<TABLE> <S> <C>


<ARTICLE>                     5
<LEGEND>
THIS  SCHEDULE  CONTAINS  SUMMARY  FINANCIAL   INFORMATION  EXTRACTED  FROM  THE
CONSOLIDATED  BALANCE  SHEET AT DECEMBER  31, 1998 AND THE RELATED  CONSOLIDATED
STATEMENT OF INCOME FOR THE TWELVE MONTHS ENDED  DECEMBER 31, 1998 OF THREE-FIVE
SYSTEMS,  INC.  AND  ITS  SUBSIDIARIES,  AND IS  QUALIFIED  IN ITS  ENTIRETY  BY
REFERENCE TO SUCH FINANCIAL  STATEMENTS.  THIS EXHIBIT SHALL NOT BE DEEMED FILED
FOR PURPOSES OF SECTION 11 OF THE  SECURITIES  ACT OF 1933 AND SECTION 18 OF THE
SECURITIES  EXCHANGE ACT OF 1934, OR OTHERWISE  SUBJECT TO THE LIABILITY OF SUCH
SECTIONS,  NOR SHALL IT BE DEEMED A PART OF ANY OTHER FILING WHICH  INCORPORATES
THIS REPORT BY REFERENCE,  UNLESS SUCH OTHER FILING EXPRESSLY  INCORPORATES THIS
EXHIBIT BY REFERENCE.
</LEGEND>
<MULTIPLIER>                  1,000
<CURRENCY>                    U.S. DOLLAR
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                                                    DEC-31-1998
<PERIOD-START>                                                       JAN-01-1998
<PERIOD-END>                                                         DEC-31-1998
<EXCHANGE-RATE>                                                                1
<CASH>                                                                     4,946
<SECURITIES>                                                                   0
<RECEIVABLES>                                                             19,117
<ALLOWANCES>                                                                 516
<INVENTORY>                                                               12,493
<CURRENT-ASSETS>                                                          41,033
<PP&E>                                                                    50,355
<DEPRECIATION>                                                            17,041
<TOTAL-ASSETS>                                                            77,904
<CURRENT-LIABILITIES>                                                     16,208
<BONDS>                                                                    7,444
<PREFERRED-MANDATORY>                                                          0
<PREFERRED>                                                                    0
<COMMON>                                                                      80
<OTHER-SE>                                                                     0
<TOTAL-LIABILITY-AND-EQUITY>                                              77,904
<SALES>                                                                   95,047
<TOTAL-REVENUES>                                                          95,047
<CGS>                                                                     76,149
<TOTAL-COSTS>                                                             90,642
<OTHER-EXPENSES>                                                             117
<LOSS-PROVISION>                                                               0
<INTEREST-EXPENSE>                                                           418
<INCOME-PRETAX>                                                            4,363
<INCOME-TAX>                                                               1,773
<INCOME-CONTINUING>                                                        2,590
<DISCONTINUED>                                                                 0
<EXTRAORDINARY>                                                                0
<CHANGES>                                                                      0
<NET-INCOME>                                                               2,590
<EPS-PRIMARY>                                                               0.34
<EPS-DILUTED>                                                               0.33
        

</TABLE>