<PAGE>


                                  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 March 28, 1999

                                       OR

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

For the transition period from _____________________ to _____________________

Commission file number 0-21970

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

                            MATTSON TECHNOLOGY, INC.
             (Exact name of registrant as specified in its charter)

DELAWARE                                                       77-0208119
(State or other jurisdiction of incorporation               (I.R.S. Employer
         or organization)                                  Identification No.)

3550 WEST WARREN AVENUE
FREMONT, CALIFORNIA                                              94538
(Address of principal executive offices)                        (Zip Code)

                                 (510) 657-5900
              (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.
                             Yes     X         No       
                                 ---------        ---------

  Number of shares of common stock outstanding as of April 26, 1999: 15,491,522




                                       1
<PAGE>

                         PART I -- FINANCIAL INFORMATION

1.       FINANCIAL STATEMENTS

                            MATTSON TECHNOLOGY, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>

                                     ASSETS

                                                            MAR. 28,      DEC. 31,
                                                              1999          1998
                                                            --------      --------
<S>                                                      <C>           <C>
Current assets:

    Cash and cash equivalents                               $ 13,820      $ 11,863
    Short-term investments                                        --         8,128
    Accounts receivable, net                                  13,130         9,614
    Inventories                                               13,928        10,924
    Prepaid expenses and other current assets                  8,839         8,745
                                                            --------      --------
      Total current assets                                    49,717        49,274
Property and equipment, net                                   11,129        12,090
Other assets                                                   4,467         6,756
                                                            --------      --------
                                                            $ 65,313      $ 68,120
                                                            ========      ========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

    Accounts payable                                        $  5,335      $  3,399
    Accrued liabilities                                       12,599        14,841
                                                            --------      --------
      Total current liabilities                               17,934        18,240
                                                            --------      --------

Stockholders' equity:

    Common stock                                                  16            16
    Additional paid in capital                                63,271        63,239
    Retained earnings (deficit)                              (12,691)      (10,250)
    Treasury stock                                            (2,987)       (2,987)
    Other                                                       (230)         (138)
                                                            --------      --------
      Total stockholders' equity                              47,379        49,880
                                                            --------      --------
                                                            $ 65,313      $ 68,120
                                                            ========      ========

</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                        2
<PAGE>

                            MATTSON TECHNOLOGY, INC.
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                    (in thousands, except per share amounts)
                                   (unaudited)

<TABLE>
<CAPTION>

                                                    THREE MONTHS ENDED
                                                    ------------------
                                                  MAR. 28,      MAR. 29,
                                                    1999          1998
                                                  --------      --------
<S>                                            <C>           <C>
Net sales                                         $ 14,320      $ 20,248
Cost of sales                                        7,076        11,173
                                                  --------      --------
  Gross profit                                       7,244         9,075
Operating expenses:
  Research, development and engineering              3,898         4,501
  Selling, general and administrative                6,031         6,725
                                                  --------      --------
    Total operating expenses                         9,929        11,226
                                                  --------      --------
Loss from operations                                (2,685)       (2,151)
Interest and other income (expense), net               293           481
                                                  --------      --------
Loss before income taxes                            (2,392)       (1,670)
 Provision (benefit) for income taxes                   49          (450)
                                                  --------      --------
Net loss                                          $ (2,441)     $ (1,220)
                                                  ========      ========

Net loss per share:

    Basic                                         $  (0.16)     $  (0.09)
                                                  ========      ========
    Diluted                                       $  (0.16)     $  (0.09)
                                                  ========      ========
Weighted average shares outstanding:

    Basic                                           15,423        14,254
                                                  ========      ========
    Diluted                                         15,423        14,254
                                                  ========      ========

</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>

                            MATTSON TECHNOLOGY, INC.
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                                THREE MONTHS ENDED
                                                                             -----------------------
                                                                             MAR. 28,      MAR. 29,
                                                                               1999          1998
                                                                             --------      --------
<S>                                                                        <C>           <C>
Cash flows from operating activities:
    Net loss                                                                 $ (2,441)       (1,220)

    Adjustments to reconcile net loss to net cash provided by (used in)
      operating activities:
      Depreciation and amortization                                             1,150           815
      Amortization of in-process research and development                         168          --
      Changes in assets and liabilities:
         Accounts receivable                                                   (3,516)        3,513
         Inventories                                                           (3,376)        3,814
         Prepaid expenses and other assets                                        (94)           14
         Other Assets                                                             168          --
         Accounts payable                                                       1,936        (1,105)
         Accrued liabilities                                                      379         1,695
                                                                             --------      --------
      Net cash provided by (used in) operating activities                      (5,626)        7,526
                                                                             --------      --------
Cash flows from investing activities:
    Acquisition of property and equipment                                        (485)       (1,208)
    Purchases of short-term investments                                          --          (2,537)
    Sales and maturities of short-term investments                              8,128         4,028
                                                                             --------      --------
      Net cash provided by (used in) investing activities                       7,643           283
                                                                             --------      --------
Cash flows from financing activities:
    Proceeds from the issuance of Common Stock, net                              --              40
    Purchase of Common Stock                                                       29          --
                                                                             --------      --------
      Net cash provided by (used in) financing activities                          29            40
                                                                             --------      --------
Effect of exchange rate changes on cash and cash equivalents                      (89)           22
                                                                             --------      --------
Net increase  in cash and cash equivalents                                      1,957         7,871
Cash and cash equivalents, beginning of period                                 11,863        25,583
                                                                             --------      --------
Cash and cash equivalents, end of period                                     $ 13,820      $ 33,454
                                                                             ========      ========

