products, services, and technologies;

     .    inability to maintain uniform standards, controls, policies, and
          procedures; and

     .    impairment of relationships with employees and customers which may
          occur as a result of integration of the acquired business.

     To the extent that shares of our stock or other rights to purchase stock
are issued in connection with any future acquisitions, dilution to our existing
stockholders will result and our earnings per share may suffer. Any future
acquisitions may not generate additional revenue or provide any benefit to our
business, and we may not achieve a satisfactory return on our investment in any
acquired businesses.


We Are Exposed to the Risks of Operating a Global Business.

     Managing our global operations presents challenges that could materially
and adversely affect demand for our systems and related services. These
challenges include, among others, the following:

     .    cultural diversities;

     .    periodic economic downturns;

     .    trade balance issues;

     .    political instability; and

     .    fluctuations in interest and currency exchange rates.

     For example, our business, financial condition and results of operations
may be affected by global uncertainties with respect to:

     .    the slowdown in the rate of gross domestic product growth forecasted
          for next year;

     .    foundry capacity utilization;

     .    capital spending in the telecommunications industry; and

     .    memory price weakness may affect our business, financial condition and
          results of operations.

     Our exposure to these global business risks has increased as a result of
our acquisition of the STEAG Semiconductor Division and CFM.