</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                         4
<PAGE>

                              MATTSON TECHNOLOGY, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1  BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have 
been prepared in accordance with generally accepted accounting principles for 
interim financial information and with the instructions to Form 10-Q and 
Regulation S-X. Accordingly, they do not include all of the information and 
footnotes required by generally accepted accounting principles for complete 
financial statements. In the opinion of management, all adjustments 
(consisting of normal recurring adjustments) considered necessary for a fair 
presentation have been included.

The financial statements should be read in conjunction with the audited 
financial statements included in the Company's Annual Report for the year 
ended December 31, 1998.

The results of operations for the three months ended March 28, 1999 are not 
necessarily indicative of results that may be expected for the entire year 
ending December 31, 1999.

NOTE 2  BALANCE SHEET DETAIL (IN THOUSANDS):

<TABLE>
<CAPTION>

                                                       MAR. 28,     DEC. 31,
                                                         1999        1998
                                                         ----        ----
<S>                                                 <C>          <C>
Inventories:

    Purchased parts and raw materials                   $11,074       7,128
    Work-in-process                                       2,854       2,586
    Finished goods                                         --         1,147
    Evaluation systems                                     --            63
                                                        -------     -------
                                                        $13,928     $10,924
                                                        =======     =======

Accrued liabilities:
    Warranty reserve                                    $ 5,927     $ 5,820
    Accrued compensation and benefits                     1,648       1,214
    Income taxes                                          1,216       1,131
    Commissions                                             513         564
    Deferred income                                       1,308       1,437
    Customer deposits                                        72       2,690
    Other                                                 1,915       1,985
                                                        -------     -------
                                                        $12,599     $14,841
                                                        =======     =======

</TABLE>

NOTE 3 THE ACQUISITION OF CONCEPT SYSTEMS DESIGN, INC.

On July 24, 1998 the Company acquired Concept Systems Design, Inc. 
("Concept"), a supplier of expitaxial (EPI) systems. In connection with the 
merger, the Company issued 795,138 shares of Mattson Common Stock to the 
former shareholders of Concept. The former shareholders of Concept also may 
acquire up to 547,569 additional shares of Mattson Common Stock in connection 
with the merger if certain conditions are met prior to the end of the first 
twenty-four full calendar months following the closing of the transaction. 
The transaction has been accounted for as a purchase.

In the first quarter of 1999, a preacquisition contingency was resolved which 
reduced the liabilities assumed from Concept by approximately $2.2 million. 
Under the provisions of Statement of Financial Accounting Standards No. 38, 
this has been recorded by the Company in the first quarter of 1999 on a 
prospective basis as an elimination of previously recorded goodwill and a 
pro-rata reduction of the balance to the acquired developed technology, 
workforce and property and equipment.

                                      5
<PAGE>

NOTE 4  NET INCOME (LOSS) PER SHARE

Basic earnings per share (EPS) is computed by dividing income available to 
common stockholders (numerator) by the weighted average number of common 
shares outstanding (denominator) for the period. Diluted EPS gives effect to 
all dilutive potential common shares outstanding during the period. The 
computation of diluted EPS uses the average market prices during the period.

During the quarters ended March 28, 1999 and March 29, 1998 there were no 
differences between the numerators used for the basic and diluted EPS 
calculations. There were also no differences in the denominators in those 
quarters because the effect of stock options would be antidilutive.

Total stock options outstanding at March 28, 1999 and March 29, 1998 were 
2,893,816 and 2,674,736, respectively.


NOTE 5 COMPREHENSIVE INCOME

The Company adopted Statement of Financial Accounting Standards No. 130 (SFAS 
130), "Reporting Comprehensive Income" in January 1998. SFAS 130 establishes 
rules for the reporting and display of comprehensive income and its 
components; however, the adoption of this Statement had no impact on the 
Company's net income or stockholders' equity.

The following are the components of comprehensive loss:

<TABLE>
<CAPTION>

                                              THREE MONTHS ENDED
                                             ---------------------
(in thousands)                               MAR. 28,     MAR. 29,
                                               1999         1998
                                             -------      -------
<S>                                       <C>          <C>
Net loss                                     $(2,441)     $(1,220)

Foreign currency translation adjustments         (92)          22
                                             -------      -------

Comprehensive loss                           $(2,533)     $(1,198)
                                             =======      =======

</TABLE>

The components of accumulated other comprehensive income, net of related tax are
as follows:

<TABLE>
<CAPTION>

                                             MAR. 28,     DEC. 31
(in thousands)                                 1999         1998
                                             -------      -------

<S>                                      <C>          <C>
Cumulative translation adjustments           $  (230)     $  (138)
                                             =======      =======

</TABLE>

NOTE 6 REPORTABLE SEGMENTS

The Company is organized on the basis of products and services. All of the 
Company's business units have been aggregated into one operating segment. The 
Company's service business is a separate operating segment; however, this 
segment does not meet the quantitative thresholds as prescribed in FAS 131. 
As a result, no operating segment information is required to be disclosed.


                                       6
<PAGE>

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

OVERVIEW

Mattson Technology, Inc. ("Mattson" or the "Company") designs, manufactures 
and markets advanced fabrication equipment to semiconductor manufacturers 
worldwide. The Company's product line is based on the Company's modular 
"Aspen" platform, which accommodates two process chambers supporting 
increased throughput. The Company currently offers Aspen Strip, CVD, RTP, 
LiteEtch, and Epi products. To date, the Company has derived a substantial 
majority of its sales from Aspen Strip systems. In addition, the Company 
derives sales from spare parts and maintenance services.

The cyclicality and uncertainties regarding overall market conditions 
continue to present significant challenges to the Company and may continue to 
have a significant adverse impact on the Company's ability to forecast near 
term revenue expectations. The ability of the Company to modify its 
operations in response to short term changes in market conditions is limited. 
The extent and duration of the continued reduction in capital spending in the 
semiconductor industry and the ultimate impact on the Company and its results 
of operations and financial condition cannot be precisely predicted.

The Company experienced a loss in the quarter ended March 28,1999. Future 
results will depend on a variety of factors, particularly overall market 
conditions and timing of significant orders, the ability of the Company to 
bring new systems to market, the timing of new product releases by the 
Company's competitors, patterns of capital spending by the Company's 
customers, market acceptance of new and/or enhanced versions of Company 
systems, changes in pricing by the Company, its competitors, customers, or 
suppliers and the mix of products sold.

The Company generally recognizes a sale upon shipment of a system. However, 
from time to time, the Company allows customers to evaluate systems. The 
Company does not recognize the associated sale until and unless an evaluation 
system is accepted by the customer.

IMPACT OF YEAR 2000

The following statement is a Year 2000 Readiness Disclosure under the Year 
2000 Information and Readiness Disclosure Act of 1998. Some of the Company's 
older computer programs were written using two digits rather than four to 
define the applicable year. As a result, those computer programs have 
time-sensitive software that may recognize a date using "00" as the year 1900 
rather than the year 2000. This could cause a system failure or 
miscalculations causing disruptions of operations, including, among other 
things, a temporary inability to process transactions, send invoices, or 
engage in similar normal business activities.

The Company has commenced a Year 2000 date conversion project to address 
necessary changes and an implementation strategy. The "Year 2000 Computer 
Problem" creates risks for the Company from unforeseen problems in its own 
computer systems and from third parties with whom the Company deals on 
financial transactions. The Company does not anticipate that it will incur 
material expenditures for the resolution of any Year 2000 issues related 
either to its own information systems, databases and programs, or its 
products. However, there can be no assurance that the Company will not 
experience serious unanticipated negative consequences or material costs 
caused by undetected errors. In addition, the Company could be adversely 
impacted by Year 2000 issues faced by major distributors, suppliers, 
customers, vendors and financial service organizations with which the Company 
interacts.

                                       7
<PAGE>

Management is in the process of determining the impact, if any, that third 
parties who are not Year 2000 compliant may have on the operations of the 
Company. The Company is engaged in a comprehensive program to assess the 
Company's Year 2000 risk exposure and to plan and implement remedial and 
corrective action where necessary. The Company reviewed all of its major 
internal systems, including financial and manufacturing systems, to assess 
Year 2000 readiness and to identify critical systems that require correction 
or remediation. The Company believes that its existing financial and 
manufacturing systems are Year 2000 ready. There cannot be any assurance, 
however, that integration and testing of new, corrected or updated programs 
or systems with which they interface will not result in necessary corrective 
action to one or more critical systems. A significant disruption of the 
Company's financial or manufacturing systems would adversely impact its 
ability to process orders, manage production and issue and pay invoices. The 
Company's inability to perform these functions for a long period of time 
could result in a material impact on its results of operations and financial 
condition. 

The assessment of the Year 2000 readiness of the Company's manufacturing 
system is complete. Based on information currently available, the Company 
believes that its systems will not be materially impacted by Year 2000 
issues. However, there cannot be assurance that a significant disruption in 
systems resulting from a Year 2000 problem will not occur. If the computer 
system fails for this or any other reason, there could be a material adverse 
impact on its operating results and financial condition. 

The Company is working with critical suppliers of products and services to 
assess their Year 2000 readiness with respect both to their operations and 
the products and services they supply. This analysis will continue well into 
the fall of 1999, with corrective action taken commensurate with the 
criticality of affected products and services. The assessment program also 
has encompassed the Company's own product offerings. The Company has 
completed the assessment of the Year 2000 readiness of these products, and 
the Company does not believe that Year 2000 issues will have a material 
impact on sales or functionality of our standard product offerings. Customers 
are seeking assurances of our Year 2000 readiness with increasing frequency, 
and the Company is endeavoring promptly and completely to address their 
concerns. However, the Company has no control over a customer's Year 2000 
readiness. The potential ramifications of a Year 2000 type failure are 
potentially far-reaching and largely unknown. The Company cannot make 
assurances that a contingency plan in effect at the time of a system failure 
will adequately address the immediate or long term effects of a failure, or 
that such a failure would not have a material adverse impact on the Company's 
operations or financial results in spite of prudent planning. The costs to 
date related to the Year 2000 issue consist primarily of reallocation of 
internal resources to evaluate and assess systems and products as described 
above and to plan our remediation and testing efforts. The Company has not 
maintained detailed accounting records, but based on the review of department 
budgets and staff allocations, the Company believes these costs to be 
immaterial. 

The Company cannot make assurances that remediation and testing will not 
identify issues which will require additional expenditure of material amounts 
and which could result in an adverse impact on financial results in future 
reporting periods. Based on currently available information, management does 
not believe that the Year 2000 issues discussed above related to internal 
systems or products sold to customers will have a material adverse on our 
financial condition or overall trends in results of operations. However, the 
Company is uncertain to what extent they may be affected by such matters. In 
addition, the Company cannot make assurances that the failure to ensure Year 
2000 capability by a supplier not considered critical or another third party 
would not have a material adverse effect on the Company.

FORWARD LOOKING STATEMENTS

This Report on Form 10-Q contains forward looking statements regarding, among 
other matters, the Company's future strategy, product development plans, and 
productivity gains 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 that are 
subject to a number of risks and uncertainties. In addition to the general 
risks associated with the development of complex technology, future results 
of the Company will depend on a variety of factors as described herein under 
the caption "Factors That May Affect Future Results and Market Price of 
Stock" and in other filings with the Securities and Exchange Commission.


                                       8
<PAGE>

RESULTS OF OPERATIONS

The following table sets forth the statement of operations data of the Company
expressed as a percentage of net sales for the period indicated:

<TABLE>
<CAPTION>

                                                              THREE MONTHS ENDED
                                                              ------------------
                                                           MAR. 28,         MAR. 29,
                                                             1999             1998
                                                             ----             ----
<S>                                                       <C>              <C>
Net sales                                                    100%              100%
Cost of sales                                                 49%               55%
                                                              ---               ---
    Gross margin                                              51%               45%
                                                              ---               ---
Operating expenses:
    Research, development and engineering                     27%               22%
    Selling, general and administrative                       42%               33%
      Total operating expenses                                69%               55%
Loss from operations                                         (19%)             (11%)
Loss before income taxes                                     (17%)              (8%)
Net loss                                                     (17%)              (6%)

</TABLE>

NET SALES

Net sales for the first quarter of 1999 decreased 29% to $14.3 million from 
$20.2 million for the first quarter of 1998. The quarterly decrease in sales 
reflects a 53% decrease in unit sales for the first quarter of 1999 compared 
to the first quarter of 1998. Average selling prices (ASP's) increased 47% 
for the first quarter of 1999 compared to the first quarter of 1998. The 
increase in ASP was primarily a result of an increase in sales between CVD 
and RTP tools and a decrease in Aspen Strip products. There were no system 
revenues from the Concept Epi product line in either period.

In the first quarter of 1999 the Company had sales in the Strip, CVD and RTP 
product lines.

First quarter bookings were $21.2 million, an increase of 121% compared to 
bookings of $9.6 million in the first quarter of 1998, resulting in a book to 
bill ratio of 1.5 to 1.0. Backlog decreased $1.3 million to $29.5 million in 
the first quarter 1999 from $30.8 million in the first quarter of 1998.

International sales, which are predominantly to customers based in Japan and 
the Pacific Rim (which includes Taiwan, Singapore and Korea), accounted for 
36% and 55% of net sales for the first quarter of 1999 and 1998, 
respectively. All sales are denominated in U.S. dollars. The Company's 
operating results could be materially and adversely affected by any loss of 
business from, the cancellation of orders by, or decreases in prices of 
systems sold through Marubeni, the Company's distributor in Japan. The 
Company anticipates that international sales will continue to account for a 
significant portion of 1999 total net sales.

GROSS MARGIN

The Company's gross margin for the first quarter of 1999 increased to 51% 
from 45% for the first quarter of 1998. The increase in margins for the first 
quarter of 1999 was principally due to manufacturing efficiencies and sale of 
higher margin tools.

                                       9
<PAGE>

The Company's gross margin may continue to be affected by a variety of 
factors. Although the Company has not offered substantial discounts on its 
systems to date, there can be no assurance that the Company will not continue 
to experience pricing pressures in the future. The Company's gross margin on 
international sales, other than sales through Marubeni, is substantially the 
same as domestic sales. Sales to Marubeni typically carry a lower gross 
margin, as Marubeni is primarily responsible for sales and support costs in 
Japan.

The Company's reliance on outside vendors generally, and a sole or a limited 
group of suppliers in particular, involves several risks, including a 
potential inability to obtain an adequate supply of required components and 
reduced control over pricing and timely delivery of components. Any inability 
to obtain adequate deliveries or any other circumstance that would require 
the Company to seek alternative sources of supply or to manufacture such 
components internally could delay the Company's ability to ship its systems 
and could have a material adverse effect on the Company, including an 
increase in the Company's cost of sales and therefore an adverse impact on 
gross margin. In addition, new system introductions and enhancements and 
rapid growth may also have an adverse effect on gross margin due to the 
inefficiencies associated with manufacturing of new product lines and rapid 
expansion, respectively.

RESEARCH, DEVELOPMENT AND ENGINEERING

Research, development and engineering expenses for the first quarter of 1999 
were $3.9 million, or 27% of net sales, as compared to $4.5 million, or 22% 
of net sales, for the first quarter of 1998. The decrease in expenses for the 
first quarter of 1999 was primarily attributable to a decrease in salary and 
related expense. Salary and related expense was $1.8 million for the first 
quarter of 1999 and $2.4 million in the first quarter of 1998. During the 
first quarter of 1998, there was additional salary and related costs incurred 
from a reduction in force. The Company believes that continued investment in 
research and development, including its multi-product strategy is critical to 
maintaining a strong technological position in the industry.

SELLING, GENERAL AND ADMINISTRATIVE

Selling, general and administrative expenses for the first quarter of 1999 
were $6.0 million, or 42% of net sales, as compared to $6.7 million, or 33% 
of net sales, for the first quarter of 1998. The decrease in expenses for the 
first quarter of 1999 was primarily due to salary and related expenses which 
decreased to $3.8 million for the first quarter of 1999 from $4.3 million for 
the first quarter of 1998 and advertising and promotion expenses which 
decreased to $.1 million for the first quarter of 1999 from $0.3 million for 
the first quarter of 1998. During the first quarter of 1998, there was 
additional salary and related costs incurred from a reduction in force. 
Advertising and promotion expenses decreased during the first quarter of 1999 
as the Company continues to decrease its spending during a slow market.

 PROVISION FOR INCOME TAXES

During 1999, the Company provided taxes at an effective tax rate of (2.0%). 
The 1999 tax rate is less than the federal statutory rate primarily as a 
result of having fully reserved deferred tax assets due to the uncertainty of 
their realization and recording the tax liability for income of the foreign 
operations.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used by operations during the first quarter of 1999 was $5.6 
million, compared to $7.5 million of net cash provided by operations during 
the first quarter of 1998. Net cash used by operations during the first 
quarter of 1999 was primarily attributable to the net operating loss in the 
quarter, an increase in accounts receivable of $3.5 million and an increase in 
inventories of $3.4 million.

                                       10
<PAGE>

The Board of Directors has authorized the Company to repurchase, through the 
year 2000, up to 1,000,000 shares of the Company's Common Stock in the open 
market from time to time. As of March 28, 1999, 274,800 of these shares had 
been repurchased by the Company. The purpose of the repurchase program is to 
acquire shares to fund the Company's stock based employee benefit programs, 
including the employee stock purchase plan and the stock option plan.

While the Company believes that it currently has sufficient cash and 
short-term investment balances to meet the Company's cash requirements during 
at least the next twelve months, to the extent that such funds are 
insufficient to fund the Company's activities the Company may need to raise 
additional funds through public or private equity or debt financing from 
other sources. The sale of additional equity or additional convertible debt 
may result in additional dilution to the Company's stockholders and such 
securities may have rights, preferences or privileges senior to those of the 
Common Stock. There can be no assurance that additional equity or debt 
financing will be available when required or, if available, will be on terms 
satisfactory to the Company.

FACTORS THAT MAY AFFECT FUTURE RESULTS AND MARKET PRICE OF STOCK 

THE COMPANY'S QUARTERLY RESULTS HAVE FLUCTUATED SIGNIFICANTLY IN THE PAST AND 
MAY FLUCTUATE SIGNIFICANTLY IN THE FUTURE.  The Company derives most of its 
net sales from the sale of a relatively small number of systems.  The list 
prices on these range from $375,000 to over $1,000,000.  At its current 
revenue level, each sale, or failure to make a sale, can have a material 
effect on the Company.  The Company's backlog at the beginning of a quarter 
typically does not include all sales required to achieve its sales objectives 
for that quarter.  Consequently, the Company's net sales and operating 
results for a quarter depend on its shipping orders scheduled to be sold 
during that quarter and obtaining orders for systems to be shipped in that 
same quarter.  A delay in a shipment near the end of a quarter may cause net 
sales in that quarter to fall significantly below its expectations.  Such a 
delay may materially and adversely affect the Company's operating results for 
that quarter. 

Unpredictable order patterns often cause the Company's manufacturing 
efficiency to vary significantly from quarter to quarter.  Any variation in 
the Company's manufacturing efficiency can adversely affect gross margins and 
net operating results.  The time lag between the Company's first contact with 
a customer and the customer placing its first order typically lasts from nine 
to twelve months.  This lag is often even longer.  The Company's customers 
often face competing capital budget considerations.  Time lags between first 
customer contact and the customer placing its first order, coupled with the 
customer's competing capital budget considerations, make the timing of 
customer orders uneven and difficult to predict.  

THE COMPANY'S FUTURE SUCCESS DEPENDS UPON ITS ABILITY TO DEVELOP ITS SYSTEMS 
AND PRODUCTS AND THE MARKET'S ACCEPTANCE OF THEM.  The Company's systems 
represent alternatives to the conventional equipment currently marketed by 
its competitors.  As a result, the Company believes that its growth prospects 
depend in large part upon its ability to gain acceptance by a broader group 
of customers.  

Once a semiconductor manufacturer selects a particular vendor's capital 
equipment, the Company believes that the manufacturer generally relies upon 
that equipment 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.  Given these 
factors, there can be no assurance that the Company will be successful in 
obtaining broader acceptance of its systems and technology.  The transition 
of the market to 300mm wafers will present both an opportunity and a risk.  
The Company  must introduce 300mm systems on a timely basis and which meet 
customer requirements.  To the extent that the Company is unable to do this, 
its business, results of operations and financial condition could be 
materially and adversely affected.

THE COMPANY'S REVENUES ARE SIGNIFICANTLY DEPENDENT ON INDIVIDUAL CUSTOMERS 
MAKING PURCHASES.  The Company sells its products to leading integrated 
circuit manufacturers located in the United States, Europe, Japan and the 
rest of the Pacific Rim. While the Company actively pursues new customers, 
there can be no assurance that it will be successful in its efforts.  Any 
significant weakening in customer demand would have a material adverse effect 
on the Company.  

THE COMPANY'S REVENUES ARE HIGHLY DEPENDENT ON ITS JAPANESE DISTRIBUTOR, 
MARUBENI, AND THE ASIAN MARKET IN GENERAL.  The Company believes that strong 
sales in the Japanese market will be essential to its future financial 
performance.  As part of its strategy for penetrating the Japanese market, 
the Company established a distributor relationship with Marubeni.  The 
Company is substantially dependent upon Marubeni to address the Japanese 
market. Although management believes that it maintains a good relationship 
with Marubeni, there can be no assurance that the relationship will continue. 
 In the event of a termination of its distribution agreement with Marubeni, 
the Company's strategy to increase its sales in Japan would be adversely 
affected.  In addition, upon termination of this relationship with Marubeni, 
the Company would have the obligation to repurchase up to $1 million of 
inventory related to its sales to Marubeni.  Although the Company intends to 
continue to invest significant resources in Japan, including the hiring of 
additional personnel to support Marubeni's efforts, there can be no assurance 
that the Company will be able to maintain or increase its sales to the 
Japanese semiconductor industry.

The Company is also substantially dependent upon sales to Pacific Rim 
countries generally.  As such, the Company is particularly at risk with 
respect to effects from developments such as the Asian economic problems.  

<PAGE>

In addition, because some of its foreign sales are denominated in U.S. 
dollars, the Company's products become less price competitive in countries 
with currencies that are declining in value in comparison with the dollar.

THE COMPANY'S SALES CYCLE IS LENGTHY BECAUSE SALES OF ITS SYSTEMS DEPEND UPON 
THE DECISIONS OF PROSPECTIVE CUSTOMERS TO MAKE SIGNIFICANT CAPITAL 
COMMITMENTS.  Sales of the Company's systems depend, in significant part, 
upon the decision of a prospective customer to increase manufacturing 
capacity or to expand current manufacturing capacity.  Both decisions 
typically involve a significant capital commitment.  The Company's ability to 
receive orders from potential customers may depend upon such customers 
undertaking an evaluation for new equipment.  For many potential customers, 
such an evaluation may occur infrequently.

The Company also believes it must significantly increase its inventory 
investment in evaluation systems because many customers use these systems in 
their evaluation processes.  Due to these factors, its systems typically have 
a lengthy sales cycle during which it may expend substantial funds and 
management effort.  There can be no assurance that any of its efforts will 
succeed. 

THE COMPANY'S SALES REFLECT THE CYCLICALITY OF THE SEMICONDUCTOR INDUSTRY.  
The Company's business depends 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 depend 
upon the current and anticipated market demand for such devices and the 
products utilizing such devices.  The semiconductor industry is highly 
cyclical.  The industry historically experiences periods of oversupply that 
result in significantly reduced demand for capital equipment, including the 
systems manufactured and marketed by the Company.  The Company anticipates 
that a significant portion of new orders will depend upon demand from 
semiconductor manufacturers who build or expand large fabrication facilities. 
There can be no assurance that such demand will exist.  Any future downturns 
or slowdowns in the semiconductor market will materially and adversely affect 
the Company's net sales and operating results. 

ACQUISITIONS, WHICH ARE INHERENTLY RISKY, ARE PART OF THE COMPANY'S BUSINESS 
STRATEGY.  As part of the Company's business strategy, subject to certain 
regulatory approvals and other conditions, the Company may make additional 
acquisitions of, or significant investments in, businesses that offer 
complementary products, services and technologies.  The risks commonly 
encountered in acquisitions of businesses will accompany any acquisitions or 
investments. Consideration paid for future acquisitions, if any, could be in 
the form of cash, stock, rights to purchase stock or a combination of cash, 
stock and rights to acquire stock. To the extent that shares of stock or 
other rights to purchase stock are issued in connection with any such future 
acquisitions, dilution to existing stockholders and to earnings per share may 
result.  

THE COMPANY'S FUTURE SUCCESS DEPENDS UPON ITS CONTINUING TO DEVELOP AND 
INTRODUCE NEW SYSTEMS WHICH COMPETE EFFECTIVELY ON THE BASIS OF PRICE AND 
PERFORMANCE.  The Company and its customers compete in markets characterized 
by rapidly changing technology, evolving industry standards, and continuous 
improvements in products and services.

Because of continual changes in these markets, the Company believes that its 
future success will depend, in part, upon its ability to continue to improve 
its systems and its process technologies.  Due to the continual change in 
these markets, the Company's success will also depend upon its ability to 
develop new technologies and systems which compete effectively on the basis 
of price and performance and  adequately address customer requirements.  In 
addition, the Company must adapt its systems and processes to technological 
changes and to support emerging target market industry standards.  The 
success of new system introductions is dependent on a number of factors.  
These factors include timely completion of new system designs and market 
acceptance.  There can be no assurance that the Company will be able to 
improve its existing systems or develop new technologies or systems in a 
timely manner.  In particular, the transition of the market to 300mm wafers 
will present the Company with both an opportunity and a risk.  To the extent 
that the Company is unable to introduce 300mm systems on a timely basis and 
which meet customer requirements, its business, results of operations and 
financial condition could be materially and adversely affected. 

THE COMPANY'S SUBSTANTIAL DEPENDENCE UPON A LIMITED NUMBER OF SUPPLIERS FOR 
SOME COMPONENTS AND SUBASSEMBLIES REDUCES ITS CONTROL OVER THE TERMS OF THEIR 
DELIVERIES.  The Company relies to a substantial extent on outside vendors to 
manufacture many of the Aspen systems' components and subassemblies.  The 
Company 

<PAGE>

obtains certain of these components and subassemblies from a supplier or a 
limited group of suppliers.  The Company's reliance on outside vendors 
generally, and a sole or a limited group of suppliers in particular, involves 
several risks.  These risks include a potential inability to obtain an 
adequate supply of required components, reduced control over pricing of 
components, and reduced control over timely delivery of components.

The manufacture of certain of these components and subassemblies is an 
extremely complex process and requires long lead times.  As a result, there 
can be no assurance that delays or shortages caused by suppliers will not 
occur.  Any inability to obtain adequate deliveries or any other circumstance 
that would require the Company to seek alternative sources of supply or to 
manufacture such components internally could delay its ability to ship its 
systems.  Any such delay could have a material adverse effect on the Company. 
 

THE COMPANY IS HIGHLY DEPENDENT ON ITS KEY PERSONNEL.  The Company's success 
depends to a large extent upon the efforts and abilities of Brad Mattson, 
Chairman and Chief Executive Officer, and other key managerial and technical 
employees.  The loss of Mr. Mattson or other key employees could have a 
material adverse effect on the Company.  The Company does not enter into 
written employment agreements with any of its executive officers.  The 
success of its business will also depend upon its ability to continue to 
attract and retain qualified employees.  In particular, the Company must 
attract and retain highly skilled design and process engineers to manufacture 
existing systems and develop new systems and processes.  The competition for 
such personnel is intense.

THE COMPANY IS HIGHLY DEPENDENT ON ITS SALES OVERSEAS, PARTICULARLY TO JAPAN 
AND OTHER PACIFIC RIM COUNTRIES. The Company anticipates that international 
sales will continue to account for a significant portion of net sales.  
Because of its dependence upon international sales in general, and on sales 
to Japan and Pacific Rim countries in particular, the Company is particularly 
at risk to effects from developments such as the Asian economic problems.  
The Company's international sales are also subject to certain governmental 
restrictions, including the Export Administration Act and the regulations 
promulgated under that act.  The Company's sales to date have been 
denominated in U.S. dollars.  As a result, there have been no losses related 
to currency fluctuations on sales.  There can be no assurance that any of 
these factors will not have a material adverse effect on the Company.

THE COMPANY RELIES ON ITS INTELLECTUAL PROPERTY RIGHTS TO PROTECT ITS 
PROPRIETARY TECHNOLOGY.  The Company relies on a combination of patents, 
copyrights, trademark and trade secret laws, non-disclosure agreements, and 
other intellectual property protection methods to protect its proprietary 
technology.  The Company believes that patents are of less significance in 
this industry than such factors as innovative skills, technical expertise and 
know-how of its personnel.  There can be no assurance that the Company's 
competitors will not be able to legitimately ascertain the non-patented 
proprietary information embedded in its systems.  If this occurs, the Company 
may be precluded from preventing the use of such information.  To the extent 
the Company wishes to assert its patent rights, there can be no assurance 
that any claims of its patents will be sufficiently broad to protect its 
technology.

THE COMPANY'S FAILURE TO COMPLY WITH CURRENT OR FUTURE ENVIRONMENTAL 
REGULATIONS COULD RESULT IN SUBSTANTIAL LIABILITY TO THE COMPANY.  The 
Company is subject to a variety of federal, state and local laws, rules and 
regulations.  These laws, rules and regulations pertain to the use, storage, 
discharge and disposal of hazardous chemicals during sales demonstrations and 
research and development.  In recent years the Company has seen an increase 
in the amount of public attention focused on the environmental impact of 
operations which use hazardous materials.  To the best of its knowledge, the 
Company is in compliance with all federal, state and local environmental 
regulations.  However, failure to comply with present or future regulations 
could result in substantial liability to the Company, suspension or cessation 
of its operations, restrictions on its ability to expand at its present 
locations, requirements for the acquisition of significant equipment, or 
other significant expense.

THE PRICE OF THE COMPANY'S COMMON STOCK HAS IN THE PAST AND MAY IN THE FUTURE 
FLUCTUATE SIGNIFICANTLY.  Significant volatility characterized the market 
price of the Company's common stock in the past.  The Company's stock price 
declined substantially from its highs.  There can be no assurance that the 
market price of its common stock will not decline in the future.  In 
addition, in recent years the stock market in general, and the market for 
shares of small capitalization stocks in particular, experienced extreme 
price fluctuations.  These fluctuations were often unrelated to the operating 
performance of the affected companies.  Such fluctuations could adversely 
affect the market price of the Company's common stock.  

<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES REGARDING MARKET RISK

The Company has exposure to the impact of foreign currency fluctuations. The 
Company has foreign subsidiaries which operate and sell its products in 
various global markets; however, all of its sales are denominated in U.S. 
dollars, and therefore the Company's foreign currency risk is reduced.  The 
Company also has some monetary assets, particularly in Japan, where the 
Company attempts to limit its foreign currency risk through the use of 
financial market instruments.  The Company uses currency swap contracts with 
maturities generally less than three months to manage its exposure on these 
assets.  To date, the Company's exposure related to exchange rate volatility 
has not been significant.  There can be no assurance that there will not be a 
material impact in the future.

                          PART II -- OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS.

              None

ITEM 2.       CHANGES IN SECURITIES.

              None

ITEM 3.       DEFAULTS UPON SENIOR SECURITIES.

              None

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

              None

ITEM 5.       OTHER INFORMATION.

              None

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

         (a)      Exhibits

                  Exhibit 27 (Electronic filing only)

         (b)      Reports on Form 8-K

                  None.


<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.

                                             MATTSON TECHNOLOGY, INC.

Date: May 12, 1999                              /s/ Brian R. McDonald
                                       --------------------------------------
                                                 Brian R. McDonald
                                             Vice President of Finance
                                            and Chief Financial Officer
                                          (as principal financial officer
                                           and on behalf of Registrant)






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